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Ten Things You Need to Know About Budgeting

    1.       Everyone should do it.  Budgets are needed at all different income levels. Tracking how much you spend helps you make more informed decisions.

2.       Know what triggers your spending.  When you recognize what is causing you to spend more money, it is easier for you to stop.

3.       You can still have fun.  Just because you are being careful with your money does not mean you can’t have fun!  Just make sure you’re allocating only as much as your budget allows.

4.       Stop sales emails from stores.  It is much easier to avoid spending money on handbags when you don’t get the emails announcing their 10% discount.

5.       You spend more money on grocery shopping when you are hungry.  Eat a snack before you shop!

6.       Review your bills before paying­­.  Make sure you know what you’re paying for.  Make sure they don’t sneak in things you’re unaware of.

7.       Expect the unexpected.  It’s necessary to allow cushion in your budget to pay for unexpected expenses.  An emergency fund is crucial!  Aim for enough to take care of 3 to 6 months of expenses.

8.       If you fall off track one month, get back on the next.  If you spend more than budgeted one month, don’t get discouraged and give up.  Spend less the next month or reevaluate your budget allowances.  Make necessary adjustments and don’t give up!

9.       Helping yourself will help your children.  Your children learn by watching you.  Help instill good spending habits in your children.

10.    Really think about big purchases before you make them.  Don’t rush into anything!  This will also help to prevent buyer’s remorse when you get home.

Stay tuned for next week’s pin! Also, check out our boards on Pinterest!

Teaching Kids that Money Matters

By Emily Scott, Guest Blogger

How do you step outside of the textbooks and help your children learn about personal finance? There are six tips to help your children experience the meaning behind personal finance. To learn about giving children an applicable finance learning experience, click here.

The key to retirement?

Save more and spend less.  It may seem obvious and simple, yet many of us fail to live by these important principles, resulting in insufficient retirement savings.  Recently published in the Wall Street Journal, Kelly Greene's "The Key to Retirement: Spend Less, Save More" presents staggering statistics:

79% of 1,008 U.S. adults surveyed in February said that they have committed a money mistake – and of those, 26% reported not having saved enough for retirement as their No. 1 problem.

20% of workers saying they need to save between 20 and 29% of their income to achieve a financially secure retirement, and 23% saying they need to save 30% – or more.

Job uncertainty and making ends meet were the most pressing financial issues faced by both workers and retirees.

So how do you catch up or get ahead while you still have the opportunity?  Follow those two simple principles: save more and spend less.  Adjust your budget to live more modestly and bulk up contributions to your retirement accounts.  You'll be glad you did.

Wealth-building for Gen Y-ers

Money Magazine's 101 Ways to Build Wealth offers valuable financial tips for each stage of your life.  Listed below are their bits of advice for 25- to 34-year-olds.  To read the full article for more details, click here.   

1)  Start saving for retirement now.

2)  Favor cash-rich stocks.

3)  Add microcap stocks for growth.

4)  Build your career.

5)  Play the numbers.

6)  Get smarter about your money.

7)  Get with the program.

8)  Watch what you buy.

9)  Build your credit score.

10) Slash your student loans.



12 steps to take in your 60s

Liz Weston's recent MSN Money article, "Money in your 60s: 12 steps to take," explores 12 steps you can take to proactively prepare for retirement during your final years of work.  These steps include:
1)  Zero in on a retirement date.
2)  Figure out where you're going to live.
3)  Consider long-term-care insurance.
4)  Don't forget to include medical costs.
5)  Deal with your debt.
6)  Draw up a retirement budget.
7)  Review your Social Security and pension options.
8)  Check your withdrawal rate.
9)  Consider an immediate annuity.
10) Stress-test your plan.

Click here to read the full article.

The Real Reason You're Broke

Life is expensive no matter what your personal circumstances may be.  But by planning properly and making wise choices with your money, you may avoid financial turmoil.  A fun article was recently written which bluntly suggests several reasons that people become broke:

1. You spend good money on crap.

2. You don’t have a budget.

3. You don’t earn enough.

4. You don’t pay off your debt.

5. You don’t save.

6. You’re clueless about your investments.

Click here to read the full article and see what you can do to avoid putting yourself in a financial blunder. 

