Can you live stress free?

Stress is a part of our everyday lives. Stress causes us to react out of fear to preserve our lives. We don’t have sabertooth tigers chasing us anymore, but the stress mechanism remains.

Long term stress can cause serious health problems: heart disease, sleep problems, digestive problems, depression, obesity, memory impairment, and I’m sure others that haven’t been discovered yet.

If you’re like me, money has be one the top stressors in my life. I’ve learned to reduce financial stress and hope I can help reduce yours too.

Causes of Financial Stress

1) Lack of Income- Not having enough income is frustrating. Being laid off or not able to find a job that pays the bills is frustrating. I’ve been there.

Finding a part-time job while you are searching for full time employment might be a short term solution. Ultimately you’ll need to find something you love doing that pays the bills. These books have helped me with career questions and finding work I love: No More Dreaded Mondays and The $100 Startup.

2) Debt- Debt weighs you down and causes stress, especially when bills keep coming in. Bill collectors only add to your stress level.

Find a plan to deal with your debt will reduce your stress. I’ve seen it happen with friends and clients.

3) Wind in the air budgeting- Determining the wind direction with a wet finger isn’t an accurate method, yet many budget their money with this method. Ditch the best guess method and learn how to budget like a pro.

4) “It’s all up to me.” mentality- Believing that your financial future is all up to you can cause stress. Don’t get me wrong I am a strong advocate of personal responsibility and hard work–I do however recognize there is a spiritual aspect to money and life.

I’ve found that trusting God with my finances and the future has relieved much stress in my life. This is a daily practice and a perspective I have to remind myself of when I feel stress creeping in.

Dealing With Stress

The effects of stress are not enjoyable and our relationships will suffer. Coping with stress and stress management are short term solutions At some point you’ll need to deal with the root causes of stress.

If you need financial help, consult an counselor and/or clergy member to discuss the root causes and find solutions. If I can help, contact me directly with your questions.

Let’s reduce our financial stress and move towards financial peace.

Photo Credit programwitch

Does money stress you out? How do you deal with these financial pressures? 

Photo Credit HRC

Is it time to clean out your Costanza Wallet? Credit shareski

I’ve been a fan of the trifold wallet since I started carrying one back as a wee lad.

The trifold is nothing special, it’s just what I grew up and what is comfortable to me…that is until it becomes so fat that I can’t have it in my pocket.

“This is an organizer, a secretary, and a friend.”- George Costanza

That makes me begin to wonder: What is in my wallet? In homage of Spring Cleaning. It’s time to clean out the ole’ wallet. For you voyeurs, this should be fun.

A Catalogue of What’s in My Wallet

I have to make this wallet thinner. I’ll put a Trash to those items I’m taking out.

Inside the folds

• $40 in mostly one dollar bills that I have saved for garage sale season.
• $1.26 left over for money to spend on my wife. (We budget cash to spend on each other each money)
• My new address listed on sticky note.

Left Fold

• ING relic debit card that will soon be replaced I’m sure [RIP ING Direct...].
• XX bank debit card
• Insurance card
• Best Buy Rewards Card Trash
• REI Member Card
• Safeway Club card Trash
• Old insurance card Trash
• Costco Card- I can trash this when our membership expires.

Middle Fold

• Drivers License
• Picture of my wife
• Picture of my son as baby
• Stash of old receipts
• 4 OTC business cards

Right Fold

• Starbucks Gold card–yes I like coffee.
• Business Debit card
• Old McDonald’s Gift Card Trash
• Panera Bread card
• HSA debit card
• AAA card

What’s missing?

• Current insurance card-doh!
• My lunch money, mad money, and couples spending money for the new month. Time to check YNAB to see how much to withdraw.

Sorry, nothing too exciting or revealing. I was able to ditch a few items, but most are essentials.

I’ll need to investigate an app that stores my reward card numbers. Any suggestions?

Now it’s your turn to Spring Clean your wallet or pocketbook.

What’s in your wallet? What could/should you take out. 

Helpful Articles on Cleaning Your Wallet

• 6 Things to Keep in your Wallet
• 5 Things You Should Never Keep in Your Wallet or Purse
• The Digital Wallet and Future Payments (Infographic)
• Don’t Sit on Your Wallet: Ergonomic Tips for Your Back

Inflation. These words might give you the chills or just a blank stare, depending on your age. I was born in the late 70′s and don’t remember ever having to deal with high inflation rates. High inflation rates are harmful to the purchasing power of the individual consumer. If there is a 5% annual inflation rate, a $1.00 cup of coffee (I wish) would cost $1.05 the following year.

