Category Archives: advice

You Can Do It

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Little Boy Beagle will be three in just over three months.  He learns new things all the time and tries something new every day.

A lot of the things he tries don’t always work, or even if they do work, they aren’t consistent.

As he works on conquering new things, he would take pride in an accomplishment, but if something didn’t go right, he would often get exasperated and say:

“I can’t do it.”

After hearing this more than a few times, I tried to turn it around.  If he would have a problem with something that I knew was within his realm of possibility, and he’d say he couldn’t do it, I’d go over and say

“You CAN do it”

and would then try to help him with whatever he was doing, showing him how to do it, working with him to get it, and encouraging him to try again on his own.

You Can Do It Lake Huron Beach Oscoda Trip 9-25-09 16

by stevendepolo, on Flickr

While not everything worked the next time he tried, after I started telling him that he CAN do it, I noticed that:

  • Many times, he would try more than once before giving up.
  • He said “I can’t do it” a lot less, even when he couldn’t.
  • He actually started telling others “You can do it” if he heard someone give up.

All of these things are pretty cool, and if a two and a half year old can get it, I think we can all learn that lesson.

If you fail at setting a budget, don’t just give up and say you can do it.  Tell yourself that you can do it and start over again.  And, as my son learned, don’t be afraid to ask for help.

Work at it hard enough, and soon you’ll not only be doing it where you once thought you couldn’t, but you’ll be the one providing encouragement and advice moving forward.

So, find something you think you can’t do.  Tell yourself “I can’t do it”.

Then stop and say: “I CAN do it”

Then, go give it a try.  You might just surprise yourself…

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2012 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive!

Don’t Get Tunnel Vision When It Comes To Your Finances

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When I was in high school, I worked for my aunt and uncle, who owned a collectibles shop.  At the time, figurines such as Precious Moments and Hummel were very popular, and their store became one of the more popular area destination for collectible enthusiasts.

Since most of the stuff was breakable and there was stock in the back room of many items, we would get the item from the back and unwrap it for the customer to look at while they were ringing up.  Occasionally, a customer would find something that they didn’t like about what they were buying.  Often paint was incorrect or maybe they would discover a small chip.  They would point out the defect and they’d ask for a different one.  Assuming we had more, we were happy to oblige.

Over the years of working there, I noticed an interesting behavior that, I would estimate 90% of customers were guilty of.  When we unwrapped the replacement piece, they would look only at the spot where they had previously discovered the defect.  If the first one had a chip on the back, they’d take the new one, look at the back, and finding no chip, give it back with the OK.

This puzzled me because, with that course of action, they neglected to look at the new piece in its entirety.  If there happened to be a chip in another location on the new piece, chances are they would have missed it, simply because their mind had zeroed in on the spot where the defect was in the original piece.

Many of us can get similarly focused on a problem with our finances.  If something goes wrong with our finances, it’s absolutely correct to focus on that and fix the problem, but don’t make the mistake of assuming everything else is OK.  Even if it was before.

The lesson here is to focus on your finances as a whole.  Sure, you want to focus on the problem spots, but if you look only at the problem spots from the past, you might miss warning signs of potential problems in other spots.

Here are some areas where this could potentially apply:

  • Just because your 401(k) had a great return last year, don’t assume you shouldn’t look at the allocations.
  • Just because your credit card payments deducted every month without fail for two years, don’t assume they came out on the date they have every month.  Make sure to check.
  • Just because your cable company has never made a billing error before, don’t just toss the bill in the trash.  Make sure everything looks correct.

I’m sure there are others and I’d love to hear your input.

Bottom line: Don’t get tunnel vision when it comes to your finances.  There are potential cracks or chips all over the place, so make sure to give a good look to all areas.

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2012 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive!

The Wrong Thing To Focus On When Re-Financing

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We re-financed last year as have many homeowners who are taking advantage of historically low rates.

