Sharon Marchisello's Blog, page 18
January 17, 2017
Shrink Your Financial Footprint
In my personal finance e-book, Live Cheaply, Be Happy, Grow Wealthy, I often refer to "shrinking your financial footprint" as a way to build wealth more easily. Although I didn't make it up, the term "financial footprint" is not widely used, so I'll offer my interpretation.
We all leave footprints during our brief stay on earth. You've probably heard a lot about "your carbon footprint" which is related to how much energy you consume. The larger your carbon footprint, the more natural resources are required to sustain your existence. We're all encouraged to shrink our carbon footprints in an effort to preserve our environment.
Your financial footprint is how much moneyyou need to fuel your lifestyle. The smaller your financial footprint, the fewer financial resources you'll require to lead a satisfying life. The less money you need to sustain your daily existence and pay for the things and experiences you value, the more you'll preserve to build wealth, which you can use to further enrich your life, and to support causes you care about.
The two footprints can be somewhat related. For example, someone who drives a gas-guzzling sports car will probably have a larger carbon footprint than a person with a well-maintained compact. And probably a larger financial footprint as well. The extra money spent on premium gas and higher insurance bills won't be going into the retirement fund or toward the kids' college education.
But maybe you want more than just basic transportation from point A to point B? Your vehicle is an expression of your personality, and driving that gas-guzzling sports car fulfills a dream. Fine. There may be other areas in your life where you don't mind scrimping in order to shrink your overall financial footprint. Like turning down your thermostat in winter. Boxing up your leftovers and stretching them into another meal. Resisting the urge to upgrade every time a new iPhone comes out. Packing washable clothes that mix and match so you can travel with only one roll-aboard.
There is a certain satisfaction in living within a smaller financial footprint. But you have to adjust your attitude to be happy with less baggage, to find joy in things and experiences that don't cost a lot of money. You have to stop worrying about impressing others with your consumption. Separate value from cost.
Once you get in the habit of shrinking your financial footprint, you'll feel less like the fat person, overstuffed from the all-you-can-eat buffet, and more like the trim person, invigorated after a bit of exercise and a nourishing meal of healthy-size portions.
What tips do you have for shrinking your financial footprint? I'd love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
We all leave footprints during our brief stay on earth. You've probably heard a lot about "your carbon footprint" which is related to how much energy you consume. The larger your carbon footprint, the more natural resources are required to sustain your existence. We're all encouraged to shrink our carbon footprints in an effort to preserve our environment.
Your financial footprint is how much moneyyou need to fuel your lifestyle. The smaller your financial footprint, the fewer financial resources you'll require to lead a satisfying life. The less money you need to sustain your daily existence and pay for the things and experiences you value, the more you'll preserve to build wealth, which you can use to further enrich your life, and to support causes you care about.
The two footprints can be somewhat related. For example, someone who drives a gas-guzzling sports car will probably have a larger carbon footprint than a person with a well-maintained compact. And probably a larger financial footprint as well. The extra money spent on premium gas and higher insurance bills won't be going into the retirement fund or toward the kids' college education.
But maybe you want more than just basic transportation from point A to point B? Your vehicle is an expression of your personality, and driving that gas-guzzling sports car fulfills a dream. Fine. There may be other areas in your life where you don't mind scrimping in order to shrink your overall financial footprint. Like turning down your thermostat in winter. Boxing up your leftovers and stretching them into another meal. Resisting the urge to upgrade every time a new iPhone comes out. Packing washable clothes that mix and match so you can travel with only one roll-aboard.
There is a certain satisfaction in living within a smaller financial footprint. But you have to adjust your attitude to be happy with less baggage, to find joy in things and experiences that don't cost a lot of money. You have to stop worrying about impressing others with your consumption. Separate value from cost.
Once you get in the habit of shrinking your financial footprint, you'll feel less like the fat person, overstuffed from the all-you-can-eat buffet, and more like the trim person, invigorated after a bit of exercise and a nourishing meal of healthy-size portions.
