5 ways to save on back-to-school clothes

  1. Check the closet before shopping  and make a list so you don’t duplicate what you already have
  2. Take advantage of tax free shopping: go to www.taxadmin.org and find out if your state has a “Tax Holiday” on back-to-school shopping
  3. Take advantage of retailer’s special coupons
    • Sign up for store’s email list
    • Check out retailer’s Twitter feed for coupons and deals
  4. Use your smart phone to comparison shop for school clothes in seconds

  5. Get your kid’s involved and figure out what your kids have to have and what they want to have. Make a list create a budget and then don’t stray from the plan when it comes time to hit the stores!

Live Rich,
David Bach

 

Five Steps to Getting a Bigger Raise

Short of winning the lottery, nothing can change your finances as fast as getting a raise. And sometimes changing your life is as simple as changing your mind about what’s possible. Ask a new question, take a new approach, and you may very well get a new result.

So as summer comes to a close, ask yourself this: What would it take for me to get a bigger raise this year?

Not everyone has control over getting a raise, of course — government workers and union- or contract-based employees with fixed salaries, for example. Everyone else, though, should keep reading.

Step 1: Brand Yourself
Nothing determines your value in the marketplace more than how you position yourself and how you come across to your boss. Ask yourself these questions and answer them honestly:

  • As an employee, do I stand out or blend in?
  • Do I come to work early, on time, or late?
  • Do I have a written plan for my career that describes how I add value at work, or do I wing it?
  • Do I have a relationship with the person who determines whether I should get a raise, or am I distant – or worse, actively avoidant?
  • Do I really care about the company I work for and the job I do, or is it just a paycheck?
  • Do I take the initiative to spend my own time, money, or effort learning new job skills so I can add greater value to my company?
  • Do I have a vision of where I want to be with my employer in three to five years?
  • Does my employer know I have such a vision?

In order for your employer to recognize your value, they have to perceive your value. And they can’t perceive you as a high-value brand if you don’t perceive it — and project it — yourself.

Step 2: Write Your Action Plan
Write the following on a piece of paper: your name, your current annual salary, how much of a raise you want, the percentage of your current salary it represents, your new salary after the raise, and your deadline for getting it.

Don’t just pull a new salary figure out of the air. Remember — you’re not going to be given a raise; you’re going to earn one by increasing your value to the organization. To get a sense for what pay ranges are for jobs like yours, and for targeted salary advice, check the following web sites:

  • Salary.com: One of the most widely recognized sources of information for employee pay levels.
  • PayScale: Provides salary profiles for many jobs (choose “Employee” and click “Select”).
  • Glassdoor.com: See company salaries, reviews, and inside connections for any company

Use the salary ranges and advice you find on these sites as guides, not as absolutes. If you find that you’re currently earning at or below the bottom of the range, you may have lots of room to negotiate. If you’re near or above the top of the range, you can still ask for more — you’ll just have to work harder to demonstrate your exceptional value.

Step 3: Put Yourself in Your Boss’ Shoes
Now it’s time to determine how you’ll add more value to your work. Asking for a raise can backfire if you aren’t willing or able to deliver the goods. A sound way to determine your perceived value is to imagine how your boss would respond if you asked what I call the Seven Magic Questions:

  1. What is the most important thing I do for you?
  2. What do you think I’m uniquely talented at?
  3. What are you afraid to tell me about my job or how I do it?
  4. How could I add more value to my job?
  5. How could I be your “dream team” employee?
  6. Knowing all you’ve learned about me since I’ve worked here, would you hire me again today?
  7. What would it take for me to get a raise in the next six months?

If you can’t answer questions one through six easily, then it’s time to meet informally with your boss. When you do, be honest about your goal. Start by saying, “I want to earn more money at work and I’m committed to adding enormous value to you. I want to become clearer on how I can help you better reach your goals and the company’s goals.” Then ask the Seven Magic Questions

Step 4: Focus on the 80/20 Rule
You may be familiar with the idea that in sales and commerce, 80 percent of your revenue tends to come from 20 percent of your efforts. Think about your own 80/20 rule: What is it that you do with 20 percent of your time and effort at work that creates 80 percent of your value? Once you’ve identified these high-value tasks, write down your plan for doing more of them.

