Bimodal Financial Planning

The importance of Bimodal Financial Planning strategies cannot be discounted for any person or family wanting to succeed in the current economic environment. Ensuring you are taking care of your day-to-day financial life and planning for your future, ensures a strong Bimodal Financial Plan.

Doesn’t that sound exciting and fun? What do I mean by a Bimodal Financial Plan ? If you asked that question, give yourself a gold star🌟, as the first time I heard it, I thought they were talking about Bipolar psychological problems, but no, folks meant Bimodal.

In mathematical terms Bimodal is simply:

Adjective: having or involving two modes, in particular (of a statistical distribution) having two maxima.

What the heck does that have to do with financial planning? Well, right now, I am making this stuff up, however the term Bimodal is the new Buzzword where I work in terms of IT (computer stuff) quoted by Gartner (the folks who create these lovely concepts). For them the definition of Bimodal becomes more literal:

Having two modes of operation (typically in computers: (1) Day to Day Support (2) Long-term evolution and planning.

Doesn’t that fit into financial planning like a hand in glove? Everyone is always taking care of the day-to-day bill paying and making sure they stay out of debt, and most of us also are planning for our Long-Term financial self, hence the most excellent new financial term Bimodal Financial Planning.

Bimodal Financial Planning

Bimodal Financial Planning Graphics

Stripping away the jargon part of this, it is actually a sound idea for planning your financial life:

  1. Take care of today’s problems financially, in terms of paying off bills and debts.
  2. Plan for your future including: Emergency Funds, Vacation Funds and ultimately Retirement Planning

If any folks are dealing with financial advisors or planners, ask them about what their Bimodal Financial Planning Solutions to plan your financial future, see how they react to that catch-phrase. See if they start using it themselves without asking for an explanation about it (that is a bad sign, they should ask for what you mean by that, before they start using it in conversation).

Never let anyone use a term (especially a financial term) that you don’t understand without asking for an explanation. If they can’t explain it to your satisfaction, it is either (1) too complicated and shouldn’t be used or (2) the person you are talking to is bluffing their way through things (and that is very bad as well).


What Twits are Talking About Money ?

Plenty of news on the twitter wire on the election front, but another fun week of interesting money related tweets on the Twitter Machine (remember I am there as @bigcajunman ) and maybe some other social media as well!

With the new economy how will the tax system deal with these new digital currencies? BDO has some advice for you.

This makes me sad, I thought my money loved me, and like the saying says, if you love something set it free (and I do).

You never thought I’d be quoting the CIA eh? Well this one is very true about your local library, and specifically it is great for financial resources too (magazines, books and articles), go to your library and support it (or you will have to answer to the CIA).

I did mention the election, and how the Bank of Canada will work if there is a change of leadership would be a very interesting question. Has anyone asked any of the leaders how they might change the Bank of Canada’s mandate?

Roger Wohlner writes about the worst Mutual fund yields, and I wish more folks would check to see what their Mutual Funds yielded they might be horribly surprised.

Now there is three words I wouldn’t think would go in a sentence “designer luxury consignment“? Does Jaguar have a crash and dent section?

For those of you who don’t follow TVO, you are missing out, and here is your deep thought for today.

A quick look at Facebook and I see that the TFSA is good for single income families? That is not what all the Financial Chicken Little Crowd is saying?


The Financial Hawthorne Effect

The Hawthorne Effect (also known as the Observer Effect), is something I have observed in my life more than once. The main thing I have seen is that when I start observing and taking close note of what I am doing, financially, I change how I act with money, thus I end up changing my lifestyle, but then having the wrong perspective on my financial life.

The specific example I can give, is when I decide that I am spending too much money (usually happens at least 3 times a year) and I want to see where the money is going. I  start watching what I am spending, by becoming (even more) anal about recording expenditures in Quicken (my normal method for watching spending).

Hawthorne Effect

The Hawthorne Effect (I always thought this happened)

Typically when I start noting my financial life I end up:

  1. Not buying lunch at the cafeteria at work, or limiting it to 1 or 2 meals a week, and eating more left overs for lunch
  2. Attempt to have “no spending days” where at the end of the day I have the same amount of money in my pocket as when I started, but that becomes a bit of a cheat with Interac and Credit Cards.
  3. Doing weekly and monthly reports to look at where the spending is happening and then “discussing” that with Mrs. C8j (OK, so it ends up in a fight because inevitably in the discussion I use the “What were YOU buying at Store Z?” phrase).

Doing all of this causes me to alter my spending habits, thus the data I am collecting is at best skewed and at worse, incorrect.

The best way I can do a real study on my spending habits is by looking at past data (in Quicken) and act on that data, however, when I do try to watch myself financially, I end up acting like I am supposed to act, so maybe that side-effect makes the whole exercise well worth while ?

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Talking about Money on Twitter this Week

I have about 2500 Twitter followers now, and my feed is alive with interesting financial stories, so here are a few of the ones I enjoyed reading this week.

Glad to see that the Bank of Canada is celebrating the Queen’s record-breaking reign (with a more secure bill):

The Economist (unfortunately) gets this one very right (also true in Canada):

How do you work around the seemingly definitive statement “first time home buyer“? Just ask Preet:

I did not realize that the CRA offered this service, but it is well worth checking out in my estimation:

The greatest retirement tweet of the year (if not kind of NSFW) :

Kerry Taylor gives us the narrowest house in Toronto, which still costs a bloody fortune

Teach, your children well, about money that is

In case you thought all those fun games on your iPad are free…


Laboured Personal Finance Tweets of the Week

To help you enjoy this long weekend (the last of the summer of 2015 I might add), here are some of the most interesting tweets of the past week in personal finance (and other things too).

Has Preet created a new Economics buzzword for the Money Talking Heads ?

Another interesting investment profile from Larry MacDonald

Another big win for cord cutters (in the USA at least) all NFL games on CBS will be streamed

Any post that has Louis CK in it, has got to be good

This should be interesting, and I will be there too

I really don’t know how Scotiabank can justify this one, amazing bit of Banks Behaving Badly

Is it time to rebalance? Maybe, if you need to rebalance, now would be a good time

Who else could drive around London sitting on a chair, on a Leyland Mini? Mr. Bean of course! 25 years ago? Really?!?!

And to finish off a possible Election 2015 preview on youtube, I will be voting Very Silly if it is on the ballot


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