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Bucks Blog: Tracking Your Finances, One Number at a Time

March 26, 2013 by Leave a Comment

I think it’s true that if I want to improve my performance in something, I need to measure and track it. As Thomas Monson, an author and president of the Church of Jesus Christ of Latter-day Saints, said: “When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates.”

I’ve certainly seen this in my life. It’s pretty amazing the difference it makes in my exercise habits when I can see on my watch how far I’ve gone and how fast I’m running. Just a little feedback sharpens my focus.

For some people, the simple act of stepping on a scale first thing in the morning and recording what it says helps manage weight.

This seems like a simple thing. In fact, when it comes to improving our financial situation, it feels as if it’s too simple. So we don’t do it. I wonder if something super simple, like tracking a single number, consistently and for a long time, may be the subtle nudge we need to improve our finances.

Most of the people I talk to, regardless of income or net worth, have no budget or financial plan. So it’s pretty clear that anything that we can do consistently will be better than the nothing we’re currently doing.

So the question I have is: How simple can we make this process and still see improvement?

What if we just tracked one number consistently, over a long period of time?

Which number would be both easy and beneficial?

The default answer is usually spending, but the idea of tracking spending makes people think of budgeting, and budgeting has a marketing problem — very few people like to do it. But it can be effective and simple.

Take 10 minutes at the end of each day and record what you spent. Use a notebook or your favorite app and track it. Over time, you start to see patterns. You learn things you didn’t know about yourself in terms of what your spending says about your priorities. That will naturally lead to change.

One of the reasons I focus on spending is that people think tracking doesn’t help. A great (or not so great) example is the time I taught a financial literacy class to people who were working their way out of the local homeless shelter. The first week, 20 people would show up. I gave them a pocket-size spiral notebook and asked them to record everything they spent for one week and to come back so we could move onto the next step. No one ever came back. After a few weeks, we canceled the class.

And it’s not just people in the homeless shelter who seem to have issues when you mention tracking spending. Most of the people I talk to who make more than $100,000 a year and have money invested think they are way beyond budgeting. So they don’t do it either.

But maybe what you spend each day is the wrong number to focus on.

What about tracking a different number like the value of your savings, investments and retirement account? Once a week, you add up the balances and write down that number. Measure it over time. Just one piece of paper with a simple line graph.

Would that lead to change?

I like this idea because it’s what many of us are focused on: having enough money saved to meet some future goal like sending your children to college or retirement. It seems to me that by just focusing on that one number, a lot of the noise goes away.

Another idea would be even simpler. Track the amount you are able to able to save each week or month. That’s a number that gets rid of the short-term variation that comes from the market and focuses clearly on something that we have control over — how much we save. In theory, if you focus on that one number, you will find ways to improve it. That could mean you will find ways to spend less, earn more, or both. Because you want to see that number go up.

Since I know many of you have tried one or all of these things, tell me what your experience has been.

  • What number(s) do you track?
  • How often do you track them?
  • How do you remind yourself to do it?
  • Have you seen improvement?

I think we all know that some improvement, any improvement, is better than standing still. Maybe something simple like tracking and measuring a single number will give us the nudge we need to be smarter about our money.

So, what’s your number?

Article source: http://bucks.blogs.nytimes.com/2013/03/25/tracking-your-finances-one-number-at-a-time/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Bucks Blog: Your Financial Resolutions for 2012

December 31, 2011 by Leave a Comment

In this weekend’s Your Money column, I rounded up some of my favorite characters from my reporting this year and asked them what they planned to do differently in their financial lives in 2012.

What’s on your hit list for 2012, and how do your priorities differ from the ones that people expressed in the column? We here at Bucks world headquarters will post our own resolutions next week.

Article source: http://feeds.nytimes.com/click.phdo?i=eeb829551065d30747b33812be0f21f8

Filed Under: Your Money Tagged With: , ,

You’re the Boss Blog: Refusing to Compete on Price

December 9, 2011 by Leave a Comment

She Owns It

Portraits of women entrepreneurs.

Jessica JohnsonSara Krulwich/The New York TimesJessica Johnson

Jessica Johnson knows she must continue to innovate if she wants her business, Johnson Security Bureau, to maintain its impressive growth rate in 2012. This year, the company’s annual sales have doubled — just as they did in 2010.

During the last meeting of our business group, Ms. Johnson talked about the continuing importance of differentiating Johnson Security and emphasizing customer service, not price. She had just returned from Building a High-Performing Minority Business, a program offered through Tuck Executive Education at Dartmouth, and said the experience had reinforced these priorities.

To differentiate itself with clients, who may use several security services, Ms. Johnson said her company focused on building relationships, understanding its clients’ different business models, and selling solutions, not security. She emphasized that there was a big difference. Often, clients will call and simply say they need a guard. Other security firms might reply, “This is how much we charge. When do you want the body there?” said Ms. Johnson. “But we ask more questions.”

Ms. Johnson has found that clients don’t always fully communicate their needs, which can go beyond having a “warm body” on site. For example, clients might reveal that a call was prompted by the theft of an employee’s purse. In that case, they may need a guard who can provide a higher level of customer service by remaining alert to who belongs on the premises. Another client may have a problem with graffiti that appears after hours and may need to install cameras.

“Do you install the cameras?” asked Susan Parker, a member of the business group who owns dress manufacturer BariJay.

“We don’t as of yet, but we’ll make a recommendation,” said Ms. Johnson.

“That’s why it’s a solution as opposed to just security,” said Alexandra Mayzler, the owner of Thinking Caps Tutoring.

Unlike many of its competitors, Johnson Security does not try to compete on price. Ms. Johnson said the company’s rates, which vary by service and client type, are toward the middle or high end of the spectrum. She finds that it is often not worth working with clients that want guards who are paid minimum wage. They don’t see the value in having a particularly attentive guard or someone who is able to manage a problem customer, she said.