Identify and maximize your most productive activities, and minimize the busywork that takes up most of your time but produces little of value. Then put your plan into action.

Step 5: Ask for Your Raise
After you’ve put your plan into action — and, just as important, demonstrated its results — it’s time to ask for a raise. Make an appointment with your boss, look him or her in the eye, and share what you’ve done to increase your value and how you plan to add even more value in the future. Then share the salary you want.

It may seem scary, but what’s the worst that can happen? Your boss will say no. Even then, you’ve brought to his or her attention that you’re increasing your value as an employee, and that you expect to be compensated appropriately. It also allows you to ask magic question number seven directly: “What would it take for me to get a raise in the next six months?”

What It Costs to Replace You
A final note — it can cost an employer up to a year of your salary to replace you. Depending on the level of training your company has invested in you, hiring and training a “new you” could cost a fortune, and employers know this.

Compared to your replacement costs, the cost of retaining a highly productive, highly motivated employee with a reasonable if substantial raise is well worthwhile.

I hope this information can help you get the raise you want and you deserve.

Live Rich,

David Bach

Give Yourself a Break Already!

Of all the things people say to me after they’ve read my books, seen me on television, or heard me give a speech, there is one comment I hear more than all the others put together:

“If only I had started saving when I was younger.”

SOMETIMES LIFE THROWS YOU A CURVE BALL. While some of you may blame yourselves for not having started saving or investing earlier, I also know that many of you are starting late not because you were shortsighted or lazy or irresponsible, but because life threw you a curve ball. I hear from people all the time who are starting late because of divorce, death, illness, disability, bankruptcy, poor career choices, lack of education—and on and on. Either way, it’s time to cut to the chase. What’s done is done. You can’t go back and fix the past.

THE PAST IS OVER. Oh, you say, if only I knew then what I know now, my whole life would be different. Of course it would. But guess what—you didn’t know. Or if you did, you didn’t do what you knew you needed to be doing.

So it’s done. Finished. Settled.
Sometimes life is unfair.
But that’s okay.
You can move on.
You can get over it.

Stop asking yourself why you didn’t do what you should have done. The real question is: what are you going to do about it now?

NO MORE SAYING, “IF ONLY”! For a long time now, you’ve been beating yourself up about what you haven’t done or should have done. Some of you have been beating yourselves up for your mistakes for decades. It’s unreal how tough we can be on ourselves.

We all do this. I’m no exception. I can’t tell you how many times I’ve said to myself, “Oh, if only I hadn’t sold that house in Danville, California.” That house was the first house I ever owned. I bought it for $220,000 and sold it nearly five years later for $225,000. (Not exactly a Donald Trump real estate flip.) Today, that house is worth more than $700,000.

If only…

I could go on and on. But none of it matters. What matters is that with all the amazing mistakes I’ve made over the years, I still managed to become a multimillionaire. That’s because rather than looking back, I focus on going forward. And here’s the bottom line: if you are not yet as rich as you want to be, stop focusing on what you haven’t done and start focusing on what you want to do.

YOU CAN’T COULDA-WOULDA-SHOULDA YOURSELF TO WEALTH OR HAPPINESS. You know what I’m talking about. So stop “shoulda-ing” all over yourself. It’s messy and makes you unhappy. I know. I’ve been there.

Instead, decide today—right now—to let it go. We all make mistakes. I’ve made them. You’ve made them. Your parents and friends have made them. We are all human. Mistakes hurt. But let’s not waste one more ounce of your energy, spirit, or time thinking about them, because all that will accomplish is hold you back.

Keep this in mind: The past will continue to be your future if you drag it along with you!

THE FASTEST WAY TO LET IT GO. Here’s an exercise I recommend you do. If you really want to get over something you regret, the fastest way to do it is to acknowledge the regret—and then burn it up. Literally.

Here’s what you do.  Get yourself a blank sheet of paper and write down a list of as many of your personal if only’s as you can think of.

If only I had saved more money.
If only I hadn’t quit that job.
If only I hadn’t taken the job I have.
If only I’d had kids.
If only I’d not had kids
If only I had bet on the Yankees.
If only I hadn’t bet on the Red Sox.

