4 Financial Steps – I want to know where your money goes?

ST. CROIX INSIGHTS

4 Financial Steps – I want to know where your money goes?

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Financial Steps

Doesn’t that seem to be the $64,000 question when you review your finances? You make good money and it seems to never be enough. Where does your money go? Let’s talk about 4 different financial steps to take.

I’ve opened up my credit card statement for the month and I can’t remember where I spent so much money without looking at the details. But, once I look at the detailed bills, I go oh “Yep, right there. I remember that, I remember that.” I always wonder how the heck did it add up so fast? I can’t be the only one that this has happened to. Have you experienced this?

Does it seem money just disappear in seconds yet it takes so darn long to earn it? Have you ever received a bonus and once you received that bonus within a day or two it’s gone?

Here are four steps easy steps to follow to know where your money goes:

 
1. Make technology your friend
With online financial software, you can not only track your day-to-day spending, establish a budget and see daily where you stand financially. Investing a few hours now will turn into real money overtime in your pocket. Mint.com is a good option and I use Emoney as it ties into comprehensive financial planning software along with budgeting software. You can print all kinds of reports and most importantly track your financial progress.

2. Cash is great but it’s hard to track down the penny
The reason I like cash is I seem to spend less vs. using my Marriott Rewards card. But, I do like all the upgrades and perks that come along with using a credit card and it does make it easy to link my transactions to my financial software. With cash, you must be disciplined about manually entering all your spending into your software.

3. Establish a base-line of spending over 90 to 120 days
It becomes surprising when you start looking month-to-month where all your money goes. This will allow you to make some easy, yet some hard decision about your spending patterns.

4. Financial “leakage” happens everyone
It’s generally not the mortgage or the car payment, but rather just everyday life that really gets us. It all adds up. $5 here. $50 there. $250 here. It all adds up to real money each month. It’s called financial leakage. We all have it yet, some of us are better than others at controlling it.

With knowledge about your money, you become even more powerful and capable of reaching your financial goals. You can make better, informed decisions along with reducing your financial stress and aligning your actions with your values is empowering.

St. Croix Advisors, LLC is an investment advisory firm. We seek to help our clients achieve financial simplicity. Before implementing financial ideas you read, work with a Certified Financial Planner (CFP) or CPA for advice or recommendations that fit your own financial situation.

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Financial Freedom – what it means to me

ST. CROIX INSIGHTS

Financial Freedom – what it means to me.

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Everyone’s definition of financial freedom varies based on their background, upbringing and life experiences. It seems today on TV, social media and movies, we have all types of expectations set forth for us to live up to. Yet, what is real life these days? From what I see – most of it isn’t real.

Almost every day, I ask someone what financial freedom means to them. Most reply with a dollar amount so they don’t have to worry about money or expenses and they can financially handle whatever life brings their way.

I’m no different. I believe financial freedom is being debt free and having an asset base provide enough monthly cash to support my lifestyle. That’s it. Basic. What that framework, it’s easy to understand and figure out what your number should be.

There are three steps to help achieve this type of financial freedom:

1. Don’t purchase what you can’t afford. Sounds easy but it’s not. For example, do you purchase a new car at 100,000 miles or do you drive it in the ground? Drive it in the ground. At 100,000 miles you’ve barely went through two sets of tires. And that dream home you desire – “right size” it. Don’t over buy.

2. Pay yourself first. Sounds easy but it’s not. For those in your working years, target 15 – 20 percent of your gross Income. Yes it’s a lot, but that is what’s required to achieve financial freedom. Numbers don’t lie.

3. Pay attention to the tax man. Remember that our money belongs to the government and if we don’t understand the rules, they keep more of it. That’s not ideal if they keep more of your hard earned money.

Financial Freedom doesn’t happen overnight. You and I have to work for it. You know that saying, “Freedom isn’t free.”

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Renting watches, robot lawn mowers to monthly car rental clubs

ST. CROIX INSIGHTS

Renting watches, robot lawn mowers to monthly car rental clubs

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Photo courtesy ‘Watch Collection Lifestyle’

It’s not often I’m surprised, but this one really caught me off guard. People actually rent watches. Seriously!

Eleven James, an online company based in Detroit, is off to the races. They rent men and women’s watches by the month. When looking at their website it isn’t your Timex watch you’re renting (maybe I’ve just shown my age). Sure they are nice watches but if you can afford to rent a high-end watch, you probably already have a phone, correct? So I wonder how many people check their phones vs. their wrist for the time? I stopped wearing a watches years ago and now wear a Fitbit to track my steps. Yet, these are nice watches.

Robin, a robot lawn cutting service. You can rent an electric mower. Sure it can manicure your lawn each and every day. They just install cable so the robot knows where to go and a home base to recharge. You’ll still have to trim, weed, etc. So it’s not 100% done for yourself.

Car rental clubs. Gone are those two or three-year car leases. Now for the car connoisseur, there are clubs to enjoy a new car each week or month. It’s call Clutch. You pick the car you want to drive each month or each week. They have a fleet of high end vehicles to choose from. Not to mention you can change the cars out if you don’t like it. I leased my Honda for 3 years. Like it or not I’m stuck so I guess I better like it. With Clutch I wouldn’t not stuck.

So all these rental ideas got we wondering……as a society; we’ve changed on how we perceive or look at “stuff”. Our parents and grandparents believed in owing. Owning is powerful and you’ve paid for it vs. having to give it back. Today, it seems our society is shifting and wants the newest and latest models. I blame it on Apple and McDonald’s. We want things now (and waiting for two minutes for “fast” food isn’t acceptable) and you have to have the latest iPhone because the version before just isn’t the same nor does it do the same things. But it does if we are honest with ourselves.

