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Baby Steps Aren’t Just for Babies

If you’ve been reading this blog for any period of time, or following my personal account on Twitter (@HJudeBoudreaux), you know how much I’ve loved watching my 13 month old daughter grow.  It has been an incredible experience.   Now, she’s starting to walk and explore her world in a new way.  I often find myself reflecting on the lessons I seem to be learning from her every day.

  • Big progress comes from small lessons.  She’s a pretty good walker for being 13 months old, and I saw that progress happen organically.  It might feel like it happened in a flash but it was a series of steps from rolling over, to kneeling, crawling, standing, and then walking holding on to things.
  • Clap for yourself.  Every new task learned is met with incredible enthusiasm from my wife and I.  It’s wonderful to see her smile and take pride in the new things she’s learning.  She’s learned to clap and is quick to give herself some applause when she finally conquers a new task.
  • You’re going to fall down. A lot.  Just because she’s done something once doesn’t mean that she can sit down and do it again.  Sometimes she gets frustrated with that (sorry honey, you get that from me), but most of the time she simply picks herself up and tries again.
  • It’s ok to ask for help.  She’s finally reaching the age where she understands she can ask for help with things, and I’m glad to help her.  She watches intently and while she’s got the attention span of a 13 month old I can see her trying to do the things that I’ve shown her.

I see her doing the above things over and over, and it’s wonderful to watch as a parent.  My wife and I are patient and supportive of her as she plays and explores.

Yet, I have no patience for myself with my own growth and exploration.  

I’m naturally a long-term thinker, which is a wonderful thing to have in your financial planner.  It does drive me crazy that the future that I envision doesn’t quickly happen.  It frustrates me to no end when I can’t pick up a new piece of software and instantly be an expert at it.

So, starting today I’m going to be mindful of these 3 lessons I’ve learned from my daughter and try to apply them to my business and my life.

  1. Take a small step.  It’s really easy to lose sight of this in our financial lives.  It’s natural to want to search for large changes, but those large changes often come from small steps.  Where can you take a small, meaningful step in your financial life towards something worthwhile?
  2. Who can help?  Is there a mentor, friend, or family member that can help you learn that new behavior?  Can you and your partner help each other learn and grow together?
  3. Celebrate the wins.  When I was involved with the Entrepreneur’s Organization Accelerator program, Scott Fritz would remind us at the end of every meeting (and regularly within our companies) to celebrate the wins.  How are you celebrating the milestones that you’re reaching?  Give yourself some applause!
What baby steps can you take today to continue your growth as a person?  

 

Financial Rules of Thumb Series – How Much Should My Car Payment Be?

[This post is part of the Financial Rules of Thumb series.  Check out the rest here!]

I’ve heard the financial rule of thumb:  ”All Vehicle Payments should be Less than 15% of your take home pay.”

The Upperline: I don’t think it really matters whether you buy a new or used car, or what percentage of your take home pay it costs.

I think it’s far more important that you know
-How much you’re spending
-What your goals are
and
-If this spending supports your goals.

This feels like a rather unnecessary rule of thumb to me, and it reminds me of the reason I think people don’t often visit financial planners.

Jude’s theory – People don’t visit financial planners because they think they’re going to be told they can’t spend money on something important to them.

Yet here’s the thing.  It’s YOUR money.  You work hard to earn it, and I think you should spend it on whatever you like, as long as you’re conscious of the choices you’re making and you understand the tradeoffs.

From a pure dollars and cents standpoint, there’s probably some value to the two rules above.  Problem is, I rarely meet people that make purely numbers-driven financial decisions.  If you’ve got your finances well under control, and are saving the amounts you want for your goals, and the car of your dreams is going to cost you 20% of your take home pay, then who is to say you shouldn’t spend that money?

If your car is important to you because you -

a) have a long commute

b) always wanted a nice car

c) any other reason you can think of -

then I think that’s exactly what you should spend your money on, as long as you can afford it within your overall household spending.

