Well here we go again! A new decade has begun and hopefully a new you as well. This
past decade has been both interesting and frightening. Remember “Y2K”? When the
year 2000 began, no one knew if computers would work or if the entire world would
just stop. We now know that it didn’t. We start this second decade of the 21st
century not knowing what the outcome will be to our financial blunders from this past
decade. We also start this decade with a different outlook on things. You start
this new decade as a new YOU. We have all changed and the only thing we can be sure
of now is change. There is more change to come. With that in mind, I thought I
would cover a few areas that have changed and I hope that you are aware of those
changes and have modified your ways of dealing with them.
Homes and home values have certainly gone through major changes and there is still
more to come. Most have seen their equities shrink by at least 30% and some have
seen it reduce by 50%. The old adage of “there is no place like home”, has taken on
a new meaning. Nothing has taken a bigger beating than home values. Even the losses
in the stock market have now recovered. The old adage of being “debt-free” now means
that you could also be “asset-free’.
Paying off that mortgage ASAP is now the mantra that most need to be chanting. The
interest on home mortgages is one of the few tax deductions that we have left so why
rush to eliminate it? In retrospect, most now see that it is not the best idea to
keep all of your money in a home. Mortgage money is the cheapest money you can ever
buy. Never forget that. That is the new mantra for this decade.
Remember when banks were a safe and secure place to keep our money? This past decade
certainly changed that image and I think this decade will show us an even darker side
to banks. Now we end up paying our banks to take our money and then they want to
charge us to get it back. There is no benefit to keeping all your money in your
bank. You will end up paying more is fees and charges than they pay you in interest.
They will make more on your money than you do. It is time to have a good long chat
with your friendly banker and let them know that you are on to their game and that
all those fees you are paying are not acceptable. If necessary, it may be time to
move your accounts to another bank that will treat you better. Loyalty will get you
nothing.
Got a savings account at the bank? You might be better off just putting your cash in
a shoebox under your bed or in a hole in your backyard! Look around for options that
will do a better job for you. It is time to wake your cash up and make it go to work
for you instead of just rotting away in your bank.
Speaking of cash, do you have any? I know that we keep hearing about a cashless
society but you don’t need to be “sans cash”! Do you have an emergency fund? There
will be emergencies and a fund would come in handy. Even if there aren’t any
emergencies, their may be some opportunities that will be available if you have cash
to take advantage of them. Why not start one right now? A good amount to shoot for
is $10,000.
Are you still carrying around a pocket full of plastic? Those credit cards will bury
us all one day. Still paying high interest rates? Well it is time you called them
and told them if they want to keep you as a customer, they need to lower those fees.
I don’t care how long you have had that card or how much business you do with them,
they will never call you and offer you a lower rate.
When was the last time you sat down with your insurance agent so that they could show
you how to save some money on all your policies? I figured that. It is time to take
a good hard look at your policies and the lack of service you are receiving. ALL
policies have deductibles and all of your policies need to have a deductible of no
less than $1,000. Anything less and you are wasting money. You wouldn’t submit a
claim for a small loss in fear that they company would either raise your rates or
drop you, so why keep a low deductible? That is the first thing you want to do. Now
see if you can combine any policies or eliminate ones that you no longer need.
Do you have a list of all of your policies that you can read and understand? If not
it is time to demand that your agent prepare this for you. You also need to know
which ones are for personal use and which ones are for your office so that you can
inform your accountant so that you take a tax deduction on those premiums. Another
way to save a few dollars. By the way, this list needs to be reviewed and updated
every two years unless some major changes have taken place. This is the one place
where most of us are paying a lot out and have no idea what we really have. That
needs to change.
Y2K10 is here and you need to take charge of your finances. This decade will be one
of many changes and some will not be good changes. You need to be prepared for any
and all changes that will occur. It is time to prepare and be prepared for what lies
ahead. Whatever it is, it will be an interesting ride! Hold onto your hat and let’s
get going!
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