I wish I had more time.

I find myself saying this quite often. You would think this meant that I am using the 24 hours I have been blessed with properly, but that’s not the case. You’ll see why after reading this.

Check out the screenshot (from about 2 weeks ago) of my web browser.

From the top left corner going clockwise: Twitter, Facebook, GMail, ING Direct, Ohio University, Facebook (Again), CNN and ESPN. This means I check my bank account quite often. I think sometimes I believe watching each cent will make them grow. Hasn’t worked for me yet, but I digress . . .

Each time I open my web browser, I am greeted with these 8 big squares and the events that unfold are quite predictable. I check out Facebook (why do you think it shows up twice) and probably realize it’s someone’s birthday. I go to their wall to say “Happy Birthday” and then I realize they have put a few pictures up and I check those out and leave a few comments, then I respond to previous comments on my wall etc. Before I know it, 20 minutes are gone. Even a “safe site” like CNN chews a chunk of my time unexpectedly. I find myself going from looking at the top news of the day to watching a video about a barking man, which then leads me to other videos and on and on it goes.

Here’s another screenshot from my phone and the time wasters are there again: Echofon (Twitter for the iPhone), Facebook and Email.

These  screenshots mean one thing: I am begging to be interrupted. The blue Facebook icon is telling me someone wants to friend me, my email notification is singing melodies in my ears and the orange glow from the ING Direct logo is beckoning me to click it.

In the end, I had clear out my history and then I made my phone icons less accessible by moving them away from the home page. In addition, I don’t open my email box for a few hours when I am at my desk and I turn off the sound on my phone for a few hours while at the office. All these are tiny changes, but now it takes more than 1 second for me to visit Twitter and I can usually stop myself before I do. This doesn’t mean I don’t tweet or facebook anymore, but now I do those things when I am ready to go on a break as opposed to responding to every single notification or stimulus. I am fast learning that as good as connecting to people is, it is more important to not let connections become more important than doing the real work. Any good thing can become bad if overdone.

Next time you find yourself wishing you had more time, have you asked yourself if there are small time-wasters that are eating away at your time currently. What about wishing you had more money? Have you asked yourself if you have plugged the money sinks you currently have? It might be time for a good ol’ self-examination.

PS. If you checked out the video of the barking man, did you find yourself also checking out other videos?

This is a follow-up to the previous article and video (1,613 views at the time of writing) I made. I provide more insight into and reasons for the steps I took to save up enough for an engagement ring.

For a moment, let’s separate the idea of getting engaged from purchasing a ring. Although there are issues concerning the origin of diamonds and whether getting an expensive ring really means anything (a la Kobe Bryant scandal), I see this ring as a sign of my commitment to my girlfriend as the woman I want to spend the rest of my life with. So the whole process of saving held an additional meaning: I wasn’t saving to buy an item for my own enjoyment, I was taking a step on the road to building my legacy by starting a family.

In the past, I had tried multiple times to save money for a rainy day. The figures were usually round numbers like $500 or $1000. Somehow, before I reached my target amount, something always came up. With this in mind, I knew the plan that I was going to undertake had to have some sort of penalty for early withdrawal. Secondly, because of my current position as a graduate student, I wouldn’t be able to put away huge chunks of money. Therefore, the plan had to be one where I could save in bits and pieces over a period. Finally, I needed to be still be able to retrieve all the money I put in at the end of the year. Therefore, I had to use safe investments capable of providing relatively good yields.

Investment 1: Savings ($100/month)

The first thing I discovered was the Suze Orman Save Yourself Account. To be completely honest, I can’t remember how I found it and I wish I could give credit to the site or where I stumbled on it. Suze Orman is one of the most popular Personal Finance Advisors in America. She’s written multiple books full of basic tips in establishing a sound and solid financial foundation. Essentially, the account is an FDIC insured account (meaning if the bank failed, your money was insured up to $250,000) and $100 was  automatically withdrawn from your account at monthly intervals. After 12 months, you were credited with $100. Short and Simple. The money was insured and I was assured of making $100 at the end of a year. The catch: you couldn’t withdraw the money before the end of 12 months and the withdrawals were made at the same time every month. As a person wary of automatic withdrawals due to fear of being overdrawn, I created an additional account in ING Direct and labelled it “Investment Transfer”. Everytime I got paid, I would immediately transfer $100 to that account in preparation for automatic withdrawal. Therefore, this plan satisfied the penalty clause (no bonus if I took the money out beforehand), small investments and safety net.