Financial fitness plan 2012

"Most couch potatoes will never compete in a triathlon. But they don't need to. Just a few minutes of exercise a day can help the formerly inert shed pounds, boost their energy levels and live longer. If you're already getting a little exercise, a little more can get you truly fit.

The same is true with money. You probably won't transform yourself from a train wreck into a billionaire. With some effort, though, you can pay down debt, build up savings and look forward to a more comfortable financial future."

- Liz Weston in her MSN Money article, "Get financially fit in 2012"

Weston lists five things you can do to help reduce debt, boost savings, and cut expenses:

1) Get your priorities straight.

2) Implement a plan to deal with your debt.

3) Review your expenses.

4) Create your survival plan.

5) Protect what you've got.

Read the full article to find out how.

How to stick to a budget

Dan Danford, CFP® and Founder/Chief Executive Officer of Family Investment Center, answers this week's episode of Money Made Easy.

He answers this financial advice question about setting a budget and helpful ways to actually stick to it:

"It seems every time I make a budget I stick to it for a bit and then slowly I start getting away from it. Then the spending gets too much so I sit down and create a budget again and the cycle repeats itself. Do you have any financial tips on how to actually stick to a budget?"

Danford explains why budgeting is similar to dieting: if your budget is too rigid you probably wont' stick with it. Watch the video for Danford's financial tips on how to stick to a budget.

Small Tips to Save Big this Christmas

By Laura Price, Investment Advisor

It may seem early to start planning for the holidays, but now is the perfect time to draw up a shopping list and budget. Gift-giving and family gatherings can become expensive in a hurry. Here are a few tips for reducing the financial burden this season brings:

Make a gift list. Start by listing all the family members and friends you wish to give something to. Then assign a specific dollar amount to each person and do not exceed that amount. Neglecting to create a gift budget is recipe for disaster.

Take an inventory of your skills and talents. Instead of purchasing gifts for everyone on your list, perhaps homemade gifts (a growing trend!) would be appropriate. What are your gifts? Sewing? Woodworking? Scrapbooking? Baking? Photography? Put those talents to use to please the folks on your list who appreciate sentiment or practicality.

Gift exchanges. With family and friend holiday gatherings, it makes the best sense financially for each person to draw one name and set a price limit. That way, you’re only buying one $50 gift for Grandma instead of buying $20 gifts for ten people. You save money and Grandma gets a better gift.

Keep an eye on the ads. Clip out coupons and take advantage of Black Friday sales. Don’t want to fight the crowds? Most sales apply to online shopping as well.

Shop early. Stores LOVE last-minute shoppers. When you’re down to the wire and desperate to find a gift, you will almost always pay more. Take your time and start shopping early.

Search the Internet. The Internet has an abundance of resources for ideas on cheap holiday parties, homemade gifts, coupons, and other ways to make the holidays less expensive. It pays to do your research!

Start planning for next year. When this holiday season is over, immediately start saving for next year. Also review this year’s budget to see how you made out. What adjustments will need to be made next year? Some folks even set up a separate savings account for gifts, allocating a certain amount from each paycheck to avoid shelling out extra from their year-end paychecks.

Money Rules

In MSN Money's Liz Weston's recent article "9 money rules to live by," she lists nine rules that will help you take control of your spending. And believe it or not, they're fairly simple!

Read the full article.

College Costs: Tuition Is Just the Beginning

The Wall Street Journal's Emily Blazer discusses costs you may not typically consider when budgeting for your child's college education. Food, clothing, transportation, extracirricular activities, storage, and many other miscellaneous expenses can add up! Click here to read the full article.

Budget your calories, and your money

By Robyn Davis Sekula

I've spent most of my adult life battling the bulge. Haven't we all? But one think I've always been skeptical about is weight loss pills, drugs, fad diets and anything else that promises great weight loss without any work.

To me, there's a corollary there between weight loss and financial gain: you can't get something for nothing. And, of course, if it's too good to be true, it probably is.

For weight loss, you must obey this one simple principle: take less in (calories) and spend more (calories) to lose weight. For financial gain, take more in (money) and spend less (money) to gain money. It's that simple.

