Shifting to Savings in 2011

As we enter the last week of the year, we hope that all of you are enjoying the holiday season. This week is one of reflection and resolution for the year to come, and for many that includes a somewhat uneasy scan of the December credit card statement to see how much damage was done over the holidays.

There will be countless articles out there in the coming week with suggestions on how to trim the coming year’s budget. To add to those, we’ve compiled a few of the more unique ways to eke out a little more value from your day to day life that we’ve seen over the last few months. Heading into 2011 seemed as good a time as any to walk through a few of them . . .

End of Year Giving

• Problem: You feel charitable and enjoy giving to those causes that are important to you, but have no idea how much you gave, who you gave to and how any of it fits into your budget throughout the year.

• Solution: Be more strategic in your giving. This is not a suggestion to give less, just more efficiently. Sit down now and determine a budget for next year’s giving, divide those resources amongst those causes that are most important to you and give accordingly. Make sure to leave room for other opportunities that move you to add to your circle of giving through the year.

Coinstar

• Problem: You have a mountain of change scattered in various jugs, piggy banks and containers throughout the house. You’d like to put it to use, but who has time to sprawl out on the floor and roll up piles of change? You could go to a Coinstar, one of those little green boxes at the grocery store, but you’ve heard (correctly) that it’s one of the biggest rip-offs out there, charging somewhere in the 10% range for this convenience.

• Solution: Were there items on your Christmas list that you didn’t receive? Did you receive a new iPod and need to beef up your music collection on iTunes? Are you tired of cooking for family and friends and need a night out? Use your loose change to treat yourself. See, Coinstar machines also give you the ability to purchase gift cards at retailers from Lowe’s to Gap to Starbucks and the retailers pick up the fee on your behalf. In fact, now through the end of the year, they’ll kick in an extra $10 for every $40 in change that you process, so grab those coins and pay for that morning cup of coffee for the first few months of the year!

Auto Loans

• Problem: There are great interest rates being offered on auto loans, but you’re in the middle of paying off your current loan and have no plans to buy a new car anytime soon. Have you missed the boat on these great rates?

• Solution: With rates near historic lows, refinancing your car loan may be worth considering. The short term nature of these loans has meant that you need a substantial rate reduction to make the process worthwhile. But, with rates as low as 4.5% on used cars at small banks and credit unions in the area, relatively substantial savings are possible if you have a higher-rate loan. It’s important to note that the refinancing process on an auto loan is much easier than a typical home refinance and can often be done in one visit to the bank.

Gas

• Problem: Did I just see gas for $3.05/gallon?

• Solution: Maximize the benefits of grocery store loyalty programs or your warehouse club membership. Many of us rack up points on a weekly basis at our local grocery stores or have memberships to Costco, Sam’s Club or other warehouse clubs that give us access to discounted fuel. The problem is, when it comes time to fill up, we’re as far away from those discounts as could be. The solution is to be a little more conscientious when you fill up. Time fill ups to trips to the grocery or the warehouse club. For example, if you use a Kroger card and spend $400 in a month on groceries, you can save 40 cents per gallon. On a 25-gallon fill-up that’s $10 back in your pocket.

These may not be cure-all savings tips, but they are a good start in putting your money to work for you and maximizing your budget in 2011. Starting off the year with a plan and the right mindset can do wonders for achieving greater peace of mind.

Much like any resolution, don’t fall into the trap of trying to do too much. When we overwhelm ourselves with choices, we typically wind up doing the same thing…nothing.

From all of us at The Asset Advisory Group, have a very safe & Happy New Year!

The Asset Advisory Group
www.taaginc.com

Clearing Out the Clutter

Some people make New Year’s resolutions every year as they cross over from one calendar year to the next. I go on a cleaning binge.

The packing up of Christmas decorations, New Year’s Eve leftovers and all the other holiday trimmings forces me to organize so everything can go back where it belongs. I believe the less clutter I have in my house the more my family and friends will be able relax and feel at home there. Overcrowded spaces feel too stressful.

As I go through the closets and bookcases each year and select items to go to charity, I make a point to only hold onto things that are really important to me – things that have significance. I have seen too many people through the years become possessed by their possessions. I only want to be surrounded by books and other items that hold a special meaning for me.

