New Year Resolution

For the last couple of months we have been equipping our readers with “cost saving ideas”.  In this blog we would like to educate our readers on a seasonal journey that 45% of us take but 70% fail to finish.  That is the “New Year Resolution”….Why is that? What makes it so difficult? Is it unattainable goals? How about unfair expectations?

Even though we may never know the whole “why” people don’t accomplish the resolution let us look at some steps on what you can do.

Step X: Begin with the end in mind......Maybe your end goal is to make 6 figures. This is a great place to start. Now let’s work from the end to the present and what has to happen for your end goal to be objected.  This will usually mean the steps you need to take to get there. Be wary of putting a time stamp on your end goal till you realize all the steps you need to reach first. Maybe you need more education, a better business plan,  a different career path or more confidence.  Each one of these could take months even years to complete, so making a resolution to make 6 figures and then wanting to do that by years end could be lost the second week of the year when you realize just how long it could take. (goal setting worksheet) or (personal budget)

Step X: Find help……An accountability partner is a must, someone who can take the 3^rd person point of view and can be honest with you.  Athletes are an easy example of this, particularly non team sports like tennis or golf.  We feel, the responsibility of a coach is to EDUCATE, EQUIP and INSPIRE individuals to the goal. Without a coach just how good are some of the greatest golfers/tennis stars?  Would they ever accomplish their dreams?

Step X: Stay positive……Certainly having a plan to reach your resolution and working with a coach/accountability partner will make it easier to stay positive but this step, like the weight baring beams in a building need to be strong. Your own belief in not just the outcome but process will be your track to success. The world itself has the task of bring you down with the events that continually take place, but your ability to move past and trusting your process will be a vital step. 

Step X: Take action……If you haven’t noticed the steps are not numbered because for each individual these steps will come as needed.  Some of us need a coach to help create the goal setting process.  Maybe just staying positive is the first step so that we can focus properly on creating the right goals. The “Take action” step (see previous blog) needs to be instituted throughout the process. 

We apologize for the long blog; We broke our first rule of keeping things short. Hopefully the second rule of interesting was not lost in the length of the blog.  With that said no New Year Resolution is going to determine ones success, as success is judged only by looking in the mirror. This blog is meant to guide you to the place that you want to be and to let you know that if you set and plan New Year resolutions like no one else you can accomplish them like no one else.

The time is NOW!

If you are going to save money do you know what the most important step is?  Could it be step 1?  Step 1 being taking action.  To many time we see people that want to save money but failed in the past on taking action.  They may, my favorite quote “Never been late on a credit card payment” but will continue to miss the monthly budget by one hundred, five hundred or even thousands of dollars. 

Unfortunately it may take a crisis for most people to make a change in behavior that will get them out of debt, into a career that they love, or create a winning business culture.  Most of what works is a simple formula of goals + action = progress.  So with this blog we challenge you to “take action” and find an accountability partner, a coach, a mentor or anyone that can take a 3^rd person approach to your current situation.  

In the book “Outliers” Malcolm Gladwell writes that it is not just one event that causes a passenger plane to crash. It is a series of events and that these events can be discovered in time to save lives with the proper training in place.  The same lesson can be applied to your own personal life at home or at work. Step back and become educated on what is going on around you so that you may grow in the right direction and have the opportunity to take action before the crisis.

Work that you love = $

Today we talk about the money coming in.  You see when we talk about saving money we tend to think of only the outgoing, but in order to save money we must be bringing money in.  Sure we can work more by getting a second job or ask for more hours but is that the end all be all? We often suggest that people work more but the understanding is that it will be temporary or until the crises or debt is paid off.

 

If you need to increase incoming cash you most likely will have to do what does not come natural…that is work in a field that you are passionate about.  Strong statement I know, and studies show that 55 % of people are not satisfied with their current work.  In John Maxwell’s book “Leadership Gold” he references a study that took 1500 recent college grads and sorted them into two categories.  Category A, were students who were going to work for the money, category B were students who went to work in their passion regardless of money.  After 20 years there were 101 millionaires…..100 of them came from category B!

The point is to work in your passion.  While we all have skills, abilities and traits the question is are those being effectively used?  Too often we grab a job to fulfill the bills, but I will ask you...What if you could grab a job that fulfilled you?

Mortgages

Let’s blog mortgages……I am expecting that this will be a technical blog with plenty of numbers and references to stats.  I don’t think this going to be on the entertaining side but I promise that it will be informative. Here we go….

Comparing a 30 year fixed, a 30 year fixed paying extra, and a 15 year fixed.  Historically the 30 year fixed is approximately .75 points higher than a 15 year fixed. For  this example we use the 30 year at 4.5% and the 15 year at 4.0%. 

