Many years ago when another enthusiast and I started the Family Budgeting Service Inc., we were heavily involved in trying to get people out of the financial cart . Time and time again I would go out with a budget form to a couple’s home, listen to all the reasons why the heavens had fallen in – how it was everybody’s fault but theirs – and how it was impossible to repay the multitude of debts and hire purchases.
How I kept my cool in some of these ridiculous situations amazes me. But I would cajole and persuade until finally we would arrive at a small surplus of income over expenditure. I would then add up the total of all debts, divide by the available surplus which duly produced the wonderful news that they would be clear of debt and say five years.
Always that would be too long a time-span. They would start off with good intentions but eventually fall by the wayside. After a few of these failures, I injected a bit of steel into my soul. I would arrive on their doorstep, make tracks for the kitchen table, turn the telly off, set them down in front of me and fire questions like a machine gun. In no time I would have all the information without having to listen to the historical diatribe of woes. I would then say, “You got yourselves into the cart but just as quickly you can get yourselves out again – would you like to go on a crash program?” Invariably they would say yes. I would strike while iron was hot and show them how to curtail all extraneous spending and live on an economy diet. That would enable us to produce such a good surplus that many times the time-frame would be reduced to a matter of months.
The interesting aspect was that when a crash program was instigated I didn’t have one failure because the light at the end of the tunnel was more visible and attainable.
When I graduated to using computers they enabled me to mellow because it somehow wasn’t me telling them what to do, but the results on the screen revealed what was necessary to produce the desired action. Often one partner would say to the other, ”Is that what’s wrong with our finances,” as if suddenly all was revealed in a blinding flash. Invariably he would continue, “I’ll have to work some overtime, or you had better get a part time job.”
When they had run out of steam, I would offer the advice that it’s fifty times easier to reduce overheads than generate more income. Then we would go through the pruning process on the screen and at no time the shortfall would be turned into a generous surplus.
Finally the crash program to get rid of all the debts could then commence in earnest knowing that provision was made for every item of necessary expenditure for the ensuring twelve months.
Sunday, October 12, 2008
Monday, September 15, 2008
DECISIONS .. .DECISIONS
Some years back I was wanting to prepare seminar material before racing down country so I asked my secretary, who happens to be my wife, to fend off any requests for an appointment until my return the next week. But she relented and booked in an evening appointment. A 48 year-old man who had worked over 21 years as a qualified tradesman in the one workplace was summarily called in by management and offered three alternatives:
1. To leave and take redundancy money of just over $25,000.00.
2. To be retrained and eventually be assigned another task and be relocated in another area.
3. To take a lower paid job in the same place and receive a payment of around $5,000.00 as compensation.
Well, he and his wife came and we had a four-hour session. To solve his problem, and it really was a problem as he literally didn’t know which way to jump, I could have used a few of the decision processes that people use.
Firstly the Binary System. This is a computer term which uses the method of either on/off or yes/no. Yes, we will take redundancy; no we won’t take redundancy. Yes, we will retrain; no we won’t retrain. If this is a system you use, you will eventually make a bad decision.
The next is the Voting System. Ask as many people as you can what they think you should do then take a vote.
Or we could use the Intuitive System. “I just have a very strong feeling that I should take redundancy,” or, “I had a dream last night that I was sitting in a rocking chair enjoying the scenery. That must mean redundancy.”
Well I’m not enamoured with any of these puerile systems and prefer to do a feasibility study using the Pros and Cons method.
I quizzed them about retirement. Would they be content to stay in the same house and locality? Had he any skills that would enable him to turn a hobby into a small income? Did they have a mortgage free house? If not would they repay the mortgage if they took the redundancy money? Could they exist on the unemployment income without touching capital and many other questions. It was fascinating as we went through all the options how one started to strengthen with many pros while the others racked up more and more cons.
By the end of the evening he knew without a shadow of doubt what he was going to tell his boss the next day. Then we completed the financial plan (using the unemployment income) balancing with a reasonable surplus. It was rather nice to receive a telephone call of thanks the next day by someone who had considered all the options, weighed up all the consequences, and then made a firm decision.
By the way, I knew right at the start which option they should take and could easily have completed the interview in a quarter of the time. But then it would have been a decision made by external influence rather than considering every angle and together planning the future.
Can you guess which option they took?
1. To leave and take redundancy money of just over $25,000.00.
2. To be retrained and eventually be assigned another task and be relocated in another area.
3. To take a lower paid job in the same place and receive a payment of around $5,000.00 as compensation.
Well, he and his wife came and we had a four-hour session. To solve his problem, and it really was a problem as he literally didn’t know which way to jump, I could have used a few of the decision processes that people use.
Firstly the Binary System. This is a computer term which uses the method of either on/off or yes/no. Yes, we will take redundancy; no we won’t take redundancy. Yes, we will retrain; no we won’t retrain. If this is a system you use, you will eventually make a bad decision.
The next is the Voting System. Ask as many people as you can what they think you should do then take a vote.
Or we could use the Intuitive System. “I just have a very strong feeling that I should take redundancy,” or, “I had a dream last night that I was sitting in a rocking chair enjoying the scenery. That must mean redundancy.”
Well I’m not enamoured with any of these puerile systems and prefer to do a feasibility study using the Pros and Cons method.
I quizzed them about retirement. Would they be content to stay in the same house and locality? Had he any skills that would enable him to turn a hobby into a small income? Did they have a mortgage free house? If not would they repay the mortgage if they took the redundancy money? Could they exist on the unemployment income without touching capital and many other questions. It was fascinating as we went through all the options how one started to strengthen with many pros while the others racked up more and more cons.
By the end of the evening he knew without a shadow of doubt what he was going to tell his boss the next day. Then we completed the financial plan (using the unemployment income) balancing with a reasonable surplus. It was rather nice to receive a telephone call of thanks the next day by someone who had considered all the options, weighed up all the consequences, and then made a firm decision.
By the way, I knew right at the start which option they should take and could easily have completed the interview in a quarter of the time. But then it would have been a decision made by external influence rather than considering every angle and together planning the future.
Can you guess which option they took?
Sunday, September 14, 2008
SLOWLY DOES IT:
Motivational books abound telling us how to be successful in life – the main emphasis being that success is equated with how much money we have accumulated. They may endeavour to disguise the base desire to be a millionaire but the suggestion that if we had a million or two all our troubles would be over appeals no end to avid readers. Castles in the air can produce an airy-fairy attitude of let’s get rich quick, hence the popularity of the TAB, lotto, football pools etc..
Money is really only good for what it can do. We need sufficient of it to run our household but it shouldn’t be a main goal just to accumulate riches. Misers are never happy and contented people and they won’t be remembered just for having a lot of money. When a multi--millionaire died someone asked, “How much did he leave?” The answer was, “Everything!” But the great philanthropists are remembered with gratitude for having given this world a legacy that endures. So, if you want to make your mark in this world, you need to learn how to work less and get more done. Most of us work harder than we have to in order to reap the benefits life has to offer. People can lock themselves into circumstances which make it imperative that both partners have to work too hard just to stay afloat.
Mastering our personal finances is the key to succeeding in this life. It’s all very well taking speculative risks but even a minor disaster can tip the scales and lock us into a debt situation. We are all apt to take risks now and then but some people don’t do their homework and try a feasibility study to see what the end result of their action will be. We all hear about and envy the entrepreneurs who take enormous risks, pull them off, and live in the lap of luxury. But seldom do we hear about those who fail and litter the bankruptcy courts.
My advice is to beware of the get-rich-quick syndrome and look for long-term stability that comes with adequate financial planning. To always have a sufficient percentage of unallocated income to cover any future contingencies and to gradually improve the financial position year by year is the best proposition. In this way while we won’t rise to any great financial heights we will not suffer the depression and despondency of those who have bitten off more than they can chew and failed financially.
Discouragement is the one commodity that we cannot afford to live with for any length of time.
Money is really only good for what it can do. We need sufficient of it to run our household but it shouldn’t be a main goal just to accumulate riches. Misers are never happy and contented people and they won’t be remembered just for having a lot of money. When a multi--millionaire died someone asked, “How much did he leave?” The answer was, “Everything!” But the great philanthropists are remembered with gratitude for having given this world a legacy that endures. So, if you want to make your mark in this world, you need to learn how to work less and get more done. Most of us work harder than we have to in order to reap the benefits life has to offer. People can lock themselves into circumstances which make it imperative that both partners have to work too hard just to stay afloat.
Mastering our personal finances is the key to succeeding in this life. It’s all very well taking speculative risks but even a minor disaster can tip the scales and lock us into a debt situation. We are all apt to take risks now and then but some people don’t do their homework and try a feasibility study to see what the end result of their action will be. We all hear about and envy the entrepreneurs who take enormous risks, pull them off, and live in the lap of luxury. But seldom do we hear about those who fail and litter the bankruptcy courts.
My advice is to beware of the get-rich-quick syndrome and look for long-term stability that comes with adequate financial planning. To always have a sufficient percentage of unallocated income to cover any future contingencies and to gradually improve the financial position year by year is the best proposition. In this way while we won’t rise to any great financial heights we will not suffer the depression and despondency of those who have bitten off more than they can chew and failed financially.
Discouragement is the one commodity that we cannot afford to live with for any length of time.
Friday, September 12, 2008
HOW TO EVALUATE A GOOD BUY
Let me share with you a few rules that have saved us a mint of money over the years. Firstly I must confess to being a bit of a spendthrift. It’s quite disastrous for me to enter a hardware shop. I can see so many good reasons to buy a power tool. I will be able to make endless works of art for the house and save vast amounts of money by not having to call in a technician.
Years ago my wife suggested that we check with each other before buying any item of a capital nature above $20.00. I realized that this would have an inhibiting factor on my buying escapades but nobly assented to the proposition. It has been one of the best rules governing my spending and has enabled us to save for the larger goals instead of frittering our money away on the odds and ends.
The second rule is that we took it in turns to decide what to buy with our special savings money as it builds up. Again my wife suggested a limit of $2,000.00 just in case I had big ideas to save up for a BMW. Over the years it has been real fun to work out what month each partner would be able to achieve his or her goal. We would invariably have a little celebration of some kind to mark the achievement so both of us could enjoy the purchase. Now that our income has shrunk we have graduated to writing out our individual financial goals separately, then coming together to merge them, and finally putting them into order of priority. Then we save up to achieve these one by one not forgetting the treat which marks the occasion.
The third rule has saved a mint of money. We call it the “delayed action” rule. When the shop assistant has made his pitch we say, thanks very much, we’ll be back with within an hour after we have discussed the pros and cons. Time and time again the decision is not to buy. The reason for the delayed action is to give us opportunity to coolly evaluate the purchase without the pressure of the salesman and also to look around for another make which may be a better bargain.
Here are a few questions to ask yourself when considering a purchase.
Do I really need it? Just because it has a bargain price tag doesn’t mean you need it.
Is the price reasonable? Don’t be afraid to check around.
Is this the best time of the year to buy? Prices get inflated around Christmas time.
