Friday, July 23, 2010

Credit or Debit? How to Run a Business via Plastic

Over the last 15 years I've been asked a lot of questions about money. But there are some that I get asked again, and again, and again...I'm thrilled to have a blog so that I can post answers and then just refer folks to the particular article that they need. However, with the economy bouncing around and folks feeling the pennies being pinched I'm getting asked the old questions in new ways and have to reword older posts so that things stay current.

Last week I received a new twist on and old problem. This email from a student in Virginia hit my box a few days ago (I've changed the names of the people involved that is all.)

Dear Janine:

We have a new question: A year or so ago Wilson agreed to cut up all of our credit cards, including business credit cards (inspired by Dave Ramsey who insists that a business can be run without debt or credit cards). Do you agree with Dave Ramsey about that?

The reason I ask is because Wilson flew out to Utah on business this week and ran into his first big disadvantage of not having a credit card -- he was almost unable to rent a car, and the one place that would rent to him on a debit card charges nearly twice as much as the other places he has been using. What are your thoughts about running a business without credit cards? Do the benefits outweigh even these disadvantages?

Thanks for your time, and have a great day!

Let's address the theory first before we launch into the practice. First off, I really like Dave Ramsey. I've read two of his books, "Financial Peace" and "More than Enough." I have found that our philosophies are very similar and we only have a few points where we differ and those points are minor.

Do I agree with Dave Ramsey about running a business without credit cards?

Yes and No. How's that for walking the fence? Let me explain. I agree with Mr. Ramsey that we need to be allergic to debt. He and I have both been caught in the debt trap and we have both vowed never to walk that path again. However, I have trained myself not to use my credit cards unless I have cash IN THE BANK to pay off the statement at the end of each month. I DO NOT allow myself to have roll-over debt. This is a horrid use of my hard won earnings and I won't allow myself to pay that much interest to borrow money.

However, I do understand what Mr. Ramsey is saying. Please remember he has clients that are so far in debt it takes them anywhere from 7-14 years to pay it all off. The best way to help these people is to remove all temptation of going further into debt by refusing them any access to short term loans. Debt is a disease. There are folks out there (Lord knows I've worked with them and so has Dave!) That are addicted, that's right, addicted to debt. For these people you have to cut up all their cards. They can't keep their hands off of them and use them at every opportunity. So I understand why Dave would say this.

My personal philosophy is this: use credit cards for your business to hold rental cars, hotels and airline reservations and other business related activities, but pay off the balance with travelers checks or your debit card or cash. You get the idea right? Most of these agencies do not "charge" your card until you return the car or check out of the hotel, etc. So use the credit card "hold" your spot, but pay for it using other means (your debit card, etc.)

The challenge is this...can you have that card in your wallet and not be "tempted" to put a purchase on it "just this once" even though you don't have the money to pay for it. Frequently, business owners are overly optimistic on this month's sales to cover their expenses. Face it, they have to be optimistic otherwise you wouldn't be in business for yourself, right? But don't allow your optimism to run your business in debt.

Many a client of mine has done just that. We would work together for 6 months to 3 years getting them out of debt and then they would decide to go into business for themselves and in a matter of 6 months be further in the hole then they were when we first started because they ran their business on a debt basis rather then using the financial principles they had learned over the past 3 years! It was maddening for me. Especially when I found out a client of mine had to declare bancruptcy after working with them for 4 years because they had $80,000 in business debt ALL on PERSONAL credit cards and they had neglected to tell me THAT part of their financial situation.

So you can see why Mr. Ramsey might be just a wee bit DRASTIC in his methods to keep his students/clients out of debt. He wants you to be seriously allergic to all things loan-ish for very good reason.

My advice: Run your business debt free, if you don't have the cash, don't make that jump (using a loan) to the next phase of your business or take that trip. Use the credit cards of the business as "place holders" for cars, hotels and the like unless you have money in the bank that can pay off the card when the statement arrives. You are to absolutely NOT allow roll-over debt!!! Okay...I'll get off my soap box now.

Have an abundant day!

Busting the Top Three Diet Myths with Cheryl Dolven

Last week on my radio show (Power Women) I had a guest that made the chemist in me smile that really geeky smile. Her name is Cheryl Dolven and she works as the Director of Nutrition Marketing for the Kellogg Company. Our lives happened to intersect due to a marketing campaign that was being done for Kellogg's FiberPlus Bars (this was my post as a participant of the study). I was chatting with the Marketing Group in charge of the product launch and I asked if they could arrange for a Dietitian to discuss some of the nutrients in the product.