Some other things to think about:

  • Once you’re done making the payments on a car (or any other loan), continue paying that money to yourself.  You’ve got the payments built into your budget, so start directing that money towards a new goal.
  • Leasing a car isn’t an inherently bad decision. I can hear some financial planners cringing as I type this.  If you want to try out a new car before you buy it, don’t drive a ton of miles, and like new cars, then leasing has a lot of pluses (including some nice tax features if you own your own business).  I’m particularly fond of lease takeovers, where you can assume a lease from somebody that wants to exit a lease.  Swapalease.com is a personal favorite.

What financial tips would you give somebody thinking about buying a car?

Is Your Identity Safe? National Protect Your Identity Week

This week is National Protect Your Identity Week, and while I’m sure every week is a national week of one kind or another, this is a good reminder to take steps to protect your identity.

They’ve got a great quiz on their website that can help you more easily understand the warning signs and risk factors for identity theft.  I enjoyed the quiz and took away a few important points as a new parent.

  • Children are at risk for Identity Theft.  They’ve got a new Social Security Number, a clean slate from a credit standpoint, and are good targets for identity theft.
  • Identity Theft could happen, even before birth.  The Social Security Administration simply issues new Social Security Numbers, they don’t check to find out if they’ve been used fraudulently by someone.  (There’s a great free tool to run a quick scan for your child - https://www.allclearid.com/child).
  • Keep your usernames and passwords secure, and use different passwords as much as possible.  I know this is a huge hassle, but if a website gets breached and it’s the same username and password that you use for multiple sites, you’ll need to change your password for multiple sites.  It helps if you use a tool like 1Password or LastPass to generate complex passwords, and store them on your computer with an encrypted keychain.  That all sounds a lot more complex than it is, I promise.
  • Check your credit reports regularly.  You can get free credit reports every year from each of the major credit reporting bureaus at AnnualCreditReport.com.  Put a reminder in your calendar to pull one every 4 months and it will help you stay aware of what’s happening with your credit life.
Take a few simple steps today, and protect your identity!

New Orleans – #1 City for Young Entrepreneurs

In case you haven’t seen it, New Orleans is the #1 City for Young Entrepreneurs according to this recent survey.  I agree with everything in the article (except for the Bourbon Street sign in the picture).

I’ve watched entrepreneurship in New Orleans explode since Katrina, and I think it’s because of the 4 C’s I’ve listed below

  • Culture – If you’re a young professional, there’s just a lot going on here.  You can live in a vibrant urban environment with lots of history, and frequent cultural events including one of the most vibrant music scenes in the United States.
  • Cost of Living – Compared to many of the other cities on the list, the cost of living downtown in New Orleans is a fraction of what it would be in New York or Chicago.  If you prefer a more suburban lifestyle, close-in suburbs like Metairie provide easy access and short commutes.  You can even split the difference in a neighborhood like Lakeview, or the more bohemian Mid-City and be minutes from downtown.
  • Community – There’s an amazing entrepreneurial community here.  All you have to do is visit a place like LaunchPad and see the list of companies that are using the co-working space to launch and you get an immediate sense of what’s going on here.  Others are here to share your struggle, share experiences, and connect you with other entrepreneurs so we can all grow together.
  • (tax) Credits – Ok, so I had to work that one a bit to make it fit.  However, there’s no underestimating the impact that the targeted tax credits have had here.  Digital Media & Software, Film, and other programs have creative, cutting edge companies setting up shop in Louisiana and bringing 21st century jobs with them.  That’s to say nothing of the Historic Preservation tax credits that help us maintain so much of what makes us unique as a city, and the Solar Power Tax Credits that makes us one of the leading solar cities in the nation.
I’m proud to be part of the entrepreneurial community in New Orleans, and to support other local businesses.  If you want to meet more of the entrepreneurs that are fueling this movement and celebrate 10 years of the Urban Conservancy’s Stay Local project, check out their fundraiser that is happening on Saturday the 22nd (More details are on the StayLocal website).  It’s a worthwhile cause, and I hope to see you there!

