The party is over. Now, let's have some fun!

Hello again!  Here we are several days into the new year and our 2011 resolutions.  We've been members of the local YMCA for over 3 years and we are often amused at the dynamics of the new members around January 1st.  Like most gyms or athletic clubs after January 1st, the YMCA is filled to the gills.  New faces, determined looks, fancy new workout clothes, etc.  It takes about 7 days for the crowds to get back to normal and see many of the new faces for the last time.  


I can't help but think about how many of those same dynamics hold true for our financial resolutions.  It's relatively easy to think about what's possible and how the new you will tackle the tallest financial mountains in the coming year.  It is very common to see people well into their 40's before they really begin to think seriously about reaching their lifelong financial goals. Like most well-intentioned New Year fitness goals, many financial goals are left dramatically unmet and largely forgotten about as soon as the first unexpected bill or repair comes along.  


Some people are determined to start living on a budget.  However, if you've ever tried to put a budget together and actually maintain it month to month, it's extremely difficult.  If you've been able to successfully create and live on a budget, please share your experience.  I'm all for it, but I've never really attempted to live on a budget.  That may surprise some of you, but it's true.  It may be especially surprising to know that my income (and we are a 1 income house) can vary as much as 30% year to year.  I tend to take a different approach to budgeting.  Some of my approach will be revealed later on.


If you've already established some goals for this year, good for you, but keep reading.  If you haven't, you are certainly not too late.  I have some tips and ideas for your consideration as you put together your financial plan for 2011.  They go something like this:


1) If you budget for anything, budget for this.  Frankly, there is nothing more irritating than the doorbell ringing as we are sitting down for dinner to find someone asking for donations for the football boosters, or clean water funds, or hungry African children, or a 4th grader selling magazines for a field trip.  Not that these are unworthy causes, but it puts you in an awkward situation that requires split second financial reasoning.  I'm a big believer in giving and giving generously, but also giving strategically.  We will set a general amount aside each year that is for exactly these type of situations.  Once the money is gone, it's gone.  It helps us stay disciplined so we don't end up with 4 magazine subscriptions we don't read.  It also makes saying 'no' that much easier.  I would encourage you to set a specific amount aside just for these purpose.


2) Set a record - then break it!  This one is fun.  One way to feel successful in goal setting is to make them manageable.  Annual goals are okay, but they can seem far off and if you fall behind, they can seem impossible.  Try setting many small goals.  One of my favorites is seeing how many days in a row you (or your family) can go with out spending any money.  This excludes your regular bills and food staples of course.  How many days can you go without any discretionary spending?  No fast food, movies, clothes, coffee, etc.  See how long you can go.  Once you've established your record, then set a goal to break that record!  It can turn into a lot of fun and save you from spending on generally unnecessary items.  Give it a try!


3) Getting a tax refund?  Many of us will be getting a tax refund in the next few months.  Many people use that refund to pay off Christmas bills or credit card debt.  If you have credit card debt that you can't pay off with your regular income, then that is probably the best way to spend that refund.  If you are looking forward to getting a refund to use as you wish, this is an important moment for you.  The temptation will be to spend it on something.  Challenge yourself to fight that urge.  For some of you, this might be your best chance to make a significant contribution to your savings account.  Save it, it'll feel good!


4) If you didn't earn it, save it!  One of my favorite ways to save money is to save every dollar I didn't earn.  The $50 birthday check, the rebate check in the mail, the $20 your neighbored paid you back, the refund given in cash from an item returned to the store, garage sale proceeds, money from Craigslist/Ebay sales, etc.  This is all money you didn't earn, but rather money given to you.  This money, for me, always goes into savings.  You will be surprised how much this might add up to be.  


These ideas are simple and easy.  None of them require detailed budgeting or ongoing maintenance that so often causes us to stumble.  What things do you do?  What goals do you set?  How to you keep yourself accountable?  I'd love to hear from you!


Lastly, there are two ways to connect with the Low Down.  You can follow this blog (see above right) and you can "Like" my Low Down Facebook page.  


Here's to a great 2011!


Until we meet again...