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, 2008 |
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Financial Journey
Your Money Choices - Panic or Take Control I find it is getting very frustrating to turn on the news
these days. Why do they only report the bad news? I think they should balance
each negative story with a positive one, but that isn’t what gets them their
high ratings. Let’s turn to the financial news in particular. More...
The stock market seems to be taking a daily swing up and down—or sometimes it just goes down, down, down. Here’s your first choice. Listen to the news and let it frustrate and worry you, or turn off your television! I still am often glued to the news and watch it anyway, especially the economic news. I do feel it is important to understand what is going on in order to better manage our money. But, often I turn off other news when I am finding the reports to depress, or sometimes even sicken me. Some time back, I realized that I have a self-survival instinct within me that helps me during the tough times. When I am listening to the variety of reports of oil prices going up, the dollar weakening, the cost of groceries skyrocketing, and debates about whether we are in a recession and headed toward a depression—I kick into my self-survival mode which has learned to click in on auto-pilot. I immediately realize most of this is beyond my control, so I focus my attention on matters in my life that I can control and it starts to instantly lift my spirits. The first question I ask myself is whether our investments are sound. We exercised good judgment when we developed our portfolio and researched our selections carefully. I review our portfolio quarterly and if there have been any changes in the ratings of particular funds, I make changes to our investments. I keep a portion of our investments in a money market account in order to invest twice monthly into our various mutual funds. I have diversified our holdings so that we are in a variety of mutual funds. By dollar cost averaging in this way, I gain peace of mind because it is the most secure way to take advantage of a volatile market that is going up and down like a roller coaster. When the funds dip lower, I am purchasing more shares each time. When the funds start to rise, I benefit from having more shares at a higher price. This is a safeguard that I’ve followed for years. When the total value of our portfolio is going down, I remind myself that I am benefiting by purchasing more shares at a lower price. As long as I am invested in sound securities, I don’t panic. I’m not particularly happy to see the amount of the portfolio sliding downward. We all like to see our savings and investments going up, up, up. Remember, there have been years that it has done very well and we love seeing those higher numbers! That is the next thing that I do to reassure myself. The market has always cycled up and down since the beginning of time. We have times that are lean and drought, and times of plenty and abundance. Knowing that cycles are natural and should be expected, helps me to calm down. This is where I make my choice. I don’t panic and sell everything we have in the stock market. I consider that it is only a loss on paper unless I decide to sell it, and that eventually it will go back up. The way I take control is to examine our investments, making sure that we are well diversified, and continue to dollar cost average by investing twice a month into each fund. Note: If you are unclear about "dollar cost averaging" I would recommend that you research this investment strategy. Start by googling on the internet and you should get the information you need to understand it. The next step I take is to review our spending plan and our budget carefully. Are we saving everywhere we can, or are we overspending in some areas? We immediately take control of our spending and tighten our belts. We’ve been on a money tightening program for several months and we can see a huge difference. There is some extra each month to put into savings, and to pay off unexpected credit card debt from last year. I also focus my energies on smaller things that I have control over. I look in our freezer and pantry and get very creative with the meals I fix. I have spent $235 this year on groceries through March by using food from our stores on hand. I have also replenished some of our staples, including meat, when there have been good sales and that is included in the $235. Last week I made a delicious creamed cauliflower and broccoli soup by using the stalks leftover from both. I used to throw the stalks away, and they make a delicious soup. I searched several recipes on the internet and took a little of something from several recipes and it was delicious. I usually make corn muffins (three boxes for $1.00) and we have a filling meal with the soup and muffins. The batch of soup lasts three dinners for two of us. It’s a good thing my husband is signed up to our life of careful spending and doesn’t mind leftovers! I’ll try to rotate meals so we don’t have to eat the same dinner more than two nights in a row. Since we both like leftovers, it isn’t a problem for us. If possible, I freeze leftovers—however I’m not certain creamed soups will freeze well. Here is another opportunity to make your own choices. Even if you aren’t crazy about leftovers, there is a huge amount of money to save on groceries if you reframe your attitude about leftovers and decide you would rather see the money in savings. I started visualizing all of the food we threw away as dollar bills going down the garbage disposal. I very rarely throw away spoiled food with that visualization in mind! We celebrated my birthday last week. I have always enjoyed going out to dinner and a movie to observe the day. If my husband could cook, I know he’d be more than happy to make dinner. But that is not one of his many talents and he is the best gift I could have for my birthday. Because of our recommitment to strengthening our savings, I decided to cook a meal I hadn’t made in years and really, really love! We rented a movie for $1.00 and I fixed chicken kiev, lemon pasta, and asparagus for dinner. I already had the food on hand, so I estimate we saved at least $75.00. Okay, I have to admit that when I go out to dinner to celebrate a special occasion, I like to go to nice restaurants! My husband gave me a pedicure and manicure for my birthday because these are luxuries for me, yet it didn’t cost an extra dime from our pockets. My husband and I decided to do some joint planning and make a list of things we would really enjoy that don’t have a high price tag attached to them. When we want to celebrate or do something special, we can choose from our list. This includes our favorite meals. I actually enjoyed cooking the chicken kiev and I don’t think I could have had something at a restaurant I would have enjoyed more. Planning ahead and making it a joint family planning session will save you a lot of money in the long run. This doesn’t mean you can never go to a restaurant again! When life feels like it is spinning out of control, I enjoy working on a project. I make many of the gifts for our children, 12 grandchildren, and 1.9 great grandchildren (second one is due at the time of this writing!). I find that this helps me focus on something positive, while at the same time enjoying the feeling of accomplishment and reducing our outgoing expenditures on gifts. It’s a win, win situation all around. This is one of those areas I can take control and by focusing on the project at hand, it keeps my mind in the present moment and not dwelling on negative thoughts. I read a recent article about the current state of the economy. It noted that Estee Lauder has realized a sizeable increase in its sale of lipsticks. The point was that people still want to treat themselves, even when times are rough, so they will go for smaller purchases. Here is another opportunity to make wise choices. Just skip the impulse purchases. Even though they are lower priced items, it all adds up. It’s easy to drop $5 or $10 throughout the day on coffee, snacks, and other impulse purchases. There is a $150 to $300 a month—by the end of the year, your savings can be $1800 to $3600 higher simply by foregoing small purchases. If you are spending more than that in impulse purchases, then you can do the math to determine your savings by making different choices. Sometimes it helps to visualize $3600 in a neat pile in front of you, versus the variety of small items that you might not remember purchasing. Which would you rather have? I’ll take the $3600! To help me through the tough times, I remind myself that "this too will pass." It’s not a life sentence of gloom and doom. I prefer to think that I am making wise choices so we will not only survive the economic downturns, but we will thrive because we have made good decisions. If you look at the world through a negative frame, reconsider your approach—reframe the picture. By deciding to take control of your situation, you will achieve the outcomes you desire.
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Copyright © 2008 by Karen Kuebler. All rights reserved. Want more money-saving tips? Get a FREE Subscription to our monthly newsletter!
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