Denial

Now I know some of you have been anxiously awaiting for me to update my tip of the week.  I hope you enjoy!  Inspiration for this came as I was reading the revised third addition of Dave Ramsey's The Total Money Makeover (It's great by the way if you have never read it).  I was struck by how much denial there is in this country when it comes to people and their money.  For some reason mediocrity in financial matters has become acceptable and down-right normal in this country.  Why?  The fact of the matter is 7 out of 10 households live paycheck-to-paycheck, yet as many as half of those actually think they are in the 30% group.  That is some serious Denial!  Think about it, if you had a major life event today (ie. job loss, serious illness or injury, loss of spouse through death or divorce) would you even be able to make it to the end of the month?  Be honest with yourself.  


Now I'm not trying to belittle you or tear you down,  I'm just trying to get you to face the music before life literally smacks it into you.  Sadly even faced with these kind of major events, some of us go on living life like we didn't lose a job and the new one doesn't pay as much.  Failing to make adjustments in the short term will become disastrous long term.  This is why I have talked so much about being intentional with your money.  If you are living without a plan and spending as much or more than you make, it's a dangerous road you are walking.  It's only a matter of time before life pushes you over the edge, making it hard to recover.  So please start today taking steps to correct the situation.  Who knows, maybe things really aren't as bad as you fear them to be.  If you're curled up in the fetal position with your eyes closed, you'll never find out.  Please don't let the fear become paralyzing.  Feel free to contact me if you think you need more help unpacking your particular situation.  Sometimes a fresh set of eyes, with a different perspective is needed.  I offer a free no-obligation 30 minute consultation.

Tip & Quotes of the Week Apr 16-30

Don't loan the Government money!

Of all the ways we use to save our money, giving it to the government for the year and then getting no interest back is probably one of the worst. Across the board, I have never heard financial experts of any kind endorse this idea. Yet millions of Americans do it year after year. Why? If you are among those, then PLEASE stop the madness! Take control of your money and don't loan it to the government.

Homework:

If you got a tax return simply due to overpaying, go to your HR manager and increase your exemptions immediately. Look at your pay stub and see how much tax is being withheld every pay period. Obviously you can't help it if the government pays you to have kids, pay your mortgage and give to charity, but if you are getting more than that back, change it TODAY!

"It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta." Dave Barry

"Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents?" Peg Bracken

"We have long had death and taxes as the two standards of inevitability. But there are those who believe that death is the preferable of the two. 'At least,' as one man said, 'there's one advantage about death; it doesn't get worse every time Congress meets.' " Erwin N. Griswold

Pictures From Training

(As promised) I got my pictures downloaded from my counselor training in Brentwood, TN (just south of Nashville).

He slipped in the back door when we were in the middle of break out groups the first day of training.  His voice was a little rough from talking all day and I could tell how tired he was.  He stayed and talked to us for about 30 minutes.  He praised us for coming (one-on-one counseling really is close to his heart) and talked about areas his company is growing to meets the needs of the country.  Then of course being the good Christian man that he is, he prayed with us.  It was a great experience!

The famous address of his building

It really is a beautiful building- All 4 stories of it!

Just inside the front doors- on the right of the lobby is his studio and on the left is Martha's Place and the store.  Martha goes all out for visitors and had this great spread of cookies and chocolate covered strawberries and fruit.  It was delicious!

When he came out during a commercial break to meet the counselors in training.

(No he is not a hummingbird)

Me and Dave (Yes I was nervous. That's why I look like a deer in headlights.)

Live on the air doing his radio show.

Hard at work solving the nation's financial woes!

Yes it really says that outside his studio

I didn't get any pictures of the fabulous hotel we got to stay in.  It was an Embassy Suites- need I say more?  It really was such a wonderful week.  I learned so much and am having fun this week networking with people in my area.  Last night I got to visit an FPU class for the first time. Financial Peace University, Dave's 13-week class is taught all over the country (go to his website to learn more about it).  It was great to see people's lives changing for the better.  Overall it's been a long past few weeks, I'm tired, but it's a good kind of tired because I love doing this stuff!

Counselor Training!

So I know some of you are looking for my tip of the week.  I decided to just post a new one this coming Friday since as most of you know I was at counselor training last week.  I wanted to share a little about the week.  First off, it was AMAZING to say the least.  We of course got to meet Dave.  He came and spoke to us for about a half hour near the end of day one of training.  He (and his whole team) came across as a very humble, passionate, and hard working.  I was very struck by how kind and loving they all are.  Their goal is to literally to help one person, one family at a time.  In the Media, Dave is often portrayed as one egg short of a dozen, because his ideas buck the norm in this country.  He doesn't care about all the fame and notoriety he has gained over the years.  20 years ago when he went broke, he started one-on-one counseling at a card table in his living room because he didn't want anyone else to go through what he did.  Now he has been blessed to share that message with an audience of millions on the TV and radio everyday.  But I could tell as he was talking to our group that counseling is still his 'baby' and it really is about the people not the money.  It is near and dear to his heart.  


