Ok, now we all know that creating a budget is important to help keep your financial life in order. And as I have mentioned in the past, if you don't have a coach to show you how to create it correctly, it could do you more harm than good. But even when you have created a budget that fits and make sense for your financial reality, there are still some more components that can come around and destroy all of your hard work! So in this post, we are going to talk about the different personality types and how they can affect your budgeting plans and essentially your life.
Most of the experts say that there are four different financial personality types. Spender, Saver, Avoider and Monk. Below you will find a breakdown of each one....
1. The spender- this may seem obvious but, this person spends and spends pays no attention to the budget created. There is something inside of them that is compensating for something else, and just feels the need to spend as their heart desires. This person can destroy your budget more than any other personalities.
2. The saver- this person thinks it's more important to save for the future than to enjoy the present. They are HIGHLY anal about the budget and any deviation can make them crazy. They are usually the "responsible' ones too. Combine a spender with a saver and one can be called "fun" and the other "boring".
3. The avoider- now this person just avoids the bills all together. They don't want to know anything about a budget or about the interest they are paying on their credit cards. They usually WILL NOT even open a bill to see the balance or when it's due. This person is dangerous financially because they spend without a clue of what's happening in their accounts.
4. The Monk- This person thinks and feels that money has no place in our society and if they can avoid the use of it in any way they will. These people usually live a very very very simple lifestyle and prefer not to even speak about money at all, because it's messes with their spriritual flow and existence. Need I say more?
Ok so now that we know what type of personalities there are for dealing with money let's talk about how we can make things more pleasant between clashing personality traits.
This is where EQUAL DOLLARS, comes into play. Now we all know that opposities attract and how there needs to be balance in the world, the whole Ying and Yang theories. But the problem is that when opposities comes together there is usually a problem with how they interact with one another. This is especially true when it comes to finances. The statistics vary but it is VERY widely known that the BIGGEST reason for relationship stress and arguements is FINANCES!
Equal Dollars is meant to keep this in balance. Let's say that in one household you have a spender and saver, or saver and avoider, or spender and avoider (this is really not a good combo), how do you keep your financial reality and budget in line without filing for divorce?
If you combine accounts and finances, this is for you! This is how equal dollars works.
1. Agree on an equal dollar amount that fits into your budget. For this example lets use $100 each.
2. Every month, each person gets $100.
2. For the spenders, that they can spend it on ANYTHING they want. And the rule is, that the other person can't comment on the purchase because it was bought with equal dollars. They can even save it for bigger purchases without repercussions.
3. For the savers, you can save the $100 a month if you want and put it away for your rainy day. And again the other person can't comment on it either.
4. For the avoiders, they only get the $100 to spend ONLY if they open and pay 2 bills per month. This is an incentive for getting them involved in the financial future of the couple.
The idea behind this method is to keep the arguements to a minimum. The spenders are happy because they can spend as they want ($100 in this case) without arguement. The savers are happy because they get to protect their own money without fear of losing it, and the avoiders are happy because they still get to avoid the majority of the bills and get to spend a little for themselves.
Now if your budget after it's been created, doesn't have enough room for $100 each per month, make it $50 or $40, or whatever is going to keep you on track.
REMEMBER: Just because your working together and living together doesn't mean you should LOSE your independence. EQUAL DOLLARS makes sure you can still make decisions on your own with your hard earned money, it keeps your financial personality happy, it reduces the #1 reason for relationship stress and it keeps your budget alive and well!
Paycheck Distribution Coaching- "Making your money work harder for you than you do for it!"
If you have any questions or comments please feel free to post below!
follow me at http://www.irenemcruz.com/
www.facebook.com/paycheckdistributioncoach
www.twitter.com/irenemcruz
Monday, February 7, 2011
Wednesday, December 22, 2010
The Giftless Christmas....Or is it?
About two months ago, I let my family and friends know that I decided to do a "giftless" Christmas this year. My thinking was, if the entire nation is struggling financially, there is no point in making things any worse than what they already were. And as hard as it has been, because I love Christmas time and shopping for the most "thoughtful" gift I can find, I have been successfully been able to stay my course. I have made every effort to avoid the dreaded trap of "oh it's on sale" and even though my head keeps saying "wow, this person would love that, or that person could really use this", I am pretty proud of my ability to control myself and keep the idea of the "giftless" Christmas in full effect.
Now what I noticed is this: during the Holidays friends and family ask a lot of questions.....and come to think of it, so do strangers. It's usually "Happy Holidays, are you done with your shopping yet?' or "Merry Christmas, only 5 more days left, did you get everything you wanted yet?" And this year, I have made it my mission to pass on the idea of the "Giftless" Christmas.... So everytime I get one of these questions, I explain that "I'm not doing gifts this year" and usually I get this look of "how could you?" or the usual comment is "oh, my kids would be so mad at me if I did that". And the more and more I got these types of looks or comments the more I thought about what Christmas has become.
Christmas isn't "Christmas" anymore. It's the "shopping time" or "sale holiday" or "gift giving or getting time". We as a people have lost so much perspective about what the holidays are supposed to mean. So as a result of my little experiement, I have decided to change my mentality. Because this year and every year before this, has been a GIFT, regardless of what was in that box that was wrapped so nicely. I don't mean the gadgets and the gizmos (everyone who knows me, knows I love my techy stuff), I truly mean the time you spend with your loved ones.
I was looking through pictures of last years Christmas and I was remembering my sister laughing because she had Plantains under the tree by accident, and my niece singing to music, and my nephew goofing around with my other half. I remember my dad showing up at some point, asking for his usual cup of soda, everyone telling him it's bad for him and my mom bringing her awesome food to the table as we enjoyed a little cocito that was my cousins recipe. What I remember most of last year, was the time we spent together as we walked around Rockefeller center, which happened to be the first time my brother in law had ever been there during the holidays. I also remember that my younger sister and her fiance weren't there and how we all felt their absence.
My point is this. This Christmas season for us is so much more about family and friends than anything else. And, honestly, it took, this idea of not buying gifts to make me really realize it, and also as I write this, to realize that it was never about the gifts anyway. Yes it's fun to see their faces when they open something that you know they really wanted, and it's great to feel that other people took the time to do something thoughtful for you in return but I think we have lost the true meaning of Christmas.
