Managing our money does take some time, but it doesn’t have to take an entire day. Nor does it have to take many hours if we create a simple routine to address our specific needs.

The benefits to creating such a routine are at a minimum, threefold:

• You actually know how much money you have
• You know how much your lifestyle is costing you
• You spend more efficiently when you have a handle on what expenditures you value and which ones you don’t, subsequently eliminating waste and boosting your cash and savings balances

Today I’m going to share with you three suggestions I made to my audiences that resonated the most with them. Hopefully they will resonate with you as well.

1. Include your “annual bills” in your monthly budget. This sounds like a no-brainer, but I was amazed how many folks received this as “new” information. Insurance premiums for your auto, home, medical, life, long-term care, and disability, etc. are significantly less if you pay annually instead of monthly. You can throw property taxes in there, too, if you’re a homeowner. Simply divide the annual amount by 12. Each month, set those amounts of money aside in your savings account and earmark them for a particular expenditure. When the annual bills come, simply transfer the amount needed out of savings into your checking and pay the bills. You’ve just saved 10-20% by paying once instead of monthly.
2. Use a Quicken, Money, or an excel spreadsheet to track your accounts. With a few clicks you can produce extremely valuable reports such as your personal balance sheet and cash flow statement. My mother used to say, “The proof is in the pudding! ” these statements don’t lie and will give you an accurate view of your current financial standing. However, these statements are only as good as the info you enter into them, which leads to my next suggestion …
3. Schedule a time each week to enter your income and expenditures and pay your bills. Set up online banking or bill-pay with your bank - it’s mostly free these days. Bills can be paid weekly in less than 5 minutes. Your banking transactions can be downloaded from your bank’s site into your software on a weekly basis which will enable you to reconcile your monthly statement when it arrives in a matter of minutes.

Once you establish your routine, you will find that it only takes about 15 minutes a week for you to accomplish all the above. On a monthly basis, you can print out a report so you know exactly where you stand each month and can see your progress. These three steps will provide powerful knowledge that you can apply to modifying your habits for better outcomes. Wouldn’t you like to create more money by applying your knowledge for positive change as opposed to wandering around the “forest” of ignorance? I thought so!

© 2010 Start Smart Advisor™, Inc.

While listening to the presentation, it became very clear to me that we were two peas in a pod. Her attitude is one of joy, prosperity, and peace. This woman didn’t appear to have a care in the world. She continued to explain herself. Her life was filled with challenges, as many of ours are. She had a thriving business that nearly failed. She came face to face with addiction and beat that. Her relationships failed; she had to find new ones. She even had to file bankruptcy at one point,(the bane of all financial planners), but yet she stood before me, glowing, and was a huge success.

How was she able to overcome all these financial and personal disasters and still be so positive? Here’s how she did it then and continues to do it now… she intentionally guards her positive attitude through positive affirmations and choosing to hang around “her people.”

Jack Canfield says, “The power of positive thinking… takes you to where you want to be.” The icon of positive thinking, Norman Vincent Peale, opens his remarkable book, The Power of Positive Thinking, with the following, “Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in your own powers you cannot be successful or happy. But with sound self-confidence you can succeed. A sense of inferiority and in adequacy interferes with the attainment of your goals, but self-confidence leads to self realization and successful achievement. Because of the importance of this mental attitude, this book will help you believe in yourself and release your inner powers.” Mr. Peale has sold more than 5 million copies of his book around the globe. Apparently Chellie isn’t the only one who bought into the power of positive thinking.

Check your attitude towards your finances today. Don’t waste another minute. Sweep out any negative messages you’re currently telling yourself. Replace them with positive messages like, “Money just flows to me.” “I live in abundance.” Check your current relationships and choose to spend time with folks who are positive and supportive of you. They will help reinforce the new, confident you.

Check out www.StartSmartAdvisor.com for more ways to empower yourself and win at the game of finance.

© 2010 Start Smart Advisor™, Inc.