	30yr Fixed	30yr w/extra $349	15yr Fixed
Monthly Payment	$760	$1109	$1109
Loan amount	$150,000	$150,000	$150,000
Interest paid	$123,612	$59,674	$49,714
Total	$273,612	$209,674	$199,719

Have you finished the math yet? The number that has our interest is the $73,000 you would save versus a 30yr fixed.  The reason I put the extra payment plan in there is because it is common for most people to think or be sold on the approach that they could just pay extra on the mortgage each month.  As you can see that argument has you coming up short $10,000 and not pictured is that it would take you about 16.5 years to complete. 

To those 1^st time homebuyers, when you budget for a house remember it not to exceed 30% of your take home pay and that by using 15yr mortgage it will ultimately save you THOUSANDS of dollars.

So what are the objections to a 15yr fixed? Would you be "upside down" in your mortgage if you used a 15yr fixed?

BUDGET!!!

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You really want to save money?  Then start with a budget! So many times we like to over think things, when it is really the simple idea or plan that works the best.  Almost 70% of Americans are living paycheck to paycheck and nearly the same percentage does not have a budget……could there be a correlation between the two?  I think Zig Ziglar says it best “Aim at nothing and you will hit it every time”

A budget is nothing more than a spending plan.  Spending money on paper with a purpose will allow you to save a ridiculous amount of money over any period of time.  Not having a budget is like not have a goal or destination in mind.  How can you possibly get to where you are going if you don’t know where you are going?????

Coupons

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Did someone say coupons? If you are like me then you would rather have fingernails scrape the chalkboard.  Nothing is worse than combing through the Sunday paper for 10 minutes searching for coupons of items you actually use.  Coupons have evolved….grocery stores send out email/newsletters that state discounts or come with printable coupons.  Websites, blogs even on facebook you can find some buys or at least the mention of some deals.  The facts are that if you use coupons you can save on average 11.5% from your bill.  With the typical family’s grocery bill is about $4000 a year that would be a savings of $460.  “Professional” coupon clippers can get anywhere from 20 to 30% off of the bill. Not a bad return on your time. Remember that coupons are not limited to food only. Airport parking, golf, zoos, movies, flights, clothes, and more….

Save money while fixing your car

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Yes you can do this...A good mechanic will not only fix your car but will help you save money.  Most of the time if your mechanic can diagnose the problem and send you shopping for the parts you can save 10 to 50% on the parts.  Alternators and fuel pumps among other parts can be recondition and bought for a fraction of the cost.  

Get this I once had a "multi-function turn signal switch" go bad in my car.  Replacement cost for a new one $300 plus labor.  My mechanic suggested that I call the local salvage yard, so I did and found one for $50, but I had to buy the entire steering column.  After consulting with my mechanic quickly he said that would be no problem. In the end I had a bill for $195 which I gladly settled with cash for $175. By the way, if anyone is interested I have a steering wheel I have one for sale……

Save Money With Health Ins????

Health Insurance….yeah I said it. The past year this term can fuel plenty of debate. The fact remains that we all need it and if you have it whether it through your employer or individually understanding and reviewing your policy regularly will help you save money.  If you need to adjust your budget quickly raising your deductible can help.  However you must understand what goes with a high deductible plan.  Many of you have heard of and HSA.  HSA’s are beginning if not already replaced the “traditional” health plan.  HSA’s will raise deductibles to 5,000 or 10,000 thereby lowering your monthly premium.  You should however fund the SA part (Savings Account) of your HSA on a regular basis. You also can simple use other savings you will have on health related expense, keeping receipts because this money can be tax deductible.  Once you meet your deductible generally 100% of your care is covered.  Worse case you are out 10,000 with and HSA….No health insurance your guess is as good as mine.  If you have a traditional coverage you can expect to pay 2 to 3 times more each month on the premiums compared to and HSA.  So check it out and understand what you have. 

Life Insurance.....Really?

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You want to save some money fast? Just take a look at your Life insurance. Most people could not tell you the difference between whole life and term insurance, yet explain to you how a Universal life policy works.  The truth is Life insurance is not an investment.  You may have been led to believe that by “investing” in a policy you are guaranteed a certain return. In reality the only guarantee is the profit the insurance company in making from your policy.  You see, buying life insurance is about insuring a life.  If you purchase life insurance with this in mind, term insurance is a great product.  Look to your employer through group term insurance as the least expensive. If not available seek an insurance professional that has the ability to shop for the best rates.  