In the end, I have found it again and in the process, have saved myself and my little family even tougher financial times this coming year. When I open my credit card statements, the balance will have decreased for the first time in years and when i look at our bank statements, I will not see extra gas purchases for trips to the mall. And I am hopeful that this little idea of "RE-GIFTING" Christmas back to ourselves will catch on, so that others may truly experience the feeling of satisfaction I have right now, as well as in the future.
Happy Holidays to everyone, and a VERY Happy New Year.
Irene M Cruz
Paycheck Distribution Coaching....
Please follow us at www.facebook.com/paycheckdistributioncoach
twitter and linked in IreneMCruz
Now what I noticed is this: during the Holidays friends and family ask a lot of questions.....and come to think of it, so do strangers. It's usually "Happy Holidays, are you done with your shopping yet?' or "Merry Christmas, only 5 more days left, did you get everything you wanted yet?" And this year, I have made it my mission to pass on the idea of the "Giftless" Christmas.... So everytime I get one of these questions, I explain that "I'm not doing gifts this year" and usually I get this look of "how could you?" or the usual comment is "oh, my kids would be so mad at me if I did that". And the more and more I got these types of looks or comments the more I thought about what Christmas has become.
Christmas isn't "Christmas" anymore. It's the "shopping time" or "sale holiday" or "gift giving or getting time". We as a people have lost so much perspective about what the holidays are supposed to mean. So as a result of my little experiement, I have decided to change my mentality. Because this year and every year before this, has been a GIFT, regardless of what was in that box that was wrapped so nicely. I don't mean the gadgets and the gizmos (everyone who knows me, knows I love my techy stuff), I truly mean the time you spend with your loved ones.
I was looking through pictures of last years Christmas and I was remembering my sister laughing because she had Plantains under the tree by accident, and my niece singing to music, and my nephew goofing around with my other half. I remember my dad showing up at some point, asking for his usual cup of soda, everyone telling him it's bad for him and my mom bringing her awesome food to the table as we enjoyed a little cocito that was my cousins recipe. What I remember most of last year, was the time we spent together as we walked around Rockefeller center, which happened to be the first time my brother in law had ever been there during the holidays. I also remember that my younger sister and her fiance weren't there and how we all felt their absence.
My point is this. This Christmas season for us is so much more about family and friends than anything else. And, honestly, it took, this idea of not buying gifts to make me really realize it, and also as I write this, to realize that it was never about the gifts anyway. Yes it's fun to see their faces when they open something that you know they really wanted, and it's great to feel that other people took the time to do something thoughtful for you in return but I think we have lost the true meaning of Christmas.
In the end, I have found it again and in the process, have saved myself and my little family even tougher financial times this coming year. When I open my credit card statements, the balance will have decreased for the first time in years and when i look at our bank statements, I will not see extra gas purchases for trips to the mall. And I am hopeful that this little idea of "RE-GIFTING" Christmas back to ourselves will catch on, so that others may truly experience the feeling of satisfaction I have right now, as well as in the future.
Happy Holidays to everyone, and a VERY Happy New Year.
Irene M Cruz
Paycheck Distribution Coaching....
Please follow us at www.facebook.com/paycheckdistributioncoach
twitter and linked in IreneMCruz
Monday, December 6, 2010
Organization of Receipts-Paycheck Distribution Coaching Style!
Anytime you purchase a product or service your bound to get a receipt right? Well most people just throw them away (especially if they are for small items) and a lot of the time the big ticket item receipts get lost in the shuffle. Now I know there are those of you out there who are organzied enough to keep your receipts and use them to your benefit (for budgeting purposes), if this includes you, keep reading you might find a simple tip that can help you further. So lets start with the simple stuff:
1. ASK for a receipt! Every time you purchase something! There are many places that don't automatically give you a receipt so you need to ask. EVERY TIME!
2. KEEP ALL OF YOUR RECIEPTS! This includes ALL of the small ticket items too. I don't care if it's for $1.00 or $10,000.00. If you pay cash, check, credit card, or debit doesn't matter. KEEP them all.
3. Put a note on the receipt at the register!- This is handy because you know why your buying the item at the time you bought it. A lot of times, you can get home, and weeks later when your organizing of just cleaning off your night stand, you can look at a receipt and wonder.....what did I buy and why? There are basically 5 different categories for your receipts. Food, Entertainment, Everyday (like Gas or tolls), Education, and Debt. See a detailed explanation below:
a. Food- now this can be groceries or it can be eating out so make sure you specify. Any time you don't cook at home it's considered eating out so they need to be counted seperately. Oh and don't forget your daily coffee in this equation. This category includes anything that you drink or eat when your NOT at a bar or at the movies.
b. Entertainment- this is play time. So if you like to go to the bar on thursdays, the movies on fridays, bowling on saturdays or anything else that would cost you money for fun, that's what this category is for.
c. Everyday- this is the necessities category. Like gas for your car, the bus or train pass, taxi fare, tolls to get to and from work. It also includes the bigger things like Mortgage/rent, car payments, utilities, cable, internet, phone, and other things that are needed for everyday living. If you utilize interent banking, print out the receipt that you get for paying your bill online! You will understand why soon.
d. Education- now wether your paying for your childs education or your own, don't forget to include any books, cd's, or dvd's that you use for that purpose....and NO the latest Harry Potter book doesn't qualify. If you take seminars or webinars....don't forget to include these too.
e. Debt-this would include any debt payments (don't include your car payment or your mortgage in here). This would be credit card debt or line of credits that you are paying.
Now that we have our categories figured out for each receipt let's move on to how to organize them. Some of you have heard of the 6 jar method for your money. Well after much consideration and a bit of personal troubleshooting of this method, I realized that the jars are more useful for receipts instead of money. And I'm sure you will understand why in a moment.
Once you have saved all of your receipts....and categorized them as you get them by putting your little note on them at the register....now it's time to seperate them into your 5 categories. But where do you put them? Some use file folders, other use accordian style folders. I suggest you use Jars. Jars are easier to fill and with them being out in the open, it keeps your goals fresh in your mind.
