Unfair Comparisons: Keeping Up with the Joneses

There is a natural tendency to compare ourselves with others. In some instances, this isn’t necessarily a bad thing—comparing ourselves with others can drive us to be better. Some of the greatest athletes and minds in the world succeeded because they compared themselves to others. However, comparison also has a downside. This is particularly true when it comes to material possessions.

Why do we compare ourselves to others?

There is no one definition of success and there is no absolute way to measure it. If we don’t have a clear definition of how we define it internally, we often look for external signs that we’re doing ok by comparing what we have to what those around us have. The problem with this is that it is an endless and unwinable game. There will always be someone with more. Chances are we will continue to measure our success by comparing ourselves to others, but the good news is that there are three things we can do to avoid the downside of doing so.

Know what success means for you.

The most important thing you can do is to clearly define and write down what success means for you. Completing this exercise provides us insights into what drives us and can act as a compass when we catch ourselves making unrealistic comparisons. It may be that owning a six-bedroom house and a pool does mean success for you, and that’s Ok. What isn’t OK is deciding that success means a six-bedroom house and a pool because the neighbors only have a five-bedroom house and a hot tub.

Pay attention to how the media is affecting your buying decisions. It used to be that we were just trying to keep up with the Joneses—those in our immediate vicinity. The media has increased our comparison pool beyond the Joneses next door to every fictional family in every sitcom and drama on two hundred channels. Add to this the myriad Do-It-Yourself shows that teach you how to get a new bathroom for under $1000 when your old bathroom is functions just fine. We aren’t preaching the evils of the television. We are, however, asking you to pay attention to how what you watch affects your buying decisions. If you feel like going on a shopping spree after watching What Not to Wear you may want to avoid it in the future. Choose activities that build relationships In this materialistic world, sometimes we default to activities that cost a lot of money and aren’t very satisfying anyway. The most satisfying activities usually involve experiences that allow us to build relationships with our family and friends. Having friends over and cooking a meal together can be a much richer experience than simply going out to eat. Look at how you’re spending your disposable income and assess how satisfied you are with your activities. If you’re below 70%, come up with some new ideas. Finally, be vigilant and stick to your guns.

Knowing is half the battle. The other half is action.

Take a minute during your planning and goal-setting time to evaluate how you’re doing. When you catch yourself making comparisons with others, are you mentally referring back to your personal definition of success? Are your activities satisfying? Is there anything you need to quit watching that encourages comparisons to others? Keeping these unrealistic comparisons at bay and looking inward instead of outward will encourage a much more satisfying and fulfilling life.

www.secretbudget.net

The Most Important Discussion after the Most Important Decision

Engaged couples spend a lot of time thinking about merging physical assets, points of view, and expectations for the future, but many omit the all-important discussion on how money will be handled within the marriage. The number one issue couples fight about is money, so being on the same page from the beginning can avoid a lot of conflict later on.

In a perfect world, couples would agree on things like how credit cards will be used, what sort of savings and investment plans should be in place, and how to stick to a budget, but in reality, that rarely happens. But with a straightforward conversation before the joint account is opened, five major mistakes can be avoided.

Mistake #1: Mismatched financial goals

It isn’t romantic, and may seem untimely, but it is never too early to talk about long-term financial goals. Couples should have an idea of when they would like to retire and what it will take to meet this goal. This includes when and how much they are going to contribute to superannuation and retirement funds, disability insurance, wills, and other joint assets. Both partners should have a clear understanding of the assets and who holds them, understand where the documentation is kept, and be clear on how they will be handled in the future.

Mistake #2: Overspending

Going from one household and no accountability for how money is spent to a joint household with a lot of accountability can be difficult. Different values, priorities, and spending habits make overspending highly likely a meeting of the minds when it comes to spending. Couples should decide on a spending limit that, if approached, requires a discussion. For example, if one partner wants to buy new golf clubs for $500 but they agreed to a spending limit of $300, a discussion would be needed before the clubs were purchased.

Mistake #3: Skipping the rainy-day fund

Bathrooms flood, people get sick, jobs get lost, and acts of God happen. Households living pay to pay have little recourse aside from credit when the unexpected occurs. Couples should agree in the beginning of their marriage to build up a rainy-day fund above and beyond their retirement accounts that is equal to at least three months’ salary. This money should be kept in a safe and liquid form (ie.., no real estate, or heavy penalties for accessing it) and should be used ONLY in case of emergency. Couples should agree on the use of this money before any of it is used.

