Holistic Money Manager

4 Good Reason to Make a Will

In a recent blog I wrote about financial transparency within the family and why it is important in the day-to-day management of your finances.  Making a will is also part of the process.  You may think that you have nothing much of value to pass on, or that you are way too young to think about such matters.  Yet there are … good reasons why you should make a will.

1. Peace of Mind

With an up-to-date and legally valid will you have peace of mind, knowing that your money and assets will be used as you have decided, contributing to the people and causes which are closest to your heart and your executors will be helped by clear guidelines.  If you die without a will, i.e. intestate, a legal formula is used to distribute your estate.  This might mean that distant relatives could inherit while the people and charities you care about are ignored.

2. Your Children

If you have young children you need to think about who you would like to appoint as legal guardians to look after their interests.

3. Tax

Tax is another good reason for making a Will.  Supposing, for instance, you own your own home and have paid off the mortgage your Estate may be liable for Inheritance Tax.  Gifts to charity are deducted before the tax liability is calculated and can offer a way of bringing the value of your Estate within the tax-free limit.

4. Support  for Your Loved Ones

My colleague Kevin Mercadante wrote in one of his recent blogs that “grief and financial management are not compatible”.  Appointing a person that you trust to help settle your affairs can be one of the best gifts you can leave your loved ones.  Your executor will help your family in dealing with banks, creditors, courts and tax authorities in the months that follow, giving them more time and space to grieve.

 I have prepared a short guide to help you make or change your will.  If you would like a copy go to http://www.holisticmoneymanager.com/contact/ and write WILL in the box.

 

Sanni Kruger helps people become competent and confident money managers who live within their means without stressful money concerns.  She supports her clients in creating systems that enable them to reduce their debt whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it.  What makes her approach “holistic” and different from other budgeting advice is that it is needs, and to a certain extent, conscience led rather than money led.  Sanni has written a book on the subject, “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich”.  The full-colour illustrated workbook is available from http://www.holisticmoneymanager.com/self-help/.

 

Finances – A Family Affair?

A few years ago a member in my Quaker community told the story of how she was approached by a friend who wanted to ask her an “intimate” question.  The friend was terribly embarrassed and had difficulties getting the words out.  So my Quaker friend braced herself for what might come, only to hear: “Do you …?  Do you and John …? – I mean, do you and John have joint bank accounts?”

This blog is not about whether or not you should have joint bank accounts.  But it is about financial transparency.  In the Bible it says:  “Whoever conceals their sins does not prosper, but the one who confesses and renounces them finds mercy.” (Prov. 29:13 NIV)

It might be tempting to conceal the real state of our finances from our spouse, especially if they are in disarray.  I remember a lady whose husband had been present at the birth of all their 5 children, yet found herself unable to share with him how she managed the household money.  But what will that do to your marriage in the long term?

I advocate that couples and families (with the children who are old enough) actually meet regularly to discuss finances.  That it becomes part of the family routine.  For instance, it might be a family tradition to go to church together on a Sunday, or have a carvery lunch and then go for a walk afterwards.  In the same way having a “finance summit” once a week or once a month could become such a fixture.  I make detailed suggestions how this might work and how to establish the vital ground rules in my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich”.

Why would you want to discuss your finances with your family?  It’s about doing it together, sharing the burden and the joys.  There is a German proverb, which translates roughly to: “A sorrow shared, is a sorrow halved – and a joy shared doubles the delight.”  The family summit can be used to brain storm and bounce ideas and strategies around.  Sometimes you might also want to involve someone outside the family.  If you are in a financial crisis you might find it difficult to think straight.  Here advice from a debt counselling service might be invaluable.  Or you may need help from an Independent Financial Adviser.  Or you might want to use a finance coach, who is completely neutral and has no vested interest is the final outcome.

The family summit can also be used to talk about and share visions and goals.  And about which actions you need to take which might get there. Therefore, financial transparency is also about accountability.  It can help you actually take whatever actions you said you would. Thus it will bring you closer to achieving your goals and making your visions become reality.

Sanni Kruger is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from http://www.holisticmoneymanager.com/self-help/

How to avoid the Festive Financial Hangover

I have just come across some very sobering research:  According to Michael Ossei, personal finance expert at uSwitch.com 62% of people in Britain struggled to pay for this Christmas, and almost three in ten (28%) ended up in the red.  Apparently, 42% had Christmas on credit this year – 4% even took out new credit especially for it.  On average it will take almost six months to clear the debt.  However, 8% will still be in debt next Christmas.  That’s almost one in ten people.

So what can you do that it won’t happen to you next Christmas?  The best thing is to start planning now.  I have a friend who started shopping for Christmas 2012 even before New Year.  This is someone with a large family who is very organized about the whole thing: everything will be labeled immediately and put away.  Christmas cards and wrapping bought at knock down prices.  Over the course of the year my friend will add to the stash.

How on earth does she have the cash to do that?  She keeps a special “Christmas Fund” to which she adds a bit of money every month.  How?  You can find detailed instructions in my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich”.  (You can get it from http://www.holisticmoneymanager.com/self-help/)  The book also shows you how to apply the same principles to other regularly occurring events, such as your summer holidays and birthdays.

Other things you can do to have a good Christmas despite a tough economic climate is save up reward points and shopping vouchers.  Savvy use of credit cards can also help.  I advocate paying the balance in full every month anyway to avoid getting into the debt spiral (my book explains what that is).  It also gives you a good credit rating and you can then opt for a card which offers cash back or rewards.  They can then be saved towards next Christmas.