Well, one conversation lead to another and I just HAD to ask Cheryl onto the radio show to discuss Dieting (Diet: The major four-letter-word for most people when it comes to health), Myths and Basic Nutrition. Cheryl has worked for major supermarket chains and has spent her career educating people on the nutritional guidelines seen every day as one wanders the grocery aisles. She also helps people navigate the horrendous torrent of nutritional data that is erupting everywhere on the Internet via her lectures and several presentations now being used on

Here are some of the basic tips and myths that Cheryl shared on the show. (oh, and just so you know...I don't make a DIME for talking about Kellogg's or any of their products-I'm being a typical science type and am just relaying information here!)

Diet Myth Number 1 - BUSTED

Skipping Breakfast Can Help You Lose Weight.
Cheryl discussed how the exact opposite is true. Studies have shown over and over that people who eat breakfast actually have healthier body weights than those who don't. Breakfast is just what it sounds like, Break-Fast: you are breaking the fast of the night before. When you eat breakfast in the morning, it helps your metabolism get that much needed kick-start for the day. I have seen in my own life as well as others that do power-lifting that by skipping breakfast they would have greater calorie intake later in the day. So, you're mom was right! Take that time to eat in the morning.

Diet Myth Number 2 - BUSTED

Processed Food Are Bad
Cheryl agrees with the current mood of health conscious individuals that the move to a more whole foods diet is a GOOD thing. We most certainly need to include more whole foods in our diet - including fruits and vegetables, low fat milk and lean meats. However, there is also a place in our lives for pre-made packaged foods, especially for folks that have some serious travel schedules (like me). Cheryl mentions, "When I worked as a dietitian in grocery stores, the single most often question I got was 'is this good for me?' Here is the thing, it didn't matter what they brought to answer was always the same: 'It depends: How much of it are you going to eat?'" Cheryl went on to discuss how important it is that you decide up front what sorts of other food are you going to eat with the one you are choosing. As well as, what sorts of foods are you planning on eating tomorrow. "For ANY food, the key is how you surround it with other foods."

Diet Myth Number 3 - BUSTED

Sugar is BAD!
Cheryl and I had a great time with this one. As some of you know I teach math and science at multiple institutions and when we get to the part of biology when we talk about metabolism and biochemistry, this is when I hit my "lecture" on "Sugars are Carbohydrates" you can't live without them!!! Cheryl was much better at discussing the various forms of sugars and how you need some more than others, etc. I really wanted to get into more detail in this area of the show, but alas...we were running out of time and we had to discuss other nutritional details.

The main point with all things "diet" related and otherwise is this: extremes are not healthy. However, gradually eliminate behaviors and foods that are not good for you. Now, I realize, there are folks out there that have to use the "cut-and-run" method where they stop eating "X" item today and will never have it again. But I have found that most of my clients and students have to gradually wean themselves off foods, money spending, etc. so that they can learn the good behaviors and/or foods to replace the old ones.

Cheryl then discussed the Fiber needs of most individuals (no bathroom humor, please! LOL) She was quick to mention that fiber is more than just regularity. I was laughing up a storm here. The main issue in the American diet is this we need anywhere from 25-35 grams of fiber a day. Most folks only get around 13 grams of fiber a day. Yikes! What we are eating is obviously NOT fiber rich so it is great to be able to fill the gaps with things that can ramp up your fiber intake such as:

  • items high in cellulose (fruits, vegetables, beans) stuff that you have to chew!
  • whole grain products
  • snack bars that are high in fiber (Kellogg's FiberPlus bars were mentioned - wink, wink!)

We then wrapped up the show with a final question: "Is there a golden recipe for women balancing the needs of protein, carbohydrates and fiber?" Cheryl had three points:

  1. "For me the golden recipe comes down to two key ingredients: one is knowing your needs and the second is planning ahead."
  2. "I'd challenge everyone to visit and use the tool they've created to help you find the right dietary pattern for you. There is no way you can meet your dietary goals if you don't know what they are! When I worked in the grocery store environment, I was always surprised how many people were reading labels...which is good!...but so few people actually knew what they were looking at! Seeing 5 grams of fat on the label doesn't mean anything to you unless you know how much fat you should have. I think of my nutrition needs as a budget. You need to know how much you have to spend in order to be within budget.
  3. "Next you need to plan ahead. The best thing you can do for yourself is to sit down at the beginning of the week and plan your meals and snacks. If you have something in your mind and in the fridge for dinner, you are much more likely to stick to your nutrition goals. When I don't take the time to do this, my family and I end up eating out and ordering in far more than we should - and that usually means more calories, more fat and less good for you foods."
I want to thank Cheryl for taking the time to educate us all on food and nutrition. I have since been on both of the websites mentioned in the this post and had a blast using their calculators and finding out my nutritional needs. I ended up grabbing each of my four kids and entering their data into the calculator at and we had a fun afternoon figuring out the menu for the next week taking into account each one of their nutritional needs. The younger ones (7 and 8 years old) had a blast making charts and filling in the "foods" they needed in each of their pyramids. It made the menu planning a lot easier and I heard less, "What is THAT!" at dinner time.

If you wish to hear the complete 30 minute interview with Cheryl visit us at:

Saturday, July 10, 2010

The Money Muse is Now on Radio!

It took awhile, but finally, after several years of work, encouragement from students and harassment from friends (thanks, Bryan and Ruth) I am lucky enough to be hosting a radio show called "Power Women."

The show is designed to inspired and help women rise to their full potential despite their already packed "to-do-lists." Learn tips, tricks and techniques that are used by successful women to balance life or at least get what you want without sacrificing your health! Oh, and we discuss money strategies too!

Feel free to tune in live (it is a call in show) or you can download the program later to your MP3 player or iPod. By the way, thanks to all the guys who listen to the show and email me afterwards giving their support and ideas for future shows. I know you folks are busy with your daily lives, but if you want a quick 30 minute show to energize you to move along with your dreams, tune in.

Pay Off Your Credit Cards with Simplicity

When I get three emails on the same subject in one week, I know it is time to post a blog response. This week's main topic is paying off the credit card debt. It seems there are lots of discussions going on in a variety of households regarding the proper way to pay off the credit cards. Let me shed some light on the main source of confusion that seems to dominate these conversations. These chats seem to go something like this:

Strategy 1: (rated: not good)

"We want to do the 60/40 principle on our money, but we'll get the debt paid off quicker if we don't put money into savings and instead use it to pay off the credit cards faster!"

Strategy 2: (rated: corrosive)

"We won't do the 60/40 principle exactly, we'll instead pay down our debt faster by using a 70/30 allocation of our money instead!"

Strategy 3: (rated: really toxic!)

"The best thing for us to do in this financial situation is to pull all the money out of our long term savings account (IRA, 401K, etc.), pay off our credit card debt and start over with our finances!"

Those are the three statements I hear over and over and over from households trying to manage their finances. All three of these strategies are doomed to failure. This is why...

Strategy 1 is the most common rationale I hear used when it comes to handling debt. It is also the fastest way to dig yourself into deeper debt. Every single personal finance book I have ever read (last count over 73!) States that you MUST, there is no leniency here, you MUST save money and pay down debt AT THE SAME TIME. Why? Because it is saving money that initiates the process for you to learn to be a wealth accumulator! Paying down your debt must happen, of course, but the more you focus on just paying down your debt and you don't focus on saving is the single biggest mistake a household can make with its finances. That short term savings account is what keeps you from pulling out your credit cards to pile on more debt! Over and over and over again, I have talked with millionaires, financial planners and investors...all of them who are wealthy agree on one thing:

In order to get out of debt you must save money and pay off your credit cards at the same time!

This is a requirement. Do not try to wiggle out of this, do not try to barter with me or any other financial coach. You have to do this. This is a financial law. In order to get out of debt, save your money and pay off your loans at the same time. How do you do this? See my posting on the 60/40 principle. It will get you kick-started in the right direction.

Strategy 2 involves people trying to do too much too fast. Rather than focusing on running the 60/40 principle in its entirety , they begin to customize it, mold it and mutate it to a point that the principle no longer works and they wonder why the results are not forthcoming. If you change the ingredients of a cake too much you'll end up with bread, right? Or a brick of flour and water that would be useful for a stone wall. Don't try messing with the process when you're digging yourself out of debt. Go with the tried and true principles that have helped thousands of people out of the financial hole and have gained them wealth.

Strategy 3 is extremely detrimental to the financial well being of households because this process of pulling money from long term savings vehicles robs you three times of your future wealth. Remember money that is earning compound interest is not a linear form of investing. The curve is logarithmic. (Google Logarithmic curves to get an idea of what we are discussing here or you can review this site.) You can not simply "pay yourself back" by taking money out and putting it back in later and it will "work out in the end." If you pull money out today, you will have to put up to three times the amount in 5 years later and you still may not accumulate enough to get you where you were before you yanked out your savings principle.

