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

In 1776, the Continental Congress adopted the Declaration of Independence and the US became an independent nation. That was 241 years ago. I can only imagine how they must have felt.

But freedom is not something that is guaranteed. So we must continue to be vigilant and more importantly we must hold those that we have entrusted to protect us – the president, the congress, law enforcement, military officials – accountable because they literally hold our lives in their hands.

But beyond all of that we must hold ourselves accountable because we all have a job to do and it starts at our home base. I think Martin Luther King Jr said it best:

"In the process of gaining our rightful place, we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must forever conduct our struggle on the high plane of dignity and discipline."

And, that’s the minute for today. Minding your money has never been more important and having a good credit score is essential. Download a copy my How to Raise Your Credit Score Cheat Sheet at www.psworth.com.

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.

Well, it’s really a question that a client presented to me. She wants to buy a house in six months and she wants to get the best rate so she wants to raise her credit score as high as possible. It’s in the high 600’s but she wants to push it to 760 so she can get the best rate. So, I took a look at what she’s doing and made some suggestions for her to raise her score. I took a lot of notes and if you are interested in raising your credit score, you can visit my website at www.psworth.com  and download my top 10 strategies that I shared with Ellen.

So, as I said, she wanted to raise her credit score to get the best possible rate. The reason that that’s so important is because the lower your rate, the more money you can save over the life of the loan. For example, on a $200,000 30-year mortgage it’s estimated that someone with a 760 score will pay $67,000 less over the life of the loan than say someone with a 620 score. That’s huge and this same scenario plays out over and over again. People with higher credit scores pay less. They have lower rates on their credit cards. They have lower insurance rates and they can often get better jobs because many employers are using your credit score as a hiring criteria. So, if it comes down to two equal candidates but one has a high credit score, guess who might get the job. I know there is something inherently unfair about the whole credit score thing but if you want to be in the game that’s part of the rules.

I have an aunt who laughs at the whole thing. She retired many years ago and she loves to say she doesn’t give a rats about any of it. But for those of us still in the game, we need to play.

Oh, I almost forgot, here is one strategy that I shared with Ellen that should have an immediate impact on her score. She has one credit card that she pays off each month but she waits to get the bill and then she pays it. Although it’s not late, it’s too late because her balance has already been reported to the credit bureaus so it looks like she always has a balance. The solution is to pay the bill before it’s reported to the credit bureaus. If you don’t know when that is, call the credit card company and find out. This simple tip could give you a big boost.

Want more of these strategies, visit my www.psworth.com and download my How to Raise Your Credit Score Cheat Sheet. And, that’s the minute for today.

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 Investment Strategy.

I chose investment strategy because for most of this week we have been talking about some of the basics of establishing an investment program and a key to making it all work is to have an investment strategy.

Once you understand the goals you want to accomplish and some appropriate investments based on your time frame, it’s time to develop an overall investment strategy. Or in other words, decide how you will invest the dollars you have. If all of your goals fit into one time frame such as short-term or long-term or if you plan to work on one goal at a time, this is less of an issue.

However, if you plan to work on multiple goals at the same time, you will need to develop a strategy to divide your investment dollars. For example, if I want to buy a house in 5 years and save for retirement in 15 years, I might decide to put one-half of my investment dollars toward a down payment for the house and half toward retirement. Then after 5 years, put all of my investment dollars toward retirement. The possible combinations are endless.

Since everyone’s goals and time frames are different, you may need to give this step some thought. And you may even need to work backwards based on the amount of money you will need for your goals to determine how much to save each month based on your projected return.

Our word of the week investment strategy. If you are like most people, you don’t have an endless supply of money to put towards your goals so you need to devise a strategy to divide your investment dollars so you get the biggest bang for your buck. And that’s the minute for today. Like the Minute? Subscribe to it and leave us a review on iTunes or your favorite site so you never miss an episode. Five starts would be spectacular. 

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

I want to continue our discussion about setting up an investment program and today I want to talk about the importance of knowing your risk tolerance but not letting it be the main driver of your investment decisions.

