HAPPY NEW YEAR! 2012 has finally come to an end. And with the stroke of midnight came new resolutions, new promises, and new goals. We told ourselves we would eat better, exercise more, save money, yadda…yadda…yadda. Now we are at the end of week 3 of 2013, and many of us have not taken one step towards our newly established goals. After the New Year’s hugs, kisses, and celebrations were over, many of us went right back to what we were doing the day before. Some of us may have taken baby steps in the right direction while others took a leap into the new resolutions, only to fall back by the end of week 1 because we hit it so hard in the beginning that it was too much to sustain. Which group do you relate to?

With any change, you have to identify the steps that you plan to take to make that change, and you need to visualize what success looks like.  If it is your goal to get healthier this year, you must first determine what you need to do to get there (cut calories, exercise more, drink more water, etc.). And you need to get a mental picture of what it “looks like” after you actually achieve the goal.  Maybe success looks like pounds lost, or blood pressure stabilized, or reduction of insulin required for diabetics. If your goal is to save more money, you have to lay out the steps you will take to do that.  Maybe it means cutting out your Starbucks coffee in the morning, or putting your pocket change in a jar at the end of the day. Maybe it means having a certain amount of money automatically deposited each pay day into a savings account that you don’t touch. What would success look like to you in that case?  Maybe success is having a certain amount of money saved by the end of the year.  Or success might resemble the establishment of a 529 Plan for your child’s college education. It’s your goal…your vision…so you must design it.

Whatever your goal…whatever your vision, you can’t finish if you don’t start. “HOW DO I GET STARTED?” you say. I’m glad you asked… J. You start by taking one step at a time. By now you should know that I am a really big fan of journaling and writing things down.  So your first step should be to get a notebook, journal, napkin, matchbook, something…anything…and start listing the steps you plan to take to make your goals a reality.  As you list them, challenge yourself but be realistic on expectations, otherwise you will quit before you really get started. After you have made your list, put them in order of priority. What must you do first, second, third, etc? At that point you are READY. Then you must equip yourself with whatever tools you need to work through the items on your list. Maybe you need running shoes, or to open a savings account.  Maybe you need to have your taxes prepared so you can get your tax refund to fund your investment plan. Once you have the tools you need for your goal, then you are SET. With your goals in hand and your tools readily available, it’s time to GO! Don’t wait one more minute. It’s time.  READY…SET…GO!!!

Until next time… KNOWLEDGE IS POWER! – Dawn-Charmel

With 2012 quickly coming to a close, now is the perfect time to get organized, including your finances. Gather your bank statements, credit card statements, utility bills, insurance bills, etc. for the entire year.  Pour a glass of your favorite beverage, turn on some Christmas music, sit down and review your financial activity for this past year. Look at your cable bill, cell phone bill, and internet service provider bill to determine if you are paying for more services than you are actually using.  Maybe you don’t need 2 Gigs of data use per month for your Smartphone.  Maybe you are paying for premium cable channels but actually only watch Lifetime movies. Maybe you no longer need a home phone since you receive all of your calls on your cell phone. Maybe you will save more money by bundling some of your services. Try to identify opportunities to cut back on your monthly expenses.

Reflect on this year and remember your fiscal failures and your fiscal victories. Look at your mortgage payments and determine if there were any months that were paid late and identify the reason. Was there an emergency or had you used the money for more frivolous spending? Review your credit card statements and establish a plan to pay down your debt. Use this time to put yourself in a position to start 2013 off with purpose and a plan.

Put all of your documents in a folder/binder and label it 2012. Gathering all of these documents will also put you in a good place for tax preparation.  You will already have all of your documents together in a file to take to your tax preparer.  Just remember…when you get your tax refund…bank it…don’t spend it. This time next year, you will be glad you did.

Have a wonderful, joyous Christmas and a Happy New Year!!

