Tuesday, October 2, 2007
During one financial seminar I held for youth I was explaining the power of purpose and told the students that the best way to stay true to their goals was to have a three-dimensional object they could look at from time to time. This object could be anything as long as it reminded them of their purpose and would provide them with immediate visual remembrance of their reason for working hard in life.
After the lunch break I found a plain brown paper bag on the podium. I was a bit hesitant to open it since many of the kids in the room were trying hard to stifle giggles. I also had the fleeting impression that there might be something alive and slimy in the bag. I need not have worried. When I finally plunged my hand into the sack, I pulled it back to find this small stuffed Dolphin. My mind was totally filled with questions marks at this point. Finally, a sweet young voice called from the back of the room, “Mrs. Bolon, I just wanted to let you know that I found my porpoise!” All the kids laughed, and I joined them. All of us realized that a porpoise was a great three-dimensional object for helping to keep one’s own noble purpose clearly in mind. I was also tickled that everyone in the classroom had understood the importance of finding their own great purpose.
A year later another student approached me with his three-dimensional object. It had taken him a few months of hard thinking to pull together his purpose, and he wanted to show me what he had worked up. As he told me his plans for music and pulling together a band with a unique sound, he unveiled the picture he was carrying. It was a framed gold CD on a black velvet background. I was so proud that he had never given up on his dream. No matter that forming a band is hard. He had recognized that this was his dream, and also his purpose in life, and so he had chosen an object to give him a real target to shoot for … a solid gold album!
It doesn’t matter what three-dimensional object you choose to keep your purpose in mind, as long as it matters to you. Pick a good vivid object like a porpoise or a gold CD, and then each time you’re out and about you will be able to stop yourself when presented with a sudden impulse to spend money. You will automatically ask yourself whether or not the proposed purchase is really worth delaying your financial goals or your purpose in life. It will assist you in keeping your dreams in front of you.
In the face of all the marketing and temptation we have in our lives today, we need some positive reinforcement on why we are living frugally, why we save money and why we are whittling down our debt. We do it so we can live our dreams. So, make your dreams a reality by giving yourself a mental nudge by having a focal point for your goals.
Wednesday, September 26, 2007
posted by Janine Bolon and Jan Dahlin Geiger, CFP®
I am always impressed with how fast people are able to get out of debt once they set their minds upon that goal. I have so many clients and students that make amazing changes in their lives and are able to live a financially stable life even after ramping their credit cards up a few years before. People really are amazing when they set their minds to a task!
Recently one of my students asked me a question. "How do I invest my money?" This is a very difficult subject for me because the system I use for my family may not be the best system for you to use with yours. So, I have brought in some expert help on the topic. Her name is Jan Geiger. Not only is she a dear friend of mine, but she is also a highly successful financial planner and author. I have asked Jan to take a look at the average sort of email I get on a weekly basis concerning investing and to give her advice on the topic.
Here is the type of email I usually get from folks:
I am 25-35 years old and recently married/divorced/separated. I started a new job/new life. I have $1o,000 -$20,000 in a 403b/401k account from my previous job, which I rolled over into a Roth IRA account. I pay 7-10% of my salary into a retirement account. I make $40,000-$50,000 a year and I am starting to invest at least 20% of my pay towards retirement. I am going to put the max in a Roth IRA account ($5,000 I think) each year and put the rest of my money in my high interest money market account (4.89%). I have $3,000-$5,000 in my MM account at the moment. I owe $125,000-$200,000 on my house.
My husband/My wife makes $50,000-$80,000 a year. We are going to put the max into a Roth IRA for him/her starting this year. We also plan on saving at least 20% of his/her income each year. Once, I get to the max on my money market account, I am not sure what I should be investing in next?
Please let me know what your advice would be. I am not very knowledgeable with stocks, bonds, etc. Would like to have plenty of money to last us the rest of our lives (retire as millionaires), and we are willing to make the sacrifice now.
Here is Jan's reply to people who are seriously interested in retiring so that they don't outlive their money...
I hope this post has helped all of you. Jan and I have a commitment to bring as many people as possible to the debt-free living lifestyle and then to bring them to wealth! We want you to age successfully and without the worry of money!
Friday, September 21, 2007
posted by Janine Bolon
My family and I were out picking the last of the tomatoes today. This time of year is so full of excitement and fun for all of us. We're harvesting the last few fruits and veggies of the garden. Finishing up the apples and pears and then the real work begins in the kitchen as I set to work putting all the stuff into jars to last us through the winter. I love canning. I watched my mom do it for years and I remember how "grown up" I felt when I was finally allowed to do more than just cut the apples! We live a mile up so our growing season is much shorter from southern Missouri's season. (That's said, Miss-our-ah! for those of you who haven't traveled that region of the country!)
I have several frugal friends who have asked me what are they to do about growing their own food when they live in a small condo on the 6th floor! Even if you are a city dweller and you don't have the option of large amounts of land. Know that you have options. For the first 14 years of my marriage I lived in apartments moving every 18-24 months because of rental prices. I learned how to have gardens in pots. I would buy large pots and then plant two to four plants in them and fertilize like crazy and water them every day. You have to be a bit more attentive with garden pots, but the fresh tomatoes, squash, basil and lettuce make it all worth while.
One reader asked me about canning when you can't grow your own fruit and veggies. That is a bit more challenging. Unless I can get my fruit free or at a super low price like 45 cents or less a pound. I have found that you really don't save yourself much money to can produce that you have to buy. Of course, when I lived in southern California, I would buy strawberries by the cases and would make jelly out of them, just because I love my homemade jelly and I enjoy canning. I wasn't going after the savings for this activity. I was doing it for fun. Not everyone has my warped sense of "fun."
Let me know how you go about saving money on food. Do you can your own or do you just throw your extra produce into the freezer and use it for smoothies and such?
One last note for you good people who are space deprived for gardening. I heartily recommend "The Square Foot Garden" book to you. I used this method for seven years while I lived in a 1,500 sq ft townhouse in southern California where my back patio was dwarfed by the 6 ft by 6 ft square, raised garden we had constructed for tomatoes, lettuce and herbs.
Thursday, September 20, 2007
Review: Debt is Slavery and 9 other things I wish My Dad had Taught Me about Money; by Michael Mihalik
Michael and I have never met in person, but we were on a Canadian talk radio show earlier this year and had many similar views on how to get out of debt and live a life of abundance. Michael and I hit it off because his background is Aerospace Engineering (He truly is a rocket scientist!)and I was a pharmaceutical biochemist.(Major geek factor here!) After the radio show, Michael and I continued to correspond and we started traded books and philosophies.
