Tip of the Week January 21-28

Spousal Financial Sabotage
If there's one thing that is harder to deal with than self-sabotage, it's when your spouse sabotages your finances. Whether this is intentional or not it's a BIG problem. I see in it many of my friends, family & clients. So what can you do about it if you feel that you and your spouse are trying to row your financial oars in different directions? First you both have to realize that it's happening and how emotionally exhausting it is. Remember, financial problems are only the topic that you fight about, or the symptom to the real problem(s). Where there are money problems in a marriage there will always be a breakdown in communication, mis-trust, or lack of organization. Many times it's a combination of all three. It takes an enormous amount of effort to be on the same page financially, but the dividends pay back many fold every time. Like I told the couple I coached last night, if you can come together on your finances, you can do anything!


Homework:

For some of you, change will be instigated simply by having a heart to heart talk. Regardless of what your circumstances are, start with this. Put the kids to bed and really talk with your spouse. You'd be surprised how much this really helps. Your spouse may be totally unaware of how serious the situation is. This is a non-confrontational approach, so stop if it escalates. More of you will need a third party to intercede and help you through the issues. This should start with your local clergy or a good marriage counselor. If your spouse doesn't want to attend, go by yourself to get the support you need to deal with the situation. This is very serious stuff I'm talking about. These are the seeds that lead to divorce. If left alone and untreated, they will grow as a wedge and fester your marriage. There will come a point when one or the other of you will reach a breaking point, snap, and the marriage like Humpty-Dumpty won't be put back together again.

Tip of the Week January 14-21

Financial Self-Sabotage
Are you guilty of sabotaging yourself financially? If you answered no, then you are probably lying to yourself. We all have done it at times, I know I have. So how do you avoid the pit falls of self sabotage? Whether you are talking about becoming financially fit or physically fit, the solution is one in the same- permanently changing the behaviors that led to the anorexic savings and bloated debt loads. That's right, this is the reason why so few actually get the long term results that they want. Think about it, our brains are hard-wired to seek pleasure and shy away from pain. Delaying a purchase or telling yourself 'no, not right now' is painful, especially at first. Think of this as an exercise building strength and memory, only for your wallet.

Homework:
I want you to sit down with a sheet of paper and think of every reason that you use to sabotage your finances (you may even need two sheets of paper). What's your negative self-talk when it comes to the way you handle your money. This could be anything, 'I spend too much', 'I'm too busy to think about it', 'I don't make enough', 'I make more than enough so it doesn't matter', 'I'm in too deep', 'It's only this one time', 'I'm having a bad day'. The list could go on and on. Think on it long and hard. The point I want to reach is that these are ALL simply excuses. They are the symptoms, the surface. Next, I want you to go back through your list and answer, 'why?' to every excuse you came up with. Why you think X makes it okay in your mind to do Y. I guarantee that if you do this and really search for 'the why', you will get down to the deep rooted issues of what led you to where you are today. Until you know the real reasons you will never see any lasting results.

Tip of the Week January 7-14

Back to Basics!

This time of year is filled with lofty goal setting and getting out of debt usually tops the list. Of course this rarely just happens. And so I want you to think of this from a different approach. It's the simple little things that make up the fabric life is made of. The small choices we make everyday that determine the course your life takes. In the world of finance I think it's best known as 'the latte effect'. A few dollars here and there that make a big difference over the long haul. Making small and simple changes now, on a daily basis does the same thing. So let's get back to the basics and focus on those small things that really do make a difference in your financial lives.

Homework:
Choose one area of your finances or budget that could use some extra attention. What is the category that is always out of control or throwing you off? What is your weak spot or chink that if left unchecked will unbalance the whole thing? We've all got one! You probably know exactly what I'm talking about, so it's time to fess up. Regarding this one habit or issue, identify what you can do to change it. This might be something drastic or simple tweaking. The point is that you do something to address the situation. We all know the power of denial. So stop and take stock of what you need. Be realistic and specific and if you slip up, don't quit!