Inflation:

“The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.”- Investopedia

I believe my time of experiencing low inflation rates will be over soon and a new generation will once again learn how to deal with a high inflationary atmosphere.

Brief History of Inflation in the U.S. and Canada (for those who weren’t there)

In the 1970s the United States and Canada experienced a time of high inflation. It was characterized by gas shortages, high mortgage rates, rising prices, high unemployment, and social change.

Why? It wasn’t just high oil prices, but a poor monetary policy including increasing the national debt and lowering interest rates lead by Nixon and Fed Chairman Arthur Burns (The Great Inflation of the 1970s).

“OPEC got all the credit for what the U.S. had mainly done to itself.” WSJ (1986) via Investopedia

Measures of Inflation (nerd section)

There are different ways to measure inflation: Gross Domestic Product (GDP), Producer Price Index (PPI), Consumer Price Index (CPI), Employment Cost Index (ECI), and even more. The most common measures are generally GDP and CPI, though there is debate amongst economists as to which measure is the best indicator for inflation.

CPI Index from 1914-2012 - These numbers are slightly higher than GDP.

Inflation by GDP: (U.S. and Canada) 

High inflation not only effects the U.S., but the whole world market.

Prepare for High Inflation

1. Fix Your Rates- If you have variable interest rates on your credit cards, mortgages, student loans, or private loans–NOW is the time to transfer to fixed interest rates. In a high interest economy variable rates will keep rising, thus increasing your interest and lengthening your time in debt.

2. Cash Reserves- Keep a good stash of cash of cash as your buying power will decrease with inflation. Start with an emergency fund and then grow from there. Check out this cool Inflation Calculator to see how your buying power changes. For fun plug in the numbers for the last car you bought.

3. Buy a House- Interest rates for mortgages are currently at historic rates and will rise quickly. Houses will increase in value as inflation rises, so in a sense you ride the wave of inflation with your largest asset. High interest rates could lock you out of the market, so plan on purchasing sooner than later if you are on the fence.

4. Consider rental property (if you are out of debt and financially stable) and Real Estate Investment Trusts (REIT) for protection against inflation.

5. Invest in I-Bonds or TIPS- Having these in your mix of investments will help protect your portfolio from high inflation. You can cut out the middleman and buy I-bonds directly from Treasury Direct. TIPS can be bought through a variety of ways. It is a good idea to compare TIPS and I-Bonds to see which bond is right for you and always ask your financial advisor if this fits into your overall investing plans.

More Inflation Articles:

• Has Inflation Killed the Need for the Penny? - Miranda Marquit
• Using Your Mortgage as an Inflation Hedge or Pay It Off Early- Kevin Mulligan
• Nominal vs. Real Interest Rate – Effects of Inflation- Kim Petch

Spring is upon us. The days are longer. The beaches and mountains are calling.

Cough, Cough. What is all that dust around my house? Seems the long days of being in doors has created quite a mess. Good thing someone invented a thing called spring cleaning.

Origins of Spring Cleaning

There is no definitive answer, but many ancient cultures celebrate spring cleaning.

In preparation for Passover, the Jewish culture scours the house to rid the house of leaved bread. In China there is also a cleaning at the end of the Chinese New Year to get rid of any bad luck and misfortune. Persians (modern Iran) also have a similar practice for Nowruz called Khouneh Tekouni literally meaning “shaking the house”.

No matter what the origin is. It’s a great idea to rid the house of dust, clutter, cob webs, and start the spring off on the right foot. It leaves more time to play outside too!

While you are dusting the shelves, why not give your finances a bit of spring cleaning too?

Spring Cleaning for Your Finances

These are a few tips on how to spring clean your finances:

1. Reclaim Your Desk- If you’re going to be organized with money, start with your desk and/or area you pay bills. Time to file that stack of “important” papers and shred others.

So just what do you need to keep and what to shred? Keep tax info for the past 3-7 years just in case you get audited.  See the IRS website for more details and guidelines.

There is no need to keep your paper bank and retirement statements, you’re most recent one should do. If you want to keep them, then pull out the ole’ scanner. This would be a perfect time to sign up for electronic statements and go “paperless” See The Motley Fool for more tips on your mound of paperwork.

2. Go Digital- Sign up for electronic statements, automate your monthly reoccurring bills like utilities, and store your statements digitally in the cloud (Dropbox or Evernote) or backup with an external hard drive. If you haven’t backed up your computer lately, then stop and do it now.