Your risk tolerance is just what it sounds like: A measure of how much risk you can handle as an investor and still sleep at night. A bit of self-knowledge in this area can go a long way in building a portfolio that works for you.

Most people tend to think of themselves as conservative, moderate or aggressive investors and then they look for investments that fit that profile. But I want to caution you against taking such a narrow approach.

There are times when you need to step outside of your comfort zone to accomplish your goals. For example, if you have a very low tolerance for risk and only choose quote/unquote safe investments like cash products and bonds, you could find yourself in trouble. Your investments could grow very slowly and in some cases not even outpace taxes and inflation. To compensate for this, allocate a portion of your portfolio to growth investments like mutual funds to get to your goals faster.

By the same token, if you have a high risk tolerance or you enjoy taking risks, that can also have a downside like choosing riskier investments that may not perform well, overextending yourself or opening yourself up to scams all in the name of getting a higher return. So again, adding some quote/unquote safe investments can help keep you in balance. Every portfolio should have a mix – a balance regardless of where you fall on the conservative to aggressive timeline.

And, that’s the minute for today. Got a burning 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!

Yesterday, I started to answer a question about starting an investment program and we started with a simple premise that it’s much better to have a goals driven investment program because it then becomes easier to choose the right investments and track your progress.

So how do you choose investments to match your goals?

Well, first I want to go back to yesterday and the goals you set. In addition to setting goals, I suggested that you break them down into timeframes – short, mid and long-term goals. With short term being roughly up to three years before you will need the money to mid-term which could be as long as seven or ten years to long-term which is anything longer than that timeframe. Using the list of goals you created we can start to match them up with various categories of investments.

For example, for short-term goals – you don’t have a lot of time so consider more conservative or “safe” investments that are designed to protect your principle so that the money will be there when you need it. In this case, cash investments like savings accounts, money market accounts, CDs and some Treasuries might be a good option.

For mid-term goals, mutual funds – I like index funds -- or again some Treasuries might be a good option and you can transfer funds to lower risk investments as you get closer to your goal.

And finally for longer-term goals – consider using ETFs or mutual funds to increase your earning potential. These options are less risky for longer term goals because you have time to ride out some of the ups and downs in the market before you will need the money. One warning here…there are thousands and thousands of possibilities to choose from. Don’t go for the exotic. Stick with well-known investments at firms you know. This is where doing your homework becomes so important. And, again you will want to move your money to lower risk investments as you get closer to your goals.

And, that’s the minute for today.

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

I’ve gotten several questions lately from people wanting some tips on how to start an investment program but who also worried that this might not be the best time to get into the market. Well, I think this is a great time to get into the market and I say that with this caveat. The idea is to get started in a program and to test out a new skill not to dump every penny you have into it. Go slow and but don’t stay out.

So if you’re thinking about starting an investment program you already know that the hardest part is taking the first step. But before you start, I have a recommendation to help you get off to a good start. And, my recommendation is this:

Make a list of your financial goals and treat them like real goals. That is make them specific, measurable, realistic and give them a time table. Goal driven investments help you to choose the right investments with the appropriate amount of risk based on your time frame.

For example, you might have a short-term goal like buying a home. A mid-term goals like paying for your children’s education or their wedding or a long-term goal like your retirement. Or even a lifetime goal, like leaving a legacy. Plus a lot of other things in between. Once you complete your list of goals, put them in order based on their priority. Then create a schedule to complete them.

This will provide you with a method to track your progress and celebrate your successes along the way. And, most importantly, it will give you a basis for choosing investments and that’s what we’ll discuss tomorrow.

And, that’s the minute for today. Got a burning 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…where are you now? This is a reflective moment and it’s a four part question. It’s mid-year and I want you to think back to the beginning of the year when you made those New Year’s resolutions. Think about what you have accomplished – your big wins and take some time to celebrate and pat yourself on the back. For myself I published a new book, “How to Get Divorced Without Losing Your Blouse” and it was featured on NerdWallet.com! That’s big. I’ve been a little under the weather and I don’t think I had really stopped to congratulate myself until just now. So what’s hiding in your life – this is not the time to be shy – put it out there and celebrate. I would love to hear what you are celebrating so drop me a line. So that’s part one.

