5 Go-To Financial Behaviors

5 Go to Financial Behaviors

 For financial freedom

If I could condense twenty or so years of wealth accumulation onto a 3 x 5 index card, and keep it handy as a refresher, this exercise would reinforce good personal finance behaviors.  My mom is a fan of 3 x 5 index cards and has encouraged me to use them for the simplest reminders.  Even in this day of mobile lists, downloading, songs, streams, and tweets, writing down these five behaviors in your own handwriting and referring back to them frequently will result in a larger Personal Financial Statement over time.

Focus on affordable housing first.

I lucked out plain and simple.  But it did take saying “NO” to a lot of Realtors who were pushing expensive houses that were well outside of my price range.  I can just see how the housing crisis evolved.  We tend to listen to people that hold themselves out as experts.  Statements like “Don’t worry, it can only go up in value.” OR “You’ll build equity and you can always sell it if needed.”  Here we are some six to seven years later and many Americans are still under water.

I didn’t take that deal.  I bought a cheap townhouse that I financed with a 15-year mortgage and paid off in 9 years.  No….it’s not the Taj Mahal.  Ironically, all my friends tell me they love my house. My cheap paid-off condo allows me to sleep at night and focus my attention on the next four behaviors.

Live well below your means.

The 15-year mortgage was an impulsive last minute decision and obviously wreaked havoc on implementing this behavior.

Or did it?

You will adapt when you want to achieve something won’t you?  Deposit paycheck to savings account, transfer enough to checking account to cover variable costs with weekly cash budget.  Use credit cards for purchase protection only.  Yes, sounding like a broken record.  This one’s non-negotiable!

Continue to reinvent thyself often.

Another non-negotiable behavior.  Social media makes this all possible.  You can have a virtual resume  working for you 24/7 for all to view and take in.  Any introvert can now sell themselves to virtually anyone or any company at anytime.  Get started.  Use LinkedIn, Facebook, Twitter, etc.

Dollar Cost Average (DCA).

Let’s talk DCA here.  It is entirely behavior-based.  By saving and investing bi-weekly, monthly, etc. a sum of money, the power of compounding and time will result in an accumulation of wealth.  Notwithstanding volatility in stock/bond markets, this one technique, combined with living well below your means is why so many middle income folks WILL become millionaires.

Save for a rainy day

It’s called an Emergency Fund and if you use DCA, the result will not only contribute to your wealth accumulation, but also allow you to sleep better at night and be strategically positioned to take advantage of opportunities that you might not have otherwise if you are  living paycheck-to-paycheck.

I hope that this condensed list of ideas will resonate with you or someone you know. 

Remember this one thing:  These behaviors are absolutely achievable under any income level.  The challenge is taking the time to go through each behavior and craft the process that works for you and your life.

Because, as I always say in the end, it is about life and how you live it.

In the spirit of financial well-being,

Paula Cashflow

October Cashflow update

Time to refresh your PFS or Personal Financial Statement.

Back in July, I introduced the concept of quarterly financial updates.  If you choose to work with a financial advisor, chances are they will encourage quarterly meetings.  I usually did with my client base.  Although, I found that my clients after a year of these meetings were comfortable with the relationship and chose to forego the quarterly meeting.  This was actually okay, because I was working behind the scenes keeping close watch over my client’s overall financial picture.  Continue reading

Financial Planning is Healthful

My mother is an avid reader and she’s always giving me newspaper clippings, dog-earred magazines, blurbs, etc. penned with ideas she considers to be valuable information that I MUST read, right this minute.

Her intentions are always good and, most of the time, I do read the bag full of clippings that she sends home with me after our visits.

But this week, Viviane (Paula Cashflow’s mom) nailed it!  Continue reading

Borrowing from your 401k

Whether you’re a spender or a saver, most of us will need to borrow money at some future point in our lives.  It’s inevitable.

Back in the late 1990’s when my income was much less, I borrowed money from my 401k.  In the spirit of full disclosure, I am not a fan of borrowing from 401k funds.  Therefore, I think it is necessary to have a healthy conversation about why 401k loans should not be part of a wealth accumulation strategy. Continue reading

Life Insurance 101: Part One

As Open Enrollment season approaches, you might have the option to choose employer provided life insurance. Generally, most companies offer a no-cost group life insurance option limited to one- or two-times your annual salary. Needless to say, this is not an employee benefit option that anyone should pass up.

Here are some things to consider this open enrollment season when evaluating your benefits plan for 2015. If you are in any of the following categories, you MUST consider electing this coverage: Continue reading

Money Lessons I Have Learned

Over the years most of the money lessons I’ve learned have involved money and some combination of family or friends.  This is a sensitive topic.

Money and family can be a toxic combination, but I’m going to attempt to address some events that can transpire and hopefully not offend any of my readers in the process.

As I take a deep breath, here are a few of my toughest money lessons: Continue reading

Fees You Should Start Boycotting Today

When I first started to pay more attention to the expense side of my wealth accumulation strategy, I started taking a harder stand on ALL fees that I was being charged.  You might be thinking, well, what control do I even have over these fees?  Answer:  you have total control.  Businesses are focused on fee revenues to boost overall revenues during periods of low interest rates.  Don’t let fees erode your savings. Continue reading