Not only does Strategy 3 rob you of your future, it also breaks the flow of money in horrendous ways. It takes households three times longer to get back on their feet and recover when they knowingly use this behavior despite being told the contrary. I have over 15 years of data accumulated from hundreds of households and it is clear...pulling money from long term savings vehicles to pay off credit card debt sets you back more financially then any other bad money behavior.

I can't be soft or kind or gentle with this post. I've seen too many families and households crash, burn and then declare bankruptcy because they refused my council, did it their own way and then hired me a SECOND TIME to pull them out of the DEEPER hole they had made for themselves.

Please, please, do not be like them. Learn from this post and don't follow the large road of debt slavery. Make today the day you take control of your finances and become an active force in your financial life.

Good luck and know that I'm here to help as you walk the path to wealth accumulation.

Saturday, June 19, 2010

Kellogg's FiberPlus Bars--What a Treat!

First off, know that this is not a "paid" endorsement. Two months ago I was given an opportunity to beta-test a new product from Kellogg's. Their FiberPlus Bars. I was contacted by a very nice saleswoman, Martha, who asked if I was willing to participate in this product launch since I was a "frugal" mom and had my own blog. Wow! "Cool!" I thought, free product and an opportunity to voice my opinion to people who want it." How fun is that? (Can you tell I'm used to teenagers?)

Anyhow, I received in the mail a week later a nice little lunch bag complete with three FiberPlus Bars:

Chocolate Chip
Dark Chocolate Almond (Turned out to be my favorite of the three)
Chocolatey Peanut Butter

It just so happened that I was doing a lot of traveling during this time so I quickly stuffed the free bars into my bags and literally ran out the door to make sure I wouldn't be late for the plane.

You know me, I'm not one that really "does" prepared food. I usually cook from scratch and the only time I buy processed stuff is when I am on-the-road. And even with that I don't stop off at fast-food places. I stop off at grocery stores and buy from their deli counters. Not only do I save money with this, but I get food that is a bit better for my digestion. (And the kids each get exactly what they want, did I mention I have four kids? LOL!)

Well, dear reader, I have to admit. I was really surprised at how good these bars were. I mean, come on, "FIBERPLUS" Bars? The name doesn't even ring like a good thing for me. It is not an item I would have reached for on my grocer's shelf! However, they tasted great as I was flying over the Rocky Mountains headed for San Diego. As I was given my beverage by the airline, I munched happily on the Chocolatey Peanut Butter Bar. It was the perfect snack for this trip since I was unable to grab breakfast before I left for the airport.

Data: Being trained as a bench chemist (in my pre-mom life), you know how I love my data so here you go:

Calories for a FiberPlus Bar (Dark Chocolate Almond) relative to leading name-brand dark chocolate bar that I adore and has nuts and caramel.

130 calories to FiberPlus whereas 271 calories for my chocolate bar (ouch!)
FiberPlus 5 grams fat; 13.6 for chocolate bar (Oh, man, really?)
FiberPlus 24 grams carbs; 34 grams for chocolate bar (I'm starting to really whimper here!)
FiberPlus 7 grams sugar; 29 grams for chocolate bar (I'm feel'n pain.)
FiberPlus 2 grams protein; 4 grams for chocolate bar (of course.)

Now, this is far from a scientific study, but for me I had only one complaint with the bar. It was a tad too sweet for my taste. That's because I make a lot of my own food and I really cut down on sugar. Even in cakes and cookies, I'll use 1/3 to 1/2 less the sugar in the recipes. Because of this, to me, the bars were too sweet.

However, as much as I dislike processed food, I have to admit that the next time I'm traveling and need a quick snack, I'll be reaching for these silly bars from Kellogg's. Grrrr! Why?

  1. The calories are less than my favorite chocolate bar (Dark chocolate with almonds and caramel!)
  2. The sugar content is WAY, WAY less. sigh.
  3. Those dratted FiberPlus bars kept me "full" filling far longer than my other bar does.
  4. It took longer for me to chew them then my chocolate bar and hence I felt like I "had" more to eat then my alternative snack treat. Psychological tricks that worked.
Bummer, it looks like, yet again, I'll have to make a change in the way I eat. So, there you go, dear one, I totally thought I would dislike this processed food (Talk to Martha the salesperson for Kellogg, I actually told her I wasn't suited for her demographic!) However, I have to eat crow here and say that under certain situations, I'll be reaching for one of these bars over other treats.

