Tuesday, January 28, 2014

To Hire or Not to Hire a Tax Professional?

Ah, January. The beginning of the month is all about starting new and fresh…we’re all full of hope… ready to make our world a better place...Then the tax forms start showing up and reality hits us square between the eyes.


I do my own taxes, because overall, I don’t mind doing them…I may even enjoy it…I always learn something…and I always feel a great sense of accomplishment when they’re done. I'll admit that every year, there’s at least one moment where I’m reading through the tax codes about something and I want to pull out all of my hair and pay someone to do my taxes for me. But every year, I make it through and the numbers work out in my favor.

Well, until last year, when we had to pay additional taxes for the first time. Which of course made me think that my husband and I are finally at a point in our lives when it’s time to pay a professional to do our taxes for us.

There are easy tax years, when I know that I can ignore my taxes till April 1st and get them done in one night (those years aren’t as common anymore). Then there are the more complicated years, when I need to start in January because there’s a new and exciting taxable something or other in our lives that I need to deal with.

This year is going to be one of the complicated years because I need to learn about depreciating a rental property. Fun for the whole family… Just a quick glance at the IRS Depreciation of Rental Property webpage and I’m convinced that this is the year that I hand it over to a professional.

That being said, I’m still going to do them myself first so that I’m at least familiar with the rules, regulations and numbers and then I’m going to hire a professional to do our taxes. 

My decision to hire a professional was further validated when I started asking people about their taxes and the general consensus is that the people who have a tax professional consider them an absolute must. 

Looking forward to saving some money on taxes this year. 

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
Reach your financial goals. Get motivated. Get support. Get results. Are you ready?

Thursday, January 23, 2014

Speaking Your Numbers Out Loud

We all have different ways of learning and digesting information. Some of us are visual, others auditory and still others kinesthetic. Yet when it comes to knowing where we are with our money, there’s usually only one way of learning what where we are financially: by reading reports. 

If you’re a visual learner and good with numbers, then financial reports are probably a great way to anchor yourself in where you are financially. For everyone else, though, financial reports just might be saying to you “blah blah blah blah,” much like the Far Side cartoon from the 90’s.

In my years of working with clients, I have often incorporated different approaches to teaching clients their numbers. At Creating Answers, we not only give clients reports, but we read them to them, have them read them to us, draw them on the wall, and sometimes have them write their numbers down themselves. 

My most remarkable memory of the impact that this had with a client was with a client on her first visit. Admittedly, I was a little nervous about how I could help this client. She was extremely successful financially, as in multi-million dollar success; her industry was one that I’d had very little experience in, and I knew that she already had some very highly respected consultants advising her in her business. I wasn’t sure I was going to have much more to offer than she was already receiving. 

In her first meeting, I handed her the financial reports and proceeded to walk her through them, asking her to speak the numbers out loud to me. She was floored. She’d been looking at her financial reports for months, but had never really understood them the way she did after she spoke them out loud to me. 

There’s a huge body of work out there that explains the brain science behind all this. But that’s not my passion. My passion is to help people really understand and know their numbers. If you want to have a different experience with your numbers, try a method you’ve never tried before. Here are some ideas:

  • Get a pencil out and transcribe your major numbers: income, major categories of expenses, and net income.
  • Take your monthly financial report and go stand in front of a mirror and read it out loud to yourself.
  • Get some crayons and butcher paper and draw your assets and liabilities in a chart or graph.
  • Look at your 2013 income, expenses and growth of your assets and liabilities and write about 6-10 sentences about how you did last year (e.g. “my business earned 116% of what we budgeted” or “I have $3,400 less debt than I did at the beginning of 2013.”)

Keep trying a method until you find one that really speaks to you. Have some fun with it. And most of all, embrace the fact that truly knowing where you are financially is empowering and motivating. 

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
Reach your financial goals. Get motivated. Get support. Get results. Are you ready?

Tuesday, January 21, 2014

My Experience Buying Bitcoin

We researched. We read. We watched. We discussed. We figured that this was as good of a time as any to get our foot in the door. So, my husband and I bought some Bitcoin over the weekend. Only $100 worth to get our feet wet and learn the ropes of this brave new world.

An interesting thing happened when we started the process, because yes, it’s a process to buy this digital currency that works outside of the financial institutions that we know. 

There are a number of ways to acquire Bitcoin. First you have to create a wallet and it can be stored online or on a device. Once we had a wallet, my husband’s first attempt to fill our wallet was to ask our friends via facebook to send us a small amount, pennies even, just so we could test out using our wallet and transferring Bitcoins. No go.  

Second attempt, my husband was a gamer in his younger years, so he decided to try buying Bitcoins through a game broker. I doubt this is what they’re actually called because I don’t understand how this option works, but he seemed to think it was going to be easy enough. It wasn’t.

