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Everybody’s got a plan…

in Retirement Savings

… until they get punched in the face! Evidently this quote is attributed to Mike Tyson, but it outlines how life is, everyone has great plans and hopes, but when life punches you in the face, that is when your plan and YOU are being tested. I heard this one again after the Super Bowl and I do like the message sent, “Plan, but remember to react and change the plan if need be”.

February the Month of Pain

Not sure about the rest of my readers but February is a very painful month for me every year (financially speaking), because you have a perfect storm of Financial “trigger points” to cause stress:

  • If you have managed to pay off Christmas, you are now very cash poor, or you may still be paying off the Christmas debt load.
  • A month into your financial plan for the year, yet you most likely are not seeing much progress (due to the debt load of January).
  • This is a short month, but all the bills still want to get paid (your cost per day of living this month is actually more, because it is so darn short).
  • RRSP silly season begins and you are inundated with messages about how you must save for your retirement, or you will be eating cat food (and not the low ash stuff either, the cheap no name cat food) when you retire.
  • Taxes loom on the horizon, both Federal and municipal property taxes and you wonder can you pay one with the rebate you hope to get from the other? Sometimes you do your Federal taxes and get a rude surprise like, you OWE money (due to your HUGE income from financial blogging (yes that is a joke)).
  • This year’s extra concerns are looming University fees (and possibly living away from home costs).

All of this creates a “perfect storm” of financial stress to deal with in a very short month. Remember that Mike Tyson quote, I think this month is punching me in the mouth.

{ 4 comments }

  • One Man Rodeo February 8, 2008, 7:20 PM

    For Bi-Weekly folks!!!!!

    I budget for a 13 month year. That is my monthly budget is 28 days or exactly 4 weeks, and in each month there are two income periods from my job. So I pay all my bills on a 28 day cycle not 30 or 31 days. I put money aside for Food and Gas and Clothing and prepay my credit card with the anticipated livings expenses amount I will require for 4 weeks. 13 prepayment periods for 12 months of living. When budgeting you should be able to resaonlby expect what your future month’s heating and water bills, insurance bills, etc should be, within reason of course. Pay tomorrow’s bills today.

    If you do it right you actually end up with the last 4 weeks of the year paid, no telephone or water or electric or oil or gas card or winter clothing bills, therefore you have no living expenses from Dec 8 to Dec 31 and you should be able to have Xmas paid before Dec 31.

    Then Jan 1 you start the “13 month” cycle all over again, XMAS DEBT FREE. If you can’t pay for Xmas with your two free paycheques, I don’t know what to say to that….

    You always get 2 “bonus” months of 3 paycheques under a 26 pay period structure (bi-weekly). Under my budget I was able to transfer those bonus pay periods to the time of year I need cash the most. HOLIDAYS!

    Anyone follow?

    Reply
  • Jerry February 6, 2008, 9:46 PM

    Ugh – I read that quote, too, and it was referring to my beloved Pats getting punched in the face on Sunday night. Painful… but an exciting game, nonetheless.
    Anyway, in a financial sense, I think that the quote summarizes just about any month in which the unexpected occurs – for us this month, it is an expensive (but necessary) overseas trip. There is no insurance against these things happening, and because they come out of nowhere they cannot be scheduled, so the best thing to do it just to manage them as best you can! I also think that staying positive in the face of distress can lead to a better outcome, because it keeps you from freaking out and making poor choices. (Like New England did for 3 quarters… argh.)
    Jerry

    Reply
  • bigcajunman February 6, 2008, 2:20 PM

    Also true, but for those of us paid bi-weekly it is a royal pain.

    Reply
  • DM February 6, 2008, 1:29 PM

    > This is a short month, but all the bills still
    > want to get paid (your cost per day of living
    > this month is actually more, because it is so
    > darn short).

    A different perspective: because I get paid bi-monthly instead of bi-weekly, February actually means a few less days of daily expenses than other months.

    Reply

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