Quotes of the Month Dec 10-Jan 14

"There are no short cuts to anywhere worth going." Beverly Sills


"Change is very hard and we change only when the pain of [staying the] same is greater than the pain of change." Dave Ramsey More Than Enough


"You will find peace not by trying to escape your problems, but by confronting them courageously.  You will find peace not in denial, but in victory." J. Donald Walters

New Format for a New Year

I have decided to change things up a bit on my blogging format.  Instead of having a longish post about my tip of the week, I'm only going to have the tip (off to the right) in a more expanded form.  Also, instead of changing the quotations every week with the tip I'm going to leave them up for a whole month.   As a result the tips will have the same theme for the month to go along with the quotations.  I feel the need to streamline the process and not be bogged down with a long detailed post every week.  


Again, PLEASE leave your feedback if you want a specific topic covered or if you have a problem you need help with.  My goal is to give you the information and the encouragement you need to keep going no matter what your personal circumstances.  I want you to read my blog and feel refreshed, inspired and hopeful again.  If I have learned anything about personal finance it's exactly that- personal.  Let's face it, this is hard stuff we are talking about.  It's nice to read about in theory but when you start to apply things to your own life, you'll understand what I'm talking about when I say- IT'S REALLY HARD!  But almost in the same breath, I'll always tell you that the 'hard' is worth it in the end.  Happy New Year!  May 2011 be all that you want it to be!

Tip of the Month December 10-January 7

Be your own Catalyst for Change

Only when and if you have decided that you have had it up to your eyeballs with the way things are, will anything begin to change. Coming to the realization that you are sick and tired of it is perhaps the crossroads that you need. Don't shrink away from this. Be courageous in facing things head on. Having financial freedom and peace is priceless and worth the sacrifice to have!

Homework:
Work together with your spouse toward the new direction you want your lives to take. Learn the tools necessary to start and more importantly continue on the journey. Keep going when things get rough, because the results really are worth it.

Happy New Year!!!

A new year has begun!  Sorry for such the long break between posts.  Don't worry I have not fallen off the blogging wagon completely.  I just had a busy holiday season with my family and then have been sick over New Year's.  Please check back later this week for more about what I love best!

Time for A Change?

Chances are that you are part of the 7 in 10 American households living paycheck to paycheck.  The funny thing is that only about half of you recognize that you really do live paycheck to paycheck.  That is some serious denial going on.  Here are some signs that you are indeed living paycheck to paycheck.  You have no savings, you feel like you play catch up on payday, you have too much month at the end of the money, you are anxious about how you are going to pay for an upcoming bill and most importantly- if you lost that paycheck today, you would be in serious trouble.  I'm not trying to make you feel stupid or worthless, I just want you to have a dose of reality as ugly as that might be.


There could be several reasons for being in this predicament.  Having career or medical issues, not knowing how to live differently and not having a plan are just a few.  Whatever the reason and no matter what your circumstances, you don't have to live like this anymore.  The key to unlocking a better future is change and that makes you the catalyst.  Only you can decide if you have had enough of the stress, pressure, and turmoil of living this way.  When you come to this crossroads you have a choice, either keep doing the same thing and getting the same results OR make a change (or several) that will lead you down a new path.  Sure, this new road seems scary and I won't lie to you, it will be hard at times.  You will even have setbacks and discouragements along the way.  But having traveled this road for the last 3+ years, I will tell you that I wouldn't go back to the way things were for anything.


If you don't know where to begin, start by realizing that you need to make a change.  If you are married, talk to your spouse about how you feel.  If your spouse doesn't feel the same way, get help from a third party clergy or counselor.  Not being on the same page with your spouse may be the biggest problem you are facing.  You will always be frustrated and never get anywhere if you are trying to row the same boat in different directions.  Work together to develop goals and a plan of how you are going to get there.  Gain the tools and knowledge to help you be successful in following that plan.  Get help when you need it.  Above all remember that this isn't a cake walk or a sprint.  Almost daily, I have to remind myself to think tortoise, NOT hare.