Here’s part two – what have been your biggest lessons – good, bad or ugly? It’s hard to accomplish something and not learn some lessons. So what have you learned that is worth adding to your repertoire to repeat again and what have you learned not to do again?

Part three – what are you still working on that you can accomplish by the end of the year? You still have a lot of time in this year. What can you start or continuing working on a finish by the end of the year? Having a goal is essential if you want to do anything so what’s your goal? What do you want to do? To change? To accomplish? Write it down and post it where you can see it every day to help you stay on track.

Finally, part four. What can you do today to move yourself closer to accomplishing this goal? Don’t put off working on it, start today.

And, that’s the minute for today.

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

It’s Friday and in lieu of our word of the week this week, I want to round out our financial health week with one more part of the check-up.

All this week we’ve been covering financial health check-up basics and today we finish with very important basic.

Your investments. And, my question is, how did your investments perform over the past year? Whether you have a big goal like retirement or smaller goals like a vacation, you need to stay on top of your investments to ensure that they will be there when you need them.

Start the process by looking at your statements. If you’re new to this, you might need to get some help. Most brokers or mutual fund companies have great customer service and they will walk you through the process of reading your statements and calculating the current value of your investments as well as the increase or decrease in your return over the past year.

Don’t shy away from this part of your financial life. Your investments are key to building wealth and financial independence. If you simply don’t understand your investments, take the time to educate yourself. Attend classes and seminars, watch tv programs, read the newspaper and books, talk to people who know their stuff and ask questions – lots of questions until you get it. Then check in on your investments at least quarterly.

Quick recap for our financial health week. At a minimum:

Check your overall health by calculating your net worth

Track your spending with daily tracking for a month

Check your credit by getting copies of your credit report from annualcreditreport.com

And, review the performance of your investments by reading your statements

And, that’s the minute for today. Got a burning 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!

Have you had a financial health check-up this year? All this week we’re covering financial health check-up basics.

Having good credit is essential to good financial health. Your credit score is used for a lot more than just purchasing a home or a car, it’s also used to determine your insurance rates, landlords use them to decide if they want to rent to you and employers use them to decide if they should hire you so having a good credit score can mean a lot to you over your lifetime.

Your credit score is based on your credit report. Each year you are entitled to receive a free credit report from each of the three major credit bureaus by visiting annualcreditreport.com or calling 1-877-322-8228. You can get them all at once or stagger them throughout the year. I like to stagger them throughout the year so that I am always up to date on what’s being reported. Did you know that it’s estimated that 75% of credit reports have errors in them and that could mean higher rates for you or even being denied credit. In either case, as soon as you get them, check them for errors, even small ones and if you find any, challenge them right away.

An accurate credit report and a good credit score is essential for good financial health. And that’s the minute for today.

Got a burning 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!

Have you had a financial health check-up this year? All this week we’re covering financial health check-up basics.

If your money has a way of just slipping through your fingers, burning a hole in your pocket of just performing a disappearing act, today’s check-up basic will help you track where it’s going. For this part of the check-up use a checkbook register, an app or a journal and write down every penny you spend and every purchase you make for a month. This includes checks you write, charges on your credit card, and online payments as well as cash payments – everything. List what you purchased, how you paid for it and the date.

If you don’t think you can do this for a full month, do it for as long as you can – the longer you do it the better the information you will have to make decisions going forward.

At the end of each week, review your expenditures check to see if your spending matches your goals and what’s really important to you. If it does Congratulations! If it doesn’t make some notes about what you would like to change…. and create a plan to change them. At the end of the month, look for trends in your spending, especially spending on things that don’t really matter to you. Is a certain time of day? When you are feeling down or up? When you are out with your friends? Etc.

Bottom line, you have the power to change your spending habits and improve your financial health, but you can’t change or improve what you don’t know exists. Want a copy of my health quiz? To get a copy simply, shoot me an email at [email protected] with the word ‘health quiz’ in the subject line and I’ll send you a copy. Then take it in the privacy of your home or office and find out once and for all the areas you’re good in and the areas that may need some TLC.

And, that’s the minute for today.

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