Can the appliance be serviced? It may be a throwaway appliance that would be a bad buy.
Compulsive or impulsive buying doesn’t reap happiness in the long run.
Years ago my wife suggested that we check with each other before buying any item of a capital nature above $20.00. I realized that this would have an inhibiting factor on my buying escapades but nobly assented to the proposition. It has been one of the best rules governing my spending and has enabled us to save for the larger goals instead of frittering our money away on the odds and ends.
The second rule is that we took it in turns to decide what to buy with our special savings money as it builds up. Again my wife suggested a limit of $2,000.00 just in case I had big ideas to save up for a BMW. Over the years it has been real fun to work out what month each partner would be able to achieve his or her goal. We would invariably have a little celebration of some kind to mark the achievement so both of us could enjoy the purchase. Now that our income has shrunk we have graduated to writing out our individual financial goals separately, then coming together to merge them, and finally putting them into order of priority. Then we save up to achieve these one by one not forgetting the treat which marks the occasion.
The third rule has saved a mint of money. We call it the “delayed action” rule. When the shop assistant has made his pitch we say, thanks very much, we’ll be back with within an hour after we have discussed the pros and cons. Time and time again the decision is not to buy. The reason for the delayed action is to give us opportunity to coolly evaluate the purchase without the pressure of the salesman and also to look around for another make which may be a better bargain.
Here are a few questions to ask yourself when considering a purchase.
Do I really need it? Just because it has a bargain price tag doesn’t mean you need it.
Is the price reasonable? Don’t be afraid to check around.
Is this the best time of the year to buy? Prices get inflated around Christmas time.
Can the appliance be serviced? It may be a throwaway appliance that would be a bad buy.
Compulsive or impulsive buying doesn’t reap happiness in the long run.
Wednesday, May 14, 2008
RISK TAKING VERSUS SECURITY
I was jolted while sitting in church to hear the minister say:
“Youth is prepared to take risks – older people stick with security.”
As I look back over my life I could see the accuracy of that statement. I took risks in those early days that I wouldn’t dare to now. However there must be a reasonable balance in all things and I’d like to look at both sides of the coin to discover a pathway that is neither two rocky to negotiate nor two smooth to lack excitement.
When I was dishing out housing loans as a bank manager and a young couple was facing me keen to purchase their first house, the easiest thing to do was to grant the loan to make their dreams come true. But bitter experience always made me dig under the surface to determine their capacity to cope with the extra mortgage and interest repayments, rates and insurance , repairs and maintenance. Invariably this aspect hadn’t entered their young heads. The availability of mortgage monies to purchase the house property was their prime consideration. Nor would they have done their sums correctly and added on all the hidden costs of settlement.
So I would have to go through the tedious task of working out the budget forecasts, add up proposed income and expenditure to discover whether there would be sufficient surplus to cope with any subsequent aberrations. Often I would have to say that on the face of it they could just cope but the risk factor was extremely high. When asked if they still wanted to go ahead with the transaction invariably the young couple would say, yes we’ll have a go! But I noticed that older people would reconsider and plump for a lower price house to give them a safety margin.
With a reasonable predictable economy the risk factor is lessened but these days with interest and inflation going up and down like yo-yos, there certainly needs to be a larger safety margin.
Even though my banker’s instinct would want me to deny a young couple their mortgage money, after warning them of the risk I would say, “if you don’t have a go now, you probably will never own your own home.
Well what about security? Should we go through life always financially solvent, never using credit, only buying what we can afford and taking no risks whatsoever? Many would say that would be a humdrum existence
But in hindsight I believe financial freedom is the only way to go. If we plan our spending to achieve our financial goals neither using credit nor taking excessive risks we may never rise to any great heights financially but money worries will never be our lot.
Then we can take risks in other areas. Maybe we will volunteer for community work, learning how to be a good secretary or treasurer of some committee. Trying some sports like skydiving or skiing. Learning skills in mechanics, electronics or woodwork.
Life can be exciting or dull whichever way you want it.
However the tortoise only makes progress when he sticks his neck out!
“Youth is prepared to take risks – older people stick with security.”
As I look back over my life I could see the accuracy of that statement. I took risks in those early days that I wouldn’t dare to now. However there must be a reasonable balance in all things and I’d like to look at both sides of the coin to discover a pathway that is neither two rocky to negotiate nor two smooth to lack excitement.
When I was dishing out housing loans as a bank manager and a young couple was facing me keen to purchase their first house, the easiest thing to do was to grant the loan to make their dreams come true. But bitter experience always made me dig under the surface to determine their capacity to cope with the extra mortgage and interest repayments, rates and insurance , repairs and maintenance. Invariably this aspect hadn’t entered their young heads. The availability of mortgage monies to purchase the house property was their prime consideration. Nor would they have done their sums correctly and added on all the hidden costs of settlement.
So I would have to go through the tedious task of working out the budget forecasts, add up proposed income and expenditure to discover whether there would be sufficient surplus to cope with any subsequent aberrations. Often I would have to say that on the face of it they could just cope but the risk factor was extremely high. When asked if they still wanted to go ahead with the transaction invariably the young couple would say, yes we’ll have a go! But I noticed that older people would reconsider and plump for a lower price house to give them a safety margin.
With a reasonable predictable economy the risk factor is lessened but these days with interest and inflation going up and down like yo-yos, there certainly needs to be a larger safety margin.
Even though my banker’s instinct would want me to deny a young couple their mortgage money, after warning them of the risk I would say, “if you don’t have a go now, you probably will never own your own home.
Well what about security? Should we go through life always financially solvent, never using credit, only buying what we can afford and taking no risks whatsoever? Many would say that would be a humdrum existence
But in hindsight I believe financial freedom is the only way to go. If we plan our spending to achieve our financial goals neither using credit nor taking excessive risks we may never rise to any great heights financially but money worries will never be our lot.
Then we can take risks in other areas. Maybe we will volunteer for community work, learning how to be a good secretary or treasurer of some committee. Trying some sports like skydiving or skiing. Learning skills in mechanics, electronics or woodwork.
Life can be exciting or dull whichever way you want it.
However the tortoise only makes progress when he sticks his neck out!
Tuesday, May 13, 2008
REAPING WHAT WE SOW
Some young people need to wake their ideas up because what they are sowing now, they will be reaping in the future. Parents also need to realize that maybe they are unconsciously allowing bad habits to form in their children that will be difficult and sometimes impossible to eradicate in the future. Inculcating good financial habits in children does not come easy. There’s not much practical information available these days and most parents have only a vague idea of how to go about training their children in financial expertise.
Take weekly allowances for instance. Some children don’t get any, some have to earn it, some get it gratuitously, others ask or demand at the drop of a hat. Some parents put the allowance in a Savings Account for their children, others invest it in Life Policies, Shares etc..
One thing for sure, your children watch you like a hawk – they observe how you budget and spend your money. Unfortunately they never seem to hear much about the income side but they certainly see the ease with which money seems to flow in a never ending supply from purses, cheque books, credit cards or just on the never- never.
No wonder they learn an ‘easy come, easy go’ attitude. I would be surprised if 5% of families have at least an annual family conference when Dad explains how his budget scheme works, how he apportions a set amount to cover committed expenditure, how much Mum gets for housekeeping and her allowances. How much he retains for his allowance and contingent, variable items such as repair bills, dental and medical etc. How much for holidays and the all important factor, how much is left over to achieve the immediate goal. Wouldn’t that be a great start for your children (that is if you are operating a good financial system).
Richard Halverson wrote:
“Each of your children will meet an old man or woman someday. Down the road ahead – 30, 40, 50, 60 years, waiting for them to catch up. What kind of person will they meet will depend upon your input and their own. They may catch up with a generous, likable person who has financial stability and plenty of friends. Or they might meet up with a dried up, cynical old miser or spendthrift, soured, friendless, alone. The kind of person they meet will be the sum total of all they think, do and say from now until then. A point to remember is that these things don’t always tell immediately but they will show up sooner than they think. Time to take care of the old man or woman is right now because the day comes when it is too late.”
Habits formed in childhood usually set like concrete. I know you have good intentions to get your own household financial plan in order then you fully intend to teach your children the necessary financial skills. Let me remind you that the road to hell is paved with good intentions and unless you schedule prime time and make this your number one goal, your children might just end up like you.
You wouldn’t want that would you? Or would you?
Better check it out
Take weekly allowances for instance. Some children don’t get any, some have to earn it, some get it gratuitously, others ask or demand at the drop of a hat. Some parents put the allowance in a Savings Account for their children, others invest it in Life Policies, Shares etc..
One thing for sure, your children watch you like a hawk – they observe how you budget and spend your money. Unfortunately they never seem to hear much about the income side but they certainly see the ease with which money seems to flow in a never ending supply from purses, cheque books, credit cards or just on the never- never.
No wonder they learn an ‘easy come, easy go’ attitude. I would be surprised if 5% of families have at least an annual family conference when Dad explains how his budget scheme works, how he apportions a set amount to cover committed expenditure, how much Mum gets for housekeeping and her allowances. How much he retains for his allowance and contingent, variable items such as repair bills, dental and medical etc. How much for holidays and the all important factor, how much is left over to achieve the immediate goal. Wouldn’t that be a great start for your children (that is if you are operating a good financial system).
Richard Halverson wrote:
“Each of your children will meet an old man or woman someday. Down the road ahead – 30, 40, 50, 60 years, waiting for them to catch up. What kind of person will they meet will depend upon your input and their own. They may catch up with a generous, likable person who has financial stability and plenty of friends. Or they might meet up with a dried up, cynical old miser or spendthrift, soured, friendless, alone. The kind of person they meet will be the sum total of all they think, do and say from now until then. A point to remember is that these things don’t always tell immediately but they will show up sooner than they think. Time to take care of the old man or woman is right now because the day comes when it is too late.”
Habits formed in childhood usually set like concrete. I know you have good intentions to get your own household financial plan in order then you fully intend to teach your children the necessary financial skills. Let me remind you that the road to hell is paved with good intentions and unless you schedule prime time and make this your number one goal, your children might just end up like you.
You wouldn’t want that would you? Or would you?
Better check it out
Sunday, May 11, 2008
FREEDOM . . . to do what?
The catchword during the immediate past has been, ”Let’s free up.”
Disciplined action has been largely done away with. No longer is the strap or cane tolerated in schools. Because there is very little discipline in the home, parents have to resort to cajoling and bribery to get some law and order in their everyday living. Politicians have leapt on the bandwagon to free up the economy by throwing out existing rules and regulations; the old has been ousted and the new regime instituted so fast that the populace is lagging behind, uncertain and apprehensive of what the future will bring
What is freedom? What does it mean to be totally free? If freedom is to have lasting value it must be contained within definitive borders. In so many cases freedom is degenerating into, “Yes, I’ll do what I want even if it means breaking, or bending the rules so long as I am pleased, satisfied and rewarded.”
But we are also free to do right and live justly. When rules are broken we not only hurt ourselves but we hurt others. When the raging sea breaks down the barrier meant to contain it, chaos reigns until justice takes over to enforce the existing rule and the wall is rebuilt even stronger.
