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Giving Yourself Permission to Spend

vacation.jpgBigg success is life on your own terms. The five elements of bigg success are money, time, growth, work and play. Today we want to focus on money.

Some people struggle to save money in the first place because they love to spend it. Other people have no trouble saving it, but they get uncomfortable spending it.

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georgeI grew up with one of each. I’ve never seen research on this, but I bet that happens fairly often. Mom was a saver and Dad was a spender. I learned from both of them.

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marylynn
So I know the answer to this, George, but share with everyone which one you are.

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georgeI think I’m both so I face this internal battle – there are times when I swing to the savings side; there are times when I lean toward spending. The challenge for me is not letting it get out of balance when I shift one way or the other.

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marylynnBoth of us tend to spend on small ticket items. We’re not bigg ticket buyers so we can completely relate to one of our readers, Paul.

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Bigg question

Paul sent us an e-mail about his dilemma. He’s a regular saver, but he has trouble spending it – especially on bigg ticket items. For example, he could comfortably take a vacation but he’s not sure if he should pull the money out of savings. He wants our advice.

Bigg solution

Reading between the lines, it sounds like Paul wants to spend the money but he’s afraid he’ll need it for something else. Here’s the bigg solution:

Set up a separate account dedicated to the next bigg purchase you want to make. Set aside a portion of what you save in this account.

Right now, you’re implicitly saving for these things, Paul. By planning for your purchase and explicitly saving for it (i.e. by stashing money for it in a dedicated account), you’ll feel comfortable buying it once you’ve accumulated enough money.

Since you’ve been saving all along, Paul, consider taking a portion of the money you have in your general savings account and seeding this account with that money. You may feel you have enough to take that vacation now. If that’s the case, go for it! Then use this separate account for your next bigg ticket item.

Live (a little) in the moment

It’s important for all of us to save for our future. It’s also important to live a little in the moment and enjoy life along the way. Otherwise, we risk forgetting why we’re doing what we’re doing.

So Paul’s going to save for a vacation. If you can’t afford that right now, plan for a weekend away. If that’s going to stretch your budget too much, plan for a nice dinner out this month. Maybe even that’s too much … plan for a nice meal at home. Make it an event. Every day … every hour … every moment is precious. Don’t fall into the trap of living too much for the future. Strike a healthy balance between now and then. That’s living bigg!

How do you save for bigg ticket items?

Share that with us by commenting below, calling us at 888.455.BIGG (2444) or e-mailing us at bigginfo@biggsuccess.com.

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Please join us next time when we discuss getting your employees to take a step toward personal leadership. Until then, here’s to your bigg success!

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Direct link to The Bigg Success Show audio file:
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Coaching Kids to be Clever Consumers

word_money.jpgBigg success is life on your own terms. The five elements of bigg success are money, time, growth, work and play. Today we want to focus on money.

Here’s a bigg challenge faced by a lot of people – you’re trying to save money. You’ve done everything you know to do. You may even have your spouse on board, but what about the kids?

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Smart savers

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georgeMy mom was a dedicated saver. She taught me about saving when I was young. I had this fun little coin machine where you could watch the money going down into the appropriate slot. I just loved to watch the coins pile up!

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marylynnMy mom took my sister and me to the bank so we could open our own savings accounts. I just loved watching the money accumulate in that account! And to earn interest – I thought that was the greatest thing in the world!

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Play money

If you have kids in grades K – 8, check out the money section of kids.gov. They have some fun games, virtual tours and all kinds of other ways to help your kids understand money better. We wish they would have had it when we were kids!

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Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

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Clever consumers

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marylynnWhen I was a teenager, I had my own job so I had my own money. The popular jeans at that time were Guess jeans. All the cool kids had them and I wanted a pair. My mom wasn’t too thrilled that I was buying designer jeans. They cost a lot more than the regular old jeans. I did buy one pair but Mom’s reaction made me think twice the next time.

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georgeI can remember the day when I learned the difference between real money and play money. I was in the fourth grade. My teacher was one of the best teachers I ever had. He was always talking about the Guinness Book of World Records. I was with my Mom … shopping. She told me that, if I was good, I could pick out a toy. I found this air-powered toy gun. When we got up to the check-out counter, I noticed they had the Guinness Book of World Records on sale. I wanted it too! Mom said I couldn’t have both; I had to choose. It was a hard decision, but I finally chose the book. I never regretted it!

