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May 11, 2009
Dear Clients and Colleagues,
The economy looks like it will be in bad shape at least until 2010
and housing could take another year or two beyond that to recover.
And….it is cold and gloomy as I write this. So, you ask, what else
is new? More importantly, what can I do to get through these tough
times?
First, let’s assume that while you probably cannot do a lot to
increase your income in the immediate future (except win the
lottery), you can control the other side of the ledger, your
expenses.
Second, let’s assume that you are a typical American with four or
five thousand dollars of credit card debt, at 20% interest. You know
you should pay it off; perhaps you have even worked out a budget.
But month after month, the debt does not seem to go down. You do not
seem to be able to give up buying the things you deserve, and live
on rice and beans. That may be because the hardest part of paying
off debt is not financial, but emotional.
You have to understand how you got into this bind. It is not because
you are a bad person. More likely, it is because you are a good
person who deserves nice things. Or you work really hard and deserve
a special treat now and again. I agree, you deserve it. But you may
not be able to afford it. This doesn’t make you a bad person, or not
as good as your neighbor. It just means that you do not have the
money to buy everything you want.
A budget is a lot more than a bunch of numbers that leave you with
no money at the end of the month. A budget is a way of putting your
priorities and values into effect. It is living what you say you
believe in. It is putting a dollar value on what is important to
you. I know that might sound crass, but it needn’t be. Put a
positive spin on it by saying this is what I believe in, and I going
to spend my money based on what I believe in. And the first thing
you should believe in financially is living within your means.
By paying off your credit cards, you are taking back control of a
very important part of your life. Do not be ashamed of this. Talk
with your spouse or significant other, your friends and relatives.
If you cannot afford something, say so. Anyone who really cares
about you will understand and be supportive.
Try to visualize what it is like to live within your means, to buy
only what you can afford. One trick is to put your credit card, or
debit card, away in a dresser drawer (or the freezer). Just carry
your week’s allowance in cash. Giving the cashier real money, makes
more of an impact on you than handing someone a piece of plastic.
You can see it disappear from your wallet. Money is not virtual,
money is real. And when your money is spent, it’s gone until the
next week’s allowance. It worked when you were twelve, so why not
now?
Pretty soon, even before you have paid off everything, you will be
living a debt-free life style. Living within your budget, according
to your values, will have become a habit, a good habit.
If you have any questions or need any help, please contact my
Financial Assistant, Evan Press, at 818.887.9401 or by Email at evan@hornsteinlawoffices.com.
In fact, if you have any questions about your tax or financial
situation, need tax advice before you set up an IRA or 529 College
Savings Plan, or want help making sure that you can meet your
financial goals, please contact us. Also, if you know someone who
could benefit from our services, for example, your son or daughter,
who should start saving for retirement, please contact us. We would
love an introduction.
We are a full-service financial firm, with experts in estate
planning, taxes and financial strategy, and offer a free initial
consultation.
Thank you,
Steve Hornstein
We are a full-service financial firm, with experts in estate
planning, taxes and investments.
Steve H. Hornstein, CPA, Esq., LL.M., CFP™
Hornstein Financial
20335 Ventura Blvd., Suite 203
Woodland Hills, CA 91364
Office: (818) 887-9401
Fax: (818) 887-7173
Toll-free: (888) 280-8100
www.hornsteinfinancial.com
Securities are offered through LPL Financial, Member
FINRA/SIPC
The opinions voiced in this material are for general information
only and are not intended to provide specific advice or
recommendations for any individual. To determine which investments
may be appropriate for you, consult myself or your financial advisor
prior to investing. All performance referenced is historical and is
no guarantee of future results. All indices are unmanaged and cannot
be invested into directly.
This document is for information purposes only and is not intended
to be an offer or solicitation. The past performance of securities
or other investments does not necessarily indicate or predict future
performance.
The information in this document is not intended to provide
individual tax advice. You should consult either your tax advisor or
me for specific guidance. |