Third attempt, buy through a Bitcoin broker that requires a bank account number and credit card attached to our wallet. Not our first choice because of security concerns. But it was the easiest, or at least the most straightforward. 

So, we addressed our main security concern (really the only one we can do anything about) by opening a bank account that is just for buying Bitcoin; it has little to no money in it and it isn’t connected to anything else. 

We were ready. Or so we thought. Right as we're about to hit the button that started the verification process of attaching our bank account to our Bitcoin wallet, my husband says “Wait!” Which was a surprise considering that 1) he’s been the main driver on us buying some Bitcoins and 2) we were so close to finally buying some Bitcoins after trying for more almost two weeks. 

He was having second thoughts because it’s new to us and it’s entirely digital, which leads to greater security concerns. Even though we had taken some precautions, he was still concerned. Which is justified, considering that 70 million Target customers were affected by the recent security breach. But on the other hand, the Target breach proves that nothing is safe. 

So, we took the conversation to the place of no regrets. Under what circumstances would we regret our decision when we’re 70?

  1. If Bitcoin goes through roof like the experts predict, then yes, we would regret not getting in when we could. So, we should BUY.
  2. If Bitcoin tanks and disappears, will we regret spending $100 on Bitcoin to try it out? No. So, we should BUY.  
Both scenarios point to buying a small amount of Bitcoins. No regrets!

My husband and I were reminded of one of our core life principles: we have to continuously push ourselves and do things that are new and slightly scary, so that 1) we don’t become obsolete and 2) we don’t end up 70 years old wishing we would’ve done things differently.

Living life with no regrets!

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
Reach your financial goals. Get motivated. Get support. Get results. Are you ready?

Thursday, January 16, 2014

Money and Sex: Normalizing the Conversation

When I was a teenager, I remember closing myself off in my bedroom to listen to Dr. Ruth’s pioneering radio show on sex. No one talked about such things! It was shocking. And somehow, normalizing. There were real people, getting on the phone, asking questions and admitting that they had questions and uncertainties. Wow, me too! I learned a lot from Dr. Ruth and from all of the callers.

Money and sex are a lot alike. No one talks about money. No one wants to admit their uncertainties. Most people feel they should know so much more, that their money situation could be so much better and that they are the only ones. But as with listening to Dr. Ruth, once you spend some time listening to your peers about how they feel about money, you feel some relief. “I’m not the only one.”

As a financial coach, I’ve experienced over and over new clients walking in and before the end of their first session, grabbing the Kleenex box. Talking about your money is cathartic as well as motivating and clarifying. But wow, is it hard and scary. I’m not sure why it is that we’re so fearful. It’s as if something is going to break if we tell someone else how much debt we have, how much we earn or how much we have (or don’t have) set aside for retirement. It’s a shared fear for most of us.

And if telling a financial professional isn’t scary enough, can you imagine what it would be like to tell an entire group? I’ve led countless mastermind groups through the process and it’s always so interesting and inspiring to watch everyone’s financial growth as they first admit to something they don’t know and then share some truth about their finances.  I think it must feel a little like I felt as a teenager, closing my door and listening to people talk about something I never thought I’d get to hear them talk about. I think a lot of people who’ve joined a Finance Boot Camp must think “Wow, me too!”

Here are some of my favorite strategies and resources to help you normalize the money conversation:
  • Join a support group: we of course love Finance Gym’s Finance Boot Camps, but Debtors Anonymous is a good option too.
  • Take a class: Dave Ramsey’s Financial Peace University groups have been successful for many or look into your local learning center for classes on investing and other financial topics.
  • Find someone to talk to: we of course love Creating Answers’ financial coaching, but there are also excellent professionals trained in financial recovery counseling, and CFPs who prioritize money conversations over charts and graphs.
  • Set a “Date Night with Your Finances:” ask someone you respect to mentor you by joining you once a month to talk about your money.
  • If you’re married, set a “Date Night with Your Finances” with your spouse. Once a month set a date, get out of the house, go somewhere special and talk about your money. Not the nagging “why did you buy this?” conversation, but the supportive “these are my hopes and dreams and fears” conversation.

And if you just can’t bring yourself to talk to other live people then take your radio into your bedroom, shut the door, and listen to a radio show on money.

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
Reach your financial goals. Get motivated. Get support. Get results. Are you ready?

Tuesday, January 14, 2014

Have Your Cake and Eat it Too!

Or in my case, a doughnut.

Turns out that budgeting calories is very similar, if not, just like budgeting money. I can already hear some of you saying “duh,” but this is new to me, because I’ve never budgeted my calories before. It’s been over two weeks now and Oh. My. I’m loving this!

I wanted a doughnut. I ate a doughnut. And it tasted like sweet victory!