A person, who is free, is free to live an ordered life within the limits of well-defined conscience. If everyone on a collective basis lives in similar fashion within the confines of authority we are free indeed. In this country we have more freedom than many other countries but I fear we are abusing our privileges. We’ve been free to borrow up to the hilt both nationally and privately. We’ve been free to split up with our life partner if the going gets rough. This type of freedom only seems to spawn a bucket full of problems and sorrow.
May I suggest that we are still free to decide on a new course of action for our lives and, since it will be our decision, we will have the sense of responsibility for what happens. We are rewarded with the decision when it is a good one and we should learn a lesson when it is a bad one.
You are totally free to plan your spending within your income. You are free to teach our children money discipline and skills. You are free to live on a lower income in order to save for your retirement. You are free to drive an old car even though your neighbor has a BMW. You don’t need to suffer the tyranny of others’ expectations. You are free to be honest, up front, full of integrity, free to keep the laws of the country and free to legitimately avoid tax so long as you don’t evade it.
Which freedom will you choose – to do right or wrong?
The ball is totally in your court
Disciplined action has been largely done away with. No longer is the strap or cane tolerated in schools. Because there is very little discipline in the home, parents have to resort to cajoling and bribery to get some law and order in their everyday living. Politicians have leapt on the bandwagon to free up the economy by throwing out existing rules and regulations; the old has been ousted and the new regime instituted so fast that the populace is lagging behind, uncertain and apprehensive of what the future will bring
What is freedom? What does it mean to be totally free? If freedom is to have lasting value it must be contained within definitive borders. In so many cases freedom is degenerating into, “Yes, I’ll do what I want even if it means breaking, or bending the rules so long as I am pleased, satisfied and rewarded.”
But we are also free to do right and live justly. When rules are broken we not only hurt ourselves but we hurt others. When the raging sea breaks down the barrier meant to contain it, chaos reigns until justice takes over to enforce the existing rule and the wall is rebuilt even stronger.
A person, who is free, is free to live an ordered life within the limits of well-defined conscience. If everyone on a collective basis lives in similar fashion within the confines of authority we are free indeed. In this country we have more freedom than many other countries but I fear we are abusing our privileges. We’ve been free to borrow up to the hilt both nationally and privately. We’ve been free to split up with our life partner if the going gets rough. This type of freedom only seems to spawn a bucket full of problems and sorrow.
May I suggest that we are still free to decide on a new course of action for our lives and, since it will be our decision, we will have the sense of responsibility for what happens. We are rewarded with the decision when it is a good one and we should learn a lesson when it is a bad one.
You are totally free to plan your spending within your income. You are free to teach our children money discipline and skills. You are free to live on a lower income in order to save for your retirement. You are free to drive an old car even though your neighbor has a BMW. You don’t need to suffer the tyranny of others’ expectations. You are free to be honest, up front, full of integrity, free to keep the laws of the country and free to legitimately avoid tax so long as you don’t evade it.
Which freedom will you choose – to do right or wrong?
The ball is totally in your court
Monday, May 05, 2008
ECONOMY EATING
Judged by world standards New Zealanders eat very well. It’s been estimated that we eat 72% more than is necessary for good health. With food prices constantly rising the weekly Supermarket cost is a big drain on our overall expenditure. The fact is that many families are eating the profits and wondering why there is no surplus left from their income.
Feeding a family can be either a haphazard affair or a managerial operation. With so many solo parents and wives working there is precious little time for them to set aside for planning well balanced, low-cost meals. The tendency is to opt for fast foods, pre-cooked, or easy-to-prepare meals.
Eating habits can become a very personal affair with different members of the family demanding different diets to the extent where the cook is stretched to the limit trying to keep pace with individual idiosyncrasies. I firmly believe that consistency in eating nutritious, satisfying meals can not only bring good health but also to trim the budget at the same time. Most foods need an acquired taste and if it is served up long enough with no alternatives permitted it will eventually be enjoyed.
Why not turn over a new leaf this year. Become a home executive with managerial skills in housekeeping, learning new ways to cut food costs, so that you can have a greater purchasing power for more permanent items. Just a few hints to get you going but I hope you leave me for cold eventually.
PLANNING: Perhaps the most important hour you set aside once a week is to plan your menus for the ensuing seven days. This should preferably be completed the day before you go shopping. Jot down your seven main meal menus then write out a shopping list to provide the necessary ingredients.
SHOPPING LIST: Also keep a continuous shopping list and add items as soon as they run low. You will save on emergency trips to the store to buy single items.
SUPERMARKET BUYING: Stick to your list and don’t be tempted buy unnecessary goodies. Don’t rush your shopping or shop when you’re hungry. Try to do the weekly shopping yourself. You’ll soon become an expert, quick to spot seasonal bargains in vegetables, meat, fish and fruit. Whenever possible, buy the exact amount required for the recipes. This minimizes leftovers.
RECIPES: Scan cookbooks for wholesome low-cost recipes – go easy on the meat – be lavish on rice, pastas, coleslaw and salads of all descriptions. You can’t beat a breakfast of muesli. It tastes like cardboard and needs plenty of chewing to get the juices going but it provides plenty of bulk to fill the corners until lunchtime. You can then economize on the toasts, jams, honey etc..
BECOME AN EXPERT: You have the potential – all you need is to schedule enough prime time each week to accomplish that task. But learn to develop an inquiring mind that will enable you to ferret out the shortcuts and best ideas.
Feeding a family can be either a haphazard affair or a managerial operation. With so many solo parents and wives working there is precious little time for them to set aside for planning well balanced, low-cost meals. The tendency is to opt for fast foods, pre-cooked, or easy-to-prepare meals.
Eating habits can become a very personal affair with different members of the family demanding different diets to the extent where the cook is stretched to the limit trying to keep pace with individual idiosyncrasies. I firmly believe that consistency in eating nutritious, satisfying meals can not only bring good health but also to trim the budget at the same time. Most foods need an acquired taste and if it is served up long enough with no alternatives permitted it will eventually be enjoyed.
Why not turn over a new leaf this year. Become a home executive with managerial skills in housekeeping, learning new ways to cut food costs, so that you can have a greater purchasing power for more permanent items. Just a few hints to get you going but I hope you leave me for cold eventually.
PLANNING: Perhaps the most important hour you set aside once a week is to plan your menus for the ensuing seven days. This should preferably be completed the day before you go shopping. Jot down your seven main meal menus then write out a shopping list to provide the necessary ingredients.
SHOPPING LIST: Also keep a continuous shopping list and add items as soon as they run low. You will save on emergency trips to the store to buy single items.
SUPERMARKET BUYING: Stick to your list and don’t be tempted buy unnecessary goodies. Don’t rush your shopping or shop when you’re hungry. Try to do the weekly shopping yourself. You’ll soon become an expert, quick to spot seasonal bargains in vegetables, meat, fish and fruit. Whenever possible, buy the exact amount required for the recipes. This minimizes leftovers.
RECIPES: Scan cookbooks for wholesome low-cost recipes – go easy on the meat – be lavish on rice, pastas, coleslaw and salads of all descriptions. You can’t beat a breakfast of muesli. It tastes like cardboard and needs plenty of chewing to get the juices going but it provides plenty of bulk to fill the corners until lunchtime. You can then economize on the toasts, jams, honey etc..
BECOME AN EXPERT: You have the potential – all you need is to schedule enough prime time each week to accomplish that task. But learn to develop an inquiring mind that will enable you to ferret out the shortcuts and best ideas.
Tuesday, April 29, 2008
ECONOMY LIVING
I must confess that sometimes I get bogged down with terminology and occasionally see blank stares when I’m giving a talk entitled “Planning a Simpler Lifestyle”. What is a simple lifestyle? Simple compared to what?
Some people imagine that I am advocating a hippy life style, living off their organic gardens, selling craft goods at the front gate and bartering for the commodities they cannot produce. I have a certain admiration for these hardy and innovative folk but that is not what I mean by a simple lifestyle.
Others think that it is driving a twenty year old bomb, going to the opportunity shop for clothes and salvaging anything that the might be useful someday. This again isn’t what I am on about either. I could go on because simplicity takes many shapes and forms. Baking instead of buying; turning the unused lights off; cycling instead of using the car. All these things are a part and parcel but it’s it’s not where I suggest starting. Simple lifestyle in these terms can become faddish, almost cultist.
Simple lifestyle is not a way to cop out of social relationships and responsibilities. Many of the specifics that mark simplicity might also be seen as selfishness or stinginess.
I prefer to talk about “Economy Living” rather than the simple lifestyle. When I see what people are frittering away on nonessentials and wasting precious commodities without a thought for the millions of starving people in third world countries, there has got to be something wrong somewhere. One small step taken towards economy living with the intention of sharing with those less fortunate could get our eyes off ourselves and open up exciting avenues for many who otherwise would only live for themselves. We seem to be getting oblivious to empty stomachs with the growing need for a few scraps off our well-laden tables.
I saw a statistic that really hit home to me, “If all the starving (not just the undernourished) children in the world were lined up, one behind the other, starting from your front door, the end of the queue would be 25,000 miles away. That should make us choke on our oysters and pate. But we cannot remedy other people’s problems until we have our own house in order. The right use of money includes using it properly for our own needs. Only when have done that can we turn to the aid of others. In fact it’s a balancing act and we walk a tightrope strung between our needs and the needs of others. To stand on either side is to neglect the other side. We need to be poised so that a delicate balance is maintained and that’s not easy.
So, if your attitude is, “ Yes, I'll give the hungry something to eat if you show me how” – great! -- may I suggest that you don’t go overboard but take a few small steps towards creative economy living.
First you need to establish a target or goal to aim for like sponsoring a child through the one of the aid organizations. Then to make consistent giving a habit you need to determine your capacity to fulfill the obligation. Establish your present financial situation then, if necessary, prune away extraneous expenditure until sufficient surplus can be maintained in your financial plan for the ensuing twelve months.
You can find a deep personal satisfaction in learning to live more simply that the poor may simply live .
Some people imagine that I am advocating a hippy life style, living off their organic gardens, selling craft goods at the front gate and bartering for the commodities they cannot produce. I have a certain admiration for these hardy and innovative folk but that is not what I mean by a simple lifestyle.
Others think that it is driving a twenty year old bomb, going to the opportunity shop for clothes and salvaging anything that the might be useful someday. This again isn’t what I am on about either. I could go on because simplicity takes many shapes and forms. Baking instead of buying; turning the unused lights off; cycling instead of using the car. All these things are a part and parcel but it’s it’s not where I suggest starting. Simple lifestyle in these terms can become faddish, almost cultist.
Simple lifestyle is not a way to cop out of social relationships and responsibilities. Many of the specifics that mark simplicity might also be seen as selfishness or stinginess.