Michael's focus is definitely for anyone who is in debt and wants some no-nonsense simple systems to bail out of it. My two favorite chapters of this book were Chapter 4: Be aware of the ongoing campaign to separate you from your money and Chapter 10: How to plan your finances. I immediately felt a connection with Michael because he and I both lost a parent before we were 25. His Dad died when he was 13 and my mom died when I was 21. When I first read Michael's dedication of his book my throat seized up with emotion. He had dedicated his book to his Dad just like I had dedicated my first book to my mom. Of course, I was off and reading after that!
Michael's systems for gaining control of your finances are simple and easily accomplished in a spiral ring notebook or you can use a computer spreadsheet. The Appendix section is a boon where Michael discusses and defines all those crazy financial terms that you may have never heard around your family's dinner table. Such crazy words like: Amortization, Collateral, Equity, and Interest. Different mortgages are also demonstrated with lots of tables so you can see how each one works. I wish someone had taken me by the hand after college and explained all these principles to me. I would have become financially stable a lot quicker! Good job on the book, Michael. Give his website a view and tell him, Janine sent you.
Thursday, August 23, 2007
posted by Janine Bolon
Last night I finished reading Tricia Molloy's book, Divine Wisdom at Work: 10 Universal Principles for Enlightened Entrepreneurs. First off, this book is for everyone. I was amazed to see so many financial, emotional, and time management techniques packed into such an easy-to-read book. Tricia gives you exercises and ideas for increasing your productivity as well as the savings in your bank account. I was stunned at how quickly I read this book.
Tricia has done a vast amount of research to bring you the 10 principles of an abundant and successful life. Her chapters are chock full of quotes from different books and people that she has read and interviewed so you not only get her take on each topic, but you're in the discussion with at least five to eight other individuals on the same principle.
My favorite chapters were: Principle 4, Clean Out the Clutter: The Universe will Fill the Vacuum, and Principle 10: Give Thanks Often: Cultivating an Attitude of Gratitude. I focus on these two chapters because they are so pivotal to having a financially secure life. Most folks forget how all these topics effect your view and choices on money, and what Tricia does is demonstrate how changing your environment from clutter to clean brings you more energy and time (at least 2 hours a day says the research) to be productive with what is really important to you.
Giving thanks often is something that has brought me many new clients, opportunities and joys in life. So all the advice Tricia gives in Chapter 10 I heartily recommend to others because I've seen the positive results first hand with my own experiences. By expressing my happiness to others in thanking them for their assistance, the Universe turns around and continues to shower me with the very things for which I am grateful! It's crazy! It's abundance! And it is how Life works. Tricia does a great job of explaining this.
I highly recommend this book to anyone looking to break out of their negative rut in a simple yet positive way. Sure, the titel says the principles are for entrepreneurs, but I have found that the truths talked about are just as viable for the stay-at-home-mom, teacher, construction worker, or medical professional. It really doesn't matter what you do for income. If you are working, this book is for you!
Tricia also has a free monthly newsletter on her web site that offers inspirational guidance and support.
Friday, August 3, 2007
posted by Janine Bolon
For all my readers who don’t celebrate Christmas because of their particular religious practice, please replace “Christmas” with whatever celebration you want to simplify and all will be well. On to our story...
It is a Christmas that will always stand out in my memory. After eight trips up and down our townhouse steps on Christmas Eve, I was sitting on the couch six months pregnant with our fourth child. Across the living room I saw the cute little Christmas tree sweetly decorated with strings of popcorn, cranberries and cut-paper decorations. The children had put small candy canes along the lower rows of branches. As my eyes traveled down the beautiful but simply clad tree, they came to rest on the carnage that used to be a carpeted floor.
My plodding up and down the stairs had been productive. Packages by the hundreds seemed to rest there on the living room floor. Like a boulder field below a mountain, packages were strewn so far from the tree you couldn’t have reached it to put an ornament on it! As I stared at this mass of gifts that came to us compliments of well-intentioned family, friends and co-workers, I wanted to cry. I knew that many of these gifts were for the children and I also knew that the toys and packages took time, effort and money to reach us. However, I also recognized a sad fact, that after the third gift was unwrapped my kids would lose interest. They were still young; I had a 6-year-old, a 4-year-old and a 2-year-old. I knew that Christmas for them was all about the excitement and joy of seeing new toys and packages, but that they could not sustain that enthusiasm when they had received too much.
The pile under the tree represented way, way too much! Please don’t think I am being ungrateful here. I’m not. I was touched by the thought that each one of those presents represented. I was thrilled that so many people loved us that they had sent these gifts to brighten our Christmas morning. However, it was too much. By having too much, my children would not use most of the toys. By having too much, my little townhouse would become packed full with objects that would require attention, storage and clean-up. By having too much, my children would rip off paper of packages and move on to the next gift without even giving consideration to the one just opened. This is not how I wanted to celebrate the sacred time of Christmas. I wanted simplicity, not excess.
I have heard over and over from friends, colleagues and clients how much they dislike the glut of Christmas and all the financial stress it brings. “How do you stop it?” they plaintively cry. I don’t blame them for the sentiment. The holiday itself is wonderful, but buying stuff has managed to get out of control. Here are the steps that Brad and I had with family and friends to change our traditions to a simpler system.
1-Start the Christmas conversation now. With summer here people are more willing to chat about the commercialism of Christmas because the stores aren’t full of messages that say you MUST buy product X to be a good relative or you’re a cheap jerk! Now is the time to discuss options to Christmas giving.
2-Draw names for gifts. Many families already do this, drawing one name to receive a major gift at Christmas and then buying little “stocking stuffers” for other members of the family. This works especially well when you set an upper limit to the gifts. We did this one year and had a $20 limit (by the way that’s $20 total for the main gift and stuffers!) It was a blast to see the creativity everyone brought to the celebration.
3-Explain and show Grandma and Grandpa other ways that they can demonstrate their love throughout the year rather than saving it all for Christmas. I pick on them because in our family they are the major spenders in the gift-giving arena. I had to explain to my wonderful parents that I appreciated what they were doing for their grandchildren, but what the kids REALLY loved was mail. We discussed that they send short notes to the kids and articles from magazines during and after the holiday season. This idea hit the jackpot. Grandpa now sends his grandsons a new quarter for their collection as each new edition is minted along with a short handwritten note. My sons love it.