Cost Saving Idea #1....The Phone

Image via WikipediaWith today’s technology most people now have cell phones. The day of the dedicated land-line is in the past. My wife and I along with our youngest son who is over twenty- one all have cell phones. We were able to disconnect our land line and save $49.00 per month. This ended up saving us $588 per year. I found no down side to having the line disconnected. I have had a few Financial Coaching clients who had smaller children who were concerned about not having a land-line for their baby sitters. Last I looked almost every child over the age of 13 I know had a cell phone. If not you may want to leave one of your cell phones behind or buy one of those very inexpensive cell phone that have pre-paid minutes.

101 Cost Saving Ideas

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Over the next three and a half months our blog will be sharing with you 101 cost savings ideas that will help you keep more of your hard earned money in your pocket and not let it get away. So many time I see the “death by a thousand cut” situation. These are people whose house payments and car payment are reasonable. By reasonable, I mean the house payment including insurance and property taxes are between 25 and 31 percent of their net take-home pay. We see all kinds of little things that they are paying extra money for. By themselves they don’t mean much but added together, these little cuts can cause you to bleed to death. Over the past few years we have seen the $400 cell phone bills, $190 tv/phone/internet/cable bills, $600 a month in Starbuck and much more. We will share some of these stories with you.

          Please keep in mind, regardless of how much money you reduce from your monthly spending, having a clear, on paper/ on purpose budget is the foundation. It would be like me going and running 2 to 3 miles every morning and then going to breakfast and eating sausage biscuits and gravy with extra cheese and extra gravy. I feel great about the running, but I bet I won’t lose many pounds. Keep track of the money coming in and coming out is absolutely the best thing anyone can do to have a healthy financial plan. Follow us over the next 101 days and soak up the savings ideas. 

Taking actions with your dreams

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We all have dreams. Things we want to do and places we want to go. As I drive around for work or when I am working, my mind tends to wander. I think about where I will be and what will I be doing 5 or ten years from now. Dreaming can be fun. But what is more fun is putting actions behind your dreams. Zig Ziglar says that only 3% of people have written goals. I think this is the first place to start. What do you want to accomplish? I have physical, relational, family, financial and spiritual goals. But it is always easier to start with one area. I think about where I want to be 5 years from now. That is my direction. Now what are the steps I need to take to get there? I break it down in to small bit sized tasks and do them one at a time.


I see people all the time talking about their dreams and focusing on what they can’t do instead of what they can do. I can get up every morning and compile a list of companies I may want to work for. I can sit down and design a business card. I can go to the bank and open up a business account and get a checking account for my dream business. I can make an appointment to network with someone who knows more about my dream job that I do and interview this person.

Taking action is key. I have heard it said, do the next right thing. What are you dreaming of doing or becoming? What are the 50 small steps to getting there? Who are you talking to about it? Share your story with us.

I once heard Les Brown say “On people’s death beds I never hear them complain about not reaching their dreams because they aimed to high, I hear them complain that they aimed to low. Aim for the moon because even if you miss it, you will be with the stars”

I recently read….okay listened to the book “Drive” The Surprising Truth About What Motivates Us.  Daniel Pink does an excellent job in presenting facts on how we are motivated and what the current “dangling the carrot” motivation theory actually does for us. 

Our current culture is all about incentives and compensation. According to Daniel Pink, the facts state that people can be the most productive when compensation factors are taken away. He does not argue against compensation but rather that by incentivizing a workforce you are injecting negative factors into your culture.  Incentives are merely temporary and will not secure a productive workforce.  He even makes case for cooperation amongst your colleagues rather than competition.

Google requires their employees to use 20% of their working hours and invest in a project of their choice.  Some of Google’s most productive creations have come from this concept i.e. Gmail. 

Early in the book Daniel Pink states his case with the Wikipedia phenomena as an example.  From that point on you will be hooked.  Let us know what you think….


Lighthouse

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Are you Coasting?

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The great tragedy with coasting is that you can only coast in one direction. (Brian Tracy)

Sometimes words come together and they don’t mean anything, then one day you are driving in your car and you hear these words.  They are not anything different then you heard before but at this particular point in time they not only have a meaning but a purpose.

Coasting through life….I have heard of people doing this and at one point this was what I thought I wanted to do.  But when you think about what coasting is you begin to see that it, like Brian Tracy states, is one direction. For me I asked myself what is the value I get out of coasting.

Let us compare to people going to the top of a mountain.  Person one starts at 9,500ft in a 2010 Corvette.  This person takes their time and reaches the summit in 2 hours.  Stopping along the way to take pictures and spending some time in the gift shop that is located near the summit of this 14,000ft peak.

Person two starts at 9,500ft with a 40lb pack.  This hike requires a 3 day journey crossing streams, dodging insects, breathing the ever thinning air, maneuvering across snowfields and then summiting the 14er. 

In the end both will have reached the summit of their respective peaks but who is a different person because of it?

Why do I have so much in Student Loans?

