Change Starts In Our Own Homes

It's been a while since I've taken time to blog.  I started a post last month but didn't have time to get back to it.  I'll finish and save that post for another time.  In light of the country being so close to being evenly split on the direction the country will take for the next 4 years, I thought those of us who are not enthusiastically looking forward to it need a reminder of perspective and truth.

Our nation was founded like no other nation in the history of the earth.  We have been through some pretty horrible things in our young 236 year existence.  We've been through a revolution, slavery, a civil war, stock market booms and crashes, women's suffrage, a great depression, jim crow laws, world wars and crises, terrorist attacks, and some whopper storms, tornadoes & earthquakes that nearly wiped cities off the map.  That's an awful lot!  Any or all of these could have at one time or another torn us to shreds, but it didn't.  While I'm not naive to the breadth of issues and problems facing this country (the fiscal cliff, tax increases for all, inflation on all fronts, trillions more in uncontrolled spending and debt, devaluation of the dollar, recession on the horizon, and eventual insolvency, to mention a few), I am choosing to be optimistic because the only way we'll wade through this is by rallying together around our founding document- The Constitution.  Politicians come and go, but the constitution remains.

This starts in our own homes as individuals.  We must remember that our rights and hope come from God, not government.  Change only happens when we make it happen.  So if you haven't already, start paying attention to your money!  Individual financial freedom is only the start of a greater wave of national freedom unrivaled in our history.  Choose today to make the changes necessary to experience this freedom for yourselves, it will be worth it!

One last thing:  In light of the devastation caused by Hurricane Sandy, I am going to start a new section on the blog called emergency preparedness and self-reliance.  To me, this is just as important as being fiscally prepared.

Quotations of the Month September/October

"I am what I am today because of the choices I made yesterday."~Eleanor Roosevelt

"My success was not based so much on any great intelligence but on great common sense." ~Helen Gurley Brown

"Arriving at one goal is the starting point to another." ~John Dewey

Financial Crisis

Are you or someone you know dealing with a financial crisis or have one coming on the horizon?  If so, this post is for you.  There are many things that can precipitate such an event.  Anything major like a job loss, severe income reduction, injury, or personal crises such as divorce, or death of a loved one can cause it.  But also something as ordinary as chronically overspending, not paying attention and being sloppy with your handling of money can too.  No matter how you got into the mess or whose fault it may be, the fact remains you are there and there is nothing you can do but go forward.  So what can you do going forward to minimize the damage?

1.  Do NOT under any circumstances completely ignore phone calls, letters and demands.  This will only make things worse.  Set boundaries as to how often you will talk to them.  Once every week or two is usually sufficient unless something suddenly changes.  Having good communication with them can actually slow down or stop their proceedings until you can work out a deal and get back on your feet.  Ignoring them will only speed up the process and lead to wage garnishments, which will cause further damage.

2.  Establish good communication with the lenders, collectors and/or attorneys you're dealing with.  Be up front and completely honest with them.  Share your budget with them if necessary to show you are serious about solving the problem.  It will take some doing but you will eventually find someone who will work with you, even if that means being sued and talking to the attorney in charge.  This holds true if you facing foreclosure, repossession, lawsuits or wage garnishments.

3.  Decide what you are going to do.  No matter what you're facing you have to decide whether you are going to fight to keep the house or car you're behind on or let it go.  If you decide to let it go, try to sell the item before it gets taken by the lender.  A short sale is better on your credit than a foreclosure and it's better than just walking away.  If your car is repossessed they will sell it at auction for a fraction of what it's worth and then come after you for the difference.

Here are some guidelines to decide:

If you weren't behind can you reasonably afford it?
Do you really need the item? Or can you downsize to a cheaper vehicle or living situation?
Can you work out a deal to catch up the payments?
Does keeping it stress you out more than letting it go?

Depending on how you honestly answered these questions then as painful as it may be, you may need to consider letting it go.  Every case is different and what's best for one might not be the best for another.  Just  remember two things.  One, relationships are more important than a house or car, and two, do your best because that's all you can do.  It will be stressful and take a lot a work but you will eventually come out the other side.