I prefer to talk about “Economy Living” rather than the simple lifestyle. When I see what people are frittering away on nonessentials and wasting precious commodities without a thought for the millions of starving people in third world countries, there has got to be something wrong somewhere. One small step taken towards economy living with the intention of sharing with those less fortunate could get our eyes off ourselves and open up exciting avenues for many who otherwise would only live for themselves. We seem to be getting oblivious to empty stomachs with the growing need for a few scraps off our well-laden tables.
I saw a statistic that really hit home to me, “If all the starving (not just the undernourished) children in the world were lined up, one behind the other, starting from your front door, the end of the queue would be 25,000 miles away. That should make us choke on our oysters and pate. But we cannot remedy other people’s problems until we have our own house in order. The right use of money includes using it properly for our own needs. Only when have done that can we turn to the aid of others. In fact it’s a balancing act and we walk a tightrope strung between our needs and the needs of others. To stand on either side is to neglect the other side. We need to be poised so that a delicate balance is maintained and that’s not easy.
So, if your attitude is, “ Yes, I'll give the hungry something to eat if you show me how” – great! -- may I suggest that you don’t go overboard but take a few small steps towards creative economy living.
First you need to establish a target or goal to aim for like sponsoring a child through the one of the aid organizations. Then to make consistent giving a habit you need to determine your capacity to fulfill the obligation. Establish your present financial situation then, if necessary, prune away extraneous expenditure until sufficient surplus can be maintained in your financial plan for the ensuing twelve months.
You can find a deep personal satisfaction in learning to live more simply that the poor may simply live .
BOOMS & BUSTS
I suppose change add spice to life and most people learn to adapt to changing situations reasonably well. But there are too many who throw a wobbly when something unexpected hits them. Mainly these are people who live in the past or present and let the future take care of itself. When some crisis, be it family, financial or health hits suddenly they are totally unprepared and a sequence of events takes place.
1. Alarm.
2. Temporary Panic
3. Apathy and Disinterest
We spend 80% of our waking day working for money. That’s why we get concerned at the state of the economy. We enjoy the boom times, which started in earnest in the 1960’s but we were totally unprepared for the first big bust, which came early in the 1970’s. Since then the value of the dollar has been shrinking on the world market. Inflation increased and grew at an alarming rate. Real production dropped and the only real growth has been in the investment area, shifting money around like a commodity. The effects of the inflationary spiral just resulted in higher and higher prices and these continued to soar while real production declined. We stand the risk of pricing ourselves out of the world markets because no longer do people beat a path through the forest to buy the best mousetrap. Nowadays, the mountain won’t go to Mohamed, Mohamed has to trot along to the mountain. Sometimes I think that we had it too good for too long and the last few Kiwi generations grew up with too high expectations without putting their backs to the wheel.
We certainly don’t benefit from history and the 1987 crash reminded ourselves of this fact. But since then we have enjoyed another boom and this one has lasted a long time but it looks now as though a bust is inevitable.
Too often we react to events around us without understanding what is really happening and why. We need to expect crises in the economy and learn how to respond rather than react.
It’s an interesting fact that when times are good people resort to easy credit and hock themselves up to the hilt assuming that the good times will go on forever but when the downturn comes, as it inevitably will, those who are in a debt situation are just the ones to panic when their capacity to repay is not possible.
Happy are the people who not only owe nothing when the bust comes but have a nice little nest egg tucked away to cushion the effects. The fact that you have accumulated a nice bunch of material assets doesn’t mean much in depression times because you can’t flog them off when there’s no money around. For what it’s worth I’m forecasting that the next bust isn’t too far away and suggest that you start preparing for it. Here’s a better sequence of events:
1. Pay all your sundry debts off as soon as possible
2. Save up a nest egg of $2,000 minimum and tuck it away in some high interest, “no touch” account.
3. Effect some economies and learn to live on a lower income – it can be fun.
4. Write out your financial goals for the next five years.
5. Save up for purchases instead of going into debt to acquire them.
Then you will be able to forget money matters for a while and enjoy some of the forgotten pleasures that we take so much for granted in this beautiful country.
1. Alarm.
2. Temporary Panic
3. Apathy and Disinterest
We spend 80% of our waking day working for money. That’s why we get concerned at the state of the economy. We enjoy the boom times, which started in earnest in the 1960’s but we were totally unprepared for the first big bust, which came early in the 1970’s. Since then the value of the dollar has been shrinking on the world market. Inflation increased and grew at an alarming rate. Real production dropped and the only real growth has been in the investment area, shifting money around like a commodity. The effects of the inflationary spiral just resulted in higher and higher prices and these continued to soar while real production declined. We stand the risk of pricing ourselves out of the world markets because no longer do people beat a path through the forest to buy the best mousetrap. Nowadays, the mountain won’t go to Mohamed, Mohamed has to trot along to the mountain. Sometimes I think that we had it too good for too long and the last few Kiwi generations grew up with too high expectations without putting their backs to the wheel.
We certainly don’t benefit from history and the 1987 crash reminded ourselves of this fact. But since then we have enjoyed another boom and this one has lasted a long time but it looks now as though a bust is inevitable.
Too often we react to events around us without understanding what is really happening and why. We need to expect crises in the economy and learn how to respond rather than react.
It’s an interesting fact that when times are good people resort to easy credit and hock themselves up to the hilt assuming that the good times will go on forever but when the downturn comes, as it inevitably will, those who are in a debt situation are just the ones to panic when their capacity to repay is not possible.
Happy are the people who not only owe nothing when the bust comes but have a nice little nest egg tucked away to cushion the effects. The fact that you have accumulated a nice bunch of material assets doesn’t mean much in depression times because you can’t flog them off when there’s no money around. For what it’s worth I’m forecasting that the next bust isn’t too far away and suggest that you start preparing for it. Here’s a better sequence of events:
1. Pay all your sundry debts off as soon as possible
2. Save up a nest egg of $2,000 minimum and tuck it away in some high interest, “no touch” account.
3. Effect some economies and learn to live on a lower income – it can be fun.
4. Write out your financial goals for the next five years.
5. Save up for purchases instead of going into debt to acquire them.
Then you will be able to forget money matters for a while and enjoy some of the forgotten pleasures that we take so much for granted in this beautiful country.
Wednesday, April 23, 2008
HOW ABOUT A FRESH START
There’s a certain sector of the public that I really feel sorry for and sometimes am in a quandary to know how to give the best advice. These people are locked into a debt situation and no matter how hard they try, have no show of ever getting out. It can happen so easily even to hardworking, honest people and this is how it happens.
Advertising to imbibe a materialistic viewpoint is the first temptation. Buy on easy credit and spread the payments over the next few years. So the purchase is made and everything goes along smoothly until the washing machine breaks down. There isn’t any contingency cash available for a repair bill so the machine is traded in for next to nothing on a shiny new model again on hire purchase. Troubles never come singly – the car engine blows up and the same procedure is resorted to,
Now the point of “ no return“ is reached; too many short term loans and for the first time the budget won’t balance – committed expenditure now exceeds available income. If at this point help is sought it’s an easy matter first to reduce sufficient items of expenditure to reverse the situation. If that fails a debt consolidation loan will inevitably do the trick so long as it’s not just the symptoms being treated but a commitment to correct the cause and stay out of future debt.
Unfortunately the majority don’t recognize the problem mainly because they haven’t the capacity to do a feasibility financial plan accurately themselves. Instead they defer the annual bills that come up to pay immediate debts. Then there is a false hope that a miracle will come their way – they will win the big one or Dad will come to the rescue.
Usually debt depression sets in with predictable symptoms, sometimes a spending spree on credit cards with the thought that they may as well be hung for a sheep as a lamb. Then comes the arguments and apportioning of blame.
If it’s at this late stage that many come to me hoping I will wave the magic wand and fix all problems in one fell swoop. Even though I know beforehand it may be a hopeless case I still put the financial plan up on the computer and am never surprised when up comes a horrible weekly shortfall. I then add up all the unpaid bills, credit cards, hire purchases etc. and shock number two sets in.
But it’s good therapy especially when I see that the horror of debt occurs plus a determination that if they ever get out of the situation, they will never get back into it again. If they have a home with sufficient equity to consolidate all debts and loans I can invariably show them the light at the end of the tunnel. If not and there is no chance to trade out of the situation then the only alternative is a trip to the Official Assignee to file for bankruptcy.
For these people who genuinely want to make a fresh start and have learned by their mistakes, I wish I had a trust fund that I could lend the amount required with little or no interest and build in the repayments over two or three years. It would certainly save a few marriages from going on the rocks.
Advertising to imbibe a materialistic viewpoint is the first temptation. Buy on easy credit and spread the payments over the next few years. So the purchase is made and everything goes along smoothly until the washing machine breaks down. There isn’t any contingency cash available for a repair bill so the machine is traded in for next to nothing on a shiny new model again on hire purchase. Troubles never come singly – the car engine blows up and the same procedure is resorted to,
Now the point of “ no return“ is reached; too many short term loans and for the first time the budget won’t balance – committed expenditure now exceeds available income. If at this point help is sought it’s an easy matter first to reduce sufficient items of expenditure to reverse the situation. If that fails a debt consolidation loan will inevitably do the trick so long as it’s not just the symptoms being treated but a commitment to correct the cause and stay out of future debt.
Unfortunately the majority don’t recognize the problem mainly because they haven’t the capacity to do a feasibility financial plan accurately themselves. Instead they defer the annual bills that come up to pay immediate debts. Then there is a false hope that a miracle will come their way – they will win the big one or Dad will come to the rescue.
Usually debt depression sets in with predictable symptoms, sometimes a spending spree on credit cards with the thought that they may as well be hung for a sheep as a lamb. Then comes the arguments and apportioning of blame.
If it’s at this late stage that many come to me hoping I will wave the magic wand and fix all problems in one fell swoop. Even though I know beforehand it may be a hopeless case I still put the financial plan up on the computer and am never surprised when up comes a horrible weekly shortfall. I then add up all the unpaid bills, credit cards, hire purchases etc. and shock number two sets in.
But it’s good therapy especially when I see that the horror of debt occurs plus a determination that if they ever get out of the situation, they will never get back into it again. If they have a home with sufficient equity to consolidate all debts and loans I can invariably show them the light at the end of the tunnel. If not and there is no chance to trade out of the situation then the only alternative is a trip to the Official Assignee to file for bankruptcy.
For these people who genuinely want to make a fresh start and have learned by their mistakes, I wish I had a trust fund that I could lend the amount required with little or no interest and build in the repayments over two or three years. It would certainly save a few marriages from going on the rocks.
ARE YOU VERSATILE?
Time and time again I am apt to get a little frustrated with people whose ideas and actions are set in concrete and wonder whether they will ever get the message that we live in a changing world. I presume that the root cause is a desire for safety and security. The fear of the unknown, the dark at the top of the stairs, is enough to make many a heart quail at their inadequacy to face up to new situations.
I think parents are to blame often for not giving their children a chance to make their own mistakes. They like to swathe them in cotton wool in case anything drastic happens to their children. And, of course, parents' tolerance level is usually pretty low especially at the end of the day or weekends when childen demand attention. How often have you said, "Not now Johnny, I'm just too busy."
