RSS Blog Updates
Houston, We Have a Problem - We Need to Prepare
August 2, 2008
Yesterday, my family and I visited NASA in Houston and it was enlightening. I was struck by the amount of preparation that goes into a flight. The astronauts prepare for hours and hours and actually months and years. For every hour astronauts spend in weightlessness they spend countless hours underwater in a mock spacecraft preparing for every detail, for every experience they might encounter.
I thought how really amazing - we should do the same with our kids. For all the hours they are going to spend managing their money when they are older, we should train them not just with book learning which we really don't do now. But with actual practical training.
We can give them the money we spend on them - and let them manage it themselves. Depending on the kid, we might start this when they are around 14 or so. And get them use to spending it - wisely. I hope mine falls on her face. When she's young. Much better than when she's older. I got a feeling many kids will buy $90 jeans and have no money for a movie. But that's not a bad thing. When they are 18 or 28 they won't buy those $90 and have no rent money.
I think preparation is the key. It certainly is for the astronauts.
Retire Early, Take Care of the Little Things
July 31, 2008
I know two people who have retired early. This weekend I am travelling with one of them. And she's cheap. But she's also a lot of fun.
She doesn't mind staying in a nice hotel but she keeps track of the bottom line. Whenever we travel together or do anything together, I am reminded of the importance of taking care of the little things. Yesterday, she was appalled when the drinks at the hotel cost $2. So we went across the street to Walmart and got a 2 liter for $1.28, a two liter that satiated the thirst of 4 people. She saved us $8 for four people.
And that's how fortunes are made. A bit at a time. She's enabled her husband to retire 8 years early by watching the bottom line always. And she always has fun.
Our Lives, Lots of Little Choices, Big Results!
July 29, 2008
Whether it's living an exceptional life or having a rich financial life, it's about making lots of little right choices. While addressing an envelope before going into the post office on my birthday, I sat a truck with a man eating a McDonald's biscuit, gulping a huge drink and smoking a cigarette. He was about 100 pounds overweight. Oh, boy. That was me at 30 years old. I thought about my choices. I had fish and greens for breakfast - sounds gross but I feel great - better at 50 than 30.
I have welcomed an opportunity to go over the budget and look at our cable package. I've asked for a lower price and you know what it's like talking to the cable company. So I've made a choice to downgrade and get Netflix. Just two adjustments and I save $300 a year. Doesn't sound like much. But I'm getting unlimited streaming shows that I like whenever I want. We're looking at making the similar choices with our phone and health insurance. Just tweaking those 3 areas and a few little (some frustrating) phone calls, and I should save $3000 a year.
I bet that when you go to Wal-Mart, little things that seem inconsequential, those little bits of junk, would amount to thousands. Thousands you could invest. So that $3000 from tweaking the budget plus $2000 from avoiding little bits of junk could send a kid to college if saved and invested.
A New Book- An Army Dad's Guide
It's exciting to do something new. I turned 50 on Tuesday and spent it putting the finishing touches on a book. It's wonderful to do something that I love.
This book is called "An Army Dad's Guide to Peace and Happiness."
It's a book I did a couple years ago - one morning when I woke up and felt God pick me up by the scruff of the neck and stick a pen in my hand. It's a book of tribute and inspiration - what my Army Dad taught me. He would often crawl to bed because it was too painful to walk - with a smile on his face.
He taught me that wholeness and happiness come from serving others and peace comes from unconditionally accepting others. He taught me that the most life changing experiences are the times when we work - when we help others or when we put others first.
It's on this site - just click on www.12winningsecrets.com/media/ or the heading above that says Army Dad.
My dad was not that great with money but he always taught me to persevere - to enjoy life while stick to something like a dog with a bone.
What Can Our Teens Learn From This Economy?
