Romancing your Money

By Robin Applegarth CRPC®

Personal finance advice often comes wrapped in red guilt. Managing money takes time and effort, so we often put it off.

What’s the payoff for giving your money some time, attention, and well…love? The payday comes when your money starts loving you back.

Here are four ways to “romance” your money and multiply it, all beginning with the letter “R.”

Respect it.

Support your hard-earned dollars with some TLC–tender loving care. When money is disorganized or ignored, it won’t do you much good. Boyfriends, girlfriends and spouses don’t thrive on disrespect or lack of attention. Neither does your money.

Are the dollars in your wallet crunched or disorganized? Spend a few seconds to flatten them and organize by denomination so you can find the one dollar bills when you buy your next coffee.

Are your bills sometimes paid late, or getting lost? Set up a system to collect them right after you pick up the mail. Better yet, pay recurring bills online or automatically. Reducing late fees can even earn you enough to indulge in a box of artisan chocolates or a movie date with a friend.

Do you have neglected bank or savings accounts in different places? Consider consolidating them into one account you can monitor more easily. Having one steady relationship is easier than juggling multiple dates.

Reinvest it.

People reinvest in their relationships by contributing understanding and acts of kindness. This goes into the “love bank” for future withdrawals.

Reinvesting money means allowing the earnings of an investment to stay inside the investment for the benefit of compounding. These are funds you’re letting grow for future “paydays.” You’re creating a “Bank of You.”

Explore reinvesting, or “rolling over” any employer retirement plan money when you leave a job. It may be tempting to spend that lump sum payout, but unless you’re over age 59 1/2, you’ll generally lose much of that money to taxes and penalties. Ouch. That can lead to a breach between you and your future retirement.

Reinvesting keeps your money actively working—which means higher profits for your future.

Rebalance it.

Healthy relationships are always in the process of balancing themselves: give and take, help and be helped, talk and listen.

Your money needs balance too. If you have investments such as retirement funds with your employer or through an IRA, rebalance them periodically. This means you adjust the ratio of stocks and bonds and cash to fit your needs. Not sure how to do that? Many employer plans will provide guidance online or by phone.

One easy way to make sure you’re balanced is to put investments for later retirement into a “Life Cycle Fund” or “Target Date Fund.” These easy mutual funds provide the right balance of investments for your age group. They are professionally managed, and change over time to a more conservative blend as you approach retirement age.

Recommit to it.

When you recommit to a relationship on a regular basis, you’re showing that you value the other person. You’re willing to spend the time to nurture that relationship by keeping it fresh and vital.

Your money also needs nurturing and attention. Recommit to learning more about personal finance by reading a good magazine such as Kiplinger’s Personal Finance Magazine. It’s full of relevant topics about living a good life, saving money on your purchases, and nudging your retirement investments in the right direction.

Finally, recommit to yourself by planning for your future needs as well as your present needs. If you’re lucky, you’ll live long and grow old one day. Will your money be ready to support you then? Give it a little respect and attention now to make sure it’s a long and happy relationship.

By Robin Applegarth CRPC

Robin is the founder of The Silver Purse LLC

 

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