I’m going to share how you can create a financial game plan for next year and how you can actually follow through on it. The best part is once you have your system set up it’s just a matter of using 15 minutes a month to check your progress. Interested? Let’s get started.

Define Your Big Goal

Saving up for our next car

What’s your #1 goal for next year? Maybe it’s paying down or off some debt. Perhaps it’s building up your savings or paying for a vacation before taking it. Whatever it is, pick a goal that’s important to you.

For this exercise I’ll use one of our own goals for 2012- getting a family car. Our current vehicle is small and crowded for our family. Before the baby it was alright; four people could fit and we still had some trunk space. Now we have baby gear and we tend to carpool with friends to events. In addition, the car is 12 years old and repairs are starting to increase.

However we want to avoid having a car payment with the family car. We keep our living expenses based on one of our incomes while we pay down the student loan and mortgage with the other. We purchased a car last year for my husband so we have a system that has worked; we just had to tweak it to fit our new goal for the family vehicle.

Break Goal Down Into Bits

Now that you’ve defined your goal, it’s time to break it down into bits, the smaller the better. Continuing our example, we’re not going to throw our money at the first car that fits our needs. This will be a big purchase, so we want to get the best value out of it.

Here’s the list that I’ve made on what to do:

• Build up our care replacement fund.
• Whittle down what car we’re looking for.
• Spread the word about the car hunt.
• Shop around locally to find the best deal.
• Get a 2nd opinion (from a mechanic).
• Purchase the car.

Looks a bit long, but I wanted to break it into manageable pieces. Can I get this task get started or done in a day? If so, then it’s small enough. If not, I try to break it down further.

Set a Deadline for Your Goal Bits

Now that you have an idea of what you need to do, it’s time to out your checklist into your calender. My recommendation is look at a goal or two a month. Don’t feel like you have to do everything at once.

Here’s how I broke down the plan:

• Build up our car replacement fund. We did a great job in 2011 with automating our payments into a dedicated savings account. I’ll review and adjust a monthly contribution the first week in January to build it up further. Deadline: January 31, 2012
• Whittle down what car we’re looking for. The two of us need to sit down and figure out a handful of makes and models that fit our criteria for a family car. We need to have something that’s mechanically reliable, has a good safety record, and gets the same or better gas mileage than the car we have now. Deadline: February 15, 2012
• Spread the word about the car hunt. I think is the easiest – we’ll tell all of our friends to keep an eye out for us and give them a price range. Deadline: February 29, 2012
• Shop around locally to find the best deal. We’ll be visiting private sellers and dealerships to see what around. We’ll probably pick a day out of the week to set aside for actively looking around. Deadline: March 31, 2012.
• Get a 2nd opinion (from a mechanic). With spending a good amount of money for this car and to find something that will last a bit we’ll pay to have a mechanic give us a second opinion. This step will be for cars we’d like to purchase. Deadline: December 31, 2012
• Purchase the car. Sign the check drive the car!  Deadline: December 31, 2012

It’s going to be a fun ride this year, but baring any huge emergency/event we should reach our goal.

Psychology of Money

What goals do you have for next year? How will you accomplish it? Curious to see what affects your money making (or losing) decisions? Check other posts in the Money & Psychology series:

• Choosing Friends to Build Your Net Worth
• Decisions, Decisions – Making a Big Purchase
• Is Saving Really About Motivation?
• Ways We Spend Money Without Evening Knowing It (and How to Fix It)
• Barriers That Prevent us From Saving Money
• Dealing with the Stress of Financial Issues
• Getting Your Finances Ready for a New Job
• Are You Hurting Your Own Finances?

Photo Credit: Ha-Wee

Have you ever heard any of your friends complain that they just can’t seem to save money? Have you ever tried to save yourself and wound up failing? Is saving really about motivation or is there a secret that can you reach your financial goals?

Believe it or not, many people fail due to two things - external and internal influences. External influences include losing a job, getting unexpectedly sick or injured, or having your car totaled. Internal influences are the psychologically barriers we’ve placed on ourselves.

