Sunday, October 19, 2008

Protect Your Financial Castle

By: Joseph W. Norman

Today is as important a time as ever to take control of your finances. Managing your finances well today gives you options tomorrow.

“The average American is busy buying things he doesn’t want with money he doesn’t have to impress people he doesn’t like.” O. Donald Olson

According to John Maxwell, there are three simple truths when it comes to your money:

1) Money won’t make you happy, 2) Debt will make you unhappy, and, 3) Having a financial margin gives you options.
There are plenty of strategies out there to maintain and excel when it comes to your money. The key is that it does not have to be complex. It can be as simple as dedicating 80% of your income to expenses, 10% to investments, and the other 10% as you desire. Some use the other 10% as a charitable giving.

How can you start managing your finances well today? Use a program like ( to get an idea of where your money is going. Your transactional data is downloaded on a daily basis into the program and it gives you trends, simple budget tools, savings opportunities, and more! I use it personally and after my introduction, my financial advisor uses it now as well!

Once you know where the money goes, you can isolate what David Bach calls “your latte factor.” That is the one item you might buy everyday which is costing you hundreds of thousands in the long run. It could just be a $4 coffee at Starbucks everyday. But, multiply that $4 by 5 work days and 52 weeks. Then take that number and give it a 10% return over the duration left until your retirement. Do the math. The number will be astounding!

Another crucial item is to firm up your credit score! Are you incurring too much consumer debt on frivolous things? Change your automatic payments to a debit from your checking account and lock those cards up! Then, put yourself on an automatic payment plan to absolve your debt.

Don’t focus on the debt because that won’t help. Just stop the bleeding and set up an automatic plan to resolve it!

Dealing with your money is stressful but it doesn’t have to be overwhelming. Make a commitment to yourself today. Remember, properly managing your finances daily gives you options.