 Was ringing in the New Year something special for you this year? Did any resolutions resonate with you? I sat down the Monday before New Year’s Day to ponder what I wanted out of 2010. With that in mind, I tried to come up resolutions for this year and realized I couldn’t because the whole “resolution idea” just didn’t feel “real” to me, and I sense a lot of you probably feel the same way. Personally, in my near 5 decades on the earth, I have never reached a single resolution with the intention set at the beginning of the year. After a lot of soul searching — three nights of it to be exact—my big “ah ha” was that I didn’t want to resolve to hit a punch list of goals, I wanted to approach my life differently.

2010 for me is going to be all about getting real. 2010 is going to be a big year for me: I’m launching a new start up, I’m determined to live my dream, and I turn 50! Yes …now you know my age, but that’s all part of my plan for 2010. I’ve always confessed to be a holistic financial planner, but as an entrepreneur, it proved difficult to follow my own advice. Or at least I thought so. Chalk it up to “maturing,” but it became clear that with a few tweaks of my current lifestyle, I could live my dream and reach a lot of my personal and financial goals naturally, while becoming a “real” mentor for my clients and followers to emulate. So here’s my “Get Real in 2010” plan. Feel free to adopt and modify if it excites you.

Step One: Perform a personal audit on spending habits and get them back to lean and mean. Commit to 30 days of intense honesty in the spending department.

Step Two: Based on the results of the 30-day spending audit, create a cash flow statement  so you can see how much discretionary income you truly have.

Step Three: With “real” numbers to work with, create a budget that is both challenging and rewarding for both business and lifestyle. This is a necessary step for monitoring success. Here is where you cancel the non-read subscriptions, the gym membership you never use, etc. and then update your cash flow statement for an accurate view of your revised discretionary income.

Step Four: Prepare a Balance sheet so you can see where you’re currently at financially. Set goals that address debt elimination, wealth aggregation, and charitable giving for the year. Monitor quarterly.

Step Five: Learn and utilize the TVM (time value of money) principles. For example, take the time to run the numbers for retirement planning or think about the opportunity cost of purchasing a “want” or a “wish” a little bit more before spending freely. Remember to keep your goals close by to help keep in line with your “real” financial plans and accelerate your success as opposed to sabotaging it.

Step Six: Address the “WAM factor” or “what about me” facet to successfully acquiring financial goals. We all know that financial matters can be so stressful that ignoring them altogether becomes a habit many adopt. By addressing the WAM factor, money matters become more of a game than a nightmare. Keeping your emotional self engaged and excited will be easier if you check-in more often and actively, and I emphasize actively! Drive your petit demons away with some physical activity—walk the dog (or yourself) and enjoy your surroundings. If you don’t think there’s anything to enjoy, look again. Sometimes it’s that little flower that finds its way between the sidewalk’s cracks that makes my day.

 Small rewards that don’t involve spending money and invest in your well-being are a great way to play the game successfully and build sustainable momentum.

So that’s it. I’m getting real in 2010 and going to take my own advice and perform these six steps. Come join me, follow me, share your comments, or whatever you like to enhance your financial health and wealth now! And may a purposeful and fulfilling 2010 bring the health, wealth, and happiness we all seek in abundance!

© 2010 Start Smart Advisor™, Inc.

With the New Year rung in, resolutions abound

The suggestion I’m about to make is a simple step towards realizing three main goals the majority of us share—to save more, exercise routinely, and weigh less. Is choosing to brown bag lunch to work at least four times a week a possibility for you? Think about it. You could make a significant dent in, if not realize your resolutions by making that ONE change. Let’s look at a hypothetical situation:

If we were to have chicken or tuna salad sandwiches, green salad with grape tomatoes and cucumber slices, and an orange for lunch; and celery sticks with peanut butter and an apple with cheese for mid-morning and afternoon snacks, respectively, and substitute water for your beverage of choice, you could actually lose weight, eat healthier cuisine, and save money! The key is to make simple food that you enjoy.

Here’s the math behind it:

One loaf of high quality bread - $4.00
1 lb. of high quality lunch meat or canned fish - $7.00
Lettuce - $2.00
Grape tomatoes - $4.00
Cucumber - $1.00
Oranges - $4.00
Cheese - $4.00
Apples - $3.00
Celery - $2.00
Peanut Butter - $3.00
TOTAL $34.00

This is the estimated cost for high-quality, non-sale groceries. If you took advantage of discounts, coupons, local produce, and bulk purchases that make sense, you could bring the cost down to $5 or less per day, while still catering to your tastes and preferences.