What tips do you have for shrinking your financial footprint? I'd love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
January 1, 2017
Countdown to Financial Fitness: New Year's Resolutions You Can Keep
Countdown to Financial Fitness: New Year's Resolutions You Can Keep: Most New Year's Resolutions are abandoned within the first month. Some people don't even bother to make them anymore. One reaso...
New Year's Resolutions You Can Keep
Most New Year's Resolutions are abandoned within the first month. Some people don't even bother to make them anymore.
One reason resolutions are hard to keep is that they are often unrealistic. Overnight, we vow to forsake our old ways and become perfect. It's hard to suddenly break habits we've formed over a lifetime.
Crash diets don't work because you're asking yourself to adopt a behavior that is unsustainable, and even unhealthy. As soon as you meet your goal, provided you make it, you'll go back to the same eating patterns that made you fat in the first place, and the pounds will pile back on. For a weight-loss plan to be successful, you have to permanently change your eating and exercise habits. The best way to do this is gradually, taking small, manageable steps.
The same goes for achieving financial goals. If you instantly try to impose an austerity program on a spendthrift, you're setting yourself up for failure.
Set reasonable expectations. For example, if you've identified eating lunch out daily as an area where you can cut expenses, instead of promising to start taking your lunch to work every day from now on, set a goal of brown-bagging it several times a week. Make lunching out a special treat, rather than a necessary errand to grab something to fill the void.
If you're not maxing out your retirement accounts and building a healthy retirement fund is important to you, try increasing your contributions by a few percentage points at first. (Or put that money you're saving from not going out to lunch as often into an IRA.)
If you're teetering on the edge of bankruptcy and you've resolved to get completely out of debt in 2017, that goal might be a bit ambitious. Why not plan to pay more than the minimum payment each month, stop accruing additional debt, or pay off one credit card within a specified amount of time? (And apply that money you're saving on lunches out to reducing your debt.)
Before you make your resolutions, establish some long-term, big-picture goals. What do you want your financial future to look like, and why? What will it take to get there? How do you want to feel when you've reached those goals?
Next, write down reasonable resolutions that take you toward these goals, tell a trusted friend or family member willing to hold you accountable, and get started. If you falter, don't give up. Just like it wouldn't make sense to throw in the towel on a diet because you overate at a party, don't abandon your financial goals because you overspent on a shopping spree or missed a payment. Forgive yourself and get back on track. When you do make some progress, celebrate your success, and then keep going.
What resolutions have you made for 2017? What tips do you have for keeping them?
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
One reason resolutions are hard to keep is that they are often unrealistic. Overnight, we vow to forsake our old ways and become perfect. It's hard to suddenly break habits we've formed over a lifetime.
Crash diets don't work because you're asking yourself to adopt a behavior that is unsustainable, and even unhealthy. As soon as you meet your goal, provided you make it, you'll go back to the same eating patterns that made you fat in the first place, and the pounds will pile back on. For a weight-loss plan to be successful, you have to permanently change your eating and exercise habits. The best way to do this is gradually, taking small, manageable steps.
The same goes for achieving financial goals. If you instantly try to impose an austerity program on a spendthrift, you're setting yourself up for failure.
Set reasonable expectations. For example, if you've identified eating lunch out daily as an area where you can cut expenses, instead of promising to start taking your lunch to work every day from now on, set a goal of brown-bagging it several times a week. Make lunching out a special treat, rather than a necessary errand to grab something to fill the void.
If you're not maxing out your retirement accounts and building a healthy retirement fund is important to you, try increasing your contributions by a few percentage points at first. (Or put that money you're saving from not going out to lunch as often into an IRA.)
If you're teetering on the edge of bankruptcy and you've resolved to get completely out of debt in 2017, that goal might be a bit ambitious. Why not plan to pay more than the minimum payment each month, stop accruing additional debt, or pay off one credit card within a specified amount of time? (And apply that money you're saving on lunches out to reducing your debt.)
Before you make your resolutions, establish some long-term, big-picture goals. What do you want your financial future to look like, and why? What will it take to get there? How do you want to feel when you've reached those goals?
