.How to Create a Financial Binder

Written by Sam

It’s a common worry. Am I spending more than I should? When are my bills due? Have I paid them? Am I on track to reach my financial goals? Am I going to be able to get out (or stay out) of debt? Financial worries are not only one of the greatest causes of personal anxiety; they can also be one of the biggest strains on a relationship.

Many people don’t have their finances well organized and therefore aren’t able to tell where they stand. Disorganized finances can have severe consequences; In the short-term, you may end up paying hundreds of dollars in late fees and penalties.

You may be digging yourself deeper into debt without even realizing it. In the long-term you won’t meet your high-level financial goals. Couples often end up re-hashing the same financial issues over and over again because they don’t have a way of tracking the decisions and progress they’ve made as a result of their arguments…er discussions. If your finances are not organized how can you ever have any hope of getting them under control?

The good news is that by taking one simple step you can start down the road of financial security and begin to get your finances in order. You can get a good overall view of your financial picture and establish a base from which you can build your financial future. It all starts with creating your financial binder.

What Is A Financial Binder?

.CNBC: Sudden Wealth Can Leave You Broke.

By Ilana Polyak   Wed, Oct 1 2014

​At some point, we’ve all fantasized about winning the lottery and living the high life, replete with mansions, sports cars, yachts and exotic travel. But the reality of hitting the jackpot isn’t some glamorous Kardashian-style existence.

Instead of finding themselves in the lap of luxury, 70 percent of people who come into sudden money are broke within a few years, according to the National Endowment for Financial Education. Many even end up cursing their windfalls.

 The reason, said Susan Bradley, founder of the Sudden Money Institute, is that people get used to their own level of wealth. Suddenly they don’t have the same limitations they had before, but many don’t realize they still do have limitations.

And it doesn’t take a Mega-Millions win to throw someone into monetary chaos.

When Do You Finally Feel Rich?

By  Financial Samurai

There’s a saying that goes something like this: To feel rich, take whatever you earn and triple it. Once you get there, triple it again, and again, and again. In other words, due to hedonic adaptation, it’s impossible to ever feel rich!

But I’ve noticed on my path to financial freedom that there were several times when I felt incredibly rich. The Dow reaching 20,000 wasn’t one of them by the way. Perhaps you can share when you finally felt rich as well.

When I Finally Felt Rich

1) When I went back to Malaysia. I used to live in Malaysia from 5th grade to 8th grade in the early 1990s. At the time, the exchange rate was ~2.3 Ringgit to 1 USD. When I finally paid a visit more than 20 years later, the Ringgit had depreciated to 3.7:1. One Ringgit bought the equivalent of $1 worth of stuff in the States. Therefore, I suddenly had almost 4X the amount of purchasing power during my week-long stay. So perhaps making 3X more doesn’t really make you feel rich, but making 4X more does!

In addition to the increased purchasing power aspect, it felt particularly moving to visit my old house and to realize I didn’t fall through the cracks. I was an undisciplined kid who got into way too much trouble. If I was my own father, I’d have considered sending myself to military school.

.What If I Don’t Get Hit By A Bus?

By Steven  October 14, 2019

We’re a bit extreme about saving money around here. In fact, we recommend saving so much money that you never have to work a job again if you don’t want to, preferably as early in life as possible. This is usually achieved by optimizing your everyday spending and making big, deliberate choices to reduce some of life’s biggest costs, especially during your 20s and 30s.

Over the years, we’ve heard from a lot of people who don’t think this is such a good idea. One of the most common arguments is, “but what if you get hit by a bus?”

The implication is that it’s risky and senseless to deprive yourself of life’s pleasures, especially in your “best years.” After all, life is fleeting, and it could all be taken away in the blink of an eye.

An argument against pursuing financial independence and early retirement, apparently.