Archive for the ‘Savings’ Category
How often have you caught yourself saying: “I Can’t Afford It”? That’s one of the most disempowering phrases we can use in our creative lives. “I can’t afford it” is the financial equivalent of “I don’t deserve it” or “I’m not ready for it.” Of course you deserve it, and of course, you’re ready.
You just have to tell yourself that you are ready, you deserve it, and all you need is a plan.
Now perhaps there truly are some things you may not be able to afford. Like this yacht…
However, more often than not, you could (and should) be breaking down life into two columns:
- I don’t want it.
- I am creating a plan to have it.
Let’s explore these two options: (more…)
I recently received this email from an actor who just finished working through the Artist’s Prosperity Home Study System:
I just have to write and tell you how excited I am to have found you! I’ve been an actor for five years, struggling along with everyone else, and I finally decided that enough is enough: I need to put together a plan so I can really focus.
All of this time, I thought I had already been focusing on my art, when in reality, I was part-timing everything: my job, my family and my craft. Now, you’ve put me on a path that I don’t think I could have accomplished myself. I have an emergency fund, a separate checking account for my business, and for the first time, real hope for the future. While I have yet to score that elusive “great part,” my auditions are much better. I believe this is because I come in focused and without worrying about “how broke I am.” Sure, I still worry about money, but not in the “OMG, I need this role” desperate way that I have in the past.
Thank you again for what you do. I just wanted to let you know there are people out there who appreciate you very much.
It is rewarding when we hear from folks who have started to take control of their financial futures, because the unfortunate truth is that many people simply never will.
I was just reading some statistics from a group called the Employee Benefit Research Institute. While most Abundance Bound readers are self-employed (and not employees of others), we frequently fall into these same traps and the results of their recent retirement survey weren’t encouraging: (more…)
I’m facing a big tax bill. Every year I have trouble putting away money for quarterly taxes. What’s a good trick to get money saved?
Here’s my favorite technique to save money: save into a central savings account that’s difficult to reach, then pay yourself a separate amount into checking from this fund. Have money automatically deducted from this central savings account each month for your tax bill before you pay yourself money to live so that you don’t face these huge bills.
It’s a horrible mistake to pay tax penalties. The IRS assesses a five percent penalty for every month you’re late filing. Then they tack on a half percent penalty per month on late payments. These amounts are on the overdue sum, not the entire tax due, and are capped at 25 percent.
The biggest problem I see?
People try to use discipline to fix their saving problem. Don’t trust your financial picture to your ability to be “disciplined.” Take 15 minutes with your bank and set everything up on automatic deduction. You’ll be happy you did the next time you encounter a large tax bill and the money is already saved.
I have to admit, I’m a perfectionist about planning my business. While making dinner, my mind races through lists of ways to perfect my craft. When folding laundry, I’m usually strategizing about my next potential project. My mind seems to always be at work on the next “better” idea, even when daily mundane tasks rule the moment.
I was reading management guru Tom Peters recently, who stated that balance is baloney. Top people in any field don’t have balance. They obsess. They strategize non-stop. They’re always looking for the better idea, the perfect “new thing.”
As a bit of an obsessor myself, I mostly agreed with his statement, except in one area. You shouldn’t obsess about your money.
It’s actually easier to obsess about business if you’ve done a good job of setting up a sound financial structure. By taking care of some small details today, you’ll be able to focus all of your energy on your craft. (more…)
Contribute to your 401k even if you don’t plan on staying with the company long enough to claim the matching dollars.
A 401k plan allows an investor to place money into investments on a pre-tax basis. Let me explain what that means: when you collect cash from an employer, they’ve already taken out federal tax, state tax, FICA tax, and in some cases, city taxes. Yuck. When you invest in a 401k, your money avoids ALL of these taxes until you take it out. That means you’ll have more money invested than if you tried to save these funds in the bank. Even when you take money out, it’s distributed as ordinary income, circumventing FICA taxes. The 401k is a powerful tool you should be using right now! When you leave your company, you can often leave it alone or roll it to an IRA until retirement.
If I were forced to choose one time of year that was about making smart choices, it’d be hard to choose against this one. What should you wear to the next holiday party? Who should you invite to a gathering you’re holding? How much should you spend on gifts? Probably the biggest one of all is this: what should you eat?
I was out with a friend recently for lunch and as she perused the menu, I heard her mumble, “Oh, that looks good, but I want that cake!” I felt a bit envious because if I eat frosting at noon, I’m struggling to stay awake by 2:00 PM. But I was surprised when the waiter arrived and she ordered a healthy salad and water.
She never ordered cake.
I asked when the bill arrived, “You aren’t getting the cake?”
Her answer was surprising. This healthy, fit woman told me that she was on Weight Watchers. She enjoyed this particular program because it was less about diet and more about making wise choices. She hadn’t been talking about the cake from that restaurant’s menu. Instead, she was already thinking about the awesome cheesecake a woman was serving at a holiday party we’d both be attending later in the week.
In short, she was making choices today that would affect what she was going to eat in the future.
If you extend this type of thinking to your whole life, powerful results are right around the corner. (more…)
Remember the three little pigs? Sure you do. The moral of the nursery rhyme was simple: build your house right the first time and it won’t be blown over.
In the arts, we’ve all heard this advice before. It’s the quality of our work that brings people back. We’ve watched suspiciously as performers with gimmicks shoot to the heights of fame for a few brief moments; but it’s only quality work that helps ensure a long, prosperous career.
Or in other words, using three little pigs speak: If you’re building your house, make it brick.
I’ve often heard financial planning referred to by professionals as a house. A foundation laid on the sandy ground of debt and scattered income is bound to fall later. For the average person, building consistent, dependable income and paying down debt are jobs number one and two.
But we aren’t average, are we? (more…)
So you’ve finally checked your bank statement to discover that you’re getting nearly no interest from your savings account. Should you check out online bank accounts or are those risky?
Internet banking isn’t for everyone. I could never tell my mother to open an online account because she wouldn’t know how to withdraw funds and would worry that she couldn’t run down to the corner to take it out. That said, usually your best interest rates are going to be found with large, reliable banks online.
There are two considerations –
- Are you internet savvy and comfortable saving online? If so, explore away! Websites such as www.bankrate.com will help you compare interest rates when deciding where to invest. You should also check out bankrate’s list of star rankings when determining which firm to trust with your money. All banks aren’t created equal.
If you aren’t internet savvy, it’s better to stay close to home. Check to see if you’re eligible for a credit union. You may be surprised to find very competitive interest rates, which are often better than those at the bank.
- How quickly can you remove the funds? Remember that a savings account pays a low interest rate because it offers quick liquidity. If you’re saving online but don’t have an easy method to access funds, you may defeat the purpose.
You may also want to check other account types at your bank. Often, banks offer higher interest money market accounts with higher rates as long as you promise not to touch them often.
I’m setting up my emergency fund at the bank. What type of interest rate would you call “good” on a savings account?
Let’s focus on how to find the best rate, because bank rates change quickly. Interest rates have been extremely low lately, so it’s going to be impossible to find anything that looks like a great rate.
The best rates are usually found with money market accounts. These are still FDIC insured but have limited access. Ask first about money markets at your bank, then try competing banks in the area. Finally, check out credit unions. These institutions often offer higher rates because they’re designed specifically for their members instead of shareholders.
By the way Rita, congratulations on getting started! Although it may not feel like a big step, to me it may be the most crucial one. Taking action to create and move toward financial security is a real leap toward abundance!