Motivation for July 14th, 2014

Our Greatest Fear —Marianne Williamson

it is our light not our darkness that most frightens us

Our deepest fear is not that we are inadequate.
Our deepest fear is that we are powerful beyond measure.

It is our light not our darkness that most frightens us.

We ask ourselves, who am I to be brilliant, gorgeous,
talented and fabulous?

Actually, who are you not to be?

You are a child of God.

Your playing small does not serve the world.

There’s nothing enlightened about shrinking so that other

people won’t feel insecure around you.

We were born to make manifest the glory of
God that is within us.

It’s not just in some of us; it’s in everyone.

And as we let our own light shine,
we unconsciously give other people
permission to do the same.

As we are liberated from our own fear,
Our presence automatically liberates others.

Check out my Running Group

Catheters & Cuffs is a wonderful group of people who all share a love of running.  They use that common bond as a way to help others as well.  Over the past few years, Catheters and Cuffs has raised tens of thousands of dollars for St. Jude.  It truly is inspiring to see a group of people come together and effect other people’s lives. Please check them out!

http://cathetersandcuffs.com

Getting Married Doesn’t Mean Marrying your Bank Accounts

Are you thinking about getting married, are married, or one of those crazy people that is thinking about joining your bank account with someone else and having no legal obligation to them? If so, then I am about to hit you with some knowledge.

I have worked in banking for years and have seen the best practices of personal banking and also worst case scenarios that would literally blow your mind. For all relative purposes lets go over a worst case scenario… Say you and your lovely significant other decide after your glamorous wedding to go get a joint account, and make that your main account. Then one of you talk the other into making this the account the main account that your direct deposit goes into. Everything is fine for a couple years then all the sudden one of you falls off the rail and it doesn’t work out. At this point, your once significant other now has direct access to your funds, and if you start taking the money away from that account their lawyer will eat your lunch in court (YES I’VE SEEN THIS HAPPEN). What I have learned from this scenario and what I recommend people do, is both have their own individual account. Then have that account filter into the joint account via online banking transfers. Or, you can have your employer set up your Direct deposit to be split into multiple accounts. The following argument I usually hear to this is “what if something happens to me and the other is not on my account?”…. Well there is a simple solution to this problem that does not give them rights to your funds… and that is giving the account a POD also known as a Payable On Death.

Now you may be thinking well what about a savings account…. Those are perfectly fine and normal to get a joint account with. They are never the primary funding account, and have very limited fees at most banks. Feel free to save for your vacation, a house, or a new car with your significant other.

Financial Infidelity is one of the leading causes of divorce. According to an article by Rob Leibner of the New York Times in 2009 the odds of marriage ending in divorce due to finances is approximately 45%. Now is keeping separate accounts going to solve this issue? No, it is not. What it will do is allow a couple to budget the funds appropriately to keep each other from “overspending”. Myself being a guy I know that a weekend out with my buddies can turn into a couple hundred dollar weekend in a matter of minutes… Having a restricted amount of funds in certain accounts keep me from “overspending” and impeading on me being able to pay my bills. Now imagine that happening and you have a wife and a few children who are now in a bind….. You can probably see why if that happens more than once it could lead to a divorce.

So protect yourself, your spouse, your children, and your financial future by keeping at least one “Spending account” to the side. But make sure that is the first account your money goes into. I cannot say that this will help your future marriage or civil union, but I can say with certainty from first hand experience that it will make your future a more budget friendly place, which will lead to a happier home.

Setting Up Bank Accounts for the Young Professional

Have you ever been sitting there at the end of the month and just thought…”Shit”. Well good cause this will help you fix that issue. What you are dealing with is a simple fix. It is not as bad as say… the herps… That doesn’t go away; your budgeting issues will go away with time, TRUST ME. The first thing I need you to do is ask yourself three simple questions. If you answer any of them yes, then this article will help you out. If you answer “no”, then you are lying to yourself because you found this article most likely by googling “budgeting” or something along those lines.

  1. Have you ever spent 30% of what’s in your bank account at a bar? (ex. You have $100 to your name and you spent $31 at the bar)
  2. Have you ever over drafted your account due to “bad timing”?
  3. Have you ever been late for a rent payment or credit card payment due to short funds?

Now let’s be honest… Almost every human in this great country of ours has done this. I used to be just as guilty. But I got it corrected, and so should you. It is not easy but if you follow my step by step instructions you will be in far better shape than you were before reading this article.

