Eight (Surprisingly Painless) Ways to Achieve Financial Sanity This Year
Another year has passed and darned if you can figure out where all your money went. Diane McCurdy explains how to rein in your free-spending habits, cut the fat out of your budget, save for retirement—and yes, have some fun along the way.
Hoboken, NJ (January 2007) — You just got your W-2 and you're feeling a bit discouraged. Okay, you didn't make a Bill-Gates-size fortune last year but you didn't do too badly, either. Problem is, you're not sure where all the money went. Surely your bills can't be that high . . . can they?
Your credit card balance has ballooned to frightening levels and, once again, you've failed to save a cent toward retirement. Meanwhile, you still haven't taken that long-awaited trip to Europe. And now—adding insult to injury—it's time to pony up to the Tax Man.
Don't fret, says financial planner Diane McCurdy, author of How Much Is Enough? Balancing Today's Needs with Tomorrow's Retirement Goals (Wiley, 2005, ISBN: 0-471-73871-9, $14.95). This is actually the perfect time of year to change your (financial) ways—ensuring that in 2008 you'll be patting yourself on the back, not kicking yourself in the, er, wallet. And surprise! Making a budget is not only the "responsible" thing to do; it's also your fast-track ticket to getting the fun stuff you fantasize about.
"Budgets may be painful, but they are a practical pathway to helping you realize your dreams," says McCurdy. "Creating one might even help you get the new car, vacation, or flat screen TV sooner! You can't get financial freedom unless you organize your cash flow—understanding that a wish list is as much a priority as recording your purchases."
Perhaps the word "budget" and the word "wish list" feel like polar opposites to you. Not to McCurdy. She is a big believer in the life-affirming power of budgets. And her book—which teaches readers how to delve into their money attitudes, identify their personal pitfalls, separate their wants from their needs, and chart out a realistic financial road map—makes it clear that if you don't embrace the B-word, your money will never work for you.
"If you don't control your money, it will control you," she asserts. "It will cause strife in your marriage, crush you under a load of debt, and force you to toil your life—and maybe your health—away to pay off that mountain of bills. When you look at creating a budget that way, you'll see that it's not a straightjacket at all. In fact, it liberates you."
Once you get serious about getting a handle on your finances, the process is surprisingly easy. You'll want to read How Much Is Enough? for the complete picture, but the following tips will get you started:
"There are all kinds of places to cut corners," says McCurdy. "Most people have gym memberships they don't use, subscriptions to magazines they don't have time to read, 100 cable channels they don't watch. Maybe you could dramatically reduce your gasoline bill by carpooling, or by trading in your expensive gas guzzler for a more modest pre-owned economy car. Believe me, most people have no idea how much money they waste until they sit down and make out a budget."
By the way, there's another benefit to focusing on retirement right now: with April 15th looming, you might enjoy putting Uncle Sam on a diet by fattening up your 401(k) or IRA. "It's best to contribute the maximum to your retirement accounts," says McCurdy. "But even if you don't have enough money to sock away a big chunk right now, you can at least start planning to do it before Tax Time 2008 rolls around."
Here's where the different "money attitudes" McCurdy writes about—she divides people into Spenders, Savers, Givers, and Builders—really assert themselves. "Savers may actually be reluctant to create a wish list because it seems too 'frivolous,' while Spenders may chafe at giving up the 'high' they get from spontaneous shopping sprees," she says. "I would remind Savers that they deserve a reward now and then for all their discipline, and I would urge Spenders to include on their wish list a couple of unspecified shopping sprees with specified spending limits."
If you try this financial makeover and fail, don't give up. McCurdy says it takes most people two or three attempts before their new budget finally sticks.
"This stuff is not rocket science," she says. "We all know, intellectually, what we need to do to build financial security, just as we know what we need to do to lose weight. The problem isn't with our brains; it's with our emotions. We have all sorts of emotional issues tied up in money, and we let those issues override our common sense."
"But really, money is just a tool," adds McCurdy. "That's what it is and that's all it is. Why not make 2007 the year that you finally learn how to use that tool to help shape the kind of life you want to live?"
Diane McCurdy, CFP, is one of the most respected and visible financial planners in North America. In 1982 Diane established McCurdy Financial Planning, Inc.—becoming a full-service "financial planner" long before the term became the industry's designation. Simply, Diane believes her clients need financial advice in all aspects of their lives. Diane's passion for her clients' success has grown into a financial program that has helped thousands of clients attain their goals. Her quest for "the number" culminated in her authoring How Much Is Enough?—a book written to help almost anyone reach financial peace of mind!
Diane's remarkable program for financial success makes her a highly sought after speaker, commentator, and author. She has given countless radio, television, newspaper, and magazine interviews and has addressed many audiences as a keynote speaker throughout the United States, Canada, and Mexico. Recently she has been interviewed by CNN Today, CNBC Asia, FOX TV, MSN Money, Forbes, ABC News, USA Today, Fidelity Investments, and Family Circle, to name just a few. Diane gives of her time and energy to many charitable organizations and industry associations and is a constant achiever of industry awards.
How Much Is Enough? Balancing Today's Needs with Tomorrow's Retirement Goals (Wiley, 2005, ISBN: 0-471-73871-9, $14.95) is available at bookstores nationwide, major online booksellers, or direct from the publisher by calling (800) 225-5945. In Canada, call (800) 567-4797.
For more information, please visit How Much Is Enough.
Posted January 25, 2007