The Third Step to Financial Success

Posted on Thursday 28 February 2008

Earlier in the week, I discussed steps one and two for achieving financial success. The third step is to develop financial objectives. Objectives directly tie into the goals you set and a rule of thumb for setting effective objectives is to make them S.M.A.R.T. This stands for Specific, Measurable, Achievable, Realistic and Time-Bound. I’ve created a worksheet to help you map out your plan for financial success. The template can be found here or on the Financial Tools and Calculators page.

After you’ve listed objectives for each goal, determine if each one is a want or a need. If you’re having trouble deciding whether something is a want or a need then ask yourself two questions. Is it absolutely necessary to accomplish your financial mission and it is required by law (i.e. maintaining a minimum of liability insurance on your vehicle). If not, then that objective can be classified as a want.

Once you’ve identified which objectives are needs and which are wants, evaluate the relative importance of the wants. Use a ten-point scale with one assigned to objectives that are ‘nice to haves’ but you could do without.  Assign ten to those objectives that have the most importance, those that you have a strong desire for.  Give the worksheet a try and tune in tomorrow for the next step – developing strategies.

savvy @ 8:00 AM
Filed under: General Finances
Your Questions Answered

Posted on Wednesday 27 February 2008

I decided to stray from the financial success series for a moment to answer the most common question I receive – what prompted your interest in personal finance and have you always managed your money well?

What can I say – I’m a nerd. From an early age, I loved all things math and money. Even now, I think spreadsheets are fun. As a result of my interest (and maturity for my age), my parents opened up their finances to me (which was a big binder with sheets showing all the income, bills, etc.) and started teaching me. They didn’t hold anything back and openly and honestly answered any and all questions I had. I know they never did that with my brothers to the extent that they did with me. Perhaps because they didn’t show an interest or maybe couldn’t be trusted with all that information.

Once I reached 8 or 9, they would actually let me pay all the bills (they’d just sign the checks) and balance their checkbooks. I had a passbook savings account where I had to put part of my allowance and any gifts I received. So the stage was set as a child. That’s not to say I didn’t ever stray though.

My freshman year of college, I had an excess of scholarship money plus spending money from my parents. Needless to say, I was living pretty high on the hog. (Just as an example, I spent spring break in Jamaica that year.) Then I lost my scholarship (too much living it up and not enough studying it up). So when my parents had to pay that high private school tuition on their own, the spending money dwindled. I’d already had a taste of the “good life” and wasn’t ready to give it up so I got a credit card. I would run it up each school year (always paying the minimums though) and pay it off with the money from my summer job. Rinse lather repeat all the way through grad school. The summer after grad school I paid off my credit cards again (for what I thought was the final time) then moved to California.

The cost of living was ridiculous there (especially compared to my hometown in Alabama). The rent for my one bedroom apartment in a far suburb of San Francisco was more than my parents’ mortgage. Of course I needed furniture for my new apartment, my car insurance tripled and I was partying every weekend (gotta make friends you know). So practically from the start, I was living check to check and running up my credit cards. I got laid off from my job after eleven months. This was in October. I remember that I only had enough money to make November bills and NOT December rent and didn’t even have enough money to get myself home if need be. That was the worst feeling in the world. I was blessed to be able to find a job in time to make December rent and I vowed that I would NEVER live like that again. I had never really stressed about my finances before but that was the wakeup call that the way I was living wasn’t (financially) right. I shared with my dad (before then, my parents had little insight as to my finances) and he told me about the Motley Fool ( and started teaching me even more. I started changing my spendthrift ways (I used to shop EVERYDAY during lunch – gotta love working near Union Square) and starting seriously tithing (vs when I felt I could afford it). After that, things only got better. I started living WITHIN my means (which wasn’t always easy) and started writing down my goals. I didn’t accomplish all of them in the time frame that I wanted but when I look back at my old journals, I have accomplished and exceeded every single (financial) goal I set for myself. That’s not to say I didn’t face any other hardships (for example, getting laid off again after four months) but once the stage was set, I was able to weather the future storms.

So what’s YOUR personal finance story?


savvy @ 8:00 AM
Filed under: Credit Cards andGeneral Finances
The Second Step to Financial Success

Posted on Tuesday 26 February 2008

2/27 – Edited to add a great link about selecting disability insurance

Yesterday, I discussed the first step to financial success. Click here for that post. Now that you’ve defined your financial mission, the second step of your journey is to establish goals. Your goals can be short-term (within five years) or long-term (five years or longer). The goals you set should be those that will allow you to achieve your financial mission. Writing down your goals will help you prioritize your spending when it comes time for you to chart your course. Generally speaking, your goals will fall into one of five categories.