  1. First things first, you need to take a look at what you fixed expenses are each month. In simple terms… What bills are you required to pay. Examples are rent, car payment, utilities, credit card (minimum payment), phone bill, student loans, child support, and etc… Now take that total and add $100 to that. We will use this number later, but for all purposes let’s say it is $1100.00.
  2. Now let’s find out what your net income is. Take a look at your paychecks and add up your checks for the last month. (this is easier if you are salaried) If you are not salaried find your net based off a check without any overtime. Now your Net income is what you get paid after Social Security, taxes, retirement savings, health insurance, and so on and so on… Our example total will be $3000.00
  3. So we now have our total bills and our net income. We now need to work on how to make sure we budget this out appropriately. I structure my accounts very similar to what you would see with a large corporation would. As of now we have a surplus income (extra money after bills are paid) that we can work with. Notice I did not say “play with”. You cannot afford to “play with” money until you are financially secure. My example surplus is $1900.
  4. Here comes the point where we set up our bank accounts. If you already have a checking account great, we will add to that. I want you to go out and open a checking account that will simply be for paying bills. I even have mine titled on my online banking as “BILLING ACCOUNT”. This account will be used only for my bills. I will never carry my debit card with me, and will only use it for those companies that require you use one to pay them. Every month we need to make sure that all our bills come out at 1 time of the month. I know this is challenging, but what it will do is allow you to control your funds easier. This will result in you paying most of your bills early or ahead of schedule, which is ok, I promise you. For example, my first paycheck of the month covers my whole month’s bills. So when that check comes in I have an automatic money transfer set up on my online banking.(If you don’t know how to do this, call your banks tech support they will walk you through the steps). So say I get paid twice a month that means I will receive two paychecks for $1500. $1100 of that is going into my bill account, and $400 is going into my normal checking account right?…. Wrong. Maybe at first when you are getting adjusted that would make sense, but after we get going you will not notice when you are getting paid… Trust me. That $400 is going to be split. So we need another place to split this money.
  5. That place is going to be a savings account. This is going to be tough to swallow but you should be savings 20% of each paycheck into some sort of savings. So we will assume you have no savings right now and help you build up that savings to where it needs to be, which is at least 6 months of base living expenses. In this example that is $6,600. Yes, take a minute to let that sink in. You have probably not saved that in your entire life as of yet. But it can be done. So out of that $400 on your first paycheck you will put $80 into a savings account. And $300 on your second paycheck for a grand total of $380 in monthly savings. Now simple math would tell me that this would take me roughly 17.5 months give or take to reach my goal of $6,600. That doesn’t seem bad does it? So we are only savings $380 out of $1900… What do we do with the rest…?
  6. WE SAVE AGAIN! Have you ever heard of whole life insurance or maybe those three crazy letters IRA? We need to take at least 10% of that $1520 and put it into some auxiliary savings. That means we have about $150-$200 to put towards that. I personally have a whole life insurance plan and an IRA I contribute to, and I go to an advisor so I don’t have to make the hard decisions myself. So say we put $200 towards auxiliary savings. I now have a grand total of $1320 left over. Great! You can use this money to enjoy life. You work hard for your money. You should be able to enjoy it, but now you can enjoy it without worrying about over spending or not knowing where you are at. But our steps are not finished here.
  7. Get a Credit Card that earns you points or gives you cash back…. NEVER USE YOUR debit card. It will only lead to you having fraud on your account and the bank has at least 10 BUSINESS DAYS to refund that money… Could you live 10 BUSINESS DAYS without your money if your account was hacked because you bought a plate at target? No you probably can’t. So get a good Credit Card and pay it off monthly. That way you do not receive interest and you get the rewards points for your everyday spending.
  8. Balance your checkbook. Get a register from your bank when you open these accounts and balance it weekly. And check your online banking daily. I even have text alerts set up so if anything happens to my accounts I know immediately. This is a good old practice that works, and every responsible adult should do this. I still do and it keeps me on track of where I am at.

Now this may seem like a lot of work upfront. But it isn’t that bad I promise you. The upfront troubles will smooth out after a month or two. And you will be smooth sailing after that. This budgeting will help you do the things you always wanted to do like travel, or buy expensive nice clothes, or the house of your dreams. Whatever it is, you can achieve it. Just put your mind to it and pay attention to it daily. I used to be a wreck financially when I was in my late teens early 20’s. But someone told me to do this and now I take annual vacations to wherever I want. I spend crazy money on suits that I need from work so I look better than other, and I go out with my friends and not have to worry about my finances. So from one young professional to another…. Good luck and remember if it is easy, it’s not worth it.