4-Buy gifts after Christmas Day. I have a couple that told me this works great in their family. Each person posts on the web site what they want for Christmas. The family members “sign up” to get the gift they want to buy and the actual purchase is done AFTER Christmas when the sales hit and the pressure it off. Then in January the family celebrates Christmas! They told me of the thousands of dollars that the family has saved not only in gift giving, but also in air fare!!!!
5-Ask for or give gifts that are perishable or require no storage space. My favorite gifts to give and receive are books, magazine subscriptions, and food. I read books and then give them to the library. I read the magazines and then give them to friends who I know will enjoy them, or recycle them. And I love cooking in the kitchen. Remember that re-gifting is a fine art form that is frugal, not cheap. You can do it as long as you don’t give the gift back to the very person who gave it to you. If you’re not going to use the gift, by all means, give it to a person who will.
The bottom line is this, dear friend. The act of giving gifts is to let folks know we thought of them. What the actual gift is doesn’t matter as much as the thought that went behind it. This has always been my view; unfortunately, I didn’t have family that always agrees.
It took three years and many, many telephone conversations, but, finally, we have détente! (Celebrate with me here!) When Christmas arrives, we are no longer deluged with packages. Our tree actually can cover all the packages with its limbs and the kids get one “big” gift and several little ones. How did Brad and I bring about a non-commercial Christmas? We started using money. That’s right. Grandma, Grandpa, Aunts, Uncles, and Cousins -- all of us now ship money (not cash) through the mail and ask the folks on the other side to buy what they want. It took years of working on this and trying LOTS of other options before there was mutual consensus on this simple and obvious solution. Now, we all save on shipping, time at the mall and gift wrapping. And we always get what we want!
Some people have told me that money doesn’t say as much as a “real” gift. Then I look at my four kids playing with the “exact” toys they wanted from Grandma, Grandpa, Aunt and Uncle. I see the excitement and joy of Christmas still in their eyes after the last gift is unwrapped and I see them totally thrilled with the treasures. Brad and I exchange our gifts after Christmas because we go shopping for each other during the sales on December 26th.
You will have to come up with your own system for handling Christmas this year. I suggest you initiate negotiations now for scaling down on the gift giving. Be creative in options that you list as potential traditions for the new Christmas coming along. Given enough time, you too, can celebrate the true joys of the season without the financial stress of the commercialism.
Here are some web sites that have articles and stories on returning to simple holiday seasons.
Happy Holidays, Everyone!
Thursday, August 2, 2007
Hello Operation Paperback Supporters!
We know that you have expressed an interest in supporting our troops, and that's why we are writing to you today. Every day volunteers at Operation Paperback send their gently-used books to soldiers deployed overseas.
We have just received a somewhat different request from one of our Marine chaplains. He would like copies of the book, "Courage After Fire: Coping Strategies for Troops Returning from Iraq and Afghanistan and Their Families."
Here is a description of the book:
"The bravery displayed by our soldiers at war is commonly recognized. However, often forgotten is the courage required by veterans hen they return home and suddenly face reintegration into their families, workplaces, and communities. Authored by three mental health professionals with many years of experience counseling veterans, Courage After Fire provides strategies and techniques for this challenging journey home."
Chaplain Harding would like to give everyone one of his Marines a copy of this book as they return home. And that is why I am writing to you. We would like to ask if you would consider donating to our special fund to purchase copies of this book. We can purchase and ship books on amazon.com for $10 each.
Chaplain Harding's goal is 1,000 books, and we'd like to try and help him reach it. This book may be able t help prevent problems that our veterans may suffer years and years down the road.
If you would like to participate, please click here and we will take you to a special page where you can securely make a donation just for this book fund. (You can also mail a check to our Post Office Box if you'd prefer.)
As always, we appreciate you taking the time to read this email--and please do not feel obligated to participate. We know that you all support the troops in your own way, so please participate only if you are able to. We also encourage you to forward this message. If anyone would like to verify our status as a non-profit organization, the can click here.
If you have any questions or comments, feel free to email me at:
Thank you so much for the support of our troops!
I have worked with these wonderful folks for over 3 years and have heard from my military friends how valuable their donations have been in books to read while hanging out for deployment or waiting for the next mission.
Thanks for reading!
Wednesday, August 1, 2007
posted by Janine Bolon
Over the past three years of travel, speaking and talking about money with numerous people, one thing has become very obvious to me. Many of us don’t know what we want. For those who do know what they want, they are the successful ones. They have a savings account. They have little to zero debt and are working on becoming “retired” by the time they turn 45-50 years old. Whereas, those who don’t have a clue what they want out of life, except winning the lottery, have the problems with debt, over-extended credit and a car on its last leg (or axle) with no idea how they will be able to replace it when it finally gives up the ghost.
Now you may not be that badly off, but I think you know where I’m headed with this. If you wish to be financially successful, you need to know what you want out of life. As Rob Bennett says in his book, “Passion Saving,” “To be middle-class almost by definition means to be on a quest for more meaningful work.” This is so true. Many of us have credit card debt, mortgages, loans and medical bills; how can we possibly dream of living “off grid” in Colorado when we have all that looming over us?
How about giving your dream one more try? Until you nail down what you truly want out of life, all your financial goals will fall by the wayside because you don’t know why you need to be saving money. So, sit down with a piece of paper and a pen and write at the top of it, “What I want most in the world is...” and fill in the blank. What you write may surprise you. Most folks start off with the standard stuff: “a healthy family, a house, no debt, and a better job.” But I want you to work past these things and go deeper. Why? Because I know that you have given up on your real dreams.
At some point in life you gave up on a passionate dream because you didn’t see how it was going to be possible to achieve. Rather than trying to figure out a solution, it was SO much easier to drop it and then try to fill that emotional void with impulse spending and driving the credit card balance up to higher levels. It was easier to deal with the pain of debt repression then the fear of attempting to achieve a dream.
Your dream is possible. I know you may not even remember what it was that drove you so passionately when you were 8-12 years old, but it is usually at about that age when most people stop believing in themselves and their dreams and start walking the path of paycheck-to-paycheck living.
For my husband, it was giving up on getting a history degree because he was told by so many of his friends and family that a young man couldn’t make a decent living with such a career path. Here he is now at 45 finishing up a degree in history and feeling great about finally doing what he has always wanted to do. Studying history and writing books.