So, if you like the dollar store, go pick up 5 Generic Jars that you can put a sticker on (just make sure it's big enough to hold your receipts for a while). It is preferred that they are clear and see through so you can see your progress! Take each sticker and mark it with a category and stick it on the jar (make sure it's nice BIG lettering so you can't mistake each jar when you come home). And take another bigger sticker (white) and put it on the back of the jar with each month and a line....So if you start in November, put November ___________ then December ____________ and so on....if you move into another year, make sure you mark it for that year (this is for tax purposes later)
Now that you have kept all of your receipts, you have categorized them, AND you have your jars to store them it's time for the next step. EVERY DAY that you come home, I want you take out all of your receipts from your pockets or your purse, where ever you keep them and place each receipt into it's jar. Easy enough so far right?
Now here comes the bigger work. On the last day of every month, once all of your receipts have been collected for the day, I want you to take one jar at a time and add up all of the receipts for that category and put that total $ amount on the back of the jar for that month. Once all of your receipts for that jar have been added up, take a stapler and staple them together at the TOP of the receipt (this will make it easy for you to go through them later if need be and it will keep your next months receipts seperate from the old ones so you can keep using the jar efficiently).
You may be asking yourself, What is this going to do for you?...Well, it's going to give you a BIG picture of where EVERY penny of your money is going. For a lot of you , it WILL be a HUGE eye opener! Some of you may see that $400 every month is going towards entertainment, or your paying $600 a month towards debt....or that your everyday expenses are more than 60% of your total income. The point of this system is to make you more aware of where your money is being spent and hopefully help you make wiser choices in the future.
I know some of you are saying "I can use a program do that or that's what Quickbooks" is for." this may be the case for some of you, but most people don't really use these programs because they are not easy to follow and they take too much time. And what happens is, 6 months pass and then you have to sit down and input EVERYTHING for the last 6 months....and frankly, from my experience, most people don't bother.
This system is created SPECIFICALLY to keep you on track and mindful of your expenses while keeping it simple and efficient.
Paycheck Distribution Coaching helps make your money work harder for you than you do for it! I hope this helps you achieve at least a little bit of financial success!
Please follow me at... http://www.irenemcruz.com/ or www.facebook.com/paycheckdistributioncoach
Linkedin or Twitter (irenemcruz)
1. ASK for a receipt! Every time you purchase something! There are many places that don't automatically give you a receipt so you need to ask. EVERY TIME!
2. KEEP ALL OF YOUR RECIEPTS! This includes ALL of the small ticket items too. I don't care if it's for $1.00 or $10,000.00. If you pay cash, check, credit card, or debit doesn't matter. KEEP them all.
3. Put a note on the receipt at the register!- This is handy because you know why your buying the item at the time you bought it. A lot of times, you can get home, and weeks later when your organizing of just cleaning off your night stand, you can look at a receipt and wonder.....what did I buy and why? There are basically 5 different categories for your receipts. Food, Entertainment, Everyday (like Gas or tolls), Education, and Debt. See a detailed explanation below:
a. Food- now this can be groceries or it can be eating out so make sure you specify. Any time you don't cook at home it's considered eating out so they need to be counted seperately. Oh and don't forget your daily coffee in this equation. This category includes anything that you drink or eat when your NOT at a bar or at the movies.
b. Entertainment- this is play time. So if you like to go to the bar on thursdays, the movies on fridays, bowling on saturdays or anything else that would cost you money for fun, that's what this category is for.
c. Everyday- this is the necessities category. Like gas for your car, the bus or train pass, taxi fare, tolls to get to and from work. It also includes the bigger things like Mortgage/rent, car payments, utilities, cable, internet, phone, and other things that are needed for everyday living. If you utilize interent banking, print out the receipt that you get for paying your bill online! You will understand why soon.
d. Education- now wether your paying for your childs education or your own, don't forget to include any books, cd's, or dvd's that you use for that purpose....and NO the latest Harry Potter book doesn't qualify. If you take seminars or webinars....don't forget to include these too.
e. Debt-this would include any debt payments (don't include your car payment or your mortgage in here). This would be credit card debt or line of credits that you are paying.
Now that we have our categories figured out for each receipt let's move on to how to organize them. Some of you have heard of the 6 jar method for your money. Well after much consideration and a bit of personal troubleshooting of this method, I realized that the jars are more useful for receipts instead of money. And I'm sure you will understand why in a moment.
Once you have saved all of your receipts....and categorized them as you get them by putting your little note on them at the register....now it's time to seperate them into your 5 categories. But where do you put them? Some use file folders, other use accordian style folders. I suggest you use Jars. Jars are easier to fill and with them being out in the open, it keeps your goals fresh in your mind.
So, if you like the dollar store, go pick up 5 Generic Jars that you can put a sticker on (just make sure it's big enough to hold your receipts for a while). It is preferred that they are clear and see through so you can see your progress! Take each sticker and mark it with a category and stick it on the jar (make sure it's nice BIG lettering so you can't mistake each jar when you come home). And take another bigger sticker (white) and put it on the back of the jar with each month and a line....So if you start in November, put November ___________ then December ____________ and so on....if you move into another year, make sure you mark it for that year (this is for tax purposes later)
Now that you have kept all of your receipts, you have categorized them, AND you have your jars to store them it's time for the next step. EVERY DAY that you come home, I want you take out all of your receipts from your pockets or your purse, where ever you keep them and place each receipt into it's jar. Easy enough so far right?
Now here comes the bigger work. On the last day of every month, once all of your receipts have been collected for the day, I want you to take one jar at a time and add up all of the receipts for that category and put that total $ amount on the back of the jar for that month. Once all of your receipts for that jar have been added up, take a stapler and staple them together at the TOP of the receipt (this will make it easy for you to go through them later if need be and it will keep your next months receipts seperate from the old ones so you can keep using the jar efficiently).
You may be asking yourself, What is this going to do for you?...Well, it's going to give you a BIG picture of where EVERY penny of your money is going. For a lot of you , it WILL be a HUGE eye opener! Some of you may see that $400 every month is going towards entertainment, or your paying $600 a month towards debt....or that your everyday expenses are more than 60% of your total income. The point of this system is to make you more aware of where your money is being spent and hopefully help you make wiser choices in the future.