  1. Insurance planning -Insurance is necessary in order to reduce the risk of a catastrophic loss. This includes, but is not limited to, auto insurance, homeowner’s/renter’s insurance, health insurance, life insurance, disability insurance and long term care insurance.
  2. Tax planning -The goal of tax planning is to minimize income tax liability as well as take advantage of available incentives such as tax credits, tax deductions and tax-deferred or tax-advantaged accounts.
  3. Retirement planning – The goal of retirement planning is to accumulate sufficient capital to provide adequate income for your predicted life expectancy.
  4. Investment planning – Investment planning is key in order to amass assets and resources in order to fund retirement, inheritances as well as other expenditures such as home purchase, college. etc.
  5. Estate planning -Last, but not least, estate planning allows for your wishes to be realized as it applies to your heirs or other parties to whom you wish to transfer funds.

While these categories may seem different, your goals are all interdependent. Keep in mind that goals are high level statements. You will refine them and be more specific in the next step, which is defining objectives. Stay tuned for tomorrow’s post which will address that.

savvy @ 8:00 AM
Filed under: Estate Planning andGeneral Finances andInsurance andInvesting andRetirement andTaxes
Setting the Stage for Financial Success

Posted on Monday 25 February 2008

Just as you wouldn’t set out on a trip without a road map to guide you, you need a plan in order to achieve financial success. Now success means different things to different people. There is no ‘one size fits all’ definition or path. Today’s post will be the first of a six part series.

The first step of your journey is answering the question – What is your financial mission? Companies find it hard to succeed without defining a mission statement and the same applies to individuals. People often confuse a mission with a goal. A mission generally ISN’T a finite goal like buying a home. Your financial mission is a broad statement that identifies your long-term purpose for developing a financial plan. An example (and my personal mission) to be financially independent. I would urge you to take some time and really think about what your mission is. It may be retiring with two million dollars or it may be as simple as living a comfortable lifestyle and never really retiring. Stay tuned and tomorrow I will discuss setting financial goals.

savvy @ 8:00 AM
Filed under: General Finances
Verizon Unlimited Minutes Plan

Posted on Thursday 21 February 2008

The competition is heating up. Effective February 19th, Verizon is offering an unlimited minutes plan for $99.99 per month. See the Verizon site ( for more details.

savvy @ 8:00 AM
Filed under: Deals
Tell Your Story to BusinessWeek Magazine

Posted on Wednesday 20 February 2008

From Brian Burnsed of BusinessWeek magazine –

I’m Brian Burnsed, a reporter with BusinessWeek magazine. I’m working on a story for the magazine about how hectic tax season can be and how it can sometimes become a source of contention among couples. I was wondering if any of you find that during tax season you and your spouse tend to drive each other crazy because of differences in tax habits (i.e. wife wants to file early, husband tends to wait until the last minute or vice versa, ect…) or, if there are any CPA’s, EA’s or attorneys out there who have tales of clients squabbling with each other over taxes. I’m not looking to dig up deep seeded resentment among married couples, but rather have you talk in a fairly light hearted manner about some of the problems that tax time has caused for you in the past. If there are any of you out there who are willing to share your stories, I would relish the chance to speak to you. If you could, call me at your convenience at 404-240-7392 or e-mail me at so we can talk about this further. My deadline is Friday (2/22/08), so if we could talk soon it would be a huge help. Thank you for your time and I look forward to hearing your stories.

Please contact Brian directly if you’re interested.

savvy @ 6:57 PM
Filed under: Marriage andTaxes
New Sprint Unlimited Plan

Posted on Wednesday 20 February 2008

Sprint has rolled out a new Unlimited Access Pack.  For $119.99 per month, you get unlimited voice calls, text messages, web access, e-mail and picture mail.  At this time, this plan is only available in select markets – SF Bay Area, upper central CA, Philadelphia, Minneapolis and Tampa.  For more information, call 1-800-569-1077 or click the following link –


savvy @ 8:00 AM
Filed under: Deals
New! Coupons and Deals Page

Posted on Tuesday 19 February 2008

I’ve added a new page to the left for coupon and deal sites.  If you know of a site that I don’t have listed, please let me know and I’ll add it.

savvy @ 8:00 AM
Filed under: Coupons andDeals