Wednesday, March 24, 2010

Have a Plan and Stick to it

Why is it so difficult for people to come up with and stick to a plan? Whether it be for finances, business, fitness or some other need, doing so is apparently against human nature.

Coming up with a plan can be tough because it feels like a lot of work and it requires a change of operation and mindset. The irony is that having a plan actually saves you time because it creates efficiency.

Challenges to sticking to a plan involve not being fully committed in the first place, not having a specific timeline for implementation, and allowing external factors to derail us.

In my financial life I have a plan and am thankful for it. However, I do have a tendency at times to get derailed when my "now" urge fights with my prior plan. In my business life, I have a plan and am happy to report that I'm sticking to it. The problem is that this focus on business has led to a lack of priority on my fitness, something that is very important to me.

When you put your different plans into place, no matter how solid, having competing interests in your own life may very well be an impediment. I'm beginning to think that my high school French teacher was right -- equilibre (balance) is the key to most of life's challenges. When we put plans together, whether for finances, business or personal, we must be sure that they are not only realistic independently but in the context of each other.

Wednesday, March 17, 2010

Your *Actual* Entertaining Budget

So what was it? A month ago you were challenged to record your entertaining (not daily individual meal) expenses. Was the number lower, higher or just as you expected? For those in the lower or expected category, congratulations! Knowing your habits is the first step. For those with a higher figure this should be an eye-opening exercise.

Know that even your number is lower or as expected, it doesn't mean you're off the hook. There's not rule as to the entertaining part of your budget but it shouldn't be very significant if you're in debt, without an emergency fund and not fully contributing to your 401(k). (If it is, you're basically paying interest, taking on risk and forgoing retirement dollars to entertain!) If you're not in debt, have a six months stash of cash and contribute the maximum amount allowed to your 401(k) and IRA, then it will be your decision as to what is reasonable.

Every LMF4HMW reader can save money using these tips:
* think drinks instead of dinner
* entertain in private homes instead of at restaurants
* instead of funding a huge dinner party bill ask for guests to bring a dish -- not quite "potluck" but it absolves you of feeding a multi-course meal to a group
* host a wine tasting where each guest brings two bottles of wine -- the guest who brings the winning bottle will take all of the second bottles home (i.e., you're off the hook for party favors)

* think brunch instead of dinner -- less wine and courses involved