Blind Spots
“If you don’t know where you are going, every road will get you nowhere.” – Henry Kissinger
Jeanine and I just returned to Newport from our Christmas visit with my family in Ohio. We head there once a year and yes, I have plenty of Middle America tidbits to share in future posts. Hats off to all the gays and lesbians that survive and somehow thrive in these parts of the country. I honestly don’t know how you do it. We always breathe a sign of relief when the plane touches down in Los Angeles.
Anyway, my mother had a stack of semi-recent Fortune magazines that she was preparing to toss so at my request she sent me packing with as many issues that could fit in my carryon. I specifically wanted to read the 2005 Retirement Guide and Real Estate Gold Rush issues on the plane ride back and accomplished this in between take off, landing and having to hold Jeanine’s hand under the blanket. She is a nervous flier and there was a heck of a lot of turbulence onward from the connection in Dallas. I managed to read these issues and start my latest fiction find, Jesus Land by Julia Sheeres. Quite fitting after my weekend.
Anyway, for me, the big ah-ha article in the Retirement Guide was a sidebar by Julia Boorstin called Psych Yourself to Save. An appropriate topic as we approach the New Year and reassess our savings goals. She writes about four blind spots and how to get around them. “Behavioral economists say that understanding savings-hindering psychological tendencies like this can help us overcome them.
Problem: If you see money in your checking account, you spend it.
Solution: Pay yourself first. Automatic savings plans; especially those that deduct money directly from your paycheck are a godsend. The money is whisked away into a kitty where you don’t see it and are far less likely to touch it.
Problem: You spend “windfall” money whenever you get it.
Solution: Treat all money the same. We are inclined to spend money we weren’t expecting – a gift, a bonus, a tax refund – more freely than we would regular income. That’s because we tend to create different mental categories for different kinds of money. Tell yourself you’ll put the “found money” into a savings account for just one month and consider how to spend it later.
Problem: You throw good money after bad.
Solution: Don’t let past decisions dictate future ones. Past decisions can’t be undone; make future spending and saving decisions based on what you know now.
Problem: Saving money feels like depriving yourself.
Solution: Visualize something concrete that your savings will buy. The secret to successful saving is to focus like a laser on the better things your savings will buy in the future.”
Richard Jenkins over at MSN Money reminds us about the loose change method of savings. He writes, “Want a foolproof way to turn $1 a day into $67,815? It doesn’t take a lot of money or time or personal sacrifice. All you had to do is take your pocket change at the end of the day and drop it in a jar. If you can do that, and you put away about $1 a day, that’s just $7 a week. At the end of the month, you’ll have about $30. What’s a paltry $30 a month going to do for you? Growing tax-free for 30 years, with a 10% annual return, your investment account will be worth $67,815. Not bad for pocket change.”
Nice idea, but I rarely spend cash so it’s not like I have a new stockpile of coin to empty out on the dresser every night. This tip is circa 1973. I remember hearing my father empty his pocket change after arriving home at the end of the shift from the Chevy plant. But the concept behind the tip makes sense.
To put a 2005 twist on it… you want to see money add up, just have thirty bucks deducted from your checking account and put in a separate savings account. After six months, raise it to fifty dollars. After a year, raise it to one hundred. You won’t even notice that it’s missing.
Jeanine and I just returned to Newport from our Christmas visit with my family in Ohio. We head there once a year and yes, I have plenty of Middle America tidbits to share in future posts. Hats off to all the gays and lesbians that survive and somehow thrive in these parts of the country. I honestly don’t know how you do it. We always breathe a sign of relief when the plane touches down in Los Angeles.
Anyway, my mother had a stack of semi-recent Fortune magazines that she was preparing to toss so at my request she sent me packing with as many issues that could fit in my carryon. I specifically wanted to read the 2005 Retirement Guide and Real Estate Gold Rush issues on the plane ride back and accomplished this in between take off, landing and having to hold Jeanine’s hand under the blanket. She is a nervous flier and there was a heck of a lot of turbulence onward from the connection in Dallas. I managed to read these issues and start my latest fiction find, Jesus Land by Julia Sheeres. Quite fitting after my weekend.
Anyway, for me, the big ah-ha article in the Retirement Guide was a sidebar by Julia Boorstin called Psych Yourself to Save. An appropriate topic as we approach the New Year and reassess our savings goals. She writes about four blind spots and how to get around them. “Behavioral economists say that understanding savings-hindering psychological tendencies like this can help us overcome them.
Problem: If you see money in your checking account, you spend it.
Solution: Pay yourself first. Automatic savings plans; especially those that deduct money directly from your paycheck are a godsend. The money is whisked away into a kitty where you don’t see it and are far less likely to touch it.
Problem: You spend “windfall” money whenever you get it.
Solution: Treat all money the same. We are inclined to spend money we weren’t expecting – a gift, a bonus, a tax refund – more freely than we would regular income. That’s because we tend to create different mental categories for different kinds of money. Tell yourself you’ll put the “found money” into a savings account for just one month and consider how to spend it later.
Problem: You throw good money after bad.
Solution: Don’t let past decisions dictate future ones. Past decisions can’t be undone; make future spending and saving decisions based on what you know now.
Problem: Saving money feels like depriving yourself.
Solution: Visualize something concrete that your savings will buy. The secret to successful saving is to focus like a laser on the better things your savings will buy in the future.”
Richard Jenkins over at MSN Money reminds us about the loose change method of savings. He writes, “Want a foolproof way to turn $1 a day into $67,815? It doesn’t take a lot of money or time or personal sacrifice. All you had to do is take your pocket change at the end of the day and drop it in a jar. If you can do that, and you put away about $1 a day, that’s just $7 a week. At the end of the month, you’ll have about $30. What’s a paltry $30 a month going to do for you? Growing tax-free for 30 years, with a 10% annual return, your investment account will be worth $67,815. Not bad for pocket change.”
Nice idea, but I rarely spend cash so it’s not like I have a new stockpile of coin to empty out on the dresser every night. This tip is circa 1973. I remember hearing my father empty his pocket change after arriving home at the end of the shift from the Chevy plant. But the concept behind the tip makes sense.
To put a 2005 twist on it… you want to see money add up, just have thirty bucks deducted from your checking account and put in a separate savings account. After six months, raise it to fifty dollars. After a year, raise it to one hundred. You won’t even notice that it’s missing.
posted by Nina Smith at 6:10 AM
Links to this post:
Create a Link
<< Home