Sidenote #1: I got the 8.33% mentioned in the video by $100/$1200 * 100%.

Sidenote #2: If you ever setup an automatic withdrawal and you are afraid that you might overdraw like I was, you can apply a similar method of making withdrawals from an alternative account instead of your checking account. Keep in mind that bank savings account only allow a maximum of 6 monthly withdrawals.

Investment 2: Mutual Funds ($120/month)

At the time when I was  beginning to save for the ring, the stock market was doing terribly. The Dow Jones Industrial Average, which is used as a marker for how the stock market is performing, was below 8,000 (Prior to the recession, it was around 10,000 and is now at 11,006). I’ll start by saying that at the time of investing, I was quite clueless on investing but I was beginning to read the Four Pillars of Investing and one of the many things I learned was that the best time to invest in the market (with a long-term vision) was when it was doing poorly. Since financial markets go through cycles, catching the market when it was low provided opportunity for growth. In order to preserve the length of this article, I won’t go into explaining investments in detail but will save it for a later date. In summary, I was planning on saving for a mid-range goal 1-2 years so I chose to invest in a mutual fund (not attached IRA). I used T. Rowe Price because they were the only company I found who would let me invest a minimum of $50 per month as I wasn’t sure I could invest more than that (I later increased this amount to $120).  I divided my investment as $50 to an index fund (PREIX) and an $70 to actively-managed fund (RPBAX).

A screenshot of my account as of December 2009 is below.

Notice how market fluctuation added about 9% (again because of how poorly the market was doing when I started)

Investment 3: Tax Refund

This was relatively simple. Every year, I file my taxes as soon as my W-2 and bank statement is available (Jan/Feb) and I had my refunds direct deposited into my checking account. As a reminder, the deadline to file federal taxes is this Thursday April 15th. Just go to the IRS website to see where you can file your federal taxes online for free if you make less than $57,000 (Students fall into that category for sure, unless of course you are the new Mark Zuckerberg).

Summary

Essentially, armed with the information from books and websites, the small steps instituted to growing the funds,  and a purpose and commitment that was bigger than a temporary want, I was able to save up for something I considered very essential. You may not be saving for a ring, but something equally important to you. Don’t try to do it all at once if you can’t afford it, but you should start. Small grains end up adding up.

Image courtesy of Brooks Elliot

Almost a month ago, J.D. Roth over at Get Rich Slowly started sponsoring a video contest asking readers to turn in a tip or a financial success story. When I revived this blog last week, I mentioned that I had been able to save up for a ring and I would be sharing the story of how it happened. Well, here is the first part of that story condensed into a 2 minute video.

Confession #1: I have never done a video blog before this

Confession #2: I have never saved this amount of money at one time before

Confession #3: I wondered if sharing this would ruin the surprise of the actual moment

With that being said, I hope you enjoy the video. It will be the first time some of you are hearing or seeing me and I must say that the still picture here doesn’t create a great first impression .

[There is a video that cannot be displayed in this feed. Visit the blog entry to see the video.]

Next week, I will provide a detailed article explaining the products I used in this video and why I went the route I did.

Hello World

For most of you that have subscribed, this is the first post you are getting from me since you started reading my blog. It’s been 6 months since I wrote any articles at this website and it is unfortunate that this has been the case. I want to first of all apologize because in writing this blog, I expected consistency from myself and I have failed in that. I’m hoping that after this post you will still come back and keep reading.

Why did I call this the end of the beginning? It’s because the first 3 months of blogging for me were an experience that although enriching, was just the beginning of this journey. The reason for starting this blog has always been to share with others my journey through the financial waters. I hoped that in sharing that journey we can all learn a better and more appropriate way to treat our finances. In addition to this, my core belief is that you can’t separate your financial growth from personal growth because they they often occur together. They are like a couple, if one grows and leaves the other behind, sooner or later there will be regression. I will explain this in a series of posts called “Time is Money.” However for growth to happen, it has to be slow and steady. As such, this is the first step (the end) in a series of steps to continue the growth (the beginning) that started last year.

In the coming weeks, I will be going through the Goals in my Goal Report and how far I came in the past year (including how I was able to save enough money for a ring). Sidenote: It’s the first time I have saved that amount of money and I can’t wait to share it with you.

