How many of you read the title of this article and said “Oh no! Not that again!”?
If you’ve ever attended any kind of financial seminar or read any books on money management, you have been told that you should consistently be putting a set amount of your income into savings. We all know that we are supposed to be putting away money every single month. Still, the reality is that an extremely small percentage of us actually do it.
So let’s just be extremely clear – no more beating around the bush… If you are not willing to make the commitment to automatically pay yourself first—every, single month without exception—you will NEVER build any kind of financial security, let alone wealth. Read the rest of this entry »
Recently, I was reading about Elon Musk – the business magnate, engineer, and investor – involved in a number of amazing creations. (Tesla, Space X, Hyperloop, SolarCity are just a few.) At first, I thought, “Goodness! He’s an incredibly creative guy!”
Then I realized that in a real sense, this entrepreneur is also an artist… He just creates his “art” in a way that emphasizes the business aspects.
That made me think that flipping the discussion might be fun. What would happen if as artists, we treated our financial lives like we were business owners?
How It Would Work
Examining your financial life as if it’s a business and you’re an entrepreneur, causes a noticeable attitude shift. Instead of thinking, “Maybe I’ll save a little money here or there down the line,” we ask “How do I start saving NOW?” If the answer is “It’s impossible,” then looking at your money like a business leads you to the next logical question: “How do I speed up the process?”
You are reframing financial planning in a way that makes it fresh, exciting, and empowering. Read the rest of this entry »
Last week I had coffee with a friend who is feeling anxious about the size of her emergency fund and hoping for some tips that might help her put away additional money every month. I showed her some of the new apps I’m trying out. It’s amazing how the financial technology world has exploded in just the last couple of years. Not only can apps do some of the most obvious tasks like helping us save. There are also some that help us prioritize debts, make budgets, invest money, and even tip ourselves when we think we deserve it. “I don’t know,” she sighed. “I want it to be easy.” “Look at how simple these apps are, though!” I said.
“I know. It’s just… there’s a ton of them. Who has time to sit on their phone all day flipping through a bunch of apps? Painting is easy. (My friend does beautiful watercolors.) This looks hard.”
I realized she had a point.
Many of the financial conclusions we reach have more to do with our point of view than about the topic at hand. In this case, I’m already pretty immersed in the financial landscape, so all of these tools are like fascinating new toys allowing me to explore something I already love. For her, it was a nightmare. She was worried about the fact there were countless new things she didn’t know how to use. Like a person who’s never seen tools before being introduced to a Home Depot super store, she’s overwhelmed. Read the rest of this entry »
I’ve written before that much of financial planning comes down to you. In my time working with people, I’m always sad when they want to talk about all of the reasons they can’t get ahead. They worry about politics, the government in general, rules and regulations, the stock market and more…
Yet there’s also something very exciting to be found at the other end of the spectrum. It’s inspiring engaging with clients who are passionate about life and everything they are “up to” in the world. These are the people who rarely have much to say about the negative external forces. Rather, they focus first on their own actions.
If you really want something, including financial security, there’s a five step process to getting it:
1) Decide. I’m not talking about hoping or wishing. You have to actually decide what’s going to be in your future. Several years ago, I worked with an artist who decided she was going to stop talking about “one day selling her paintings,” and instead, was going to actually do it. In less than 2 months, she sold her first piece.
Making the decision to change your financial status means that you’re going to do something about it. We’ve all felt the difference between hoping and deciding in our own lives. When you first decided to shoot your short film, finish your script or stage your solo show; when you decided it was time to lose weight; when you put down the cigarette and said, “That’s my last one.” You have to decide. Without this step, no magic happens.
The rule = You have to ask for it before you have a chance of receiving it. Read the rest of this entry »
Been to a bank lately? If you’re a saver, there’s not much for you to smile about.
It’s frustrating, isn’t it? You work hard to save money, and then there’s nothing to do with it. While interest rates have been supposedly on a rising path, a quick look at comparison sites shows that there’s not much out there paying more than one percent.
Let’s look at some potential ways to earn better rates on your money and examine the pros and cons of the various options, so you can approach your choices with a critical eye.
What worries me: you aren’t beating inflation. I’ve heard arguments that inflation may be nonexistent but look at how much you’re spending on your craft…supplies…classes… Have those prices risen? I’ll bet they have.
Why I like it: Currently, money markets pay between a tenth of a percent and just over one percent. That’s certainly better than a savings account! Read the rest of this entry »
One of the most common feelings about money is that there is this “mystery target” out there somewhere… and that as soon as our bank accounts reach that magical number, all of our financial troubles and worries will be over and we won’t have to spend time dealing with our finances anymore.
Here’s the truth…
- Everyone – no matter how wealthy – worries about money sometimes; and
- We will always have to “deal with” our finances.