Refinancing – the Silver Lining of the Uncertain Markets

If you haven’t already, you might want to explore refinancing your home.  With all of the uncertainty in the markets, people and institutions are stocking up on US Treasury Bonds, which has the side-effect of lowering mortgage rates.  Mortgage rates have hit a new record low, and that could mean a huge benefit for your pocketbook in the form of a shorter mortgage or a lower monthly payment.

I can already hear you saying, “but it’s such a huge hassle to deal with all of the paperwork and the closing process!”

Today, it’s worth the hassle to explore your options.  Here’s a quck example to illustrate what a great deal this can be for you:

 

 

 

That’s $148.51 per month and $53,465.69 over the life of the loan in this example.

Now read my article on 6 tips for refinancing your home and contact your banker to get the process started today.  Then, use the money you save on something worthwhile like building your emergency fund, saving for you retirement, or something that might help with all of those areas like hiring a financial planner.

Earn More by Making the Most of your Benefits at Work

It’s that time of year again, when your Human Resources managers distribute large booklets of information and ask you to make choices about your benefits for next year.  It’s never a fun task to read through all of that material, but it can have a real impact on your personal bottom line when you make good choices.

Benefits are a huge part of your total compensation.

How much?

Would you believe 30%?  That’s the amount, according to this recent report from the Bureau of Labor Statistics.  That’s a huge amount, and you can’t afford to not pay attention to those.  Most of the companies we have worked with here in New Orleans offer great benefits, and they want their employees to make the most of these for their and their family’s benefit.  Here are 6 things to think about while you make your choices.

  1. Make the right choice for you and your family for your health insurance.  Most employers offer several options for their health insurance plans.  Look at the different options, and learn about some of the newer choices like Healthcare Savings Accounts (HSAs).  Once you understand the moving parts, they can be a great deal and they can save you thousands.
  2. Get a raise by contributing to your retirement plan up to the match (at least).  If your employer offers a match, it’s free money there for the taking.  Make sure you take it. Here’s a previous article I wrote on 401k Matches that provides more specifics.
  3. Don’t assume the life insurance offered is the cheapest option for you.  Most employers offer a basic amount of life insurance that is fully paid by your company.  The supplemental life insurance isn’t always a great deal, however.  If you think you need more life insurance (and are in great health), check the rate offered by your company and search online for quotes.  You might be able to save some money.
  4. If you’re not in great health, the life insurance offered by your company is probably a great deal.  If you’re not sure you’d be able to qualify for life insurance through the traditional underwriting process, grab whatever coverage you can get from your employer.
  5. Check your beneficiaries.  Open Enrollment is a great time to make sure you’ve got your beneficiaries listed properly.  Did you get married?  Divorced?  Have a child?  Make sure your elections are up-to-date and accurate.
  6. Ask an expert.  We offer free employee benefits reviews for anyone, so if you want a second opinion on the options offered by your employer, contact us and let us do some of the heavy lifting.
These 7 simple steps can help you make the most of your benefits.  Do you have any questions about the benefits you’re offered at your workplace?  Contact us and we’re glad to help you find the answers.

Upperline Featured as a StayLocal Success Story

I’m proud to announce that my company Upperline Financial Planning was featured in a great story by Rebecca Mashburn on the Stay Local New Orleans website (click here to read the article).

Stay Local! is a city-wide initiative for creating strong economies based on locally owned and operated businesses. We encourage consumers to shop locally and help independent businesses compete more effectively.  I’m proud to be a supporter.  I’ve written about the importance of buying locally previously here, and I’m glad to see the Stay Local project have so much success in New Orleans.

Let’s all keep supporting our wonderful local businesses here!

15 Minutes a Week Leads to Budgeting Bliss

For most people, budgeting on a monthly basis just doesn’t work.

You sit down, try to figure out what you’ll be doing and spending your money on for the next 4 weeks, and ultimately sit down for a few hours a few weeks later to try to figure out how good your guesses were.

That’s no fun for anybody.