Mistake #4: Pretending the budget doesn’t exist

All couples should have a budget and stick to it. When most people think of budgeting, the word tedious comes to their minds, but budgeting can be liberating. Setting boundaries about money fosters communication between partners, keeps partners focused on both long and short term financial goals, and can even spark creativity by forcing couples to come up with very inexpensive or even free entertainment when the budget shows that there is no more money at the end of the month. Couples should set aside time every month to take a look at the budget and designate one partner as the keeper of the spreadsheet.

Mistake #5: Living beyond your means

Even when couples have the same spending habits, use credit the same way, and have no disagreements about long-term financial goals, they can still live well beyond their means. The past year has taught us a lot about the dangers of taking on more debt than can be handled. Couples should make living below their means a way of life.

The money discussion is the most important discussion an engaged couple can have. Making sure they communicate well about something that most people take very seriously will hopefully set the tone for a long and happy life together.

www.secretbudget.net

Untidy Handbags cost you money!

Is your bag messy? Get organised and save money!

How does an untidy handbag cost you money?  Here some examples…

* If you can’t find your mobile phone and you miss the call… you have to pay to retrieve the message and then pay again to return the phone call!

* Can’t find your lipgloss?

* Can’t find the tissues?

* Where is that pen?

* I need to write something down…

Be prepared, get organised and have useful items in your handbag so you are not impulsively purchasing new items because you can’t find them.

Here are my suggestions -

* Get a small pencil case and stock it with pens.  Keep the pencil case in your handbag.  WHY?  How many times have you been on the run and needed a pen and bought one?

* Find a small cosmetic bag (usually found in the bottom of my bathroom cupboard!) and put some lipgloss and your favourite lipstick in it.  Also pop in some lip balm.  WHY?  How many times have you lost your lippy in the bottomlessness of your handbag and bought a new one?

* Buy a handbag that doesn’t have black lining.  The lighter the lining inside, the easier it is to find stuff!

* Make sure your handbag has pockets on the outside for easy access to mobiles.  (deep pockets at the front of the handbag are safest)

Visit www.secretbudget.net to add your tips and ideas for saving money!

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Living Within Your Means: Do you know if you do?

Living within your means is more than just a zero sum game. If you successfully spend less money each month than you make, good for you—you’re actually ahead of about 75% of the population. But those who truly understand financial freedom know that it’s conscious (yet rewarding) work to stay on top of your finances. Reflect on the following questions to evaluate how well you live within your means.

1. I know exactly how much money is in my savings (and spending!) accounts. The first step to living within your means is understanding exactly what your means are. Be aware of your balances and cash flow. With online and automatic bill pay it is easy to lose track.

2. I have a monthly budget that I stick to religiously. Make sure you understand how much it costs you to simply exist. Outline your monthly bills, create a budget, and stick to it!

3. I follow the 24-hour rule. The 24-hour rule means that when you want to make a purchase that is not in your budget, you take 24 hours to determine your true need/want for the purchase. Waiting 24 hours ensures that you do not make impulse buys that you will later regret. For bigger purchases, such as cars, you may want to give yourself an entire week.

4. I set aside money every month. Those who truly live within their means understand the importance of rainy day funds. Aside from Superannuation Funds or 401Ks and other non-liquid assets, consider a good old-fashioned savings or money market accounts. The earned interest may be low, but they’re perfect for emergencies or even family vacations or other large purchases.

5. I recommend keeping low or zero balances on my credit cards and pay them off religiously. We live in a credit society. Having healthy credit is important and keeping low balances on your credit cards do not only increase your credit score, but also your sense of well-being.  If you can avoid them altogether – even better!

www.secretbudget.net

How Should I Buy – Cash or Credit?

Use cash from your Personal Budget Organiser

This is a guest post by Amanda McCall, Avery Financial

In spite of the current economic situation, we are encouraged by the Government to still buy and we will still buy. So how is it best to buy – cash or credit?

Cash is still king – you have more bargaining power and you can negotiate prices with retailers as they don’t have to pay additional merchant fees. Cash doesn’t leave you with a credit card debt and you avoid fees and charges.

Paying by credit card, however, can lead to more debt and more financial stress. If you do pay your credit card off in full each month – I can see no reason why you wouldn’t use your credit card. Credit cards can provide some safety – no lump sums of cash to carry around and if you lose your credit card you can report it stolen. If you lose cash the chances of getting it returned are low.