Choices

Eleanor Roosevelt said, "I am what I am today because of choices I made yesterday."  This got me thinking about the choices my husband and I have made over our 10 year marriage, and our lives before that.  All of them, both good and not so good, have made a difference for where we are today.  I know I've written about his before but I want to share it again.  5 years ago we made the major decision to get out of debt.  At the time we had student loans, a car payment, and a home improvement loan.  It wasn't an easy road to pay that off, but we made the choice month after grueling month to work toward that goal.  Yes, we had some financial set-backs.  Our air conditioner died and had to be replaced, we had our second child, and our house flooded.  Even in the nearly 3 years since we got out of debt we've had challenges.  Our third child spent 2 weeks in the NICU, my husband totaled our van and then earlier this year we took a significant loss to sell our home that was too small for our family.  My point of sharing this is not to toot my own horn or say, "wo is me" because everyone has successes and challenges. My point is that we are an average family with an average income and if we can do it, you can too!  Choices add up. What we did yesterday is manifest today and what we chose today will determine our tomorrow.

Quotations of the Month August

"Progress means getting nearer to the place you want to be. And if you have taken a wrong turn, then to go forward does not get you any nearer. If you are on the wrong road, progress means doing an about-turn and walking back to the right road; and in that case the man who turns back soonest is the most progressive man." ~C.S. Lewis

"Even a mistake may turn out to be the one thing necessary to a worthwhile achievement." ~Henry Ford

"Don't judge each day by the harvest you reap but by the seeds that you plant." ~Robert Louis Stevenson

The Difference

I often get asked the question, "How can I help my friend/child/sibling/parent who is struggling with their finances?"  The answer to that question often depends on the person or people in question because no matter how badly you want something for someone, you can't do it for them.  I know first hand how frustrating this can be.  This got me thinking about the people I have coached over the last 2 1/2 years since I became a financial counselor.  I've had quite the range in client's ages and circumstances.  From the young newlyweds to the retired or nearly retired couple, those with very modest incomes to those with six figure salaries.  Some have turned out to be my success stories, while others have struggled to get things together.  What really has made the difference?  I've come to the conclusion that those who are successful with what I teach have some common characteristics.

1~ Be Teachable:  If you want to be successful with what I teach, you have to be open and ready to learn.  Not everyone is ready to learn or make the changes necessary.
2~ Realize You Need Help:  This is probably one of the hardest steps because it requires you to swallow your pride and be open and honest with not only yourself, but me.
3~ Be United with Your Spouse:  If you aren't on the same page or can't get on the same page with your spouse because of trust or communication issues, you will not be successful with your money or your marriage.  Fighting about money is a symptom to those deeper issues and must be addressed first.
4~ Be Determined to Follow Through:  The mechanics of budgeting isn't difficult, but having the follow through to actually do it is another story.  Not giving up even when things start to unravel is what it takes sometimes.
5~ Be Proactive:  Ignoring problems will not do.  No matter what your circumstances, you have to be in the driver's seat and take control.

So when it comes to trying to help yourself or those you love, keep these qualities in mind.  They transcend both age and income and are more important in determining the outcome.   These aren't something developed overnight but through patience and diligence even the worst of circumstances can be turned around.  When they all come together nothing will stand in the way of achieving success.

Spending Triggers

Do you use money at a stress reliever?
Do you cave to the pressure or obligations put on you by family or friends with vacations or gifts?
Do you, your spouse or children throw a fit sometimes because you want it now?
Do certain times of year cause you to spend more?

All of these situations can be triggers for spending money you either don't have or haven't planned for.  These are all really difficult things to overcome.  We all fall prey to them at times so balance is key.  If we allow ourselves to justify them, then little by little we can find ourselves far away from where we thought we would be. So here are some things I want you to put in place to prevent giving in to these triggers.

1~ If you use credit cards, STOP IT! Lock them up, delete them from your online shopping sites or cut them up if you have to. All too often they become a crutch to fall back on when you're really stressed and in the heat of the moment need to go shopping. Find a new way of coping with your stress, exercise, talk to a friend, read a book.  Trying to heal matters of the heart with money never works and just causes more pain in the long run.

2~ Stop abusing your debit card. If you don't use credit cards you might abuse your debit card by telling yourself that you'll just transfer money from savings to cover it.  This will constantly cause you to lose the traction you're trying to gain.  Cash, on the other hand, causes you to pause before buying something and once it's gone, it's gone.  You just have to be careful not to go by the ATM for more or you'll be right back where you started.

