Sunday, April 25, 2010

Your Frap Fund & You

Throwing money away. We can all agree that’s a bad thing, right?

But how do we make sure we aren’t doing it ourselves? Everyday?

Money has a very emotional component for just about everyone I know.

Like me. I never just throw money into my wallet; I always put the bills in order and facing the right way.

So yes, money is an emotion and the use of it should be as well.

I coach my clients to understand the emotional impact money can have and use that to their advantage.

An example? My so-called “Frappuccino Fund” (Frap Fund for short) is such a way.

First I always recommend that a client trying to pay off debt set up a separate bank account fund.

And we call it their “Frap Fund.”

Each time they are out and about and ready to spend money, I ask them to think about it first. Is it really worth the money?

If they decide no, they note how much they just saved. They do this each and every time they would have spent on a coffee, a dinner out, breakfast, etc you get the picture.

For each time you resist the urge to splurge, transfer that amount of money from your regular checking account and put it into your “Frap Fund” account. Which should NOT have an ATM card or any kind of easy access to get the funds. The point is to SAVE money, not use it as your ‘paint the town red’ money (that is in a completely different account if you are anything like my wife!!!)

Several years ago my wife and I decided to practice what I preach.

We set up our very own “Frap Fund” and we began to transfer money into that fund every time we saved money by NOT doing something on impluse.

We went as far as to even save the money from store coupons and those store clubs.

Let’s say I was on my way to Starbucks, which was a daily occurrence for a Frap and then of course a muffin, I would instead go to the office where the coffee is free and transfer the $5 or $6 straight way from my bank account to my online account.

After one year we were able to save over $8,000 doing this!

To me that was real money saved!!!. And, of course, @TheDeeView had to something to spend on shoes from @Zappo's. But wait that is another blog!

The beauty about doing this technique is that it creates a win for you and helps build savings, which is a vital factor in financial planning.

I think as we all move forward from this last recession we really need to focus on savings while reducing our debt load.

Plus, as you might notice, one of the components in the word Fund is Fun!

I find this method of savings, that can involve the whole family is actually fun!

Try it for a week and let me know in the comments below how it went and how much you saved!

Debt & Taxes - One Might Be Avoidable!

Debt and Taxes

I know it is supposed to be death, but somebody else can talk about that. I am more interested in Debt. It is as unavoidable as we seem to think?

I’ve been reading a lot lately from financial planners, after years of hearing about it, payoff your credit card debt!

I totally agree with the philosophy of being out of credit card debt especially today as rates rise and the credit card companies are harder to deal with.

But for me the question always arises which do I payoff first?

A high balance card or a low balance card with a lower interest rate?

Conventional wisdom always says to get rid of the high rate card first and then go after the lower interest rates. While I agree with this on principle, I find that the never works that way! Mainly because my clients never feel like they are getting ahead!

To me the credit card debt is not only financial it is also very much emotional. I want my clients to have a win!

Hell I want a win too!

So my approach is a little different.

I advise my clients to get rid of one debt as fast as they can, even if it means paying off a low balance low interest rate card first. Then move to the next one that is easiest to pay off and so on.

With this plan in place, my clients start to feel the emotional side of having a win.

Remember money is emotional. Treat your money well and it will be there for you.

Another technique I use to get people in the habit of paying down their credit cards (and not using them in the future unless it is an emergency) is to pay off each new charge. The day you make it!

Get in the habit of each and every time you put a purchase on a credit card, that you go home, and now it is so easy with the internet, and pay off that exact amount (or hey, maybe 10 bucks more!) on your credit card account.

This way, you are really using cash and not increasing your credit card debt.

This is a discipline and I know that is seems tough to follow. But I am telling you if you practice the techniques I have outlined, you can and will have a win!

Sunday, April 4, 2010

Zappos! My Role Model! #Seriously

Hula Hoops? An accappella singing group? A core value of Create Fun and a Little Weirdness? This is all in a business plan? For a real business? A successful business?

What ever you may think of Zappos (and to tell you more about the shoe experience of Zappos, check out my wife’s blog at the company is actually the business model we use to run our business. Now we are accountants, with a rather serious selection of financial services to offer. How the could we possibly have anything in common with the retail SHOE Giant of the World?

Well, for one thing, Zappos has the Zappettes. (We are too small to have the Greg Ettes, but I’m sure that is coming). This is a group of staff that may spontaneously serenade visitors. The receptionists have Hula Hoops, which they may use on a regular basis. (Okay, we don’t have Hula Hoops yet, but we are in the market for a Gong.) The Customer Service Department (the Loyalty Team) have no limits on the amount of time they will take on the phone with each customer (never gonna happen in our office, but hey?)

But the most amazing thing, is that they have a really committed and caring take on customer service for their clients. We do that (though not as well without the Hula Hoops I fear).

They have values like: Create Fun and a Little Weirdness (@TheDeeView makes our staff dance during retreats. They hate it when they see her lugging the Boom Box into a conference room), Deliver Wow through Service (Hey, some of our clients are saying “WOW, the IRS hates me”, but hey, they are saying WOW People!) Embrace and Drive Change (it is an accounting firm, but we are all about making it great for our clients), No snobs (I made that up. I just hate snobs.)

Staff at Zappos have to be prepared to do the wave at any moment. And they have crowns you can wear if you are having a particularly bad day. (We don’t offer crowns, but you do get a free piggy bank.)

They go through 160 hours of Customer Loyalty Training. (Can we send our staff there?) And they love to have their staff Tweet about their experience working at Zappos. (Oddly, though we encourage our staff to do the same, they keep asking for extra money to stay late and Twitter. I don’t understand this myself.)

The point of studying the Zappos business model, is to see if we are giving the ultimate in customer service at our firm, making the most money for everyone and doing it in an efficient manner (cuz time is GOLD, isn’t it?).

So while we may not have Hula Hoops, Greg Ettes, or our Giant Gong yet, that doesn't mean we don't want our office to make people feel as good about paying their taxes as my wife does about her shoes!