Unhealthy Attitudes Can Lead to Financial Ruin

How you value, spend, save, and invest money has more to do about who you are a person than you may realize. You don’t just develop good and bad money habits by chance. Instead, they are usually a result of an underlying personality trait or develop over the course of your lifetime due to your experiences and circumstances. Who you are and how you approach problems in other areas in your life will ultimately create your unique attitudes toward money.

Something as simple as your attitude toward money can have a significant impact on the financial decisions you make. What is a healthy money attitude? Here are a few questions you should first ask yourself:

• Are you a buy now and pay later kind of person or do you save now and pay in full later?
• Are you willing to wait or do you demand immediate gratification?
• Is your shopping out of control?
• Do you have trouble saying no to yourself, kids, spouse or others?
• Do you waste money on gambling?
• Do you spend too much on tobacco or alcohol?
• What is more important to you: buying something or watching your money grow?
• Do you avoid making a budget and just assume that if there’s money in the bank that’s good enough?

It’s possible to do almost everything right in regards to your finances yet have it all undermined by some unhealthy money traits. The questions above are just a starting point when looking at how you treat money. Many of these may apply to you, or maybe just one or two ring true. Either way, certain traits can have an impact on your overall financial success.

Whether you find yourself spending money when you aren’t feeling good about yourself or you simply have a hard time saying no to your kids, these actions can put your long-term goals in jeopardy. A lot of these issues may result in what seem to be just small expenditures. A few dollars here, ten dollars there, and so on. While they aren’t much in the grand scheme of things the real problem is that these behaviors can become habits. What may be small things now can evolve into a habit or attitude that can spiral out of control later in life.

Most of us simply try to place blame on our money problems based on circumstance. I don’t make enough. I got into debt years ago and now I have to deal with it. My house went down in value. The stock market stinks. You know the excuses and we all make them. It’s always easier to blame something else than blame ourselves. Sure, there are plenty of external factors that play a role in our financial situation but even those can largely be altered by our actions.

Blaming the stock market for not having much saved? Maybe it’s not so much the market’s fault but a factor is that you didn’t save enough when the market was down and only buy when things are doing good. Maybe you didn’t learn about asset allocation and took on too much risk. Or maybe you simply waited too long to even get started and now realize you can’t afford any losses. The key is that you shouldn’t beat yourself up over the issue, but you do need to take a hard and realistic look at some of the possible issues that put you into the position you’re in. Don’t take the easy way out and just blame something else, but take some time to look at your own actions and see if there is something you could have done differently to generate a better result.

Addressing Unhealthy Traits

This doesn’t mean you can’t buy things for pleasure and enjoy life and stick to an extreme budget, but what you need to do is recognize is when you are carelessly spending money for an underlying reason or doing something that is creating a bad money habit. For example if you go to the mall and shop when you are feeling depressed, that is an unhealthy trait. Not only are you spending money based on emotions but you are reinforcing this behavior subconsciously. You begin to attribute a sense of feeling good when you are down by spending money. This is a bad long-term habit to get into as it will lead to even more spending and likely force you to buy expensive things you really don’t need.

It is important to be honest with yourself and your habits. Many of these traits we aren’t even fully aware of. Don’t be discouraged if you find yourself with these unhealthy traits. They don’t make you a bad person, they just make it more difficult to reach your financial goals. Whether it’s a spending problem, lack of investments, or a bunch of credit card debt you racked up five years ago, there’s usually a bad habit or poor attitude that led to the result Like any habit they can be difficult to break so start slowly. Going cold turkey can be a sure way to become discouraged.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Examine Your Attitudes Toward Money and Uncover Problems

Without Goals You Have Nothing to Achieve

So you’re putting part of your paycheck aside for your retirement account, making more than the minimum payment on your credit cards, and spending less than you earn so you’re doing everything you can, right? Not quite. While all of these things are good habits to get into and will help you maintain a solid financial foundation you still need to have goals before you can sit back and relax. After all, what is the point of saving if you don’t know what you’re saving for? And it’s great you’re paying down that debt but do you have any idea when you should have it paid off, and even if you do, how do you know if that’s good or bad?

This is where setting goals come into play. Without financial goals you may be doing all the right things yet still have no idea what you’re trying to accomplish. When you aren’t following a specific action plan and trying to reach finite goals you often end up floating aimlessly over the years just doing the status quo. It’s still better than doing nothing at all, but many studies have been done over the years that show those who take the time to define clear goals are far more likely to succeed in reaching them. So, stop telling yourself l that you just want to pay down your debt, or put money away for retirement, or try to make a little more money at your job. Those are all things you want to accomplish but you need to put some specifics behind them.

What is a Financial Goal and How Are They Different from Dreams?

A financial goal is something you intend to achieve. A financial dream is something you hope to achieve. This doesn’t mean that your financial dreams can’t come true, but usually your dreams are a little more lofty and not all that likely. Dreams start with “I wish” and goals start with “I will.” You achieve your goals by setting a specific deadline, dollar amount, or task and t hen create a plan that you can follow to completion.

Consider these two individuals:

John

• wants to get out of debt
• would like to buy a house
• is thinking about retirement
• hopes to be able to send his son to college

Mark

• will be out of debt in five years
• will have a down payment set aside to buy a house in two years
• is putting 10% of his paycheck into his 401(k)
• has established a 529 plan and is saving $250/month

I probably don’t have to point it out to you, but is John or Mark the dreamer and who is more likely to actually reach their goals? Exactly, Mark has defined a very clear vision of what he wants to accomplish and how he can get there. If I had to guess, even if their financial situations and goals were identical Mark would be far more likely to reach his goals before John. It’s much easier to take action if you know exactly what you want and how long you have to get there.

How Your Values Determine Your Goals

Your core values and fundamental beliefs about what’s important to you will provide the basis for your goals. This is why no two people have exactly the same goals. Sure, everyone wants to save money and build wealth, but how much, how fast, and for what reasons will be different from person to person. Others will value being debt-free over an early retirement. Some will want to focus on buying a home and starting a family instead of traveling and so on.