Dang it! I hate it when that happens!
Have a great summer everyone.

Tuesday, June 8, 2010

Becoming Rich with Tiny Steps each Day!

This week I read two things that so inspired me, I just had to share them with you. The first one was a quote that I saw from Helen Keller.

"I long to accomplish a great and noble task, but it is my chief duty to accomplish humble tasks as though they were great and noble. the world is moved not only by the mighty shoves of the heroes, but also by the aggregate of the tiny pushes of each honest worker."

I laughed when I read this quote because my thought was, "Oh my gosh, she's NAILED the basic principle to all of success!" In this simple statement Helen Keller has basically given all you need to be wealthy, powerful and successful in any endeavor you choose to take on. Sure all of us want to do something that is great before we die. I'm right there with her. I want to do something this is truly grand and noble. A work that will live long after I am dust in the earth. What we have to remember is that we accomplish such a work by daily decisions that move us along the path in a steady, methodical way!

The next day I was reading a story of a Hindu saint who was attending a sacred ceremony in his beloved India. He was mulling over all the thousands of people surrounding him and how few seemed to be focused on the spiritual goals of the event rather than the money that could be made from the attendees. He then came to be in the company of a guru and was told simply this...

"for the faults of the many, judge not the whole. Everything on earth is of mixed character, like a mingling of sand and sugar. Be like the wise ant that seizes only the sugar, and leaves the sand untouched."

How does this help you with your monetary situation? Simply this. What are you doing each day that is moving you toward your financial goals? Are you tracking your expenses? That is the single most valuable activity that you can do to understand where your money is going. At the end of each week or month review your expenses and make adjustments on how you are spending your hard-earned cash.

What other activities are you performing each day that move you along physically, emotionally and spiritually. Your attitude and focus determine the reality that you will experience. So if you focus on your expenses and focus your attention on activities and behaviors that are nourishing to you, you will find over time that you are becoming less agitated, angry and irritated with life. You will discover a hidden talent (or many) that had never had a chance of expression because you are now living a purposeful existence rather than just going along with everyone else.

So, here is your homework for the next week or two.

1-If you aren't already doing this, track your expenses...this will solve a multitude of ills financially.
2-every day take a few minutes before you fall into bed to determine if the use of your time was a benefit to you or a hindrance to your purpose filled life.
3-Lastly, write down the things you want to do before you die. Even if you don't know how you will ever travel to Australia, the point is, start making plans to go even before the money arrives, that way when it does, you will be able to go!

My hope for you is that you will be that smart, little ant that carefully picks the pieces of sugar from the sand of life. Focus on the sugar not the sand and you will watch your life go from irritating to sweet! Good luck and stay in touch.

Wednesday, May 19, 2010

Sexy Broads Talking Cash

Last night I played hooky from putting kids to bed (Thank you, spouse!) to participate in a fun event with just "the girls." I was asked by Laura Nickerson, BroadTopicsRadio host, to join her and three of her buddies to chat about money. Their show was called, "Let's Get Fiscal" and as their intro music died down they were all singing it to the tune of Olivia Newton Johns hit! LOL! Anyhow, they asked me some really fun questions like:

How do women save money in this economy? Do women have the wrong perception about money? Do I have to give up my favorite brands? Is "The Bean" a good purchase? LOL! Okay, we really did have too much fun. I took some notes while on the show and here is the executive summary and at the bottom of this page I have the link so you can listen to the full two hours at your convenience.

What are some practical ways for women to save money?

The beauty of personal finance management is that there are thousands of ways to save money in little baby steps on a daily basis. These baby steps add up to $1,000s in the course of a year. Here are a few examples with some numbers about how these little tiny steps can save you money and cost you very little in the way of time.

  • Invest in a Rubber Spatula. Sounds silly but this little kitchen aid can save you money. Now I realize not everyone cooks pancakes for their family, but I have this breakfast about twice a week. I use a spatula to scrape out the bowl and that gives me one additional full sized pancake each time I make them. If you do the math this equates to 104 pancakes a year! It costs me $2.24 to make a double batch of pancakes which works out to about 20 pancakes. This makes each pancake worth 11 cents. Thus the amount of money I save each year by scraping a batter bowl equals (ta da, drum roll please!) $11.44 a year! That's JUST on pancakes, what about all the peanut butter, jelly, ketchup, honey, mustard and other sticky items that are used in a home? All for an initial investment of 99 cents!