For me I gave up on ever getting a doctoral degree. I almost starved myself through the 5-year degree program for a Baccalaureate in Biochemistry. No lie. I had dropped down to a dangerous weight and would not have been able to continue if I had to go an additional semester. Now, here I am at [age omitted because a lady never tells!] and just last month I applied (and was accepted) to a Ph.D. program. Thanks for celebrating with me!
What dreams have you given up on? Are you having problems figuring out how to remember them? Here is a list of things to do to get your memory moving. Answer these questions on a piece of paper.
1-If I had all the money in the world, what would I do with my time?
2-If I could spend my time in any way I wanted, what impact would I make in my community?
3-What have I always wanted to do for myself, but stopped because I was afraid? Don’t let the fear stop you this time. Write this down.
4-If I didn’t have to worry about the opinions of friends, family or spouse, what things would I do?
These questions may seem a bit simplistic, but I have found that when I’m mentally blocked on an emotional topic, it is the simple questions that get my thinking gears rolling. Write your responses down. Don’t just sit there at your computer and stare into space working on your answers. Bring them into our 4-dimensional “real” world and put them on a page.
Once you have figured out your dream, then it is time to put that dream into an action plan. Let your mind wander and consider the financial, educational, and support systems needed to help you achieve it. Here is an example. One of my relatives decided at the ripe age of 57 to go back to school to become a doctor. Yes, a doctor! Her children were all for it, but her friends were the naysayers in this. She frequently heard them say, “But Grace, you’ll be 67 before you’re even done!” Quick as a flash she answered back with, “Yes, but I’ll be 67 anyway.” Grace is my inspiration!
After you have finished writing down your dream, you are going to e-mail me. Okay, maybe you don’t want to e-mail me, but the idea is e-mail it to someone and discuss it with them. Ask for help on how you are supposed to accomplish this dream. The ideas will start to flow. Your mind will start to work on possibilities and potentials. That is when the fun begins. That is when you become financially mature and begin to change your money situation.
Saturday, July 28, 2007
posted by Janine Bolon
One of the things I first noticed as my husband and I moved from the financial cellar to financial stability and, eventually, wealth was how the conversations in our lives changed. I don’t mean the conversations between us, but the conversations we had with friends, colleagues and total strangers. A new topic developed that we had never chatted about with our family. That topic was money.
When Brad and I were in debt and living in a 4 room mobile home, the subject of money never came up at parties, work get-togethers or family events. It was taboo to talk about legal tender unless you were discussing a decrease in income or how Uncle Sam managed to cut you out of more cash. However, as our financial situation became stronger and we started investing our savings account, a whole new world opened up to us. We noticed we were having more and more conversations about money with everyone that wasn’t our family and friends. It was the weirdest thing.
One particular conversation stands out from the rest. I was in the break room at work finishing off a bagel and cup of coffee when a co-worker of mine popped in and sat down next to me. He was a gentleman of 52-years of age. After exchanging pleasantries he hit me with a bombshell. “I’m going to retire next month.” I responded with a blank stare and a, “You’re WHAT?” He repeated his reply and then he said he had noticed how I never ate lunch in the cafeteria and that I always brought my own coffee in a thermos to work. He asked me what my retirement plans were. I was 31 at the time.
I laughed and said that I figured it would take Brad and I another 30 years or so before we could retire. He then looked me straight in the eye and said, “You can do it faster than that, if you want to.” He then outlined for me a 15 year plan that he and his wife had used to get them to a financially secure spot to leave the work force for good. I was stunned. No one had ever talked to me about money like that. What I came to realize was this, wealthy people talk about money, but the middle class and others do not unless it is the negative view of money.
What does this mean for you? Simply this. Start acting like the wealthy and initiate conversations about money with people who can help you. When was the last time you had a discussion about money with that “rich” Uncle of yours that didn’t relate to a loan? Start asking people who have money advice on how to handle it and work with it. Don’t get personal about their finances or ask for details, but talk to them about what their advice would be. If you’re like me, my family rarely had a savings account so the first time I had $5,000 in an account, I panicked because I knew I HAD to do something with it, but I had no idea WHAT to do with it. As far as I was concerned having a strategy for investing money was like shooting a rocket to the moon. I didn’t know the first thing about it!
Initiate conversations with financial professionals, talk with wealthy family members, if no one in your family is wealthy then set up an appointment with the “wealthy” person in your town. The one everyone knows and ask them what their advice would be to someone who is just starting out. I did this very thing when I was 32. I called up a gentleman who was worth 25 million dollars and asked for a 30 minute appointment and I offered to pay him his consultant rate. He was charging $400 an hour.
The best way to obtain a wealthy mentality is to start forming strategies and goals for what to do with the money that you are saving. If you have no idea about what to do with money, like me, then chat with folks who obviously invest and discuss strategies with them.
Monday, July 2, 2007
Posted by Janine Bolon
When I put this book down I looked up and shouted, "YEEEESSSSS!" Finally, I have a book on investing and asset allocation that I can recommend to my clients. I enjoyed laughing with Jan Geiger as she described her passion to become wealthy along with the many stories she told you about her journey. The fact that she assists others now as her vocation is a brilliant attribute to the data in her book.
I always prefer to have an author tell me about their personal journey to wealth and Jan does this in a very easy to read format without the jargon the financial industry uses that confuses me. This is book that is a must read, but also implement what Jan tells you. Don't just read the book and put it down. This is a book you've got to put into daily practice.
Jan has great tips scattered throughout the book along with boxes that highlight major points so you can skim easily through chapters to get the information you want. I liked the fact that she ends each chapter with action steps and then recaps them at the end of her book. For those who wish to become financially independent, this is a must read book. If you are older and just now starting to look at your personal finances, Jan has help for you, too! Get and stay as healthy as you can!!!
You can order Jan's book through amazon or visit her web site. More comments later on this great book!
Thursday, June 28, 2007
The headlines were blaring at me: ”Savings at the Lowest Rate since Great Depression.” My husband handed me the financial section of our local newspaper as I was finishing up the breakfast dishes last week. “Oh no,” was my reply as I read the truly negative news. It seems we Americans have hit another record and, unfortunately, it isn’t one that I’m very proud of. For the second time in 73 years we are now saving in the negative numbers. 2006 has the dubious honor of a -1% savings rate. Yikes! On the average we are now spending more than we earn as a population. 2005 had us saving at -0.4% rate and what is even worse is there have only been two other years that we have saved so little as a country and those were 1932 and 1933.