Take a minute to think about what is important to you before blurting out specific goals and put them down on a scrap piece of paper. Throw out words or ideas that you value as a quick brainstorm. For instance, if I quickly put down a few things that I value and feel are important I come up with: family, education, independence, golf, entertaining, good food.  These are the things that make me happy and now that I’ve brought them out and started to think about them I can then begin to start putting down some concrete goals that reflect these values and ultimately help me achieve them. On their own they are far too broad of ideas to actually be goals themselves, so that’s why it’s important to take the next step.

Putting Together Your Financial Goals

Setting goals is a process and each one requires a few key pieces of information in order to be effective. The steps in creating your financial goals are:

1. Identify the goal.
2. Set a deadline for achieving the goal and be as specific as possible.
3. Estimate the cost of the goal, either in terms of time and/or money.
4. Break down the total cost into monthly amounts required.
5. Identify the specific actions or tasks you’ll take to reach the goal.
6. Track your progress.

Using a Goal Worksheet

One of the easiest ways to start developing your goals is to use a financial goal worksheet. This sheet highlights all of the important information required for each goal and allows you to get a nice visual picture of what you want to accomplish and how to go about it. Let’s start with a sample goal.

As you can see, the first part of our goal process is fairly specific. We want to create an emergency fund within 18 months. Now that we know what we want to accomplish and in what time frame, it’s time to put a dollar amount on this goal.

So, you’ve determined that you need to put $10,000 into an emergency fund in 18 months. So far we have a specific goal, how much it is going to cost, and how long we have to accomplish it. So, that allows us to calculate what it will take each month to make that a reality. Some basic math tells us that in order to save $10,000 in 18 months we’d need to put aside $556 each month. Now that we have a specific and realistic number to work with it’s time to outline how we can accomplish that.

This is where you get to go into detail and outline how you’re going to come up with the monthly commitment. For example, maybe you will cut back on a few meals out each month, drop the expensive premium movie channels, and open up a high-yield online savings account. Those were just some quick action examples and your action plan will be different depending on your situation. You can make this as detailed as you want, but the more specific actions you list the more likely you’ll be able to follow through and reach that monthly commitment, and ultimately your goal.

If you’d like to get started I have provided a copy of the financial goals worksheet for you to download.

Prioritizing Your Goals

Most of you will have multiple financial goals but limited resources. This often means you can’t fully fund every single goal all at the same time. That’s ok! Don’t get discouraged and take some time to prioritize your goals so you are putting your time and money to work in the most efficient manner possible. Once you have your goal worksheet filled out you may want to label each one as either a long-term or short-term goal. I usually like to think of long-term as anything beyond five years.

Once you’ve broken down your goals into long and short-term you can start to prioritize. Usually it’s best to take a hard look at your short-term goals first. That’s because shorter term goals tend to deal with more pressing financial concerns such as getting out of debt, building an emergency fund, or taking care of something that is somewhat urgent. As you can probably guess, it wouldn’t make much sense to fully fund your retirement account if another goal is to create an emergency fund and you don’t have a penny in savings. So, focus on your short-term goals first and put most of your effort into those that are most important.

Then you should begin looking at your long-term goals. Now, this doesn’t mean you should put your long-term goals on the back burner while you tackle all of your short-term goals first. Not at all. Instead you should just be putting a little extra money or time into your short-term goals while cutting back on your long-term goals for the time being. Remember, even if one of your goals may be something 30 years down the road you still want to maximize all of the time you have. So while you may not be fully funding that goal while you’re focusing on paying off your credit card debt in the next two years it might not be a good idea to abandon that long-term goal completely. There is opportunity cost associated with all of your goals so it’s up to you to prioritize what’s more important to you and make sure you’re maximizing your efforts.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Setting Your Financial Goals With a Goal Worksheet

The 2009 Gallup-Healthways Well-Being Index found that out of the 673,000 Americans they interviewed by phone, 36.6% are overweight and 26.5% are obese. The survey, conducted between January 2008 and December 2009, notes that “59.2% of obese Americans exercised at least one day per week, compared to 69.9% of overweight people, and 73.8% of normal-weight people.”  Those with the greatest health risks also have the least amount of discipline when it comes to eating right.  Obese people often fail to eat five servings of fruits and vegetables three out of seven days.

The findings listed here are to be expected in our fast-paced environment.  Lack of financial resources and greater time constraints have people looking for shortcuts.  Men and women on tight budgets refrain from hitting the gym because they don’t want to incur the expense of a monthly membership pass.  Although it can be considered a wise investment in terms of benefits, there are fees to consider when joining a gym or fitness center.

Good health doesn’t have to come at a cost.  Ten of the easiest and most inexpensive ways to get physically fit include:

• Walking 10,000 steps or 30 minutes a day, five days a week. A pedometer worn on your waistband can help you achieve your goal no matter where you go. One thing I did this year was buy a membership to a golf course and plan on walking at least two 18-hole rounds a week. Each round burns over 1,500 calories!
• Eating a balanced diet that includes the appropriate amount of servings from each food group. Refer to the food pyramid below:



• Getting involved in a community-based or work-related sports team and go to every practice. You don’t have to be the best athlete to reap the rewards of doing drills or running around bases.
• Setting small, obtainable goals regarding your health. Keep a journal as a way of tracking your progress.
• Partnering up with a friend or colleague and combine exercise with socialization. Catch up with one another over a game of tennis and increase your endurance. This is something else golf can provide. The key is to avoid getting a cart and picking up a six-pack of beer while on the course!
• Maintaining balance. Resting up, drinking lots of water, and keeping a positive frame of mind will help you achieve your goals quicker.
• Having a yearly check-up with a physician. Prevention is always the best medicine.  A trained professional can help you create the type of work-out that best suits your physique and personal medical history.
• Eating at home at least five days a week. A Consumer Reports survey reported that “successful losers” choose home-cooked meals over convenience foods. We also have this going for us since we eat virtually every meal at home and use typically fresh foods, but it’s also just as easy to stray from the food pyramid when cooking at home if you aren’t careful.
• Reducing the size of your plates and eating less at every meal. There is no need to clean your plate when you are no longer hungry.  The Japanese people living in Okinawa eat until they are 80% full.  You can use this strategy too.
• Formulating lifelong habits that are not detrimental to your health and well-being. The time to give up your vices is today.  You can’t expect to lose weight or increase your life expectancy by drinking, smoking cigarettes, or bingeing on food.