Enjoy the day and remember it’s April Fool’s. Try not to fall for any tricks

This is the second in a series of articles directed towards college students – both graduates and undergraduates. As a PhD student in my 5^th year after being an undergraduate for 4 years, you can call me a professional student. Through various experiences, I have learned a few things that can save money and help to reduce expenses. This series is dedicated to these suggestions. In the previous article I looked at textbooks.

After the costs of textbooks are taken off the table, the next area in which spending can easily get out of hand is food. Everyone has to eat, but the question is how you can eat without hurting much in the wallet? Here are a few of the things that I have seen that could help in managing costs of eating.

Attend Cultural Events: Every college campus has an international student organization and as a current (and former) member of several international student organizations I can attest to food being a major item in planned events. Most of these events take place on weekends, during dinner and cost little to no money. So instead of spending money at a Chinese buffet off-campus, support the Chinese Student Organization by attending their cultural event. You get the added bonus of interacting with people of other cultures in addition to eating well. Check your campus newspapers for details on these events and prepare yourself for some delicious dining.

Buy groceries: This is the most common way to save money. Knowing how to cook is an advantage but even if you don’t know how to cook there are easy food packages from Ramen to 5-minute rice to Hamburger Helpers. It’s a guarantee that you will save with a $2 ground beef and $2 hamburger helper package because it costs less than buying a similar food item that’s premade and you will usually have enough left over for a full meal. There are plenty of cheap and easy-to-make food packages ranging from oatmeal to Ramen to 5-minute rice. This is useful whether you live on or off campus. For more on grocery shopping tips, check out an older article from Get Rich Slowly

Cook in bulk: If you’re already buying groceries, take time on the weekend to make 2 – 3 different meals in bulk and refrigerate them for the rest of the week. Cooking more than one meal provides the variety required in a regular diet and reduces the monotony of only eating one meal (Of course if you’re like me and loves eating rice for days on end, there’s nothing wrong with that either). Another way this helps to save money is when it comes to resisting invitations from friends and co-workers who are constantly asking you to go to lunch when you just can’t afford it. Now you can say “I packed my lunch already.”

Make friends: If you don’t have a kitchen on-campus, offer to cook for a friend/classmate that lives off-campus and you both can share the meal. If you do have a kitchen off-campus and can’t cook or don’t have the time to, invite someone who can but doesn’t have a kitchen. This is basically an exercise in trade by barter. It still works even in 2009 (and beyond)!

Organize a Potluck: Although potlucks are usually organized as social events to foster camaraderie and conversation, it can also be another way to cut expenses. Consider that instead of eating out at a restaurant and paying individually, you can have a variety of dishes at a low cost. Although graduate students organize potlucks more frequently than undergraduates, this is a benefit to both parties. Using this idea, potlucks can be organized around themes (Game Night), sporting events (Super Bowl) or even T.V. shows. And if you are unable to cook, you can always offer to provide drinks.

Coupons: Before you skip over this section, remember that using coupons are more of a mental hurdle than anything else. How would it look eating at Applebee’s with a coupon for $5 off? Does $5 really make a dent in a $30 meal? It’s an internal battle, but when you think about it $5 is essentially half of a movie ticket or a haircut or 2 cups of coffee from the campus shop. Websites like campusfood.com and restaurant.com regularly offer deals and coupons to local restaurants. For those living off-campus, there is regular bulk mail delivered featuring pizza coupons and fast-food deals. Although these foods are inherently unhealthy, and minimizing them in your diet is the most beneficial habit, the focus here is not to eliminate bad habits but attempt to reduce their cost.

Brew your own coffee (or tea): From helping you make it through an all-nighter to giving you that extra kick in the early morning, caffeine intake usually increases proportionally with the time spent in college. A cup of coffee can range from $1 – $5 depending on the temperature, flavor and size. Yet this cost can be highly reduced if you make your own beverage from home. A little research using Wal-Mart and Walgreens website provides the following

Some people don’t consume that much coffee, but if these numbers are way lower than the amount you spend on coffee (Check out these useful tools) it might be time to modify.

Eating well does not have to come at a premium and food doesn’t have to bite into your pocket money if you network with people and make some of the things you pay high prices for. What are some of the other ways in which you have been able to reduce costs? I’ll update this article based on the suggestions I receive.

Coming up next in the series - Money Tips from a Professional Student: On Housing

Image from PhD Comics

This is the first in a series of articles directed towards college students – both graduates and undergraduates. As a PhD student in my 5^th year after being an undergraduate for 4 years, you can call me a professional student. Through various experiences, I have learned a few things that might save money and help to reduce expenses. This series is dedicated to these suggestions.