July 23, 2008
Ok, we are where we are. News of doom and gloom, bank closings, mortgage foreclosures abound. But since we're here, how can we use this to our advantage, a positive for teaching teens. I think it's a golden opportunity to show our teens that it's not always a time of prosperity.
It's a great time to show them what got people in trouble. This is the perfect time to build good money skills. First, we have to admit that we aren't victims.
I heard this guy with over $200,000 in IndyMac frustrated that he was only going to get 50 cents on the dollar for the amount he had in the bank over $100,000. Ok, the first lesson here is that he should have known banks are covered by the FDIC up to $100,000 - either by educating himself or some program of education. One thing I know is that it's all over any bank's literature.
Two, lots of us think the government should save us. I am all for government programs. We have some great programs like adult day cares, work training for the disabled, lots of wonderful programs. But should we not educate ourselves? There are great materials all around us about growing wealth. This guy was blaming the government for his problem. True, it's important to look at the causes. But had this guy known he could have distributed his money across two banks and he would have been golden. The FDIC policy is all over the place, usually on the door when you enter the bank. Instead of being a victim he could be a learner.
Is Media Coverage to Blame for Bank Failures?
July 17, 2008
No, not yet. But that title is just about as accurate as the media's coverage of IndyMac's failure. There's a great lesson to be learned here, actually several. First, don't panic. And second, really consider the facts. Is the news coverage accurate? I got two different stories within 20 minutes from big news channels and they were vastly different. This is when it pays to become really educated and skeptical.
Yes, the bank failed. Yet when you listen to news on TV, you get lots of different perspectives. Monday, I listened to one really reputable news station explain that IndyMac failed because they chose to buy mortgages that were risky. They specialized in mortgages people took out that were not solid. Mortgages people couldn't afford. You know, mortgages where people often didn't have to provide proof of their income. Unwise mortgages people took out that represented more that 25% of their income. That's the sound safe rule for house buying from good financial experts.
CNN fully explained the problem with IndyMac and also calmly explained that Freddie Mac and Fannie Mae are much more solid. They buy safe and sane mortgages. They are not failing.
But turn the channel and you'll find supposedly reputable news programs saying the sky is falling - and they aren't giving any supporting facts. I turned on one of the original big three channels and heard a story of doom and gloom - of what will happen when Fannie Mae and Freddie Mac fail.
Their story leads off with "Are Fannie Mae and Freddie Mac
safe?" They basically gave little attention to the actual facts. They use an
expert who says if they fail,
They have left out important information. They are fear mongering.
When you hear a story, get another source - and another.
Don't run in fear. When you get the whole story and you find a news giant
spreading fear when it's unfounded, don't just get mad. Turn the channel. And wait
a bit. Today we hear that IndyMac is under investigation for possible fraud. Wait and get all the facts before running around like Chicken Little.
Do You Have Trouble Recording Your Debit Purchases?
July 16, 2008
I just talked with a mom whose teen daughter has trouble
doing that. I just talked to a web guy who has that same problem. I do, too,
actually at times. I think most of us do.
For us old timers and that's probably anybody over 40, it's probably just a matter of remembering to write it down just like a check. But for teens and college students it may be a different matter.
The mom came up with a great idea. What if there was a way to enter their information on their phone? I think this is an awesome idea. But there are some potential pitfalls - like what might happen if they lost their phone or it was stolen.
Also, I've heard that the new Apple iPhone upgrade may have a function to enter your financial information. It doesn't go into our bank book but you have it on your phone to record later. Don't know if it's true or not.
But teens and college students are a new generation, a net generation who live with the cell phone and technology. There's got to be a way to make it easy for them. Let us know if you have any great ideas to make recording spending a snap for them.
12 Words That Can Changed Your Life
July 15, 2008
You'll find your house running like a well oiled machine. And I found my car clean at the same time my house was clean. Now, with a bunch of kids always in my car they call the "Crumbmobile," that's a miracle. I've lived my these words for a week and so far I've streamlined my work, come up with a new plan to get my book out there and I found myself riding my bike this morning.
