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Getting in Shape in 2010: Taking a "Fiscal Health Day”

  • Joseph Slife Sound Mind Investing
  • 2010 11 Jan
Getting in Shape in 2010: Taking a "Fiscal Health Day”

To cut expenses, some employers have been instituting "furlough" days, telling workers they have to take days off with no pay. When New York Times personal-finance writer Ron Lieber was furloughed for a few days, he had an idea: if he used one of his days to take care of long-languishing tasks related to his own personal finances, perhaps his unpaid time could actually pay off.

He dubbed one of his furlough days a "fiscal health day" (a variation on a "mental health day" aimed at taking a break from workplace stress) and put together a financial to-do list.

In a subsequent "Your Money" column in the Times, Lieber related the results of his fiscal health day: "Financially, the total of my savings and new earnings [from what I was able to accomplish] will net out to about $2,000 annually after taxes," he wrote. The reward turned out to be so great that Lieber has decided to take a fiscal health day annually. "I got enough done that I now plan to take a fiscal health day at least once a year…on a weekday when all phone lines and financial institutions are open."

Here are some of the things on the list for Ron Lieber's first fiscal health day:

  • Open a high-yield savings account. Why should your savings languish in a low or no-yield account?
  • Get a cash-back credit card. Lieber opted for a 2% cash-back card tied to his Charles Schwab account.
  • Shop for cheaper insurance. Lieber saved $150 a year by finding a lower-cost carrier.
  • Cut back on phone service. Lieber got rid of phone features he never used but for which he was paying a monthly fee; by the way, this task took longer than any other. ("I had to talk to the landline people, the DSL people, and the billing people to confirm a switch on the auto-payment system," he wrote.)
  • Make progress on getting a will completed. Lieber called three lawyers to price the possibilities.
  • Fill out a "here-is-what-you-need-to-know-about-our-finances-if-I-die" form. This is a wonderful thing for your family to have during an emotionally wrenching time.
  • Set up automatic monthly contributions to non-profit groups. Lieber hopes this will end his "end-of-the-year scramble to get donations out."
  • Check gift cards to see how much money is left on them; then go ahead and spend that money! "The longer [gift cards] sit," Lieber wrote, "the more interest Apple or Borders or the department store will earn from your money and the bigger the chance you'll misplace the card."
  • Organize insurance paperwork. Like many of us, Lieber was "adrift in a sea of forms" that needed to be sorted.

(Speaking of insurance, here's a preventative step that can save you down the road: make sure your computer has an ongoing backup plan in place — either to an external hard drive or to a vendor such as Carbonite.com. There's a good chance a crashed computer will cost more to restore than one of these systems.)

Ron Lieber's idea for a fiscal health day seems to be catching on. Motley Fool senior editor Denise Coursey went through a list of financial tasks during her "stay-cation" (what people take when they can't afford to go anywhere on a vacation). Coursey used her time off to open a new bank account, set up direct deposit and auto bill pay, change her family's cell-phone plan, and sign up with Mint.com, the online budgeting site (see SMI's review of Mint). Like Lieber, Coursey estimated that the time invested in tackling her to-do list will pay off to the tune of up to $2,000 a year in savings and earnings.

Blogger Larry Jones, stewardship pastor at the First Baptist Church of Raytown, Mo., noted on his Rich Christian, Poor Christian blog that he took three fiscal health days in 2009. He wrote that setting aside time to tackle one's financial to-do list is an effective way to battle against "financial creep" — i.e., those "money drains that come on gradually and almost unnoticed." What Jones accomplished:

  • Asking the cable company for a lower rate. He got it.
  • Automating payment of bills for insurance, electricity, gas, water. This is a significant time saver.
  • Setting up an auto-draft for monthly savings. Easy to do online.
  • Closing two old bank accounts. Why keep what you don't need?

The things Larry Jones accomplished during the six hours devoted to his first fiscal health day will likely yield an annual savings of about $600, he noted on his blog. In other words, he "earned" roughly $100 per hour for his labor.

Of course, no two people will achieve exactly the same savings. But for most of us, taking a fiscal health day — whether during a forced furlough, a stay-cation, or just a day off — is well worth the investment of time. Indeed, the return could be so substantial you might even start looking forward to facing your financial to-do list and getting more fiscally fit.

January 6, 2009

 

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