The ticket to optimum health lays in your ability to balance personal and professional obligations with long-term goals.  By making slow but steady changes in your life, you can reap the rewards of physical fitness without tying up your time or breaking the bank.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

10 Ways to Get Physically Fit Without Spending Money on a Gym Membership

I don’t have to tell you that the job market is tough out there these days and with unemployment at near record highs there are a lot of people out there looking for work. For many people the inability to find new work may come down to outdated job skills or a lack of performance in your old job that’s keeping you off the short lists.

When we explore our financial situation we’re almost always focused on ways to save money and invest the money we do have better. What is often overlooked is the importance of income as many of us take that regular paycheck for granted. Without income none of the aforementioned items will even matter. Outdated job skills or lackluster performance can impact income or even eliminate it altogether and if you haven’t taken a serious look at your job situation and skills you may find that you’re scrambling in the unfortunate event you do lose your job.

If you do not regularly monitor your job skills, performance and job security, you will likely have an unexpected problem at some point in the future. Business is competitive and if you aren’t living up to your expectations or find yourself in an industry that is declining it should be no surprise that you could potentially be without a job. When that happens it can take many months to find replacement employment.

Job Skills

Start by taking a look at your job skills. Would you hire someone with your job skills to do the job you’re doing? Are you current with computer and other technical skills required for your job? Do you need more training? Does your job require specific certifications? Your career isn’t static and the tasks you need to complete are always changing. Your employer will generally offer basic training required to do the job but above and beyond that it may be up to you.

Some employers even offer reimbursement for outside training so that is the first place to look. Other times it may be out of your own pocket and you need to consider the benefits of additional training. Would obtaining that certification or touching up on certain industry skills make you more valuable to the company? These small improvements to your skill set may be the difference needed to keep your job during a downsize or losing it to a new college graduate who is current with the latest skills.

Job Performance

This area can be a bit subjective, but take an honest look at your performance. Put yourself in your supervisor’s chair. What kind of review would you give yourself?

• Do you show up on time?
• Do you do all that is asked of you?
• Is your work completed by the deadline?
• Do you put in an honest day’s work for an honest day’s pay?
• Do you cut corners?
• Do you like your job and does it show?

Job performance is more than showing up, doing what is required without messing up, and then going home. If you are familiar with the movie Office Space you probably remember the manager at the restaurant requiring the servers to wear a certain amount of “flair” on their uniform. The manager regularly addresses Jennifer Aniston’s character for wearing only the minimum and encourages her to wear more like her co-worker. She later proclaims that if he wants everyone to wear 38 pieces of flair to just make the minimum 38.

The point is, yes you can only do the minimum and still maintain your job, but is that really what you want to do? You don’t have to be over-the-top and obnoxious about doing more than the minimum like the waiter with a million pieces of flair but your boss will notice if you do a little bit more. At the same time,  you will also be noticed if you are known for just doing the minimum when the company is looking to cut costs or introduce new talent.

Job Security

This one can be harder to examine but it is important to understand your true employment situation. Are you working in an industry that has been facing hard times recently? Are you in a rapidly expanding industry? Aside from the broad economic aspect take a look at your individual employer. Is the company operating at a profit? Is the company local, national or global? What are your chances of advancement within the company?

These questions can paint a picture of how secure your job actually is. Clearly there will always be unforeseen circumstances that can make even a seemingly secure job become obsolete, but by understanding where you stand can give you an edge in spotting potential troubles before they become a reality.

Have a Backup Plan

You need to have a backup plan in the event your source of income is drastically reduced or eliminated completely. What this means is to have a course of action established to minimize the impact of this situation as little as possible. The first thing you should be concerned with is your emergency savings. Ideally you would have enough money saved up to continue paying the bills for a few months with little or no interruption. Unfortunately this isn’t always the case.

Next, have a plan for getting back to work as quickly as possible. Keep your resume updated. The last thing you need in the event of a job loss is spending the better part of a week trying to write a new resume from scratch before even being able to apply elsewhere. Being prepared will allow you to get into the hunt for a new job as soon as possible.

Finally, it is important to maintain contacts. Keep the numbers of old co-workers or acquaintances that could have an inside track to open positions. These people could be your best resource when it comes to finding a new position. They know you and what you’re strengths are and can be great referral sources. One good resource is to sign up on LinkedIn where you can create a professional profile, search for employment, and stay connected with old co-workers so you can network. If you’d like, you can find me on LinkedIn and we can connect.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Outdated Job Skills, Poor Job Performance, and Lack of a Plan Can Keep You From Getting a New Job

Disorganization is the pits.  It causes you to forget important dates, misplace your keys, and let money saving coupons expire before you get a chance to use them.  It wreaks havoc on your finances, puts strain on your relationships, and causes more stress than you need.  Rather than go another day living amidst chaos, why not consider using the following free web applications?   In addition to simplifying your workload, they can also help you create grocery lists, set up birthday reminders, and add tasks from a number of sources including Twitter, Facebook, iPhone, and Blackberry.

Did you know that being organized can actually save you money? If you’ve ever forgotten to pay a bill on time you know how much that can hurt your wallet. Could be a $20, $30, or even $40 late fee. Had you simply been organized and knew when to pay the bills it could have saved you money. And don’t forget organizing your financial documents. When it comes to doing your taxes, buying a home, or making any other large financial decision it will save you a lot of time and money if you’re organized. Luckily, getting organized is easy and you can do so for free.