But what if you’re one of those people who ended up in debt after this Christmas?  My advice is, don’t worry about it.  “Making Friends with Money” will give you step-by-step directions how to pay it all back quite painlessly while making sure at the same time that you won’t wake up to another financial hangover after next Christmas.

Can You Expand Time? – You Betcha!

Why is a money coach writing about time management?  Because I’ve discovered that we often have the same behaviour patterns around the way we use money and how we spend our time and energy.  For instance, before I got into the habit of cashflow planning my pattern around money used to be “feast and famine”.

It wasn’t until I took part in a CBT-based research project on fatigue in Rheumatoid Arthritis that I realized that I had a similar “boom and bust” pattern in the way I used my time and energy.  Others might find that time “disappears” just as money does.  And just as we can get stressed over not having enough money to do all the things we need or want to, we can easily get stressed over “so much to do and too little time to do it in”.

I’m single, but I need to juggle my health needs with those of my business and my social life.  I suppose this is very familiar to anybody with a family, especially “mumpreneurs” with small children.  But how can you expand time?  After all everybody has 24 hours in the day; no more no less.

Just as having clarity about my needs and desires and what my priorities are help me manage money better, and even expand it, so does having clarity about what I need and want to get done and clarity about what my priorities are, help me manage my time and energy better.

When I draw up a cashflow plan I first need to know what I need money for.  In the same way I need to know what needs to get done and when; i.e. I need a “to do list”.  I like to colour-code mine, so that certain things stand out immediately.  And I use a weekly grid.  Below is an example of one of mine for a recent Wednesday.  Like many self-employed people I sometimes take time out in the week and make up for it at weekends.  Therefore my list includes weekends.  And I use my own personal “shorthand” for the various tasks.

 

I tend to enter things into the grid as I go along; i.e. as tasks present themselves.  Then I create the final list for the following day just before I shut down my computer.

A few years ago I was introduced to the 4 quadrant approach to time management.  I don’t know where it originates, but for me it works very well in conjunction with the “to do” list, because it helps me decide what is really important to me and where I want to invest my time and energy.

First thing in the morning I allocate the tasks from the “to do” list to the various Quadrants.  Suddenly the whole list looks much less daunting and more manageable.  And sometimes certain tasks will get moved to another day immediately, because in the clear light of morning it becomes apparent that it would be unrealistic to expect to do everything on the list.

 

For most of the actions in the right upper quadrant I use what I call the “piecemeal” approach.  Most of them are bigger projects.  Instead of stopping everything to get on with the one(s) where the deadline is closest I do a little bit on a variety, preferably all of them.  I might either give myself a time limit or just carry on until I come to a natural pause.  Then I have break, and when I return to my desk I’ll get on with something else.

However, I will tick off the task I have been working on, even if the project is incomplete at this point.  I once read that ticking things off on a list releases endorphins (the hormones that make us feel good) in the brain.  It certainly works for me.  It gives me a great sense of satisfaction.

I use the same approach with those annoying things in the lower right quadrant, since I haven’t got anyone to delegate to.  For instance, if the trays on my desk are overflowing, or I have a huge backlog of emails in my inbox, I will just take one piece of paper, or one email, and do something with it, that is enough to get this task ticked off, and eventually they, too, will get cleared up.

At the end of the day I look at my list and am constantly amazed at how much I have achieved in the day and how quickly I do complete the bigger projects, usually ahead of schedule.  Thus I expand time.

“But”, I hear you say, “what if I’ve got a feverish child at home, who’s kept me up all night and needs my loving attention?”  When these things happen I remind myself of the German proverb “Papier ist geduldig (paper is patient)”.  The items on my list are not going away and can wait.  I just make sure that if I have to miss appointments or deadlines that I send my apologies in good time.  Then I “give in” graciously and go with the flow.  It’s actually quite nice to have a break from lists and schedules once in a while.

I’d love to hear how you expand and manage your time, and what you do when life happens and things “go wrong”.

Sanni Kruger is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from http://www.holisticmoneymanager.com/self-help/

Cashflow Plan or Budget?

Recently I was asked whether cashflow planning isn’t the same as budgeting.  My answer is an emphatic “no”, even though at first glance they look the same.  However, cashflow planning is slightly different.  It looks at our needs first, and then how we can meet them within our means.  Not at how much money we have and how we can meet our needs within that.  The difference is subtle – and huge at the same time.  Cashflow planning is more flexible and gives you a sense of prosperity, while budgeting usually gives you a sense restriction.

This is what a reader of my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” (http://dld.bz/axHMU) says about it: “Cashflow planning categories help me remember through the month what I need more money for – better than just keeping an eye on the balance in the D2D account going down. I can afford Waitrose all month – I decide where the money goes, not the money what I can afford.”

That’s it in a nutshell.  In my work I help my clients identify what their individual needs are, and also to prioritise them in a personal hierarchy of needs, which, incidentally, has very little to do with Maslow’s.  Rather I let my clients work out what matters most to them and what meeting those needs would look like at different levels from “survival” to “luxury”.

Then we work out together how that can be translated into numbers for a cashflow plan.  For instance, in a recent blog a wrote about Jim and Natalie who identified that they absolutely need to take a breather in the supermarket café before heading home with their two small children after the weekly shop.  They know that this costs them about £30 per month, and they are finding ways to generate the cash.

I describe how to do this in practice in “Making Friends with Money”, and, of course, I’m available for one to one sessions to go through the process with you. http://www.holisticmoneymanager.com/finance-coaching/

Sanni Kruger is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from http://dld.bz/axHMU