I’m serious about this. Really go to town with it. Free flow. Let it all hang out. Be honest with yourself. You’ve been beating yourself up over this stuff for years, so you might as well as get it down on paper.

When you’re finished making your list…set fire to it! I’m serious. Light a match and BURN IT UP. Let all those damn if only’s turn into ashes.

Have a “Goodbye If Only’s party. Invite a friend over and do it together. Just make sure you burn your if only’s somewhere safe. We don’t want you setting fire to your house. If burning them seems too extreme, then just tear up your if only’s into little pieces and toss them in the garbage can.

YOU REALLY NEED TO GIVE YOURSELF A BREAK. The one thing I’ve learned from coaching so many people on their lives and money is that we are just too brutal on ourselves. And what do we do when we actually make some progress? We beat ourselves up for not doing everything perfectly.

It’s a fact that no one will ever be as tough on you as you are on yourself. So give yourself a break. Really. Please leave a comment below letting me know how you feel once you’ve freed yourself of your if onlys.

AND REMEMBER- ITS ONLY TOO LATE FOR YOU IF YOU GIVE UP!

Live Rich,
David Bach

 

 

 

 

Feel like a millionaire starting today

The one incredible universal truth that has stood the test of time is that the more you give the more you receive.

This notion—that the more we give back to others, the more comes back to us—is not simply a religious doctrine; it is virtually a law of nature. If you are looking to attract more wealth and happiness into your life, the fastest way I know how is to give more.

HAVING IT ALL…THROUGH TITHING
What exactly is tithing?
Tithing is the proactive practice of giving back. It is a spiritual principle common to many traditions that says you should give back a portion of what you receive, that those blessed with abundance have a duty to help others through gifts of kindness, time, ideas, and money. What is amazing about tithing is that when you tithe you get a feeling we often associate with acquiring material things. You simply feel great.

HOW TO TITHE
Should you tithe? Ultimately, it’s a personal decision. Still, I’d like to suggest that if you are not doing it now, you give it a try. Take a percentage of your income and start donating it to some worthy cause. You could donate the 10% traditionally associated with tithing, you could donate more, or you could donate less. As I said, tithing is personal; it’s not about percentages but about the love of giving. What’s important is simply that you get started.

YOUR 5 STEP PLAN FOR TITHING:

STEP #1: COMMIT TO TITHING. For tithing to work, it needs to be a consistent commitment. It’s just the same as Pay Yourself First. If you donate a set percentage of your income every time you get paid, you will compile an impressive record of contributions. If you wait until the end of the year to see what is “left over,” then you will wind up donating less—maybe even nothing. Select a percentage that feels right to you and that you know you can manage.  Once you’ve done that, make a commitment in writing to donating this amount on an ongoing basis.

GIVING BACK A PERCENTAGE OF YOUR TIME
People ask me, “What about giving my time to charities? Does donating my time count?”  Of course it does.  In fact, donating your time can often be more useful than donating your money. There are tons of charities that need helping hands far more desperately than they need additional dollars. And from your point of view, donating your time can be incredibly meaningful.

STEP #2: AUTOMATE IT. Whatever amount you decide to tithe, arrange to have it automatically transferred out of your checking account on a regular basis. Doing this is easier than ever. Most organized charities will be happy to help you arrange an automatic transfer schedule (where they automatically debit your checking account on a regular basis), and many are set up to do it online in just a few minutes.  If you are not comfortable having your bank account debited by a charity, you can probably set up an automatic transfer through your bank’s online bill payment system.

STEP #3: RESEARCH THE CHARITY BEFORE YOU GIVE. Where you donate your money is entirely up to you. The most important advice I can offer is to make sure that the charity to which you are giving your hard-earned dollars really uses the funds it collects to help the people or causes it is supposed to be helping. Here is a list of organizations that can help you learn more about potential recipients.