Also, you really don't need to spend money to accomplish either goal. You can walk outside or run and use an online calorie tracker for your weight loss. For money, you can prepare a budget on a sheet of paper. It's all about your own discipline from there. Money can't buy you discipline.

Calories have become a budget item for me. I use thedailyplate.com to track my calories. You plug in your weight, height, and how much you want to lose and how fast. It tells you how many calories you have to "spend" during the day. You gain calories back by exercising. If I have a big evening out planned, I make sure to eat a lighter lunch, cut back on snacks, exercise and order sensibly.

I've also discovered what's calorie cheap: fruit and vegetables. You can eat an entire tomato for about 25 calories, an apple for 60, a banana for about 100. Full of fiber, fat-free and low in calories, this is a perfect way to eat lots of food and resolve my hunger. I've also discovered that some of my favorite treats have lost their appeal because I now know how many calories they cost me. A French Silk Pie Blizzard from Dairy Queen is almost 700 calories. Sure, I love them, but a half-day's worth of calories isn't worth it for me. The occassional donut, though, is about 260 calories, so I do still indulge in that.

So far, I've lost 13 pounds, and I plan to lose more. I'd like to get down to the weight I was when I got married in 1996, which for me is the upper end of what the height/weight charts say I should be at - so it's reasonable and I know I'll feel great. It will probably also prolong my life.

The financial cost to me is a membership in the local YMCA, which is for me, my husband and three kids, and a place we love to go, all for $60-some per month, and the $2.99 dailyplate.com application for my Blackberry. That's it. Years ago, I went to Weight Watchers, but I don't have the time to make a regular meeting, plus, I don't think the program teaches you the fundamentals you need. You don't learn about calories and nutrients, you learn about points, and ultimately, that doesn't do you any good.

The point is this: you have to know what indulgences cost you before you dive in. If you have a tendency to spend on clothes that you don't need, stay the heck out of your favorite stores. Likewise, if you love ice cream but know that you don't have the calories available to eat that Blizzard, then DON'T GO to Dairy Queen.

You can extend your life, and the life in your life, by engaging in good, old-fashioned discipline. It won't cost you a thing.

Frugal by nature

By Robyn Davis Sekula

In the past few years, my income has increased. In fact, it’s more than tripled. It’s been terrific. But I have spent so many years not making all that much that I’ve developed some thrifty habits. And even now that I’m making much better money, I’m not willing to let go of most of my frugal ways.

Why? Mainly because I enjoy getting a bargain. Plus, I believe that most items in the world are overpriced. Children’s clothing is among the things on the top of my list. Since my first daughter was born, and I wasn’t making much money, I picked up most of her clothes at yard sales. I then passed those on to my twin daughters a few years later. To this day, they still wear hand-me-downs. It doesn’t make one bit of difference in their lives. I find that coats, sweaters and fancy dresses are among the most overpriced and the most under-used by children. I regularly pick these up in almost new condition and pass them along to my children. Or I buy new clothes at the end of one season and use them a year later. But I never, ever pay full price for any clothing. It’s just about never worth it.

Books and toys are also just as good used as they are new, for the most part. I buy books for myself, my husband and my children second-hand. They read just the same and can be less than half the price of new. They’re essential in my home for all five of us.

However, one of my frugal habits has gone by the wayside. Now that I need to dress professionally, I do not buy second hand clothes for myself or Greg. Adults are hard on clothes. We keep them for a long time and wear them for years. I’ve gotten picky about my clothes. I buy quality items, usually from Land’s End, Talbots (actually an outlet they have in Lexington, Ky.) and Coldwater Creek, which is a wonderful catalog company. The clothes wear well and stay with me for a long time. Also, fit matters, and you simply can’t try on clothes at Goodwill or yard sales. I do buy the occasional item at a yard sale, but not often, and only if it’s very cheap. If so, and it doesn’t fit, I donate it to Goodwill and move on.

I’ve also given up the routine eating out that tends to drive the lives of those with small children. Now, Greg and I go to nice restaurants and hire a babysitter. It’s an expensive evening out, but extremely valuable to us. We spend money now on things that mean something.