Now let’s compare that to the cost of eating out. In an effort not to pick on any establishment, I’ve chosen to list a few eateries I know to be packed to the gills with patrons during business lunch hours and to use their lunch specials prices.

So here goes …

Cheesecake Factory ($8 lunch, $2 soda, $1 tax, $2 tip)  - $13.00
Elephant Bar ($6 lunch, $2 soda, $1 tax, $2 tip)  - $11.00
Applebee’s ($9 lunch, $2 soda, $1 tax, $2 tip) -  $14.00
Yard House ($10 lunch, $2 soda, $1 tax, $3 tip) -  $16.00
TOTAL -  $54.00

The difference between brown bagging vs. eating lunch out is $20 per week. If you saved it, (just a suggestion), you could accumulate nearly $1,000 over the course of 49 weeks (52 weeks minus 3 weeks for vacation). I’m sure you could find lunch ingredients for less than $34 for four days, but I wanted to make a point …

…if you spend a little extra at the grocery store to get foods that you enjoy, homemade meals are so much better than going out for lunch, and they can be interesting, even exciting, with a little creativity and effort. Here are some ways how:

Choose exotic snacks, perhaps spicy soy nuts or peanut butter pretzels and celery Make soups with pastina, barley, or mini ravioli’s for a heartier version combined with a simple salad with croutons and a pear (I love this combo, especially with a little feta on the salad!)

Reward yourself for brown bagging it with a mini-chocolate snack. Milky Way, Snickers, 3 Musketeers all have bite-size versions at the local market. Or …indulge with a piece of good dark chocolate and a Clementine orange for an afternoon snack. (Might I say, “Pure decadence! Savor the delicious combination of tastes and fragrances as they linger on your tongue and fingertips.”)

A BONUS:  With the time saved from not having to drive, park, order, wait, and then eat, you can find a quiet spot walking distance from your work station, preferably outside with greenery, eat your meal or snack and then take a 5 to 20 minute walk. You’ll feel so much better and stronger, both physically and mentally.

This relaxing, self-indulgent lifestyle can be yours. All you have to do is simply choose something different for yourself. Invite your peers to join you. Visualize your goal whenever your attitude needs a boost, such as what your version of a successful retirement looks like, or the vacation you’re saving for, or if you don’t have an emergency fund, the feeling of security and self-love that results from taking care of yourself and those you love. It’s truly worth the change in behavior.

So in closing, I challenge you to start smart and brown bag the majority of your lunches if your habit is to eat out during the week. Your net worth could go up while you slim down …not a bad trade off. Let me know your comments if you take up the challenge. I’m interested in hearing how it’s going and how you feel about the changes.

When I teach my personal finance or investment classes

As most of you know, financial advisors are always touting the necessity of a savings account solely for emergencies. I call this an “e-fund.” Generally speaking, if one is an employee, his e-fund is recommended to be three to six months of expenses. In the case of a self-employed individual, six to twelve months of income is recommended to safely avert financial disaster.

In my experience of my clients and myself, I didn’t ever have a dramatic example of how important the e-fund really is …until last fall.

In September last year, I was in a terrific car accident. We were fully insured as was the person who hit me. However, it became clear very early on that this was a financial disaster for my husband and me. Injuries aside, we needed a new car. To cut to the chase, my 10-year old Cadillac, in excellent condition and with brand, spanking new tires, keys, & tune-up, was worth a whopping $7,000. That was it! $7,000! Having a car payment was not our modus operandi, and to add insult to injury, my husband had his heart set on another Cadillac. Neither of us saw this one coming. We were heart-broken. My class quickly learned that being “fully insured” still meant I’d be responsible to buy a new car—many of them believed, admittedly naive, that insurance would take care of it. But it didn’t!

Just when they all thought their professor was going to pass around a hat to buy a new car, I sprung the fact that we had an e-fund. Thankfully, it was substantial enough to buy the new car, but would deplete it significantly. One suggestion was pretend to have a car payment to build it back up, which makes great sense (they’re learning).