If you ask yourself what is the most productive thing you can do at this moment, you might find yourself riding a bike when you usually collapse in a chair. You will be producing a happy body. Or hugging your kid when you are tempted to work. You are producing love in them. Or you might find yourself collapsing on the couch to watch cartoons with your kid. And you're producing a kid who knows her mom thinks she's pretty doggone special.
Next step is to try them with money. I think they will make a great difference.
It's Amazing What Teens Can Do!
July 11, 2008
Yesterday, four teenagers dressed up as cans of food and stood in front of our local food bank - in the rain. And you know what they did? They raised 20 thousand pounds of food for our local food bank. A teen called the other day to ask about volunteering and was told there was no food to bag or process. The food bank's cupboards were getting bare.
So they organized a short-notice food drive, right then and right there. A radio station, not one I listen to since I'm the other side of 30, jumped in and a kid dressed up as beef stew. That's what got my attention.
I really like these teens...they didn't hesitate or go to the pool and forget about it. They jumped in and dressed up as beef stew. And raised 20,000 pounds of food and a bunch of money.
So hooray for the teens. It's truly amazing what they can do!
Buy It With Love
July 8, 2008
I'm still intrigued by the movie Wall-e. I won't give away anything really important but in Wall-e, we are living in a pleasure place run by a mega corporation called Buy-n-Large. A friend, in her forties, was thoroughly depressed after seeing the movie. It's easily a reflection of ourselves.
But for me it was an inspiration. No, not to run the world by starting a mega corporation. Well, it actually crossed my mind. But what if we bought with an overriding guiding principle of love, not pleasure. What if we budgeted with love as our reason to manage our money?
So when we face a decision of whether to buy something or not, we do not think of our pleasure first. But we might think whether this purchase is a truly loving one. Does it demonstrate love for our families? Does it demonstrate love of our planet? Are we demonstrating God's love through that purchase? So when I am filling my buggy at Wal-Mart, I can ask myself whether this piece of plastic, this thing I just have to have, does it demonstrate love for my family. Or does it take away from things that are more important like my ability to purchase health and life insurance, which are very real ways to love my family by providing for our health and our survival if the breadwinner were to die.
If we thought of our money as an interpretation of our love for others and ourselves, how would we change what we buy?
Wall-e, I'm Intrigued
July 2, 2008
Yesterday, I went with 8 kids and three adults to see Wall-e, Pixar's amazing animated movie. Seems like a kid's movie. Little Sammy, he's four, melted into tears. I had to take him out a little early. I can't tell you why he was distraught, it would give it away.
But one of the moms was thoroughly depressed. Wall-e hits a nerve. Wall-e is an indictment of all the junk we buy and what it can do to us. It shows us what happens to the planet if we put stuff first. It's a showcase of what happens when buying and pleasure comes before planning for the future.
So, we get to what I learned. Putting pleasure first and foremost is destructive. We forget to save for the future - that applies to money and resources. It also applies to hurting other people.
And I'm reminded to buy out of love. Is my purchase loving or is it a way to fill my soul? Or a way to console my sorrow?
What if we used that to guide our finances? Today, I'm taking my 80-year old aunt to see Kit Kittredge, American Girl. My aunt hasn't been to see a movie in 20 years. She's a widow and she grew up in the Depression. Sounds like a loving thing to do, spend some great time with her. And it's in the budget.
I'd say if we truly spend out of love for others and the planet, we'll be ok.
Jed Clampett Millionaires in North Dakota
July 1, 2008
I love it! In
But here's what I love. Oscar and Lorene Stohler spent some of their money. They bought a new home with cash, the first home they have ever owned. They are in their 80s. The only luxury items they bought were a sprinkler system for Lorene's flowers. Oh, and Oscar bought a $1,000 ring for Lorene. For their 60th Wedding anniversary. That's it.