Later in the week we got to go over while he was live on the air and see him in action.  I have some great pictures of his beautiful building.  He came out during a commercial break and shook our hands, posed for pictures with us individually.  Unfortunately, I am having problems downloading them to the computer because of some recent changes we've made to it.  I will try to get them up later in the week.


Now these were just my experiences and impressions.  I am not an employee or paid by his company in any way, but I feel the same way.  It's really about the people.  I look forward to start counseling more and helping those in need.  I'm really excited because of all the resources I have at my finger tips.  So if there's ever a question or situation I'm not sure of, I have a great counseling team back in Nashville to help me.  Over all this was one of the best and most fulfilling experiences of my life.  It ranks right up there behind marrying my wonderful husband and having my two precious girls.  I learned so much and am really looking forward to this new journey.

My Website & Business

It's official! My website came online last night.  You can see the link in my services and pricing box or you can go to www.financesbyrachel.com  After I finish my training this week in Nashville I will be officially open for business.  Please help me spread the word about my services by joining my referral program.  Refer a friend or family member and get a gift card as my gift (see my website for more details).  As a service to my neighborhood, I am offering my services for free to my ward members at church.  I feel I have been blessed with this gift and want to bless the lives of those around me.  I also have a special rate for other friends and family, if you're interested in either of these, please let me know.  Thanks to all you wonderful readers for your support.  I hope you keep coming back for the learning and insights that I offer.

Tax Returns

Ah...spring is in the air, the birds are chirping, the flowers are blooming and of course people are pulling out what hair they have left trying to get their taxes done.  Nothing like the last minute procrastinators rushing to the post office to send off their tax returns.  I know my quotes this week are more funny and sarcastic than thoughtful but I couldn't resist because it's true.  Taxes really are the bane of most people's existence.  The tax laws in this country get more convoluted every year trying to squeeze more and more out of the working people.  But this post isn't about the injustice of the current tax system, it's about the tax return.


This time of year is either the most dreaded or the most loved depending on how much the government decided to take or give to you.  If you are among the hard working, self-employed, then I feel your pain.  For you, there's not much you can do for this except vote!  This post is  addressed to those if you who are not in that group and have a regular job with w-2's.  You know who you are.  When you started work, you filled out a W-4 that tells your employer how much to take out of your paycheck and give to the government in taxes.  This form is vague and many people don't know what number of exemptions to put down.  The number that's right for you varies depending on your situation.  Quite often the guidelines on the form to figure the exemptions come out too low.  This is especially true if you are a one income household and have children.  


The bottom line is this: if you are over withholding your taxes simply to 'save money' and get a large refund STOP!  As I said in the tip of the week, this is probably the one area that I have never heard disagreement in the world of financial advice.  Here's what usually happens when you get your big fat tax return.  You try to act responsibly and put some into savings or pay down the last of the Christmas bills or other debt that has accumulated throughout the year.  But more often than not, the money just burns a hole in our pockets and we end up buying some big thing or going on a fabulous vacation.  Either way, the money is gone and you still aren't any better off. 


The most common excuses for this practice are 'I can't save money otherwise' and 'we use the money to pay down debt, so that's good'.  Let's start with this business of not being able to save money.  If you do what I'm telling you to do you will have more money coming home every paycheck.  If you still don't trust yourself, then set up a savings account and have the money that would come home sent directly into the savings account.  Out of sight out of mind.  If nothing else, at the end of the year you would have your own 'tax return' and the interest accrued on top of that.  If you want to make even more on that money than just simple interest in a savings account try this: use that extra money every month to go toward your debt.  The interest you would save far outweighs the savings account interest.  This is my preferred method but doesn't just happen automatically.  It requires you to take an even bigger step and become intentional with your money.  If you don't have a plan for that extra money, it will get blown on whatever looks good that week.  


If you are using the money to pay down debt, then try this on for size.  Try using the extra money every month to pay down debt or at the very least, to avoid the need for the debt in the first place.  You'll see progress throughout the year and build confidence in your ability to take control of your money.  Yet another reason to have a plan every month for your money (aka a budget).  If you are still having trouble swallowing this advice, I would ask you to think about it and try it out for a year.  You can always go back to loaning the government money if you don't like it.

Tip & Quotes of the Week Apr 9-16

Financial Infidelity

For those of you who have never heard the term, let me explain. When you lie to your spouse about money by hiding income, or debts incurred, you are guilty of being unfaithful- financially speaking. (And no, I'm not talking about a stick of gum.) This is a very serious concern because it goes against everything a marriage is based on- trust.

Homework:

If you are guilty of lying to your spouse about money in any form, hiding income, debts or spending sprees, then it time to pay the piper and come clean. You know who you are. I am joining with that little nagging voice in the back of your head. DO IT TONIGHT! The future of your marriage depends on it. No matter how insignificant you think it is, you must be honest with your spouse. Chances are that your spouse's reaction will be like you are confessing an affair. It's that serious!