So where does our money go? This year, I made $25,000 extra over last year’s income. I made a point not to blow it. I paid off our van, which had $10,000 in debt, and put away $5,000 each for us in Roth IRAs. I also doubled our payments to our second mortgage, and at the end of the year, doubled the amount we’re putting away for the kids’ college funds and through Greg’s 403 (b) at his work. I’ve also built up savings. We did splurge on a new TV, but not much else.

The point is this. I simply LIKE being thrifty. After 15 years of working in professional jobs where I made sometimes as little as $15,000, I have gotten into frugal habits that stay with me. I now can afford some things of quality, and I buy those things when I need them. I probably won’t ever start shopping at Gymboree for all of my kids’ clothes. Yes, they sell great stuff, but good gracious, $50 for a kids’ dress is nuts. It pains me to pay that and know that it will be stained and outgrown in a matter of a few weeks. What I really love about being frugal, too, is that I’m going to pass these habits on to my kids. They are having a happy childhood, thank you very much, doing simple things like baking cookies and playing dressup, and reading books with us. It’s all they need.

I don’t really like expensive jewelry (too flashy) and cut flowers just die. Want to get to my heart? Buy me an iTunes gift card. Nothing means more to me than permission to buy music.

We dumped cable TV this year because we realized we really don’t watch $60-some worth of TV each month. Instead, we have Netflix, and their wonderful Roku watch-instant player.

The best thing you can do for your family’s budget is find the things that you’re spending on that really don’t matter to you. Do you read the magazines that come into your home? Do you actually watch much TV? How often do you take out that boat? Where is the fat in your budget, and what happens if you trim it?

I’d love to hear your own stories of frugality. Post in the comments section.

Managing a variable income

On Mondays, we answer a question from a reader. Today's question deals with variable incomes. If you have a question, please post it in the comments section.

QUESTION: I would like to set up a household budget, but my income varies, from as low as $2,000 per month to as much as $10,000 per month. How do I set up a budget on a variable income?

ANSWER FROM DAN DANFORD: There are lots of people like that, and the best solution isn't budgeting. It's saving. Expenses aren't as variable as income. They are pretty predictable, actually. Groceries, electricity, rent or mortgage, and on, and on ... the expense side of budgeting is easy. Just add up your monthly expenses over a six-month period and divide by six. That should give you a fair idea of how much you need each month.

The trick with variable income, though, is covering expenses in the months where income falls short. To do that, you need a savings reserve. Over that same six month period, you should have enough good months to offset the bad. To succeed, you'll need to set aside extra when you have it.

This seems an elementary lesson, but many folks blow it. When the good months come along, they spend it all. And in the bad months, they use credit cards to cover. Eventually, they meet financial disaster.

My recommendation is to accumulate enough money to cover six-twelve months of expenses without any income at all. That should be enough to regulate the inflows/outflows and meet emergencies. This is the best way to manage variable income.

One last point. Don't kid yourself about income (or let your sales manager kid you about income). Sometimes, "variable" is a descriptive word used to hide ridiculously low wages. After a reasonable period of time where the variation is always low, find another job. Everyone deserves a living wage, and there are good jobs for qualified people. Don't let anyone hold you back with false promises!

Fine-tuning the household budget

One of the best ways to find extra money isn't necessarily to increase your earnings. Sure, that's good, but you may not have time to work any more than you already do. Before you take a second job, look hard at your spending. This article on Yahoo! Finance outlines how to save at the grocery store, and lists ways that you can save almost $500 per month. Keep this in mind when you're planning the family budget for the month.


http://bit.ly/a6AeD

Another great way to look for deals is this blog, written by a dedicated home economist. She keeps up with e-coupons, sales and other information that savvy consumers can use to cut the grocery bill. She posts often. Find it here:


http://www.wickedcooldeals.com/

Create a monthly spending plan

Most Mondays, we post a question from a reader and an answer from Dan Danford. We've skipped a few Mondays due to vacations, but we're back on our regular schedule as of today. Please let us know if you have a question of your own. Post it in the comments section.