During the Great Depression, however, we were saving less due to the loss of jobs. One out of four households had no work and these families were tapping into savings in order to make ends meet. Food and rent were the major reasons for their decreasing balances. For 2006, what are the reasons for the negative numbers? A good economy! Believe it or not. I was stunned to read that the Associated Press article was listing low interest rates were the primary reason for this decline in our savings accounts. It seems at times like these it is more attractive to borrow money to make purchases by refinancing one’s home! The Federal Reserve has driven rates down to the lowest level in more than 40 years so is it a wonder folks are jumping at the ability to get a loan? These lower interest rates have caused a major increase in housing purchases, which has caused an increase in housing prices which has, in turn, increased the number of mortgage refinancing so people can have more money to spend on things. Eeek!
There are problems on the horizon if this sort of spending continues. At some point the money will have to be repaid. Remember that the boomer generation is just starting to retire and pulling money from their savings to compensate for the lack of paychecks. This is adding to the negative numbers we are currently seeing and the number of retirees is going to increase over the next decade.
So, what do you do? I mean, all this negativity about saving and the consequences of excessive spending is enough to make the stoutest heart want to grab the wallet, head to the mall and SPEND! Here is what you do. Make sure that at least 10% of your income is going directly into an IRA, 401k or if you are self-employed, pick one of the solo401k options that allow business owners to invest income in a retirement vehicle. It is important that you don’t give up your future due to the lures of today. If you are unable to save 10% of your income then start looking at what you are buying on a daily basis that can be handled a different way.
We are NOT talking about deprivation here. If you are buying a cup of coffee at your local coffee shop every morning on your way to work, then I suggest you buy a thermos and make your coffee at home and take it to work with you. If you buy a trinket or little “something” every time you checkout at your local food mart then I suggest that you find another way to fill that emotional need. What is important is to ask yourself this question; “Why am I buying this?” It will amaze you how many times the answer is something out of a 3-year-old’s mouth. “Because I want it!” or “Because I’m mad/upset/irritated!” Often, many of my clients tell me that they get so depressed about their credit card bills they go out shopping to feel better! Talk about your vicious cycles, right?
Here are some tips to avoid this sort of trap:
1-Every time you avoid buying a trinket or item at checkout, put that money into a savings account. One of my clients told me that by the end of one week she had $112 in her checking account. Talk about an eye opener. She knew that she had been spending money on stupid stuff, but had no idea it was THAT much in a week!
2-Track all your expenses. Yes, all of them. Buy or make yourself a little notebook that you carry around with you all the time. Every time money or a credit card leaves your wallet, record the expense. Over a month of recording you will start to see patterns in your spending that are impulsive, not satisfying in the long run and destructive to your mental health. Eliminate those expenses or find low cost alternatives so you don’t go into a deprivation/splurge cycle.
3-Track your savings. Keep an eye on your savings account and watch it grow over time. When an emergency occurs or an unplanned expense hits, pull the money from your savings account and put that credit card back into your wallet. If you don’t have the money saved, then it is simple, don’t buy it!
4-Make financial goals. This is the single most powerful exercise anyone can do, but is the most often neglected. By making REALISTIC financial goals you will achieve them. What is necessary in making goals is to have a reason for them. Saying that you want to have $5,000 in a savings account by this year’s end is not enough motivation for me. I have to have a reason for that $5,000. Before I had an IRA in my name, I was totally committed to saving money so I could open it and to make sure I could fund it every year! Why? Because I had a picture in my mind of me old and grey and not able to work anymore, the thought of living with my children or being a burden to them is enough to make me save money for my IRA.
5-Affirm your financial goals. Instead of telling yourself or your loved ones, “Sorry, honey, you can’t have that we don’t have enough money.” Start affirming a positive financial picture. A better way to affirm abundance of money is to state, “I can’t have that, because I spend my money on different things.” This keeps the affirmations out of the negative and starts you to thinking about the purchases that really matter. Then, your not just throwing your money away.
Take a look at your savings account balance as it stands today. Then, make a financial goal that is realistic for how much you want in that account in three months, then six months and then the end of the year. Write these numbers down and then post them conspicuously in your home. You will be amazed how those numbers keep floating around in your head and how they keep your fingers from grabbing your wallet the next time you pass the candy aisle!
Wednesday, June 20, 2007
You may think it odd that I would bring up the subject of Clutter. I mean, what does clutter have to do with your checkbook, anyway? A lot more than you realize. It is the clutter in your closets, drawers and rooms that is keeping you from living the simple life. Yes, it is true! As weird as it may seem the connection does exist between the two, finances and clutter.
Here is the deal. In order for Life to gift you with the resources, money and opportunities that you want, you first have to have room for them. You may be saying to me right now, “Hey, Janine, I’ve got PLENTY of room in my checking account for an extra few thousand dollars right now! Where is it?” As I chuckle at your all too appropriate request, I also know that the problem is not the low balance in your check book; it is the over stuffed closet next to your bedroom.
Americans, Canadians and Britons on average buy more stuff than they have room. The quantity of You-Store-It warehouses is testimony to that! It is a problem of our capitalistic economies. It is very easy for us to “get” stuff. It is easily accessible and for the most part we pay less for “stuff” than most of the world. Because of this cargo and our high standards of living, we have a tendency to really get ourselves over stuffed on “things.”
When you start out to create your financial plan I ask you this question, What do you really want out of life? Once this question has been answered people tell me what amazing transformations occur. They stop impulse buying, their expenses drop almost magically and they realize that many of the shopping habits they had in the past were due to their lack of understanding. They didn’t know what they really wanted in life so they fixed their lives by buying more stuff!
Well, you now have an opportunity to align your home as well as your finances. In order to have space and time to take the opportunities that will come to you as you lower your debt and become more financially stable, you now need to purge your home of its unnecessary stuff! Does this cause you to recoil! Do you suddenly start to hyperventilate and feel yourself hugging your precious stuff in fear that Janine is going to make you give up something priceless? Look closely at yourself and your emotions during this trip of thinning your things. You know you have more stuff in your life than you can possibly use. Why do you hang onto it? Why do you allow it to take up your time, money and energy as you move it, store it and haul it around? It is crazy! Does this stuff love you? Then why do you love it back?
Here is a quick list of things to do over the weekend to get you started on your decluttering campaign.
1) Start Small. Don’t tackle a HUGE project like the garage right off the bat. Do something really easy, like, your wallet or purse. Dump everything out of it onto the table and throw away, put away or file all the little pieces of paper that you’ve been carrying around for weeks. Then decide what REALLY needs to go back into the purse or wallet and return them. Isn’t that wonderful! Don’t you already feel like you’ve lost weight? Don’t you feel lighter on your toes? I mean, you can actually sit down now with your wallet in your back pocket, right? When was the last time that happened?
