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Two Shall Become One

February 21, 2012 By Kathryn Leave a Comment

One of the few times in our lives that two things combine to become one is when we get married. The preacher says that we become one, for richer, for poorer, for better or for worse. You won’t have a great relationship until you can communicate and agree about money. Larry Burkett, noted financial author, says, “Money is either the best or the worst area of communication in our marriages.”

Communication before Marriage

One of the most important things to do prior to marriage is to seek pre-martial counseling. Find a good counselor or pastor and sit down and find out about your future spouse. Building strong lines of communication before you get married is essential to a good marriage and a strong financial future.

Money fights are one of the leading causes of divorce in America today, so make sure that you can agree on your spending and savings goals before you tie the knot.

Combining Income

Do not combine your income before you getting married. Once you say “I do!”, then it is time to combine your finances. Starting out your marriage with a spending plan and a budget to reach your goals will get your marriage off to a strong start. Do you need to pay off debt, student loans or the wedding reception? Set a budget and stick with it. Doing so will also help you save for a home and your future.

Agree on Your Goals

In order to be able to focus your energy and your financial management to reach your goals, you first need to know where you are going and why you want to get there. Sit down together and dream about your financial future. Do you want to own a home, send your future kids to college or retire early and travel? All of these things are within reach if you set goals early, learn to save and have the power of compound interest and time on your side. To calculate your goals with compound interest click here.

Gerken Financial Coaching Can Help

We have a pre-marital coaching package that can help you and your fiancée get on the same page with your finances. We can help you to set goals, to create a plan for eliminating debt, and to save for your future purchases. Most of all we can walk you through the process of learning to talk about money.

Whether you seek help from a professional to learn to communicate effectively with money or you work on communication with your partner, in order to be pointed in the right direction you must be in agreement on where, how and why you are spending and saving money for your future.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community through classes and speaking in the greater Seattle area. Their coaching services are uniquely tailored to each client.

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A Plan That Works

February 14, 2012 By Kathryn Leave a Comment

The downturn in our economy over the last few years has amplified the personal finance situations of the people of this nation. It has divided us into two categories: the stable and the unstable. Some American households have upwards of 9 credit cards according to a 2010 report.  Which category do you feel that you fall into?

Is Your Money Management Plan Working?

In the lasts several years our national economy has made it obviously easy to tell if we are living with a money plan that can withstand the ups and downs of a weak economy. If you have been able to sail smoothly through theses turbulent waters, then you probably have a money management plan that works well. If you have had to resort to credit cards and stress while the economy is rocky, you may want to consider changing your plan.

Emergency Fund is The Key to Peace

Having an emergency fund will help relieve the stress of unexpected events. Everyone should have an emergency savings. Even though these events seem unexpected, we know that it is only a matter of time before one will occur in our lives. In the 7 steps to financial health, we recommend a starting fund of $1,000. This is large enough to cover most emergencies, but small enough that you have some urgency to make it larger. Paying off debts is the next step. The emergency fund will help you to keep from incurring more debt while you are working your way to clean up debt that you already have.

Debt Elimination Takes Change!

The habits to change are those that started with your unstable financial plan.  That plan, which may have been no plan at all, is the first thing you will need to break. This is a group effort. It will not work unless every adult in your home is willing to change. That change should start with you! Whether your spending is the main problem or not, you can lead by example. You can work with your spouse to establish a budget and live on less than you make. Save for emergencies and pay off your debt. This is a huge step in relieving your stress over money and fights over money. It is the first step to put you into the “Stable” side of the nation.

Budgeting Works!

Telling every dollar where it is going to go during the month, before the month begins, is the key to getting ahead and paying off debt. controlling your money instead of it controlling you will lead you to get pointed in the right direction for financial stability. Stick with your budget corner stones first, before you pay any debts, so that you can stay in a strong position to fight your way through the time it takes to become debt free. You can do it. Stay strong, keep motivated and be successful!

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

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Tricks and Tips: Valentine’s Love

February 11, 2012 By Kathryn Leave a Comment

February 14th looms in the near future. If you are in a relationship, the pressure is on to come up with a suitable nod to this retail holiday. Retail holidays can be a stressful time of peer pressure to spend money that you don’t have to impress someone close to you. My husband, Tim and I rarely celebrate Valentine’s Day because we show our love every way by the way we do things for each other. I know, however, most women expect a little or a lot of Valentine’s Day love in the form of a gift. So here are my suggestions.

No Cost Tips

If you are trying to get out of debt and stay on your budget, talk to your spouse first. Decide together if you will be exchanging gifts this year. You could rename your gifting to pay down a debt instead. If this is not an option consider a few of these:

  • Get out for a walk or drive to see the sunset.
  • Have a picnic dinner – at your house in the living room. (Don’t forget the music)
  • Make some “gift certificates” for some of the chores on her list.
  • Go downtown and “window shop” together

Low Cost Tips

  • Splurge a little at the grocery store and cook a “nice” meal.
  • Purchase “budget” flowers like carnations, which, by the way, last longer than roses.
  • A small box of nice chocolate is better than a huge box of cheap chocolate
  • For some more suggestions see this article

Remember

If you are getting out of debt, it truly is the thought that counts. Making this committment to each other to build wealth and get pointed in the right direction is the ultimate sacrifice and shows your love everyday of the year.