And he goes off to play with his toys instead of learning to fix the puncture in his bike under your supervision.
Your children learn more from watching how you operate than any other way and they become mirror images of you. Maybe you should look at yourself and ask the question, "Do I like what I see? Am I a versatile person with a good capacity? If anyone shows me a better way of doing something am I willing to change? What are some of the inhibitions I have gleaned from my hereditary or environmental upbringing? Are my attitudes so set that I am unwilling to change?"
Over the years I've discovered that versatility is one of the most desirable of traits to add to my repertoire. And I have had the benefit of bringing up two sets of children, experimenting on the first lot and hopefully doing better with the second lot. The first batch I did everything for them expecting them to watch what I was doing and hoping it would rub of them somehow.
They watched me do all sorts of things but in hindsight I didn't give them much of a chance to make their own mistakes.
The second two had to do things under my supervision and now I must agree that they have proved the most versatile.
In the area of finances childen should be given an allowance and, initially under supervision, spend it and save it wisely.
Different methods of investment should be discussed and the resulting effects nutted out. A mini-budget for the ensuing twelve months should be worked on together and parents should firmly ensure that at least for the first year the plan should be adhered to without too much flexibility. After the child has had the discipline of spending under supervision, increasing lattitude should be allowed until such time as he or she can fly solo. In this way you will be setting a firm foundation that will give direction to your child right through adulthood.
I think parents are to blame often for not giving their children a chance to make their own mistakes. They like to swathe them in cotton wool in case anything drastic happens to their children. And, of course, parents' tolerance level is usually pretty low especially at the end of the day or weekends when childen demand attention. How often have you said, "Not now Johnny, I'm just too busy."
And he goes off to play with his toys instead of learning to fix the puncture in his bike under your supervision.
Your children learn more from watching how you operate than any other way and they become mirror images of you. Maybe you should look at yourself and ask the question, "Do I like what I see? Am I a versatile person with a good capacity? If anyone shows me a better way of doing something am I willing to change? What are some of the inhibitions I have gleaned from my hereditary or environmental upbringing? Are my attitudes so set that I am unwilling to change?"
Over the years I've discovered that versatility is one of the most desirable of traits to add to my repertoire. And I have had the benefit of bringing up two sets of children, experimenting on the first lot and hopefully doing better with the second lot. The first batch I did everything for them expecting them to watch what I was doing and hoping it would rub of them somehow.
They watched me do all sorts of things but in hindsight I didn't give them much of a chance to make their own mistakes.
The second two had to do things under my supervision and now I must agree that they have proved the most versatile.
In the area of finances childen should be given an allowance and, initially under supervision, spend it and save it wisely.
Different methods of investment should be discussed and the resulting effects nutted out. A mini-budget for the ensuing twelve months should be worked on together and parents should firmly ensure that at least for the first year the plan should be adhered to without too much flexibility. After the child has had the discipline of spending under supervision, increasing lattitude should be allowed until such time as he or she can fly solo. In this way you will be setting a firm foundation that will give direction to your child right through adulthood.
Thursday, February 15, 2007
TAKE TIME TO SPEND WISELY
The beginning of a New Year is the time when we think and plan and wonder what it will hold for us. Will it be a better or worse year than the last? Will it be easy or hard going financially? Will it be mere existence or exciting? Some who are financially stretched look with envy on those who are well endowed with this world's goods and chattels and waste time on wishful thinking.
But let's play pretend. Say your Banker had phoned you on Friday to say that he had good news for you. A person who wishes to remain anonymous will deposit each morning 86,400 cents into your account starting day after tomorrow, Monday. That is $864 per day, 7 days a week, 52 weeks a year. He added that there was one stipulation. You must spend all the money the same day. No balance would be carried over to the next day. Each evening the Bank would cancel whatever sum you fail to use. With a wide grin you thanked the Bank Manager and hung up. You have only one weekend to plan and suddenly this becomes your number one priority. You grab a pencil and paper and start figuring.
$864 times 7 will give you over $6,000 per week; times 52 will give almost $315,000 per year available to you "IF" you are diligent to spend it each day.
Remember, whatever you don't spend is forfeited!
So much for let's pretend.
Now let's get serious. Every morning you are granted a deposit in your Bank of Time, 86,400 seconds of time which represents 1440 minutes which, of course, equals 24 hours a day. Now you've got to remember the same stipulation applies because you can spend only this amount of time each day. There is no such thing as a 26-hour day even though some of us wish it could be.
Someone said, "Life is like a coin - you can spend it anyway you want to but you can spend it only once."
It's the same whether we are flat broke or the richest man on earth, young or old, single or married, employed or without a job, an adolescent or the Prime Minister. We have exactly the same amount of time.
Now let's get "really" serious. How about applying the same principles to your weekly or fortnightly income. You get a certain amount credited to your Bank account each period and even though you don't lose it if you don't spend it, the same diligence should be applied in using your time wisely to plan your spending for the ensuing twelve months.
If you are too busy to plan . . . you are just too busy! Don't let the urgent take precedence over the important. Don't suffer the tyranny of others' expectations. Get in the driving seat and this year make your dreams and plans come true. But remember that "Time is the World's Most Precious Commodity." Don't waste it, use it wisely otherwise you will end up saying,
"Today is the Tomorrow I Worried about Yesterday."
But let's play pretend. Say your Banker had phoned you on Friday to say that he had good news for you. A person who wishes to remain anonymous will deposit each morning 86,400 cents into your account starting day after tomorrow, Monday. That is $864 per day, 7 days a week, 52 weeks a year. He added that there was one stipulation. You must spend all the money the same day. No balance would be carried over to the next day. Each evening the Bank would cancel whatever sum you fail to use. With a wide grin you thanked the Bank Manager and hung up. You have only one weekend to plan and suddenly this becomes your number one priority. You grab a pencil and paper and start figuring.
$864 times 7 will give you over $6,000 per week; times 52 will give almost $315,000 per year available to you "IF" you are diligent to spend it each day.
Remember, whatever you don't spend is forfeited!
So much for let's pretend.
Now let's get serious. Every morning you are granted a deposit in your Bank of Time, 86,400 seconds of time which represents 1440 minutes which, of course, equals 24 hours a day. Now you've got to remember the same stipulation applies because you can spend only this amount of time each day. There is no such thing as a 26-hour day even though some of us wish it could be.
Someone said, "Life is like a coin - you can spend it anyway you want to but you can spend it only once."
It's the same whether we are flat broke or the richest man on earth, young or old, single or married, employed or without a job, an adolescent or the Prime Minister. We have exactly the same amount of time.
Now let's get "really" serious. How about applying the same principles to your weekly or fortnightly income. You get a certain amount credited to your Bank account each period and even though you don't lose it if you don't spend it, the same diligence should be applied in using your time wisely to plan your spending for the ensuing twelve months.
If you are too busy to plan . . . you are just too busy! Don't let the urgent take precedence over the important. Don't suffer the tyranny of others' expectations. Get in the driving seat and this year make your dreams and plans come true. But remember that "Time is the World's Most Precious Commodity." Don't waste it, use it wisely otherwise you will end up saying,
"Today is the Tomorrow I Worried about Yesterday."
Thursday, August 03, 2006
YOUR PAD - A HOUSE OR A HOME?
It's interesting being invited into people's homes not only to receive their hospitality but also to gain a greater insight into their characters by observation. Just looking around a home tells it all. Maybe there is a bookcase with a preponderance of craft books or paintings on the walls of some special artist or a piano with some classical music ready to play. The lounge may be comfortable and lived in or it may not be inviting. Often it appears that people match their type of furniture and so we could go on.
It got me thinking that house maintenance means one thing to one person and something totally different to another. One section of the community treats their houses very casually. They usually wait until something has broken or the paint starts flaking off before they get around to fixing the situation. Others are so house proud that every speck of dust is chased off the premises and the paintbrush is poised to obliterate every spot or blemish. Again some people are never satisfied with their house. They are continually upgrading and buying items to titivate it up.
It always interested me when I was in the lending game for housing to observe the modus operandi of young couples about to purchase their first house. Some would opt to buy a broken down old house determined to spend the next decade pulling down walls and renovating from top to bottom. Other young couples would mortgage themselves up to the hilt to buy their dream house so that they could walk in with nothing to do and then work like crazy to reduce the mortgage to a reasonable level so that they could eventually raise a family.
There must be a better way and I suggest a middle of the road attitude can be helpful in determining how and when we should maintain or upgrade our property. I like to walk in and around the house pretending I am a Real Estate agent looking for deficiencies jotting down things to be done. Then I try to put them in order of priority determined often by the cost involved and finally setting target dates for completing each task.
Once you set yourself a task and complete it there is great satisfaction generated.
That's my theory anyway but I hope my wife doesn't read this - I might be painting instead of writing. Someone said, "Those who can, do, those who can't, teach!"
It got me thinking that house maintenance means one thing to one person and something totally different to another. One section of the community treats their houses very casually. They usually wait until something has broken or the paint starts flaking off before they get around to fixing the situation. Others are so house proud that every speck of dust is chased off the premises and the paintbrush is poised to obliterate every spot or blemish. Again some people are never satisfied with their house. They are continually upgrading and buying items to titivate it up.
It always interested me when I was in the lending game for housing to observe the modus operandi of young couples about to purchase their first house. Some would opt to buy a broken down old house determined to spend the next decade pulling down walls and renovating from top to bottom. Other young couples would mortgage themselves up to the hilt to buy their dream house so that they could walk in with nothing to do and then work like crazy to reduce the mortgage to a reasonable level so that they could eventually raise a family.
There must be a better way and I suggest a middle of the road attitude can be helpful in determining how and when we should maintain or upgrade our property. I like to walk in and around the house pretending I am a Real Estate agent looking for deficiencies jotting down things to be done. Then I try to put them in order of priority determined often by the cost involved and finally setting target dates for completing each task.
Once you set yourself a task and complete it there is great satisfaction generated.
That's my theory anyway but I hope my wife doesn't read this - I might be painting instead of writing. Someone said, "Those who can, do, those who can't, teach!"
Friday, April 07, 2006
IS THERE A BETTER WAY?
Is there a better way? If so, do I want to change?
Fred Smith, the famous consultant, said that when called into a sick Company he always looked for one of two attitudes, either IGNORANCE or CONCEIT. If it was ignorance he heaved a sigh of relief. They could easily be taught the right principles and practices. But if it was conceit, "We have done it this way for umpteen years", or "Nobody can teach us anything", he would give up.
There seems to be an "Effective Curve" that operates on about a five-year cycle. It may be a business, a project or our household financial plan; we start off with high hopes being innovative, enthusiastic, creative and eager. Things happen, life is rosy and our effectiveness rises sharply. Then we start to ease up and allow inefficiencies to creep in. We learn to coast along on past successes and in fact look backwards instead of forward. Then the curve starts downward until we often can end up where we started, ineffective, disillusioned, a life of tedium and totally lacking in excitement.
It's good to evaluate just where we are on the effectiveness curve so we can take immediate, corrective action if necessary.