STEP #4: KEEP TRACK OF YOUR DEDUCTIBLE CONTRIBUTIONS. The U.S. government has long allowed taxpayers to deduct contributions to qualified charities.  Depending on how much you give, you can offset as much as 50% of your income in this way. In order for a donation to be deductible, the organization must formally apply for and be granted tax-exempt status under section 501(c)(3) of the tax code. You can verify this for any particular organization by visiting the IRS website. For contributions of less than $250, the IRS requires you to keep some sort of written record, such as a cancelled check, a letter or receipt from the recipient, or a bank or credit card statement that verifies the where and when of the donation. If you give more than $250, the IRS wants your proof of donation filed with your tax returns. 

STEP #5: FIND OUT ABOUT DONOR ADVISED MUTUAL FUNDS. Donor Advised or Charity Funds allow people to invest their money for a charity’s benefit later but get a tax deduction now. Benefits of these funds …

  1. Instant Tax Deduction.
  2. More Money for Charities.
  3. Less Pressure. These funds are great for people who know they want to give (and would like the resulting tax deduction now) but don’t yet know who they want to give to. You simply put whatever amount you want in the fund, take the deduction, and then make up your mind at your leisure about what the right charity is for you.
  4. Create a Legacy. As your wealth you will increasingly be in a position to make a lasting difference in the world.  Donor funds allow you to build a real charitable base for your family, since more than one person can contribute to the fund.

Here are some established donor funds worth considering – the minimum initial investment in each is $5,000 (except Vanguard, with a minimum $25,000 contribution).

  1. Fidelity The Giving Account
  2. Schwab Charitable Fund
  3. The T. Rowe Price Program For Charitable Giving
  4. Vanguard Charitable’s donor-advised fund

WHY THE ‘HAVE MORES’ HAVE MORE

Over the years, I’ve seen firsthand that the “Have Mores” give more.  I’ve also seen that the fastest way to feel rich is to give more—and that those who give more become rich faster.  I don’t think it’s a coincidence. Research shows definitively that people who give of their time and money to help others live longer, happier, and wealthier lives. What more could you ask for?

Live Rich,
David Bach

Life Insurance: Are you and your family covered?

I recently received a powerful story from a woman by the name of Stephanie. Her and her young family were trying to get on track financially and decided to read Smart Couples Finish Rich. In a short period of time, her husband was diagnosed with Lou Gehrig’s disease. She told me that his health failed at a considerable rate and he was immobile only 4 months after the onset. Two week’s after he passed away, she wrote to me an email thanking me for the advice to purchase life insurance. She said that although she was devastated, she was “financially ok” and could find a little peace knowing that her and her two boys could still live comfortably.

My entire team and I were so touched by Stephanie’s story and it reminded all of us why we do what we do: to help teach and inspire others to be smarter with their money for a more secure and rich future. And its because of her story that I am writing this blog post for all of you today; to make you stop and think… if something like this happened to you would you and your family be covered? Would you be able to find some peace?

When I was a financial adviser, I reviewed hundreds of my client’s insurance policies and for the most part what I have seen firsthand is that most people and most families are under insured.

The key to life insurance is figuring out if you need it, how much you need and the smartest way to buy it. Let’s get started…

MAKE SURE YOU REALLY NEED IT                       

In general, you don’t need life insurance if….

  • You are young, single, and don’t have any dependents.
  • You are not concerned about leaving money (an estate) to anyone.
  • You are not planning to have children and you don’t know if you will ever get married.

You do need life insurance if…

  • You have dependents.
  • You are married, owe a lot of money, and want to protect your spouse.
  • You have people or organizations you want to leave money to.
  • You have completely maxed out your retirement contributions and are looking for another tax-deferred way to save money.
  • You have a large estate and want to use insurance to reduce potential estate taxes.

IF YOU NEED IT, BE SURE TO SHOP AROUND:

THE 3 MAIN FACTORS TO CONSIDER WHEN YOURE DECIDING WHICH INSURER TO BUY YOUR POLICY FROM ARE:

1.  How stable is the company? To get an idea of how strong a company’s finances are and whether you can count on it to be around for the long haul, check with one of these firms that rate life insurers.

2. How well does the company take care of it’s policyholders? National Association of Insurance Commissioners maintains an online Consumer Information Source at www.naic.org/cis/, where you can look up the complaint record of virtually any insurance company in the country. 

3. How cheap are their rates? Once you’ve satisfied yourself on these two counts, you should look for the best price. The most efficient way to do this is through an online broker such as.