While people often blame external influences on why they have no money saved up, there are many cases where it’s actually an internal barrier that can hold us up.

Becoming Friends with Money

Being properly motivated to reach your financial goals often means have a realistic relationship with money. What feelings do you associate with money? Do you think about security and control or do you worry about how it would affect you?

Don’t make the same money mistakes others have. Become empowered to become richer and make more money.

Use Psychology to Become Rich

You don’t have to be super motivated and self-disciplined to build your net worth. In fact you don’t have to dedicate a huge amount of time to make better money decisions. What you need is to make our psychological barriers work for us rather than against us.

Here’s one example – having a debt free vacation. What usually happens is that we say we want to save for our vacation, but instead we end up putting the trip on our credit card and slowly pay off the debt until the next vacation comes around and we repeat the cycle.

Here’s what you can do in 5 minutes. Go to your banks’s billpay portion for your accounts. Set up an automatic transfer of x amount of money (10% of what you last trip cost you if you want a number) to either your savings account at the same bank or better yet to a savings account at another bank/credit union. The key is to make it automatic and make it a bit harder to get to your money.

Alan Corey used this technique with his paychecks and saved money to fuel his real estate deals and become a millionaire before he was 30.

It’s not hard at all, but it works.

Psychology of Money

Curious to see what affects your money making (or losing) decisions? Check other posts in the series:

• Choosing Friends to Build Your Net Worth
• Decisions, Decisions – Making a Big Purchase

What have been some hurdles for you when it comes to saving money? What helped you to succeed where you had failed before? How long did it take for you to reach your savings goal?

Photo Credit: shortformvideo

Good Morning Green Panda Friends.  If your personal finances are less than perfect then we are here to help you with some easy steps to organize your finances.  Very often we discuss the goals we are working towards and the steps we need to take to achieve our goals.  However, we seldom discuss what to do if our finances are already less than perfect.

US News released an article titled 10 New Money Tools for Young Adults.  It discusses free ways for us to create and track our budgets, set and follow our goals, as well as responsibly manage and pay off our debts.

Check out these Free Money Tools for Young Adults:

Go to Mint.com. They are listed as the number one Free Money Tool for Young Adults by US News.  I have to agree 100%.  I personally use Mint to track my monthly spending, follow progress on my personal goals, and manage my debt.  You can instantly download all of your bank account, loan, and credit card information into Mint.  It is very easy to set a budget as well as personal goals such as retirement planning, paying off debt, and saving for a major purchase.  Mint is available for both young Americans as well as Canadians.  If you have not yet tried Mint, I suggest that you sign up today…it’s totally free!

Read Personal Finance Blogs. Most personal finance blogs offer free budget spreadsheets for their readers.  Next time you are reading posts on your favourite personal finance blog check out the free budget spreadsheets and other financial planning tools they offer.  Personal Financial Bloggers usually recommend their favourite financial tools, as well as tools that have helped them in the past.  To view Personal Budget Spreadsheets recommended by Green Panda click here.

Visit Your Financial Institution. Not in person, but visit their website.  Many Financial Institutions offer free financial tools right on their website, consider it as virtual financial planning advice.  Next time you log into your online banking with your financial institution check out their free financial planning tools and calculators.

Register for Online Receipt Organizers. If you are like me then you never carry cash, however we are probably the minority of consumers.  For everyone who doesn’t like to use their credit or debit card for their every purchase, Myreceipts.com offers a free way to manage your paper receipts.

Avoid Impulse Purchases. US News suggests using online wish lists.  We can add items that we want to our personal online wish list, if we still want the time or need the item next time we log in to the website then we can buy the item.  I always leave a week delay for my purchases to avoid impulse spending.  If I see something in a store that I want on Monday I walk by again on Friday, if I still want it or need it five days later then I buy it.  This strategy usually works because five days is a long time to talk myself out of something.

Other Free Money Tools for Young Adults Include:

-       Bundle.com

-       Payoff.com

-       Billlshrink.com

-       YouNeedaBudget.com

Photo by Robert Couse-Baker

When Should College Graduates Apply for Their First Job?