The point was made: without those savings, we could have been in a world of hurt having to get a car loan at significantly higher interest rates than a few years ago. Or worse yet, having to get a car my husband really didn’t want (all married folks will understand that statement .)  So, lesson learned. My students are now thinking much more broadly about the uses of an e-fund. I hope you do too. It can be the difference between starting smart or not at all.

Happy saving!

© 2010 Start Smart Advisor™

Enter Timothy Ferriss, author of the Four-Hour Work Week. In his remarkable book (available at Amazon.com), he asked two questions that hit me like a bolt of lightning:

1. If you had a heart attack and could only work 2 hours a day, what would you do, what would you delegate, and what would you let go. And if that wasn’t enough,
2. If you had a heart attack and you could only work 2 hours a week, what would you do, delegate, and let go?

This was an incredible answer to my dilemma with my injury. All I did was substitute “heart attack” and enter “car accident” and that was my life, my doctors’ orders. Immediately, I banished all thought of not being able to remain a financial planner. At that very moment, I started living my dream, injuries and all, using Tim’s tips, suggestions, and strategies.

The key to living our dreams is PASSION. What are you passionate about? What is it that you would scale a mountain for to shout from its top …”Now hear this …”? You might want to give some serious thought to this. I know I did. It’s all I could do while recuperating.

I sorted out quite a lot by asking myself the following questions:

• Did I want to?
• Was it an obligation?
• Does it serve me?
• Could I delegate it?
• Could I eliminate it?

It really is true that most of what we do is for ourselves even though we swear we “have to do it” in the name of our jobs, children, spouses, and friends. Decide to make different choices with your actionable time. By running your tasks, errands, meetings, relationships, reading, etc., through this filter, you’ll be amazed at how much you will be able to eliminate completely or delegate to someone else. This enables you to complete more work in less time, thereby freeing up time to work on things you are truly passionate about.

My recuperation started while working my financial planning business an hour a day until I could work longer. If you would have told me six months ago I would only be able to work 20 hours a week, I would have had a conniption fit and spiraled downward by the weight of self-imposed anxiety and guilt. But that didn’t happen. Instead, I learned how to put me first; something I could never do before. I’ve got more time to spend on the things I value most—my faith, my husband, my friends, and my clients. I never thought I would say that two of the most disturbing incidents in my life enabled a life-changing discovery I am truly grateful for. But then again, doesn’t the phoenix arise and fly out from ashes? Now I truly understand the beauty of the mythological lore.

How does this relate to financial planning? Well for starters, time is a priceless resource. This plan allows you to reclaim your time so you’re free to do what you were meant to do. By decreasing the hours spent on earning an income, yet maintaining or even increasing revenues, your income per hour rises. That makes good financial sense. Again, as a holistic financial planner, I like to look at the client’s life as a whole. This methodology feeds personal values and increases resources that guide and direct our investment policies and decisions, no matter if you’re an entrepreneur or employee. That’s why I’m sharing it with you. So what if it wasn’t all my idea, I learned a lot from Tim. So can you.

I challenge you to use this filter to weed out extraneous expenditures and activities. After a few weeks, take a little time to assess the changes and discover how much more time and resources you have and the impact of those results.

You can live your dream now if you live your life by intentionally choosing what to spend your precious time on and what not to. I choose faith, family, friends, and clients. How are you going to start smart in 2010?

Let me know by commenting below.

© 2010 Start Smart Advisor™, Inc.

The highlight was the conversation we had. We were able to discuss the matters most important to them, but it didn’t stop there. We were really getting to know each other even more. At one point in the conversation, Pam (not her real name) made the comment that if Plan A didn’t work out, she’d simply revert to her Plan B. However, knowing her as well as I do, and her husband, I was a little shocked at her flip remark. I asked her if she was really serious about Plan B and she replied, “Yes.” My response was an emphatic, “Oh NO you won’t!” A little wide-eyed she sheepishly asked, “Really? Why?” Knowing her, I was able to tell her, “You don’t want to do that. You’ve told me over and over that taking that route would signify defeat, and we have so many options to choose from that would thrill you. We will not slink back because it’s easy. Making a different choice that serves you better is just as simple as the making one that deflates you of your energy.” After all, they have the resources to do whatever they want with planning and proper execution at the right time. I thought her husband was going to fall off his chair.