MAKE SURE TO BUY THE RIGHT AMOUNT

Life insurance is all about protecting your family against financial hardship in the event you pass away. So you need to base the size of your policy on one of two things: either what your potential earnings would have been if you hadn’t died or how much money your family will need in order to stay afloat after you’re gone.

The Life and Health Insurance Foundation for Education (LIFE), an industry-supported educational group, has two terrific calculators on its website that can help you figure this out: a “Human Life Value” calculator “Human Life Value” , which estimates what your lost earnings would be worth, and a “Life Insurance Needs” calculator “Life Insurance Needs”, which computes how much money your family is likely to need.

DON’T FORGET YOUR COMPANY BENEFITS

Many employers offer free life insurance coverage that can be worth as much if not more than your annual salary. So when you’re figuring how much insurance you need, don’t forget to factor in your workplace benefits. If you are young and healthy, however, do a comparison between your employer’s group rate and what it would cost you for an individual policy. Because a group policy covers both healthy and unhealthy workers alike, your company’s policy could end up being more expensive than an individual policy for a healthy person in the open market.

MAKE SURE YOUR EMPLOYER PLAN IS “PORTABLE”

The most important advice I can give you regarding a group employer policy is to make sure the plan is portable.  This means should you leave your employer, you can take the insurance policy with you (and fund it yourself).  The advantage is that you won’t have to re-qualify for the policy and you should be able to keep the group rate that you were paying—which can save you a ton of money.


YOUR LIFE INSURANCE ACTION STEPS

  • Check with your human resources department at work to see how much life insurance you currently have and what the premium is costing you, if anything.
  • Calculate how much money your dependents will need to pay your debts and replace our income after you die.
  • Request quotes online or work through a recommended agent.
  • Check a provider’s rating and customer service record.
  • Don’t forget to name your beneficiaries, and keep them up to date.
  • If you have a term policy, call your provider to request a lower premium that reflects today’s lower rates.

Be a budget savvy bride and groom

The average American wedding costs $27,800.00 and the days of “dad” footing the entire bill are numbered. According to a recent study by The Wedding Report, in 2011 83.2% of U.S. couples made a contribution or paid the entire cost of their wedding, and only 51.5% of parents contributed to the wedding.  The more people contributing to your wedding finances the more confusing the budgeting and bookkeeping will end up being.

Here are my TOP 2 wedding budgeting tips to help all parties involved communicate effectively and stay on track!

Tip #1: Determine your budget

Plan a money date and figure out how much money you and your fiancé can spend.

  • Calculate how much money (if any) you have saved, and how much of that you are willing to use if you stick to a rigid saving plan.

Schedule a sit down meeting with all parties involved, and be mindful of economic differences.

  • Meet with everyone who is contributing to the cost of your wedding, to talk about the expenses.
  • Two separate meetings might be a good idea if those contributing come from different economic backgrounds in order to avoid potentially awkward and uncomfortable moments.

Pick your priorities.

  • Try using an online budgeter (like the one on TheKnot.com) to breakdown your budget item by item.
  • Decide what is most important to you and then dedicate your budget accordingly.

Be upfront and honest with your vendors.

  • Always approach your vendors with the budget you have allocated the service they will be providing you.
  • Have them create a proposal for you within that budget.
  • You might want to account 10% of your budget for extras and upgrades. 

Tip #2: Manage your funds

Open a bank account devoted specifically to your wedding so you can track your spending.

  • Make sure you don’t agree to frivolous upgrades without recognizing the economic impact.

Devise a secondary savings plan.

  • After deciding on a wedding budget, and figuring out how much of your savings you would like to contribute to this budget, open your “Wedding Bank Account.”
  • Once you have transferred money into this account, create an additional savings plan.
  • Creating an automatic monthly transfer from your checking account to your “wedding account” will help to manage the wedding budget and spending.

Reap great rewards: Sign up for a credit card with a rewards program.

  • Make your wedding costs work for you! Sign up for a new credit card with a rewards program, allowing you to earn points each time you spend.
  • You know you are going to be spending — make it work to your advantage.
  • Make sure you have the money to pay of your card in FULL each month!