Next, write down reasonable resolutions that take you toward these goals, tell a trusted friend or family member willing to hold you accountable, and get started. If you falter, don't give up. Just like it wouldn't make sense to throw in the towel on a diet because you overate at a party, don't abandon your financial goals because you overspent on a shopping spree or missed a payment. Forgive yourself and get back on track. When you do make some progress, celebrate your success, and then keep going.
What resolutions have you made for 2017? What tips do you have for keeping them?
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
December 26, 2016
Tips for Charitable Giving
Late December is probably the most popular time of the year for charitable giving. People are still in the holiday spirit, and those who itemize deductions may be thinking about ways they can reduce the year's taxable income.
There are so many worthy causes out there. How do you choose which ones to support? And all charities are not created equal; some are better stewards of your donation dollars than others.
Here are some tips for deriving the most benefit from your charitable contributions:
1. Don't respond to solicitations by telephone, unless it is a charity you recognize and plan to support. Ask the caller to send you some literature or refer you to its website (which should end in .org, not .com). A legitimate charity will not mind. The crooked ones will insist that you give them your personal information over the phone. Keep in mind that many fake charities have names that sound similar to the legitimate ones.
2. Make your gift online by credit card or mail a check so you'll have a record of it. Most charities will immediately send a thank-you email confirming receipt of your online donation, with the date and amount—documentation you will need to support your tax deduction. And try to give directly to the charity, rather than through a paid fundraiser, who will most likely keep a portion of your donation.
3. Research the charities you are considering supporting. Charity Navigator (www.charitynavigator.org) assigns ratings of one to four stars based on the organization's financial performance, accountability and transparency. You can see how much its leaders are paid, how much of its income goes to programs—as opposed to administration and fundraising—as well as how the charity compares to other organizations doing similar work. You may be surprised to find that some of the better known charities don't score very well.
4. Charity Navigator only rates charities that have at least a million dollars in revenues, so many small, local charities will not have a score. Check Guidestar (www.guidestar.org) for copies of the organization's tax return (Form 990), mission statement, customer reviews, and programming/governance information shared by the charity.
5. Ask if your donation is tax deductible. The organization's IRS status as a 501(c)(3) or similar should be clearly noted on its website, receipts, and/or other materials. If you're unsure, visit the IRS website to verify. Also, if you accept a "thank-you gift" such as a tote bag, dinner, magazine subscription, etc., in exchange for your donation, the fair market value of that "gift" must be subtracted from your tax deduction.
6. Think about supporting small, local charities so your donation dollars will stay in your community. Many of these organizations are run entirely by volunteers and thus have lower overhead costs than the national powerhouses headed by CEOs making six-figure salaries. Also, you might be able to visit the site, meet and talk to some of the volunteers, and observe how well the charity executes its programs. And if you can't help with your checkbook, perhaps you can spare a few hours of your time?
What charities do you support, and how do you choose them? I'd love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
There are so many worthy causes out there. How do you choose which ones to support? And all charities are not created equal; some are better stewards of your donation dollars than others.
Here are some tips for deriving the most benefit from your charitable contributions:
1. Don't respond to solicitations by telephone, unless it is a charity you recognize and plan to support. Ask the caller to send you some literature or refer you to its website (which should end in .org, not .com). A legitimate charity will not mind. The crooked ones will insist that you give them your personal information over the phone. Keep in mind that many fake charities have names that sound similar to the legitimate ones.
2. Make your gift online by credit card or mail a check so you'll have a record of it. Most charities will immediately send a thank-you email confirming receipt of your online donation, with the date and amount—documentation you will need to support your tax deduction. And try to give directly to the charity, rather than through a paid fundraiser, who will most likely keep a portion of your donation.
3. Research the charities you are considering supporting. Charity Navigator (www.charitynavigator.org) assigns ratings of one to four stars based on the organization's financial performance, accountability and transparency. You can see how much its leaders are paid, how much of its income goes to programs—as opposed to administration and fundraising—as well as how the charity compares to other organizations doing similar work. You may be surprised to find that some of the better known charities don't score very well.
4. Charity Navigator only rates charities that have at least a million dollars in revenues, so many small, local charities will not have a score. Check Guidestar (www.guidestar.org) for copies of the organization's tax return (Form 990), mission statement, customer reviews, and programming/governance information shared by the charity.
