Tuesday, August 4, 2009

Waiting for 'Someday'

Pathways Advisory Group, Inc.
Michelle Carter, CFP®

After weeks of negotiations and political hoopla, California finally has a budget for the 2009 – 2010 fiscal year. However, if you read carefully, you will see that this budget was ‘balanced’ on the back of some grand expectations.

For example, state estimated tax payments will be increased for the first half of the fiscal year (July – December 2009). Although the total tax owed to the state has not increased with this budget deal, the estimated amounts paid will be accelerated.

Another example: The final paychecks for the 2009 – 2010 fiscal year will not be released on June 30, 2010, but rather July 1, 2010. This allows those salaries to count towards the 2010 – 2011 budget, instead of the current year.

A little tricky maneuvering on the part of our government, wouldn’t you say? The common theme is the hope that the economy will improve, and tax revenues will increase. If nothing changes, we have merely pushed our problems to a future date, with potentially devastating results.

As I shake my head at California’s situation, I guiltily remember times I have done the same thing in my own life: making financial decisions based on some anticipated, or even just hoped for, event. Do any of these statements sound familiar?

“Once I get my next raise, I’ll start contributing to my 401(k).”

“When I’m older and more settled, then I’ll contribute to a Roth.”

“After this vacation, I’ll buckle down and pay off debt.”

Life happens, and things change. After countless times watching my expected financial parachute fail, I have learned that there is no time like the present to save yourself.

Perhaps I can’t maximize my 401(k)? Well, I can contribute small monthly amounts instead. David always suggests trying out a higher contribution amount than first considered, and seeing whether you can make it work. Little tactics like this can help inch you closer to your objective.

So, my goal is to see what I can do today to improve my position tomorrow, no matter what the future brings. I may not be able to do it all, but any little bit is a start. Join me?

You pile up enough tomorrows, and you'll find you've collected a lot of empty yesterdays.
– Harold Hill (The Music Man)

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