I believe there are 2 important questions you need to ask yourself prior to making the decision to buy:

· Do I need this? and  Can I afford this – be it cash or credit.

Experience tells me that the euphoria of a purchase usually only lasts a few days or weeks at the most. I practice a “sleep test” – if I see something I “need” and I can afford it and I still have the “need” 48 hours later -I buy it. Often times this “need” has gone and I’ve saved myself some money.

Another option is to buy using Interest Free terms. I recommend to anyone using these types of facilities to divide your total purchase by the number of months you have interest free and pay this off monthly. This ensures your purchases are paid off in the interest free period and you won’t end up with any nasty surprises if you can’t pay the total amount at the end of the term. Interest Free term loans often have a setup fee ($25) and a monthly service fee ($2.95). This adds to your purchase price for the convenience of paying for your purchase over a longer period.

Credit Cards and Interest Free Terms are not designed to help you save, they encourage you to spend more. I would advise you to budget and purchase any items with cash.

www.averys.com.au

Respect your money and it will respect you

With the New Year here it’s a great time to get organised and de-clutter. The saying, “a place for everything and everything in its place” is very true! As you place the item in its place, you are valuing it and respecting it… Now, apply that to your money.

1. Honour your money. You’ve worked for it, now look after it and use it with intent. How do you handle your money? Do you keep it neatly sorted or is it just jammed in? Handle your money as though you value it. Use cash as much as possible, we are more attached to it and value it more than EFTPOS or Credit Cards.
2. Be Conscious. Know how much money you are earning and how much you are spending. Be conscious of your spending and avoid impulse purchases. Stay on track to achieving your financial goals and dreams.
3. Create Balance and be organised. Reconcile your bank account, pay your bills on time, have a budget and a financial plan for your future. It is important to know your financial position with all debts and assets so that you don’t get any nasty surprises and so you can organise your money in a way to help you achieve your dreams. Have all of your accounts organised and ready for payment and then file away for easy reference.

Money is a form of energy and it needs to flow through you life – not just land in it! Anything to do with your money needs to be valued and respected for it to grow.

If you are interested in attending our latest seminar; Back to Basics – Managing the Household Budget – please send your enquiry directly to michelle@secretbudget.net

www.secretbudget.net

What’s in your wallet?

I’m a fan of Feng Shui and I have studied it for many years. I believe that we’re all energy and everything we use and do is energy. I also believe that clutter fills up our minds with mess and keeps us stagnate.

Do you want to attract wealth and abundance? Have a look inside your wallet – do you have a chunk of receipts? Can you easily find your cards easily? Do you have cards in there that you don’t use? Is there any cash? Now is the time to clear out your wallet and get rid of the dead energy and get organised. Clutter is dead energy and you don’t want dead energy in your wallet! So, let’s get started…

• Is your wallet clean and in good working order – no broken clips or zips
• If you need to purchase a new wallet, go for these colours
  • Green – for vitality and growth
  • Purple – colour of wealth
  • Red – most auspicious colour
• Go through all cards and loyalty cards and throw out those that you don’t use
• Organise them in most frequently used so they’re easy to get at
• Clean out all receipts on a weekly basis
• Make sure you always of $5 in your wallet – an empty wallet is considered bad luck
• Empty coins out on a daily basis

   

See my other blog about why it’s important to have a budget.

You can purchase a Personal Budget Organiser at www.secretbudget.net. A ladies wallet with extra sections to organise your budget! 50% Clearance Sale on NOW!

Planning and Preparation – Keys to Money Success

Hello – Michelle here from www.secretbudget.net.  Our vision at secretbudget.net is to “Provide the freedom for us and others to live an enriched life.”  We do this through providing FREE access to budgeting tools and money saving tips and ideas.

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Start Planning Today!

I’ve been doing a lot of market research and polling over the last few weeks and am really very surprised when I hear people say things like, “I don’t need a budget”, “I have an idea of my budget, it’s in my head” and “I did a budget three years ago”.

Firstly, I believe everyone does need a budget of some kind, it’s vital that you can determine there is more money coming than going out.  A budget is about knowledge, not about restriction.  It’s important to know where your money is going and if you are on track with your financial goals.  I also recommend that you review your budget regularly – things change all the time, understand and accept that.  I’m even more surprised that with what is going on in the world, some people are not watching their pennies.  This “global crisis’ may or may not have affected you personally just yet, but what if it does done the track.  For me, I know that I would rather be prepared than be in the middle of it saying, “gee, I wish I’d had better control of money a few months ago.”