One thing that I’ve seen in some of the discussions about re-financing is a focus on the wrong thing.  See if you can spot what’s wrong with the following hypothetical statement:

“Our current 30 year rate is 6% but we’re able to get our re-financed 30-year loan at 4.25%.  This will save us $350 per month!”

On the surface, this looks like great news all around.  Lower interest rate, saving more money, what could possibly be wrong?

Simple: The focus on the monthly payment is misguided.

In this scenario, you’re going from an existing 30 year mortgage to a new 30 year mortgage.  This means it’s thirty years from the re-finance date, meaning that your total time of paying the bank is thirty years plus however long you already spent on the original thirty year note.  If you’ve been paying for five years, that means you’ll be working on this loan for thirty five years.

On top of that, part of the ‘monthly savings’ that the hypothetical homeowner is so happy about comes, not from the lower rate, but from the fact that they’re spreading the remaining balance over additional years (in the example above, thirty years versus twenty five years).

When you’re re-financing, it’s my advice to look at how much time you have remaining on the existing mortgage, and strive to shorten it, or at worst, keep it the same.

In the example above where the homeowner has already paid five years on the original note, their new mortgage should be no greater than twenty five years.  Ideally, they should go for a fifteen year note.

This could mean that the homeowner might have to pay more than they did every month.  If you’re looking at only the bottom line, many will rule this out, even if they have the income to do so.  But the benefits are tremendous: You’ll apply a ton more toward principle and you’ll get done paying the mortgage that much earlier.  And your interest rate will be lower.

In the example above, going to a fifteen year mortgage might end up costing the homeowner an extra $150 over what they’re paying today.  If they can afford that, though, they shave a total of ten years off of the time that they pay on the house, and they pay a fraction of the total interest cost.

Now, if your payments are already stretched to the limit, fine.  Go ahead and get the thirty year re-finance, but instead of banking that extra money from the lower payment, keep your payment the same as what you were paying.  One hundred percent of that extra payment goes toward principle, so you’ll end up paying the mortgage off way faster, keeping with my goal not to exceed the term of your original loan.

In the example above, sticking with a 30 year note but plowing that ‘saved $450′ right back into the mortgage could have them paying the new loan off in, say, twenty years.  Add the five years from the original note, and they’re paying for a total of twenty five years, still way ahead of the original thirty year loan.

That’s five years less of stress!

If you’re in the market for a re-finance, great.  Just make sure to focus on the right numbers!

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2012 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive!

The First Step In Organizing Your Tax Information

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Now that it’s February, chances are that you’ve received most (and hopefully all) of your tax documentation.

The problem I’ve found is getting it all together.  So much mail comes in that sometimes it’s easy to overlook something, not to mention the fact that we get electronic statements for more than a few things, which can save on paper and such, but require you to actually print those tax documents.

Getting everything organized can be a challenge.

For me, what I’ve found works best is to rely on the fact that we are creatures of habit.

What does this mea?

Well, most of us probably work at the same job, have accounts at the same banks or brokerage firms, give to many of the same charities, etc.

For us, that means that the best way to start organizing our tax information for 2011 is to look at our 2010 tax return.

I can quickly go through the return and jot down the items that we used in 2010 to create a checklist of what we need in 2011.  This process will also trigger thoughts of things that were different and lead me to note what I need to do there.

For example:

  • Charitable deductions – We typically give to church, schools, Salvation Army, and a few other charities.  Looking through the list is a good way to remind me to look up the exact amounts
  • Mortgage – The biggest deduction we have is the interest deduction on our mortgage.  Jotting this down will remind me to check for our statements, and this year, we re-financed, so I can write down a note to pull out the closing statements since we can write off some of the closing costs as well.
  • Income – My wife doesn’t work and I didn’t change jobs, so this seems easy, but I also note that I should declare income from blogging, so I add that to the list.

You get the idea.  Now, there might be other changes as well that you won’t necessarily see from the list, but if you check last year’s statement as a first step, you’ll typically cover almost everything you need to get yourself ready for this years taxes.