A famous aircraft engineer has a picture of a large bee in flight with this caption. "Aerodynamically it has been proved conclusively that the bee cannot fly but the bumble bee doesn't know it and just goes on gathering honey."
A great many people over the ages have "proved conclusively" that this or that could not be done only to wake up too late to discover somebody has done it and like the bumble bee gathered the honey. Maybe we need a few lessons on "Creative Thinking" just to get us back on the upward curve again.
Here's a little test to see whether you limit your thinking by assuming requirements that are not asked for and may not even exist. Draw nine dots in the form of a square. Now you are asked to draw four straight lines so as to intersect each dot. You must not cross any dot more than once, not retrace any line not lift your pencil from the paper until all nine dots have been crossed.
Don't give up - it can be done - only you have to start thinking laterally. However thinking is not sufficient. Creativity needs to be applied. Our country needs original thinkers, not a bunch of robots who only do what they are told. We need those who are prepared to be innovative, think outside the square and willing to test out and improve until like the bumble bee we gather enough honey to set our economy straight again.
Fred Smith, the famous consultant, said that when called into a sick Company he always looked for one of two attitudes, either IGNORANCE or CONCEIT. If it was ignorance he heaved a sigh of relief. They could easily be taught the right principles and practices. But if it was conceit, "We have done it this way for umpteen years", or "Nobody can teach us anything", he would give up.
There seems to be an "Effective Curve" that operates on about a five-year cycle. It may be a business, a project or our household financial plan; we start off with high hopes being innovative, enthusiastic, creative and eager. Things happen, life is rosy and our effectiveness rises sharply. Then we start to ease up and allow inefficiencies to creep in. We learn to coast along on past successes and in fact look backwards instead of forward. Then the curve starts downward until we often can end up where we started, ineffective, disillusioned, a life of tedium and totally lacking in excitement.
It's good to evaluate just where we are on the effectiveness curve so we can take immediate, corrective action if necessary.
A famous aircraft engineer has a picture of a large bee in flight with this caption. "Aerodynamically it has been proved conclusively that the bee cannot fly but the bumble bee doesn't know it and just goes on gathering honey."
A great many people over the ages have "proved conclusively" that this or that could not be done only to wake up too late to discover somebody has done it and like the bumble bee gathered the honey. Maybe we need a few lessons on "Creative Thinking" just to get us back on the upward curve again.
Here's a little test to see whether you limit your thinking by assuming requirements that are not asked for and may not even exist. Draw nine dots in the form of a square. Now you are asked to draw four straight lines so as to intersect each dot. You must not cross any dot more than once, not retrace any line not lift your pencil from the paper until all nine dots have been crossed.
Don't give up - it can be done - only you have to start thinking laterally. However thinking is not sufficient. Creativity needs to be applied. Our country needs original thinkers, not a bunch of robots who only do what they are told. We need those who are prepared to be innovative, think outside the square and willing to test out and improve until like the bumble bee we gather enough honey to set our economy straight again.
FOUND ANY DIAMONDS LATELY?
One of the most famous lectures ever delivered was the one made 5700 times by the American, Dr. Russell Conwell. The name of the speech was "Acres of Diamonds" and I think we can learn something from the moral. The fable was told to him by an Arab guide he used on a tour of the Middle East in 1870. It concerns a poor Arab who was told by a Buddhist priest how the world was created and how all the minerals and gems came into being; that diamonds were among the last of the precious stones to be made and that they were in fact congealed drops of pure sunlight. The poor Arab, made disconent by the story of the diamonds, asked the priest where they were to be found. Told to look for rivers that run over white sand, the Arab sold his farm, left his family with relatives and began the search. After years of fruitless searching and ultimately becoming penniless, he killed himself.
Then one day, the new owner of his farm, took his camel to a stream running through the property. While the camel drank he noticed a gleaming rock in the river, retrieved it and took it to the house.
Coincidentally the same priest who had sent the Arab on his search for diamonds came around for another visit, noticed the diamond and helped the farm's new owner retrieve fabulous stones that soon adorned the crowned heads of Europe.
There were indeed acres of diamonds on the poor Arab's farm. But he did not look in his own garden. He missed finding the diamonds in his own back yard.
I wonder if you are still looking for the pot at the end of the rainbow? Too often our own circumstances seem mundane - we never seem to have enough money to satisfy our wants and we go searching for some get-rich method that will solve all our problems in one fell swoop.
I believe that is why the share market is artificially propped up by the thousands of investors who want to get rich quickly even if it means borrowing to do so. Recent history has been studded with booms and busts and the '87 crash brought many investors to their knees.
Some investors enjoy the cut and thrust of speculation and have the flexibility to ride the highs and lows with equanimity. Others are more intense and are either in a state of euphoria when their shares gain a few points or suffer ulcers when they take a dive. The large remaining group of investors if asked, "Do you want to sleep easy at night or are you prepared to take the risk for high returns and wouldn't worry too much if you lost out", would plump for security every time.
I believe there are diamonds in our own back yard. A big one is the ability to learn how to live within the income we receive. The second is to plan our spending in such a way that we have sufficient surplus to save for the necessities of life without using easy credit. But the most sparkling diamond is reserved for those who are willing to help the poor and needy - those who have no access to the things in life that we take for granted.
Hope you discover a few diamonds in your back yard that you can share with others.
Then one day, the new owner of his farm, took his camel to a stream running through the property. While the camel drank he noticed a gleaming rock in the river, retrieved it and took it to the house.
Coincidentally the same priest who had sent the Arab on his search for diamonds came around for another visit, noticed the diamond and helped the farm's new owner retrieve fabulous stones that soon adorned the crowned heads of Europe.
There were indeed acres of diamonds on the poor Arab's farm. But he did not look in his own garden. He missed finding the diamonds in his own back yard.
I wonder if you are still looking for the pot at the end of the rainbow? Too often our own circumstances seem mundane - we never seem to have enough money to satisfy our wants and we go searching for some get-rich method that will solve all our problems in one fell swoop.
I believe that is why the share market is artificially propped up by the thousands of investors who want to get rich quickly even if it means borrowing to do so. Recent history has been studded with booms and busts and the '87 crash brought many investors to their knees.
Some investors enjoy the cut and thrust of speculation and have the flexibility to ride the highs and lows with equanimity. Others are more intense and are either in a state of euphoria when their shares gain a few points or suffer ulcers when they take a dive. The large remaining group of investors if asked, "Do you want to sleep easy at night or are you prepared to take the risk for high returns and wouldn't worry too much if you lost out", would plump for security every time.
I believe there are diamonds in our own back yard. A big one is the ability to learn how to live within the income we receive. The second is to plan our spending in such a way that we have sufficient surplus to save for the necessities of life without using easy credit. But the most sparkling diamond is reserved for those who are willing to help the poor and needy - those who have no access to the things in life that we take for granted.
Hope you discover a few diamonds in your back yard that you can share with others.
Wednesday, April 05, 2006
MONEY IN PERSPECTIVE
I have hust read about a thrifty young woman who became concerned over the lavish amount of money her boyfriend was spending on her. After an expensive dinner date she asked her mother, "What can I do to stop Bill from spending so much money on me?" Her mother replied simply, "Marry him!"
Is that an unfair generality or a very perceptive comment on the state of our Kiwi male who within a year of marriage reverts to type and becomes buried in the dull routine of existence. As far as the purse strings are concerned he is likely to pursue one of two directions. Either he says to his wife, "I'll make the money - you handle the pay packet. Mind you any overtime or extras usually finds its way into his hip pocket.
The other option is for him to keep tight control of the chequebook so that his wife has to plead when she needs money to buy a new outfit.
Very seldom do I see a totally shared responsibility when it comes to handling the household finances. Yet this is the very essence of good money management.
Take two people, one male and one female, from totally different homes with different upbringings and experiences each with different likes and dislikes, each with some degree of independence and self-centeredness living in the same house with different tasks and responsibilities trying to work from the same budget and trying to meet the same goals. Will they agree on everything? Not in your life! Despite their firm commitment of love and loyalty these differences make some degree of conflict inevitable. There are more disagreements about handling of money than possibly any other subject.
So, what should a young couple do when setting out on life's journey? I would like to see them take these steps:
1. Get some expert advice to set up their initial financial plan.
2. Open the required number of joint Bank accounts with either to sign.
3. Enrol in a few courses like cooking classes for low-cost meals, repairs and maintenance etc. and teach each other these skills.
4. Start right from scratch while there are two incomes to save a healthy deposit on their first home.
5. Take it in turns to decide what will be the next financial goal to save for but put a ceiling on the limit.
6. Have a family conference every few months to discuss finances, evaluate progress, allocate tasks and modify plans.
7. Plan an annual holiday and decide where to go and how much it will cost. Then save specifically for the holiday.
8. Above all, get some enjoyment out of your hard-earned money and use it for innovative purposes. Give each other a surprise present apart from birthdays and Christmas.
Enjoy a dinner out on occasion. The reciprocal rewards will be great!
Is that an unfair generality or a very perceptive comment on the state of our Kiwi male who within a year of marriage reverts to type and becomes buried in the dull routine of existence. As far as the purse strings are concerned he is likely to pursue one of two directions. Either he says to his wife, "I'll make the money - you handle the pay packet. Mind you any overtime or extras usually finds its way into his hip pocket.
The other option is for him to keep tight control of the chequebook so that his wife has to plead when she needs money to buy a new outfit.
Very seldom do I see a totally shared responsibility when it comes to handling the household finances. Yet this is the very essence of good money management.
Take two people, one male and one female, from totally different homes with different upbringings and experiences each with different likes and dislikes, each with some degree of independence and self-centeredness living in the same house with different tasks and responsibilities trying to work from the same budget and trying to meet the same goals. Will they agree on everything? Not in your life! Despite their firm commitment of love and loyalty these differences make some degree of conflict inevitable. There are more disagreements about handling of money than possibly any other subject.
So, what should a young couple do when setting out on life's journey? I would like to see them take these steps:
1. Get some expert advice to set up their initial financial plan.
2. Open the required number of joint Bank accounts with either to sign.
3. Enrol in a few courses like cooking classes for low-cost meals, repairs and maintenance etc. and teach each other these skills.
4. Start right from scratch while there are two incomes to save a healthy deposit on their first home.
5. Take it in turns to decide what will be the next financial goal to save for but put a ceiling on the limit.
6. Have a family conference every few months to discuss finances, evaluate progress, allocate tasks and modify plans.
7. Plan an annual holiday and decide where to go and how much it will cost. Then save specifically for the holiday.
8. Above all, get some enjoyment out of your hard-earned money and use it for innovative purposes. Give each other a surprise present apart from birthdays and Christmas.
Enjoy a dinner out on occasion. The reciprocal rewards will be great!
Saturday, January 21, 2006
PERSONAL FINANCES
I wonder what your Personal Finances are like. Have you found Financial Freedom for your family? If not do you realise that careless management of your finances can produce stress in the home, debt depression and even separation. Lack of planning can induce:
* Compulsive or impulsive spending
* Leaving it all to the other partner
* Trying an inferior system that won't work.