I know some of you are saying "I can use a program do that or that's what Quickbooks" is for." this may be the case for some of you, but most people don't really use these programs because they are not easy to follow and they take too much time. And what happens is, 6 months pass and then you have to sit down and input EVERYTHING for the last 6 months....and frankly, from my experience, most people don't bother.
This system is created SPECIFICALLY to keep you on track and mindful of your expenses while keeping it simple and efficient.
Paycheck Distribution Coaching helps make your money work harder for you than you do for it! I hope this helps you achieve at least a little bit of financial success!
Please follow me at... http://www.irenemcruz.com/ or www.facebook.com/paycheckdistributioncoach
Linkedin or Twitter (irenemcruz)
Wednesday, October 20, 2010
Considering Personal Finance Software?
Using a computer to track your money and investments used to mean just choosing software and getting started. It's not that simple anymore.
For the first time in years, you might wonder if you can bypass using personal software altogether and instead use a third-party financial tracking website or just use your bank's or brokerage's site. Here's the irony: Financial tools such as Quicken are supposedly easier to use, and trying to choose which product is best for you is increasingly complex. "There are more choices, that are growing increasingly more powerful each year plus more options from banks and brokerages and a number of other Web applications but none of them offer you the coaching and expertise you need to make the more difficult decisions.
Here is an analysis of the four major ways you can use your computer to monitor spending and investments. You'll discover the advantages and disadvantages of each method so you can spend less time choosing technology and more time getting your finances on track.
Solution No. 1: Quicken
They say Quicken is the gold Standard. And for those with the patience to get through it and set it up, it is. But for the rest of us, I think it complicates the process.
The upside: Quicken is an annually upgraded product backed by Intuit, it lets you create detailed budgets, as well as download all your bank and brokerage data and even see the ups and downs of your cash flow and portfolio.
For investors, Quicken is tough to beat, because it can track how much you've paid for stocks even if you've invested in the same security several times.
All your data are stored on your personal hard drive, so you can make copies yourself. And if you switch brokerage firms, you don't have to worry about losing your historical data.
The downside: Quicken is an app, and you must pay for it.
The Deluxe version costs $60. Quicken 2011 runs on computers running Windows, but the version for Apple’s Mac isn't nearly as powerful.
The online capabilities of the software, including stock quotes, expire every three years, so that forces you to update every three years.
Also, Quicken 2011 doesn't connect with any smartphones.
Solution No. 2: Other personal finance software
Microsoft dropped out of the personal financial software game, but that doesn't mean the competition is gone. Several viable rivals to Quicken exist.
The upside: Quicken's rivals focus on areas that irk some Quicken users. Moneydance, for instance, is designed to work equally well on computers running Windows as well as Macs and Linux. The software is also a bit less expensive at $50, and the part of the software that pulls online data doesn't expire. And like with Quicken, your data are stored on your hard drive so you can make copies and have access any time.
The downside: Many of the alternatives are much less polished have fewer features. Moneydance's asset allocation tool, which helps investors measure how their investments are diversified, is much less powerful than Quicken's. Another rival's software, iBank, works only on Macs and not on computers running the more popular Windows operating system. These software programs aren't free either: Moneydance costs $50, and iBank, $60.
Solution No. 3: Third-party websites
E-mail, photos and diaries are going online, so too is personal finance tracking. Personal finance websites, such as Mint.com and Yodlee MoneyCenter, are changing how many track their money. Rather than downloading your financial information to your computer, these sites pull data and store them on their own computers and make them available online. Some sites, including Wikinvest, provide websites that help you track just your investment portfolio.
The upside: All you need to check on your finances is a device with a Web browser. These sites are designed to be as simple as typing in your user names and passwords from your bank and brokerage accounts. In most cases, you can be up and running, tracking all your accounts, in just a few minutes. You can also tap your financial information from anywhere, either on a friend's computer or from your smartphone. Best of all, these sites are free.
The downside: The first HUGE hurdle is security. You'll need to enter your user names and passwords from all your financial accounts to get the most value. The providers all say they have security safeguards in place. But so have the Madoffs of the world.
In addition, because information sits on the providers' site, if that website goes down or your Internet connection is severed, you can't access it. These sites also lack a way for longtime users of financial software to import past transactions from software such as Quicken.
There's also no guarantee you can always get your information. There have been cases of smaller rivals that have discontinued their websites, leaving users stranded. And they still lack one main element, ASSISTANCE or COACHING.
Solution No. 4: Bank and brokerage websites
Seeing the advances in personal financial software and websites, banks and brokerages are beefing up their own sites so people won't switch.
The upside: If you want the least amount of work, bank and brokerage sites are tough to beat. All your information is already culled and imported. Some brokerages, such as Vanguard, will even let you track your portfolios at other financial institutions. Also, thanks to new IRS rules that kick in in 2011, these sites are required to track your cost basis on new investments, which is one of the biggest reasons why people use personal financial software and sites in the first place. These sites are free.
The downside: Unless you have all your money with one firm, the utility of these sites can be limited. The brokerage sites, for instance, can't help you create a budget with your checking account.
But the biggest drawback is that your institution controls your data, not you. If you switch banks or move to a brokerage with lower commissions, you could lose data on many historical transactions.
What's the bottom line? If you're worried about security and want tight control over your historical financial data, Quicken and other personal financial software apps are good choices. Quicken is the best-known app , but doesn’t mean it’s the best solution for you.
If you're looking to just keep a quick tab on all your financial accounts, including while traveling with your smartphone, online sites might be best.
And if you want little hassle, and want only the very basics, then your bank or brokerage websites may be just fine.
In the end all of these solutions will help you keep track of your money…but NONE of them will help you with the most important element, Self-control and understanding why your budget should consist of X, Y, and Z. Paycheck Distribution Coaching doesn’t want any of your passwords or account numbers and we don’t leave you alone to “figure” out what budget is best for you and your situation. We are there to hold your hand through the process and help you make the best decisions for your financial situation and to help you meet your goals.