Here are a few to try today:

• Remember the Milk.  Members of the site can upload To-Do lists, sync them to their Google calendar, and share tasks with friends and family members.  Access your lists from your phone or update them via Twitter.

• Evernote.  Appropriate for school, business, and personal matters, the service allows users to capture web pages, store wish lists, and keep meeting notes together in one place.  Find items easily through the use of keywords, titles, and tags.

• Group Tweet.  Members can take an ordinary group Twitter account, privatize Direct Messages, and send them to colleagues without the threat of someone outside of the circle obtaining personal information.

• 4 Shared.  Store up to 10 GB of your favorite music, movies, and photos in a virtual drive that is accessible from any computer.  Sort and organize items into folders for future use without paying a dime.

• Birthday Alarm.  With 50 million members worldwide, the service gives users access to over a hundred free birthday cards as well as party planning tips and invitations.  Never forget an important milestone again!  In addition to birthdays, members can request reminders for anniversaries, holidays, and events.

Being disorganized can cause you more grief than happiness.  The key to an organized life is persistence.  Simply incorporate the systems that are listed here into your daily routine and see what kind of progress you make.  It’s likely that you’ll free up more time than you’ll know what to do with and can use it to research other methods that you can use to further simplify your life.

Charissa Arsaoui is a freelance writer for ChickSpeak, Buzzine, DisFUNKshion Magazine, Student Stuff, and a guest contributor for Wisebread.  She loves thrift related topics and can spot a bargain a mile away.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Five Free Online Applications to Help You Get Organized

Married Couples Spend a Lot of Time Fighting About Money

Apart from sex, money is one of the leading causes of stress in a marriage. When couples fight about money it’s not only bad for the marriage, but it can also lead to bigger financial problems as well. One of the problems is that one person in the marriage may be completely in charge of the daily finances while the other may completely unaware of what’s going on.  When you are married or dealing with shared finances both parties need to take an active role in dealing with the family’s finances. It is not fair to place the entire responsibility on one person’s shoulders and this extra burden is sure to leave to arguments.

It isn’t just about avoiding arguments. Yes, having shared responsibilities may reduce stress, but what happens if the person normally in charge of the finances were suddenly no longer to manage them? Maybe it’s an injury, or even worse, death? What happens to their spouse who has never had a hand in the finances before? As if the death of a spouse isn’t difficult enough, now they are at a complete loss when it comes to simply paying the bills.

Start With Simple Tasks

It’s common for one person in the relationship to handle the checkbook or to monitor daily balances. Whether it is because this person is better with numbers or has more time to keep up with the task, when only one party is privy to this information it can quickly lead to a disagreement when questions come up regarding the status of the finances. Begin by making sure both people are on the same page with day-to-day finances. This doesn’t mean both people need to sit down and work out the checkbook or enter data into Quicken together, but both parties do need to have regular access to this information so they are on the same page.

Tackling the Big Purchases

While it isn’t likely that in a marriage one person will go out and buy a car or a boat without first consulting their spouse, but these larger purchases are still an area for added stress in a relationship even if they are openly discussed. Again the problem comes when one person isn’t fully aware of the financial situation. If one person handles most of the budgeting and day-to-day finance issues they are fully aware of their family’s situation and may know whether or not they can afford the big purchase. But what happens is the spouse that is not as involved in this aspect of the finances will have a false sense of what they can or can’t afford. Maybe they freak out thinking that their financial situation isn’t as good as it is so they fight about spending too much money. Or maybe they have this feeling that money is abundant and wants to buy a new car without realizing how tight money is. Either way, you can be sure there will be a heated discussion about this.

When deciding on a large purchase it is crucial to take some time to make sure each person fully understands where the finances stand and what the purchase would mean going forward. If you need to, sit down and go over the budget item by item, clarify the current balances in all of your accounts, and understand what bills or expenses will be coming out in coming months. With both parties in agreement on the true state of their finances they can go into making a large purchase without assumptions. There is no quicker way to an argument when one person thinks they can afford a $30,000 vehicle while the other knows they can realistically only afford a $15,000 vehicle.

Hold Regular Family Money Meetings

Think of your family finances like a business and hold regular meetings. You don’t need to set aside hours of time or put together fancy reports to have a successful meeting. All it takes is spending a few minutes a week together to make sure everyone is aware of what is going on. Make it a point to spend at least a little time once a week going over the immediate financial issues and then try to have a monthly time set aside to review longer term issues. Don’t stop with basic budgeting and cash flow discussions. Use those monthly meetings to go over longer term goals such as retirement plans so you don’t end up broke, college savings, and other financial goals and dreams.

I’m sure you’ve been here before. How does it feel when your spouse springs something up on you at the last minute? For example, have you ever had a situation where your spouse tells you about a birthday or baby shower gift that needs to be purchased tomorrow for the event this weekend? If you’re living paycheck to paycheck this can be a stressful nugget of information. Nobody likes surprises when it comes to spending money that wasn’t budgeted. A quick talk once a week will identify these types of expenditures before they become a surprise and will not only allow you to budget better, but probably keep you from sleeping on the couch over a $50 argument.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Couples and Money: Learn How to Stop Fighting Over Your Finances in Marriage

Clearly Defined Goals Will Help You Achieve Success

I have discussed in the past the importance of setting and tracking goals and how it can affect your results on both a personal and financial level. I wanted to take a moment to discuss in more detail how goal clarity combined with a positive attitude can help you achieve better things both personally and financially.

First, what is goal clarity? In essence it can be defined as your ability to set and reach specific goals. The important part of this definition is the word specific. A very broad or general goal won’t help drive you to success. If your goal is to get up and go to work in the morning, that is not a well-defined goal. It may be easy to achieve and a very important thing to succeed at, but it really has no strong emotion behind it.