Until next time…KNOWLEDGE IS POWER! – Dawn-Charmel

Fiscal Fridays: SPEND LESS THAN YOU EARN
by Dawn Funderbirk

Welcome back to Fiscal Fridays! I hope you have taken time to think about and set your financial goals. On our Fiscal Fridays blog that was posted a few weeks ago, I gave you a list of financial tips that women should know.  The third item on that list (which was in no particular order) was to “spend less than you earn”. I know it seems like common sense that if you spend less than you earn, you will be better off financially. I agree.  But sometimes we don’t do things that we KNOW we should do. Like, we know that if we decrease our intake of “bad” food, and we increase our exercise, we will lose weight.  Yet we still sit on the couch in front of the TV with the remote in one hand and a pint of ice cream in the other. J We know the rules, but we don’t always follow them.

When you mention spending less, some people immediately think that it means that they have to cut out all “extra” activities that are not necessary for daily living. That is not true. Spending less than you earn does not mean that you have to cut out all of the things that you love to do.  It just means that you need to take a look at your spending and decrease (not cut out entirely) spending on unnecessary or excessive things. Or find a less expensive way to do the things you enjoy. You work hard to earn the money so you should enjoy it.  But you want to be able to enjoy it now and later. You could do this by decreasing your daily trips to Starbucks to twice per week instead of seven.  You could start taking lunch to work instead of buying lunch out every day which hits your wallet for at least $6 per day. With 20 work days in a month, you are spending $120 per month on lunch. If you decrease that to eating out just twice per week, you are saving almost $900 in the course of a year. If one of your short-term goals is to pay off a credit card, that $900 savings would make a nice dent in the outstanding balance.

Sometimes spending less than you earn means that you have to earn more. If you have already cut the “fat” from your spending and cannot spend any less without starving or sleeping outside, then you could try to earn more. If you are already living paycheck to paycheck, and just make enough to pay your necessary living expenses, then there is no room for decrease so you must earn more. You can do this by taking on a part-time job, looking for a new job that pays more, selling things you no longer use/want/need, or starting a side business. (side note: Whenever you can, it’s good to have more than one stream of income.) You can use your talents and skills to make additional income. Maybe you are great at making gifts baskets, jewelry, or cloths. Or maybe you are an income tax guru. Your income could increase by doing that on the side. You could take all of your “extra” earnings and use it towards funding your financial goals.

Spending less than you earn is a big sacrifice for many people who are used to “spending ‘til it’s gone”. But this sacrifice will be well worth it, as you see your bank accounts get fatter, your investments increasing, and you reach your financial goals. Until next time…KNOWLEDGE IS POWER!  - Dawn-Charmel

Setting financial goals is a very important step in building wealth and financial security. Financial goals are as individual as the person who has them.  Your goal may be to purchase a home, save for your child’s college tuition, build an emergency fund, go on vacation, get out of debt, etc.  Your financial goals may address an immediate financial need or may be for your long term dreams.  Whatever the case may be, there are steps you should take for setting financial goals.

However, before you think about your financial goals, you must first assess your current situation.  Do you have $89,000 in student loans?  Are you carrying $12,000 in credit card debt?  Are you living paycheck to paycheck? Evaluating your current financial status will help you classify your financial goals as short-term, medium-term, or long-term.  If you are carrying $12,000 in credit card debt, you really shouldn’t have “saving for a week-long cruise” on your list of short-term goals. Maybe that could be your “prize” after your reach your interim, immediate-need goals.  The steps for setting financial goals are:

1.        First you should identify and write down your goals. Thoughts and feelings become more “real” when you write them down. Make a list of all of your financial goals (i.e. to retire at the age of 40; or to provide a nest-egg for your children).

2.        Once your goals have been listed, divide them into 3 categories, short-term, medium-term, and long-term.  Short-term goals are those you want to achieve within 1 year. Medium-term goals are those you want to reach within 3-5 years.  Long-term goals are those goals that you intend to reach beyond 5 years.

3.        Once you have prioritized your goals, set a specific date by which you intend to reach your goals. For example, you might say, “By January 1, 2014, I will have paid off all of my credit cards and all balances will be $0. Or, “I’d like to have my house fully paid off in 2027”.

4.        After you have established a date, evaluate your current budget and determine how you plan to achieve these goals.

