Self-Evaluating Your Financial Behavior, Part I

financial behavior

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

Self-Evaluating Your Financial Behavior, Part I

If you were to sit down with a financial planner, you might expect to state your goals and come away with directions for allocating your money.  You might expect to be sold a life insurance policy or have your money transferred to accounts that are under the control of the advisor.

A CFP® follows specific steps to align the client with a sound financial plan.  These steps involve establishing a relationship, gathering data, analyzing the current financial status, developing a recommendation, implementing the suggestions, and monitoring the plan.

A comprehensive evaluation of your financial status should integrate your underlying money motives and help you understand how you are managing yourself and your money.  This is critical knowledge because you are the only person that will take the necessary actions.

Dr. Brad Klontz is my hero on this topic.  Dr. Klontz combines behavioral finance and financial psychology into standard financial planning procedures. He’s the Dr. Phil of finances.  If you need help getting real with your finances, Dr. Klontz has your remedy.  In case you haven’t made the connection between your behavior and your financial status, read below where I’ll translate Dr. Klontz’s recommendations for conducting client meetings into self-evaluative introspection and actions.   If you understand your motives and harness that energy, you will be better empowered to make smarter financial decisions.

Continue reading “Self-Evaluating Your Financial Behavior, Part I”

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Mid-Year Financial Checklist

financial checklist

Usually I wait until December 31st or January 1st to assess my financial condition.

I ask myself the following  questions:

  • How much have I saved?
  • Is my money in the right accounts?
  • Is my retirement account percentage enough?
  • Do I have a balance in my Flexible Spending Account?
  • Have I contributed enough to my IRAs (deductible or non-deductible)?
  • Have I donated as much as I wanted to?

With the blur of the holidays fuzzing out my faculties, I decided that halfway through the year is probably a better time to check my financial diagnostics.  By December I don’t remember anything and I don’t have time to fix anything to fall within the calendar year.

This weekend’s activities involved conquering a mountain of laundry and getting to my fiscal monitoring.  Here’s a list of things I took care of and recommend:

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Your Health Is Your Most Valuable Asset

health

 

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

Because I feel that every aspect of life overlaps with financial success, I feel strongly about a topic that most people don’t consider related.  In fact, most take it for granted and neglect it when it needs everyday attention.  Here we go: Everyone must take charge of their health.  OK, I can feel the collective groan.  You mean I have to eat chunks of tofu?  Um, no, but it would help to put down the donuts.

Here’s the downside of not managing your health.  Feeling like a slug all the time might be a hint.  Having minor, chronic discomfort is another clue, whether it be from digestion, skin problems, allergies, or constantly getting a cold.

Here’s my day when I don’t eat right, exercise, or sleep well: cranky, no focus, foggy-headed, lethargic.  I can’t read anything beyond a third-grade level and I don’t want anyone near me.  After a few days, it’s like I’ve chosen Door #1 to the dark vortex that brings on depression.  Eventually, everyone will run from me but I don’t care because all I want to do is lay down.

Continue reading “Your Health Is Your Most Valuable Asset”

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investing

Investment Compounding Schedule

 

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

I devised this schedule to predict what my future investments would be worth.  The typical Future Value calculation involves taking today’s account balance, applying an interest rate and the number of periods for compounding. 

That’s great if you are working with only one balance at one given time. 

Because I make regular deposits into my investment accounts, I wanted to increase the balances at different intervals.  I created quarterly segments where any additional investment can be entered.  The formula will take the new end-of-quarter balance and apply the compounding. This repeats for all quarters. 

The yellow fields are the input fields.  The investment account balances can be entered at the top left.  You will see the entire schedule update as soon as an investment balance is entered.  Amounts can be entered in all the “Cash Invested” fields. 

At the end of the schedule, I calculate a cash flow amount based on the final balance.  I have used a conservative 3.5% return.  Below, I have a short list of estimated living expenses. Both cash flow and living expenses can be calculated on a monthly or annual basis.

If you’re good at Excel, you change alter the rates and add rows for additional years.  Let me know what you think of the schedule. I hope you find it useful.

Inv Compounding

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