If I were on a diet, I would’ve wanted a doughnut, but I would’ve told myself, “no, I can’t, because I need to lose weight.” Then I would’ve wanted it 100 times more. My willpower may have held on for a week or so, but I would’ve broken down sooner than later, because all I’ve thought about for a week is that one stupid doughnut. When I finally got to eat the doughnut, it would make me feel weak and guilty. I would continue on, just long enough to reach my short-term weight goal and then I’d revert back to my old habits. Eventually the weight would come back. Cycle continues. 

Diets don’t work. Yes, I know, this isn’t news. I suppose I had always considered counting calories just another form of dieting...but after doing it, I realize it's just a method to educate myself so that I can make informed decisions. Which of course, is exactly how I already feel about budgeting my money. 

                RELATED: Budget for the Life You Want

So, back to the wonderful calorie budgeting present. My doughnut was 300 calories. I could totally work that into my calorie budget. I had so many options:
  1. Doughnut replaces my breakfast.
  2. Doughnut is an afternoon snack, so I have to cut a little from lunch and dinner.
  3. Option 2, but I cut a little less from my other meals and exercise a bit more/harder.
Based on timing and circumstances, I went with option 3 and I enjoyed that doughnut completely guilt-free. OMG! Writing that sentence feels amazing! That's an accomplishment! 

Disclaimer: I get a doughnut craving about once every couple of months…My options would be very different if this was a daily or weekly craving, because I know doughnuts aren’t good for me, even if they fit into my calorie budget. That’s a whole other blog.

Options are everything! The truth is in the numbers.

When you need to save money for something fabulous, determine how much you need, cut a little here, cut a little there, earn a little extra, and voilĂ , you’re enjoying your tropical vacation worry and guilt-free.

But first you need to know your numbers. Get our ideal life budgeting tool for free when you subscribe to our newsletter. It’s all free and we promise not to spam you.

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
Reach your financial goals. Get motivated. Get support. Get results. 

Thursday, January 9, 2014

Meeting 2014 Spending Goals

Leah wrote a great New Year's blog on the importance of telling the truth to herself about how much food she eats. In it, she admits that she realized she ate enough on Christmas Eve to feed a small village. It was knowledge and clarity she gained by logging her calories on a nifty app (Noom). I go through periods of logging my calories and it is indeed clarifying, and sometimes even shocking. But it takes work. You have to log in every little thing. Annoying. You’d think they would invent something that would just link to your stomach and directly sync your stomach to the app and it would know how much you ate, what the nutritional value was, and tell you how to adjust for the rest of the day, week or month. Ugh, so hard.

Ok, that’s a bit *sarcastic*. But when compared to how easy it is to track your money these days, there’s little comparison. Using an app like Mint makes monitoring your adherence to your goals super simple. It syncs automatically. A few minor corrections here and there, and you’ve got great data. And when you think simple, you can make budgeting even simpler. 

What do I mean by that? Well, don’t let yourself spin out by trying to assign budget amounts for every category they have, or even every category you spend money in. Mint has 21 major categories and each of those has an average of 5 subcategories. Wow. Who wants to keep track of 105 spending areas? It’s overwhelming, and thus not very motivating.

If you want to be motivated by tracking your numbers, do something simple and fun. Focus on what really matters. For me, that is often eating out, coffee on the run and groceries. I’m certainly not going to spend extra money on gasoline or the water/sewer bill, so why should I bother tracking it in a daily or weekly budget app. But I might be tempted to get a few more lattes than I said I would or a $30 bottle of wine instead of a $15 one. Using that passiveness of Mint lets me do that with hardly any hassle at all. It’s almost as if it was directly syncing with my bank (because it is).

In the budgeting area of Mint, I’ve chosen only the 6 areas that I think are important for me to monitor. I can pop in to the app on my iPhone or iPad, or log in on my computer. At a glance, I can see how I’m doing on that goal for the whole month. Totally clarifying.

What are the 6-10 most important areas for you to keep your eye on your spending?

-Stacey Powell

[A little disclosure. I love Mint. I use Mint all the time. But its effectiveness is for snapshots and monitoring. In my experience, it’s ineffective when you need to capture your annual income and spending, run reports for taxes or to analyze your finances. But day to day, week to week, it’s a breath of fresh air.]

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
We motivate. We inspire. We support. We help people change their lives by improving their finances.

Tuesday, January 7, 2014

Stop Lying to Yourself and Instantly Feel Better

I've been lying to myself for decades.

For the first time in my life, I'm tracking my daily caloric intake as part of my 2014 goal. My first oh-sh*t moment was when I logged 3,876 calories on Christmas Eve! That’s enough food for a small village in some countries. And to add insult to injury, I know for a fact that I forgot some things and incorrectly logged others. 

Lesson learned. From that moment on, I’ve been mindful about every bite I put in my mouth.

