I will be sending out a copy of the excel spreadsheet I created to newsletter subscribers so watch your inbox.

Part 1

Part 2

There are a couple of guidelines to follow in creating your first Net Worth Statement:

1. Don’t go overboard and try to include all your possessions in the first version.  You should only include your house, cars, and at most 1-3  of your most valuable possessions.  Then, every time you update your statement you can add one or two more items.  Over time you’ll have quite a comprehensive record of your possessions.
2. The first statement should take you 20-30 minutes to create.
3. If you haven’t completed your List of Accounts and List of Debts for your financial binder, please do so first.  This will make creating your net worth statement much faster and easier.
4. In the screencast I mention three resources for determining the value of your assets:
• Zillow.com for real estate.
• Kelly Blue Book for vehicles.
• Ebay using the “completed listings” search for general possessions.

5. Here’s a list of items you may want to include in your net worth statement
• Assets
• Cash
• Checking accounts
• Savings accounts
• Money Market accounts
• Stocks, bonds, CDs
• Market value of your home
• Major household items
• Market value of other real estate
• Rental property
• Time shares
• Vacation homes
• Market value of cars
• Value of Cash-value life insurance
• 401K accounts
• IRA and Roth IRA accounts
• Liabilities
• Mortgage
• Lines of credit (HELOCs, etc)
• Auto loans
• Credit card balances
• Student loans
• Other loans
• Owed taxes

There are several advantages to creating and updating a net worth statement.

1. Your net worth is a single number that reflects whether you are making progress financially or not.
2. Recording a list of your possessions can act as a safety measure if you were to be robbed or have a fire and needed records to get reimbursed for insurance purposes.
3. Updating your net worth statement keeps you in tune with your various accounts and amounts in them.  It increases your overall financial awareness.
4. In recording possesions and their worth you may uncover some assets you can sell for a healthy profit and put those assets to use in a more valuable way.

As always, leave any comments or questions below and I’ll do my best to answer them.

Share on Facebook

There are a couple of audio glitches in the podcast so don’t be alarmed or think it’s your mp3 player. It turns out I need to disable my screen saver while I’m recording. Also, I compressed this podcast more than last week to keep the file size down. Please let me know if there are any compatibility issues playing the podcast.

I’ll be providing some additional resources for newsletter subscribers later in the week including:

• List of accounts form
• List of Bills form
• Decision form
• Savings goals forms
• Net worth spreadsheet and screencast – UPDATE: I may delay this to a later week because it may take too much time with the other assignments.

Here’s a link to the Annual Credit Report site where you can get your free yearly reports.

Man I look like a smurf in the video below. I’ll have to work on my lighting.

Your assignments this week are as follows:

• Create your personal financial binder. Don’t worry about filling out all the information in the binder. Instead, just make sure you’ve created the binder and fill in as much information as you can.
• Start using cash exclusively in three budget categories: one that each spouse chooses and in the grocery budget category.
• Try to automate as many of your bills as possible. See if you can get on an even-payment program for your utility bills (specifically gas and electric).

As always, leave your comments, experiences, and questions in the comments below. Let me know how the assignments are going. Are they too hard and confusing? Are they too easy? Do they help?

HERE’S THE PODCAST:

Share on Facebook

The short video below describes how the contract works and why it’s important. It may seem a little cheesy, but signing the document and having your spouse sign will really increase your commitment to the program.

Share on Facebook

• My family’s journey on the path to total financial control. How we went from barely being able to pay our bills to meeting all our financial goals.
• What you can expect to learn from this course.
• What this course won’t do for you.
• Your first assignment:
• Get your spouse on board. Agree to follow the course unless you BOTH disagree on a single point in which case you can choose not to follow that point.
• Agree to never work on or discuss finances more than 30 minutes at a time

CLICK BELOW TO DOWNLOAD OR LISTEN FROM YOUR BROWSER.

Please email me or leave comments below and let me know what your biggest financial challenges are.

Share on Facebook

I don’t mean to excuse my lack of follow through, but rather wanted to give a sense as to why taking on the 12 week program became too much for me to handle. But even more than not following through with the program, I apologize for not communicating to those who were waiting and expecting it.

So now I am taking a new stance on this site which is to under promise and over deliver. I’m also going to let go of my tendency to want perfection in each post. That’s not to say I’m going to let the quality slack, but it does mean that I may be splitting up larger posts into chunks to make it easier for me to write them. It means that I may not be on a perfectly consistent posting schedule (not that this will be any different for the readers, but it will help me give myself a break mentally).

I WILL be starting up the 12 Weeks to Fiscal Fitness soon (given the above, I won’t promise a time). The one difference will be that I can’t promise to have new content every week. That will be my aim, but if I miss it I don’t want to get down on myself and stop posting just because I fell behind. Instead of looking at it as “12 weeks,” you might want to look at it as “12 steps” for now. All of the activities and assignments will still work just as well given a slightly longer time frame and I still anticipate it will help you get your financial life under control. In other words, the content won’t be any different.

I have so much more to share on this topic and I never even scratched the surface as to the topics I wanted to discuss. I miss having the community and user feedback which has dwindled due to my lack of involvement. I hope to reinvigorate that. Personal finances are such a personal topic that we don’t often share our struggles and questions with others and I hope to make this site a place where people can share and get their questions answered.

Thank you to all you readers who have stuck around even during long periods of silence. Your readership and contribution is very valuable to me and I truly appreciate it.