3~ Talk with your family or friends. Share your goals with them. Tell them you can't do certain things as often with them anymore because you are choosing to use the money to accomplish your goals.  This isn't very pleasant at times but by and large most people understand.

4~ Be realistic in your budgeting for vacations, activities and other discretionary spending.  Let's face it, Summer is a very demanding time of year for our budgets.  Next to Christmas it probably does the most damage.  A counselor friend of mine recommended having an emergency fund for your vacation to catch any unplanned things like car repairs, higher gas prices than anticipated and splurges on food and gifts.  Bottom line- things always end up costing more than you think, so plan for it.

Making these changes requires you to get back in the driver's seat with your money again.  No more autopilot, ostrich head in the sand, or plug your ears and sing mentality.  If you want change to happen then you can't keep doing the same old things.  Above all, be honest with yourself!  This is probably the most important because if you truly are, then everything else will fall into place.

My Expanded Thoughts on Progress

Yesterday I came across a C.S. Lewis quote that struck a chord with me. "Progress means getting nearer to the place you want to be. And if you have taken a wrong turn, then to go forward does not get you any nearer. If you are on the wrong road, progress means doing an about-turn and walking back to the right road; and in that case the man who turns back soonest is the most progressive man." While this quote is from his book Mere Christianity and is referencing a more spiritual note, I found it also to apply to the world of personal finance. I could not stop thinking about it and had to expand my thoughts on the subject.

Do you ever feel like you're stuck spinning your wheels in the mud when it comes to your finances? I know I have many a time. Especially lately as my husband and I have been trying to rebuild our emergency savings from the substantial hit it took earlier this year. While I know we are on the 'right road' because we have been making progress towards our goal, it has ended up being a lot slower than originally anticipated. And that has caused frustration. I'm constantly reminding myself that there are no perfect months for a budget and that adjusting your expectations can be really hard sometimes.

There is a delicate balance between being flexible with your budget and completely blowing it. In the world we live in there are so many ways we can get pulled off the road that leads to our financial goals. Family, friends, children, neighbors, advertisers all have a tremendous pull on our budgets trying to lure us away from putting extra money into debt payments or savings. Those other roads are sometimes bigger and have bright neon flashing signs promising fun and happiness for all. At the end of the day when the money is spent, you're left with nothing but the figurative hangover wondering why you did that. We then can become discouraged and give up on our goal altogether. Instead of doing that I want you to stop and think about where you're at right now. Go back to the basics and start again. Even if it's not the beginning of the month. Be realistic and honest with yourself. Recognize your triggers for choosing that path. It's easy to tell yourself Yes rather than NO. But if you tell yourself 'no' or 'not right now' long enough it becomes easier. Getting and staying on the path that leads to your goals is a struggle. Changing direction is really hard to do but worth it when you actually see the progress you are making.

Quotations of the Month June/July

"Courage is being scared to death but saddling up anyway."~John Wayne

"Difficulties mastered are opportunities won." ~Winston Churchill

"Those who cannot change their minds, cannot change anything."~George Bernard Shaw

"Most of us spend our lives as if we had another one in the bank."~Ben Irwin

Terin and James: A Lesson on Perseverence

This is the story of two phenomenal people, Terin and James.  From the outside you would never guess the life experience they both have.  I first had the privilege of getting to know them nearly two years ago.  They were some of my first clients, but they were (and still are) no ordinary couple.  In the Summer of 2010 they were newlyweds living with her family and expecting their first child.  They were only 16 and 17 at the time and both wise far beyond their years.  Like so many other teens across the country, they made a mistake, and had some decisions to make and some fast growing up to do.  They loved each other, chose to get married and make the most of the circumstances they found themselves in.  When I sat down with them, I saw fear in their eyes, of the future and the unknown.  But I also saw something very rare- willingness to learn and determination.  Like most newlyweds they had a modest income.  Thankfully because of their ages they had no debt.  But they still had some pretty hefty goals.  James graduated from high school early and worked part time while attending college.  He was also in the Army Reserve and had a pretty good idea of what he wanted to do with his education.  Terin was in high school and working hard to finish on time with her class.  


