by Miata on April 27th, 2015
I’ll admit it…as someone who tries to be creative, I often find myself looking for the most extravagant way to handle any money management issue. Then I can hear the voice of my mother in my ear:
The simplest solutions are often the most effective.
Isn’t that true? I can’t believe that the secrets to managing money are often the ones right in front of me… while I’m busy creating chaos and complexity.
I’ll share my hack for spending less money in a moment, but overall, it’s amazing just how many areas of our financial lives are managed by the very simple solutions that are right in front of us.
A good friend who’s a financial writer pointed this out to me at a networking meeting last week. She said, “Miata, I spend all this time writing about budgets and how to cut expenses… but it all boils down to one equation.” I couldn’t figure out what she was talking about until she told me:
The simple solution: Spend less than you make.
While that may seem TOO simple at first, it really is the heart of everything we do, isn’t it? Take out a pen and paper. Figure out how much is coming in. Cut expenses until they’re lower. Save the difference. Try to increase income more and spend less so your savings becomes bigger.
She’s right on: Budgets are a simple device that can be really, really powerful. Read the rest of this entry »
by Miata on April 15th, 2015
The world of health insurance has changed significantly over the last two years… especially for those of us who are fortunate enough to spend our days working in the craft we love. Whether you’re full time self-employed or contemplating it, one big area to understand is health insurance.
How you buy insurance depends on where you live. If you live in the USA, you’ll need to be aware of some important dates and the penalties for missing them.
Affordable Care Act
The Affordable Care Act was passed to ensure that all Americans have health insurance coverage. While some may want to focus on the politics of the Act, we’ll focus on complying with it. Effective financial planning means looking at the law right now and not what might or might not happen in Washington!
Unfortunately, if you’re reading this and don’t have health insurance now, you already paid a tax penalty. If your penalty didn’t hurt your pocketbook (the minimum penalty is at least $95… if you earned $50k or more it’s at least a $400 bite… so it should have!), you’ll see a much larger penalty next year. That’s why you want to get health insurance today if you live in the United States.
And while it is important to avoid penalties, lets also look at this from a different angle: you really need health insurance. Most bankruptcies are health related. Beyond the expensive costs of treatments and doctor visits you’ll have to shoulder without a minimum level of coverage, you’ll also find yourself avoiding medical care because you can’t afford it… and that road leads nowhere good. Read the rest of this entry »
by Miata on March 30th, 2015
Reader Question: Do I Need Disability Insurance?
Autumn writes: Hi Miata, Our financial advisor is pressuring me to buy disability insurance. I have some through my day job already. Isn’t that enough?
Autumn, you’re right to question your financial advisor… not because disability insurance is unnecessary (I’ll tackle that in a moment), but because you shouldn’t ever feel pressured by your advisors. While advisors may disagree with you about a course of action, their job is to give you the data you need to make good decisions.
In this case, I do believe that the data supports your advisor’s assessment.
Here’s the hard fact: according to Cornell University, an astonishing twelve percent of Americans reported a disability in 2012. Twelve percent! People wonder why disability costs are so high…it’s because insurance companies think chances are high it’ll happen to you.
For someone like you, working in a day job and then presumably working on your craft as well, having disability coverage is even more important. Why? You’re relying on that day job to support your work. Without adequate income coming in, I’ve found many of my readers would be unable to continue pursuing the art they love.
“But I Have A Policy At Work”
Disability insurance is a complex topic. Most people’s work insurance policy simply isn’t enough. There are a few reasons for this: Read the rest of this entry »
by Miata on February 24th, 2015
A friend of mine likes to pay for lunch every time we meet. Surprisingly, she also always picks the most expensive places. I love to see her and there’s no reason for her to pay…but she always insists on paying anyway.
Lately, I’ve seen some disconcerting problems. Three weeks ago I could tell she was anxious.
My friend, we’ll call her Rachel, shared that her husband Mike is now seeing a psychiatrist. “He always feels like he’s about to have a heart attack. After asking three doctors for opinions, he’s starting to realize that it’s in his head.”
“What have they found out?” I asked, worried.
Rachel said, taking a bite from her caprese salad, “They think it’s stress.”
When we parted, Rachel again paid for lunch over my continued objections, and then wrote me a check for some earrings from a mutual friend’s jewelry party.
I found out two days later the check bounced. Read the rest of this entry »
by Miata on February 2nd, 2015
Is Fear Keeping You From Financial Success?
I’d like to share a secret about one trait many of us share. We have a fear of the unknown.
When I was a child, I was afraid of the dark. I’d check under my bed before turning out the light (which is funny now, because I never stopped to think that if there WERE bad things under there who cared if it was dark or not?). I’d open my closet door and thoroughly search. Then, even after all of that, I’d still pull the covers tightly around my head some nights, sure that the bogeyman had figured out how to sneak in through a heating vent and come to end my young life.
