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What's Your Money Paradigm?

4/20/2014

Finding financial balance is a common topic on our website and blog, and for good reason. I don't think anyone today would disagree that our country's financial system is completely off balance - and that applies to the personal finances of most of its citizens as well. How did we get to this point? There are probably a lot more reasons than I could list here, but just a few include:

* Unbalanced spending
* Unbalanced lending
* Unbalanced borrowing
* Unbalanced financial world view favoring short-term "gains" over long-term stability
* Generally poor management of available resources

Obviously there are many more as well, but these are probably the biggest issues that would apply to both governments and individuals.

So what is the solution? Our modern money paradigm is obviously not serving us as well as we would have hoped. From major stock market losses, to virtually non-existent savings, to literally trillions of dollars worth of debt on student loans, credit cards, and more, as a country and as individuals, most of us are moving backwards financially. Maybe it's time for a new (or rather very old) money paradigm. Maybe it's time to get back to basics.

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The Tax Man Cometh: Pay Him Now, Or Pay Him Later?

3/23/2014

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It's almost that time of year - the time we all dread - unless we're tax professionals! Tax season is almost upon us, and it always brings up a number of questions and conundrums to deal with.

Obviously many of us invest in some type of qualified plan (aka government-sponsored retirement vehicle), hoping that our money will be waiting there for us (nicely compounded) when we are ready to retire. But all too often, this isn't the case. With the massive numbers of baby boomers retiring each day, the problem is only going to get worse. What happens when we suffer another market crash, and the majority of thousands of people's retirement savings are virtually wiped out - right when they are about to retire?

Qualified plans may sound like a great concept, but they don't always work the way we want them to. Remember that the majority of funds in a 401k, 403b, IRA, etc., are at risk and subject to market fluctuations. They are also not liquid, and it's hard to access them before retirement age, unless we want to pay a penalty. (But wait a minute - if it's YOUR money, why should you have to pay a penalty to access it??) And then of course there are taxes....

We all love the idea of a "tax-deferred" plan - if we can defer paying taxes until some later date, why not? We tend to think of it in the short-term as "saving" money on our tax bill - even though it's actually deferred - not saved. Of course with our human desire for instant gratification, this sounds like a great idea! I don't have to pay taxes on my retirement savings until I retire? Sweet!! Well, the government is wise to our tendencies of procrastination, and don't think they haven't thought this through! Setting up these qualified plans was very strategic - and the strategy wasn't necessarily designed to favor YOU....

Let me show you what I mean. Let's start with a very basic example, and I will make a few assumptions to make this easier to calculate.

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3 Tips for Successfully Managing College Costs

2/16/2014

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College costs continue to rise every year - and so do the number of students graduating with heavy debt loads. Nothing can throw your long-term financial plan off balance like $100,000 of student loan debt right when you're starting your new adult life at an entry-level job! And if you're a parent, nothing can throw your long-term financial plan off track like having to figure out how to get your kids through college, while facing the prospect of retirement just a few years later....

More and more families are forced to put their retirement plans on hold due to the high cost of college, while more and more graduates face daunting levels of debt all the way into their 40's - and sometimes even beyond. College costs don't seem likely to drop anytime soon, so how can you maintain financial balance and still get a good education?

Today I'll share three helpful tips that can help you navigate the costly maze that is a college education, and come out ahead - or at least not so far behind. Whether you are a parent or a student, these tips should help!

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Stop The Insanity: 3 Rules for Avoiding Debt This Holiday Season (& Beyond)

12/1/2013

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The holidays come every year, like clockwork, but somehow so many of us still seem surprised by our credit card bills come January. We certainly live in a society of the moment, but if we truly want to take back control of our health and our future, we also need to take responsibility for our finances, and that means controlling our spending.

You may have heard the phrase, "the slavery of debt," and make no mistake, debt indeed makes you a slave, and the financiers of your overspending are your masters. I still remember vividly a scenario from my church quite a few years back, when they did a message on debt, and illustrated it with live-action scenes of people with shackles and nooses around their necks, being dragged around by those they were in debt to.

It certainly was a dramatic interpretation, but the point hit home with me hard - then still deeply in debt myself - and I never forgot it. Having experienced it myself for many years, I can truly say that being in debt feels like being in chains, and getting rid of that debt is like being set free. I will share my story of the long, arduous process of freeing myself at another time. But today I want to talk about what you can do, right now, to stop feeding your debt, and start building a freer future for you and your family - starting with your holiday shopping this season.

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What's Your Money Paradigm?

The Tax Man Cometh: Pay Him Now, Or Pay Him Later?

3 Tips for Successfully Managing College Costs

Stop The Insanity: 3 Rules for Avoiding Debt This Holiday Season (& Beyond)

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