Please follow us at www.facebook.com/paycheckdistributioncoach and http://www.irenemcruz.com/
For the first time in years, you might wonder if you can bypass using personal software altogether and instead use a third-party financial tracking website or just use your bank's or brokerage's site. Here's the irony: Financial tools such as Quicken are supposedly easier to use, and trying to choose which product is best for you is increasingly complex. "There are more choices, that are growing increasingly more powerful each year plus more options from banks and brokerages and a number of other Web applications but none of them offer you the coaching and expertise you need to make the more difficult decisions.
Here is an analysis of the four major ways you can use your computer to monitor spending and investments. You'll discover the advantages and disadvantages of each method so you can spend less time choosing technology and more time getting your finances on track.
Solution No. 1: Quicken
They say Quicken is the gold Standard. And for those with the patience to get through it and set it up, it is. But for the rest of us, I think it complicates the process.
The upside: Quicken is an annually upgraded product backed by Intuit, it lets you create detailed budgets, as well as download all your bank and brokerage data and even see the ups and downs of your cash flow and portfolio.
For investors, Quicken is tough to beat, because it can track how much you've paid for stocks even if you've invested in the same security several times.
All your data are stored on your personal hard drive, so you can make copies yourself. And if you switch brokerage firms, you don't have to worry about losing your historical data.
The downside: Quicken is an app, and you must pay for it.
The Deluxe version costs $60. Quicken 2011 runs on computers running Windows, but the version for Apple’s Mac isn't nearly as powerful.
The online capabilities of the software, including stock quotes, expire every three years, so that forces you to update every three years.
Also, Quicken 2011 doesn't connect with any smartphones.
Solution No. 2: Other personal finance software
Microsoft dropped out of the personal financial software game, but that doesn't mean the competition is gone. Several viable rivals to Quicken exist.
The upside: Quicken's rivals focus on areas that irk some Quicken users. Moneydance, for instance, is designed to work equally well on computers running Windows as well as Macs and Linux. The software is also a bit less expensive at $50, and the part of the software that pulls online data doesn't expire. And like with Quicken, your data are stored on your hard drive so you can make copies and have access any time.
The downside: Many of the alternatives are much less polished have fewer features. Moneydance's asset allocation tool, which helps investors measure how their investments are diversified, is much less powerful than Quicken's. Another rival's software, iBank, works only on Macs and not on computers running the more popular Windows operating system. These software programs aren't free either: Moneydance costs $50, and iBank, $60.
Solution No. 3: Third-party websites
E-mail, photos and diaries are going online, so too is personal finance tracking. Personal finance websites, such as Mint.com and Yodlee MoneyCenter, are changing how many track their money. Rather than downloading your financial information to your computer, these sites pull data and store them on their own computers and make them available online. Some sites, including Wikinvest, provide websites that help you track just your investment portfolio.
The upside: All you need to check on your finances is a device with a Web browser. These sites are designed to be as simple as typing in your user names and passwords from your bank and brokerage accounts. In most cases, you can be up and running, tracking all your accounts, in just a few minutes. You can also tap your financial information from anywhere, either on a friend's computer or from your smartphone. Best of all, these sites are free.
The downside: The first HUGE hurdle is security. You'll need to enter your user names and passwords from all your financial accounts to get the most value. The providers all say they have security safeguards in place. But so have the Madoffs of the world.
In addition, because information sits on the providers' site, if that website goes down or your Internet connection is severed, you can't access it. These sites also lack a way for longtime users of financial software to import past transactions from software such as Quicken.
There's also no guarantee you can always get your information. There have been cases of smaller rivals that have discontinued their websites, leaving users stranded. And they still lack one main element, ASSISTANCE or COACHING.
Solution No. 4: Bank and brokerage websites
Seeing the advances in personal financial software and websites, banks and brokerages are beefing up their own sites so people won't switch.
The upside: If you want the least amount of work, bank and brokerage sites are tough to beat. All your information is already culled and imported. Some brokerages, such as Vanguard, will even let you track your portfolios at other financial institutions. Also, thanks to new IRS rules that kick in in 2011, these sites are required to track your cost basis on new investments, which is one of the biggest reasons why people use personal financial software and sites in the first place. These sites are free.
The downside: Unless you have all your money with one firm, the utility of these sites can be limited. The brokerage sites, for instance, can't help you create a budget with your checking account.
But the biggest drawback is that your institution controls your data, not you. If you switch banks or move to a brokerage with lower commissions, you could lose data on many historical transactions.
What's the bottom line? If you're worried about security and want tight control over your historical financial data, Quicken and other personal financial software apps are good choices. Quicken is the best-known app , but doesn’t mean it’s the best solution for you.
If you're looking to just keep a quick tab on all your financial accounts, including while traveling with your smartphone, online sites might be best.
And if you want little hassle, and want only the very basics, then your bank or brokerage websites may be just fine.
In the end all of these solutions will help you keep track of your money…but NONE of them will help you with the most important element, Self-control and understanding why your budget should consist of X, Y, and Z. Paycheck Distribution Coaching doesn’t want any of your passwords or account numbers and we don’t leave you alone to “figure” out what budget is best for you and your situation. We are there to hold your hand through the process and help you make the best decisions for your financial situation and to help you meet your goals.
Please follow us at www.facebook.com/paycheckdistributioncoach and http://www.irenemcruz.com/
Wednesday, June 9, 2010
8 things your Financial Planner WON'T TELL YOU!!
More people are flocking to financial planners these days, convinced they need professionals to help them navigate the market's stormy seas.Unfortunately, not all planners are created equal. Some are thinly disguised investment salespeople, and many don't have the background or inclination to offer true, comprehensive financial advice. So before you sign on with a planner, or implement the advice offered, make sure you know these secrets the planner may be keeping. Such as:
1. I have no qualifications for this job.
Anyone can claim to be a financial planner. There are no education, experience or ethical requirements and no government agency that regulates planners as planners. Of the estimated 250,000 people calling themselves financial planners, only about 56,500 have earned the Certified Financial Planner mark -- the best-known financial planning designation. Fewer still are a Chartered Financial Consultant (ChFC) or Personal Financial Specialist (PFS), the financial planning designations offered by the insurance and accounting industries, respectively. Even if your planner has one of these designations, you're not home free. It generally takes years of experience and ongoing education -- not to mention integrity and ethics -- to become a truly good planner.