* Establishing plans that aren't followed
* Establishing unrealistic plans.
* Buying now, paying later "with interest."
There is a better way. For many years I took Personal Financial Seminars showing people how to plan expenditure for the ensuing twelve months - how to set up a system using three Bank Accounts so easy that a 12-year old could operate it - plus many tricks of the trade to reduce expenditure etc.
Over the years I have processed a few thousand Personal Financial Plans using my computer by interview and mail order and many are operating this system successfully. The problem was that all you got was a printout and diagram to set the system going. But when changes in expenditure or income came it was awkward to revise your figures. Now I have great news. You can have a plan on your own computer, make your own adjustments and print out your financial plan for the year.
DO-IT-YOURSELF FINANCIAL PLAN;
I've put my plan on computer disc using Microsoft Excell and am making it available for purchase. The disc has full instructions and hints that you can print out. All you need is to insert your Regular Committed Payments on the Financial Plan, then insert the amounts you require for Housekeeping and Allowances - then alot an amount for Contingencies and Holiday Spending. Finally insert all Income.
Trigger the calculating icon and up comes a weekly surplus or shortfall. Whilst on the computer you can make adjustments to balance the budget with a reasonable surplus.
But all the instructions are on the disc to take you right through to a completed plan for the ensuing year.
There is a Setting Up Diagram that automatically includes your figures so you can set the system going with your preferred Bank. Retaining the Plan on your computer allows you to make necessary adjustments and gives you the capacity to make larger spending decisions. Revised figures put in will determine if you would still have a reasonable surplus.
To order a disc:
Send Name, Address and Phone No. plus a cheque for NZ$40 made out to Tranzsend and post to
Buck Pound,
50 Magnolia Lane,
Wilson St., THAMES 2801
New Zealand.
* Compulsive or impulsive spending
* Leaving it all to the other partner
* Trying an inferior system that won't work.
* Establishing plans that aren't followed
* Establishing unrealistic plans.
* Buying now, paying later "with interest."
There is a better way. For many years I took Personal Financial Seminars showing people how to plan expenditure for the ensuing twelve months - how to set up a system using three Bank Accounts so easy that a 12-year old could operate it - plus many tricks of the trade to reduce expenditure etc.
Over the years I have processed a few thousand Personal Financial Plans using my computer by interview and mail order and many are operating this system successfully. The problem was that all you got was a printout and diagram to set the system going. But when changes in expenditure or income came it was awkward to revise your figures. Now I have great news. You can have a plan on your own computer, make your own adjustments and print out your financial plan for the year.
DO-IT-YOURSELF FINANCIAL PLAN;
I've put my plan on computer disc using Microsoft Excell and am making it available for purchase. The disc has full instructions and hints that you can print out. All you need is to insert your Regular Committed Payments on the Financial Plan, then insert the amounts you require for Housekeeping and Allowances - then alot an amount for Contingencies and Holiday Spending. Finally insert all Income.
Trigger the calculating icon and up comes a weekly surplus or shortfall. Whilst on the computer you can make adjustments to balance the budget with a reasonable surplus.
But all the instructions are on the disc to take you right through to a completed plan for the ensuing year.
There is a Setting Up Diagram that automatically includes your figures so you can set the system going with your preferred Bank. Retaining the Plan on your computer allows you to make necessary adjustments and gives you the capacity to make larger spending decisions. Revised figures put in will determine if you would still have a reasonable surplus.
To order a disc:
Send Name, Address and Phone No. plus a cheque for NZ$40 made out to Tranzsend and post to
Buck Pound,
50 Magnolia Lane,
Wilson St., THAMES 2801
New Zealand.
Wednesday, January 11, 2006
ADVICE
Where do you go these days for general advice that (a) doesn't cost you the earth and (b) hasn't someone on the other end with an axe to grind? Again how do you separate Financial Advice, Legal Advice and Consumer Advice?
Things are getting a trifle complex for Mr. & Mrs. Average who spend the bulk of their time making an honest living and raising a family to do likewise. They usually don't have the time or inclination to read up all the current available literature. However when a sudden emergency arises, who are they to turn to. I've been asked all sorts of questions - some relatively easy to answer but some really curly ones that over stretch the memory banks and resources.
For instance, one couple came to me who were leasing glasshouses and having hassles with the landlord. Their Solicitor recommended court action but with lack of montary resources to pay legal expenses they could well end up flat broke. So they were directed to the Family Court to endeavour to have the matter sorted out amicably.
Another couple wanted to know whether they could afford to separate. I did individual feasibility budgets on the computer but with the extra expenditure on one income each revealed an unhealthy shortfall. I then asked if I could do a combined one and even though finances were the problem, up came a healthy surplus. My instant advice was, "Why not stick together and sink your differences?"
Those appoaching retirement usually come up with a spate of queries. It's going to be a totally new ball game so shall we sell the big house and purchase a unit or beach house. Shall we invest the maturity proceeds of our Life Policy or clear the house mortgage? Investment advice is a hardy annual. There is such a variety available with so many institutions competing for the surplus dollar that it can be confusing to the uninitiated.
I have a few basic rules I endeavour to abide by:
1. I remind myself that I am operating under a legal "Duty of Care", thus I can be accountable for the advice I give.
2. I try not to give generalised advice without seeing the present financial situation in toto. So often the gut feeling advice would be inadequate when the present financial situation demands another course of action.
3. I endeavour to bat ideas around showing the reactions and possible results of certain courses of action.
4. Ultimately I say, "It's totally up to you now - you've heard the pros and cons - you choose!"
So, if you can find a financial advisor who has a wide knowledge, political skill and above all moral credibility, my advice is to listen carefully, weigh up the pros and cons then make your final decision. Proverbs 12:15 has the last word, "The way of a fool seems right to him but a wise man listens to advice."
Things are getting a trifle complex for Mr. & Mrs. Average who spend the bulk of their time making an honest living and raising a family to do likewise. They usually don't have the time or inclination to read up all the current available literature. However when a sudden emergency arises, who are they to turn to. I've been asked all sorts of questions - some relatively easy to answer but some really curly ones that over stretch the memory banks and resources.
For instance, one couple came to me who were leasing glasshouses and having hassles with the landlord. Their Solicitor recommended court action but with lack of montary resources to pay legal expenses they could well end up flat broke. So they were directed to the Family Court to endeavour to have the matter sorted out amicably.
Another couple wanted to know whether they could afford to separate. I did individual feasibility budgets on the computer but with the extra expenditure on one income each revealed an unhealthy shortfall. I then asked if I could do a combined one and even though finances were the problem, up came a healthy surplus. My instant advice was, "Why not stick together and sink your differences?"
Those appoaching retirement usually come up with a spate of queries. It's going to be a totally new ball game so shall we sell the big house and purchase a unit or beach house. Shall we invest the maturity proceeds of our Life Policy or clear the house mortgage? Investment advice is a hardy annual. There is such a variety available with so many institutions competing for the surplus dollar that it can be confusing to the uninitiated.
I have a few basic rules I endeavour to abide by:
1. I remind myself that I am operating under a legal "Duty of Care", thus I can be accountable for the advice I give.
2. I try not to give generalised advice without seeing the present financial situation in toto. So often the gut feeling advice would be inadequate when the present financial situation demands another course of action.
3. I endeavour to bat ideas around showing the reactions and possible results of certain courses of action.
4. Ultimately I say, "It's totally up to you now - you've heard the pros and cons - you choose!"
So, if you can find a financial advisor who has a wide knowledge, political skill and above all moral credibility, my advice is to listen carefully, weigh up the pros and cons then make your final decision. Proverbs 12:15 has the last word, "The way of a fool seems right to him but a wise man listens to advice."
Tuesday, January 03, 2006
WHERE ARE YOU GOING FINANCIALLY?
Most couples don't seem to be going any place. If you ask them what their financial goals and objectives are they usually give a nervous laugh before answering, "Just keeping body and soul together," or "We're keeping the wolf from the door," or "With the help of our friendly Bank Manager we are making ends meet."
It's a tragedy that money dominates our lives to the extent that there never seems enough to satisfy our desires. The more we have, the more our needs and wants close the gap between income and expenditure.
So the first question I wnat to ask you is:
Where are you now financially?
It can be quite a frightening question because in come cases it will reveal how unpleasant or serious the problem really is. Indeed many people are totally incapable of answering that question. They literally don't know how to find out.
The same question could be legitimately asked of many small businesses. Some don't realise that they are in a deteriorating situation until it is too late for a rescue operation. Others have a hunch that all is not well and hope against hope that some miracle will hapen to reverse the situation. The only way to answer that question is to spend sufficient time to work out the present financial situation, "What I own minus what I owe."
The next question is:
Where are you going financially?
You and your family are on the journey of life. A journey begins with knowledge and proceeds with action. Knowledge of where you are is essential. Knowledge of where you are going is just as vital. With the two in mind you take action. The answer to the second question is to work out a budget for the first twelve months. A budget plan is the proposed expenditure and income over the ensuing year that will give a weekly surplus or shortfall. It is as clear a picture as can be worked out in advance of how objectives will be reached financially. It's like a road map before a journey in a car.
Once a budget plan is developed, the discipline of sticking with it can be played like a game and enjoyed rather than a gritting of the teeth in sheer determination. The basic thrust should be adhered to but adjustments should be made to maintain flexibility. Remember that any action begins with the first step.
Ask yourself:
1. Where do I want to be financially? (What are my goals?)
2. Where am I now? (What is my Financial analysis?)
3. How will I reach my goals? (What is my budgeted Surplus to enable me to achieve my goals?)
It's a tragedy that money dominates our lives to the extent that there never seems enough to satisfy our desires. The more we have, the more our needs and wants close the gap between income and expenditure.
So the first question I wnat to ask you is:
Where are you now financially?
It can be quite a frightening question because in come cases it will reveal how unpleasant or serious the problem really is. Indeed many people are totally incapable of answering that question. They literally don't know how to find out.
The same question could be legitimately asked of many small businesses. Some don't realise that they are in a deteriorating situation until it is too late for a rescue operation. Others have a hunch that all is not well and hope against hope that some miracle will hapen to reverse the situation. The only way to answer that question is to spend sufficient time to work out the present financial situation, "What I own minus what I owe."
The next question is:
Where are you going financially?
You and your family are on the journey of life. A journey begins with knowledge and proceeds with action. Knowledge of where you are is essential. Knowledge of where you are going is just as vital. With the two in mind you take action. The answer to the second question is to work out a budget for the first twelve months. A budget plan is the proposed expenditure and income over the ensuing year that will give a weekly surplus or shortfall. It is as clear a picture as can be worked out in advance of how objectives will be reached financially. It's like a road map before a journey in a car.
Once a budget plan is developed, the discipline of sticking with it can be played like a game and enjoyed rather than a gritting of the teeth in sheer determination. The basic thrust should be adhered to but adjustments should be made to maintain flexibility. Remember that any action begins with the first step.