"We're never so vulnerable than when we trust someone- but paradoxically, if we cannot trust neither can we find love or joy."Walter Anderson

"A lie may take care of the present, but has no future."Unknown

"The cruelest lies are often told in silence." Adlai Stevenson

"The glue that hold all relationships together... is trust, and trust is based on integrity." Brian Tracy

Honesty really is the BEST policy

A solid marriage has at its core trust, communication and above all honesty.  A marriage lacking in any of these categories is bound for some bumpy roads.  Quite often, these core issues manifest themselves in the form of money problems and fights about money.  Money fights are the symptom, while a lack of honesty and trust are the root of the problem.  Complete financial transparency is absolutely vital in a healthy marriage.  If you can’t trust each other with money, then you’ve got much bigger problems that need to be addressed through good marriage counseling. 

If you don’t get help for these underlying issues, you are leaving a big wedge in your marriage.  We all know what wedges do, they split things in half.  I don’t want to scare you into thinking your marriage is doomed, but I do want to spur you into action.  In coming clean to your spouse, he/she will really feel betrayed, because you broke trust.  It won’t be pleasant, but neither is digging out a splinter with a needle.  If you don’t remove the splinter, it festers and gets infected.  This infection can get so bad that it can lead to death.  If you both fight through the tough times your marriage will come out stronger than before. So please, get help and remember, honesty really is the best policy.

Tip & Quotes of the Week Apr 2-9

2 Lessons in Money

There are two things you need to know about money. First, money is amoral. It isn't inherently good or bad. What people do or don't do with their money is what makes the difference. Second, money is active. It is in a constant state of flux. This is why it's called currency, because it has a flow or current to it. Whether you are a high school drop out or have a PhD, you still have to learn to control your money.

Homework:

Don't let financial ignorance stop you from making the most of the money your earn. Swallow your pride and know when to get help. You can be a genius and still be broke because you don't know how to manage your money. I guess by reading this blog, hopefully I am helping you learn more.

"Money will make you more of what you already are. If you're not a nice person, money's going to make you a despicable individual. If you're a good person, money's going to make you a better person." Bob Proctor

"The amount of money you have has got nothing to do with what you earn. People earning a million dollars a year can have no money and people earning $35,000 a year can be quite well off. It's not what you earn, it's what you spend." Paul Clitheroe

Money is Amoral

We all have heard the frequently quoted scripture "For the love of money is the root of all evil..." (1 Timothy 6:10).  Notice that it doesn't say money is evil, it's "the love of money" that is evil.  For this reason money is amoral.  It doesn't make you good or bad it simply amplifies what kind of person you are.  We see this all around us.  I'm sure you've met rich and poor people alike who are jerks. Just like you probably know really good, nice people who either don't have much or are very wealthy and generous with that wealth.  Having money doesn't make you a better person unless you are good to begin with.  Likewise, the lack of money doesn't make you a bad person.  Whatever the state of your finances, remember that the type of person you are doesn't dictate how much money you have.  The kind of person you are is reflected in how you behave with that money.

Money is Active

Anyone who has had money or would like to have money (pretty much everyone) has experienced how money is active.  It has a flow that makes it unique.  Whether it's observed through varying interest rates, cash flow, or value, money is dynamic.  If you try to hold onto it by burying it in the back yard in ten years, it will have lost buying power, and therefore value, due to inflation.  Sometimes the harder you hold onto it the faster it seeps through your fingers.  (That is the paradox of giving that I'll talk about another time.)  The vast majority of time however, money leaves because you're not respecting it. You've gotten lazy and just going with the flow, swept up in the current so to speak. 


Are you starting to see that if you can understand this law of money, it might be easier to manage?  This is why I think I keep talking about and coming back to the principles of being intentional, organized, focused and above all educated about how to handle money.  This concept takes time and patience to understand and develop.  It doesn't happen overnight but if you keep going, you will get there.  Through this process please remember that money doesn't care what level of education you have.  The fact of the matter is if you don't know about money management, then you can't keep beating yourself up.  Until now you have probably been doing the best you could with what you knew.  Ignorance about money and impatience are a recipe for disaster.  Now it's time to change that and do better.

Tip & Quotes of the Week Mar 26-Apr 2

Patience is Golden

We all know that patience is a virtue. Unfortunately, patience is one of the hardest virtues to develop. But if you can master patience in your finances, nothing will stop you! The possibilities are endless if you can develop patience. On the other hand, being impatient is probably what got you into the financial mess in which you find yourself. Delayed gratification is truly golden.

Homework:

If you start to feel impatient and want to buy something now, even if you don't have the money- stop and slow down. Rushing into things because you want it now, is impatience. Poor decisions are made in impatience. This is especially important if you are making a big purchase like a car or a home. But even the little purchases add up and can be detrimental to wealth building. Just think about it please.

"The two most powerful warriors are patience and time" Leo Nikolaevich Tolstoy

"Patience is the companion of wisdom" Saint Augustine

"He that can have patience, can have what he will" Benjamin Fanklin