Instead a goal should be clear, concise and worth achieving in which a specific outcome is reached. Unfortunately, we are less likely to consistently set such specific or high goals because of many self-limiting thoughts. People generally tend to stick to the safe and secure status quo and try not to get out of their comfort zone. To further illustrate the importance of setting high and specific goals I want to take a piece out of the book Integrity Selling for the 21st Century by Ron Willingham.

He describes the various emotional stages you feel once you set these higher and more specific goals as:

1. Initial excitement – the thrill of new possibilities can be intoxicating until you realize how much extra effort is usually required before change can take place.
2. Conflict - you might wonder, “Can I actually achieve this new goal? What if I try and fail?”
3. Doubt - focusing on the difficulties or roadblocks, and wondering whether you can overcome them.
4. Resistance to change -the idea of changing your habits, beliefs and routines become uncomfortable.
5. Commitment - a renewed sense of dedication to whatever work, education or effort it might take to reach your goals.
6. Acceptance - finally believing deep down that you’re capable of reaching your new goals.

The problem most people have comes after the first few stages of emotions take place. The initial excitement gives way to conflict and doubt and if your focus is on the negatives and not the positives you will abandon the goal.

Setting Attainable and Intermediate Goals in Order to Achieve the Ultimate Goal

There is nothing more discouraging than setting a a lofty goal and then failing. We don’t like to fail and we don’t want others to see our failures. This fear of failure is what causes people to avoid setting higher or more specific goals. There is a fine line between setting a lofty goal that is attainable and one that is simply out of reach. For example, if I set a goal right now that said I wanted to make $250,000 by the end of the year, it would be a great goal that I’d love to reach, but the chances of reaching that goal is slim to none baring an unexpected inheritance or lottery jackpot. This is not the type of goal you should be setting.

Think of your ultimate goal as a game of baseball. Every batter that comes to the plate doesn’t go up there and try to hit a home run. A game of baseball is long and requires strategy and finesse to reach the end result of a win. Yes, hitting a home run is a great thing to accomplish but the probability of hitting one every time is very small. Instead, the team focuses on smaller and more reasonable goals that will hopefully add up to reaching the ultimate result. Some batters will go up looking to just get on base, another may follow up and bunt, or the team may have to sacrifice an out to score a run. If the team can reach these important, yet manageable goals the likelihood of success is much higher than trying to rely on knocking one out of the park every at bat.

The goals you set are no different. Maybe you want to retire at age 50. Ok, that is a great goal to try and reach but it is not well-defined and without hitting a home run it might be difficult to achieve. Maybe in order to retire at age 50 you need to tackle some credit card debt or put a child through college first. Or maybe you need to increase your income or save more money to help you reach that goal. Whatever the ultimate goal is there are many small goals you can set that lead up increasing the probability of success. Think of paying off your credit card goal as a base hit on your way to retiring early and finally getting your kid through college is a sacrifice fly to advance one of the runners home.

Emotional Response Determines the Outcome

Looking back to the six stages of emotions above it should be clear that you have to overcome the first four in order to have a chance at success. If your goal is too broad or easy to accomplish you will breeze through the series of emotions quickly with very few negative thoughts or apprehension. At the same time, if your goal is too high or incredibly specific you are likely to stall out after reaching number two or three on the list and never reach the goal.

If you can overcome the conflict, doubt and resistance to change you will find a sense of commitment and acceptance that you really can reach the goal you’ve set for yourself. If you let negative feelings take over, either because the goal is virtually impossible to complete on its own or there is no motivation to achieve it, you are setting yourself up for failure which in turn brings you back to sticking with the status quo.

Take Action Today

As an example let’s assume one of your big goals you’ve had for a while has been to pay off about $15,000 worth of credit card debt in 3 years. Clearly you understand the importance of reaching this goal yet you find that you aren’t making much progress. The reason you aren’t making good progress is that it is a bit overwhelming without understanding what it takes to get there. The first thing you should do is determine what it will take to pay off that debt. Generally speaking this would require:

1. Earning more money to accelerate payments, or
2. Find more money you currently have to accelerate payments
3. Put the money I do have to work and earn interest

Now that you have determined what it will take to reach that goal you can begin to set more specific goals. For instance, maybe you think finding additional income is a good way to achieve this goal. So, now you can set an intermediate goal that will increase your likelihood of paying off that balance. You may set a new goal to find a way to make $50/month by doing some sort of side work, or maybe you set a goal to have a garage sale or sell a bunch of items on eBay to generate some more money. Whatever the case may be, these new goals you set are easier to reach than simply saying you need to knock out $15k of debt in three years, yet these smaller and more concise goals will help you reach it without feeling a sense of failure.

Take a look at some of the goals you have set for yourself and consider why you are having a difficult time reaching them. Are your emotions getting in the way or have you simply set a goal that is extremely difficult or too broad? If you can identify the reasons why you are having a difficult time with a goal you can then take the action required to overcome the obstacles and improve the likelihood of achieving that goal.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Your Financial Success Depends on the Clarity of Your Goals

This is a guest post from Grant Baldwin, the author of Reality Check, a book about helping students transition into the real world.  His new website, BrokePiggy.com, answers questions from teenagers about personal finance, savings, and all things money.

This series “12 Things Every Teenager Needs To Know About Money (And How To Teach Them)” is a community blog experience.  This post is only one of the 12 points in the series so to view the other 11, please visit the list of links below.

Do What You Love, Love What You Do

In the book “The Millionaire Mind” by Thomas Stanley, he discovered several different common characteristics among millionaires.  One of the leading traits of financially successful people: a passion for their work.

To them, it’s not just a paycheck.  It’s more than just a Monday through Friday J-O-B.  The work they are doing doesn’t feel like work.  It feels more like a calling.

As a motivational speaker for teenagers, I regularly present a workshop at conferences and conventions called “What the heck am I doing with my life?” in which we discuss the importance of finding work you love.  And as Stanley’s work indicated above, doing work you’re passionate about may have a direct impact on your income.