Fast forward to New Year's Day...what better way to celebrate the New Year, than with a huge American brunch? I was controlled. I only ate the foods that I really wanted. I ate just enough to enjoy myself. I didn’t overindulge in anything. I was so proud of myself :)

Then I logged the calories in my handy little app (noom)...Turns out reality is a b*tch! I just ate 80% of my daily calories and it was only 1pm.

This was my ah-ha moment of how I gained 25lbs in the past year. Without the numbers, I would’ve relied on how I felt and I was proud of myself for showing restraint; so, I would've gone about my day and eaten normally, which would’ve put me in the range of 2,400 calories—twice what I should be eating if I want to lose weight. Then at the end of the month, I would wonder why I’ve gained weight, when I’ve been so controlled—even felt deprived at times. 

Luckily, I was logging my calories! Knowing my numbers allows me to evaluate my options and make conscious and rational decisions to stay within my daily caloric intake. My choices are so much clearer now and I don’t waste my calories on foods that I don’t really enjoy.

My experience with calories is similar to the experience that some people have with their money: they don’t buy something, they feel good for having control, then they spend regularly the rest of the day/week/month, but when they pay their bills, there still isn’t enough money…then they throw up their hands and say they aren’t any good with money. It’s most likely because that one little cut isn’t enough.

Once you know the numbers, you can see the truth and make choices that make a difference. Then you can stop beating yourself up for things that you shouldn’t be beating yourself up about. 

Read more: Budget for the Life You Want. Get our free ideal life budget by subscribing to our newsletter here
-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups.
We motivate. We inspire. We support. We help people change their lives by improving their finances.

Thursday, January 2, 2014

2014: The Year of Listening

I was sharing with my daughter the other day the fabulous axiom "we are the average of the 5 people we spend the most time with." When you're an entrepreneur, you end up spending the most time with people you choose to hire. 2013's hire was Leah, and I'm grateful that she's one of my 5. She has a completely different perspective and experience of life, money and health than I do, yet we share a focused intention to make our own lives the best we can and to support others in doing the same.

It's the beginning of the new year. In an accountant's world, that means new budgets. I've spent much of the last two decades spending this time of year helping others create their budgets for the upcoming year. But "budget" is just an accountant's word for "goals": [a framework within which to operate.] So with all the talk about budgets and goals for the New Year, Leah went and threw down the gauntlet. She put her own goals in her blog (for everyone to see) and then looked me in the eye and told me I had to do the same (for everyone to see).

That left me with 3 options: fire her, make up fluffy goals for the blog, or tell the truth.

And the truth is, I don't know what my goals are. Well, that's not true. Of course I know. I have a huge goal to change 1,000,000 people's financial lives. I've had that goal since 2007. And it's a SMART goal: specific, measurable, attainable, relevant and time-based. While I'd love to accomplish it in 2014, I know that it might not be attainable within the time-based framework of 2014. I'm not sure how long it will take, but I am sure I'll accomplish the goal, eventually.

What would I coach another business owner in my position? Break your goal down. Make it an attainable goal for 2014. But that's where I circle back to "I don't know." What I learned in 2013 is that I haven't yet cracked the code of how to get people to step up and say "yes, I want to join the gym, I want to work out on my finances, I want to change my financial life." And because I haven't cracked the code yet, I don't know what my core goal should be. I hate saying that, but it's my truth.

So, as I mull over my potential goals (and you know I have a spreadsheet of them!), my truth is that my overarching goal is this: Listen.

That's all I've got. My 2014 business and professional goal is to listen, and keep listening until I hear and see and feel what the right path to reach my 1,000,000 person goal is. 

I will not do the things that keep me from listening: I will not be driven, I will not implement 50 new strategies to see which one works, I will not work 60 hour weeks over and over and over. 

I will simply listen. I will incorporate into my weekly schedule more time listening to podcasts and audiobooks, talking with other leaders in my field, and simply listening quietly to my own intuition. I will keep a journal and title it "The Year of Listening." I will share that journal with one of my mentors.

I will create personal goals that will support and accentuate my ability to listen. Those goals?
The pertinent ones are:
  • My body and soul: I will begin and sustain a yoga practice.
  • My creativity: I willl schedule monthly blocks of time to draw, garden and paint my home.
  • Fun: I will schedule something special every month; a vacation, a weekend getaway, a drive in the country, a walk by the river, windsurfing, paddle boarding, a long bike ride.
  • Prosperity: I will build an additional $6,000 in my personal reserves.
I've never had an annual plan like this before. I'm an accountant and by nature, a bit driven to accomplish and succeed. But after 2013’s very driven year of two major accomplishments: writing a book and selling my first business, I feel called to listen to my intuition and simply: Listen

-Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
We motivate. We inspire. We support. We help people change their lives by improving their finances.