Needs and Wants :)

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Have you ever wanted something so bad that you do anything to get it? There is a fine line between goals and being taken advantage of by your wants.   Wants are sometimes hard to control.  I recently read,

“One in 10 Americans making $80,000 or more a year are willing to take on more than $5,000 in debt in an attempt to portray their life as luxurious, according to the report, which surveyed over 1,100 adults online in the U.S. in February”.

In society, we have access to products are out finger tips. I can get online right now and purchase a multiple product from Amazon and it can be at my door step within 2 days. Advertisements and products are always around us making an environment that is not conducive to saving money.

On top of all of this we also have the issue of coveting items. That man is driving a super nice car. I wish I had one of those. I just read a blog which talked about people that have a mid-life crisis and use a large amount of their savings to buy and expensive car. Why would you want to spend your hard earned retirement money half way through your life?

I have to put myself in check which I am shopping, do I really need this or is this something that I want. We would ask this questions for every purchase and make sure you are keeping yourself in check.

I also read another blog that had some great insight on to control spending. Some of the subjects are the following and of which I felt are the important and why.

  1. Take only the cash you need.

If you limit yourself the amount of money you will use in a day it can hugely decrease your spending habits. It is really about having a plan before you go shopping or going on vacation. For example, I took my family to Disneyland this last year and we made the decision that we would only really spend money on one meal a day. We purchase snacks and sandwich making and packing into the park with us. It also helped because kids always get hunger and all the time. They are like little eating machine that get cranky if they do not have food in their system. This decision saved us hundreds of dollars on the trip and we had a blast getting on a few extra rides instead of sitting down to eat.

  1. Leave and come back.

Don’t buy something immediately. Half the time after you think about the purchase for a little longer it does not make as much sense to have it. It gives you time to realize if it is a need or a want and then you can really make an educated decision.

  1. Shop with a list.

Always take a list to the store. It is much like a project. You have a plan and anything adding to that list is scope creep. Stop the scope creep in your life and it will make your life a lot easier and prepare you for a better future. I have a real problem with this. My wife does not like to send me to the store because I always come back with something we did not need.

This is just a few of the heavy areas that hit home with me. Good luck in your spending and continue to prepare for your financial future. What tips do you have to control your spending between needs and wants? Thanks for reading my blog.

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What is the next opportunity?

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I recently had to interview a couple of people for a school project. One of my interviewees is in the UK and as I talk to him about his career, he shared that his previous job was working on government contracts. During the economic down turn in 2008 the government lost the funding for his contract and he found himself without a job. He mentioned that was a struggle for him as he started to search for a new job after a long 7 years. It took many months to finally get a job where he could support his family again. The lesson he learned through this experience is you should always be looking for other opportunities around you for work.

There is really a couple of reason why you should always be looking for more work.

  1. You never know when the job you have will be lost. I have seen people that get let go with in a few months to 20 years with a company. I have also seen contracts lost which caused a mass loss of jobs. The boy scouts have the right idea when they came out with the scout motto “Be Prepared”. It can happen to any of us.
  2. The next opportunity that come up may be a lot better than your current work. In today’s world, the working professional changes jobs an average of every 3 years. Therefore new job opportunities are coming and going all the time and one of those jobs could be twice as better with pay and job satisfaction then the current job you are in.

This does not mean that you just need to get up and move jobs every 3 years just to meet the norm. It just means you need to be ready to ensure that your financial future is not impacted by the loss of your current job. You work so hard to add to your 401k and other investments. You do not want to lose the hard earned savings due to a loss in work.

A couple of powerful ways to be on the lookout for a new job:

  1. Networking: Get to know the people around you. Every connection in your life could result in a different future for yourself. There are also networking functions around town that you can get involved in. It is also good to be active in your community to make those connections.
  2. Get on Social Media: Social media can be used to connect with people around the world and across may different industries. Make sure your social media platforms are updated and profession.

Hope this give you some help in your life to create a better financial future. Let me know if you have any thoughts on this subject. Do you know any other ways to network?

Help with student loans

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Student loans are a resource which can be used to help you get a higher education degree. It is not free money but most loans will delay your monthly payment while you are enrolled in the university full time. Not having the monthly payment is very beneficial while you are in school and on a tighter budget. You need to be careful that you really think about the money you are taking out and how fast it can accumulate. At some point you will not be in school anymore at which point you will start getting a monthly statement to pay your bill.