So you have a stipend or loans or money from the parents to cover your books, somehow it still doesn’t make parting with $400 for textbooks any easier. Even more painful is paying $120 for a new book and only to sell it back to the bookstore for a measly $40. I know this experience very well and I learned (as a senior) that I could have saved a fortune over the course of three years. Some of the methods I tried require more effort than others and one of these methods (using older editions) you may never try. However, the goal here is to get to keep more of that textbook money in your pocket (or bank account).

1. Buy Used Books: The most common technique is to buy used books from sites like Amazon.com, BarnesandNoble.com and half.com. These sites usually have various editions and versions of the book and connect you to other vendors (usually students) who are selling the book. A disadvantage with this method is that you may not know the required text until the professor hands out the syllabus on the first day and then you have to spend more money on shipping to receive the books on time.
2. Contact your professor: When you aren’t aware of the required books, email the professor(s) over the break to ask about the books for the class. You can let them know you want to get them ahead of time to cut down costs. Almost all professors will oblige you. Once you get the response, go to the aforementioned sites. An added advantage to this route is that the professor will already know your name before the course begins and that never hurts.
3. Bookstore Website: Once in a while, you come across professors with tardy responses or no response at all. In that case another option is to try your college’s bookstore website. The bookstores get the list of course textbooks way ahead of time and then list the books on their site for purchasing. Take advantage of this and look up the required books on the site and then get them cheaper from other sites. Think of this as sticking it to them for buying back your books at ridiculously low prices.
4. Use the Library: Request the book from the school library and use it while waiting for your book to arrive from the site that you will order from. Better yet, use the book over the course of the quarter and renew it as many times as possible. In the state of Ohio, all public college libraries are linked so if you don’t find a book at Wright State University, you can rent them from from Ohio State University. Ask your school librarian if there are opportunities like this at your school. This means you should know where the library is if you don’t already.
5. Use preceding edition(s): Something I have noticed (especially in the sciences) is that material doesn’t change much from one edition to the next especially with books that have undergone several revisions (Really good books undergo very few revisions and revisions are years apart) Changes usually involve extra examples, problem sets and pages with the subject material unchanged. When I went this route, I just made photocopies of relevant questions using my friend’s textbook. If you want to insure yourself against risk, borrow from the library to compare how drastic the changes are to help you make a decision on obtaining the newer edition. Note: If you decide to do this, make sure to check with someone in the class who has a recent copy to make sure that assignments are the same.
6. Rent and Exchange: While writing this post, I learned about two other opportunities I haven’t tried, but are useful nonetheless.
   • A student of mine recommended chegg.com and rentabook.com which are sites where you can rent textbooks. I would advise anyone who is doing this to check the math just to make sure that it’s worth it. Sometimes it’s better to own than to rent especially in cases where you might need the book for a whole year. If you’re into nature preservation, you will like that chegg plants a tree for each book you rent. Environmental Awareness and Expense Control all at once.
   • Another student referred me to a book exchange website hosted by the school’s student senate. I am not sure if other schools have this sort of network, but I know that most schools maintain a listserv dedicated to students trying to sell their materials at really low prices. Your Resident Assistant might be a helpful resource here.

Buying textbooks are a basic part of any college student’s career and the experience is that much sweeter when you know that you won’t be breaking the bank every semester.

Coming up next in the series – Money Tips from a Professional Student: On Expensive Eating.

Image from http://www.flickr.com/photos/pleasewait/ / CC BY-NC-ND 2.0

After today we will be in the month of October. OCTOBER . . .  2009!?!

I’m literally taking a moment to digest how nine whole months have flown by . . . . . OK! Moment Over.

With about 90 days (92 days to be exact) left in 2009, I want to mention 6 steps using the Achievers Focusing System (click image below to enlarge) from Success Principles to make the latter part of 2009 your best yet.

Step 1 – FOCUS AREA: In what aspect of your life do you want to make the most impact?

The Achievers Focusing System has divided areas of life into seven

• Finance & Wealth
• Career
• Free Time
• Health and Appearance
• Relationship
• Personal Development
• Community & Charity

When the year began, you probably thought about making a change in 1 or more of these categories and somewhere along the way that got lost in translation (9 months wheezing by can do that). No matter, a lot can still be done in 90 days by making minute and incremental changes.