2. I have no obligation to put your interests ahead of my own.
Real financial planners take seriously their duties as fiduciaries -- professionals who are trusted to think of their clients' needs first and foremost. Most of those who call themselves planners, though, are really in the business of selling investments. As such, they may face scrutiny from various government agencies over their sales tactics. But instead of being obligated to create the best financial plan for you, they're only required by law not to sell you something that's utterly unsuitable.
3. I'm not being paid the way you think.
"Commissions" became a dirty word in the 1990s, when even the big brokerage houses like Merrill Lynch decided that people would rather pay fees than have advisers compensated by commissions for the investments they sold. True fee-only financial planners are still a rare breed, however. The leading association for fee-only planners, NAPFA, has fewer than 800 members. Most financial advisers still get some or most of their income from commissions, according to FPA. Many finesse the situation by calling themselves "fee-based" planners, or by simply avoiding the issue of how they get compensated.Commissions aren't bad, per se. But they do create a built-in conflict of interest. Your planner should volunteer information about how she gets paid. If you have to ask, you should at least get a straight answer.
4. I'm looking at only one small portion of your overall finances.
A good financial planner looks at every aspect of his or her clients' financial situations, from their budgets to their estate plans. That's the only way to give truly customized, comprehensive planning advice. Many of those calling themselves financial planners, however, focus on one narrow aspect of a client's monetary condition -- usually the area that corresponds with whatever financial training they've received.
5. The only products I understand are the ones I'm selling.
The old saw goes like this: When all you have is a hammer, everything looks like a nail. Advisers who lack training in comprehensive financial planning often know only what their companies tell them about the various investments they're told to sell. An insurance agent, for example, might sing the praises of variable annuities -- not realizing that annuities should only be considered after tax-favored retirement options, such as 401(k)s and IRAs, have been exhausted and less expensive alternatives, such as index funds or tax-efficient mutual funds, have been considered. I still remember a conversation a few years ago in which an insurance agent launched into a passionate defense of variable annuities, only to confess -- after much probing -- that he had never heard of alternatives like tax-efficient mutual funds and didn't know how much could be invested in a 401(k) or Roth IRA. Likewise, a stockbroker might push individual stocks or mutual funds, when the best use for your money might be increasing your emergency fund or paying down your mortgage.
6. I can't beat the market.
Many people think a financial planner can help them supercharge their investment returns. Many of the best financial planners, however, believe they're doing well if their clients' portfolios simply match the market averages. They don't even try for more, convinced that such efforts are a waste of their time and effort -- and of their clients' money. Those who do try often fall woefully short. The more they trade, the more money they spend in commissions and fees, and the farther they fall behind the market benchmarks. Good financial planners concentrate on making sure their clients are well-diversified and that other aspects of their finances -- their budgets, credit ratings, insurance coverage, tax situations, estate plans and retirement accounts -- are in the best shape possible. In contrast to the adviser who's trying to keep secrets, however, these good planners are upfront about the fact that they're not trying to beat the market.
7. I won't save you from yourself.
The best financial planners didn't let their clients overdose on technology stocks during the 1990s and insisted they stay invested during the roller-coaster ride of the past few years. The worst encouraged their clients to chase every hot trend, whether it was dot-coms or excessive investments in real estate. Many planners fall somewhere in between -- trying to make the case for diversification and common sense, but lacking the confidence and experience to insist their clients not make suicidal moves.
8. I have a checkered past.
Sooner or later, most financial planners will have a run-in with an unhappy client. If those disputes regularly escalate to lawsuits, however, or your adviser has been disciplined by a regulatory board, that's a red flag. The worst offenders skip from job to job or industry to industry, hoping their past never catches up with them.
I hope this was a true eye opener for most of you.....
In conclusion....Financial Planners invest your money and most don't do much more than that...some may try to sell you a financial product such as Insurace, Mortgage or Mutual Fund and even a smaller amount actually look at the most basic of your finances, where is your paycheck going? Paycheck Distribution Coaching was created with this in mind....How can you know where you need to go if you don't know where your coming from?
please feel free to comment and follow me on www.facebook.com/paycheckdistributioncoach
1. I have no qualifications for this job.
Anyone can claim to be a financial planner. There are no education, experience or ethical requirements and no government agency that regulates planners as planners. Of the estimated 250,000 people calling themselves financial planners, only about 56,500 have earned the Certified Financial Planner mark -- the best-known financial planning designation. Fewer still are a Chartered Financial Consultant (ChFC) or Personal Financial Specialist (PFS), the financial planning designations offered by the insurance and accounting industries, respectively. Even if your planner has one of these designations, you're not home free. It generally takes years of experience and ongoing education -- not to mention integrity and ethics -- to become a truly good planner.
2. I have no obligation to put your interests ahead of my own.
Real financial planners take seriously their duties as fiduciaries -- professionals who are trusted to think of their clients' needs first and foremost. Most of those who call themselves planners, though, are really in the business of selling investments. As such, they may face scrutiny from various government agencies over their sales tactics. But instead of being obligated to create the best financial plan for you, they're only required by law not to sell you something that's utterly unsuitable.
3. I'm not being paid the way you think.
"Commissions" became a dirty word in the 1990s, when even the big brokerage houses like Merrill Lynch decided that people would rather pay fees than have advisers compensated by commissions for the investments they sold. True fee-only financial planners are still a rare breed, however. The leading association for fee-only planners, NAPFA, has fewer than 800 members. Most financial advisers still get some or most of their income from commissions, according to FPA. Many finesse the situation by calling themselves "fee-based" planners, or by simply avoiding the issue of how they get compensated.Commissions aren't bad, per se. But they do create a built-in conflict of interest. Your planner should volunteer information about how she gets paid. If you have to ask, you should at least get a straight answer.
4. I'm looking at only one small portion of your overall finances.
A good financial planner looks at every aspect of his or her clients' financial situations, from their budgets to their estate plans. That's the only way to give truly customized, comprehensive planning advice. Many of those calling themselves financial planners, however, focus on one narrow aspect of a client's monetary condition -- usually the area that corresponds with whatever financial training they've received.
