By: Pauline Handy – Marketing Director, V.F. McNeil Insurance

The New Year is always a popular time for change.  So, what about your financial status?  If you have a lack of confidence, we have a few suggestions to help you give your financial status a makeover without feeling like a have-not. 

Let’s face it, nobody likes to be scraping together money in a rush due to a I didn’t see that coming moment.  It’s also no fun to rack up credit card bills because you don’t have adequate cash on hand.  Those high interest rates can bury you in debt!

Whether it’s a broken-down furnace, a summer vacation, or an emergency car repair, it’s much less stressful to handle life’s curveballs with confidence.  You’ll sleep better at night without all the worry.  Okay, by now we can guess what you’re thinking.  How could you possibly accomplish this without feeling like you are missing out?  Below are some suggestions to consider for the New Year.  

Change your mindset 

Just because many folks around you never seem to go without, it doesn’t mean they can really afford what they are not going without.  Avoid spending for the whole keeping-up-with-the-Joneses thing.  Everyone has their time to shine.  Your time to shine will be when you get that new kitchen you’ve been planning and in the end, you don’t owe a dime.  Yup, you’ll shine extra brightly.  

Spend for the right reasons and only when you can truly afford it.  In the meantime, have fun planning, gathering ideas, and making whatever it is yours for your own fulfillment and not for the sake of impressing others.

You’re in charge of your money –It’s not in charge of you

On the flip side, I recommend carefully considering all your purchases.  Is it something you really need right away or could it wait?  As tempting as it may be, don’t charge that new lawnmower or finance it.  That temptation will own you.  Wait until you save the money or consider other more affordable options.  You’ll be thankful to avoid the monthly payments with interest attached.

Depending upon what it is, you can purchase many things in more affordable ways.  I for one have a lovely 3-piece ensemble of solid maple furniture in my dining room that I only paid $350.00 for!  Brand new, that set could go for a staggering $4500.00!  The only thing I had to do was re-cover the seats, which cost me $50.00.

Furniture isn’t the only thing.  I walked into work recently wearing a lovely black lace skirt that a few of my female co-workers complimented.  One co-worker mentioned that she saw a similar skirt in J. Crew over the weekend.  She considered it for her daughter until she saw the price!  It was a whopping $99.00 for one skirt!  I giggled as I thought about the mere $7.00 I shelled out at a local thrift store.  She probably thought I really splurged! If you must know, 75% of my wardrobe comes from thrift and consignment shopping.  Okay my secret is out and here’s my next one.  I proudly carry zero credit card debt and have a great wardrobe.  You’d be surprised at the treasures you can find!  Point is, I’m still getting what I need and sending my second child to college. 

You won’t even miss it

As our financial professional, Megan Maruzo, says, pay yourself before you pay anything else.  In other words, if your employer offers a 401K, this is a great way to divert money out of your paycheck before it comes to you.  If you use a paycheck deduction and get used to the money not being there, you won’t even miss it.  Not to mention, it lowers your taxable income!  Megan recommends a goal of living on 15% less than you earn.  That 15% will do you much more good in a savings vehicle.  However, if that seems like a big leap at first, start small and work your way up.  A great way to increase your contribution is to allocate more every time you get a raise.  You won’t even notice the difference!  Contact Megan for more great recommendations on how to make over your financial status. 

On a smaller note and for the more immediate things in life, don’t overlook your spare change.  It can be a great way to save!  Instead of keeping it in your wallet, throw it in a five-gallon jug and tuck it away out of plain sight.  You won’t even miss that change, but in a few years when it fills up, you will have a nice surprise.  My family went on a vacation once with the jug money we collectively saved!  It worked out great during a year that we had a lot of unexpected things eat up some of our savings.

Don’t slack off when you pay off

Just because you recently paid that car off or hopefully your last credit card bill, don’t feel free to start spending that money frivolously.  You are used to making that payment each month so keep paying it!  The only difference is, you’ll be paying yourself by socking it away in a savings account.  What’s the result?  You won’t have to charge it or scramble the next time you want or need something substantial.  

Ditch the drain on your cash  

I can’t tell you how many people I know that could make a mortgage payment with the amount they spend annually on their daily coffee runs.  If you love Dunkin Donuts or Starbucks, buy it and make it at home.  Look for coupons or sales and stock up.  Invest $10.00 in one of those cool travel mugs and ditch the drain on your cash.  If you’re in a crunch for time, Cumberland Farms makes a great coffee and it’s only a dollar!  There’s always an alternative.  

We all like to eat out, right?  Although fun and easy, it gets costly if you are doing it too often.  An added negative is that frequently eating out can be bad for your health.  These are two great reasons to save those restaurant nights for special occasions and try to find Groupons and other deals like pre-fixe menus to control the cost.  You get more for less and do something good for your health.
Do you have cable television with hundreds of channels but still find yourself streaming Netflix because there’s nothing worth watching on any of those channels?  Why waste money on meaningless things when you could save it for things that you really like?  This is just another example of things that unnecessarily drain our cash.  Now that I’ve got the ball rolling, I’m sure you could come up with a few of your own examples.  If you do, please email me and I'll share your tips in our next edition of Financial Makeover.

Resist Temptation

Hold back from buying that brand-new car that will drop 15-20% in value the second you drive it off the lot.  The newness will wear off much more quickly than the high monthly payments and associated costs.   Look for the used, low-mileage cars, preferably with a good warranty and skip the high monthly payments.  My husband and I scored a nice little Toyota Corolla for our daughter with very low miles, in amazing condition, and driven part-time by an elderly couple. We payed cash for the purchase and three years later have no regrets.

Also, resist the urge to buy the house the bank says you can afford.  Buy the house you can afford after carefully considering savings, taxes, insurance, utilities, and all other monthly expenses.  You’ll surely come up with a much different answer than the bank.   

Instead, consider a fixer-upper that has good bones and mechanics.  Take your time making it your own.  Look online for ideas.  The internet has so many great, low-cost ideas to remodel and redecorate every room in your house.  I gave both of my fireplaces a makeover several years ago for less than $100.00 and they still look amazing! 

Consult with the right professionals

Consult with a financial professional who has your best interest in mind.  That person should help you review your current circumstances and in turn, help you establish realistic financial goals and ways to reach them.
You should also consider consulting with an insurance professional to be sure you are properly protecting your family, property, income, and savings.  You’ll get a double dose of easy rest at night knowing that your loved ones and your hard work are covered. 

 V.F. McNeil Insurance is a Trusted Choice® independent insurance agency located in Branford, Connecticut. Our insurance agents are always happy to help.