Ask yourself:
1. Where do I want to be financially? (What are my goals?)
2. Where am I now? (What is my Financial analysis?)
3. How will I reach my goals? (What is my budgeted Surplus to enable me to achieve my goals?)
Sunday, January 01, 2006
PAYING YOUR DEBTS
There's a generation growing up knowing nothing of the Biblical adage to "Owe no man anythng." National debts keep on rising and the future of our youth has already been mortgaged.
When a country can't pay its debts the rot seems to filter right through the economy. I venture to say that if it became mandatory for all Companies to pay all debts by the old tradional 20th. of the month a large proportion of them would go under. Many a small man has been forced into bankruptcy because big firms wouldn't pay them on time.
However it is personal debt that is my special vendetta. For many years now I have had a mission in life - that is to reverse the trend and show people how to get rid of debt and enjoy that special privilege of paying bills as they come in. Maybe if enough people learned this habit the cumulative result would cure our country's ills.
Every year thousands of families are destroyed because of financial bondage. They encumber themselves with debts beyond their ability to repay. Every family has a "point of not return." If they borrow up to this point and some emergency tips them over, they lose their capacity to climb back again.
Too many times I have put figures on the computer to discover that not only is expenditure exceeding income but liabilities exceed assets. It's a no-win irretrievable situation that leads to insolvency and more often than not the break up of the marriage. Why do so many people fall into this trap? And I'm not talking about the compulsive spender or alcoholic. I've had professional and business people succumb to this temptation of borrowing more than their capacity to service. Proverbs 22:7 says, "The rich rule over the poor and the borrower is servant to the lender." So what do you do if you find yourself loaded up to the hilt with debt?
Firstly you need to set aside a night to pull all those bills out of the drawer and write down every thing you owe leaving the first mortgage out. Add up the whole raft so that you arrive at the total. Then add on a comfort level amount like $1,000 so now you have a target figure to aim for.
Secondly you need to acquire a mind-set about debt and determine that once you have extricated yourself from this bondage you will never, ever use easy credit again but save up for future purchases.
Thirdly you need to work out an economy budget eliminating all unecessary expenditure and reducing other expenditure. The housekeeping is the great variable and usually can be reduced with ease.
After you have the best weekly surplus you can achieve and maybe supplement this with overtime or extra work, go like crazy to pay off the debts. Try to eliminate the smallest ones first and have a little celebration with each finally repaid.
If you have any assets that you do not absolutely require then have a garage sale to get rid of a few more debts. It may be a long haul but don't give up as you will win out in the end.
Keep going until you have that $1,000 as a nest egg buffer.
When a country can't pay its debts the rot seems to filter right through the economy. I venture to say that if it became mandatory for all Companies to pay all debts by the old tradional 20th. of the month a large proportion of them would go under. Many a small man has been forced into bankruptcy because big firms wouldn't pay them on time.
However it is personal debt that is my special vendetta. For many years now I have had a mission in life - that is to reverse the trend and show people how to get rid of debt and enjoy that special privilege of paying bills as they come in. Maybe if enough people learned this habit the cumulative result would cure our country's ills.
Every year thousands of families are destroyed because of financial bondage. They encumber themselves with debts beyond their ability to repay. Every family has a "point of not return." If they borrow up to this point and some emergency tips them over, they lose their capacity to climb back again.
Too many times I have put figures on the computer to discover that not only is expenditure exceeding income but liabilities exceed assets. It's a no-win irretrievable situation that leads to insolvency and more often than not the break up of the marriage. Why do so many people fall into this trap? And I'm not talking about the compulsive spender or alcoholic. I've had professional and business people succumb to this temptation of borrowing more than their capacity to service. Proverbs 22:7 says, "The rich rule over the poor and the borrower is servant to the lender." So what do you do if you find yourself loaded up to the hilt with debt?
Firstly you need to set aside a night to pull all those bills out of the drawer and write down every thing you owe leaving the first mortgage out. Add up the whole raft so that you arrive at the total. Then add on a comfort level amount like $1,000 so now you have a target figure to aim for.
Secondly you need to acquire a mind-set about debt and determine that once you have extricated yourself from this bondage you will never, ever use easy credit again but save up for future purchases.
Thirdly you need to work out an economy budget eliminating all unecessary expenditure and reducing other expenditure. The housekeeping is the great variable and usually can be reduced with ease.
After you have the best weekly surplus you can achieve and maybe supplement this with overtime or extra work, go like crazy to pay off the debts. Try to eliminate the smallest ones first and have a little celebration with each finally repaid.
If you have any assets that you do not absolutely require then have a garage sale to get rid of a few more debts. It may be a long haul but don't give up as you will win out in the end.
Keep going until you have that $1,000 as a nest egg buffer.
Friday, December 30, 2005
SHARED FAMILY FINANCIAL PLANNING
I've observed that very few families understand that financial management of their household is not a pastime to be attended to by just one partner when the spirit moves. It is a serious business requiring skill, planning and control and above all a sharing of responsibilities.
So, how about scheduling adequate prime time for a family conference when the following agenda should be discussed amicably and mutually acted upon. But just a few rules to be observed:
1. No arguments or recriminations about the past.
2. No apportioning blame over what has previously happened.
3. No negative thinking - look for the possibilities.
4. Be the first to say "sorry."
5. Be totally honest and willing to change.
6. Be methodical.
OK, let's start the meeting:
SOLVE THE PRESENT:
Until you plan your spending over the ensuing twelve months to discover what weekly surplus you will have, you will never achieve financial freedom. Your spending will continue to be haphazard. First you need to divide proposed expenditure into three main categories and arrive at a weekly total for each.
A. Committed Payments
B. Housekeeping, His and Her Allowances, Petrol, Giving
C. Contingencies, Holiday Spending and Special Savings.
BALANCE WITH INCOME:
All income should be paid into one Bank account which will be used for items in "C" category.
From this account weekly automatic payments replenish the other two accounts ("B" & "A")
DO-IT-YOURSELF FINANCIAL PLAN
I have a plan on a computer disk using Microsoft Excell with full instructions and hints that you can insert your proposed figures in each category, trigger the calculating icon and up comes a weekly surplus or shortfall. While on the computer you can make adjustments to balance the budget with a reasonable surplus. There is a Setting Up Diagram that automatically includes your figures so you can set up the system with your preferred Bank.
Retaining the PLAN on your computer allows you to make necessary adjustments and gives you the capacity to make larger spending decisions. Revised figures put in will determine if you would still have a reasonable surplus.
(I sell the disc and will post it anywhere for the price of NZ$40)
So, how about scheduling adequate prime time for a family conference when the following agenda should be discussed amicably and mutually acted upon. But just a few rules to be observed:
1. No arguments or recriminations about the past.
2. No apportioning blame over what has previously happened.
3. No negative thinking - look for the possibilities.
4. Be the first to say "sorry."
5. Be totally honest and willing to change.
6. Be methodical.
OK, let's start the meeting:
SOLVE THE PRESENT:
Until you plan your spending over the ensuing twelve months to discover what weekly surplus you will have, you will never achieve financial freedom. Your spending will continue to be haphazard. First you need to divide proposed expenditure into three main categories and arrive at a weekly total for each.
A. Committed Payments
B. Housekeeping, His and Her Allowances, Petrol, Giving
C. Contingencies, Holiday Spending and Special Savings.
BALANCE WITH INCOME:
All income should be paid into one Bank account which will be used for items in "C" category.
From this account weekly automatic payments replenish the other two accounts ("B" & "A")
DO-IT-YOURSELF FINANCIAL PLAN
I have a plan on a computer disk using Microsoft Excell with full instructions and hints that you can insert your proposed figures in each category, trigger the calculating icon and up comes a weekly surplus or shortfall. While on the computer you can make adjustments to balance the budget with a reasonable surplus. There is a Setting Up Diagram that automatically includes your figures so you can set up the system with your preferred Bank.
Retaining the PLAN on your computer allows you to make necessary adjustments and gives you the capacity to make larger spending decisions. Revised figures put in will determine if you would still have a reasonable surplus.
(I sell the disc and will post it anywhere for the price of NZ$40)
Thursday, December 29, 2005
BUCK POUND'S MONEY TALKS
Why talk about money? It's not just the talk of the rich but so often the dream and aspiration of the poor as well. It can be the topic at home, at work and on the sports field and it seems to have invaded the privacy of us all.
Money talks about us. It talks about our characters, our upbringing and attitudes more than we realise. Money is valuable for what it can do. It can purchase the necessities of life - food, clothing and shelter. It can also purchase the luxuries of life - prosperity, pleasure and power. Money is valuable, not only for what it can do but also for what it represents. Our money represents ourselves. It represents our time, energy and skill. Money is nothing more than a person converted into dollars and cents.
Because money talks about us, we ought to talk about money and get it into the right perspective.
How much is enough? We all have our aims and goals especially in the monetary field. Yet so often when we achieve our goal we extrend it further and further revealing the salutary fact that we never seem to have enough to satisfy our desires and wants. For many couples the early years of marriage are the best. The lack of money and a common purpose seems to draw them closer to each other. Without too many material possessions they are free to enjoy each other because there is little else to distract them. As their financial status changes they shift their attention from each other to outside matters. Pressures to achieve in business and sport can often generate financial pressures and these in turn can drive a wedge between husband and wife. So money in itself doesn't bring happiness. In fact I have come to the conclusion that the salary you earn can be inversely proportional to the satisfaction you receive. Maybe it's time to call a halt in the sometimes compulsive drive to generate more and more income. Instead we could learn to live beter on the income we receive.
The key is money management. We should know exactly where we stand financially at all times instead of just the usual guesswork.
In future articles I will show you how to get control over the money that passes through your hands.
Money talks about us. It talks about our characters, our upbringing and attitudes more than we realise. Money is valuable for what it can do. It can purchase the necessities of life - food, clothing and shelter. It can also purchase the luxuries of life - prosperity, pleasure and power. Money is valuable, not only for what it can do but also for what it represents. Our money represents ourselves. It represents our time, energy and skill. Money is nothing more than a person converted into dollars and cents.
Because money talks about us, we ought to talk about money and get it into the right perspective.
How much is enough? We all have our aims and goals especially in the monetary field. Yet so often when we achieve our goal we extrend it further and further revealing the salutary fact that we never seem to have enough to satisfy our desires and wants. For many couples the early years of marriage are the best. The lack of money and a common purpose seems to draw them closer to each other. Without too many material possessions they are free to enjoy each other because there is little else to distract them. As their financial status changes they shift their attention from each other to outside matters. Pressures to achieve in business and sport can often generate financial pressures and these in turn can drive a wedge between husband and wife. So money in itself doesn't bring happiness. In fact I have come to the conclusion that the salary you earn can be inversely proportional to the satisfaction you receive. Maybe it's time to call a halt in the sometimes compulsive drive to generate more and more income. Instead we could learn to live beter on the income we receive.
The key is money management. We should know exactly where we stand financially at all times instead of just the usual guesswork.
In future articles I will show you how to get control over the money that passes through your hands.
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