I was talking to a couple of co-workers and they mentioned when they were going to school they were young and did not know the impact of taking out student loans. It was the first time that anyone had given them an option to take a large amount of money in their life. One of them had a full scholarship to the school but he took out student loans to purchase music equipment. He was not given the proper guidance in his early years about how money loans work. He dug such a large hole that he will be paying the debt for may years to come. The younger generation entering school need to be better educated to make the right decision.

I can give you just a few words of advice that can help you in the right direction. You can also go to the below links to get a wealth of information.

  1. There are two types of student loans.
    1. Federal loans & Private loans: I would recommend that you try to stay with only the federal loans as the interest rate will be lower and the repayment is much easier. It is available if you really needed it but remember as soon as you start taking money out you have started a hole of debt in your wallet that will not just go away.
  2. There are different types of federal loans to be aware of.
    • Direct Subsidized Loans: These loans are your best option. They monthly payment of the loan is deferred till you are out of school and the interest is paid by the government while in school. Therefore, it is like you just took the loan out right after you leave your school. Except that the money was already spend. This is only available for undergraduates.
    • Direct Unsubsidized Loans: These loans are another option for both undergraduates and graduate students. The payment is also deferred but the interest will be added to the loan balance during while you are in school. So after you get out the balance will be a lot higher then you expected. It possible, I would recommend you stick with the Direct subsidized loans.
    • Direct Plus Loans: These are another options of loans for graduate students or for undergraduate with their parents to get additional money.
  1. Student loan calculator: I recommend that you take a good look at a student loan calculator to get a good idea of how much it will cost you after you graduate. This will help you see how long you will hold the debt and the monthly commitment you are signing up for. You can plan out the class you are going to take and how much money you are willing to take out in loans.

Good luck in your schooling and make the right choices in getting the right loans. Please reach out to me if you have any questions. Do you have any other tips of information I have not mentioned?

 

Avoid Buyer’s Remorse

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Have you ever bought something, or made a large decision and suddenly regretted that decision?  “Buyer’s remorse, especially for high-ticket items, happens all the time, and it makes everyone involved unhappy: Customers regret their purchases and wish they had their money back. Brands and stores lose too, because they’re left with unhappy shoppers who don’t want to return to the store.” You do not need to be one of these people. With every larger purchase you make you should ask yourself some questions to avoid buyer remorse and make sure you are still saving for your future.

  1. How often will I use this item?
  1. Can it be rented?  Rent ideas here.
  1. How long will it last? Here’s a link to expected life of most large purchases
  1. Will technology make it worthless before you get the value?
  1. Is what I currently have fulling my current needs?
  1. If it’s a large purchase, is it something you can borrow/rent or test for a period to be sure it’s something you will actual use?
  1. Will I be happy I purchased this item in the future?
  1. Does someone else sell the item cheaper

When you take the time to ask yourself these questions, and research your purchases you will be less like to have buyer’s remorse and waste money that could be used to invest in your future. You do not always need a new car or the next flashy electronic gadget. How do you make sure you don’t have buyer’s remorse?

Let Bing.com save you money?

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I know most people use google as their main search engine but have you every check out Bing.com?  I was on google since it opened but when I hear that a search engine gives me something back when I search, I made the switch right way and never looked back. I know what you are thinking. Not use google? Everyone uses google, who are you. Well, I have been using Bing for a few years for one main reason. It is called “Bing Reward”. Bing Reward are points you can earn for every search you perform on Bing.

If you have not tried out Bing.com you should. The search results are not much different then you get with Google and it has a very great look and easy to navigate. So your next questions may be what can I do with “Bing Reward”, well let me give you some ideas.

Microsoft offers a large variety of gift cards which can be exchanged for the reward point you have earned. Some examples of these gift cards are Starbucks, Amazon, Fandango, Xbox live, and Hulu. Since I do not pay for TV cable because I do not want to have such a high month payment for a bunch of channels I will not watch, I use the Bing reward to pay for my month prescription to Hulu. It has saved me from having one extra expense for the month for not changing anything in my behavior but switching search engines. I know one other person at work that use Bing rewards to get multiple Starbucks gift cards to give out to co-workers for Christmas. It was super gesture to get something from this person around the holiday season and it did not cost them anything.

All you need to get started is to open a live account and then you are set. If you want to use some of your point the main page on Bing.com will have a link and you just click and go. On a side note, you should also look up the different Bing desktops they offer as well. They are free give you something different to look at on your computer every day. If you are like me, 12 hours or more on the computer everyday it nice to see something out of the norm.

I know this blog post is a little out of my normal blogs but I has helped me save money in other areas and therefore I can use the savings on other ways to prepare for the future.