Luckily, that never happened.
You and I know, it will never happen.
People share this same fear when it comes to our finances. We fear walking into a new bank, opening accounts online, having money automatically deposited, sheltering money in an IRA, buying insurance we might not need, setting up estate documents that might be wrong.
We fear lots of things about money.
So how do we move past fear? It isn’t easy, I know. But if there’s anything that kills fear in your financial plan, it’s momentum. You have to get a running start.
Read the rest of this entry »
by Miata on January 19th, 2015
I’m sure by now you’ve heard the acronym SMART when referring to goals. That means that your goals should be:
Example: Instead of, I’d love to lose some weight this year, a SMART goal would be: I’ll lose 15 pounds by July 1st.
My Problem With SMART Goals
Really, I don’t have so much of a problem with them….as much as I think simply “SMARTing” your goals doesn’t necessarily fit our community. Don’t SMART goals sound—well, there’s no nice way to say this—boring? And as creatives, we want more than that from our goals, don’t we?
Here are five ways to create better goals in 2015 that’ll motivate you to get up and start moving!
Read the rest of this entry »
by Miata on December 22nd, 2014
2014 Year End Tax Planning: Good Holiday Fun
Ready for some good times?
I love the holidays. Lights. Friends gathering. Tax planning.
I know what you’re thinking: one of those three doesn’t belong… but tax planning CAN be a whole festival of fun, even for creative people, because it can save you lots (and I mean lots) of money. Just like holiday shopping, though, there’s a clear deadline to tax planning. If you don’t want to miss out on the best tax “deals” you have to move on many of these tasks by December 31st – before the sun sets on 2014! (Okay so maybe I wanted a reason to use this beautiful photo…)
Like anything involving the government or numbers, many of my clients freeze whenever we begin talking about taxes. The first step in this game is to relax! Tax planning, believe it or not, can be easy to understand. Plus, the lessons you’ll learn will last your lifetime. As the government makes changes I’ve found I only have to adjust my thinking slightly.
Here are five tips to help you save some money on taxes: Read the rest of this entry »
by Miata on December 8th, 2014
Gift Ideas to Teach Finance and Economics!
As a creative person, don’t you find many holiday gatherings are a little less….creative than they could be? According to the National Retail Federation, more people are giving gift cards this year as presents than ever before. Gift cards? Have we completely run out of entertaining, interesting ideas for our friends?
A friend of mine suggested board games that teach people about money.
What a fantastic idea!
It turns out that each year over a thousand new board game titles are released. If you walked the aisles of Walmart or Target, you’d never know there were many more options than Monopoly, Cranium and Risk.
Most games designed to “teach” people aren’t actually fun. Instead, look for games that help players build a thirst about money, economics or business because they’re having a blast enjoying the topics. Read the rest of this entry »
by Miata on November 18th, 2014
Looking to Clean Up Your Finances? Copy Successful Health Programs
A brilliant artist friend of mine recently wanted to lose weight. He picked up Tim Ferriss’ book 4 Hour Body and within a few months lost 20 pounds. He and I discussed how he finally was able to take off weight he’d talked about losing for a long time. His answers enveloped many of the themes I’ve covered when I work with people on effective money management. Let’s get creative today and see what lessons about money we can learn from health and weight loss programs!
It Starts With a Spark
One point he made that grabbed me was when he said, “I just one day decided I had to do things differently. It was like I flipped a switch. I’d had enough.” That’s true for better money habits, too. Every person I’ve met who decided that today was the day to get their financial house in order didn’t “take it slowly.” Sure, maybe they didn’t try to change ALL of their financial habits in a single day, but with one decision—to be different—they began either cleaning up their credit card debt, building savings, tracking their expenses….whatever.
I can usually tell when someone comes to me whether they’re going to be successful or not based on their attitude. If they simply say, “I’d like to change,” they rarely do. However, when someone can point out all of the reasons they NEED to handle money differently, I know they’re in business.
Read the rest of this entry »
by Miata on October 27th, 2014
Is a Second “Side” Job the Right Answer?
If you’ve ever thought about earning more money, you might have turned immediately to the idea of taking on a second job. But as artists we know that a side job isn’t JUST about more cash in your pocket… It is important to seriously weigh the consequences on your craft and any other income streams you already have.
The Money Crunch
Everyone’s had a time in their life when there’s more month than paycheck. Maybe for you that’s right now. You see ads all over the place for “help wanted” or “make money online.” It seems simple: you’ll work a little harder. “Put your nose to the grindstone” as my mom says. But should you start searching?
The biggest problem with multiple side jobs is that they sap your number one commodity: energy. They also drain away your second biggest asset: time. You might meet your bills, but you also might lose your motivation to work toward your bigger dreams.
Before you take on an additional side job, ask yourself some questions:
Read the rest of this entry »