  • Examine Your Use of Disposable Products. I know I've blogged on this point before. (Please refer to my other blog posts of Step 6 to Abundance parts 1 and 2 for additional help here!) If you look just a paper towel use you'll see a huge change in your expenses by using cloth products. Again let's do some quick, simple arithmetic for this: Let's say you use 4 rolls of paper towels a week. They cost you $2.50 a roll. This comes out to around $10 a week or $520 a year that you are paying just for paper towels. I had a lady who switched to using linen towels (it cost her $12.64 for 20) and she bought herself a dishwasher! Now look at how much you go through in terms of paper napkins, plates, cups and plastic ware. It is very sobering how much money you may be, literally, throwing away.
How should women change their perception of money?

I really want women to lose their fear of money. There is a lot of fear about their inadequacy in taking charge of investing and saving money. They are usually okay with handling the checkbook or working the ATM machine (LOL!) but when you start discussing long term savings, investing and 529 plans (college savings plans) you will see their eyes glaze over and they start to hyperventilate!

Also, I want them to learn to allow themselves to become rich. And I DON'T mean comfortably well off, I want them to be able to say to themselves, "I want to be rolling-in-the-dough RICH!" The challenge is they have emotional barriers to this statement. Here are some of the excuses I have heard from my clients in regards to how they view "rich" people:
  • Rich people hurt others to get the money they had
  • You can't be nice and be rich
  • I'll become corrupt if I'm rich
  • People will come after me for my money
  • People will no longer see me, they'll just see me as a bank
These statements will keep you from becoming the wealth magnet you truly are. Work through these emotions and realize that these fears are unfounded. It is very easy to be extremely wealthy and not show it. Just read The Millionaire Next Door, to find out how! LOL.

Lose your fear of money by:
  • Make a conscious decision today to become "Rich!" Now, look in the mirror and say to yourself, "I am going to be Rich!" This may take a bit to say it with true passion.
  • Define exactly the lifestyle you want to have when you're wealthy. What will you do? What service will you render society? Will you start a non-profit that does good works or will you donate to causes you are passionate about?
  • Visualize and write down exactly the type of Millionaire you will be. How you will look. How you will act. How you will serve humanity...break the box and show the world a kind, feminine, strong, courageous Millionaire that loves life and is making the world a better place one person at a time.
Thanks to Laura, Stacy, Joan, and Megan for a wonderful show. It was a pleasure speaking with you and your listeners.

If you wish to hear BroadTopicsRadio follow the link.

I wish you abundance!

Tuesday, May 18, 2010

I'm Not a Bank! Why am I treated like an ATM?

This is an email I received the other day from a client:

"Dear Janine:
What do you do when you have grown children who always ask you for money to help them. I know they do not bring home enough money to pay everything. However, they haven't went on a budget as I have wanted them to do either. I feel guilty and angry when they ask me and expect me to support them or pay their electric bill etc. I have bought cars paid bills and now my savings is depleted. Not that it was a lot to begin with but I was saving. I have been very blessed and have just recieved another increase in a new job and a promotion. Am I being selfish? or have I been so blessed in order to help when they need it?"

Well, my first reaction to this question was, "Stop!"

Okay, let's get real here. First off, you're not selfish for wanting to keep the money you have worked so hard to save. You're not being a bad parent for wanting your grown children to learn financial savvy behaviors. This may sound cruel, but I recommend that the next time you are asked to pay off a bill that you hand them a personal finance book and say,

"Here you go, honey. This is the best way for you to get what you want out of life."

There will be tears, there will be wailing, whining and guilt trips offered. Ignore them. In the book, "The Millionaire Next Door" the authors devote an entire chapter on how the wealthy prevent economic welfare expectations from their offspring. It is a tough love, but it is necessary if we want our kids to learn the true ways of financial independence and that means learning the behaviors of saving money and debt-free living. One of the basic financial laws is NOT, "Thou shalt go to they parents for cash when in need!"

Harsh, yes. Will it make your children stronger, most definitely. Prepare for the onslaught with Tissues and a fresh copy of any of the following books below:

The Automatic Millionaire, David Bach
Financial Peace, David Ramsey
Debt-Proof Living, Mary Hunt

Or you can make me the "bad guy" and hand them my book, Ditching Debt: 3 Simple Steps for Financial Stress Relief.