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We both benefited from our parents forcing us into making spending choices early in life. With the right coaching, kids can learn to be clever consumers and smart savers. It’s one of the best gifts any child could ever receive.

What did your parents do to teach you about money? Or what have you done with your kids to teach them? Share that with us by leaving a comment below, calling us at 888.455.BIGG (2444) or e-mailing us at bigginfo@biggsuccess.com.

Thanks for reading our post today.

Please join us next time when we’ll look at quirks that cost us time. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00396-051809.mp3

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Should I Pay Down My Mortgage or Make Home Improvements

bigg_question.jpgBigg success is life on your own terms. The five elements of bigg success are money, time, growth, work and play. Today our focus will be on money.

One of our listeners, Bob, called us with a bigg question. He and his wife have some extra money and they are wondering whether they should use it to pay down their mortgage or make some home improvements.

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Both options are very illiquid

You can’t get your money back once you spend it with either option. So make sure you have enough extra cash to cover between six to twelve months of living expenses before you do either one.

A guaranteed return

Paying down your mortgage is one of the safest investments you can make. It’s a guaranteed return equal to your mortgage rate.

For example, if your mortgage rate is 6% and you pay it down early, you’re essentially earning 6% on your money guaranteed!

That’s a decent rate of return right now.

Returns on home improvements are often more sketchy. Start by asking yourself this question:

How does the value of your home compare to other homes in your neighborhood?

If you’re one of the most expensive homes already, making improvements probably won’t do you a lot of good financially. However, this is your home. It’s more than just an investment. So ask yourself a second question:

How long do you plan to live there?

The longer you plan to stay put, the higher the emotional returns – an important point to consider because money isn’t everything. What types of improvements yield the best financial returns? Most major outlays don’t return much if anything. Cosmetic improvements usually show a better return – paint, new floor coverings, landscaping, and those sorts of things. Remodeling the kitchen or bath can yield a reasonable return, particularly if they look a little outdated, as long as you don’t go over-the-top.

Weighing your options

Determine how much it will cost for your desired improvements. Then ask a Realtor or an appraiser to find out the expected increase in your home’s value. Now calculate your return:

Return = (Increased Value – Cost of Improvements) ÷ Cost of Improvements

Compare that to your mortgage rate. If the return for making the home improvements is significantly higher, you might consider making the improvements instead of paying down your mortgage.

Just keep in mind, this is not an apples-to-apples comparison. Paying down your mortgage offers a guaranteed return. Making home improvements does not.

Choosing between improvements

If they go with the improvements, Bob wants to replace the windows. His wife wants to remodel the kitchen. Which would be better for the money?

We wonder why you want to replace the windows, Bob. Is it for cosmetic reasons or are you thinking about energy-efficiency? Perhaps it’s both.

Stimulus for you

We hate to disappoint your wife, but right how is a great time to replace windows or make other energy-efficiency improvements. The Economic Stimulus Act extended and improved the tax credit for these types of repairs.

You get a 30% tax credit up to a $1,500 limit. So you can spend up to $4,500 on qualified improvements.

A tax credit is better than the deduction you’re used to getting on Schedule A. Deductions reduce your taxes by the amount of your marginal rate. Credits reduce your taxes dollar for dollar.

So $1,500 of your new windows could be paid for by the government!

The one cash outlay that pays you back year-after-year

However, it doesn’t stop there. It’s amazing how much air can leak out through poor windows. You’ll save money on your utility bills for years with the right windows.

Your returns for making any energy-efficiency improvements aren’t guaranteed but they’re close. They may also be higher than the returns on a lot of other investments these days. Improving your energy-efficiency is a cash outlay that pays you back year after year!

Thanks for your bigg question, Bob!

Do you have a bigg question?

Please share it with us by calling us 888.455.BIGG (2444) or sending an e-mail to bigginfo@biggsuccess.com.

Please join us next time when we talk about two recent examples of saying, “We’re sorry.”

Thank you for sharing your time with us today. Until next time, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00391-051109.mp3

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Save Money by Sharing

sharing.jpgOur parents taught us to share. It was part of being a good little boy or girl. The economy is reminding us adults about the value of sharing.

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Home for Sharing

For example, some people are now sharing living space. More and more people are accepting the idea of having a roommate again by renting out a room to help pay bills.

There are a number of people who are out-of-work and looking to save money every way they can. “Necessity is the mother of invention” as we’ve heard.

Co-working

Another popular idea is sharing workspace. Freelancers across the country are creating co-working stations in their communities where they can share office facilities and other resources.

Instead of going it alone – signing a long-term lease, paying utility bills, buying office furnishings and equipment – they pay a fee and share space with other freelancers and entrepreneurs.

The spaces are usually nice and bright. They have a conference room and maybe even a full-time receptionist.

It’s not just about money. For freelancers who are starting to feel like loners, it gives them a chance for in-person human interaction during the day.

Sharing infrequently-used items

We started thinking about other ways to share. One example is a lawn mower. We only use our mowers once or twice a week. In our area of the world, we only use it for about half of the year. Would it make sense to share a mower with a neighbor?

As long as both people don’t feel the need to mow on the same day at the same time, it would probably work. There are issues – you have to both agree to take care of the mower and those sorts of things.

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georgeThis makes me think of my dad. If he owned something, he took really good care of it. If he used something that someone else owned, he took really, really, really good care of it!

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Sharing for fun

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marylynnI had an event coming up and I didn’t know when I would find time to go shopping. I told one of my girlfriends about it. She said that she had the perfect dress. We went over to her house and, sure enough, she did!

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georgeI needed a pressure washer to do some clean up around the house. I told one of my friends that I needed to go rent one. It turned out that he had one that he let me use for the weekend.

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Just so we don’t give the wrong impression, we also share our stuff with our friends!

A fun way to share

Since we like to do everything in a bigg way, let’s ramp up this idea of sharing more. Why not organize an event with a group of your closest friends?

Hop from house to house. If you want, you can have appetizers or organize a full meal as part of the activities. You can do it all in one day or create a series – this month at our house, next month at yours.

At each house, let the host show off the wares that he or she is willing to share.

It could be a Fashion Show – from clothes to accessories. Try them on if you want. Parade around. Show them off.

Or a Home Show … from power tools to hand tools. Test them out. Complete a project together. It’s your show; do what you want.

You could have a Home Entertainment Show. Show off DVDs, books and Wii accessories.

You can all see what each person in your group has to share. Then the next time you need that certain something, you won’t have to go out and buy it – you’ll know Joe or Jane has it.

This is a fun way to spend some time with your close friends. You’ll find that it will spark a lot of fun conversation and you’ll learn more about each other.

It’s also a creative way to save some money by pooling resources. That’s a bigg idea!

What have you shared with your friends?

Please share that with us by leaving a comment below, calling us at 888.455.BIGG or sending us an e-mail at bigginfo@biggsuccess.com.

We thank you so much for sharing some of your valuable time with us today!

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Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

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Recent research shows that, even before the recent decline in stocks and homes, the rich weren’t getting richer. Please join us next time when we discuss why.

Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00380-042409.mp3

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What the Car You Drive Says About You

porsche_cake.jpg It’s not what you make that really counts; it’s how much you keep. We base that on studies that show how millionaires became millionaires. Sure, they’re always trying to earn more, but they really watch what they spend. That’s one of their secrets to success in many cases.

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Only you know your terms

We were recently at a birthday party for our friend, Tim. His wife had a really cool cake for him. It’s the picture you see with this post.

We were talking with Tim about his Porsche. He’s one of our regulars here at BIGG Success and he commented about how we’re always talking about frugality. A Porsche may not be consistent with that mindset.

But BIGG success is life on your own terms. If your terms include having a Porsche parked in the garage, then more power to you!

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georgeThat’s one of the things we love about our definition of bigg success – it’s not judgmental. I can’t tell you what’s best for you. Just like you don’t know what’s right for me. Heck, sometimes I don’t even know what’s right for me!

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marylynnThat’s the beauty of life on your own terms. When you’re living it, you don’t judge other people because you think, “Oh, that’s life on their own terms.”

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We try to report what works – what research shows helps you get to that next level of success in your life. But we can’t tell anyone what the right choice is for them. You decide because you’re the one who lives with it.

We hope we provide some additional insight to help you with your decisions, but ultimately you’re the entrepreneur of your life. You’re in charge.

Your car is an expression

Read more