Here's what Lorene said, "We put our kids through college without that oil money."
She also said, ""We got enough now to buy new stuff," Lorene said, "but we like our old stuff."
Now that's my kind of millionaire.
What's Your Money Personality?
June 26, 2008
Now that I'm a money personality watcher, I could use it to judge everyone's way of handling money and be holier than thou.
But the truth is that it's a mirror for me. I see myself in practically every person I meet. I could easily be Mark Twain and keep throwing good money after bad. I am not a person who has to have the fine things in life, but I love to travel and I love my movies. Traveling and movies can be expensive. I can whine with the best of them.
Truth is, I know we create our own economic reality in this society - to a degree. So when I see someone doing something stupid, I know that's probably not a major boneheaded thing compared to what I've done or what I may be tempted to do.
I'm using my money personality watching to keep myself in line.
My Favorite Pastime - Looking for Money Personalities!
You know how it is...you never notice a Volkswagen on the road until you play "Punch Buggy, No punchs back" with your kid. And then you notice them everywhere!
The other day I heard a 21 year old with a new car whining about the price of gas. Instead of getting a reliable get around car for around $5,000, she is paying payments on a $20,000 car. She's already a victim of the economy.
I hear my friends, some pessimistic and some optimistic about money, but all coming at it from their own personalities. I hear one friend predicting the downfall of our economy and one hoping the increasing gas prices will change our dependence on oil. She's optimistic about the future. She's solvent and investing in real estate.
Tune in and you'll hear all kinds of views on our economy and your friends and acquaintances will tell you about their financial life. Are they solvent or in debt? Are they hopeful? Realistic? Doomsday thinkers? Knowledgeable about how money works?
Once you tune in to money personalities, you can't tune out. It's fascinating!
What Kind of Money Personality Do You Have?
June 24, 2008
I was listening to a report on Mark Twain the other day and found it interesting that he was a big time debtor. He made bad financial decision after bad thinking that everything would turn out ok. What's interesting is that those managing the Mark Twain House in recent years revamped the house using twice the money they could actually afford. Now they are in danger of being closed any day now. Jefferson also was in debt up to his eyeballs because he felt he deserved fine things. And Meriwether Lewis was in constant financial trouble while Clark prospered.
So just like all of us, some people prosper and some people end up in debt, usually because of their personal habits and attitudes toward money. What's your money personality? I'm definitely not like Jefferson. But I know people who are, who believe they deserve the best.
Are you more like Twain, investing unwisely time after time and believing it will turn out all right? That could be me.
What other money personalities do you see? The victim who at 21 thinks the world is against him? The teenagers ready to work and build a future? The drifter who goes from one thing to another?
What's your money personality?
Freaking Out About the Price Of Gas?
June 17, 2008
In my town, we're still holding gas prices here to $3.99 a gallon. Did you ever think you would hear us say that?
Last week, my uncle brought to a funeral, yes to my uncle's funeral, a print out of a picture he found of a gas sign that read 22 cents a gallon. Ok it was about 40 years ago.
For us, the price increase has made me more conscious of our budget but I'm not freaking out. I've used it as a way to teach my kid we don't have to be on the road every second of the day to have fun. We've been in the pool nearby often. Result - we have saved money on gas. And her swimming is getting much better.
I know the gas price increase is killing lots of people. But I recently realized even more how my reaction to things affects my kid. On Friday, we saw a car accident that probably looked a lot worse than it was. A car careened from behind us across a grassy median and an oncoming 3-lane road going the other way. He looked like he was going 70 miles an hour. He flew into some trees and flipped. No one else got hurt. I freaked out because we could have just as easily been in its path if we had been going the other way. I almost always have my kid and usually two or three others in the car. Here's what I really noticed. My kid didn't freak until I did. Her reaction was influenced by mine. And being an adult, I realized the magnitude of the possibilities. My kid could have died. I freaked. Then she freaked.