In later years, when you have built wealth, if you want to fly to Paris for Valentine’s Day and pay cash to do so, you will be able to. That is real financial freedom in action.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

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Name Your Income Tax Refund

February 7, 2012 By Kathryn Leave a Comment

Many people have already filed their Federal Income Tax Return for 2011. Many more are in the process of filing. Are you getting a refund this year? If you are, you can track your refund here . If you are getting a large refund you should consider adjusting your withholding. You could be taking more money home each month to add to your budget rather than letting the government hold onto it without interest until April of next year.

For budgeting purposes, a tax refund should be considered as extra income or irregular income. Other funds that fall into this category are bonuses, stock sales, and even raises at work. If you can maintain your current level of spending, assuming that you are not over spending your income, then a raise could go toward debt, emergency savings or retirement depending on which step you are on. It is very important to name the extra money that comes into your life, before you get it. Make a list of spending and savings priorities that you would like to do, but don’t have the money for. List them in priority order. Then when you receive extra money, you know exactly where that money should be spent. If you don’t name it, your windfall will blow away on who knows what.

Take a few minutes, make a list and get pointed in the right direction to put you in a position of strength when you receive extra income.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

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168 Hours- What Are You Going To Do With It?

February 4, 2012 By Kathryn Leave a Comment

While visiting the library today, I realized, again, that I love being around books and to do research. Some day, I would like to make the time to either volunteer at the library or possibly research and write a book. So what is stopping me from doing that now? It is not a top priority for my time. We have 168 hours in a week. Time is a limited commodity and in order to keep our lives under control we must prioritize what we do.

Benefits of Prioritizing your Time:

  1. You can get more done if you have a plan for your day or week.
  2. You can attend to the most important aspects of your life first.
  3. Managed time becomes more time, just as managed money (Budget) makes you feel as if you got a raise.

So many times during coaching sessions or classes I hear that people feel that they do not have enough time to write a budget, make a weekly menu for the family or even balance their check books! This is a grave mistake. Making these things a priority will save money over the long-term so that they can get out of debt and save for their future. Here is a great guide with some time-saving tips for the home. If we don’t save for our future, who else is going to do it for us? You must make this a priority for your time each month. If you can say no to time stealers like television, you will have more time to get pointed in the right direction and make a positive change in your life and personal finances.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle Area.

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Income Crisis

January 31, 2012 By Kathryn Leave a Comment

Did you find that when you put your income on a budget and spent it on paper before the month began that you had more expenses than income?

Let’s look at some ways to reduce expenses or raise your income.

Part-time or overtime work: It might be that until you get your debts paid off that you will need to take an extra job or work overtime in your current job to make ends meet. This will be a temporary situation if you concentrate on paying off debt as quickly as possible.

Sell Stuff: Is there anything around the home that could be sold to pay on debt or to pay extra on debt. How about your car? If  your vehicles, boats, etc. all add up to payments of more than half your take home pay then you may need to sell something.

Reduce Expenses: While you can’t reduce fixed expenses like your insurance, you can look at ways to make payments lower or at least more predictable. Does your utilities company have a monthly budget plan? Do you really need the cable or internet services that you currently have or could they be reduced. Do you have a land-line and a cell phone? Do you need both? Look at your expenses and ask yourself if you could do without, or reduce them some how. You may even try to et your interest payments reduced, if you have credit card debt.

It all comes down to paying attention to what you are spending and trying to find ways to increase your income, while paying off debt, so that you will get pointed in the right direction to become debt-free! In this way your income will work for you, and not the other way around.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

Filed Under: Budgeting, Crisis Management, Financial Planning and Priorities, Our Blog, Personal Finance Tagged With: , , , , , ,

The Basic Budget

January 28, 2012 By Kathryn Leave a Comment

Last time, we covered the general rules of conduct for budgeting. Now, let’s move on to the nuts and bolts of getting numbers on paper. You might have downloaded the budget form from last week. This will help you to start thinking about and organizing your basic expenses. Once you have a good ballpark of where your money is going, it is time to get into some more detailed planning.

Spend the money on paper or a spread-sheet, before the month begins. As I write this, we are heading into February, so let’s concentrate on February’s budget.

Step One
Write the amount of your take-home pay at the top of the paper.

Step Two
Prioritize your expenses for the month. Food, shelter, utilities, basic transportation and savings should be at the top of the list.

Step Three
Estimate how much you will spend for the month on each expense. You can look at your quick budget from last week to help you out. Then spend your income as you work your way down the priorities. When your income runs out, you are done spending.

So, what happens if you still have expenses left? Well, either those items won’t get paid this month or you need to go back and adjust non-fixed expenses to free up more money to allocate to the other expenses. At the end it should read zero, which means that you have allocated all of your income into categories of giving, saving and spending.