The biggest thing right now is you have to take care of yourself and build your savings account back up. If your kids holler at you or try to send you on a guilt cruise, just remind them that one day you may need to be in an assisted living home, did they want to pay for that or would they prefer that you move into their place? Ouch. Sorry, but I have a bit of a twisted side to me.

Good Luck!

Wednesday, April 14, 2010

Calming Your Stress about Money

Money! Sometimes just speaking the word is enough to set your teeth on edge. Most people find that cash flow is the primary reason for the stress in their lives. Whether it is due to a lost job, inadequate pay, unexpected bills, or the recession's impact on your business, we are all experiencing the pinch of inadequate cash flow these days. How do you deal with the stress? What are some positive behaviors to keep you from curling into the fetal position as you look at the stack of bills on your desk, with no money to pay for them? Listed below are the three best habits you can start today to regain control over your money, rather than having an empty checkbook control you. One (or more) of these ideas may assist your particular situation.
Why don't I have more money?
This is a fair and honest question many people have. You work hard (when you have a job), and you can't seem to escape the paycheck-to-paycheck existence. You want more. Not a lot more, maybe, but enough cushion so you can breathe a bit. You'd like to be able to buy groceries without having to keep a running tally in your head so that you don't overspend. You'd like to be able to just buy what you need without having to decide, "This week I'll buy toothpaste and next week I'll buy light bulbs." Decisions on how we're going to spread our thin layer of money around are a daily crisis for all too many of us. So, what to do?
Best Habit No. 1: Track Your Expenses
Sounds so simple doesn't it? Well, it is. If you feel you don't have enough money in your life, is it because you really don't have it, or you just don't know what happens to it? Start recording all the purchases you make. And I mean all of them. From the soda and chips you picked up at the gas station to the thrift store handbag, record every expense you have for three months. You will be astonished to see where your money is going-and how often it leaves for items you didn't really want, let alone need. This exercise of tracking your pennies gives you a written record of your spending, which takes all the guess work out of the statement, "Where did it all go?"
I know, I know, you were looking for a quick fast, instant answer to the money issue. I wish in all honesty that there was one for us, but there isn't. The answer to money is in the active tracking and conscious utilization of it. Period. The only solution I've found for quickly gaining control over financial stress is to track expenses so that I can see what impulse items I can do without next time. I understand you have probably read this sort of advice again and again, but I have yet to meet a financially well-off individual who doesn't track her expenses. It is an essential trait in people who wish to control their money.
Money makes me cry/angry/run-screaming-from-the-room.
Know one thing about yourself and your relationship with money. It is very emotional. Unless you deal with the emotional issues you have regarding money, you'll never travel too far from the paycheck-to-paycheck existence. That is not what I want for you. I want you to have a healthy relationship with money not one that leaves you in fear, curled in the fetal position on your living room floor. (Am I the only one who does this when under extreme stress? I don't think so!) Anyhow,
Best Habit No. 2: Educate Yourself about Personal Finance
so that you can handle cash and talk about money without losing control of your calm.
How do you do this? Let go of the guilt you carry for the past financial mistakes you have made. Face the fact that not a single wealthy person has ever managed their finances without making some mistake. Many have lost huge sums of cash, but still managed to garner wealth. They did so by knowing, deep down, that mistakes are part of their education in money management. Don't allow your past errors or fear of future failure to keep you from learning all you can about money and how to handle it. Find a book today on personal finance and read the advice. Then, implement any "wisdom" that applies to your situation. There are many excellent books out there but the one that I like best regarding automating your finances is David Bach's, The Automatic Millionaire. This book has helped over 65% of my clients streamline their financial lives, even though they were all starting from scratch. If heavy debt load is the cause of the fights, crying fits and nightmares, read a book on debt management. My personal favorite is Mary Hunt's, The Complete Cheapskate: How to Get Out of Debt, Stay Out and Break Free from Money Worries Forever.
How did my money situation get to be such a mess?
This is a frequent lament my clients vent when they first ask for assistance with their personal finances. I want you to promise me right now that you won't give it a second thought. Seriously, stop the self recrimination and guilt about how you got here: instead, I want you to direct all your energies toward fixing your situation. Many of my students have told me that you have to know your past in order to fix a broken situation. In a way they are correct, but on this topic the best way out of the mess is simple. You don't need to go over all your past mistakes and issues in exhaustive detail to get to a better place. I want you to focus on where you wish to go. Whether the focus is to become debt-free, or to have enough money to contribute to your IRA or to start 529 college education plans for your children (or grandchildren),
Best Habit No. 3: Decide on Your Monetary Goals and Chart a Path
Stop hiding from your money troubles and face them head on. Yes, this takes courage. This takes a certain amount of will, but come on, you can DO THIS. It is ONLY money! It's not like its childbirth, dealing with the loss of a job (or worse, dealing with the loss of your spouse's job)! This is simply dealing with the here and now. Set a target date for when you will have your credit cards paid off or have a minimum balance in the 529 Plan for your granddaughter and then work daily at making that target a reality. You can do this. Hey, you lost those 15 pounds when you absolutely HAD to, so I know you can do this. Seriously, you can.
When it comes to personal finances, don't allow ignorance to make your situation seem hopeless. It isn't. No matter where you are struggling, you can dig yourself out(even if it is with a teaspoon at first!). Start with the simple things that you can do for free: track your expenses, start reading personal finance books to educate yourself (that helps shield you from fear), and set yourself some targets for 2010. By starting these three habits and following through with them on a regular basis, you'll watch your financial stress drop day-by-day as if you're lowering yourself into a wonderfully warm bubble bath.