We have more control over money than I did with the accident. We were fortunate. But with money, we really do have more control. We can get more fuel efficient, conserve gas, cut corners, elect different officials, buy different cars, make a little extra cash, change our way of living to be more green. Now's not a good time to freak out about the price of gas. Because if you do, your kid will learn to be a victim of the economy. I'm teaching mine to be more proactive.
Taking Time Out to Stay On Top
But here's where the rubber meets the road. I need to keep on track of the budget. It's my kid's birthday on Sunday and we could get carried away and spend a ton of money. But I'm going to take a breather and go over the budget. To keep on track. It's better than spending a bunch and live to regret it the rest of June.
Plus, I got my kid to pick up a bunch of her junk - so I taught her a lesson. And I'm saying no to every this, that and the other we haven't agreed on. She'll have a great birthday and I'll have taught her how to live a balanced life. Next week we rest. At least, I hope.
Why Is Money So Important?
June 9, 2008
There's so much to talk about these days - gas, rising food prices, rise in unemployment. But
that's happened before and will happen again. I'm more concerned with why money
is so important. What does it say about us as a people?
I really love money. I know, I know - money's the root of all evil. But what I love is watching what people do with money - how different people approach money. Just look around and see how your friends and family act toward money. I'll bet you find many different approaches to money.
I have a friend who never worries about money. If he has it, he spends some. If he doesn't have money, he doesn't. But what's great about him is that he always has a great life. He was born with a health issue that's always overshadowed his life and has given him a shorter life expectancy than most people. As he says, he's got more to worry about.
Look at your friends and you'll see a million different ways they deal with money. Misers, worriers, spenders, budgeters.
And what kind of money person are you? I tend to obsess about it - especially when I had little. Sometimes that's good and sometimes not.Indiana Jones and Fear of the Budget
June 5, 2008
When I learn to do something, my biggest hurdle is always that moment before I do it. My heart pounds and I am paralyzed with fear. Like Indiana Jones in The Last Crusade when he contemplates the last challenge, crossing the chasm to the Holy Grail with no visible support. When I first saw that, I thought "that's me." The fear on Harrison Ford's face was palpable. But finally he goes because he has to save his father. And miracle of miracles there is a bridge there. He just can't see it.
That's how I feel when I learned to swim. That's me when I am doing the simplest of things like learning to ship things on eBay. And that's me when I have lost track momentarily of something on my budget. Especially the food category.
Maybe that moment of fear is a good jolt to the heart but it feels like years taken off my life. So what's the solution? I'd say jumping in and reviewing the budget as often as it takes. It's June 5th and because I tend to get sidetracked and broke when the kids get out of school I've already reviewed it twice since the first of the month. I am finding ways to keep food costs in line. Since I am a terrible cook, I found two cookbooks we like, children's cookbooks by Angela Wilkes that are simple and with adult friendly food. Then I make a menu each and every week with a list of food. This may not be your strategy but find one that works. My next step will be to carry cash instead of using the debit card. And when the cash runs out, eat peanut butter. Actually I love peanut butter. I put it on rice. And at least now we have a full refrigerator and healthy meals.
Budgeting? Who Me?
June 4, 2008
Ok, I made a budget. I have all good intentions of following it. But here's one place I get stuck. I get so busy (like we all do) and just buy what's in front of me. My sister-in-law does it differently. She says my brother would just spend and be out of money by the middle of the month. That's what I do, too. If you've got a great income you can slide by and be ok. However, because of my brother's wife who kept close track of the money, my brother retired 8 years early. If you don't have a great income, you're in trouble if you don't keep track of the money! Debt, little to show for it, and not enough money to pay for essentials like doctor's appointments and gas!