I began by going through what I normally do when coaching newlyweds, teaching them about working together, not only in their marriage but with their money.  We talked about goals and how important it was to work toward something.  I helped them create their first budget and taught them the importance of avoiding debt so they could accomplish their first goal of moving out on their own in the near future.  I think by the time I left, the fear and anxiety that was in their eyes was replaced by a calm confidence and hope for their future.


A couple of months later, they had a beautiful little girl.  By the following Spring they were ready to move out on their own.  All the while they both worked hard, working multiple jobs, going to school and taking care of their little one.  Last year, James was called up by the Army to serve overseas.  While this in and of itself was very difficult for both of them to bear, Terin was also expecting their second baby.  James left in January for training out of state and then left with his unit to go overseas in April.  May was very exciting for them but a bittersweet time as James could only witness the birth of their sweet baby boy via the internet.  A few weeks ago Terin graduated from high school.  She wasn't just a graduate, she was valedictorian of her class.  James won't be home until next January, but they are looking forward to when they can all be together as a family again.  Things are certainly looking up for them.  Because of their careful budgeting they have maintained a healthy emergency fund while James is deployed.


I'd like to think that I played at least a small part in their success, but this was all them.  While I may have given them some of the tools, they used them to cultivate a beautiful life for themselves through their hard work.  They have both been scorned and written off by some and yet have triumphed.  They faced their challenges with a maturity and strength that I rarely see in middle-aged adults.  They knew what they wanted out of life and with the support of family and friends are persevering.  It would have been all too easy at any point for either or both of them to throw in the towel because it was hard, but they didn't.  They chose not to become just another statistic.  And so I hope that by me sharing their story, you find the strength to persevere and keep going through whatever challenges you are facing.  I feel like a broken record saying this but life is never easy and certainly handling money in a way conducive to your financial goals isn't either.  The important thing to remember is to keep trying, no matter what happens along the way.

Quotations of the Month May

"He that can have patience, can have what he will." ~Benjamin Franklin
"It's choice--not chance--that determines your destiny." ~Jean Nidetch
"The only competition you will ever face is with your own ignorance." ~Bob Proctor

Common Budget Busters

I know I've said it before and I'm sure I'll say it again but if you don't have a month specific budget to tell your money where to go, you will ALWAYS wonder where your money went; or you'll get frustrated because it doesn't work and throw in the towel.  It's been a while since I've talked about budgeting so I want to talk about some common areas that we forget about and tend to bust the budget month after month.  Setting a monthly budget should not be a stressful, gut-wrenching experience month after month.  It may be at first, if you have never had one or you're starting from scratch.  You may even be a bored free-spirit who doesn't get a rush over a balanced checkbook like the average nerd does.  The only way for it to get easier is to keep doing it, build confidence in yourself and your ability.

Non-monthly expenses are perhaps the biggest budget busters out there.  You know what I'm talking about, the "we forgot that the car needs maintenance" moment we've all had; or forgetting that when the kids go back to school they need new clothes, Christmas is in December, and of course the medical deductible starts over again at the beginning of the year.  So how do you stop from going crazy by these things that seem to creep up on us?  Go through your expenses and figure out which ones are non-monthly expenses.  This is everything that occurs either erratically or in regular intervals, just not every month.  Create a sinking fund for those categories by putting money into an envelope or savings account every month to cover when those categories hit.  Simply find a monthly average that you spend in each category.  This is particularly helpful with car repairs & registration, back to school, Christmas, and vacations.  If you're not in a position to be able to cash-flow it, then you need a sinking fund.  For smaller incidentals, have a miscellaneous category in your monthly budget.    If it creates a problem for you every month, then you're not budgeting for it properly.  Make it part of your monthly expenses.  I see this happen a lot with little things like gifts, or clothing.  But people get into trouble with big things like insurance deductibles.  

Above all, KEEP GOING!  Changing the way you handle money is super hard stuff and takes lots of the 3 P's, practice, patience and perseverance.  It also requires you tell yourself, your children or your friends "no" or "not right now".  If mid-month you're thrown a curve ball, roll with it and make adjustments.  Burying your head into the sand out of fear or frustration will get you nowhere.  You're only defeated when you decide not to get up and fight one more time.

