Minding Your Money 360 - Quick tips to manage your money for success

Today on the minute – Is Your Money Working for You?

Is your money working for you? One sure way to find out is to take a look at your tax return. Did you know that your tax return is really like a mini snapshot of your entire financial life? And, more importantly it can give you and others an indication of what’s really important to you because it shows you where your money is going.

Think about it. It starts out with your marital status and dependents. Then it gets deep into every possible type of income you could get from jobs, investments, taking money out of retirement investments, and even extra income like winning the lottery.

Next, it focuses on adjustments like whether or not you moved for a job, paid for higher education to beef-up your skills or one of your dependents, or if you contributed to a deductible IRA.

Then it goes on to show how much stuff you have that you can deduct such as interest on a mortgage, taxes your paid and charitable contributions. Finally, it shows if you are withholding too much or too little for taxes by the size of your tax bill or refund.

Your tax return really is a tiny snapshot of your financial life and if you aren’t impressed with what you see start moving to change it. Tax season is just around the corner.

And that’s the minute for today. You know I love helping people with all aspects of their financial lives. If you have a question, or you would you like some help in getting your financial house in order contact me at [email protected] or go to my website at psworth.com and sign up for a free Discovery Session.

Thanks for listening and as always remember that minding your money really is the path to a richer life!

Today on the minute – Should you run your household like a business?

If you stop and think about it, households are very much like businesses. Businesses have money coming in, money going out and it's always important to know where you stand so that you can keep the doors open. To accomplish this they have budgets, they watch their cash flow and they compare what they thought was going to happen to what actually happened. They also set goals and have meetings with everyone to be sure that everyone is working together.

And you can apply those same principles in your personal life. Having a budget helps you create a spending plan for your money before you actually spend it so that you can ensure that it goes to the places that you want it to go. In other words, it gives you the opportunity to make executive decisions about where your money should go. Also, weekly or monthly meetings to discuss finances, set goals or just check in with other issues can help everyone in your household stay on track.

The best way to implement running your household like a business is to start with a budget. There are lots of options and choices. You can choose a formal budget online or offline or choose something like the 60-10-10-10-10 budget where 60% of your income goes for household expenses including entertainment, 10% for savings, 10% for charity, 10% for retirement and 10% for an emergency fund. The combinations you can choose are limitless. The important thing is that you find a way to spend and track your money so that it is going in the places you want to.

And that’s the minute for today. Like the Minute? Leave us a review on iTunes. And if you have a question, send it to me at [email protected].

Thanks for listening and as always remember that minding your money really is the path to a richer life!

It's Monday and I have a question.

And, my question is this… what’s your plan for teaching your kids about money?

Now that the kids are heading back to school, this is the perfect time to add a little financial education as well. If they don’ provide financial education classes at their school this task will fall to you. So where do you start?

Well start with the basics – spending, saving and investing. Parents love to say, “Do as I say, not as I do.” And for the most part kids get it twisted around and they find it so much easier to do what you do not what you say. So why not capitalize on this and teach your kids about money and investing by being their role model. And if you don’t know the basics yourself or you are just learning that’s perfect – because all you have to do is stay one step ahead of them. So as you learn something, practice it and then teach it.

Then tackle the other big taboo – the proverbial elephant in the room, actually talk about money. Pick a day each month where the whole family gets together to discuss finances. This time can be used to discuss stocks, creating a budget, saving or any money related topics. You can even use this time to catch up with some of your money management tasks. While you don’t have to spill any family secrets, the idea is that they (and you) get used to talking about money in some context so that it doesn’t feel strange or invasive talking about it later on.

Money is a big part of life and it touches most parts so don’t pretend like it doesn’t.

And that’s the minute for today. Keep your eye on the Minute because some big changes are coming including guests to share their money stories and ideas. If you have suggestions, send them to me at [email protected].

Thanks for listening and as always remember that minding your money really is the path to a richer life!

It’s Friday and time for our word of the week –the word this week is risk vs reward.

Okay, so it’s two or three words but they are so related that it’s tough to talk about one without taking the other one in consideration because they are essentially parts of the same whole. In other words, there is no reward without risk. In theory, the more risk you take the higher your potential reward or because you are taking a risk you could lose some or all of what you put in.

Risk is a part of every investment and there are no guarantees. Even if you decide to put your money under your mattress, there is the possibility that you could be robbed or that your house could burn down. So no matter what you do, it’s hard to avoid risk. The question is, is the risk worth the possible reward and can you live with the loss.

One way that you can mitigate risk is through the use of tools like diversification and insurance. Diversification allows you to limit your losses on one particular investment or when it comes to your income, having several income streams allows you to limit risk there and insurance can help you replace losses or recover more quickly. Risk is always a part of reward and you should be aware of all the parts of your life that it touches and look for ways to mitigate it.

Our word of the week is risk vs reward. At the end of the day, perhaps the biggest risk of all is doing nothing because then you don’t even have the possibility of a reward.

And that’s the minute for today. Want more connect with us on Twitter @yourmoneyminute

Thanks for listening and as always remember that minding your money really is the path to a richer life!

Today on the minute – retirement myth #3

As I have talked about for the past couple of days, I had a long conversation with an old friend this past weekend and he had some really weird notions about retirement, notions that I called retirement myths. Today I want to talk about one more myth that I uncovered in our conversation.

And, this is one that many people I talk to are really relying on and that is working, at least part-time in retirement to make up the difference. But the reality is that although more and more people are opting for this option in lieu of saving for retirement now, many will not be able to make this option work. Studies have shown that while a large percentage of retirees want to continue to work after retirement, only about 30 percent of retirees actually continue to work after retirement.

So, why such a small number? Well, there are probably a number of reasons but my sense is that there are two likely candidates:

Health reasons – they are simply not able to work

They can’t find work – ageism is real, it’s alive and well and many employers simply don’t want to hire older workers and if you have a job many employers will encourage or nudge you to retire because you are most likely earning a higher salary than they would have to pay a new guy.

If this is an option you plan to choose, start your job search early or if you have always wanted to start your own business, consider that in earnest and start long before you plan to retire so that you can have a going business when you retire. Relying on Social Security alone is not good. In most cases, it provides about a third of what you will need today and your guess is as good as mine about what it will provide in the future.

And that’s the minute for today. You know I love helping people with all aspects of their financial lives. If you have a question, if debt is an issue or if you just want to get your financial house in order contact me at [email protected] or go to my website at psworth.com and sign up for a free discovery session.                                                    

Thanks for listening and as always remember that minding your money really is the path to a richer life!