Shakopee Accountant Asks: “I’m Not Lying–Are You?”

“Success seems to be largely a matter of hanging on after others have let go.” – William Feather

Now that “extension season” has all been about wrapped up, we’re able to breathe a little easier around here at Team Menden.

And one of the things we’ll be focusing on, next, is how to maximize YOUR tax savings for 2011. We’re in the final quarter, and there are still yet things which you can do to set up your file so that you don’t get burned, come tax time.

There might be just one problem, though. Well, one of two.

1) Some of my email contacts (even some of those with whom we’ve directly corresponded!) haven’t yet experienced how effective our work can really be! The only reason I can think of is that you try to wade through the pile of tax forms through a templated software, or you have someone else give it the old college try.

I’d like to suggest that now — here in the final quarter — is the BEST time to prepare to “make the switch”. But I’d also like to answer any questions you might have, so shoot me an email or call us: 952-445-8753 and we’ll explain more about our process. After all, trusting your sensitive details is NOT something anyone should take lightly!

2) Some existing clients only meet with us once a year — during tax season. You could be leaving lots of tax-saving possibility on the table. If that’s you, it might be well-nigh time to consider planning AHEAD for a change! See the phone number above, or shoot me an email — let’s get your file set up for maximum PLANNED saving!

[And by the way, by “breathe a little easier”, I mean that we’ll have more of a chance to focus on these exact issues–which is why NOW is a great time to get in touch!]

This week, since I’m actually preparing this Note to you in the middle of our extension-swirl (here on Monday), I’m taking the liberty of reaching back into my files for one of my most popular articles. It’s perhaps even more pertinent now than the day it was written, a few years back.

Enjoy!

Roger Menden’s

“Real World” Personal Strategy

How To Not Lie To Yourself About Finances

Working with my clients’ finances over the years has given me a bit of a crash course in human behavior. Often, I’m floored by the generosity I see displayed by many clients–even those without significant means.

Other times…well, I think that we all could use the reminder that our human flaws show up very clearly in our family’s finances. The fact is that we ALL lie to ourselves, from time to time, about what’s really happening in our wallets.

This habit of lying to ourselves threatens our financial stability. Instead of spending $5, we spend $20. Instead of recognizing that we *want* that new shirt, car, or fine dinner at a restaurant, we lie to ourselves until we are convinced that, for one reason or another, we *need* that new shirt, car, or fine dinner. The current credit crunch can partly be blamed on a nation full of people who convinced themselves, for example, that a $500,000 home was necessary–even though a $250,000 home was sufficient. We must learn to live within our income … and this means, we must stop lying!

So, I’ve compiled a short list of ideas on how to stop lying to ourselves and face the truth when making purchase decisions…

1. Have (and stick to) a budget. Is this purchase in my budget? For example, my family budgets a certain amount each month to spend on clothing. We’ve agreed that this amount is sufficient to meet our needs. We set this amount before facing a purchase decision. If during the month we want to exceed the budget because Kohl’s is having a fantastic sale, then we are now lying to ourselves. We aren’t saving money by exceeding our budget during a sale. In fact, now I have to dip into savings to pay for my overspending.

2. Set a per-purchase spending limit. A wise man said, “The four most caring words for those we love are ‘We can’t afford it.'” Take some time with your spouse to set what I call a “What I can spend without having to ask my wife if it’s ok” spending limit. My wife and I have decided that neither one of us is allowed to spend more than $50 at any given time without calling and asking the other one if it’s okay (this does not apply to groceries). Let me tell you right now, my wife has stopped me from making a lot of unnecessary purchases by telling me, “We can’t afford it.” Even though we had a budget for the purchase, we still didn’t need it.

3. Replace bad habits with enjoyable, inexpensive activities. Shopping or overspending is a habit that we have likely formed over years. Since our brains are programmed to react in a certain way in specific situations, any change is met by resistance. The existing habit is simply more comfortable and natural. To help change your behavior, replace the bad habit with another activity.

For example, instead of going to the mall to pass time, go to a local park with a soccer ball and spend some time with family or friends. Start or re-start a hobby. Your new hobby might even be a low cost home business where you make money!

4. Make sure that the reason you tell yourself you are making the purchase and the *actual* reason you are making the purchase are the same. Ask yourself, “Why am I really making this purchase?” Am I buying this dress for my wife because I love her and want to show my appreciation, or am I trying to prove to her and the world that I am a good provider? We lie to ourselves to cover our true motives. If the real reason you are making a purchase isn’t in-line with your principles and budget, then don’t buy it.

5. Take stock of and enjoy everything that you already have! Develop gratitude for what you already have in your life. Purchasing new things is often a sign of ingratitude for what life has already afforded us … or a sign that we feel deficient in some area.

Overcoming bad habits and addictions is a process that requires concerted effort. Face each day one at a time and stop lying to yourself! Don’t believe the story you’ve created in your mind that justifies unnecessary and financially harmful purchases.

To your family’s financial health!

R MendenShakopee Accountant Asks: “I’m Not Lying–Are You?”