Self-confidence is an amazing thing. Having it can make you, lacking it can break you. This applies to virtually all aspects of your life, especially your finances.

If your self-confidence is low, you’re not going to have the inspiration or the motivation to get your finances in order. Unfortunately, if your finances aren’t in order, chances are you’re not going to have high self-confidence. It’s a catch 22 with an easy fix: invest in other parts of your life to give yourself that extra motivation to get your finances taken care of.

When I say “invest in yourself”, I don’t mean spend some cash at the mall. I mean start eating healthier, go to the gym, do something relaxing, do something new, do all those things psychologists recommend to improve your personal well-being. If you start going to the gym every couple of days, it won’t take long for you to start feeling better about yourself. When you feel better about yourself, you’ll be more motivated to take care of your finances as well.

This advice doesn’t only apply to those looking to newly renovate their finances, gurus can take advantage as well: we all have our off days when we’ve let our finances slide a little bit. Think back to the last time this happened. Did you let other aspects of your life slide as well? Did you maybe go eat out a few days in a row instead of eating at home? Did you sit down in front of the TV with a container of ice cream instead of going to the gym after work? Chances are, if you’ve let your finances slip you’ve let something else slip too. Take care of the extenuating circumstances in other parts of your life, and you’ll have a much easier time getting your finances back into shape.

Take care of yourself first. That’s the most important thing. You’ll be amazed to see how much easier it is to take care of everything else once you’re taken good care of.

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We’ve all got financial goals, I’m sure. We want something to aspire to, we want a physical number to reach and we want to see ourselves hit these goals we have set. For the majority of us, our goals are long-term: we want to have a certain amount of money saved up for retirement; we want to have our home paid off in 15 years; when our kids grow up we want to be able to pay for their college or university education. But do we have intermediate goals?

Most people plan for the long term, and only the long term, with no thoughts about the in-between. Everybody should have short, medium and long-term goals. Rationally and mentally, this will help you achieve those end goals which you’ve  set for yourself. Consider myself: I’m currently 19 years old. My long-term goals are as such: when I retire, I want to have $3 million in cash to live off of before I die and own at least $4 million worth of real estate which I can sell should I outlive those savings. I won’t be needing those $3 million until I turn 65, which is 46 years away. When I see $500 being put aside every month for my retirement, those $3 million look a very long ways away. Mentally, it’s depressing, and there’s a good chance I would quit after a few years, thinking it was impossible.

This is where intermediate goals come in: I don’t need to worry about the final number, as long as my short term goals are on track.  Starting at $0, after one year I want to have around $6300 (I’m assuming only 5% interest due to the recession). After 2 years, increasing the interest rate 1%, I want to have $13100. After 5 years, I’m looking to have $36919. These numbers are far more real to me when I see the money I’m putting away every month. Mentally, it’s the stimulation to keep me going.

It makes sense from a rational perspective, as well. It’s easy to say you want to have a certain amount of money in x number of years. Short and medium-term goals give you the numbers you need to make sure you reach those goals. The amount you need to put aside every month will give you an idea of whether you’ve bitten off a little bit more than you can chew in the long run, or if you might have underestimated and can afford to put some more money towards your goal.

This applies to all parts of personal finance planning: I’m not going to arbitrarily buy property, I have a plan for it. If you don’t have short and medium-term plans for your financial goals, you need to sit down with a piece of paper and a calculator (or excel, if that’s your thing) and plan it out. Give yourself measurable goals which will show you how you’re doing on the way to reaching your long term goals. You’ll feel better by seeing that you’re at the right pace, and we all feel good when we reach our goals, even the little ones.

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I found this handy tool which unfortunately doesn’t work for Canadians, but which should give all those of you south of the border a good idea about whether or not you’re earning less, more or about the same as people in your line of work and location:

http://swz.salary.com/ 

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While the most frugal won’t get cable, won’t get internet, won’t get home or cell phones, in reality most of you reading this have internet (unless you’re at a cafe), and most probably also have cable and a phone or two. Well, with a quick phone call you can easily get your rate reduced, often by a fair amount. I did this myself for my cell phone service a year ago. Here’s how:

1) Explore the competition.  By finding a better deal from your competition, you’ve got the edge in negotiation. One thing to look at is deals with other companies. If your cable is with Rogers and your internet and cell phone with Bell, you would save money by moving to Bell, even if the initial plan were the same price, as Bell offers a discount if you have a number of products with them.

Look for “new customer” offers as well. These are often great deals which you can use to your advantage. Always find concrete proof of these deals, and save them.

2) Call your current company, armed with your new offers. Immediately call the cancellation line rather than dealing with customer service, citing the competition’s offers as your reasons for leaving your current company. Their job is to do their absolute best to keep you. Even if you have absolutely no intention whatsoever of leaving your current company, making them think you will is without a doubt the most efficient way to get a better deal.

3) Be firm, but polite. One of the key things to remember is that the person on the other end of the line deals with disgruntled customers yelling at them all day. Call centers are known to be hell for a reason, and working the customer retention line is especially so. In order to entice them to give you the best offer they can, treat them as you would like to be treated if you were in their position. Remember to be firm, but do be polite.

4) Don’t back down, but do negotiate. The representative will tell you the other company is offering inferior service and try to sell you on theirs. Let them know that you are happy with the value they are offering, and you don’t feel the service is inferior. However, you do need to compromise at some point, or you will end up with nothing. If they offer you money off, it’s money off. You could go with the competition if you want to, or if you’re happy with your current service enjoy the discount!  When I did it I didn’t get quite as good a deal as the competition was offering, but I did save over 10% on my bill, with a phone call that took just over 10 minutes.

This is a great way to reduce monthly expenses on TV, internet and phone usage. Competition is stiff in these industries; take advantage of that!

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Books can really be a student’s worst nightmare when it comes to expenses. I’ve known some science students who’ve paid upwards of $200 for a single book. In business, the average tends to be around $110 per book. Given as I took 5 classes this semester, this should have amounted to around $550. So, how did I manage to save $350?

Well, the first thing I did was the easiest: I traded. I got two books from classmates who had taken the class before. This is a pretty easy way to do things, and can save you a lot of cash!

Next, I decided which books I would really use. I knew I wouldn’t use my math textbook except to study for the final, which happens to be tomorrow morning. So, instead of buying it I just borrowed it from the library. I only used it for about 12 hours in total, which saved me $100.

Finally, the only two books that I bought at the bookstore I bought used. It wasn’t huge savings, but at $69 for one book and $109 for the other, I still saved much more money than I would have if I had bought all of my books new. Had I gone full-out, I’m sure I could have spent under $50… maybe next semester!

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As I’ve been pretty sick this week there haven’t been as many posts as normal, I apologize for that! Here are some of the better posts from around the finance blogosphere this week:

JD from Get Rich Slowly gives advice for the late bloomers who haven’t started saving early.

Frugal Trader from Million Dollar Journey discusses financing property for new investors.

All Financial Matters lists five things he wants his kids to learn from him and his wife about money.

Finally, thanks to Money Ning for including The Penny Mine in this week’s Carnival of Personal Finance #147

Have a great weekend everybody! I hope I’ll be healthy again on Monday!

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