Sandra advises recent college graduates to start applying for jobs within 3 months of graduation. It is not unrealistic to want to start at the top, but expect to start at an entry level position.  In today’s marketplace, where the “Baby Boomers” will be ready to retire in the next 5-10 years there will be many new opportunities for existing employees.  It is ok to start at an entry level position because the work experience and employee’s loyalty will be considered when new positions become available.   Be aggressive with your job search!  Apply, reapply, and follow up.  Employers love proactive candidates.

What should be on my resume when I apply for my first job?

If you have no previous work experience when you are applying for your first job, be sure to include any volunteer experience; especially if it is within your field of study at college.   All volunteer experience is helpful.  If you helped a parent on a fundraising event, or if you volunteered for an event at your college, it should all be included on your resume.

Any and all work experience should be on your resume when applying for your first job; this includes part time work experience. Even if you don’t feel your previous work experience is relevant, it is important to include any and all previous work experience.  

Mc Donald’s is a great place to start working part time.  Employers often call candidates for interviews if they have experience working at McDonalds.  The training and experience gained from working at Mc Donald’s can be a very valuable asset in the workforce.

How and Where can I apply for my first job?

There’s always a career board in schools where companies will post positions, it may be near the student union or it may be in each faculty’s office.  Some colleges allow employers to post available opportunities online, where all students can apply.   Job Fairs are always a good resource for college graduates to search for new opportunities, and network with potential employers.  Don’t be afraid to go to out of town job fairs.   There are always international companies exhibiting.  They may not have a position in your current city, but at least you will have a lead with a company that you may want to work for in the future.

I recommend that you attend college job fairs throughout the year of your graduation, but don’t hand in your resume.  Take notes of the companies at the job fair and get the contact name of whom you could send your resume to when you are ready. 

What do I need to know about my first job interview?

It is important to dress appropriately for your first job interview.  Be prepared and do your research on the company, this shows your potential employer that you are proactive and a self starter. Always ask questions during or at the end of the interview.  Employers will often ask candidates why we want to work for the company.  You should prepare a personal statement that incorporates your career goals within the company.  As an example, if you’re goal is to become a lawyer and you are applying for a law clerk position, you could say “This position will help me on the road to my career as a lawyer.”

Some common Financial Resolutions could include saving more money, paying down our debt, planning a trip, and buying a home.  These are all good goals, but a great goal also has to have a plan of action to help us achieve the goal.  In order to create an action plan we need to ask ourselves some questions.

Here are some questions that we should ask ourselves in order to create an action plan, and achieve our Financial Resolutions:

Resolution: To save more money.

Questions to ask:

How much more money do I want to save?

What am I saving for?

What expenses can I cut, and allocate the extra money towards my savings?

How will I save the extra money? Is it best if I save through an Employee Savings Plan with my employer? Or should I set up an Automatic Transfer between my checking and savings account?

Resolution: To pay down our debt.

Questions to ask:           

How much debt do I have to pay off?

When do I want to have it all paid off?

How much can I afford to pay per week or per month?

Resolution: To take a vacation.

Questions to ask:

Where do you want to go and for how long?

How much will it cost me?

How much will I need to save monthly? 

When do I want to travel? It is best to select a few different date options, and then compare pricing to see which is the least expensive.  We also have to consider the exchange rate of our dollar versus the destination country.

Resolution: To buy my first home

Questions to ask:

Do I want a house, a townhouse, or a condo?

How much can I afford? Most financial institution websites have a section with various Mortgage Calculator Tools.  These calculators can help us determine how much we can afford to pay each month with our current monthly income.

What amount of Mortgage will I need to borrow?  Visit your financial institution and get a Mortgage pre approval. This will give us the price range for our home.

How will I save for my down payment? A down payment is the amount of our own savings that we put towards our mortgage.  As a basic example, we want to purchase a house for $250,000, we will have a 10% down payment of $25,000 therefore our mortgage will be $225,000.

It is best to set specific goals with a specific action plan.  However, things can always change and we have to be prepared for the unexpected.  We may not always be able to stick to our action plan, if we get off track it is ok.  We can always revise and reset our action plan in the future.