5. The only products I understand are the ones I'm selling.
The old saw goes like this: When all you have is a hammer, everything looks like a nail. Advisers who lack training in comprehensive financial planning often know only what their companies tell them about the various investments they're told to sell. An insurance agent, for example, might sing the praises of variable annuities -- not realizing that annuities should only be considered after tax-favored retirement options, such as 401(k)s and IRAs, have been exhausted and less expensive alternatives, such as index funds or tax-efficient mutual funds, have been considered. I still remember a conversation a few years ago in which an insurance agent launched into a passionate defense of variable annuities, only to confess -- after much probing -- that he had never heard of alternatives like tax-efficient mutual funds and didn't know how much could be invested in a 401(k) or Roth IRA. Likewise, a stockbroker might push individual stocks or mutual funds, when the best use for your money might be increasing your emergency fund or paying down your mortgage.
6. I can't beat the market.
Many people think a financial planner can help them supercharge their investment returns. Many of the best financial planners, however, believe they're doing well if their clients' portfolios simply match the market averages. They don't even try for more, convinced that such efforts are a waste of their time and effort -- and of their clients' money. Those who do try often fall woefully short. The more they trade, the more money they spend in commissions and fees, and the farther they fall behind the market benchmarks. Good financial planners concentrate on making sure their clients are well-diversified and that other aspects of their finances -- their budgets, credit ratings, insurance coverage, tax situations, estate plans and retirement accounts -- are in the best shape possible. In contrast to the adviser who's trying to keep secrets, however, these good planners are upfront about the fact that they're not trying to beat the market.
7. I won't save you from yourself.
The best financial planners didn't let their clients overdose on technology stocks during the 1990s and insisted they stay invested during the roller-coaster ride of the past few years. The worst encouraged their clients to chase every hot trend, whether it was dot-coms or excessive investments in real estate. Many planners fall somewhere in between -- trying to make the case for diversification and common sense, but lacking the confidence and experience to insist their clients not make suicidal moves.
8. I have a checkered past.
Sooner or later, most financial planners will have a run-in with an unhappy client. If those disputes regularly escalate to lawsuits, however, or your adviser has been disciplined by a regulatory board, that's a red flag. The worst offenders skip from job to job or industry to industry, hoping their past never catches up with them.
I hope this was a true eye opener for most of you.....
In conclusion....Financial Planners invest your money and most don't do much more than that...some may try to sell you a financial product such as Insurace, Mortgage or Mutual Fund and even a smaller amount actually look at the most basic of your finances, where is your paycheck going? Paycheck Distribution Coaching was created with this in mind....How can you know where you need to go if you don't know where your coming from?
please feel free to comment and follow me on www.facebook.com/paycheckdistributioncoach
Thursday, May 20, 2010
Basics of Effective Money Management (Systemized Budget) Part 1 of 2
Now that we know how important a good foundational education and true self-control is to having an effective money management system, we need to put the system in place.
Systems are used in just about every aspect of life and business. Ray Kroc created a system to build his McDonalds empire, franchising is popular due to proven systems, and a systemized budget can and will assist you in effectively managing your money correctly.
The real question is this, what systemized budget is right for me? I think we can agree that no two financial situations are the same and even if they were, each person has their own goals in mind. So when you put these two elements together we need something that is systemized yet flexible enough to accomplish the same end result. Effective Money Management.
Regardless of how you make your money, whether it be by paycheck, investment income, a social security check, or even if you own a business that pays you, in any of these cases, you have money coming in and you have to manage it effectively. So lets start with the basics and then we can tweak the numbers and percentages to fit your unique financial picture.
1. We need to calculate how much money you have coming in on a monthly basis. (we use monthly figures because most expenses are paid once a month)
a. If you get paid weekly, simply take that amount (after taxes) and multiply it by 52 and divide by 12.
b. If you get paid bi-weekly, take that amount (again after taxes) and multiply it by 26 and divide by
12. (this will give you an accurate $ amount for each month)
c. If you happen to get paid monthly, then there is no calculation needed.
2. If you are in a relationship where you share the expenses and pay the bills together then do the same
calculations in step 1 and then add the 2 totals together to get your TOTAL Monthly income.
3. Now we need to break down your expenses into categories. This makes it easier to systemize your
budget. There is usually about 6 different categories you will spend your money on every month.
a. Necessities or Everyday Life- these are examples of what belongs in this category
1. rent or mortgage
2. utilities (electricity, heat/ac, water etc)
3. phone (home and cellular)
4. food (home cooked food or groceries)
5. insurance (homeowners, auto, life, health etc)
6. car payments (lease or own)
7. minimum payments on your debt (credit cards, personal loans,)
8. banking fees (if any)
9. home alarm fees
10. transportation (can be gas for your car or bus pass or even a subway card)
b. Entertainment or Play time- again some examples
1. Eating out (even for lunch at work)
2. going to the movies
3. bowling
4. movie rentals
5. clubbing or dancing
6. club fees (playing any kind of sport)
c. Education- anything that would be considered a teaching tool or to continue your education.
1. student loans
2. seminars
3. webinars
4. book purchases
5. cd purchases (not music :) )
d. Charity- I think this is pretty self-explanatory
e. Investments or Interest Creating- this could be anything your expecting a rate of return on
that you contribute money to on monthly basis.
1. 401k or RRSP
2. savings accounts
3. real estate investments
4. IRA's
5. CD's
6. Mutual Funds
f. Debt Elimination- extra money you send to your debt to get it paid faster
Now even with a list like this and putting this money into these categories we are still missing the need for an "emergency fund" or as I like to call it "the in case of xyz" account and a "I want it soon" account. These two final categories help you eliminate the need to create more debt when these things happen.
Once you have created these categories the next thing you need to do to create a Systemized budget is to figure out what percentage of your income is being used for each category and then adjust as needed.
We will cover this adjustment and recommended percentages for each category in part 2 of the Systemized Budget portion of "Basics of Effective Money Management".
Please feel free to ask questions and comment as needed.
Follow me at www.facebook.com/paycheckdistributioncoach
Systems are used in just about every aspect of life and business. Ray Kroc created a system to build his McDonalds empire, franchising is popular due to proven systems, and a systemized budget can and will assist you in effectively managing your money correctly.
The real question is this, what systemized budget is right for me? I think we can agree that no two financial situations are the same and even if they were, each person has their own goals in mind. So when you put these two elements together we need something that is systemized yet flexible enough to accomplish the same end result. Effective Money Management.