This is not an easy process. You may need to go back and adjust your numbers on paper during the month so that you come out even. As the months progress you will see that you are learning to live within your means and begin getting pointed in the right direction for financial success in 2012.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

Filed Under: Budgeting, Financial Planning and Priorities, Our Blog, Personal Finance Tagged With: , , , ,

It Is Your Choice

January 17, 2012 By Kathryn Leave a Comment

As financial coaches, we see more people who are financially strained because of parental-guilt and trying to “keep up with the Joneses.” Financially speaking, those who try to maintain a lifestyle like their neighbors, while they are in debt, are shooting themselves in the foot making matters worse by persisting with these kinds of decisions. Trying to keep up socially, while getting out if debt is almost impossible. Making the choice to cut luxury spending and focus on your debt is the hardest part of the process.

Here are two examples. Expensive pre-school for toddlers. These types of “pre-schools” can cost upwards of $600 per week. They teach the very young how to identify shapes, colors, numbers etc. They are glorified daycare centers. But parental guilt tells us that your child must be educated before kindergarten begins, so that they are not behind when they start school. This is a fallacy but it easily ensnares guilty parents. You can teach your child all these things, just like your parent and grandparents before you did. If you are in debt, there are many other things that this money could be going towards to get you to a less stressful financial environment. As an added bonus, your child might actually learn something positive about life and money as they live through this process (and they will live through it). Once out of debt choosing a luxury like this might make sense for your child. But this is what it is, a luxury, not a necessity or need.

The second example is select sports for the late-gradeschooler through highschool. Junior might be a good baseball player on his little league team, but will he be a professional? Is the opportunity cost of your time and money worth bankrupting yourself? Sports, especially select sports, is a luxury. If you are in debt, it is hard to justify this expense. Recreational leagues or casual games are still good. Remember that the organizers of all these tournaments and camps are making money from these events. They are not running them out of the goodness of their hearts. The choice is, “Can you afford to pay for it, while trying to get out for debt?”

These are but two examples of the many that we come across in day-to-day life. The choices made, day in and day out, with where limited resources are directed have a compound impact on where you go fiscally. If you are out of debt and have a 3 month emergency fund, go ahead and choose a luxury or two, but you will bog yourself and your family in the quagmire of debt if you try to keep up with the kid’s friends and your peers when you don’t have that extra money to spend. The choice is yours. Get pointed in the right direction today.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

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We Can Empower You!

January 14, 2012 By Kathryn Leave a Comment

In our last post Are you Motivated, we discussed how your wiring influences how you achieve a goal or set a plan of action. Today, I will talk further about the Extrinsic and Intrinsic factors in your life.

Intrinsic

If your motivation is internal to get a task completed or a goal accomplished, you may think that you do not need an accountability partner or other external touch points, but you do. At a minimum, you need to write your goals. Studies have shown that those who write down their goals are much more likely to achieve them. This is an external touch point for you to refer back to. Having an accountability partner to share with is also a good tool. Even if you don’t need them to motivate you, many times having them as a sounding board will help you to narrow your focus or become more empowered to continue.

Extrinsic

Those of you who need external support to accomplish your goals still need to write them down. Set some milestones and give yourself a reward for reaching each step. An accountability partner who has a cheer leader personality or who is very encouraging is the key to reaching your goal. A coach may also be a good option for you.  Coaches empower people by discussing the desired outcomes without dictating how to achieve it. They guide you, but do not accomplish the task for you. This must come from you.

If you understand what motivates you and become empowered to work consistently towards your goals, you will be pointed in the right direction and be on the path to success for 2012.

This post celebrates our 100th post for Gerken Financial Coaching! Thanks for reading!

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

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A Year With A View

January 3, 2012 By Kathryn Leave a Comment

Now that we are officially into 2012, it is time to stop and have the “talk” with your spouse or accountability partner. This is your uninterrupted time to dream! Make it fun, go to a park or a cafe and spend some quality time discussing how 2012 looks to you. Is it good? Could it be better? What are your dreams for the new year?

Write them down!

Dreams turn into goals which then become your yearly plan. If you don’t write them down, you will not know where you are going. A map is essential. You can always change your goals during the year, but you must start someplace. You probably already have some events or plans in mind. Maybe there is a family reunion this summer or a special birthday celebration. Knowing when, where and how much they will cost will help you to plan and save for the event prior to the time.

Prioritize!

Once you have your dream sheet, list them in priority order. This way you can make an action plan with goals attached to achieve your dreams. Once the goals are in place they should be put on a master calendar and refered to each month as you plan your spending and savings. If you are not a spreadsheet kind of person, then make a visual map with pictures of the dreams and goals for the year. Post it on your refrigerator to remind you of what is important.

Why plan?

If you don’t plan your year, it will slip by in the blink of an eye and you will be in the same place that you are now. Some of your dreams may take years to be fulfilled, but if they are not written down, the next crisis or new fad may lure you away from what is important to you. There is a proverb which says ”Those who fail to plan, plan to fail.” This year get pointed in the right direction and plan to succeed!

What are you doing to plan for 2012?

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

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