Coupons for free shipping have been trashed with the catalogs and torn gift-wrap.
A new year is ahead with another chance to save and spend according to our needs and desires.
"Nobody wants to talk about money," said therapist Penny Navis-Schmidt. "I have clients come in and I ask them how they budget, and they say we don't.
"There are as many ways to do money in relationships as there are relationships."
That women are generally considered more emotional in their thinking and men more calculated, can be a troublesome stereotype.
"I think, (man or woman) we come into our marriages, our relationships programmed about how to save and spend money," Navis-Schmidt said.
In fact, "I think men and women generally think differently about everything," she said.
So the first step to saving money for a family vacation, a first home, retirement or a rainy day is for a couple to talk about, or an individual to give thought to, the role of money in their lifestyle.
"The only thing you can do with money is spend or save it," said investment adviser Paul Pfeifer. "If you spend it, you are losing the interest you could have earned on it. If you save it, you are gaining the interest."
Pfeifer teaches the lost interest calculation for cash.
"Think of it this way," he said. "Say you are going to go out and spend $5,000 on a new living room set. The living room set you have is in good condition. Say you took that same $5,000 and earned, conservatively, five percent. But you have spent the money so you are not going to ever get the five percent."
In terms of investments, Pfeifer said he has found that females are conservative.
"For instance, I will ask a couple what a reasonable rate of return is and the male will say 30, the female will say six to eight percent," he said.
"It is easy to guide them to a balance because with growth and income there are so many investments that produce a high rate of return," Pfeifer said.
"Anything over an 8 percent return is fabulous in my opinion," he said.
Yet, culturally bred to buy, we talk ourselves into things we want when what we have will do just fine.
Pfeifer's Two Foot Rule:
I really want this 20-foot boat. I talk myself into it. It will bring my family closer together because we can do recreation together and be with friends. I cannot afford to pay for the boat up front, but I think I can afford the payment. So, I stick my neck out and I buy the 20-foot boat. Two years later, I think, gosh, if I could only have two-foot more, we'd have more elbow room.
We do it with cars. We do it with houses. We keep going into debt more and more.
Generally the way people look at money now is the complete opposite of how their parents and grandparents did.
I am sure there was a time I could have looked under my parents' mattress and found what money was left after buying groceries and paying bills.
"Then it was, I made less money and I saved it all, now it is, I make a little more money and I spend it all," he said.
Both Navis-Schmidt and Pfeifer recommend couples talk over financial decisions no matter which partner plans the budget. Then stick to the agreement.
Pfeifer teaches not to go into debt and recommends if that anyone who is in debt, pay it off.
"There are ways you can save money and still be able to live a really nice lifestyle," he said. "What is the magic? Be content."
Questions that need answers -- write down the pros and cons:
- Is this a necessity?
- If I buy this, what will I have?
- If I buy this, what will I not be able to have?
- Am I making this decision on a high (ie: that is cool and I want it now)?
Out of every one dollar you have a percentage you put away for a new home, vacation, transportation or whatever you are saving for.
If you are disciplined, you can put the money in envelopes, but another way is to have the amount you decide on direct deposited from your paycheck to your savings or money market account.
A healthy savings for emergency savings equals three months of your income.
Pfeifer admits that a minute percentage of the population has that amount in savings.
"But if you are disciplined and put a little aside each week or month, that savings is eventually going to grow up and be sizable. Then you don't leave it there, you place it in an investment you can reach."
The minimum is saving money in a savings account.
Review your investment on at least a yearly basis.
Next, consider your retirement.
We are living longer. Retire at age 65. Expect to be around when you are 85 years old.
"Think of the food," Pfeifer said. "Three meals a day, $5 a meal, that's nearly $110,000 just in food. You have no income coming in, just your investments."
Making your money work for you takes a little bit of money and a length of time in the market versus a lot and timing the market.
$250 every month, eight percent return, 20 years is about $250,000.
Traditional IRA versus Roth IRA.
If a traditional IRA gives you a tax write-off then that is the way to go, according to Pfeifer. But for people not in high income brackets, the rule of thumb is if you only have ten years to go, it should be going to a Roth IRA because it is tax-free.
"I have spent this last year really trying to concentrate on how to add value to people's lives, because frankly, anyone who has good training can pick good investments for their clients. So how do I add value? I want to help people reduce taxes, save money and teach people areas of their lives where they can save money.
"Just because you took out a mortgage from a bank does not mean they calculated the interest correctly," he said. "If you have an adjustable rate mortgage, 80% of those are incorrect.
I can show you how to pay off your 30 year mortgage in half the time or less. The average is 11.8 years without making extra payments.
"There are ways, if you have cash flow to use the equity in your home for retirement."
For those already retired, Pfeifer said he can show them how to reduce or eliminate taxation on Social Security.
"When President Roosevelt signed Social Security into law he said this is a gift from the government. But where does that Social Security come from? Out of our checks. It wasn't a gift. We pay it. Social Security will never be taxed, Roosevelt said. Well guess what, it can be taxed up to 80 percent now.
"I love what I do," Pfeifer said. "I help people retire and put kids through college."
Investment adviser Paul Pfeifer can be reached at his office, Southwest Financial Solutions, 3655 E. Highway 260, Star Valley, (928) 468-6858.
Therapist and Qigong teacher Penny Navis-Schmidt can be reached at (928) 474-8628.