Scott Burns

People's Money Management (Part Ii)

Here are more of the best suggestions from readers.

VISUALIZE YOUR GOAL

To make long-term goals more realistic, set up a graph that shows where you are now. Draw a straight line to where you want to be in the future. This is your target line. Each month, plot where you are to see if you are above or below where you wanted to be. This feedback will help you become a more conscientious spender/saver on a day-to-day basis. This target/graph idea works well for tracking your total investments and total debts. -- Emerson L. Bell, Dallas

PAY ATTENTION

Those who pay attention to their wealth tend to have more of it. Therefore, this tip is to keep track of what you have, which will lead to paying attention and decisions that enhance wealth. -- John Ferguson, Richardson, Texas

MEASURE HOW LONG YOU'LL HAVE TO WORK TO BUY SOMETHING

I work hourly. So when I go shopping for something that is not a necessity, I calculate how many hours I'll have to work to pay for it. If I want to spend $500, I will have to work 33 1/2 hours to pay for my purchase and then another seven hours to pay the taxes. This helps keep my spending under control. -- Louis King, Garland, Texas

USING A BONUS

When I get a bonus, I split it into thirds: One-third goes to reward, play, etc., one-third goes to investment, and one-third goes to mortgage pay down (also investment).

-- John Gay, Denver

SAVE FIRST

Three simple words describe my best personal money-management tip: Pay yourself first. This is the foundation. If you don't do this, asset allocation, earnings per share, retirement calculators, etc., are meaningless. -- Neil Hewitt, Addison, Texas

PAY CASH FOR YOUR CAR

Buy only as much car as you can pay for with cash. This will focus you on the real price of the car and not on the monthly payment. You will likely buy a less expensive car (or a used car), buy a car less often (repair costs are less than monthly payments) and save on financing. Considering how much the average person spends on transportation, this will help you save money over the long term. To paraphrase a famous comment: "A few thousand dollars here, a few thousand dollars there, and pretty soon you're talking real money." -- Les Loewenstein, via e-mail

BE CHARITABLE

The most important tip for acquiring money, as well as the feeling of abundance, is tithing. I give 10 percent of all I earn with a heartfelt gratitude for all that has been given to me. The gifts and talents of who I am and what I am able to do are given from a spirit that is in everyone. I honor these gifts.

The more money I make, the more I want to give. Money is only one way to have wealth. I have job opportunities, better health and more friends. The lack I once struggled with has changed into an inner feeling of peace, joy and abundance. Giving is a wonderful joy. -- Grace Allison, Dallas

RESIST ADVERTISEMENTS IN ALL FORMS

No matter how many frugal strategies you use, you will always have trouble with overspending until you realize that the goal of all advertising is to create a need where none exists. Once you can look at a slick commercial or print ad with a jaded eye, your desire to have more stuff that you didn't even know you needed will be much easier to control. -- Kathy Harris, Dallas

ROUND UP YOUR CHECKBOOK

When I was in college, I always found myself "scraping the barrel" of my checking account as payday drew near. To correct this problem, I began rounding up on all of my cash card purchases, no matter how small the value. For example, for a $20.13 purchase, I would write that amount in the register but I would subtract $21.00 in the total column, allowing for 87 cents to be added into my account unnoticed. Over the years this has allowed me to accumulate a nice pad in my account to avoid overdrafts. -- M. Brooks, Abilene, Texas

SEPARATE YOUR INVESTMENTS FROM YOUR SPENDING ACCOUNT

I have found that withdrawing monthly checks for living expenses directly from your growth mutual funds can be risky. Withdrawing from them in down markets can deplete your funds prematurely. So I keep my investment funds untouched and have a separate money market account to provide a monthly allowance each month. The growth mutual funds are used to replenish the money market fund when the market is doing well. The money market fund needs a balance high enough to carry your monthly withdrawal rate for about two or three years. -- George D. Pantaze, Dallas

BUILD AIR MILES, WRITE FEWER CHECKS

Get a credit card with a good frequent-flier miles program, charge every purchase, and then pay the balance in full each month. My wife and I carry about $200 in cash, supplemented as needed each month. We then charge everything we can: gas, groceries, restaurants, travel, golf, insurance, vehicles, etc. I always ask if the bill can be paid by credit card. I am seldom turned down.

Benefits: I never write more than eight checks per month, there's no need for an ATM or trips to the bank, there's a good record of purchases, and there's free air travel via a miles program. -- Walter Schmader, Plano, Texas

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