QUESTION: I am in the process of setting up a family budget. We are a two-income family with three kids all 5 and under. Our expenses include day care, a mortgage, a second mortgage, and then routine bills (electricity, cable, gas, water, trash, insurance). Can you describe a basic process for how to start doing this and what needs to be in it? How detailed should it be? What should I do with savings?

ANSWER FROM DAN DANFORD: I prefer the term "spending plan" instead of budget. Budget has a lot of negative connotations, and most of us rebel at constraints. A monthly spending plan sounds and works better for most of us.

The process can be very simple. Create a list of recurring expenses. If certain things only come up once or twice a year (insurance or taxes, maybe), divide them out into a monthly amount. Or, better yet, set them up to pay monthly - it might cost a bit more, but the convenience may be worth it. Now, armed with this list, compare to your monthly income. The difference - either a shortfall or surplus - requires more attention.

Monthly deficits require a second look at your expenses. Where can you make adjustments to eliminate the shortfall? Usually, there are some discretionary expenses that can be shifted downward. Entertainment, maybe, or clothing. Lower car payments or rent. As I said earlier, this is a spending plan, so adjust your future spending to fall within your income.

If you have the luxury of surplus (and that is a luxury today!), stash the extra into a bank, credit union, or money market account. Dave Ramsey suggests a $1,000 emergency fund (as a start) and I'd shoot for three to six months of expenses. There will always be emergencies, and it's a genuine blessing to have cash on hand when they come. In fact, that's one measure of financial success in my book! After you've accumulated three to six months of savings, you can start looking at other investments. Like Ramsey, I suggest no-load mutual funds with a bent towards growth. But, until you have an emergency reserve, that's putting the cart before the horse.

In The Millionaire Next Door (Tom Stanley), he notes that few millionaires use budgets. That seems counterintuitive, right? What he found, though, is that they know the important stuff anyway, even without a formal budget. The most important data from a spending plan is how much you spend on things on an ongoing basis. That's the key. If you know what you spend and make good choices, family results are good. The reason why many advisors suggest a plan is because most folks don't keep track of what they spend. That's why they have financial problems.

I do, but I don’t want debt

Robyn Davis Sekula is a freelance writer and public relations consultant who helps us with a variety of tasks. She helps maintain this blog and writes posts on occasion. This week, Robyn wrote about her own experience paying for her wedding and her tips for how to have a great wedding on a budget.

By Robyn Davis Sekula

In 1996, I did something that others consider to be a bit unusual. I got married, and my fiancé and I paid for almost the entire wedding out of our own pocket. My parents gave me $1,000, and my in-laws paid for the rehearsal dinner. But the wedding itself, and the honeymoon, came out of our own pockets, without debt, and without some sort of crazy corporate sponsorship scheme (which, if I had thought of it, I might have tried).

I’d like to share a few thoughts on how we did it, and why, in hopes of helping those who are getting ready to get married themselves.

To appreciate our story, you need to understand that my future husband and I made a combined $40,000 or so, and we did not live together. I moved in with a married couple I knew, mostly to save money. Greg was a homeowner. We had separate living expenses, and no second jobs. To this day, I can’t tell you exactly how we came up with $10,000 for the wedding and honeymoon in a year. I know that we are both cheapskates at heart, and my rent was crazy cheap. Those things helped. It also helped that we both wanted the same things in a wedding.

Our first cheapskate stunt was buying an engagement ring at a pawnshop. Greg had shared with a friend who knew a lot about jewelry that he wanted to propose, and she called one day to say she had been to a pawnshop and spotted a very good three-diamond ring for $500 that was worth far more. Greg filled me in, and we looked together. He didn’t want to make such a huge purchase without my endorsement. I loved it, and it fit. So we bought it. Next stop was a jewelry store, where we asked if we had gotten ripped off. They said, “We could not sell you one diamond for what you paid for this ring.” In my mind, this story illustrates why we get along so well. Greg likes a bargain, and thought nothing wrong with buying an engagement ring in a pawnshop. I’m a girl who loves a bargain, and sees nothing wrong with receiving a ring that was purchased in a pawn shop. I don't believe that "stuff" carries bad vibes. It's an object.