Monday, February 1, 2010

Orange Alert: Amazon pulls Macmillian's "Buy" Buttons

Okay, I usually don't blog about stuff in the publishing world, but I'm seeing too much going on with the power of Amazon and Kindle and, let's face it, Banned Books. As an author, I was nervous before, now I'm moving toward frustrated. The power that Amazon is wielding lately with pulling books off Kindle lists and deleting pages of previously downloaded material because it was seen as "inappropriate" material is a form of censoring that I've seen once-too-often in history. I am seriously disturbed to see it happening so flagrantly now. I mean, it used to be the quiet censorship of having librarians pulling disturbing books off shelves and me wondering why I couldn't find them in the catalogs anymore. Now, Amazon is publicly pulling material like a big bully because it can. Hmmmm. We usually assign this sort of behavior to totalitarian governmental models.

What got me all worked up? This weekend fiasco between Macmillian publishing and Amazon. If you haven't heard the headline I've quoted from the Publishers MarketPlace Ezine and it reads something like this: The Battle for the Agency Model Begins as Amazon pulls Macmillian Buy is some of the text ...

"As originally reported last night and many readers know by now, sometime yesterday (this was published on Saturday) evening the buy buttons for apparently all of Macmillan's books--including bestsellers and top releases, and Kindle editions--were removed from Amazon's site. Macmillan books remain listed but can be bought only through third party Marketplace sellers, while Macmillan Kindle titles all lead to pages that read,'We're sorry. The Web address you entered is not a functioning page on our site.' It is the first shot across the purchasing bow in big publishers' efforts to reset ebook pricing about the loss-leader $9.99 price point and retake control over that pricing by moving from wholesale selling model to an agency selling model (first reported exclusively in Lunch Deluxe on January 19), at least for ebooks published simultaneously with new hardcover releases. Kindle customers further reported on Amazon forums that any Macmillan books that were on their "wish lists" disappeared from those lists with no explanation, as apparently did Macmillan sample chapters that had been downloaded previously."

As I finished reading the entire ezine, I was left feeling like the Censor-Monster had once again ripped perfectly good books out of my hand. This goes back to a time when I was reading, "Catcher in the Rye" and I had a school teacher yank it out of my hands and tell me that "such books are not for good girls like you!" Hmmm.

This is the thing folks, I'm a self-published author. I make anywhere from 50 cents to $2 on each book I sell. If you go to Amazon to buy my books, they charge an awful $22 rather than the $15 I want to charge. I've tried to lower the price listed by cutting my royalties down to 10cents and 25cents a book and the self publisher who works with me ( says that it won't matter, Amazon will keep the price high. That is frustration in itself because my books are about saving money and I can't even help my customers because of the titan Amazon! So, I sell them off my website too, at a lower price, but it still irritates me that there are good people having to pay too much for an item. That's my own personal, little experience with the power of Amazon.

I'm reminded of a bully at a play ground here. The publishers are not wanting an Agency Model strictly for themselves and their profits, believe it or not the, model will assist many, many different businesses in the publishing pipeline. As an author that is not in the middle of this fray, I just bring points to you that I find troubling. I don't have a solution for this but I ask you to think about the fact that you buy a machine with certain features (say a Kindle) you download pages you want to read and then "someone" pulls those pages from you because they can. Hmmmm. I'm back to that memory of high school again. Not good.