Tip & Quotes of the Week December 3-10

Being Content

Learning to be content with what you have instead of dwelling on what you don't have is a simple concept. It is probably the one thing that will keep your perspective in life. When we have gratitude in our hearts, we are content.

Homework:

Are you struggling with stuff-itis? The insatiable appetite to acquire because it is on sale, shopping makes you feel better, or because other people have it. If so, then you need a good dose of gratitude. The simple things in life are really what is important.

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

"Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for." Epicurus

"We tend to forget that happiness doesn't come as a result of getting something we don't have, but rather of recognizing and appreciating what we do have." Frederick Keonig

The Gift of Contentedness

I hope you all had a great Thanksgiving Weekend and are starting off the holiday season in the spirit of thanks and giving.  At my house we are fans of Veggietales.  If you have never seen Veggietales I would highly recommend it because of the great moral lessons they teach.  My favorite is Madame Blueberry.  It's about about a blueberry who is 'blue' because of all the things that she wants and doesn't have.  Yet after buying everything she could ever dream of from the local Stuffmart, she still isn't happy.  Seeing a poor but content asparagus family who has love and gratitude makes her realize that things won't make her happy, having true gratitude will.  I know this is just a simple cartoon, but the lesson is the same.  Things will never fill a hole you have in your heart.  No matter how much money you spend you will always want more.  Happiness doesn't depend upon your worldly wealth or possessions, it's determined by your attitude.  It is very difficult to have gratitude if you are always thinking about what you don't have.  Instead of comparing your situation to others, remember and be grateful for the things that you do have.  Being truly content is the best gift you can give to yourself and teach your children and grandchildren this Christmas.

Tip & Quotes of the Week November 19-December 3

Get Organized!

Is lack of organization holding you back from achieving your financial goals? Something so simple can make a huge difference in how you view your finances. Not having a system that works for you to: pay your bills, track your income, expenses, and investments, and project cash-flow can be costly. Avoid these mistakes by having a plan and getting organized today.

Homework:

Choose a software program, form, or website that you like and keeps you and your money organized. Don't choose something so complicated that you don't understand it or something so time consuming that you don't use it. The simpler the better as long as it does the job.

"You will either learn to manage money, or the lack of it will always manage you." Dave Ramsey

"If you lack the courage to start, you have already finished."Unknown

"If you aim at nothing, you hit it every time." Zig Ziglar

Get Yourself Organized

When it comes to tackling your financial problems the first step in becoming successful is getting organized.  No amount of money or income potential will ever be a substitute for basic financial organization.  There are many options to choose, from software to websites, spreadsheets to just a legal pad.  Whatever your method of choice, the important thing is that it works for you.


If you are struggling in this area or your system consistently fails you, then you may need a change.  The key is to find something that meets your needs, you are comfortable with, and that helps you reach your goals.  Also, make sure you have a system to organize and pay incoming bills on time to avoid late fees and bank overdraft charges.  This is a huge problem for many and a very large source of revenue for banks and credit card companies.  In this case your time and preparation really is worth money.  So make sure you always make time for this vital task.


So here are some of the most available and widely used software and website options.  The most widely used software program is Quicken.  Although I personally don't prefer it, many people enjoy using it to track everything from small business income & expenses to investments and personal budget expenditures.  You can also sync it with your accounts to automatically download your info.  If you like the idea of that but don't want to pay for the software another good option is Mint.com.  It is a completely free website that has most the features as Quicken.  In fact it's owned by Quicken.  It automatically updates your expenses directly from your banks and other financial institutions.  It also allows you to track these expenses, set a budget, and see the overall trends of your spending.  I recently started using this and while I like how well it tracks income and expenses and gives you a good overall picture of your finances; I am not impressed with the budget capabilities and lack of cash-flow projecting.  You have to wait for a bill or expense to actually hit your account before it's on the radar and for me that's too late.  This is why I have used for several years and still prefer Microsoft Money.  I love the way you can set up your month-specific budget, project cash-flow for the pay period and track expenses by category.  Unfortunately, Microsoft discontinued Money and all related software in the Summer of 2009.