So here goes. It's four days into June - time to take stock
of where I am in the budget. And time to make choices. I'm taking two kids to a
free place this afternoon. To Carl Sandburg's farm where a bunch of baby goats
are roaming around. They'll love it and we're packing a picnic. I could have
gone for taking them to an arcade and ended up spending $30-50. And I'll bet
they have more fun at
School's Out - Time to Party
May 29, 2008
School here was out yesterday. When you have kids, sometimes you're happy and sometimes you're scared to death. It's a time of endless whining about "What are we going to do now."
If you don't have a plan for your kids, sit down right now and make a plan. I have one - put my kid to work. Ok, to be fair, we're going to do a bunch of fun things - minor league baseball games, visiting the Carl Sandburg home with a group of new kid goats, sleepovers, ballet camp, a production of 101 Dalmatians, sleepover camp (Oh yeah!) and a trip out of town with family.
But as a parent, a quiet moment is always followed by "So what are we going to do next?" Here's my strategy. Turn off the tv, get my kid to clean the house or no more activities, and most of all, I do extra work at home, ebaying and such. Guess who's packing stuff and helping me take it to the post office?
A friend of mine is taking her kid to work scooping ice cream. Another friend is having her kid volunteer at a local adult day care center.
So in the midst of the party, have your kid work wherever it's safe and can teach them a lot about the value of work and/or money. As for the ice cream scooping kid, she gets to spend her earnings. The kid volunteering at the local day care center this year lost an 84-year-old friend who died suddenly. Sad but this kid's life is so much richer. As for my kid, she's learning all about business. And she loves it. She actually asked to work.
A Good Reason
May 28, 2008
I have been so concerned on working on a budget and making it work for so long, I forgot the first step is to have a reason to budget.
What are some overwhelmingly good reasons to budget?
For those of us who have gone through years of crippling debt, we'd like to have extra money when the transmission goes out so we can pay cash to fix it and still go to a ball game.
For those of us who have cared for the elderly in our families, we'd like retire in dignity receiving great medical care, traveling if we'd like or living in a great assisted living with popcorn in the lobby.
Maybe we want a house at the lake or at the beach. We all know that borrowing to get those things has gotten lots of people in trouble.
A good enough reason to budget makes it fun. It makes it worthwhile. It feels adult and it feels like we're in control.
Recently, I went over the budget and found several things to cut or adjust. I had my reasons - how I want to live now and what I want in future. Funny thing is that we aren't hurting for what we're missing. Actually, I feel much better and my kid hasn't noticed.
Budgeting, it's a good thing.
Is there an Upside to Rising Gas Prices?
May 27, 2008
Last week, I rented a car, something I don't do often but my transmission went out. And being a single mom without a spare car, it was the best option.
I asked for an intermediate since I usually have my kid and her BFFs, which for those of us over thirty, means her best friends forever. What I got was a Toyota Prius. It was small but it was red so I was up for it. It's incredible. To start it, you just push the button that says "Power." The gears are no bigger than your wallet and the heat (yes, we need the heat in the morning, we're in the cool mountains) is immediate. You just push climate and key in the exact temperature, you're so hot.
I like the car. It costs me half what I normally pay to fill up. I did get 40 plus miles per gallon. I began to really realize that maybe high gas prices might just motivate us to really start producing and buying cars that are much more fuel efficient.
But there is one problem - intermediate size was not intermediate. I can cram 3 girls in the back seat if they aren't over 4 feet tall and 9 years old. I couldn't ride more than 4 people and for those of us with more people in our circle, we'd need a second car or a bigger car. Higher gas prices are killing some people like truckers and older folks on fixed incomes, but it might just motivate us to demand more fuel efficient cars.
What Veterans Have Taught Me
I wrote this last Memorial Day and thought it would be so appropriate for this memorial day. So here it is.
It's Memorial Day and I woke up today thinking about what I
have learned from Veterans. My father was in a Veterans Nursing Home for about
3 years - probably one of the best nursing homes I've ever seen. They gave my
dad great care, but the best thing about the VA hospital is what I learned from
the Veterans, many of whom have passed away.