Then we began talking about what type of wedding we wanted. I was raised Baptist. Baptists generally think a wedding, including reception, should be over in about 90 minutes. You have a short service in the sanctuary, go to the basement fellowship hall for mints and peanuts and you’re outta there. No alcohol, because Baptists typically do not drink. Seriously, Baptist weddings are cheap. Greg, however, is from a Catholic family, all of whom would be traveling, and they would expect to drink and be fed. How to combine those two competing interests?

We started with a list. We each made a separate list of what was important to us in a wedding. We both had good music at the ceremony as high on the list. We also both wanted to have a full meal at the reception. Low-ranking were flowers and cake. I also had high on my list quality photographs. Personally, I think one of the worst trends in weddings is dispensing with professional photography. That is the ONE keepsake you get from your wedding. You’ll want good photos, and so will your kids and grandkids. Spend the money on good photography. I can’t tell you how many friends have forehead-smacked themselves for foregoing this. Anyone who has been married will likely tell you that this matters.

Another item that really mattered to me was helping to pay for my bridesmaids’ transportation and dresses. I’ve always felt that making people buy a dress and shoes they’d never wear again and then pay for travel to get to the wedding site, and lodging while they were there, is a tall order, especially for the young people usually in the wedding party. For one bridesmaid who was a grad student, I bought her dress, plane ticket and found a friend for her to stay with. If you’re going to spend $10,000 on a wedding, I see no reason why $200 for a plane ticket and $125 for a dress is a problem.

Everything else we did I saw as open to negotiation. I met my mom at a bridal dress outlet and found a dress I loved for $500 (a bargain even then). I love the dress, and still do. But I didn’t have any interest in paying retail. Instead of a limo, I talked to rental car agencies to see if I could rent a white Cadillac for the day of the ceremony. Sure, they told me, and they got it for me. $40 for the entire day, and a friend relished the idea of being the driver. It was fun, elegant, and nice. I called many florists, and found one in a small town 30 minutes away who was willing to work with my budget. Another friend of mine hired a florist who regularly displayed at her local farmer's market - another great tip. The florist was less expensive and the bouquets wonderfully natural. I found a new caterer who was just learning her craft and I’m pretty sure gave me a good discount on food.

I also selected a time of day for the wedding that I thought would absolve me of the responsibility of having a full bar: 11 a.m. We had a beautiful morning wedding, and served wine only at the reception. I personally hate cash bars at weddings. I think it’s tacky. But I also understand it is incredibly expensive to offer a full bar to guests.

Yes, a wedding is your day. But it’s A DAY. Do not, under any circumstances, go into debt for a wedding. And by the way, you aren’t owed a wedding. No one is required to pay for it for you. Presumably, if you’re getting married, you should be ready for paying your own way through life. If your parents pay for your wedding, it is a wonderful gift. Be grateful.

A wedding is a great way to try your hand at budgeting, perhaps for the first time, with a future spouse. If you can’t agree on this, though, think about whether or not you have what it takes to go long-term. It only gets harder, particularly if you don’t agree about money.

Don't break the bank for vacations

On Mondays, we answer questions from readers about personal finance matters. This past week, we had a question from @sarahedale on Twitter. You can find us on Twitter @family_finances

QUESTION: What percentage of their income do most Americans spend on vacations per year? What do you think is appropriate or safe?

ANSWER FROM DAN DANFORD: Sarah, a recent Gallop poll found that almost 60 percent of Americans who usually take a family vacation are planning to downsize or cancel this year. Together, that's an estimated $30 billion drop in travel spending this summer. Tough for the industry, but generally good for families wanting to travel.

Rules of thumb aren't much help here. Families differ too much in terms of income, size, geographic region, and personal taste. One family's summer trip to a Minnesota fishing lake doesn't compare well to another's annual pilgrimage to Cape Cod or Aspen. And other families consider any vacation an extravagance. There's little common ground for good comparison.

Here's what I can say. Bargains abound. No matter your preference of time, place, or amenities, costs will be lower than any time in recent memory. Hotels, resorts, cabins, boats, airfares, car rentals, and even para sail rides will available for remarkable savings. It's a buyer's market for summer vacations.