Regardless of how you make your money, whether it be by paycheck, investment income, a social security check, or even if you own a business that pays you, in any of these cases, you have money coming in and you have to manage it effectively. So lets start with the basics and then we can tweak the numbers and percentages to fit your unique financial picture.
1. We need to calculate how much money you have coming in on a monthly basis. (we use monthly figures because most expenses are paid once a month)
a. If you get paid weekly, simply take that amount (after taxes) and multiply it by 52 and divide by 12.
b. If you get paid bi-weekly, take that amount (again after taxes) and multiply it by 26 and divide by
12. (this will give you an accurate $ amount for each month)
c. If you happen to get paid monthly, then there is no calculation needed.
2. If you are in a relationship where you share the expenses and pay the bills together then do the same
calculations in step 1 and then add the 2 totals together to get your TOTAL Monthly income.
3. Now we need to break down your expenses into categories. This makes it easier to systemize your
budget. There is usually about 6 different categories you will spend your money on every month.
a. Necessities or Everyday Life- these are examples of what belongs in this category
1. rent or mortgage
2. utilities (electricity, heat/ac, water etc)
3. phone (home and cellular)
4. food (home cooked food or groceries)
5. insurance (homeowners, auto, life, health etc)
6. car payments (lease or own)
7. minimum payments on your debt (credit cards, personal loans,)
8. banking fees (if any)
9. home alarm fees
10. transportation (can be gas for your car or bus pass or even a subway card)
b. Entertainment or Play time- again some examples
1. Eating out (even for lunch at work)
2. going to the movies
3. bowling
4. movie rentals
5. clubbing or dancing
6. club fees (playing any kind of sport)
c. Education- anything that would be considered a teaching tool or to continue your education.
1. student loans
2. seminars
3. webinars
4. book purchases
5. cd purchases (not music :) )
d. Charity- I think this is pretty self-explanatory
e. Investments or Interest Creating- this could be anything your expecting a rate of return on
that you contribute money to on monthly basis.
1. 401k or RRSP
2. savings accounts
3. real estate investments
4. IRA's
5. CD's
6. Mutual Funds
f. Debt Elimination- extra money you send to your debt to get it paid faster
Now even with a list like this and putting this money into these categories we are still missing the need for an "emergency fund" or as I like to call it "the in case of xyz" account and a "I want it soon" account. These two final categories help you eliminate the need to create more debt when these things happen.
Once you have created these categories the next thing you need to do to create a Systemized budget is to figure out what percentage of your income is being used for each category and then adjust as needed.
We will cover this adjustment and recommended percentages for each category in part 2 of the Systemized Budget portion of "Basics of Effective Money Management".
Please feel free to ask questions and comment as needed.
Follow me at www.facebook.com/paycheckdistributioncoach
Thursday, May 13, 2010
Basics of Effective Money Management (Self-Control)
The I want it now mentality comes up alot in my discussions and for good reason. We live in a very "plastic" society where most people are living way above their means by using Credit Cards to supplement their income. Now, granted there are people who just don't make enough to live on but studies show, they are the minority. The vast majority of people using up their credit cards are of the "I want it now" mentality. They see the big screen tv or the fancy car and they think the worst words I think can ever be thought when it comes to finances "I think I can afford it" and/or "I wonder if I have enough room on my credit card". These two thoughts are the downfall of most people when it comes to financial intelligence.
Paycheck Distribution Coaching has been created to help stop this vicious cycle. If you ever say or even think these words while your shopping, then your not managing your money correctly. You should KNOW you can afford something and you should KNOW the balances on your credit cards. And to take this one step further, you should KNOW how much that item will really cost you in the long run after interest is calculated on the money your borrowing to purchase it.
This is where Self-Control comes into play. Too many people use shopping as a way to make up for other deficiencies or short falls in their lives. The "I deserve it" attitude plays a huge role in this common problem. When you take a good close look at your financial situation as a whole, I'm fairly certain that you have thought these thoughts at one time or another. And as it has been said before "your past decisions are a direct result to your future problems". This is where the cycle needs to be stopped.
Most people would be surprised how easy it is to manager your income correctly. But self-control is key. If you continue to make the bad financial decisions based on the these three key thoughts then your future will continue on just as you past did. To make a change you must change the way you think and how you manage your finances. If your thinking to yourself "I have it all under control" just look at your net worth....or if you don't know that....look at the amount of debt you have and honestly tell yourself what you have to show for it.
Financial Self-Control- Practice it, Love it and it will reap great rewards, ignore it and you will continue on the path you already created. More debt, more insecurity and continued servitude.
Thoughts to avoid following:
1. "I think i can afford it"
2. "I deserve it"
3. "I think I have room on my credit card"
please follow me at www.facebook.com/paycheckdistributioncoach
Paycheck Distribution Coaching has been created to help stop this vicious cycle. If you ever say or even think these words while your shopping, then your not managing your money correctly. You should KNOW you can afford something and you should KNOW the balances on your credit cards. And to take this one step further, you should KNOW how much that item will really cost you in the long run after interest is calculated on the money your borrowing to purchase it.
This is where Self-Control comes into play. Too many people use shopping as a way to make up for other deficiencies or short falls in their lives. The "I deserve it" attitude plays a huge role in this common problem. When you take a good close look at your financial situation as a whole, I'm fairly certain that you have thought these thoughts at one time or another. And as it has been said before "your past decisions are a direct result to your future problems". This is where the cycle needs to be stopped.
Most people would be surprised how easy it is to manager your income correctly. But self-control is key. If you continue to make the bad financial decisions based on the these three key thoughts then your future will continue on just as you past did. To make a change you must change the way you think and how you manage your finances. If your thinking to yourself "I have it all under control" just look at your net worth....or if you don't know that....look at the amount of debt you have and honestly tell yourself what you have to show for it.
Financial Self-Control- Practice it, Love it and it will reap great rewards, ignore it and you will continue on the path you already created. More debt, more insecurity and continued servitude.
Thoughts to avoid following:
1. "I think i can afford it"
2. "I deserve it"
3. "I think I have room on my credit card"
please follow me at www.facebook.com/paycheckdistributioncoach
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