9 Dimes out of 10

Want To Get Richer?

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You see that smile up there?

Not only did I get a little help from photographer extraordinaire Sarah Deragon of http://www.portraitstothepeople.com (definitely call her for your headshot needs),

that is also a smile of peace and contentment.

If you’ve been reading my newsletters each month, you know some version of what I’m going to say already about money.

If you want to get richer:

~Make a spending plan before the month starts. Know, as much as you can, what is coming in and going out.

~If you have debt, plan for it like any other expense. And have an exit plan for getting rid of that albatross around your neck.

~If you are spending more than you’re earning and saving, I’d wager that something is out of balance, and you might benefit from a more sustainable approach.

~If it were “just” about numbers and math, then the 7th grader in the house could practically make all the money decisions. Of course it’s not just about that. We all seem to have VERY DEEP feelings around money issues. Applying some clarity and awareness so often helps the money situation improve.

~Recruit an accountability partner in your goals around money. Someone who both has your back AND is willing to tell you the truth.

So, for those of you who have those basics cooking, I want to share with you something else I’ve learned recently. (For those of you who are still doing the hard work of alleviating your debt, this will hopefully provide an inspirational preview!)

Reviewing Dave Ramsey’s 7 baby Steps (http://www.daveramsey.com/new/baby-steps/), you may recall that #1 is to set aside $1,000 in case of emergency; #2 is to pay off all unsecured debt; #3 is to set aside 3-6 months’ worth of emergency funds in case you are some reason unable to work or earn money.

So, once those bedrocks are in place, then you get to start really having fun with looking at the longer term of your financial life!

My financial planner, who of course rocks, (http://www.burgessfinancial.com/) gave me a book called The Richest Man in Babylon. It’s only taken me about 3 years to start reading it. (See, I have struggles with this stuff, too! It’s tough sometimes!)

One of my favorite parts of the book so far goes something like this. (Excuse me for not direct quoting. Here is the book if you want to get it. http://www.powells.com/biblio/2-9780451205360-2)

Take an empty coin purse. Imagine holding it in your hand.

Put 10 dimes in the purse.

OK. Now, take 10 dimes out to spend.

What do you have left in the purse?

Experiment 2.

Put 10 dimes in the purse.

OK. Now take 9 dimes out to spend.

What do you have left in the purse?

Now repeat that. Put 10 dimes in. Take 9 out to spend.

NOW what do you have left in the purse?

I’m telling you, that little tidbit changed my life!

So it’s exciting that I’m experimenting this month with, as soon as I get payment for services rendered, I automatically transfer 10% of it to my Vanguard-held IRA. Then, it will stay parked until my later years when I will likely want to/be able to work less than I do now, and will of course still want to have a healthy level of resources.

How else will it happen unless I build up to it slowly? Will I, one day out of the blue, just feel like saving more money than I do now? (Probably not.) Will I get an outrageous surprise one day of more money than I know what to do with, and then I’ll say, whew!, thank goodness I haven’t been saving money all this time! (Also probably not.)

Incorporating the experiment numbers for a more real example: Let’s say I get a check for $500. I know part of that will be headed towards taxes since I’m an independent contractor. (I save that estimated tax money at the end of the month, once I can deduct the business expenses I know about from what I earned.) But 10% of $500 is $50. See? Not that much money. I’ll hardly notice that is gone, once I’ve transferred it out of my checking account! And then it will hopefully earn more money over time while invested in an account that I’m not going to touch in a company that has some of the lowest fees out there.

If you want to set a goal for yourself, feel free to let me know! Always glad to hear what motivates you to make financial changes for the better.  Email me at beth@welovethezero.com.
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Also, if you want to hire an accountability coach, let’s talk! I see people who want to increase their financial organization and clarity. I help people make plans to get out of debt. I enjoy helping couples come to solid and workable agreements with each other about how money will work within the relationship and the household.

I have an office in Noe Valley in San Francisco, and also work with people via Skype or phone if geography is a limiting factor.

Call me at (415) 425-1615 to find out more!