Hey every little dollar counts right? Try out Bing and let me know your thoughts.

Teaching Kids the value of Money-What must they know?

 

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After reviewing several blogs, and taking my own experiences with my kids and my wife as a CPA, I have pick the three most important things kids should know about money. These three item can be learned as early 3 years of age.

  1. Money doesn’t grow on trees.  This is a hard lesson to learn. My 5-year-old broke down the other day because she really wanted a large stuffed care bear at Costco for $25 dollars and tried so hard to get us to say yes.
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    So for the first time we had a heart to heart discussion about how money doesn’t grow on trees.  We then talked about how I work every day to make money to pay for our house and food and her Mom a little as well to allow us to get a few extra things. When we talk about our physical working time and the effort it takes to make money it seemed like I could see the wheels turning in her head. On Parents Magazine it says “When kids see bills pop out of the ATM, they don’t realize that money is a finite resource. Explain that you work to make money, and the bank is just a place that keeps it safe (try to banish your cynicism about the recent economic crisis!)”.  I think this is a very valid point, as using credit card/debit cards at every store the money is pretty obscure. It really seems like maybe it does trees.  So teaching them about the time it takes to earn certain has totally taken a turn on my kindergartener’s understanding of our financial situation and she has definitely become more empathic when we say we can’t afford to buy that right now.

  1. Don’t spend as soon as you get it. Miguel de Cerbantes Saavedra said “The gratification of wealth is not found in mere possession or in lavish expenditure but in its wise application”.   The process of teaching kids to save money can be tricky. We have one child that it is completely natural and the other just does not get it.  So we will let him learn on his own as he gets bigger by allowing him to buy things he wants with his money even if it means that the next time he wants something there will be no money. It will be tough but following through is the best way for them to learn that spending right away when your money get isn’t always the best. You can also help make goals with them. You can make a chart and show them the amount of money they have versus the amount it cost for the item they desire. This will help them see how long it takes to make money and the rewards of getting the item at the end.
  1. Having Cash available when an opportunity comes up is awesome! Our daughter has been a great saver since she was little. We may have started teaching her that money doesn’t grow on tree too young.   But she received money at Christmas when she was 4 and saved it for 6 months till we went to Disneyland. There she got to pick exactly what she wanted and was in heaven.  Such a reward for us to see her in heaven and a great lesson that having cash available for when the perfect opportunity comes up is perfect! She is still saving money to this day and planning out what to do with it. She even wants to buy gifts for her younger brother. It is so fun to see!

What money teaching tips have worked for your family and little ones? We have to start teaching our kids about saving early. It will definitely help them learn some life lessons.

Bring on the change!

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Recently I had a friend that was in an upper level management position. He was let go after years of working for the same company. He was very loyal to his company, always showed up on time, and tried hard to accomplishing the takes given to him. There was only one issue that lead up to him growing away from the company. He was resistance to change. This resistance to change became the death of his career at this company. Much like all of us we have a hard time with change too. It gets more hard when you have been doing the same things for the last decade and it seem to work just fine. You get a sense of pride and therefore feel you know the better path than anyone else. This is the behavior which leads up to being resistant to change.

Change is so important to our lives. We often forget that in order to keep moving forward in life we must be willing to change or life will at some point move on without us.  In my personal life I’ve found as I get older sometimes I’m more resistance to change for many reason, so I’m looking for ways to improve and to be willing to be ever changing with my environment for the future so I don’t find myself in a similar situation as my friend. You have to be willing at all point to drop your pride, listen, and be willing to act on the change that is coming.

In the Harvard business review, I found an article outline 10 reasons why people resist change when imposed by leadership.  The reasons listed in this article are Loss of Control, Excess Uncertainty, Surprises (suddenly imposed), Everything seems different, loss of face, concerns about competence, more work, ripple effect, sometimes the threat is real (it can hurt). I would say that while these all seem true and probably part of the problem, a big most underlying factor I feel is insecurity.  I think often we are insecure because we don’t understand how change will improve the environment, how change will help us, or maybe that it will put us in a negative light.

So how can we help ourselves be more adaptable?

  • Being more open.
  • Be willing to say yes.
  • Be humble enough to listen and reflex on the change.
  • Be able to see the positives.

I think sometimes we get so caught up in what’s normal or “how it’s always been” that we automatically react no!  If when you find yourself wanting to react no, take a step back think about other options solutions and then proceed.  From an employer’s perspective when you are flexible you create more value for yourself, you can make better business decision, and find better win-win situations How do you deal with change, do you have any tips for improving on flexibility?