2) Check Out the Medicine Cabinet. After you’ve finished with your purse or wallet and now have a sense of accomplishment move on to the next item. The bathroom medicine cabinet. This is a small enclosed space that will take you very little time. Even if this is the first time in 5 years that you’ve actually cleaned it out. Take all the items out of the cabinet and decide which ones really belong in there. I mean, do you really want that old razor to continue sitting on shelf #2 leaving a rust mark? Look at all the medicines you have in there. Are the expired? If they are, pitch them in the trash. Don’t let them take up any more space! They’ve served there time in your washroom, throw them out!
3) What's Under the Sink? Dig out all the stuff that is under your sink in your bathroom. This place is usually loaded with 15 bars of travelers soap and itty, bitty bottles of shampoo that have never been used along with mounds and mounds of out dated cleaners, dispensers and soap dishes. I mean, really, do you need that electric blue eye shadow that you used in the 70s? No kidding, I had a client once tell me that she found 5 different bottles of foundation that she never used. Throw it out!
4) Time to Clear the Closet. Whatever you do don't attack the biggest one first. If you haven’t cleaned out the master closet since you moved in, wait on that one. Do the smaller ones first. Get some successes behind you and have the adrenalin rush working for you before you move on. Pull out everything in the closet and lay it out on the floor. You will be amazed at what you find no matter how small the closet is. I continually startle myself with the amount of “stuff” I can pack into small spaces.
I think you have the idea now. You start to declutter your abode by working with manageable tasks and then moving to the bigger ones. When you decide that it is time to get more space in your life start small and work up. Eventually you will be able to take each evening for a week to declutter the garage. It is amazing how fanatical you become as you move from closet to closet. As you find the 6th pair of leather gloves and vacuum parts from an appliance you haven’t owned in 15 years. Have no fear or hesitation. Pitch it in the trash, give it to a thrift store or find a friend who can use it. The main point here is to remove it from your house!
After you’ve taken a weekend to start this process, you may want to then consider moving to different rooms of the house for decluttering. Try attacking the kitchen. Do you need 4 pancake turners, 3 coffee makers (2 by the way are broken) and 6 bread pans when you only use 2 at a time? Figure out what it is you truly need and then make room for it by removing the rest from your home.
I highly recommend that you read a book by Don Aslett. It is called, Clutter Free! Finally and Forever. By reading Don's books, I have lost my pack rat heritage and I now purge my house once every six months to unload it of all the stuff that has accumulated from the last throw out. It is amazing what finds its way into your home.
How does this work in your favor for cash coming into your life? Well, you now know what it is you want out of life, you have cleared out all the items in your world that don't serve you (husbands and children excepted, just joshing folks!) and now you have space in your life for new opportunities and experiences. I have had client after client tell me that as soon as they decluttered their house (for some it took weeks, others months) they were astonished how a yard sale yielded them hundreds of dollars even though no item was over $2. They had more time in their life for their home-based business because they no longer had to find a path through stuff to reach their computers. I have no idea in what way Life will decide to share with you abundance after you've made space for it. But the one thing I do know is that you will see a change for the better in your life. I wish you good luck and now, pull out that wallet/backpack/purse and start purging it!
Tuesday, June 19, 2007
I am able to get so much done due to some wonderful guys like Brian Tracy, Zig Ziglar and Earl Nightingale. Back in the 80s when I was working in the corporate world, I had the fun of being able to attend a seminar given by Brain Tracy. I learned of Goal setting and Goal planning during that seminar and I haven't been the same since. I have been able to do more, have more fun and be more productive due to the books and CDs I ordered and implemented from these motivational experts.
Here is an article I wrote when I had a group of students ask me about setting goals and life plans. You'll see elements of the above teachers as well as stuff from Hyrum Smith and Dr. Covey. I'm not saying any of this stuff is new, but it is amalgamated here after being tried, worked and digested for over 20 years. I hope it helps you in your goal planning.
The major issue most people have with setting goals is that they aim too high, too far and expect WAY too much from themselves all in one lump. Here are a few tips that I’ve learned over the years when it comes to setting goals.
1) Call them targets. Don't call them goals. I learned this in 1989 from Brian Tracy. Brian is a motivational speaker that was a salesman who learned how to make his goals a reality. He became financially independent and started traveling around the country giving seminars on how to create the life you want. He was the guy who first taught me that if you call goals “targets” you’ll win an internal battle every time. With targets you get “points” for getting close! With goals, just like in football, you only get “points” if you make it. You get a goose egg for missing. If you set a “target” for yourself and slip up, that’s not a bad thing because you’ll try again, you didn’t fail. Just by changing the name in my mind from goals to targets, I found myself celebrating every time I took a baby step toward my targets rather than getting all frustrated because I wasn’t moving fast enough toward a goal.
2) Make a hierarchy of targets and all the ways that you can move slowly to your ultimate goal. Let’s take my latest target of “exercise.” I wanted to eventually get to the point of lifting weights and doing aerobics for an hour a day. Well, since I haven’t done anything but walk and light exercise for the last four months, I knew that target was going to take some “building up” on my part. So, I sketched out a plan where I walked on the treadmill for 30 minutes a day for a week, then I added sit ups and push ups the second week while continuing to walk the treadmill. By the third week, I would be ready for some aerobic work…and so on. Instead of going for the big “goal” up front, create a target and then work out the levels of tiny steps to give you a better chance of success.
3) Write your goals down. If you don’t bring these targets out of your head and post them on paper somewhere, they don’t really exist in our 4-dimensional world. It is a requirement that you write or type or paint a picture of your targets and post them where you see them every day! I know this sounds trite and maybe even patronizing. It is not meant to be. I write down my goals all the time. I have a new set for this quarter taped to the wall behind my computer monitor. That way, each time I look up, I see the list. It helps keep me focused and in line with what is important to me.
4) Don’t give up. When you slip up and miss a step (I do this all the time!) Don’t hang up your hat and call it quits! Keep at it. Maybe you tried to move to quick to your target. (This is usually where I mess up.) Step back a bit and take it slower. Maybe you had your steps out of sequence on the way to your target. Reevaluate your targets and steps and see if you’re trying to do too much in too many areas of your life. I suggest that you make no more than three major targets at any one time. I usually only have one or two that I work on at once, but for you type-A personalities, feel free to go as high as three!