3. Check Your (Free) Credit Reports- - Time to check your credit report for errors or mistakes. Click this for your FREE Credit report. Check to make sure any debt you have is really your debt and that those monkeys in the cubicles posted your checks on time. This is free yearly and don’t give out any credit card info or sign up for any monitoring services.

4. Update Your Will- Any changes in the past year? Moved states? Then you need a state specific will. Had kids? Who’s going to take care of them? Update or create your will. Made a ton of money? Then you might consider setting up a trust and need to consult an estate planner.

5. Get the Best Rates- Are you getting the best rates on your insurance, checking and savings accounts, mortgage (Great time to refinance!) credit cards, etc? Get some quotes.

6. Update Your Beneficiaries- What’s this? It’s who is going to get your assets if you die. Check to make sure everything is in agreement with your updated will. IRA, 401K (403b), Life Insurance, Investments…etc.

7. Whatever Else- We all have our personal financial cobwebs that need to be cleaned. Stop procrastinating. Be an adult. Do it. And enjoy your spring.

Any spring cleaning tips? Start your financial spring cleaning this weekend. 

Photo Credit  hans s (Creative Commons)

Avoid impulse buying landmines. Credit Walmart Corporate.

Are you aware there is a trap waiting for you inside the grocery store? Yes, a well planned attack for the dollars in your wallet or purse.

Impulse buys account for 50% of purchases not on our grocery lists and earn the industry $5.8 billion each year according to a Spirit Magazine article.

This industry knows how to encourage impulse buying once you enter their doors. They are pros and your bank account suffers unless you know their tricks and have a defensive plan in place.

What is an Impulse Buy?

An impulse buy according to the Food Marketing Institute is:

“An unplanned purchase promoted by visual or other sensory stimulation.”

Impulse buying is unplanned by the buyer, but the seller has a whole industry to make you buy items not on your list.

Impulse Buy Traps

The impulse buy traps are set. Can you spot them or will you be a snared into spending more than you planned?

$1 Bins- As soon as you enter the store bargain bins and mini $1 sections (looking at you Target) are hitting you in the face.

Free Samples- While I do love a free sample at the end of every isle, they are tempting our taste buds to purchase a product that we didn’t plan to buy.

End Caps- End caps are the cleverly designed and visually stimulating displays at the end of each aisle.

Products at eye level- The items you see at eye level and at the eye levels of children have paid for those premium position. Wrigley’s gum figured out years ago that when they paid grocery stores to place their products at eye level they sold more gum.

Televisions- I’ve been noticing T.V.’s in the grocery store with the likes of Martha Stewart endorsing a product.

The Checkout Stand- This is a landmine waiting. Candy, magazines. T.V.’s with ads, gift cards, and all those pocket sized items you’ve always wanted. I must admit–I’m a sucker for Snickers candy bars.

Mobile Devices- I know this is coming. Stores are preparing apps and programs to tweet, email, and buzz your phone when you enter a store or travel down a certain isle. This could be the most advanced impulse buy trap to come. A trap that knows what you buy and where you are.–be on guard.

A Defensive Plan to Combat Impulse Buying

Unless you have a plan you’ve planned to fail. Be ready with your defensive plan and you’ll come out with your budget intact.

1. Make a list and stick to it. This is the best strategy I know of to stay on budget and avoid impulse buying. My wife has made a menu and shopping list for years before entering the store–yeah she’s pretty awesome.
2. Don’t shop on an empty stomach- Growl. An empty stomach can turn into irrational buying decisions driven by the fog of hunger. Grabbing a snack for you and your kids will help everyone stick to the list.
3. Use Cash-  A cash envelope system is key to combat overspending. Take only the exact amount in your budget for that shopping trip. If your envelope only has $60, you’ll have to choose between your gossip magazine or little Johnny’s peanut better.
4. Shop without the kids- This may sound like a dream for some of you, but joining a babysitting co-op will give you a break. Without the kids you’ll be able to focus on shopping and won’t have to tell those cute faces NO 1000 times.
5. Avoid shopping cart envy- I know it’s hard, but stop snooping in other customer’s carts. It can only produce judgement, shopping cart envy, and impulse buying.
6. Control your inner child- Learning the difference between needs and wants will help you control your inner child and curb impulse spending.
7. Add Mad Money (Blow Money) to your budget- Unless you let off a little steam every now and then, you’re likely to blow your spending top. Add a small amount of money to your budget each month to blow and impulse buy with.

I’ve armed you with information on the grocery industry and defensive techniques to combat impulse spending. I hope you’ll fight the good fight to stay on budget and to use your money wisely.

How do you avoid impulse buying in the grocery isle?