Millard County Extension - ReliaBalance Blog

Common Mistakes

Trenton.Wilde@usu.edu (Trenton Wilde) — Tue, 30 Oct 2012 00:00:00 MST

One of the most common and costly financial mistakes is buying a 4X4 vehicle. Whether it be a pickup or the increasingly popular SUV, unless a 4X4 is a necessary part of creating income, it is one the worst investments a person can make. 4X4s are significantly more expensive than other vehicles to buy, and they are also more expensive- sometimes much more expensive, to drive and maintain. Families can often save up to $10,000 or more- not including interest, on the purchase price of a vehicle if we can get past the 4X4 craving. But the savings don't stop there. In an era of high gas prices, the cost of driving a 4X4 compared to other vehicles can add up to several hundred dollars a month in fuel costs for an active family. This cost difference can make special occasions like family get-togethers and vacations a downer, because fuel costs can ruin the fun.

The other common and costly mistake many families make is purchasing a home we can't afford. This is often driven by good intentions. Most of us want our home to be a place of security and comfort for our family. This desire is often used as justification for purchasing a home that doesn't fit our budget. Although our intentions may be good, using these good intentions to justify buying a home we can't afford can actually make our families less comfortable by increasing financial stress levels and increasing time spent away from home to pay the bills.

In the end, whether it be 4X4s, homes or any number of other things that tempt us to spend more than we can afford, spending money we don't have robs us of our family's most valuable commodity- time spent together.

The If, Then Problem

Trenton.Wilde@usu.edu (Trenton Wilde) — Tue, 14 Aug 2012 00:00:00 MST

The "if, then" problem in financial management occurs when a purchase is made, and then another purchase is justified simply because the previous purchase was made. A common example of this is with married couples. Generally one spouse will make a questionable purchase; then the other spouse will make another questionable purchase using their spouses purchase as justification.

The major problem with this behavior is that it is emotionally- not numerically based. As we mentioned in the "Lifestyle Budgeting" post, financial management is about numbers- not emotions. Emotional justification for a purchase will not change the reality of the numbers.

The "if, then" problem is a compounded problem, because the second bad financial decision is the result of a previous bad financial decision. It is the classic "two wrongs don't make a right" scenario.

This type of situation is very difficult on relationships, because if one person makes a questionable purchase, in order to keep the families finances in order, the other person will not only not be able to be equally frivolous but will likely have to go without other things to make up for the spouse's questionable purchase.

ReliaBalance Software

Trenton.Wilde@usu.edu (Trenton Wilde) — Thu, 22 Dec 2011 00:00:00 MST

We are in the process of developing software for the ReliaBalance program. Creating a computer program that runs the ReliaBalance system will allow us to streamline the program and make it compatible with handheld devices. This will allow users to track daily expenses on an iphone or similar device and then sync the device with a computer avoiding duplicate data entry, simplifying the process and providing increased convenience.

Lifestyle Budgeting

Trenton.Wilde@usu.edu (Trenton Wilde) — Fri, 23 Sep 2011 00:00:00 MST

It is a common mindset to make financial decisions based upon an expect lifestyle. If spending decisions are based upon whether or not the expense is something that is considered an important part of our lifestyle, there is no real tie to our actual ability to pay for it. Our ability to pay for an expense while still meeting other obligations must be a deciding factor in our spending decisions.

This is where ReliaBalance comes in. ReliaBalance provides us with on demand information about our financial situation at any given time, so spending decisions are not strictly emotionally based but also tied to our actual ability to pay for them.

Journal of Extension

Trenton.Wilde@usu.edu (Trenton Wilde) — Thu, 01 Sep 2011 00:00:00 MST

To view the ReliaBalance article in the Journal of Extension go to:

www.joe.org/joe/2011august/tt6.php

Why ReliaBalance?

Trenton.Wilde@usu.edu (Trenton Wilde) — Wed, 15 Jun 2011 00:00:00 MST

I am often asked why I developed ReliaBalance. ReliaBalance is the result of trying to manage my own finances. Other money management systems provided information more relevant to the bank or the credit card company's needs than mine. ReliaBalance was developed by a consumer, for consumers.

Parachute

Trenton.Wilde@usu.edu (Trenton Wilde) — Thu, 10 Mar 2011 00:00:00 MST

Managing money is like packing a parachute. It takes a little extra time, but if we don't, it can be a very hard landing.

Rolling Stone

Trenton.Wilde@usu.edu (Trenton Wilde) — Thu, 24 Feb 2011 00:00:00 MST

Saving money is often like trying to move a large boulder. Although the small pebbles at the base of the boulder may seem insignificant compared to the large boulder, they may be what is preventing the large boulder from starting to roll. Small financial changes can provide needed momentum.