Here are the three characteristics I teach students about when choosing a career path:

• Passion – If you’re not passionate about what you’re doing, you should find something else. Life is too short to do something just for a paycheck. We all need to work. We all need to make a living. Wouldn’t rather do something you love? The danger is that pursuing something you’re passionate about is risky. What if you fail? What if you’re not good enough at it? What if you burn out? All are valid questions but far too often, people play it safe and end up looking back on a life of regret for what could have been.

• Talent – The fact is nobody wants to do something they’re not good at. Do you? I like playing sports, and I’m pretty competitive, but if you’re killing me at some game, that’s no fun for me. Now if I’m destroying you, that’s great for my self-esteem! The unfortunate thing is we are often taught to figure out what our weaknesses are and improve on them. The problem with this is we can often do this at the detriment of our strengths. There are some things in life I’m never going to be that good at, so I want to spend my energy on the things I do well.

• Enjoyment – Far too many people live life with the mentality of “Thank God, it’s Friday” to “Oh God, it’s Monday.” What a miserable way to live life! This may sound strange, but I actually look forward to Monday morning. I look forward to getting back to doing something I love. It should also be pointed out that no matter how much you love what you do, you won’t enjoy every job 100% of the time. There are some things that just come with the territory but the good should far outweigh the bad.

Here are the rest of the articles in the “12 Things Every Teenager Needs To Know About Money (And How To Teach Them)” series:

• Money Doesn’t Grow On Trees @ Bargaineering.com
• Two Words: Compound Interest @ PoorerThanYou.com
• Delay Gratification To Succeed @ GatherLittleByLittle.com
• Living On A Budget Isn’t An Option @ TotalCandor.com
• Credit Cards Will Steal Your Lunch Money @ PTMoney.com
• A Degree Is An Expensive Piece of Paper @ TheDigeratiLife.com
• Spend Money Based On Needs Not Wants @ MoneyNing.com
• There Is More Free Money Than You Realize For College @ FreeFromBroke.com
• Living On Your Own Isn’t Cheap @ Studenomics.com
• Taxes Are A Necessary Evil In Life @ MoneySmartLife.com
• Do What You Love, Love What You Do @ GenXFinance.com
• Don’t Be A Tightwad: Give Generously @ CashMoneyLife.com

This is a guest post from Grant Baldwin, the author of Reality Check, a book about helping students transition into the real world.  His new website, BrokePiggy.com, answers questions from teenagers about personal finance, savings, and all things money.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

12 Things Every Teenager Needs To Know About Money (And How To Teach Them)

Investing in Yourself Can Yield Returns Far Greater than Any Other Investment

We spend a lot of time worrying about investing and are quick to gauge how things are going by looking at quarterly statements. It’s all dollar signs — bank accounts, 401(k)s, the value of your home — these are the things we invest in and can easily determine whether or not it’s a good investment. These are all important investments, without a doubt, but are these things what really matter?

You often hear about how your home or your career are your greatest assets, but I think that’s a little shortsighted. If you take a look at your net worth or your personal balance sheet, yes, you can argue that your home is one of your greatest financial assets. And if you have a steady job and a rewarding career, it’s easy to see how important that asset is since it will provide income for years and possibly decades to come. But in the end, these assets pale in comparison to your true greatest asset: yourself.

You Are an Asset

You are an asset. Think about that for a minute. If you work for someone else, you are an asset to that company. If you’re married, you are an asset to your spouse. And it goes without saying, but if you have children you are an incredible asset to them. You’re an asset to the community you live in, to your neighbors, and to those you interact with on a daily basis.

Photo: Lalji and Raadheesh

Take a moment and look at yourself in the mirror. No, not a mirror in the physical sense, but look at yourself from the outside. How do you look to others? How valuable are you to those around you? Do you stand out as an important asset, or do you slip by as just a run-of-the-mill person? These are difficult question to answer, and the answers may not always be obvious.

Becoming a valuable asset is important on both the professional and personal level. When most people talk about being an asset it has to do with getting ahead in the workplace. This is certainly important if you’re trying to keep your job, advance your career, or enter a new line of work, but it’s equally important on a personal level. These two aspects of your life are more interconnected than you may imagine. Investing in your professional life will impact aspects of your personal life, and investing in yourself on a personal level will undoubtedly help your professional life.

Invest in Your Health

Before you can make improvements in other areas of your life you must first take care of some of your most basic needs. We need to step back for a moment and forget about money. Money is important, but without your health, it’s worthless. Understandably, you’re probably groaning at the idea of what it will take to improve your health. You’re thinking about diets, lots of exercise, and cutting out all the fun stuff in your life. I agree, none of that sounds like much fun. But we’re not talking about making drastic changes overnight. Habits that have developed over the course of years can be hard to break, so it’s best to make small changes over time that will lead to healthier habits.

1. Get More Sleep

We live in a 24 hour world and it is taking its toll on sleep. Between the internet, TV, Blackberries and iPhones, the day doesn’t end when you come home from work. These days we’re constantly being interrupted and our work lives are bleeding into our personal lives. This added stress and lack of down time can really cut into your sleep. While it isn’t uncommon for people to get by on just six hours or so of sleep, studies have shown most of us still need more.

I know, I know. There are only 24 hours in a day and you already can’t get everything done, so how on Earth can you be expected to get more sleep? If you like to hit the snooze 5 times every morning, find you can’t concentrate until you’ve had your first three cups of coffee in the morning, or could pass out at your desk after lunch, then you’re not getting enough sleep. Think about all of the time you waste when you aren’t completely focused or working inefficiently because you’re fighting the urge to sleep. Instead, use that extra hour you’re wasting throughout the day by being tired and get some extra sleep. You’ll wake up feeling better, your body will be rested, and you can make better use of your waking hours, not to mention improve your overall health.