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It's that time of year for both parents and students, the time to figure out how to pay for college tuition. With the average price of tuition alone being over $26,000 a year for private colleges, and over $9,000 for public universities.   The average student loan debt for a four year degree is over $23,000.  The average student loan payment is a around $250 for ten years.  Recently I have seen a number of clients with $40,000, $50,000 and even up to $150,000 dollars of student loan debt.

           When ask what would you do differently they replied:

• taken advantage of the college level classes available in high school
• went to less expensive schools for the first few years
• taken more classes and graduated earlier
• graduated on time  

Most shared stories how they misused any extra funds. I know I used extra student loan money to purchase my prized 1968 Volkswagen van. I have heard stories of students using the money for spring break, clothes, furniture and more. What are some of the things you regret your purchased with student loan money?

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Financial Stress

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Most people learn to live with stress. It usually starts out small and gradually builds up over time. Most of us realize stress is a way of life here in America. In my office I see so many peoples whose lives are packed with stress due to financial struggles. They can’t sleep. They can’t enjoy time with family or friends. Even when they are resting, they are thinking about all the bills. Several recent surveys have stated that between 60 and 70 percent of Americans are living paycheck to paycheck. They are simply just getting by. They are using their credit cards and lines of credit to get to the next month. 

Is this really the way to live? Speaking from my own experience, stress will take its toll on your body and your relationships if not reduced. The effects show up as sleeplessness, high blood pressure, stomach problems sore muscles and more. Is it all worth it? The stuff we buy such as cars we can’t afford or huge homes that stretch our wallet. Many people are all just one minor financial event away from a disaster. How can we reduce financial stress. Well from where I sit there are only four things to do.

1) Tighten up your current budget if you have one (get a budget on paper if you don’t have one.)

2) Sell some stuff. (Use the first $1000 for an emergency fund) 

3) Increase your income (extra job or extra hours)

4) Contact your creditors and share your struggle and ask for better terms.

There are no magic pills out there. Do one or all of these 4 things and your margin can increase. Not talking about it and hoping it will go away is not a solution. 

All of these “bail out” programs we see on TV are scams. There is not President Obama program for you and I when it comes to consumer debt. These TV and radio ads are a scam and a rip offs. Please do not buy into them. If your are struggling with the stress of debt, talk with a friend and get some professional help and support from a trusted professional. Financial stress in the number one killer of marriages today. Don’t sit there in silence and let it get you. Get mad at it and attack it using one of the four suggestions above. 

I would love to hear your stories of how you kicked the bottom out of the financial stress in your life.

Dave Williams

www.lighthouse-coaching.com

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Goal setting for the second half

Can you believe it, the first six months of the year have flown by. Here we sit wondering where the first half of the year went. Back in January many of us set New Year’s Resolutions. What happened to your resolutions? I am doing great on two goals, OK and one and not so well on a fourth one. The key for me is to write the goals down on paper. Experts say that 93 % of people cannot clearly identify their goals and that only 3 % of Americans write down their goal.


I am a list kind of person so I do write down my goals and then take time monthly and revisit the goals to see if I am getting closer to meeting my goals. I use the July 4th weekend to reset my goals. Some things have changed and I need to reset and refocus. I also share my goals with my wife and with friends and co-workers to help me be more accountable. What about you, what are your goals for the second half of the year? What have you crossed off your to-do list and what it the one think that you just need jump started on? Written goals are the first steps to a healthy and successful life. The next step is making a plan to reach your goals. Check out our free goals worksheet at http://www.lighthouse-coaching.com/forms/. This form will help you set goals for the following areas in your life: financial, physical, personal development, family spiritual, social and career.

Share with us, what goals you have set for yourself.

Are you working in your passion?

We are on vacation in St. Johns and it is incredible to meet so many people who have followed their passion and are doing what they love. To them work is like play. Our Scuba instructor Josh had tried professional drumming and being a teacher but the sea kept calling him. For the past 10 years he has been sharing his love and passion for diving with people like me who are new to the sport and love the experience of seeing all the great underwater sights.


In contrast there was Kyle who sat at the desk signing people up for 12 hours a day. He said it was better than laying foundations for 12 hours a day. He has a degree in business communications and wants to be a salesman.


I hope it works out for Kyle, I don’t see the passion in his eyes for sales. I see the dollar signs. If you do what you love the dollars will follow. You will work longer and harder, you will push through more obstacles doing what you are passionate about.


Are you looking forward to going to work today because it excites you? Share your story

Dave Williams
Lighthouse

Groundswell

So I am reading this book Groundswell by Charlene Li & Josh Bernoff. In it Groundswell is defined as a social trend in which people use technologies to get the things they need from each other, rather than from traditional institutions like corporations.

So I think it begs the questions....Do you think that "Groundswell" will last or replace the big corporation?