While this clearing out process makes me feel better, the more significant and life changing New Year’s ritual for me has been examining the clutter in my life. Every year I think about what I want to start doing, what I want to keep doing, and what I want to eliminate to make room for everything else.

We are always making To-Do lists for ourselves, but we rarely think about the things we should stop doing. We don’t take the time to clear the clutter out of our lives and keep only the important people, events and habits.

One year I decided to stop watching evening television. As a result, I can no longer tell you what’s happening on any of the reality TV shows, but I’ve read many great books. Another year I decided to stop putting so much effort into a friendship that always left me emotionally drained. Now I have more time for other friends and family.

Through this process of elimination I have improved my surroundings and given myself the physical and emotional space to build a life that is focused on the things that matter. It’s a personal process of “clearing out the clutter.” Try it – there’s no telling what you might find room for as you start the New Year.

Jeannette A. Jones, CPA, CFP ®
jjones@taaginc.com
http://www.taaginc.com/

Be Resolute in Your Resolutions

It may be cliché to write a New Year’s Resolution blog in the waning days of the decade, but that’s exactly what I intend to do. The reason is simple. Every year we set resolutions in the sincere hope of this being the year we start (fill in the blank) or quit (fill in the blank) or make sure we always, always (fill in the blank.) It’s like a bad game of Mad Libs that never works out as planned.

None of the five tips below are groundbreaking or wholly original. But, practice makes perfect and if reading these tips just one more time helps any of our readers meet their goals, be it related to their financial well being, emotional or physical health or any other facet of their lives, then it will be time well spent. Worst case scenario, I’ve provided myself with that little extra oomph needed to make my own resolutions really stick in 2010.

So, join me in making these five “pre-resolutions” as we wait for the ball to drop on Friday.

1. I Resolve to Make no More Than One or Two Resolutions
All too often when we set goals for the upcoming year, there is a tendency to get motivated. Really motivated. All of the sudden, instead of making a few measured adjustments to our day, there is a 20 item list of ways to completely revolutionize who we are as a person. This is entirely too much to take on at one time, especially under the pressure of a New Year’s resolution. Resolve, instead, to make one or two reasonable changes to improve whatever area of your life needs a little work.

2. I Resolve to Educate & Evaluate the Changes I Plan to Make
You’re at the dinner table on New Year’s Day. If you’re in Cincinnati, you’re likely eating pork roast and sauerkraut. Someone leads off the dinner conversation with going around the table and announcing your resolutions for the New Year. You blurt yours out without really thinking, work on it for a few days or weeks before the motivation is gone. Make this the year you take some time to really sit down and evaluate your goals. The internet can be a great source of information and support from others who have blazed this trail before you. Learn why you’re making the change you’re making, why it has been so difficult to break habits in the past and evaluate the steps you need to take to be successful this time around.

3. I Resolve to Plan, Plan, Plan
Now that you’ve set a couple reasonable goals and researched how to go about achieving them, put a firm plan into place. Make sure the plan includes actionable goals with results that can be measured over time. Keep a journal or calendar or whatever it is that you feel will best help you stick to the task at hand. Put it on paper, post the plan at home, in your office, wherever you will see it every day and work it into your daily schedule.

4. I Resolve to Ask for Help
It’s not enough to just share your intentions at the dinner table. Ask your family, friends and coworkers to help you with your plan, support you in your efforts, even join in following your plan with you, when appropriate. You’ll feel more accountable for your actions, and having someone join you will make any habit breaking seem much more bearable.

5. I Resolve Not to Manage My Time Wisely
If your resolution will take up more of your already extremely precious time, make fitting it into your schedule part of your plan. We all have 24 hours each day and can choose to prioritize what gets done and what doesn’t however we choose. More importantly, if your resolution actually frees up some time, by giving up an activity, for example, it is just as important to fill up your calendar with something positive in its place in advance. Leaving gaps in your schedule will just remind you that it’s time to return to the bad behavior.

Keep these goals in mind ahead of setting your goals for 2010 and you’ll be just a few steps closer from really embracing the change you wish to see in yourself.

Have a very safe and Happy New Year from all of us at The Asset Advisory Group.

By Chip Workman, CFP®
cworkman@taaginc.com
www.taaginc.com