And that’s the key folks. When working with an advisor, you need to work with one you can really talk to, trust, and reveal your true needs, wants, and wishes. Knowing Pam and Ted (another fake name), I knew that the last thing they wanted to do was return to where they had come from. My flat refusal to entertain Plan B reinforced the fact that I am on their side, working towards their achievements of their goals. Both Pam and Ted felt reenergized by the realization that there were other options and were grateful that I reminded them of all the choices they could make beside the one they didn’t want to realize. My reward was Ted telling me that his last broker never had conversations with them, he just reported to them what we was going to do without asking how they felt about any of it.

Times are difficult now and can be confusing when faced with situations we weren’t planning on. There is a bevy of choices one can make if: 1) they know what they are, and 2) have the knowledge to make an intelligent and informed choice. Working with an advisor who takes the time to really know you, understand your motivations behind your goals and fears, can alleviate useless worries and anxieties and enable the realization of your dreams if you just take the time to find the advisor that fits with you. You can find a CFP® near you through the FPA and CFP® Board of Standards links available on my Resources page. You’ll be glad you did.
Don’t hesitate to comment or contact me with any questions or concerns. Until tomorrow …have a great day and happy reading.

© 2009 Start Smart Advisor™, Inc.

For more info: Here’s the link to an FPA article on why a CFP® is the best choice when working with a financial planner: http://budurl.com/6xdp.

Today is our nation’s independence day, the day we proclaimed ourselves free as a country. I love this day. It’s always full of celebration. Whether it be hot dogs and hamburgers or wine and cheese, we always finish with fireworks. When I watch those fireworks, I think of our national anthem, especially the part where we sing, “bombs bursting in air.” I’m always so grateful for the men and women who sacrificed themselves so that I could have the power of vote. To me, the vote signifies freedom.

As a CERTIFIED FINANCIAL PLANNER™ Professional, or CFP®, I suppose I should somehow bring us to the subject of financial planning. It won’t be painful. I promise. Let’s just take a moment to think about independence and freedom and how they relate to our personal financial situation. Do you know your financial independence date — the date when you no longer have to work? Have you actually thought about what it would feel like to be financially free? I encourage you to think about this seriously.
In order to achieve financial freedom, the equation is quite simple. You simply need to make more money than your expenses. For some people they limit their income solely to their job. However others try and find several revenue streams, including passive income. For the latter group, their goal is to have their passive income eclipse their expenses so they are financially free to spend their time doing what they love as opposed to working.

If financial freedom is something that you crave and are willing to make sacrifices for, I encourage you to find a mentor or advisor to guide you in this endeavor. It is completely and totally possible for you to achieve especially with guidance. Remember advice is cheap, mistakes are costly. The choice is yours!

© 2009 Start Smart Advisor™, Inc.

For more info: Today I would like to suggest two books for your reading pleasure. The first is written by Robert Kiyosaki entitled, “The Cash Flow Quadrant.” The other recommendation is called, “The Millionaire Next Door,” by Thomas Stanley and William. Danko. Both can be found at Amazon.com. Enjoy some summer reading!

There are two main reasons for getting long-term care insurance. The first reason is being unable to afford paying cash for your long-term care needs such as recuperating from a chronic disease, rehabilitation from major surgery, or other unforeseen impairment. Another name for paying cash is “self-insuring.” Most people cannot afford to set aside a large sum of money to pay the cost of their long-term care. Contrary to what many believe, long-term medical care isn’t generally covered by standard health insurance or Medicare. Medicare may cover a portion of your stay providing you qualify and the institution you’re being transferred to qualifies. If not, those costs are borne by you.

The second reason is to protect your assets, such as your retirement lifestyle, including your home, cars, checking and saving accounts, and insurance policies. Why would you need to protect these assets? Because if a medical crisis strikes requiring a period of rehabilitation or long-term care, and you aren’t able to show proof of insurance or self-insure, the state will most likely take care of you. That’s the good news. The bad news is there’s no guarantee they will care for you, and if they do, you WILL pay for it. If you don’t, they will put a lien against your assets for the cost of your care. You will have to come up with the cash to pay the bill or they can seize your property, in the worst case scenario. Essentially your estate is liquidated to the extent of the cost of your care plus any other fees they tack on. If there are any assets left, they may go to your family. I know in some states you are protected from losing your house providing you are still living in it or intend to move back into it. If you have moved out of your home and are permanently living in an assisted living facility or receiving nursing home care without any intention of returning to it, the State can force the sale of the home.