How far along are you in getting your tax info ready for the upcoming tax season?

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2012 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive!

So You Broke Your New Years Resolutions?

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It was only a month ago, but I’m sure for many, both the New Year and the resolutions that came with them are distant memories.

How many diets have been busted?  How many workout programs have been abandoned?  How many smokers are smoking again?

If you’ve already broken those promises, here’s what you do:

Take a look around.  Know that anybody you see has likely broken their resolutions as well.

Then, start them over.

People have gotten into this mindset that we can only improve ourselves but once a year.  The New Year brings a new you and when the shine wears off the list of things we want to do to better ourselves, so many of us shrug our shoulders and figure they’ll try again next year.

Why wait?

The fact is, there’s no good reason not to start again.  Why not try again to hop on the treadmill or throw away the smokes?  Are you really going to give yourself another eleven months of bad habits?  That extra eleven months is not going to make it any easier to change next year.

It’ll just make it harder.

So, forget about the fact that you’ve blown your New Years Resolution.

It’s a new month, so I ask each of you to kick off your New Month Resolution.  Today.

And, the good news about that is, that if you fail, it’s the shortest month of a year so in a few weeks you can start all over again :)

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page.This original Money Beagle post Copyright 2012 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive!

Making One Good Decision Is The Key To Everything

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Monday through Friday, my alarm goes off at 5:04AM.  I have two options:

  1. Get up, go downstairs and exercise.
  2. Flip the switch, resetting the alarm for 5:39AM.

That’s a gap of thirty five minutes.  It’s thirty five minutes of extra sleep or it’s a thirty minute workout.

My goal is to work out three times a week minimum.  More would be nice but anything less than three and it’s not a good week.

I don’t do anything too intense. I have a recumbent exercise bike in the basement, so I’ll head downstairs to use that.  Sometimes I’ll lift some of the dumbbells that we have down there.  During spring and summer months, I’ve been known to walk around the neighborhood and enjoy the sunrise.

But, it all starts with that first decision.

Measuring My Progress by kretyen, on Flickr

I’ve found that the decision on whether to wake up or sleep in goes much further than that.  It can lead to an overall impact much greater than that of just the workout.

In an average workout, I burn, for the sake of argument, 150 calories.

That means that the difference between a day when I get up versus a day when I don’t is 150 calories.

Not too shabby, right?

Except it often goes further.

On a day when I work out, I know that I’ve already started things on the right foot.  So, when it comes time to pass the candy jar later in the afternoon, I’m more likely to pass on a day when I’ve worked out versus on a day when I haven’t.  That can be 100 calories of no-candy eating.

When I get home from work, I’m normally hungry and I’ll usually have a snack at the same time that Little Boy Beagle wakes up from his nap as a way to tide me over until dinner.  One of my favorite things to snack on is graham crackers.  I’ve found that on days when I work out, I might grab a sheet, break it in half, and eat just that.  On days when I don’t, I’ll eat an entire sheet or maybe even more.  That can be another 100 calories!

Add those three things up and we’re talking a difference of 350 net calories in a single day, but the ‘indirect’ benefits have already become more of a factor than the direct benefits derived from the actual workout.

The same can hold true with financial decisions.  If you’re on a strict budget, and you go out on a whim and spend $10 that wasn’t accounted for, that might look innocent enough especially when you figure that $10 isn’t going to really break the budget that much.

Only that $10 purchase can open the door.  After all, if you can afford $10 without an impact, what’s going to stop you with the next thing you want that’s $20? After that, it could be $40.  Keep going and you’ll suddenly be wondering how you spent $500 over budget at the end of the month.

All because you made the $10 decision that started the whole thing.

I truly believe that making one good decision is the key to making a lot of other decisions that will help things go your way.

Don’t worry about every decision being the right one.  Just focus on the first one you make being the right one, and you’ll have a much easier time of it and you’ll find that many other decisions will simply fall into place.

And, for the record, today I got up at 5:09!

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2012 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive!