Posted in Lori's Blog on December 23rd, 2010

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By Lori Brillhart

Financial New Year’s Resolutions…

If mastering your finances is a top priority for you in the upcoming year, here are some simple steps to help you achieve your goals. While your financial life may be an area you have ignored or neglected, now is a perfect time to get back on track. Don’t wait another day-one simple step may be all that is needed to reach your goals.

The single most important step to take is to determine your burn rate. Purchase a notebook, use a software program or online tool, or a simple spreadsheet, to track all of your expenditures for the next month. Use a tool that is easy and one that will enable you to record each and every penny spent. This is the most challenging task, but the most worthwhile, as it will allow you to truly see where all of those extra dollars are going, and where you may be able to cut back.

Next, establish a plan to get out of debt-or significantly reduce it. Being debt ridden causes people all kinds of emotional stress. Once you resolve to reduce your debt, you will feel empowered to take additional steps that will help you realize your financial objectives.

While this may seem a bit obvious, an often overlooked step is to spend less than you earn. Have you ever gone on a diet or started a fitness program, and worked really hard to lose those extra pounds? Once you reached your desired weight, did you find that what you lost found you once again? The same can happen with your debt. If you have been in debt before, understand that this step is not a temporary action-this is a lifestyle change.

Now that you have paid off your debt and you know where you can save some money, establish an emergency fund. What you had been paying in interest on your credit cards, car loans or student loans, you can save in your emergency fund. Life happens-cars and roofs need to be repaired, medical issues may arise, and you don’t want to have to dip into your retirement fund for the many emergencies that may occur along the way. Ideally, save up to six months of your expenses in your emergency fund.

Start a retirement plan. If you already have a retirement plan in place, increase the amount you save. You may be surprised to know that millions of people who could start a retirement plan at their workplace, elect to forego this benefit. While some employers do not contribute to the plan, many still participate. If your company or organization matches a part of your retirement plan, find a way to contribute so you can take advantage of the benefit they are providing. In essence, this is free retirement money!

After you have maximized your retirement plan, start an opportunity fund. While life provides plenty of challenges-to be sure-life also provides plenty of opportunities. These opportunities typically have a cost associated with them. What happens when a friend or family member asks you to accompany them on a trip of a lifetime? Or your dream home, or second home is listed for sale? Or a business opportunity becomes available? Will you have the funds available to realize your dreams, or will you still be stuck trying to determine how to track your burn rate? Remember, the steps above are all things that you can control.

There is no time like the present to start. Strive for improvement, not perfection.

I wish you a happy, healthy and prosperous 2011!

What is your primary financial objective for 2011? We want to know!
Posted in Lori's Blog on December 16th, 2010

Reality is setting in for many last minute shoppers. I, for one, have yet to purchase anything other than stocking stuffers and small tokens of appreciation for friends, neighbors and coworkers. Typically, I would have been done with my Christmas shopping by December 1st, and would have had plenty of time for all of the things I truly enjoy about the holidays: getting together with friends and loved ones, ice-skating with my son, watching the Christmas ships pass in the night, and watching traditional Christmas shows that I’ve been watching since I was a kid. However, this year it seems as if I am constantly trying to catch up with myself, so I will feel fortunate to have a few gifts wrapped under the tree by Christmas Eve.

My informal survey of friends and coworkers indicates a continuing trend that people are longing for simple holidays with less emphasis on the commercialism of the holiday season and more emphasis on family, food and fun. One of my coworkers shared with me that her family has not exchanged gifts for several years. They get together for a wonderful meal, board games and meaningful conversation. She never feels stressed or overwhelmed because she contributes something special to the meal, which is her gift to her family.

While I admire her family tradition, this year I have learned something about myself. I actually enjoy shopping for loved ones. Therefore, I am attempting to find a middle place where I purchase just a few meaningful-and long-lasting-treasures for my family. Other than one very special gift for my son, the rest of the gifts will be books and music. And maybe, just maybe, a new board game to enjoy on Christmas Day.

If you are still searching for the perfect gift for someone in your family, why not purchase a book that will enable him or her to learn a new skill? Why not give a gift that will allow them to live better year after year, such as a book about investing? In fact, the perfect gift just might be one of the books on the “best investment books list” from the Bogleheads Forum-a site dedicated to financial planning, investing and consumer issues. Note the book, The New Coffeehouse Investor, written by my humble boss, Bill Schultheis, is on the list.

I’ve already had many friends order books for their college age kids and spouses. It  just might be one of the best gifts you’ll ever give. In fact, it may be one of those special gifts that keeps on “paying dividends” well into the future.

Happy gifting!

Posted in Lori's Blog on December 8th, 2010

I’d like to discuss the problem of financial stress during the holidays-the elephant in the room that few people like to discuss at parties. Financial challenges contribute to added stress for many couples, families, and individuals throughout the year. The holiday season tends to cause greater financial stress due to increased spending for gifts and entertaining.

Many individuals, couples and families struggle with money decisions all year long. During the holidays, issues such as: How much do I (or we) spend? How do we purchase gifts for everyone on our list on a budget? Who makes the final decision? Whose “vision” of the holiday season are we trying to emulate? Do we need a tree with designer ornaments, and indoor and outdoor lights? Do we feel internal pressure to host parties and the family feast? 

Financial concerns certainly occur when a job loss, business downturn or other financial emergency takes place. But barring an extreme situation, it is better to have a system in place than to allow yourself to get carried away by the myriad temptations that the holiday season provides.

Make it a point to handle this issue, with yourself, your spouse, or your family! In fact, if you have older kids, this may be a perfect time to introduce basic financial planning concepts such as budgeting, how to manage credit wisely, and how to save money. 

Ideas to have a simpler, more relaxing (and fun) holiday season:

1. Get together with friends and neighbors to bake cookies, and share.

2. Give homemade goodies to friends, neighbors and coworkers. Edible gifts-especially those that are special family recipes-are often appreciated.

3. Collaborate with kids to make candy or homemade breads for teachers, coaches and other special people.

4. Rather than purchasing gifts for everyone, draw one family member’s name, per person, and purchase one very special gift. 

5. Purchase a smaller tree, and trim the tree and decorate your home in an evening instead of a weekend.

6. Make a CD for all of your friends. They’ll be able to enjoy the music all year long.

7. Offer a gift of a service. Most everyone would be delighted with a gift of pet-sitting, baby-sitting, meal preparation, or other service. 

8. Host a BYOB and favorite appetizer, and simply enjoy the company around you.

9. Gather several family members, or friends, and have a “giving party.” Donate your time to a local charitable organization, and celebrate after the work is done.

10. Go to a nursing home or  children’s hospital and read a favorite holiday story. Offer to go grocery shopping or run errands for a shut-in. Host a family or neighborhood game night. The list is limitless; just use your imagination.

If you have any creative ways to reduce financial stress during the holidays, we’d love to hear from you!

Posted in Lori's Blog on November 25th, 2010

Recently, I read an article about how to be a happier person. The essential component linked to happiness, as stated in the article, is to be free of desire. After pondering the article’s merits, I found myself rather uncomfortable with the premise. Many of you may not remember the song “You Can’t Always Get What You Want,” by the Rolling Stones. The lyrics include the following: “But if you try sometime, you just might find, you get what you need.” This message resonates with me because it seems that rather than having an absence of desire, we just might be happier desiring what we have. Thus began my quest to find out what others have to say about what they are thankful for this holiday season.

Kayleigh, age 14: “I’m thankful for my family, and that we’re all healthy and that we have a nice home in a nice neighborhood, and that we have everything that we need and most everything that we want. I love the holiday season because it’s a time when people are thinking about those less fortunate and how they can help them.”

Aidan, age 11: “I’m glad that there is snow already this year! And I’m thankful that I really like school and for my family, that I love so much.”

Michael, age 15: “I am thankful for being born in the United States, and having many opportunities that I would not otherwise have.”

Jerry, age 50:  ”I am thankful for all of the goodness in my life.”

And from a neighbor: “I am thankful for my health, my friends, and my ability to enjoy the fruits of my labors.”

In my small sampling, it seems that the people I queried were basically happy with their plot in life. Absence of desire or happy with what they have? The bottom line is that there is a lot of good things that folks are thankful for this year.

Happy Thanksgiving to you all!

Posted in Lori's Blog on November 20th, 2010
Snow atop Squak Mountain, in WA State

Less than one month ago, local temperatures were above average, and many area residents donning their sunglasses had little interest in fleece jackets, hats or gloves. Ah, but how quickly things can change! The meteorologists are predicting colder than average weather, with sub thirty-degree temperatures and snow showers for the next two days.

As luck would have it, another busy Seattle are Mom and I were able to get away, on Thursday, for a couple of hours, to hike Squak Mountain. On the way up the mountain, it rained–or, rather drizzled–until about two-thirds of the way up, when it started to snow. Giggling like children, and taking numerous photos, we scurried up to the top, and stopped to delight in the beauty of the first snowfall of the season.

Unfortunately, we couldn’t stay long because we were cold and wet. We hustled down the mountain and hastily made our way to the nearest hot beverage purveyor, and warmed our hands, and insides, with our lattes. Vowing to return with gloves and hats on our next adventure, we realized that we had been ill equipped to be completely comfortable.

In life, we can’t control everything. In fact, there are actually few things we can control. However, we can control how prepared we are to handle such things as a snowy day, or even a financial emergency. If you have an emergency savings cushion equal to six months of your expenses, you should be able to weather most “financial storms.” If something unexpected occurs in your life–be it a leaky roof, a car repair, or a health concern–you will be better equipped to make a sound decision, with a financial cushion.

The same holds true with the weather. Are you and your family prepared for the upcoming snow? What will happen if you, and local merchants, lose power? Do you have ample batteries for flashlights, blankets, and food for at least seven days? Will your pets have enough food?

Here are some tips to get you prepared for winter:

-Make sure your fireplace functions properly.

-Fill your gas tank before the snow starts falling.

-Have flares, a flashlight, sand, a shovel and warm clothes in your car.

-Keep a window ice scraper in your glove compartment.

-Use alternative heat methods safely. NEVER use a gas or charcoal grill, hibachi, or portable propane heater to cook indoors or heat your home.

-Have cash on hand. ATM machines may not be functional.

-Store at least one gallon of water, per person, for at least three days.

Rather than being anxious about the possibility of something happening, why not take as many precautionary measures as possible. Life happens. The question is: are you prepared?

How do you prepare for the unexpected? We’d like to share your tips with the Coffeehouse community!
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