Quotations of the Month April

"To grow, you must be willing to let your present and future be totally unlike your past. Your history is not your destiny."~Alan Cohen

"Knowing is not enough; We must apply. Willing is not enough; We must do. ~Johann Wolfgang von Goethe

"Let your hopes, not your hurts, shape your future." ~Robert H. Schuller

Quotations of the Month January/February

"Abundance is not something we acquire, it is something we tune into." Wayne Dyer

"Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give." William Arthur Ward

What Really Makes the Difference?

I have had a wild 2 months since I my last post. We decided to try and sell our house, got an offer within a week and moved into a rental to save money to buy another house in a couple of years. As of this Monday, when we close on the sale, we will be completely debt free! Going through all this has made me think of how far we have come in the last 5 years before we started this journey. We were broke, had a lot of debt, and living nearly paycheck to paycheck. We had great vision but no guide as to how to actually get where we wanted. All that changed when in the Summer of 2007 we were introduced to Dave Ramsey's ideas about debt and money. This paradigm shift is exactly what we needed. Since then we worked hard to not only pay off all our debt (about $24,000 worth) but build an emergency fund. We are getting ready to celebrate our 10th anniversary in a couple of months and celebrate in style we will by going to Jamaica. This is something we couldn't have imagined doing 5 years ago. I can't help but reflect on what has really made the difference in all this.

The things we do now aren't rocket science. Any sixth grader can do the basic math required to balance a budget. I think we've realized that is the easy part. The follow-through requires strength, discipline, and maturity to tell yourself 'no' or 'not right now' a lot of the time. It is NOT an easy road to travel, but since when is hard not worth the end result? Now we have a completely different view on money. We save up and pay cash for things, even if that means going without or less at times. This has given us freedom that was unfathomable before. Because of that freedom I want to shout it from the rooftops and wake people up. Let them know that there is a better way and that they don't have to be broke or nearly broke as a way of life. I have learned that doing this tends to rub some people the wrong way. They think I'm being conceited and think I'm better than them. This couldn't be further from the truth. I have never intended to offend anyone. I just can't contain my joy sometimes. I am simply enjoying the view of my efforts and want to assist others in their journey. My point is that to climb out of debt and change your life is HARD. It's REALLY hard to change the attitudes and behaviors that got you where you are today. But in the same breath I say that just because it is hard, it's not impossible. My husband and I are living proof that it's not. So decide to change today if you are tired of the same old results of being broke or nearly so. I'd be happy to show you the way!

Confessions of a Financial Coach

The Tortoise and The Hare:

It's not that fun to be and feel like you're the only tortoise in a world of hares. After all Tortoises are kind of ugly. They are big, bulky and all hard and wrinkled. Hares on the other hand, are fun, popular, fast, and sleek. Sexy even, compared to the tortoise. But if you think about it, tortoises are superior in many ways. While they are worn and weathered, they have everything they need to get through the storms of life. They carry their home after all, and they have endurance for the long journey. Hares are fast in bursts, but have ADD when it comes to staying focused on the task at hand. They are also ill prepared for drought and famine.

Sometimes I feel like the slowest tortoise in the world, like I'm never going to reach my financial goals. This isn't helped by feeling like I'm surrounded by hares, jetting past and dancing around me with all their excitement and great new things. Because of this, I do a lot of self-adjustment. I have to sit back and see the path I've traveled. It's been long and rocky. While I'm not to the top yet, I've come a very long way and life is good. If I had to, I would do it ALL again because it's been worth every hard step. While we only have one car for the time being and our house is a little on the small side for our growing family, I can't complain. My husband and I are debt free except for our house AND We have an emergency fund. That's more than about 80-90% of the population have going for them. So yes, I am a tortoise, but I'm proud to be one! Who wants to be a broke, stressed out hare? If you are trying hard to abandon your hare-like ways, keep trying! It's only too late if you stop trying. Just remember, every time I read the story, the tortoise ALWAYS wins.

Quotations of the Month November/ December

"Everything can be taken from a man or a woman but one thing: the last of human freedoms to choose one's attitude in any given set of circumstances, to choose one's own way." Viktor E. Frankl

"But godliness with contentment is great gain. For we brought nothing into this world, and it is certain we can carry nothing out. And having food and raiment let us be therewith content." 1 Timothy 6:6-8