You can really get your budget under control by doing some work up-front, and by spending 15 minutes a week on it, every week. The every week part is the key. Here’s a quick snapshot of how this works:

  1. Review last week’s transactions.  Everybody’s system is different.  Use whatever works for you.  Whether that’s  logging-in to your bank’s online banking platform, opening a notebook or spreadsheet that you’ve created, or a tool like Quicken or Mint.com that automates some of the process.  Whatever method you use, record all of your expenses from last week.
  2. Categorize your spending. Lunches out, Gas, Groceries, Utiliites, etc. Identify each expense and put them into categories that make sense to you. These categories will probably evolve over time, so give yourself some latitude to make changes as you go along.
  3. Estimate your spending for next week. Look at your calendar, and get a ballpark figure of what you’ll need to spend next week. Date night, lunch with a friend, a trip to the grocery store on Tuesday, etc. Estimate these, and decide how much you’ll spend for the week.

That’s it in a nutshell. I think there are two critical things that make this process better than monthly budgeting:

When you wait a month to review your spending, you’re looking at dozens of transactions in your accounts, and having to consult your calendar to figure out what that strange charge was 3 weeks ago. By spending time on your budget weekly rather than monthly, you look at 10-20 transactions, that are still fresh in your mind so there are fewer research projects. You also get feedback about what worked for your budget this week, and what didn’t work.

You then look forward to next week, and estimate your expenses next week. By the start of the week, you’ve got a pretty good idea of what your work and social calendars look like, and what additional money you might need for one-off expenses like school projects, special events, and the like.

Budgeting weekly requires a little discipline to make sure you spend the time on it every week. Let one week slide and it becomes two, and then you end up with a stack of receipts and an hour and a half of work to try to get back on track. Just do your 15 minutes a week and avoid a big catch-up project. If you can practice this discipline, you’ll learn more about your spending habits and where your money has gone in the next month than you did in the last year.

I’ll be writing more about this topic in the coming weeks, so please let me know what you’d like to see discussed in this space.

For budgeting, what has worked for you? What has been your challenge with sticking with a budget? Any tips or questions?

Top Posts for August 2011

Below are the 10 most viewed pages and posts on the Upperline Financial Planning website in August.  I was also quoted in 5 articles in August, which you can view on my News page.

Wordle.net – word cloud of top posts in August

 

  1. My 6 Favorite Business iPad Apps
  2. This Time, Is It Different?
  3. I Don’t Know What to Say About the Markets
  4. 6 Tips for Refinancing Your Home – Financial Rules of Thumb Series
  5. Your Life or Your Investments?
  6. Buying vs Renting a Home – Financial Rules of Thumb Series
  7. Top Posts for July 2011
  8. Two Questions at the End of Your Life
  9. Financial Rules of Thumb Series – A Planner’s Perspective
  10. Heading to College?  A Quick Lesson on Credit Cards
We’ve got some great things on tap for September!  Please let me know in the comments if there’s anything you’d like to see me write about! 

Two Questions

I recently got a chance to watch the movie “The Bucket List”. For those that know me and my taste in movies, I’m sure you won’t be surprised that I really loved it. The story of two men seeking out the experiences that they hoped to have before the end of their lives resonates with me deeply since I talk about this topic on a regular basis with my clients.

Anubis the Jackal - from Wikimedia Commons, Jeff Dahl - Creative Commons

In one scene, it is mentioned that the Egyptians believed you were asked two questions at death. This intrigued me greatly and I did some further research.

The two questions are:

1. How much joy have you had in your life?

and

2. How much joy have you caused in other people’s lives?

The ancient Egyptians believed that at the entrance to the afterlife the god Anubis would weigh your heart against a cosmic feather. A heart weighed down by regrets, like not having or giving joy, will not balance. A heart free from regrets will balance, and you would be allowed through.

My question to you today is, how would you do on this test? Would you balance? What can you do to create and share more joy in your life?

P.S. – for those that are wondering, if your heart doesn’t balance, your soul would then be fed to a monstrous crocodile instead of passing on to the afterlife. Hopefully that’s more motivation for you to find and share joy today.

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