Life is not an easy road, but it is made simpler by doing goal setting each week. I have my to-do list for each day, but once a week I look over what I have scheduled to do and then work out a plan on how to achieve what needs to be done. I must tell you. My plan rarely works out. I have to constantly adjust, amend and adapt. The one thing to remember in all this is make sure you keep giving yourself a pat on the back with each step, you’ll eventually find yourself celebrating the fact that you hit the bull’s-eye!
Saturday, June 16, 2007
Angels on the Street Corner: Impulse Giving
There is a major aspect to philanthropic giving that is hidden from most people. This aspect is the numerous opportunities for unplanned giving that the Universe will throw at you to see if you are paying attention. I have been giving money away for almost 30 years, and I started my streak as an “impulse giver” when I was 12 years old. What do I mean? Well, the usual pattern for me is that I’ll be walking down a street, and on the corner will be a guy standing with a sign stating that he needs money so that he can get something to eat. It is so habitual for me to take advantage of these impulsive opportunities that I am reaching for my wallet before I have finished reading the sign. Why? Because I know that the Universe is about to send me money or an opportunity to make money, and I need to prime the pump. This panhandler is actually an angel in disguise, and he is begging on that corner not just to help himself but to help ME!
So I walk by the guy and slip a small gift into the bucket – not much, but whatever amount my conscience whispers to me. When I was 12-15 years old my usual donation was 25¢ to $2.00, which was all I could afford at the time. Now, I’m a lot better off and I’ve been known to drop $20-$60 at a time. I always listen to my conscience when selecting the amount. After donating to my “angel,” I will receive within a few days or that same day a phone call with a job opportunity or a check will arrive in the mail or I will be given something that I desperately need for “free.”
Now, you may consider me totally naïve for giving in this fashion. You have probably heard plenty of stories about panhandlers who spend their donations on booze, or who beg because they make more that way than they could in an “honest” job. You know my response to that? NOT … MY … PROBLEM! I am not here as anyone’s judge; I am only responsible for giving other people a hand up, in whatever fashion seems best. I give my money to them because that is what I’m supposed to do. What they choose to do with that money once they receive it is so not my issue; it’s theirs. You and I are responsible only for listening to what our conscience tells us to do. So, don’t look at a panhandler with revulsion! See them for what they are, angels in disguise.
The Universe wants to bless you with money, but you must prime the pump first, so dig into your pocket the next time your conscience whispers to you, “Hey, give that guy a fiver!”
The blogging world is amazing. You can find someone spouting an opinion on just
about every topic imaginable. Use this fantastic medium to your advantage. I
just found this incredible article on the “Top 100 Most Influential Personal
Finance Bloggers.” If you can’t find someone you identify with on this list, I
would be shocked. They’ve got lifestyles and personalities of all types.
(Oops, it seems the original link I posted in 2007 no longer works, thank you Donna for telling me! The article was pulled off the credit card lowdown site.) Bummer! However, don't let that stop you!!! Here are a few of the bloggers that the twitter community likes to hear from) I checked the link myself as of May 15, 2009, if it drops...let me know and I'll dig up another one for you.
To read the whole list go to:
(Sorry, folks, this article is no longer available!)
I don’t care which system you choose to get out of debt, the point is to pick a
system and then implement it! This article will present you with over 100
individuals that have found their own ways out of debt and into wealth. What an
excellent resource. You see, you’re not alone!!!
Thursday, May 31, 2007
Just finished an excellent book on how to save. Yes, this is a book that chats about HOW to save. Most of us know we need to, most of us really want to save money and have an account that we see the savings balance steadily rise each month. Unfortunately, it is rather challenging to make this a reality. Rob Bennett wrote an easy-to-understand work on the how-to of saving.
Some of my favorite quotes:
- Page 106: "To be middle-class almost by definition means to be on a quest for more meaningful work." Go, Rob! I have so many clients talk to me about job dissatisfaction, then I use this quote and we work out a plan for them to become financially independent as quickly as possible so they can go after the job that is more meaningful for them.
- Page 109: "What spending can't buy: Lessen the extent to which you need to go to work to pay the bills, and you can increase the extent to which you perform work for the growth experiences and personal satisfaction it offers." This is the crux of why a person should become wealthy. So we can do the things we love best in life and help others along the way.
- Page 129: "Yet another luxury in today's world is free time." Yet how few of us use this wonderful commodity carefully. If you feel that your life could have more meaning and you feel listless, now is time to put together a plan to get yourself out of debt and moving toward the bigger goal of financial security. One of the things that helped my husband and I become financially independent was the dream to retire early and teach at a local community college. It took us 10 years to realize that dream, but then, here we are!
- Page 177: Here is my favorite line from Rob's book: "It's spending that makes you rich!" Doesn't it sound so counter productive? However, over the next two paragraph's Rob takes time to chat with you about the main reason for saving...that is, to spend money on things that add quality to your life. Lovely!
Wednesday, May 16, 2007
My girlfriends know that for the last three weeks I've been learning how to play the mandolin. I've only just managed to get two songs down, "Old Joe Clark" and "Cripple Creek." I'm still having trouble singing and playing at the same time, but like my teachers have always said, "Practice, practice, practice!"
This was especially significant for me since my mother died of breast cancer in 1987. It was fun to be with 18,000 other people who were all supporting the work to fight this disease. Lisa is wearing the pink hat because she already sees herself as a survivor! Bravo, Lady! Rock on!
Tuesday, May 8, 2007
The first thing to do is to stop and ask yourself a question: “What do I really want from life?” If you don’t know what you want from life, how will you know whether or not the item you want to buy is something you really need? Remember, you work hard for your money, so you want to make every cent count. You want every dime that you spend to be worth the amount of life energy you spent in accumulating it, right?
I want you to have as much happiness as you can get throughout life, and the wise use of money is a major factor in how happy we feel. Yet at the same time I want you to be able to save enough money to meet your future expenses, while avoiding the feeling that you have to exist in a lifelong state of deprivation. So, how do you balance all these things?
This principle is so simple that most people miss it. Know exactly what you want out of life. That’s it. Figure out where you are going and what you need to get there, and then only spend your money on things that will help you move along the way.
Let’s take an example. Say you have $10 in your pocket. One day you find yourself at the mall with some friends, and they decide that they want something to eat. You go along because you enjoy their company, even though you’re not very hungry yourself. What’s the best thing for you to do with your money? Buy lunch anyway and then leave most of it on the plate, or have a glass of water while you chat with your friends as they eat? What is the primary point of being with your friends? Is it to spend time talking, laughing, and enjoying their company, or is it to spend your hard-earned money?