“Watch the pennies and the dollars will take care of themselves.”

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Year-end Financial Challenge

ST. CROIX INSIGHTS

Year-end Financial Challenge

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Can you do it? Yes you can!

I don’t know about you, but when you look through your monthly expenses doesn’t it surprise you how much it costs to live?

Each year, l look to cut 5% to 10% of my monthly expenses.

For example that darn Comcast bill. They enjoy increasing your monthly payment and now you have to call them to decrease it by threating to cancel it. That’s about a $100 a month each time you call.

Verizon – it’s worth revisiting your overall data usage to see if you can save any money. You can usually find $20-$50 a month.

Car and home insurance – You need to work with an independent agent. If you need a referral, let me know. This is an area we neglect not only in coverage levels but premium creep happens. Shop around every couple of years.

Cars, Cars & Cars – We don’t really think about it but these are depreciating assets that just cost us money each month. To help control the cost of my vehicles I’m a big fan of preventive maintenance. That’s how I get my cars to last so long. Plus, in the winters I wash them 3-4 times a week to keep all that crud off them to help prevent rusting. Just sign up for the unlimited car washes. They can be a great value.

Eating & drinking out – This is an easy one to overlook. It’s extremely expensive to drink out these days. Not to mention eating quality food at a good restaurant and I’m not talking about McDonald’s. Keep a close tab on this one.

Day to day – I didn’t notice I spent it but I did. Have you ever looked at your Visa or American Express bill and you spent $5,000 for the month and can’t remember where all that money went until you look at the details? Head to the bank once a week and use cash. I know I spend more when paying with a credit card and using cash helps control my spending throughout the week. I set a weekly amount to live on.

Your tracking software. Our clients can use our iAdvise software, a financial dashboard so they know where they stand every day. You can monitor everything financial aspect of your life and we build that right into your planning. That’s cool! Another good online system is mint.com.

Take an hour and see where you can save a few dollars.

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Men – Three ways to improve your sex life!

ST. CROIX INSIGHTS

Men – Three ways to improve your sex life!

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

As a man, I’ve been a lifelong learner and by my side is my wife who continually educates me along with way. I’m thankful she’s helped me become a better man. Sure, it’s taken over 26 years and the fact is her job will never be done.

So what are the three ways to improve your sex life? First, do not discuss your finances before bed. I suspect you know that nothing ruins the mood more than discussing money and maybe how much you (or rather your spouse) may have overspent in the last few weeks.

The second way to improve your sex life is to be realistic when it comes to budgeting each other’s financial needs. Our needs and wants can vary greatly. Sure, my hair cut costs me $14 and I’ve been told it looks like it. But when I add a tip it’s an entire $20 bill to look this good. Now let’s say Mrs. Anderson haircuts cost $125 and by the time you add the highlights and tip it can really add up. BTW – she looks great! So how can one fairly compare a $20 haircut to a $125 haircut? It’s impossible and I will state that I am not qualified and will never do it again.

The third and final way to improve your sex life is to have some mad money. Its money that neither one of you can complain about that you spent. You know what I’m talking about. It’s that verbal performance review on how you spend your family’s hard-earned money with a couple of questions and observations – i.e. How long have you had that? How much did that cost? I can’t believe you spent much money on that. I hear this all the time with couples I work with.

The great thing about Mrs. Anderson and myself is we always agree on the who, what, where, when and why about money which is why I’m so qualified to write about. Just ask me! I’m looking to reach the one percent of individuals reading this that just can’t help themselves and money is always on their mind. Surprisingly, as a financial advisor, money is not always on my mind. Money is not always an easy subject brining up all kinds of positive and negative emotions. There is always time to bring up this topic, but you need to ask when is the best and appropriate time to discuss. And that time is never, ever bedtime.

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Business Owners – The other number you need to focus on!

ST. CROIX INSIGHTS

Business Owners – The other number you need to focus on!

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

$100, $500 or $1,000 or more, per month per employee?

It’s a great question. As a business owner, how much per month do you personally save per employee into your own retirement/savings accounts? Let’s say you own a successful law firm, maybe your number should be $1,000 per month. Or if you own a smaller company your number should be $250 per month. Now start multiplying that and it becomes a really big number because it should be!

One of the best ways to build wealth is having other people work for you which you’ve known for years as a business owner. EBITDA is important, yet I want our clients to seek TWO meaningful buckets of money when they sell their company. You have to ask yourself this… What problems would it create for you to save an extra $500,000, $1 million or $2 million before you retire? BTW, that doesn’t include the value of your business. You already know the typical response I receive… i.e. “It wouldn’t create a problem.” So why aren’t more business owners doing this? The biggest reason is that they aren’t working with me.

Seriously, I find business owners are not always focused on diversifying outside of their business. Sure, your greatest ROI should be your business and if it’s not, it’s time to sell. Yet once we have an in-depth conversation about goals, business owners see the possibilities of two buckets: a personal financial bucket and a business owner bucket. These options my business owner clients the possibility for the most flexibility when it comes time to transition.

A business owner has no idea what their business will ultimately sell for, correct? You may have an idea, but we really have no concrete numbers to count on until someone writes that check out and it clears the bank! EBITDA, taxes, technology, markets and competition all change and it is truly out of our control. So I come back to my philosophy for business owners – build two buckets of money so you have more options and flexibility down the road.

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