5. Ask if your donation is tax deductible. The organization's IRS status as a 501(c)(3) or similar should be clearly noted on its website, receipts, and/or other materials. If you're unsure, visit the IRS website to verify. Also, if you accept a "thank-you gift" such as a tote bag, dinner, magazine subscription, etc., in exchange for your donation, the fair market value of that "gift" must be subtracted from your tax deduction.
6. Think about supporting small, local charities so your donation dollars will stay in your community. Many of these organizations are run entirely by volunteers and thus have lower overhead costs than the national powerhouses headed by CEOs making six-figure salaries. Also, you might be able to visit the site, meet and talk to some of the volunteers, and observe how well the charity executes its programs. And if you can't help with your checkbook, perhaps you can spare a few hours of your time?
What charities do you support, and how do you choose them? I'd love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
Countdown to Financial Fitness: Tips for Charitable Giving
Countdown to Financial Fitness: Tips for Charitable Giving: Late December is probably the most popular time of the year for charitable giving. People are still in the holiday spirit, and those who it...
December 16, 2016
Countdown to Financial Fitness: Year-End Financial Strategies
Countdown to Financial Fitness: Year-End Financial Strategies: The year is almost over, but there are still a few things you can do to get your financial house in order. The goal? Don't leave money ...
Year-End Financial Strategies
The year is almost over, but there are still a few things you can do to get your financial house in order. The goal? Don't leave money on the table, and try to optimize your tax situation for 2016 and 2017.
Here are some suggestions:
Spend the money in your Flexible Spending Account (FSA). Most accounts are use-it-or-lose-it, and funds have to be depleted within same calendar year. Refill that prescription, have your teeth cleaned, order a new pair of glasses or contact lenses.
Make charitable contributions. If you itemize deductions, you can reduce your taxable income and help the causes you care about at the same time.
Evaluate deductions. For example, maybe you can accelerate property tax payments, business expenses, professional dues, or make your January mortgage payment early. Or you might be able to defer or accelerate certain income and/or expenses for the most favorable tax impact.
Contribute to your retirement account. You only have until the end of the year to fund your 401k (maximum $18,000; an additional $6000 if you're over 50), but you can make 2016 contributions to an Individual Retirement Arrangement (IRA) through April 15, 2017. If you have a Health Savings Account (HSA), you can also make contributions for 2016 through next April.
Evaluate your investments. If you have capital gains, see if you can unload some losing investments to offset them. While taxes should not determine your investment strategy, you can take the sting out of a bad investment decision or mitigate the tax impact of a gain with a little clever balancing.
Give appreciated securities. Kill two birds with one stone by donating assets such as stock or mutual funds instead of cash to a qualified charity. If you sell the stock first and donate the proceeds, you'll only be able to deduct the amount of cash generated by the sale, and you will pay income tax on the gain, which could be sizable if the value of the asset has increased since you acquired it. But if you transfer the asset directly to the charity, you pay no capital gains tax, deduct the fair market value of the asset at the time of transfer, and the charity gets more money out of the deal. Check with the institution holding the asset and the charity receiving it to work out the details.
What suggestions to you have for end-of-the-year financial moves? I'd love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
Here are some suggestions:
Spend the money in your Flexible Spending Account (FSA). Most accounts are use-it-or-lose-it, and funds have to be depleted within same calendar year. Refill that prescription, have your teeth cleaned, order a new pair of glasses or contact lenses.
Make charitable contributions. If you itemize deductions, you can reduce your taxable income and help the causes you care about at the same time.
Evaluate deductions. For example, maybe you can accelerate property tax payments, business expenses, professional dues, or make your January mortgage payment early. Or you might be able to defer or accelerate certain income and/or expenses for the most favorable tax impact.
Contribute to your retirement account. You only have until the end of the year to fund your 401k (maximum $18,000; an additional $6000 if you're over 50), but you can make 2016 contributions to an Individual Retirement Arrangement (IRA) through April 15, 2017. If you have a Health Savings Account (HSA), you can also make contributions for 2016 through next April.