2. Eat Better

This doesn’t mean you should go on a drastic diet and try to cut 20 pounds in a month, but just a few little changes in your diet can go a long way. Start with breakfast. It really is the most important meal of the day. Breakfast will jump-start your metabolism and prepare your body for a full day of work. I always had difficulty finding time in the morning to squeeze in breakfast, but I’ve found that just grabbing a granola bar or something before heading out the door helps a lot.

Next, just be a little more conscious of what you’re eating and make an effort to make small changes here and there. If you drink a few sodas each day, start by replacing one with something else to drink. Ideally water, but even juice or something would be a good start. Over time you’ll find that you crave soda less and in the process be cutting out a lot of calories from your diet. If you’re looking to cut back come dinner time, consider cutting back on some of the pasta or rice and throw in an occasional salad. Again, even if you do this just a couple times a week you will begin to create healthy habits that will lead to a healthier you over time. I’ve struggled with working salads into our dinner menu here at our house, so that’s why I put together this visual guide to help you prepare a salad that stays fresh all week.

3. Go to the Doctor

Medicine has come a long way in recent years, but nothing beats preventative medicine. Why wait until you have symptoms before going to the doctor? By then it might be too late and your only option might be something drastic. Unfortunately, the cost of health care is a major problem in this country so it’s no wonder so many people put off going to the doctor until absolutely necessary. But if you have health insurance, use it.

There’s no doubt about it, but going to the doctor is an inconvenience if you aren’t sick. You may have to go late after work, take a few hours off, and otherwise waste a good part of your day. At the minimum, you should be at least getting your annual check up. It might not be the most exciting appointment in your calendar book, but if you can help keep tabs on your health and possibly receive advanced warning of a serious problem that may develop in the future, the last thing on your mind will be the few hours you “wasted” by going to the doctor.

Invest in Your Personal Self

What’s important to you? That’s what we’re going to try and answer right now. Take a moment to think about what you really enjoy and what matters most to you. Spending time with friends? Family? Being outdoors? Helping others? Just reading a good book? Now that you have an answer, how often do you get to do these things? If you’re like most people, the answer is probably, “not often enough.” Life is too short to be stuck running around constantly trying to meet deadlines, make more money, and constantly put things off until the future. You need to make time for the things you love.

Photo: Alex Bramwell

Whatever it is that you wish you could be doing, find a way to make it happen. This is easier said than done, I know. But it can be done. Now, we aren’t going to be working any miracles here and have you living on a tropical island when you have responsibilities here at home, but let’s start with gradual changes. Find days to incorporate what you love to do into your regular schedule. The bottom line is that you just have to make time. Don’t make excuses. If you can make time to run to the dry cleaners every week, you can certainly set aside a half hour each week to do something you really enjoy. Whether it’s just sitting down with a glass of wine and a good book, a stroll with your kids through the park, or volunteering your time for a good cause, you just have to force yourself to set aside some time and do it.

It’s all about balance. Our lives are filled with responsibilities, deadlines, and work to get done, but these things can’t control us. You need to invest in creating some personal time. Even if it is just 30 minutes a day, the more you can introduce the things you love into your life, the happier you’ll be. Your happiness will begin to spill over into the other areas of your life. You’ll perform better at work, have better relationships with your friends and neighbors, and overall become a greater asset to everyone you interact with. All the time you put in at work and money you save doesn’t mean a whole lot if you aren’t investing in what makes you happy.

Invest in Your Professional Self

A healthier and happier you can go a long way, but if you really want to invest in something that can pay huge dividends, consider investing in your professional self. It doesn’t matter if you’re making minimum wage doing factory work or a veteran executive with a corner office — investing in yourself will shape your future. When most people talk about investing in your professional self, the advice has to do with getting additional education, certifications, or experience so that you can advance your career. Now, there’s nothing wrong with that advice, but I want to touch on a few different areas.

1. Networking

It’s not who you know, but what you know… right? If only it was that simple. If people really got to where they are simply because of what they knew, every CEO would be an Ivy League grad with a Ph.D. You can probably see where this is going. Obviously, it can help to have a solid education and a lot of experience, but it is hardly the only path to success. Just as important as having the knowledge and skills to do a particular job, you need to have connections. These connections will open up opportunities that can be used to leverage your skills and find a path of least resistance to reach your goal.

Photo: Mike Johnson

When it comes to networking, you should strike a balance between quantity and quality. With the advent of the internet, the ability to build a massive network is incredibly simple. Just hop on Facebook, Twitter, or any of the number of social networking type sites and you can almost instantly build a network of hundreds or even thousands of people. While numbers are good, connecting with 1,000 people you never get to know and just connecting for the sake of building a connection will probably be less effective than a network of 20 people who are in your line of work and that you interact with on a regular basis.

One of the best ways to network professionally is through LinkedIn. Unlike many of the other social networks that are filled with updates from people about what they had for lunch, their favorite music, or who they are currently dating, LinkedIn is all business. Here you’ll be able to connect with coworkers past and present and join groups based on your interests or background. These professional connections can lead to a number of interactions you may not have otherwise had access to that can help launch your career in a new direction.

While LinkedIn is great for professional networking, that doesn’t mean you should dismiss the likes of Twitter or Facebook, either. With these sites, you really get out of it what you put into it. If you focus your efforts on networking with other like minded-individuals and actually foster your relationships, you can open many new doors. At the same time, if you just sign up for the sake of signing up and expect great things by befriending as many people as possible, you’ll probably be disappointed.

Finally, don’t forget about local networking. Become a part of your local community and seek out networking opportunities right in your own backyard. Even many of the smallest towns have local organizations, clubs, or functions that will allow you to get to know your neighbors while also allowing you to build your personal and professional network. You’d be surprised at the diversity within your own community, so take some time to regularly get to know the people around you.

2. Build Your Personal Brand

When you think of Coca-Cola, Nike, or Microsoft, I bet you instantly know who these companies are and what they produce. You’ve also probably formed opinions of each of these companies or their products based on how they present themselves and your past experiences with their products. This is a brand.