At the end of your session, you should have a list that looks something like this:
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5.        Finally, implement your plan.

Goal setting can be fun, but achieving the goals can be hard work. It takes personal discipline and commitment to the plan. It’s important to keep track of your progress, make adjustments if necessary, and celebrate small victories along the way. For example, if you have 4 credit cards with balances over $1,000 and you pay one off…celebrate! It’s a milestone on your journey and can be the motivation you need to keep pushing towards your goal. As with anything, consistency and maintenance is the key to success. Until next time…KNOWLEDGE IS POWER!!!
Dawn-Charmel

What does it mean to “pay yourself first”? It means that, before you pay any bills (food, utilities, mortgage, credit card bills, discretionary spending, etc.) put some money aside for your savings and investment goals.  You should make this effort automatic so it won’t really seem like an effort at all. Paying yourself first indicates that saving is a priority in your life.

There are a number of ways to do this:
1.        Have your employer take out a pre-determined percentage of your paycheck and put it into a 401-K or towards the purchase of company stock. Note: some companies match a percentage of your 401-K contribution (Can you say FREE money???), so you should max out your contribution if you can.
2.       Set up an automatic transfer directly from your checking account into your savings account. With most banks, you can set this up yourself using their on-line banking services.  Set up a recurring transfer to happen automatically on a specific day of the month (preferably on each payday).
3.       At the end of the day…every day, put all of the change that you have accumulated during the day into a jar and leave it there.  Once it’s in the jar, it is only taken out on the day you take it to the bank. Once a month or every couple of months, make a trip to the bank to make a deposit (This is also a good way to get your children into the habit of saving, but this will be discussed in a later post).

Many people feel that they do not have enough money to save. But I disagree. Even if you have to start with $5 per pay period, as least you are getting started.  And as your income level changes, you can increase it.
If you don’t develop a habit of saving early on in life, it’s harder to make that change. I know it often seems like you barely have enough to pay your bills and that there is little or no money left over after you have paid them.  But if you get in the habit of paying yourself first, you won’t even miss it, and you will become accustomed to living off of what’s left after saving/investing.
The key is that once the money is put in savings or invested…leave it alone!! Don’t take it out to go on vacation or go shopping or anything like that. You should establish a secondary savings plan for that purpose. So ladies…let’s start today. It’s Friday and payday for some of you.  Go on your bank’s website and setup a recurring transfer. For those of you who already save, make a commitment starting today that you will not touch that money.  Instead, let it continue to grow.  You will be on your way to financial security and empowerment. Until next time…KNOWLEDGE IS POWER!

 Dawn-Charmel

 Hello Ladies! Welcome back to Fiscal Fridays. Our topic for this week is “Improving Your Credit Score”. Your credit score is also called a FICO score. What are FICO scores? FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score. They are the scores that most lenders use to determine if you are a “good” risk or a “bad” risk. The higher your FICO score, the less risky you are. The lower your FICO score, the more risky you are. Your FICO score may be different at each of the 3 reporting agencies (Equifax, TransUnion, and Experian).
There are 5 components that make up your FICO Score; payment history, how much you owe, length of credit history, other factors (such as type of credit you use) and new credit. See the pie chart below (Source: Myfico.com).

How a FICO Score breaks downKnowing how your credit score is calculated provides an easy roadmap on how to improve your scores.
1. Make all your payments on time. Late payments negatively affect your credit rating.
2. Decrease your total amount of indebtedness.
3. Keep old accounts open. If you have older accounts that are in good standing, it may benefit you to keep those accounts open. Just be sure to show a small amount of activity on a regular basis and pay the balance off in full each month.
4. Be careful of opening new credit. When the Department stores offer you an instant savings if you “Apply for a Credit Card Today!”, think twice before adding another credit card to your current list of debt. You might be negatively affecting your credit score.
You did not create your credit scores overnight so don’t expect to change them overnight. But if you start making changes today, you will see your credit score increase quicker than you think. 

Until next time…KNOWLEDGE IS POWER!!! – Dawn-Charmel