Financially successful people may not be worrying about credit card debt, building an emergency fund, or struggling to make sure every bill is paid. But more often than not, if you dig deep you’ll discover that they have meticulous systems for monitoring their financial picture. They face any challenges head on, and work to respond to them quickly, to reduce the possibility that a small financial hurdle snowballs into a full fledged money disaster.
Contrast this with the person who’s always disorganized and can’t seem to ever get ahead in their financial life. He or she consistently complains, “I hate it when money comes up…it’s too depressing.” Maybe. But hiding our eyes won’t make our money concerns disappear. Read the rest of this entry »
In December, while you were most likely preparing for the holidays, the United States Federal Reserve raised interest rates one quarter of a percent. That small amount may not seem like much, but it signaled a big change in the minds of many economists. The US Federal Reserve hadn’t raised rates since June of 2006, and generally when they notch rates up, it means a series of interest rate increases are on the way.
So, what does this mean? Let’s dive a little deeper.
The Federal Funds rate, the interest rate that the Federal Reserve actually controls, is the amount of interest charged when banks borrow or lend for ultra short periods of time. This interest rate is then passed on to customers of those banks in their loans; so while you don’t have the Federal Reserve as your bank, any moves by the Fed will show up a few ways: Read the rest of this entry »
In the final weeks of December, it’s important to take one last look back at the year. How’s your plan coming? If it’s like mine, there are still some items on the “to do” list that you’ve yet to mark off. We’re down to only a few weeks to finish up our goals for 2015.
I was listening to a podcast recently with Hal Elrod (of Miracle Morning fame). He was sharing with the host that he sleeps very few hours most nights, but that it doesn’t seem to affect his day. He noticed that on short rest, everything hinged on his attitude. If he woke up and said, “Man, I’m tired. Today’s going to be awful,” the day stunk. If he said, “Alright! I’ve got a huge day today, no more time to sleep!” he became a powerful force in the universe.
I’m certainly not advocating that we give up sleep. More sleep AND a good attitude are probably the optimal one-two punch. However, if you’re in a situation where less sleep is the reality, attitude can change the game.
It’s the same with our money, isn’t it? Our attitude changes everything.
- If I believe my debt’s killing me, it is.
- If I think saving money is difficult, it is.
- If I decide that I’m stuck in a rotten financial place, I am.
As creatives, we know from literature, film, plays, and even poetry, that the hero largely decides her fate. In the beginning of a three-act play, the character faces a problem. By the end of the work, the character has formed a plan, and for better or worse, they’re working through their plan to find a resolution. Read the rest of this entry »
A good friend just finished his first marathon in Chicago. I’ve always envied people who accomplish big goals like a marathon. It takes so much time to train, and there’s no monetary payout… AND you know it’s going to require lots of effort and will be incredibly painful.
As a friend (and a student of asking “why” about everything), I had to ask, “What was your secret to success?”
He said, “I just had to remember that it was going to be exciting at the beginning of the race, then the hurt would come, and then I’d find my forever pace. After that, I needed to just keep it up until mile 20, and then gut it out the final six miles.”
Easy, huh? It sounds good, but we know that the key is in every moment of that plan… still, there was one phrase I didn’t understand.
“Forever pace?” I asked. “What’s that?”
He smiled and told me that after a few miles your body settles into a pace that you feel like you can run forever, without thinking. It’s an automatic pace, hopefully fairly fast, but ultimately one you can run for miles and miles.
I like that idea… between that and “gut it out,” the creative person in me can see plenty of connections.
When I’m working on an acting or writing project, I find my “forever pace” after awhile. Skill and training takes over. That gets me through until I’m applying the final touches, when really, in many ways, I have to “gut it out” and finish.
…but what does this have to do with money?
Because we want to focus as much as possible on our artistic careers, it’s important to find our “forever pace” with money. We need our financial plan to work for us in the background, so that we’re not constantly being distracted by financial worry. Read the rest of this entry »
My budget stopped working a few weeks ago.
I know what you’re thinking: “But Miata, you’re perfect with money…how could YOU have budget issues?” ☺
Well trust me, even I have budget issues and this last month was a doozy!
You may know that I have two children. They had some big expenses come up…as did we.
At the same time, we were invited to several events, which we agreed to attend…none of them inexpensive. We made a huge mistake and said “yes” to all of these without thinking about the budget. Because we overbooked ourselves, our schedules were crazy, so we gave up on groceries and cooking and ate at restaurants. And then with all of the increased stress, we found ourselves spending more money on movies and “fun” stuff.
“Fun” and my wallet were having an all out war and fun was winning.
So what do you do? When this happens to you?
Don’t Give Up
This isn’t the first time my budget has collapsed, and I’m sure it won’t be the last. We’ll fall off the horse, forgetting to prioritize what’s important and leave off the rest. We’ll ignore our family meetings because we’re too busy. It’ll happen again.
Our clients have similar issues. Even people with healthy budgets go through huge cash flow crunches. They’ve suddenly run up credit cards because of medical scares or car repairs. It happens.
The thing you don’t do? You don’t stop trying. Read the rest of this entry »