What if I told you that you were your own brand? It might sound a bit silly to think of just a regular person as a brand, but it’s true. The way you represent yourself and how others see you is your own personal brand. Whether you like it or not, your actions and words speak volumes about who you are. This reputation can follow you for the rest of your life, so it’s obviously important to build a positive brand as opposed to a negative one.

So, what does your personal brand say about you? When someone types your name into Google, what do they see? Do others see you as you’d like to be seen? And when you meet someone for the first time, are you leaving a good impression and clearly displaying what you stand for? In today’s fast-paced world you may only have a few seconds to make an impression. Depending on how you’ve developed your brand, you may have left an unforgettable mark, or simply fade into the homogeneous background with everyone else.

Personal branding is a topic that goes far beyond the scope of this piece, so I’m going to recommend a few great places to get started. First, you’ll want to check out Dan Schawbel’s Personal Branding Blog. Dan is also the author of Me 2.0: Build a Powerful Brand to Achieve Career Success. Leo Babauta from Zen Habits also has a great piece on personal branding as well. Make an effort to determine what your personal brand says about yourself, and invest some time in creating a personal brand you’re proud of.

Invest in Yourself for Unmeasurable Returns

It’s easy to get caught up with money. It drives everything we do from paying for food and shelter, to being stashed away for 30 years so we have something to spend in retirement. But as important as money is, it’s just as important to take a look at the bigger picture. Yes, your 401(k) is important, your home is important, and being able to afford a comfortable lifestyle means a lot. But none of this matters if you’re unhealthy, unhappy, and have few prospects.

This is especially true in trying financial times. When the news is filled with gloom and doom, your investment accounts drop like a rock, and you can’t sell your house, it’s easy to get caught up in the feeling that things are just helpless and it’s all out of your control. Well, it’s true that you can’t control the economy or magically make your retirement account go back up, but there is one investment you can make that will pay off. When you invest in yourself you might not be able to immediately put a dollar amount on the gains, but over time you will have realized returns far greater than those money can buy.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Investing in Your Most Valuable Asset – Invest in Yourself

If you’re a college student preparing to graduate, you may find that some job markets aren’t exactly hot right now. There are plenty of jobs out there, but finding your ideal job will be harder than it has been in the past few years. While many of these tips are helpful for someone seeking their first job out of college, the tips can be used by anyone that is seeking employment.

Experience Matters

Those with real-world work experience in their field will have a significant edge over those without such experience. If you have done any work in your field while in school, either through an internship, summer job, or work-study program, this will be a great asset. Companies have to make smart decisions when hiring new talent, so coming in with even a little experience will help you edge out other candidates who may not have the experience. When polishing up your resume, you’ll certainly want to highlight any work experience.

But what if you’re graduating this year and you don’t have any experience? You need to sell yourself. This is when it pays to have your interview skills honed in and projecting confidence can help you land that job. For most people, the only way to get really good at interviewing is to practice. Practice with your spouse, friend, or roommate until the process feels natural. Certainly, a real interview for a real job will never quite be the same, but the less you have to think about what you’re saying in the interview will go a long way in calming your nerves.

Start Early and Plan Ahead

Even if your friends and classmates haven’t begun searching for jobs yet, don’t delay. You’ll want to begin looking for opportunities as soon as possible. Not only will this give you a head-start, but it may provide flexibility. Getting an early start will put you in the position of being able to turn down jobs without the potential you’re looking for and holding out for a job with more promise.

Look for a company that promotes from within and has the structure to provide opportunities for career advances to talented and hard-working employees. How will you know if a job is right for you? Before you start looking for jobs, think through all the things that are important to you and make a checklist. Some things to consider:

• What is more important: pay, or a flexible schedule?
• Are good benefits more important than higher pay?
• Would you give up some perks in order to work in the city or are the suburbs more appealing even at a lower salary?

To fully compare different job offers, you really have to look at the whole package. If you plan on needing benefits, consider what those benefits actually cost or could save you money on. If you’re looking at two different offers, the base pay is important, but if the lower paying job has a retirement plan match or better health benefits, it could be a case where the lower paying job could actually end up providing the greatest total compensation.

Networking

Networking is one of the most powerful methods of finding a great job. Make a list of your contacts and how they might be able to help you. Talk to people who are working in the field you’re interested in and in the companies you’d like to work for. Don’t limit yourself to newspaper help wanted ads or online job postings. This is where it can be a good idea to begin building a LinkedIn profile so that you can begin to network with others in your field. There are also a lot of recruiters and HR personnel who use the service to find talent.

The best jobs usually go to those who start looking a little earlier, a little longer, and a little harder. Take advantage of any contacts you have in the field you’re hoping to work in, as recommendations are usually going to carry a little more weight than a a blind resume.

Additional tips:

• Take advantage of your college’s career center.
• Attend job fairs on campus.
• Participate in on-campus interviews set up by local companies looking for staff.
• Before going to an interview, research the company as thoroughly as possible so you can speak intelligently about the company’s business and its goals and how your skills and experience can help advance the company’s agenda.
• Use all the job-hunting strategies available to you. Don’t limit yourself to one or two methods of job hunting.
• Remember that your resume is your ambassador. A messy, unprofessional resume, or one with typos in it will give a bad impression to your potential employer. Take the time and effort to prepare a professional-looking resume that succinctly highlights your strengths and experiences and will make a good impression on those who read it.
• Once you’ve landed the interview, be sure to follow up afterwards with a brief, neatly written note expressing your interest in the job and demonstrating your understanding of what the company is looking for in the ideal candidate.
• Once you have the job, give it your best efforts, even if it’s not your ideal job. Your work ethic and work habits will follow you around from one job to the next. Make sure the news is all good.

About the Author: Jeremy is a retirement planning specialist and founder of Generation X Finance and the guide to Financial Planning at About.com. To learn more, follow Jeremy on Twitter.

Job Hunting Tips for the New College Graduate – Or Anyone