Evaluate your investments. If you have capital gains, see if you can unload some losing investments to offset them. While taxes should not determine your investment strategy, you can take the sting out of a bad investment decision or mitigate the tax impact of a gain with a little clever balancing.
Give appreciated securities. Kill two birds with one stone by donating assets such as stock or mutual funds instead of cash to a qualified charity. If you sell the stock first and donate the proceeds, you'll only be able to deduct the amount of cash generated by the sale, and you will pay income tax on the gain, which could be sizable if the value of the asset has increased since you acquired it. But if you transfer the asset directly to the charity, you pay no capital gains tax, deduct the fair market value of the asset at the time of transfer, and the charity gets more money out of the deal. Check with the institution holding the asset and the charity receiving it to work out the details.
What suggestions to you have for end-of-the-year financial moves? I'd love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
December 10, 2016
Countdown to Financial Fitness: Avoid Overspending During the Holidays
Countdown to Financial Fitness: Avoid Overspending During the Holidays: Get in the Christmas spirit! The holidays are the time for indulgences, to treat yourself! Don't be a Scrooge! Sale! Buy now, pay l...
Avoid Overspending During the Holidays
Get in the Christmas spirit! The holidays are the time for indulgences, to treat yourself! Don't be a Scrooge!
Sale! Buy now, pay later!
Temptation to overspend abounds, especially during the holidays. Here are some tips to keep it under control while you're shopping:
Make a list. And then stick to it. Decide in advance whom you will shop for, and how much you are prepared to spend.
Compare prices ahead of time. If you know what items you plan to buy, check around online and also peruse the ads for the brick-and-mortar stores in your area. Some stores will match a competitor's price, so take the ads with you, or print out the online display.
Set a budget. If you view a credit card as a magic plastic wand, leave it at home. Bring only the amount of cash you've allocated for your shopping trip. Or if you're uncomfortable carrying a lot of cash, load a prepaid card with your gift budget. Once it's gone, you're done.
Be realistic about your weaknesses. If you know that, for every gift you buy for someone on your list, you'll find something you just have to have for yourself, add your name to your shopping list, and budget accordingly.
Eat a healthy meal before you shop. That way, you'll have more energy and be less tempted to refuel on overpriced junk food at the mall.
And lastly, if you do overspend, don't beat yourself up. Just like a dieter overeating at a holiday feast, don't use your slip-up as an excuse to declare failure and cave in to temptation for the rest of the season. Get back on plan tomorrow.
How are you managing holiday shopping? I would love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
Sale! Buy now, pay later!
Temptation to overspend abounds, especially during the holidays. Here are some tips to keep it under control while you're shopping:
Make a list. And then stick to it. Decide in advance whom you will shop for, and how much you are prepared to spend.
Compare prices ahead of time. If you know what items you plan to buy, check around online and also peruse the ads for the brick-and-mortar stores in your area. Some stores will match a competitor's price, so take the ads with you, or print out the online display.
Set a budget. If you view a credit card as a magic plastic wand, leave it at home. Bring only the amount of cash you've allocated for your shopping trip. Or if you're uncomfortable carrying a lot of cash, load a prepaid card with your gift budget. Once it's gone, you're done.
Be realistic about your weaknesses. If you know that, for every gift you buy for someone on your list, you'll find something you just have to have for yourself, add your name to your shopping list, and budget accordingly.
Eat a healthy meal before you shop. That way, you'll have more energy and be less tempted to refuel on overpriced junk food at the mall.
And lastly, if you do overspend, don't beat yourself up. Just like a dieter overeating at a holiday feast, don't use your slip-up as an excuse to declare failure and cave in to temptation for the rest of the season. Get back on plan tomorrow.
How are you managing holiday shopping? I would love to hear your comments.
Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.
December 7, 2016
Book Nook Nuts: Author Interview with Sharon Marchisello
Book Nook Nuts: Author Interview with Sharon Marchisello: 20 Questions (Author Interviews) Brought to you by Debby P. 1.Tell us about your current project. My 70,000-word mys...