If budgeting software or online tracking is not up your alley, you might prefer a simple spreadsheet in Excel or Google docs.  Combined with bill pay with your bank or credit union this can be a very effective yet simple way to keep track of your budget.  If you are really old school you might prefer to use a simple legal pad or ledger.  Whatever your method of choice remember, if it works for you and meets your needs stick with it.

Tip & Quotes of the Week November 5-19

Taking care of The Four Walls

While this isn't a very new or revolutionary concept, it's often forgotten when push comes to shove. No matter what your situation or income you always take care of your four walls first. This includes- food, shelter, clothing, transportation, and utilities. These are the basics of life and ALWAYS take precedence over anything else, including paying down debt and saving for retirement.

Homework:

Most of the time meeting these basic necessities is no problem. There are times when even paying for these is a challenge. This includes when there has been a job loss or reduced income, a major medical event from an accident or disease, or death in the family. Whatever the source of the crisis, it's very important to keep the fours walls at the top of the list of all expenses.

"Our necessities never equal our wants." Benjamin Franklin

"But if any provide not for his own, and specially for those of his own house, he hath denied the faith and worse than an infidel." 1 Timothy 5:8

"He who knows no hardships will never know hardihood. He who faces no calamity will need no courage." Harry Emerson Fosdick

The Four Walls

When it comes to personal finance this is the most basic of principles that also has biblical roots.  I've briefly talked about this in the past, but let me give a more thorough introduction to The Four Walls principle.  No matter what circumstances you find yourselves in you ALWAYS maintain your four walls (aka your household)- Food, Shelter, Clothing, Transportation, and Utilities before you do anything else including paying down debt and saving for retirement or anything else.  Often times taking care of these basic necessities is second nature and well within reach.  There are times after a job loss, income reduction, major medical event, death or divorce when even meeting the basics can be difficult.
So what exactly do the basics entail?  Even in these categories there is wide variance with what you actually need and what you have or want.  Food is the most important basic need in sustaining life.  It is the first thing that needs to be taken care of.  I'm not talking about eating out for every meal, buying filet mignon, caviar, and bottled water at the grocery store, or expensive personal care items.  I'm talking basic food staples and personal hygiene products.  Things may be bad enough that you can't afford to eat out at all and you may even need temporary assistance from a church or food bank.  These measures are temporary for a few months or a year but are not a permanent way of life.  Like food, clothing is another basic need.  Obviously this doesn't entail designer jeans and handbags or fancy sneakers.  You may need to shop consignment or thrift stores to meet this basic need.
Shelter, the roof over your head, whether it be an apartment or home that you can afford.  If you have ever been house poor, you know what this feels like.  A good rule of thumb is that you spend no more than 25-30% of your take home pay on shelter.  Anything much more than this is unsustainable long term and puts you at risk of facing foreclosure or eviction.  As hard as it may be, you may have to sell your home, on a short sale if necessary and move somewhere else. This is much better than having the house taken from you later.  Sadly, I have seen families lose nearly everything by trying to stay in a house they cannot afford.
Transportation and utilities are other needs that have a wide range in cost.  Again this boils down to the basics.  Am I starting to sound like a broken record yet?  Unless you use mass transit, you need a vehicle to get to work and back.  Trying to hold on to a car that you can't afford the payment, gas, insurance or maintenance on is stressful and not worth it.  If you need a truck or vehicle that can tow a trailer for work, that doesn't mean you need a brand new one.  When it comes to utilities you need electricity, heat, water and a phone.  Contrary to what your teenager or spouse might think this does not mean a premium $100 cable or satellite package and a $200 cell phone plan with unlimited everything.  The high speed internet might have to go for a while if necessary.  More hard changes may be necessary to keep your family afloat, but they will be temporary.  Obviously I have listed some worst case scenarios.  Above all, when push comes to shove you may need to trim some of these categories.  Whether you are facing a crisis or trying to find money to pay down debt and save, you are the one in charge and must decide what to sacrifice.  What's important to remember is to hold on to what really matters, your spouse and family.  Stuff is just stuff and you can always get another house or car, but your family is irreplaceable.