Share on Facebook

After reviewing our holiday spending we actually came out almost exactly on target. That’s not to say we spent exactly as we’d planned. We overspent on gifts for some and underspent on others. It definitely helped to have a plan because we would have grossly overspent without one. This year our plan was a little more casual than other years. My wife and I did a quick and dirty plan one evening, but we’ve had enough experience creating these plans that we were able to implement effectively with only one short meeting.

In December I posted about strategies to reduce spending during the holidays. One strategy we relied upon this Christmas was that of buying items on the fly if we found a good deal, but then returning the items that were over our budget or that just weren’t as compelling as gifts. A couple of days before Christmas, we laid out all the gifts on the kitchen table (after our sons were asleep) and sorted through them decided which were really worth it and which could be returned.

This process was so useful and actually had an unexpected benefit this year. As we looked at the gifts all together, it gave us a great overall sense of “too much stuff.” We realized that we simply had too much stuff for our son. We’ve experienced over and over at Christmas the point of diminishing returns where each additional gift just doesn’t add that much. A 5 year old can only really enjoy a small handful of gifts. More than that and you start entering that spoiled mode where the child is like “is that all there is?” “Aren’t there any more gifts?”

By looking at all the gifts at once we could very clearly see how many gifts constituted “too much” and how many were just right.

So what was the result on Christmas morning?

I’m happy to report that this Christmas was probably the most rewarding in terms of enjoyment-per-gift for our son. Not only did our activity of looking at all the gifts at once lower our Christmas bill, it also resulted in a happier and better-balanced child. There was virtually no spoiled response and our son had just enough a variety of gifts that he was thrilled.

So how is your holiday hangover? Did you have one or were you able to remain sober?

Share on Facebook

Please give me feedback about the podcast. I’m open to feedback about content, how it’s presented, any technical challenges you had getting the podcast, etc. I didn’t try to get fancy with intro music and stuff, but as I get more comfortable with this format I’ll polish things up.

Enjoy!

Share on Facebook

Budgets put such a damper on holiday spending. It’s much more enjoyable to not be constrained by a well-thought-out plan.

2. Don’t budget any money for giving gifts to anyone but immediate family

Sure you’ll end up buying gifts for the office party, all your friends, and neighbors, but it’s too hard to think of all those people ahead of time.

3. Don’t worry about debt

You still haven’t paid off last year’s Christmas so what’s the point in letting that ruin this year’s Christmas. You’ll still be in debt either way right?

4. Don’t even think about re-gifting

Re-gifting is embarrassing. It’s much better to store the many un-needed gifts from friends and neighbors in the closet.

5. Put off your shopping until the last minute

By waiting until the last minute you won’t be able to worry about how much you’re spending and don’t have to fuss with finding sales because there’s just not enough time to do so.

6. Make sure your kids have enough gifts

The last thing you would want is to short-change your kids by giving them only a few thoughtful gifts. Quantity is king at Christmas.

7. Buy a lot of those “gift”-type items

People love those “gift” items found at department stores. Who doesn’t like a few good knick knacks?

8. Don’t worry about price. You need to get it while you can.

You can’t afford to wait when you find an item you want. It might be gone forever if you wait.

9. Don’t coordinate with your spouse about gift giving.

It’s way too much of a hassle to coordinate with your spouse. Plus you don’t want to put a damper on each others’ gift giving.

Share on Facebook

ShopLocal.com solves that problem by putting the Sunday circulars online. You can browse through the actual circulars page by page or search by item. Once you search for an item you can refine your search by brand, price, or even store.

I use ShopLocal very frequently for items that I don’t want to pay shipping on or that I want right away. I will also buy locally vs online when I want the option of returning the item to the store if I have problems or aren’t satisfied. I find that I can often find prices at local retailers as low as I can online.

Check out this brief screencast showing you how ShopLocal works.

Technorati Tags: shopping, local, retailers, sales, deals

Share on Facebook

As an example, my sister bought a Yamaha piano – the digital kind that will play itself – using these techniques and saved thousands of dollars. She paid $2,500 for a piano that sells used on the market for $8,000. I wrote about her experience in a post about using RSS to buy items on craigslist.

Even if you use RSS all the time, I would encourage you to look at the 2nd and 3rd videos. They might just blow your mind and are only a couple minutes each.

What is RSS?

If you don’t know what RSS is, please view these posts from yesterday:

• What RSS is and how it will make your life so much easier
• How to subscribe to an RSS feed.
• Using RSS in Internet Explorer.
• How to organize your RSS feeds.

How to shop via RSS using preset feeds

In this video you’ll learn about using preset RSS feeds to find great discounts and sales. In this video I refer to a post post I wrote called RSS shopping site guide containing a list of shopping sites with RSS capability as well as links to their preset feeds. In this example I use the sites SpendFish.com and boddit.com.

How to shop for the EXACT items you want using a customized RSS feed

In this video I show you how to create a CUSTOMIZED RSS feed that will instantly show you when the exact item(s) you’re looking for go on sale or are discounted. If you’re looking to buy a specific item at a great price, this is a MUST WATCH video. In this example I use the RSS feed builder from SpendFish.com

How to shop for the EXACT items you want on Craigslist using a customized RSS feed

In this video I show you how to create an RSS feed from a specific search on Craigslist. Looking for a great deal from someone selling an ipod? You’ll get an instant update within seconds when someone posts an ipod for sale in your area.

How to receive instant notifications about discounts on item from your Amazon wishlist

In this video I show you how to create a customized feed using RSStalker to give you instant updates whenever there’s a price change on an item in your Amazon Wishlists.

Additional Resources

Lazy Man and Money also wrote about this topic and has a list of some additional deal sites you can check out.

Share on Facebook