#226: Tap Into Your Support System (Friday, April 29)

When I started this financial improvement theme in January, I identified one of the key ingredients to a successful financial future: a buddy. Everyone needs a support system, no matter how independent one perceives themselves to be. And when it comes to financial matters, it's even more important to surround yourself with like-minded people who will keep you on track.

Last week a friend of mine had the financial equivalent of a nervous breakdown. She had underestimated the need for a financial buddy, so when she found herself on the brink of a financial crisis, there was no one to dissuade her from taking a course of action that would ultimately be a blow to her financial goals. But mistakes, if nothing else, are great teachers, so now she's enlisted a support system to help her rebuild her finances. I'm glad she's back on track.

I have several financial buddies myself: there's one for investing; there's one--actually a few--for home buying matters; and then there's one who talks me off the ledge whenever I'm going to do something rash. It requires a lot of trust, support and sharing before you can decide to call someone your financial buddy.

Believe it or not, there are a lot of financial support groups available if you prefer to lean on people who are not so close to you:

• DailyStrength.com is an online forum where people share their financial woes and receive words of encouragement from readers. If you ask me, it's a bit of a buzzkill, but for some it can be motivation to ensure that they avoid some of the pitfalls mentioned on the site.
• The Money Honeys are a group of women who met in a financial literacy class and provide support to each other. Now this is my kind of support group: actionable and results-oriented. One woman cleared $50k of debt within a year of joining! Love it.
• For investing buffs, the NAIC (National Association of Investment Clubs) provides a formal model for groups to start their own investment clubs. 

#225: Your Worst Enemy (Friday, April 22)

I keep this picture (it's me trapping myself under a wine glass) very close to me as a constant reminder of something I realized a long time ago: sometimes I’m my own worst enemy. Here a just a couple examples of how in this week alone, my errors ended up costing me both money and opportunities:

1. Opportunity only knocks once. Last week I saw a sale to New Orleans: airfare and hotel for a little over $600. I should’ve jumped on it, but I hemmed and hawed. By the time I finally decided to book it, the airfare alone was nearly $500 and the hotel deal was over, so I would have had to pay $150/night. I could have saved $300+ if I’d jumped on the opportunity. That wasn’t the only missed opportunity; I found out that Soledad O’Brien whom I absolutely LOVE would have been in the same hotel as I at the same time.

2. Early bird catches the sale. After my New Orleans deal fell through, I decided to go try somewhere else I’d never been. Providence, RI fell out of the hat. I had two options to get there: the train, which was $97 each way; or the bus, which was $23 each way—and they both took the same amount of time to get there. No brainer, right? For me, not so much. Once again, I debated the merits and disadvantages of both, and by the time I’d decided on the bus, it was sold out. I ended up taking a crowded train with a bunch of noisy kids that cost $109 (I didn’t buy it 3 days in advance so the fares were more expensive than the original price), $86 more than I needed to spend. 

3. One in a million chance? A couple years ago, a friend of mine sent me an application for a housing lottery in Bed Stuy. I never applied. Those housing lotteries are so competitive and especially for neighborhoods like Bed Stuy. What were the chances of me actually winning a spot? I thought. Turns out, they were pretty good. The friend who forwarded the application won a property—six blocks from where I live now and at a deep (think 40% discount off current brownstone prices). He moves in May. I know there’s no guarantee that my name would’ve been selected, but I’ll never know.

I know I’m not alone. Are you sabotaging yourself financially (or in any other part of your life, for that matter)? Are you doing things that undermine the financial goals you’ve established for yourself? Is procrastination affecting your income/earning potential? Don’t be your worst enemy.

#224: Turning A Negative into A Positive (Friday, April 15)

After last week's Good Friday, I realized that there are still a lot of people who haven't done their taxes. According to the IRS, about 36 million people wait until the last minute to file. But even though it's a more complicated tax year this year and you may have to deal with longer lines at the post office (if you're not filing electronically), there's good news:

• You'll have the weekend to sort through everything since the deadline was extended to April 18. 
• You also have until April 18 to make a 2010 contribution to your IRA and if you're eligible for a tax-deductible contribution, it'll lower your tax bill.

I found a lot of great last minute tax tips in an article on MSN Money, 8 Important Tips for Last-Minute Filers.


And remember the most important tip of all: even if you can't pay your taxes, you should still file. (If for no other reason, it's a crime that's punishable by a fine of up to $25k or one year in prison...who knew?)

#223: Choices, Choices (Friday, April 8)

Every choice you've made in your life has gotten you to this point. Even the seemingly "insignificant" ones.

With the tax season closing, many people are probably looking forward to their tax refund. What will you do with yours? Spend it or save it?

A few years ago, I decided to spend my entire tax refund. It was good while it lasted, then I felt like, "Now what?" You can choose to spend your entire tax refund on a big-ticket item, or you can use it to serve multiple purposes. Consider dividing your refund as follows:

• 20% for yourself; do whatever you want with that money. I generally put this money in my Vacation Fund or buy something ridiculous for myself that I wouldn't ordinarily buy.
• 30% in your savings; if you don't have an emergency fund, this is a good opportunity to start building one.
• 30% towards your bills; use that money to reduce your outstanding debt. Since my student loans are paid off and I don't own a credit card, I usually divide this between my savings and miscellaneous.
• 20% for miscellaneous; if you have kids or other family members that you support, this can be used for them. I use this for gifts to my parents and to fund 529 plans for my niece and godchildren.

I promise it'll be more rewarding to handle multiple financial needs with your refund than spending (or saving) it all.