Four Ways To Focus Your Finances Tomorrow

For so many of us, the problems in our life can be attributed to insufficient attention. One of the most important things we can do to solve a problem is to stop ignoring it. Financial problems are no exception. In fact, getting focused on your finances can often be the difference between success and frustration.

The key is to get started immediately. Don’t wait. Start tomorrow. Here are four things you can do tomorrow to start focusing your attention on your finances and start getting them in order:

1.) Have a family meeting
Get everyone on the same page. You can’t do anything until you’ve discussed how financial issues affect your family. Your family can tell you what they think is going wrong and you can also share your thoughts with them. This consensus and making sure the whole family understands, and is on board with, the financial goals can be the tipping point for success.
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Why a Clawback Might Be In Order

Photo by: Wildcat Dunny

When the financial crisis was in high gear I argued that the pitchforks and torches being raised against AIG were counter-productive.  I felt like it was a feel-good symbolic gesture that was more for making people feel vengeful than getting at sound economic policy.  I still stand by that idea, however in the face of record profits from companies like Goldman Sachs, one has to reconsider whether the idea of clawbacks don’t have a place in the banking discussion.

A clawback would be some kind of tax levied against the companies that took bailout money, or maybe more broadly to the financial industry as a whole.  While the legality of such a tax may be in question, there are some reasons to consider whether this is a reasonable course of action.  Many of these banks have paid back, or are paying back, the money they borrowed from the government, but that debt doesn’t fully quantify the advantages that financial institutions received from the government.

The first example of this is the asymmetry introduced by preventing various stocks from being shorted during the crisis.  This is obviously beneficial to leveraged companies that are using this stock as an asset to offset their liabilities.  This is on top of the benefits that come from being able to borrow money from the Federal Reserve Bank essentially for free, and the money that is being funneled into the stock market by the low interest rates. (more…)