In most cases we are actually seeking the companionship and not the cooking. So be conscious about what your real needs are in life, and you will keep more of your money. By asking yourself the quick question “What do I actually want?” when faced with a possible purchase, you quickly lead yourself down a path of reasoning that shows you how to best spend – or keep – your cash.
Monday, April 30, 2007
I usually read one book a month on money since that is what I teach. I figure I had better stay up-to-date on the latest trends and ideas in the personal finance genre. May's book will be Paul Pilzer's, "God Wants You to be Rich." Thanks to Bonnie in North Carolina for recommending it to me. I just ordered it tonight so I'll let you know my impressions as I get each chapter done. If you have already read this book or you are one of the Frugal Friends who are reading along with me, let's hear your opinion!
Saturday, April 28, 2007
Tuesday, April 17, 2007
Taxes have finally been put into the mail. My home office is now back to some semblance of normality and now I'm ready for the next big project, decluttering my home. It is an area of neglect for most folks that really does change one's financial situation. Yes, having an over stuffed house full of things does cause financial problems. Don't believe me? I don't blame you, but I know this is true.
There are certain habits and perspectives in life that cause use stress and sap our energy. One of the most prevelent is the "more is better" philosophy that I see perpetuated in many peoples' homes. The more you have, believe it or not, the more stress you have and that is definitely NOT wealth as I like to define it. So, now that my taxes are done, I'm headed to the far corners of my house to start the process of decluttering and spring cleaning. This is a semi-annual event for me because I know it keeps me sane, my family sane and my money in my savings account.
How you may ask? Easy. I know where everything is. By decluttering my home twice a year and getting rid of everything that doesn't serve me I am in the wonderful position of knowing where all my stuff is. Because of this, I have the added benefit of cabinets that actually have space between shelves and storage areas in the garage that are unused. All this despite the fact that I have four children and a husband with all their collections and stuff. How do you go about decluttering your home in order to assist your finances? Simple.
I recommend that you read, Don Aslett. He has written multiple books on the subject of clutter and how to get rid of it. The first book of his I ever read was, "Clutter's Last Stand." After that I read, "Not just for Packrats and Clutter Free, Finally & Forever." Then recently he came out with a real gem. "Weekend Makeover: Take Your Home from Messy to Magnificent in only 48 Hours!" Well, it took me longer using his methods then 48 hours, but the process was great and I found that I benefited emotionally, physically and financially from the change in perspective that occurred by my having space in my life.
This week is THE week where I tear into every drawer, closet, cabinet, cupboard and shelf in an effort to unload any possessions that are not serving my needs. This is spring cleaning at it's best!
Saturday, April 7, 2007
Take heart. There is a simple system that will allow you to pay off debt while at the same time increase your savings account balance. It is called the 60/40 Principle. It is the system that I used to get my family out of debt and eventually we moved from being middle class to millionaires over a 7 year period. Here are the basics:
This concept is the main rule that governs the flow of money in our lives. If you implement the 60 / 40 principle on any money you receive, you will immediately see your savings account start growing while your debt load decreases. If your debts are great, start only with money that is not part of your income, such as birthday money, rebates, unexpected cash from part-time employment, your change jar, your bonus from work, a tax refund check, whatever; you get the idea. You allocate money in this way by the 60 / 40 principle:
- 60% you live on. This goes into your main checking account.
- 10% goes into a long-term savings vehicle (IRA, 401k, Keogh account, solo 401k) for retirement. If you don't currently have a retirement account of any kind open two savings accounts at your bank. (One for long term and one for short term savings)
- 10% goes into a short-term savings account (local bank or a money market account) for use in those occasional large-scale expenses (new tires) and emergencies (the water heater explodes).
- 10% is tithed to a church or secular charity that is in line with your purpose. This is your ''rent'' for occupying space on the planet.
- 10% is pure philanthropy. That's right, you just give it away for the benefit of the community at large. This primes the pump so that the Universe starts sending wealth your way.
Once you have retired your debts, you apply the 60 / 40 principle to all your money, including your income, to keep money flowing in your life. Should you have any questions or comments please post them. I'll do my best to answer you quickly.
Friday, April 6, 2007
As I was cruising around the internet looking for ways to help you be frugal and save money, I ran across a list that I had never seen before. It was a Top 10 list for the Causes of Debt. Not only did I see this list once, but it popped up on three different financial sites that I routinely track. Wow! I quickly scanned the list and frowned.
I could agree with some of the points of the list, but overall, I have seen variations in my data that don’t support the reasons why my clients are in debt relative to the list created by http://www.marketwatch.com/ . Before I launch into my rebuttal of this list let’s take a look at what Marketwatch came up with for the top ten causes of debt.
1-Reduced income/same expenses
3-Poor money management
7-Saving too little or not at all
8-No money communication skills
9-Banking on a windfall
What I find amazing with this list is that the reason most of my clients have debt is due to one thing and one thing only. They spend more money then they earn. I know this may sound stupidly simplistic, but it is true. I have found in counseling over 362 families on their personal finances that the main cause of debt was due to their banking on money they didn’t have. Financial decisions were being made without a clear understanding of how much money they actually had coming in the door!
That’s right! Of the people I have coached, 98% of them could not give me a clear dollar figure of their earnings. I was blown away! Now, when I say how much money you earn, I mean the amount of money you have left after Uncle Sam takes his slice of your paycheck. It was amazing how many folks had to call me back or had to refigure their income. Upon figuring their income after taxes they were dumbfounded at the amount they had left. Just because you have a job that pays you $56,000 a year doesn’t mean that is the amount of money you have to “play” with. However, most of my clients have the $56,000 number in their head and they spend money like that amount is in their checking account!
I recommend that if you don’t know your exact income after taxes and other deductions that you have removed from your check, go figure it out now. Determine how much you get from every paycheck to SPEND. Then figure out what that adds up to for a year. This number will shock you into a new realization that you are not as “flush” as you thought you were. This simple exercise was enough to make many of my clients back pedal on major purchases they were planning. It put them in a whole new mind set regarding their income.
The biggest thing to remember with the causes of debt is not what other people think about and say is your financial situation, but what you think about your personal situation. The best way to pull yourself out of debt is to first get a clear understanding of your income then go from there. Most folks don’t take the time to really know their money in detail. This is why debt creeps up on them and before they know it they have spent themselves into a $9,000 credit card bill. (Read the rest of the story)