It’s during uncertain times like these I recommend just focusing on your own situation which you can change, rather than what may be happening on a large scale. Now is the time to plan and prepare and I suggest starting with a daily spending tracker.

The daily spending tracker was designed to get a realistic picture of what’s happening with your money, every day. It’s really important to track every day because it so easy to forget if you leave it for 3 or 4 days.  Please do it everyday for 4 weeks to get a clear picture of your spending habits.  It’s a great way to see where money “slips through the cracks”.  Did you know that a coffee and a paper everyday is over $2,000 a year?!  You can quickly find $1,000 just by cutting this in half!

I have the trackers available at the site and they’re broken down into four weeks.  You can get week 1 here.

So, this is step 1… Preparation.  Not only will you be able to determine where you are overspending, but it will also help you to prepare your budget.

Next time I’m going to talk about Planning.  In the meantime, if you would like some FREE money savings ideas, register at www.secretbudget.net and you can access our “secret stash”.

Don’t forget, a Personal Budget Organiser will keep you on track with your budget every time you open your wallet.  You can see more info here

Times will get tougher

It’s great to see our government doing things to protect our savings accounts and stimulating the economy with bonuses to various sectors, but I still believe we’re in for tough times ahead.  I remember the “recesssion we had to have” back in the 90’s, this was just Australia.  What concerns me is that this latest crisis is global and we haven’t seen it before.

I mix in lots of different circles including small business owners, large business owners, financial advisors, doctors, IT professionals, teachers, admin staff, single parents…  the messages are very mixed.  Some of them are “cashing in” and selling their homes and moving to rentals, others are taking on major property development projects.

So, where does this leave us?  As you may have read in a blog of mine a few weeks ago I think we need to get back to being frugal.  No more “keeping up with Jones’s”.  It’s time to tighten the belt and hang on to your job.  I would also highly recommend that you put any bonus payments from the government directly onto your debt!

Have a look at www.secretbudget.net for great ways to save money, be frugal, budgeting tools etc…  We’re here to help!  If you have any questions or would like us to have more info available on the site, please let us know at info@secretbudget.net

I would love your comments on the situation, especially my readers in the US and UK!

Budget is not a dirty word!

Budget

With the lead up to Christmas, most of us a reviewing our finances and I thought I would talk briefly about the reasons for doing a budget and explain what an actual budget is.

A budget gives you…

*Direction and focus

*A snapshot that you can present to a lender for finance

What is a Budget?

A budget is a plan, a goal. It’s a monitoring tool for your finances. Most budgets cover a 12 month period and are broken down into income and expenses. Some software programs have a budget section built in, some use a spreadsheet. You can go to http://www.secretbudget.net/external/budget-planner.html

When it comes to the end of the first month of expenditure, have a look at your budget and do a comparison. Determine what was over and what was under or if using a percentage, where the budget is tracking based on when the expenses and income are come in during the year.

Why do a Budget?

My three P’s; Planning – Preparation – Prosperity!!

The idea of doing a budget is so you can see more clearly and plan for the year ahead, it’s a way of thinking ahead, financially. You need to predict your income and expenses for the year to ensure that you are staying above the line and finishing with a profit (or surplus) for your community organisation! It is also a great tool to have on hand for any financial assistance you may need to apply for. It demonstrates that you’re serious and that you have a plan/goal in mind!

When should you do a Budget?

Anytime at all! Most people walk around with their budget on the back of an envelope or in their head! Having taken the time to sit down and enter all expenses.

Who should do the Budget?

Being single parents, it’s up to you! Remember, the responsibility you are taking with your finances will be seen by your children. Involve them where you can.

How do you do a Budget?

* The first place to start is with your expenses. Gather the previous 12 months bills/invoices.

* Predict income. Use last year’s income and discuss how this will improve.

* Determine that you are earning more than you spend and then start setting some goals!

My best tip – Reduce expenses by 10%, increase income by 10% and you’ll be up 20%!

Please contact me if you would like to cover a particular area in next month’s newsletter michelle@secretbudget.net

You can register for free at www.secretbudget.net for FREE (value $25) access to the database of savings tips and ideas!