Tip & Quotes of the Week October 22- November 5

Holiday Spending

This is a very susceptible time of year for many holiday shoppers to blow their budgets. If you are a chronic offender, choose to break the cycle this year by having a cash only holiday. Not only will January be a lot cheerier with no massive credit card bill looming, but it has an automatic spending control built in. When the money runs out, you stop buying.

Homework:

Figure out how much you can afford to spend (that's the easy part) and don't spend above that (this is the HARD part). Be creative with your purchases. Great gifts don't always have to cost a lot of money and you certainly don't have to buy the entire toy store for your kids or grandkids.

"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

"You cannot keep out of trouble by spending more than you earn." Abraham Lincoln

"Spending is quick, earning is slow." Russian Proverb

Having a Plan for Holiday Spending

One of the 7 principles of money that I teach is that if you want to be successful with your money you have to learn to live on less than you make.  Now this doesn't mean that this applies to you only 10 months of the year and during the holidays it's a free for all.  It seems to be the same story every year.  We fail to plan for the expenses associated with the holidays and are surprised every year when Christmas still comes in December.  Then we don't pay for it until the tax return comes.  There really must be something in the air this time of year that causes a disconnect between your brain and your wallet.  Did you know that Americans spent nearly 16 billion dollars on holiday spending in 2009 and that was only in November and the first week of December?  And that was up from the year before.  If you are tired of this yearly cycle, here's what I suggest to break it.


1. Be realistic about how much you can and want to spend.  No matter what your income or situation, you have to set a budget.  This includes budgeting for more than gifts.  Decorations, parties, extra food, increased utility costs from lights and guests, and transportation costs often get forgotten and aren't budgeted for properly.
2.  Spend only actual money, whether in the store or online.  If you don't have the money in cash or in your account, don't buy it!  No matter how much it's on sale or you may want it.  If it's not in the plan, you don't get it.  This will make you prioritize not only how much you spend but what you buy with that money.  Plus, not having a massive credit card bill looming in January will make the season all the more enjoyable.
3.  Do a gift exchange.  Instead of buying gifts for every member of your family or extended family, draw or rotate names year to year.  My own family has been doing this for many years and it's worked very well.  Only having to buy one gift simplifies things immensely.
4.  Be honest with your family and friends.  Tell them this is the year that you are breaking the cycle and aren't spending what you've spent in the past.
5.  Prepare for next year.  Christmas is obviously a non-monthly expense.  As such, you can start in January to accumulate money every month into a Christmas fund.  Divide the amount you are planning on spending by 12 and put that much aside every month.  By the time next Christmas comes you will have the money needed to pay for everything.  This is very simple to do, but takes planning ahead and being intentional.

Tip & Quotes of the Week October 15-22

Perseverance is Key

We all know life can be very difficult sometimes, especially when it comes to your money. To have perseverance and to keep going when the going gets tough is what makes the biggest difference in the long run. Success in anything in life is achieved through this simple concept.

Homework:

No matter what your personal financial situation, keep striving for your goals! These may be the character defining moments of your life. They will make you or break you. As hard as it may be, refocus and gather strength from those around you. Things will improve.

"Edison failed 10,000 times before he made the electric light. Do not be discouraged if you fail a few times." Napoleon Hill

"Perseverance is not a long race; it is many short races one after the other." Walter Elliot

"Every man is free to rise as far as he's able or willing, but the degree to which he thinks determines the degree to which he'll rise." Ayn Rand

"Without perseverance, talent is a barren bed." Welsh Proverb

Perseverance=Success!

If there is one thing that separates the goal-oriented from the wanderers, the strong from the weak, and the successful from the failures; it is PERSEVERANCE through the thick and the thin.  This is true if you are trying to become fit physically or financially.  While this is such a simple concept, in practice it's very hard.  But anything that is hard to do will be worth it in the long run, right?