The Bridal Budget Breakdown:

  • Reception: 50%
  • Attire: 10%
  • Photo and Video: 10%
  • Flowers and Décor: 10%
  • Music & Entertainment: 10%
  • Invitations & Gifts: 10%

When it comes to weddings and money, (especially other people’s money) it’s important to remember to communicate and take into account each party’s economic differences and needs. Hope these tips can help you or someone you know plan ahead before walking down the aisle.

Live Rich,

David Bach

 

NBC’s Today Show – Money 911 – July 11, 2012

If you missed me on NBC’s Today Show – Money 911 this morning make sure to watch the segment now! This week we discussed if debt consolidation will hurt your credit score if the loan’s in your partner’s name, refinancing a mortgage on a condo when there is a lawsuit involving the condo association, and safe online survey websites to make some extra summer cash.

Hope our answers helped you!

Live Rich,
David Bach

Life, Liberty and YOUR Pursuit of Happiness

In the spirit of the Independence Day, I want you to take some time to reflect on the importance of “Life, Liberty and the Pursuit of Happiness” not only when it comes to our country, but when it comes to your personal life.

I believe each of us has the power to discover our purpose and become joyful in the pursuit of that purpose. This journey may not be easy however; if you look back in history you’ll realize that nothing important and meaningful ever is.

To help guide you in your pursuit of happiness, I want to introduce you to what I call the “LIVE RICH FACTOR”. I call it this because those who find the purpose that leads them to happiness are the luckiest people in the world and are in fact, the ones who are truly living richly.

There are four basic principles involved in creating your LIVE RICH Factor:

PRINCIPLE ONE | BECOME CONNECTED WITH YOUR TRUTH.
The hardest thing to do is to be honest with yourself. We lie more to ourselves than to anyone else. You must tell yourself the truth about whether or not you are truly happy. If you are not happy, you must admit it to yourself. To really be connected to your truth, you must tell yourself and the world the truth. You must have what I call “truth congruence”— which means that who you are on the inside matches who you show to the world on the outside.

PRINCIPLE TWO | STOP JUDGING YOURSELF.
You are your own harshest critic. Many people talk to themselves in a way they would never accept from a stranger, a friend, or a loved one. If this describes you, try stopping the negative conversations you have with yourself immediately.

Try this, for one week, simply commit to just saying “Stop it!” when you think a negative thought about yourself. If you are in the habit of saying negative things to yourself, you will find this is one of the most difficult exercises you will ever do. Carry a pad with you at all times and make a mark each time you catch yourself “thinking negative.” You’ll find that as the days go on your negative thinking can quickly be reduced. The motivational expert Zig Ziglar uses a phrase I love about people having “stinking thinking.” Your job is to cut out that stinking thinking.

PRINCIPLE THREE | STOP JUDGING OTHERS.
It’s hard to be joyful when you’re always judging others. In fact, it’s close to impossible. Judging others creates a huge amount of stress in our lives. It affects our marriages and our relationships with our kids as well as the way we relate to friends, coworkers, and society in general.

We are not here to judge one another. The next time you find yourself upset at someone or some situation, stop yourself and ask, “Are you judging?” Judging others is often an unconscious habit. But it’s a habit that can be changed the moment you decide to stop doing it and just this little change can make a huge difference.

PRINCIPLE FOUR |PURSUE FUN WITH A VENGEANCE.
It’s okay to pursue fun. It’s what children do. My greatest joy these days is the simple pleasure of going to the park with my sons, Jack and James. The park is free; the time I spend with them in the park is priceless.

Why do we stop pursuing fun as we get older? Fun shouldn’t be squeezed into a few weeks of vacation each year. It shouldn’t be squeezed into the last chapter of your life when you will supposedly have enough money to “retire.” Fun deserves to be a part of your life now. Most of the things in life that are fun can be done for little or no money. But fun doesn’t just happen. You must make having it a priority in your life or it will go missing. And life is too short to not have fun.

This 4th of July I want you to take a moment and think about your pursuit of happiness and then go HAVE FUN! Report back to me by commenting below or on my Facebook page about what makes your life RICH!

Live Rich,

David Bach