A couple of suggestions. Look for bargain vacation packages assembled to lure travelers. Use credit cards for booking, but pay them off or use cash when buying. Any savings will vanish against high interest rates. Last, don't go if you don't have the money. Vacations are about good memories. Don't try to manufacture good memories out of bad times. First of all, it doesn't work very well. Second, the struggle to pay later could damage any good memories.

Believe me, vacations are about time together, not fancy destinations. You can have a lot of fun without spending a lot of money. Especially this summer.

Gift-giving season calls for resourcefulness

We post a daily financial tip on Twitter @family_finances. For the past week or so, we've been giving advice for the gift-giving season. The summer usually abounds with invitations for graduation parties, weddings and other similar occasions. Keep your purchases reasonable. Here are all of the Twitter tips gathered into one spot.

- Gift season is approaching. Graduations, weddings. Don’t overspend. Your gift won’t be remembered in a few years, but your presence will.

- Gift cards are a nice gift, but watch the fees. Keep your receipt; they don’t always work.

- Don’t go into debt to buy someone a gift, even for your own children. Buy what you can afford.

- Store wrapping for gifts is sometimes free. Skip it if it’s not. Seriously, you can wrap your own gift.

- Look for sales now for gifts you’ll need to give in a few months. People spend the most when purchases are impulsive.

- When buying for children, be sure to ask for sizes before you purchase. Don’t make someone return something. That’s a pain.

- Think about buying for Christmas now. If you spend the next six months or so looking casually, you may find the best bargains.

- For a graduate, think about a great book on finances as a gift. If they’re going out on their own for the first time, that’s information they need.

- For a young couple getting married, a great gift is a check. They’ll get plenty of vases and trinkets. Think practical.

- For a new grandchild, consider opening an account to pay for their college. Every time you get the urge to buy them a toy, instead, contribute.

- For a housewarming, consider a card with a certificate good for free lawn-mowing, house-washing or other service. They’ll need the help.

- A gift of time is priceless to someone who has their hands full with children. Free babysitting is always a great gift.

The 60-minute family finance makeover

What can I do to improve my situation quickly? A great question. I've outlined the steps everyone should take below.

Consolidate similar accounts. One reason families fail financially is because they are overwhelmed by monthly papers and statements. It might take a few minutes, but transferring all IRA accounts to the same place makes it much easier to follow each month. The same with other accounts. Find a convenient place where you can consolidate all your mutual funds, stocks, bonds, and bank certificates.

Simplify your investment process. Simple is good. For most families, a diversified portfolio of good mutual funds will earn solid results without all the bother and fees. A few investment hobbyists love the complexity. Most people, though, benefit from the simplest possible approach. Eliminate clutter and confusion.

Tune out “market pornography.” You’ll be happier and more successful if you ignore market clutter. Almost everyone agrees that a long-term investment approach works best for most people. Yet, we’re smothered by minute-to-minute coverage of all the markets. Just skip it completely. Enjoy life without the daily noise.

Study a good investment book. An hour reading the right book can change your financial life forever. Try Ric Edelman’s “Ordinary People, Extraordinary Wealth” or Andrew Tobias’s “The Only Investment Guide You’ll Ever Need” or Jonathan Clements’s “25 Myths You’ve Got to Avoid If You Want to Manage Your Money Right.”
Our book, “Million Dollar Management: Simple Lessons to Use Wealth Management Principles for your Family Investments” is an easy-to-read explanation of investment things that really work. Learn the basics, and you’ll succeed.

Create a simple filing system. People hate all the paper, and who can blame them? It all seems important, but it’s not. Keep a temporary file for each account, then empty it and start over after tax time each year. You accountant can help decide what’s necessary. A simple system helps reduce monthly paralysis and anxiety.

Meet with a qualified, commission-free financial advisor. Most quality advisors offer an initial meeting for a reasonable price. Bring your investment statements and a list of questions, and they’ll offer immediate insights and advice. Many families I meet with don’t need a second meeting because we can answer their most pressing questions on the spot.

Interview and hire a qualified, commission-free financial advisor. This flies in the face of today’s conventional wisdom, but many people aren’t interested in or suited to investment management. These families can hire an advisor on an ongoing basis. The world has changed and it’s cheaper and easier than ever to find quality help. Many, maybe most families, could be better off with a trusted financial advisor.