Long-term care insurance fulfills the need for this type of insurance coverage for these scenarios. It provides you insurance to cover the cost of the care you need between the hospital and complete recovery. LTCi premiums can vary substantially. In many cases, a low-cost premium may not provide you with the level of coverage you are actually seeking. It is important to understand the components of a long-term care policy and how to calculate your need for coverage, topics of future articles.

This matter is very close to my heart. My mother, who recently passed away from cancer, did not have a long-term care policy. As a result, when her health finally declined to the point where she needed 24-hour care prior to hospice, two of my family members literally moved into her home for the last 60 days of her life because we didn’t have the money to pay for in-home care. It was a huge sacrifice; one whose magnitude we did not realize until after the fact.

Another family member who’s 84 years old now requires 24-hour care. He also didn’t have a LTCi policy—he felt he didn’t need it. He was as “healthy as a horse!” That was true until he turned 82 and had a major stroke. Now, once quite strong and unstoppable, is now unable to use one side of his body and has bouts of dementia. His prognosis for improvement is deteriorating with each day. A caretaker has moved into the home and is there 24 hours a day, seven days a week. His wife pays cash for his at-home care, not Medicare. Their savings are steadily being drained by this exorbitant expense.

In both these situations, I wish my family would have made different choices. Sure the premiums are an additional expense. However, depending on the age you start your policy, the premiums could be a minor fraction compared to the total cost of self-insuring. I hope you learn from my families’ experiences. As I’ve said before, advice is cheap. It’s the mistakes that are costly.

© 2009 Start Smart Advisor ™, Inc.

For more info: Check out this article on frequently asked questions about Medi-Cal and long term care — http://budurl.com/fqag.

When celebrities neglect this step, disaster strikes and we all get to witness the train wreck. When we screw up and omit this step, no one sees it except those directly involved. As a financial advisor, I want to ask you, “What have you done to protect your family and estate?” Many of you are probably thinking, (lol), “I don’t have anything to plan for. I don’t have an estate. What do I have to protect? And why would I need estate planning celebrity style?”

Well, to respond to your thoughts there, you may or may not have something to plan for. However, the size of your estate doesn’t excuse you from executing basic estate planning. It is this plan that makes sure your family and financial goals are met after you die. Now I should disclose right here that I am not an attorney, so this should not be considered legal advice. But, it is general information that’s required in order for you to retain your own estate planning attorney and take care of this. So if you own a home, (and it doesn’t matter if you have a mortgage or not), insurance policies naming others as beneficiaries, and other assets, chances are you need some estate planning. If you have children, you definitely need estate planning. If you own a business, you certainly need to speak to your attorney about it.

And if you’re not thinking along those lines, but have done estate planning in the past, now is a good time to dust off that binder, refresh your knowledge of facts, and review your personal documents. You may find you need an amendment or another document that was either overlooked or now needed due to changing circumstances.

There are several documents that can make up one’s personal estate planning. I will list the main elements here in this article and then explain each one in subsequent articles. Here we go:

• Revocable living trust
• Revocable living trust amendment
• Certification of revocable living trust
• Community property agreement
• Last will and testament–Pour over well
• Financial durable power of attorney
• Healthcare durable power of attorney
• Living will or Directive to physicians
• Letter of direction for distribution of personal property
• Information for survivors
• Planning for catastrophic illness or incompetency
• What to do when someone dies
• Working copy of RLT

To properly protect yourself and family from probate fees, creditors, and predators, you will need some, if not the majority, of those documents. Again, I will explain what each document is and why you need it throughout the series.

Here is my disclosure one more time …I am not an attorney, so you’ll want to retain one to help you take care of you and your family. By gaining insightful and useful information, you will better understand why this type of planning is essential and how to go about getting just what you need. I look forward to this series of articles and hope you do too.

© 2009 Start Smart Advisor ™, Inc.