By the yard it’s hard, but inch by inch anything’s a cinch – Brian Tracy

Instead of trying to cover all these areas at once, start by selecting the most important area where you want change and then select the next most important area and so on.  Consequently, you will be creating a ranking system for the next three months.

Step 2 – GOALS: What are your goals for the rest of the year?

Write down one goal in the area(s) that you have chosen previously. Using the document, this can be written in the boxes provided.

This is where problems arise. In defining goals, they have to be measurable i.e. there has to be some sort of finish-line related to  an accomplishment and/or  time frame. The lack of a time frame usually results in complacency. The lack of defined accomplishments usually results in a loss of interest and boredom. Using goal #1 above, I will have to pay off $1,000 in the next 3 months. With this, I have defined the accomplishment and the time-frame. How can you measure the goal you want to attain? Is it a series of accomplishments or is it one you can measure with time?

Step 3 – ACTIVITIES: What steps need to be taken to accomplish this goal?

Outline the necessary steps to completing this goal. This can be done using the time-frame or accomplishments as a guide. The point of doing this is breaking down the goal into manageable chunks. By so doing, the viability of the goal is maintained and it would seem neither large nor looming.

For my goal, here’s what I’m thinking:

In addition, list some non-activities as well i.e. activities you shouldn’t engage in which will also help with accomplishing your goals.

• Leave credit cards at home ALWAYS
• Pay for purchases using checking account

Using the Achievers Focusing System, these activities are then spread out over 12 weeks. This allows for looking at the overall picture while keeping track of the activities spread out over the 90 days.

Step 4 – SMALL VICTORIES: What happens when you complete an activity?

Sometime ago I mentioned how celebrating small victories are essential to boosting morale. As you slowly advance towards your goal week by week, remember to take a moment to digest how far you have come. This moment of reflection can be used:

• to further fine-tune future activities
• to ensure that the pace is still being kept
• to rest before going on to the next task

Once each activity is completed, take a breath and congratulate yourself on making it this far. For me I will take great joy in seeing Balance: $0.00 and I will also update my account at NetworthIQ at the end of every month because seeing that bump provides additional motivation. Then keep pressing on knowing that you are closer than when you first started.

Step 5 – ACCOUNTABILITY: Should I involve others in my goal?

The Achievers Focusing System includes a section for an Accountability Partner. This is the person who you have shared your goals with and you know will be a willing motivator in your cause to improve. Sometimes goals are like a new toy: you play with it for a few days excitedly; then over time, the excitement fades and the toy starts to collect dust. This is when your partner(s) can help to dust off some of that dust and remind you of what you set out to do.

Therefore, since we are surrounded by such a great cloud of witnesses, let us throw everything that hinders . . . . and let us run with perseverance the race set out for us. Hebrews 12:1

Your accountability partner serves as that witness to your commitment to yourself in that area of your life.

Step 6 – FINISH LINE: When does my goal end?

As mentioned in the beginning, this goal(s) should be tailored to cover the remaining 3 months/12 weeks/92 days of the year. Therefore while striving to complete each activity always keep in mind your finish line by:

• Tick off the days on the calendar
• Cross out your to-do list each week
• Little steps will yield great results

By so doing, you are constantly reminded of where you are trying to go

Image courtesy of Mr. Mystery

What do you do when:

• your source of income suddenly stops?
• you’re suddenly ill and insurance can’t cover all the costs?
• you have to travel immediately due to a close relative’s passing away?
• your car breaks down and you realize you have to spend $700 or more on repairs?

Sure you can use credit cards to cover some of these expenses, but how long can you do that for especially if the first situation is also true. This is when the Emergency Reserve comes into play. It sounds basic and like common sense, but this is the most important account for any independent person (and often the most overlooked). In discussing this, we can focus on the What, Why, Who, Where, When and How?

What: What is an Emergency Reserve?

According to the Merriam-Webster Dictionary Online, an emergency is

An unforeseen combination of circumstances or the resulting state that calls for immediate action

Two words stick out clearly here: unforeseen and immediate. Consequently,

An emergency reserve is money kept aside for unforeseen situations that call for immediate attention and action

This means that this money should only be used for things that are unplanned. Consequently, emergency reserve should be separate from your savings. Usually when we save, we are saving for a goal e.g. a vacation, new gadget, textbooks, accessories etc. As such, while savings is usually money for planned activities, an emergency reserve is money for unplanned activities. In a way, you can call your Emergency Reserve your financial Red Cross because it arrives on the scene when emergency rears its head.