I want you to take a look at your life.  You've got things that are going well and things that aren't.  Look at the goals you may have set at the beginning of the year.  If you don't have any, think about what you want out of your life and future.  What are your financial goals?  Do you want to get out of debt?  Save for a rainy day or retirement? Have more money to give and help those around you?  Whatever your goals, have you accomplished anything towards them or are they sitting untouched on the shelf or in the drawer where you put them?  If you aren't moving toward a goal, why is that?  Personal finance is exactly that, personal.  It's not just about knowing how to do math.  By and large it's about the many emotional and behavioral strings attached to those numbers.


Remember, some progress is better than none.  It's the slow and steady mentality that you want; crockpot not microwave.  As frustrating as it is, there is no shortcut to any place worth going.  Maybe it's the optimist in me, but no matter what your circumstances financially or otherwise, a good dose of perseverance will keep you going along the way.  Because the sun eventually will come out tomorrow.  Please don't be so hard on yourself that you quit altogether.  After all, taking two steps forward and one step back will still get you to your dreams.

Tip & Quotes of the Week October 2-15

The Importance of Wills

A will is probably one of the most important pieces of paper you will own in your lifetime. Without it you leave your affairs in the turmoil of the state. They decide who will receive your belongings, and assets. Of course that might not seem so bad to you but remember, they also decide who will rear your minor children.

Homework:

If you don't have a valid or updated will, GET ONE TODAY! It's a simple process. I don't care whether you pay an attorney to create one or do it yourself with software or online. The point is that you get one done. Make those vital decisions for your loved ones, so there is no question what you want done. Please, be responsible and do it!

"No one can confidently say that he will still be living tomorrow."Euripides

"Live as if you were to die tomorrow. Learn as if you were to live forever." Mahatma Gandhi

"As a well spent day brings happy sleep, so a life well spent brings happy death." Leonardo da Vinci

"Will" You or Won't You?

They say there is nothing more inevitable than death and taxes.  While I am not going to talk about taxes, I am talking about death.  I don't mean to be insensitive but whether it's tomorrow or in 50 years we will all die someday.  I want to talk about the importance of having a valid will because the fact of the matter is 7 out of 10 Americans die without a will.  I can't understand why so many would not do something so vital for something this inevitable.  So here are a few myths or fears when it comes to estate planning.  First, "having a will means I am going to die."  NO, it only means that you are prepared for when you do.  Second, "things will work out fine for my loved ones whether or not I have a will."  Oh things might eventually work themselves out, but the courts take a long time and are much more costly.  Not to mention all this puts a lot of undue stress on those you leave behind.


Who needs a will?  Any adult who has anything.  There are very few adults who would be okay without a will- single, no minor children, and no assets (car, house, other valuables).  So if you are married, have children, or own anything of value, you NEED at least a basic will.  A will is a state specific document that provides the court with your wants and wishes for your estate.  This includes guardianship for any minor children.  Because probate is controlled on the state level, if you move to another state you will need a new one.  If you are married, both you and your spouse each need a will.  Most of the time these are mirror image or complimentary wills.  Things get a little more complicated if you have a blended family, so in these cases wills are that much more important.  It's also a good idea to update your will every 2-5 years.  


You may be thinking that it takes a lot of time or money to put one together.  Please do not let this be a hindrance in getting one.  If you're comfortable with online software you can get one for as little as $15.  If not, you can pay a reasonably priced attorney to do one for a few hundred dollars.  The more complicated the estate, the more I recommend having an attorney do it.  


I must say that I was going to talk about something completely different today.  I changed my mind because of a TV show that watched.  The back story was that the parents of these two kids were killed in an accident and the children having no other family were put into the foster care system.  This got me thinking because obviously these fictional parents did not have wills.  If they did their children would have gone to the guardian outlined therein.  I know this is just a silly fictional show, but sadly this kind of thing happens all the time in real life because people don't take the time to do even a simple will.  This, in my opinion, is the most important reason why you need a will, to declare guardianship for your minor children.  Their future is at stake and who wants to let the courts decide who will care for your children?  So please!  Be responsible to those you love, GET A WILL!  Don't wait another day!