When it comes to hiring, Ms. Johnson said that, as a small business, Johnson Security has an advantage. “We can really talk to our employees and understand what they want to do,” she said. Just because they didn’t have childhood dreams of becoming security guards doesn’t mean they can’t maximize their relationship with the company, she added.

Johnson Security tells its employees that they are expected to stay for at least a year, and that those who do well will be placed in situations that allow them to make more money. One employee worked as a security guard for six months before being promoted to data analyst, a position that involves collecting and analyzing a range of site-specific reports for clients, and helping Johnson Security track its use of resources, including uniforms and equipment. Another started as a guard and now holds a supervisory job that includes managing the employee review process.

In the last two years, Ms. Johnson said, the company has been able to increase its guards’ average pay rate. “We’ve gotten better at identifying quality clients and getting opportunities for our people to grow,” she said.

Ms. Johnson repeatedly emphasized the value of the executive education program she recently attended, which enabled her to work with Dartmouth business school professors on topics including strategy and implementation. As the meeting wrapped up, Ms. Mayzler expressed an interest in applying for a spot in the program — if she could find the time.

You can follow Adriana Gardella on Twitter.

Article source: http://feeds.nytimes.com/click.phdo?i=ca62d5c30968c8c2a007721bdaae815e

Filed Under: Small Business Tagged With: , ,

In Her First Week, Lagarde Stresses Diversity at I.M.F.

July 6, 2011 by Leave a Comment

Ms. Lagarde, formerly the French finance minister, faces the challenge of lifting the morale of bruised employees even as the fund confronts one of its greatest tests, preserving the financial stability of Europe.

On Tuesday, she held a meeting at the fund’s headquarters in Washington to introduce herself to the staff, which is still shaken by the abrupt resignation of her predecessor, Dominique Strauss-Kahn, after he was charged with the sexual assault of a hotel maid. On Friday, she holds her first board meeting to consider another round of emergency funding for Greece.

“I thought it was necessary to come back to D.C. very promptly simply because there are so many issues to address,” Ms. Lagarde said by way of introduction to her first official press conference. “It cannot wait for another summer holiday. Here I am, and for good.”

When Ms. Lagarde last met with reporters at the fund’s headquarters, during the organization’s annual spring meetings, she appeared as a representative of France and made a point of speaking mostly in French. On Wednesday, settling into her new role as an international official, she spoke exclusively in English, even when addressed in French.

She mostly dodged questions about Greece, saying that she would not prefigure Friday’s meeting, but she did provide a measure of her thinking on the fund’s mission and priorities.

Mr. Strauss-Kahn, a member of the Socialist Party in France who expanded the fund’s traditional focus on financial stability to include broader goals like reduced unemployment, argued that the benefits of prosperity did not necessarily flow to the broader populace, and that the fund needed to measure its success in terms of that broader impact.

Ms. Lagarde, by contrast, is a political conservative. She said Wednesday that people should judge her tenure by her actions rather than making assumptions based on political labels. She said that she needed time to study the fund’s policies before offering her own opinions.

But she sounded a note of caution about those policies at the outset.

“We should not become a specialized boutique to reduce unemployment,” she said, although she added that she did support elements of the fund’s current “comprehensive” approach.

“Some of the things that Dominique Strauss-Kahn has started are excellent reforms,” she said, including the “comprehensiveness that we should adopt embracing the unemployment and social issues as well as the economic trends that are more traditional.”

Much of the press conference was devoted to questions about the fund itself. Mr. Strauss-Kahn was allowed to remain atop the fund after the disclosure of an affair in 2008 with a subordinate, a decision that some considered a mistake at the time, and many more came to regret.

A number of women have come forward in recent months to describe the fund as a problematic workplace, where superiors often felt free to press subordinates for dates and little effort was made to prevent or to punish sexual harassment.

Ms. Lagarde campaigned to replace Mr. Strauss-Kahn largely on the strength of Europe’s determination to maintain leadership of the fund, particularly at a time when its primary challenge is to help the governments of Europe.

The fund was created by the United States and its allies after World War II as a lender of last resort for troubled governments. Since that time it has always been run by a European, though the United States maintains effective control.

Ms. Lagarde has said on several occasions, however, that a female executive would be an advantage for the fund, reducing what she described as the level of testosterone.

On Wednesday, she added a personal note: “For all the young girls that are in school at the moment, I’d like to say that they should each consider that everything is possible,” she said.

But she was otherwise more circumspect, speaking repeatedly about the importance of diversity.

“Together with diversity comes respect for everybody,” Ms. Lagarde continued, “and it’s been the case in the past that people have been respected and I will make sure that they continue to be respected no matter what their differences are.”

The fund has made a number of recent changes in its policies to improve its workplace culture. Ms. Lagarde’s contract includes a number of brand-new injunctions, including, “You shall strive to avoid even the appearance of impropriety.” And Ms. Lagarde noted Wednesday that she would soon attend a new ethics program now required for all employees.

Ms. Lagarde will make $467,940 in her new job, plus a stipend of $83,760, all of it untaxed.

She also addressed Wednesday widespread speculation that the fund would elevate a Chinese executive, Min Zhu, to the rank of deputy managing director.

Three people now hold that title. One of them, John Lipsky, an American, plans to retire at the end of August. But the United States is likely to insist on an American replacement.

Ms. Lagarde said the most likely solution was to name a fourth deputy.

It is, she said, “not a bad idea, and I’m going to consult in the next few days on this matter.”

Article source: http://www.nytimes.com/2011/07/07/business/in-first-week-on-the-job-lagarde-stresses-diversity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,