Why: Why should I care about an Emergency Reserve?

As mentioned above, this money is for unforeseen circumstances which can (and does) happen to anyone. Thus the prime reason for having this reserve is simply: peace of mind. Rather than worry about money in a time of crisis, you know there is money somewhere and that helps to focus on the crisis itself. Besides, if you already insure your car and health, shouldn’t you also be insuring your finances as most emergencies hit the pockets first?

Who: Who should have an Emergency Reserve?

An emergency reserve is necessary for anyone who is (or wants to be) dependent on themselves for financial resources. Therefore, this person has some sort of regular income which pays their bills and they are not necessarily dependent on their parents or family members. This reserve is also important for those who have dependents.

When: When should I start an Emergency Reserve?

As soon as possible! Right after reading this article!! I’m kidding. Well kinda. In all seriousness, you never know when you will need this, so it’s best to start as soon as you can.

Where: Where should I keep my Emergency Reserve?

Since this money is required for immediate action, it should be kept in a savings account that is linked to a checking account. This way, the money can be easily transferred when it is needed. I would stress here that it shouldn’t be in a checking account simply because just as much as this money should be accessible, it should also be untouched. With an emergency fund tied into a checking account this is very prone to happen.  In addition, the advantage is that it generates interest while sitting in the savings account when untouched.

How: How much should an emergency fund have?

For this question there isn’t always a straightforward answer. I have heard of 1 month, 3 months or even 6 months worth of expenses saved. I have also heard of using figures like $1,000 – $5,000. I personally keep set my goal at $1,000 just because it’s a nice round figure and also because it covers a month worth of expenses at the moment. When I leave graduate school and start a family, I am sure that number will go up. The most important factor here is that you set a minimum that will give you peace of mind.

I’m hoping that I have somehow convinced you about the relevance of this very important financial tool or at least initiated some thoughts into starting your own emergency reserve. When crisis happens, you will have your own Red Cross to lean on.

In yesterday’s article, we were able to explore the structure of a spending pyramid a la Robert Pagliarini.

Based on Dan Pink’s lecture on motivation (which I embedded in another article), there are three human motivating factors.

• Autonomy – The urge to direct our own lives
• Mastery – The desire to be better at something that matters
• Purpose – The yearning to do what we do in the service of something larger than ourselves

As you begin to think about what motivates you in general, you will be able to rearrange the middle portion of the pyramid (in between basic expenses and miscellaneous expenses) to conjure up a picture that aligns with your own values.

Autonomy: Your Money and Yourself

Image courtesy of Flickr

If directing your life is what motivates you then debt reduction, financial independence and personal improvement will rank high in your pyramid. The most important thing to you is being in control of what happens in your life and blazing your own path. Therefore, neither owing money to credit card companies nor retiring while being financial dependent sit well with you. As such, most of your spending will be directed at your money going mostly into your pocket prior to anything else.

Purpose: Your Money and Others

Image courtesy of Flickr

For some, being financially fit is the means while the end is the ability to serve others and the community. If the realization that there’s more to life than your own needs, then donations to church and charity will rank high on your list. Those who attend church have a set value at 10% (tithing) and will also donate in others ways. Even if you don’t attend a church, you find that donating towards a cause brings about a certain kind of satisfaction. In addition, these donations can also be used for tax deductions.

Another area not reflected in the pyramid is provision for family (both immediate and extended). I told a story of how my father laid the foundation for my siblings and me to go to college. That couldn’t have happened if he didn’t believe that part of his purpose was leaving a legacy to his children.

Mastery: Your Money, Yourself and Others

Image courtesy of Flickr

Sometimes, motivation lies in being better at something for the sake of just being better (epitome of kaizen). Two of the most popular New Year Resolutions in the U.S.A. are managing debt and saving money. Hence it would appear that most people would fall under this category as most believe that finances matter. This belief combined with the desire to understand finance could be a motivating factor for another set of people. Therefore, Goals and Emergency Reserve would rank higher in your pyramid. Goals motivate towards reaching a pinnacle while mastering personal finances starts with being prepared for emergencies. Personal Improvement would also fall under this category as mastering finances would include studying financial matters and learning from others.

Most of the time, personal motivation will come from a combination of two or all three factors and therefore you will find that your values overlap. In the end, the final picture is letting the things that motivate you in life also motivate shaping your finances. Create your own picture and it will lead to spending habits that are aligned with what you think is important.