Our Washington politicians say they worked very hard this weekend…

My wife asked me Sunday just how much is the agreed $38 Billion budget cut compared to what our federal government is spending (2011 budgeted spending is $3.83 Trillion). So to put this cut into its proper perspective according to what the U.S. Office of Management and Budget estimated for the 2011 U.S. budget:

+ Revenues of $2.57 Trillion
– Expenditures of $3.83 Trillion
= Deficit of $1.26 Trillion

So based on all these numbers this agreed upon cut is approximately a 1% reduction. So how much is that? Well that’s kind of like a couple that makes $75,000 per year choosing to eat out one less time per week. And if you’re like me, eating a couple less cheeseburgers per week would probably be a good thing and certainly not a sacrifice.

For some reason our congressmen (both Republicans and Democrats) may not realize that their electorate is more aware, knowledgeable and educated than ever before. Could the average American recognize a “spin” when they hear it? Below is a quote from Dennis Gartman in his financial newsletter on Monday, April 11th:

Both the Republicans and the Democrats have been out over the weekend touting this agreement to include ‘the largest spending cut in U.S. history.’ This is utter and complete nonsense for all they’ve done is cut back the even larger sum of spending they’d agreed to previously. If you agree to spend an additional several trillion dollars and then cut a few tens of billions from it, you can indeed say… hoping to keep a straight face in the process… that you’ve made the largest budget cut in history. Shame on these men and women. They embarass us all.

Getting your “Home Office” in Good Order!

Recently my wife hired a professional organizer to help organize my home office. My first thought was “I don’t need that”. The last couple years had been hectic, but I still knew where everything was located. And with just a little bit of motivation I believed I could get my cave back in good shape.

Yes, I am a detailed guy and my office keep’s good financial records for our clients. But I will admit my personal number of “piles” at home had grown to something that was not like me. I had grown tired keeping up the system myself. So… you guessed it. I shut up and off we went on “my wife’s” new project.

So how did it go? Well, when I came home for lunch I quickly noticed my “paper life” was under serious scrutiny. Personal papers and files were scattered all over the floor and much of my stuff was beginning to be questioned. But when I came home that evening something more positive happened. The clutter had been eliminated and I had a simpler, more organized system. In other words, the “garbage truck” needed to be empty the next time it showed up at my house!

More importantly, my wife shared that she learned a lot about me by examining my files, notes, and mathematical scratch. She said she realized the amount of stuff I manage, how my mind works, and my motivation to provide. It sounded like she was impressed.

Lastly, she felt good that she could locate our important documents and exhibited renewed interests in our files. And guess what – she offered to help me file and maintain our new system going forward. I thought, “Wow, that’s all positive stuff.” So let me briefly share the important points we learned during this exercise

1. Make sure it works for both. Our filing system needed to work for both of us. My spouse needed to know where our important documents were located and where to file each new item.

2. Keep it simple. A simple, clean, organized system can be easier to maintain and more appealing to the eye. All this can contribute to both time and money savings going forward.

3. Designate a tax basket. A basket can be used to collect the receipts and tax documents throughout the year. At the end of the day receipts in her purse and my pockets can be simply dropped in the tax basket. As needed, we can make short notes on each to make it easier to understand at tax time.

4. Use three ring binders. Information that is frequently needed or too bulky for a file folder can be organized in three ring binders. Categories like Insurance (home, auto, medical, life, disability, etc.), Estate (Wills, Power of Attorney, and Health Care Proxy, etc.), Home (manufacturers’ manuals, contractor info, paint colors, warranties, etc.), Financial Plan and Investments (annual statements, investment updates, etc.), Other (passports, birth certificates, employer handbook, children immunization records, real estate closing documents, vehicle titles, etc.) can be a starting point.

5. Get help. It can be hard to throw things away and to be objective with your stuff. Get help from a professional organizer who can give great ideas and provide a “catalyst” to make your filing system work for both of you.

In summary, I can see the time and money spent will reduce stress and save all of us time in the future. And at the completion of her project, I had to admit my wife was right again!