From Mr. Young - He was a famous fly fisherman but I never knew it until after
he died. He was modest. In his 80s, he mostly ate cake the last couple years I
knew him - no vegetables. He announced one day that he would be dying shortly
and asked the nurses to come say goodbye to him. They did and he died a few
hours later peacefully. For the sweet things in life.
From Mr. Carter - A former NC State football player. His room was full of NC
State memorabilia. I remember him mostly wearing State red and white. And he
sang constantly. For the joy of life.
From Mr. Buchanan - He was not very responsive but his wife and sons attended
to him with great care. He loved Milky Way bars. My daughter and I brought him
a Milky Way bar one day but he had died. Bring them what they love now. Don't
wait.
From Mr. Deese - He was a friend of my dad and a chaplain in the military. Bed
bound for three years, he always asked how I was doing. He held my hand after
my dad died. And he kept reading until the end. From him, I learned to keep
doing what engages your mind.
From Mr. Waters - My daughter loved him. He always wanted to tie her loose teeth
onto his motorized wheelchair and take off. He joked a lot. I learned to joke
around no matter where you're sitting.
From Mr. Denton - I learned to smile. He had Parkinson's Disease but he always
smiled. Always.
From Mr. Bistline - He reminded me of my grandfather. He loved his daughter and
she him. Watching someone love another is a great gift.
For those still alive:
Mr. Cole calls me doll. I love him down to the dyed roots of my 48 year old
hair.
Winnie, the highest ranking officer there. And a woman. An in-charge nurse for
many years, she once said "What in the World would I have gotten married
for." From her, I learned to do what I want.
Mr. King was so handsome. He's been in a coma for many years. His wife comes
almost daily and she bathes him herself, a tender gesture of love. From his
family, I learned dedication.
From Tony, a famous drummer. He always drums his fingers. A passion is always a
passion. It's in your soul.
And lastly from my dad who died almost 5 months, so much. But most of all,
compassion and forgiveness. And to keep going. He was painting a picture the
day he was taken to the emergency room. He died a week later.
But more than anything I have learned from the nurses, doctors, support staff
and the volunteers. When my dad lay dying and we sent word to those he loved,
the nurses who cared for him came first to say goodbye. They fluffed his
pillows like he liked them even though he couldn't talk or open his eyes. They
held his hand, careful of IV lines. They watched the monitors. But then they
told him one by one how much they loved him. And Helen who picked him off the
parking lot concrete one day. I saw her cry. I learned from them that a tough
thankless job is often the most rewarding job.
Balancing the Budget - Is it Possible?
May 21, 2008
This week I was thinking about how hard it is to stick to your budget. If you're like me, you start with all good intentions. The money plan is laid out. The categories are all set. It's done just like Dave Ramsey recommends. You've got your money in envelopes. You have no credit card or you've left it at home. And you feel good.
And then it's May 15th and you're wondering what happened? You are already almost through all your monthly money and your little baby birds are hungry. Sound familiar?
Now we're experiencing it more and more because gas is almost $4 and milk, bread and other groceries are skyrocketing.
As good as I have gotten at budgeting, this is a problem for me, too, at times. I get sick and the budget goes out the window. Or you get sucked under by school events, and the money flies out the window before you know it. So these next few weeks I am going to explore the whys and wherefores of the budget.
Today I picked the brain of my sister-in-law who's visiting. She's a born budgeter - in good times and bad. She's always done it when they had money and in the beginning when they didn't. She drove the family budget for years. My brother retired years early because of her. I asked her why and how. She couldn't answer because it's natural for her. But I have a clue. Her reason is big enough - she wants financial freedom. And within the budget she has found freedom and happiness that not budgeting doesn't have. Tomorrow more on budgeting. By the way, she and family have always had fun.
Charlie Rose and Sleepless in Asheville
May 14, 2008
Every couple weeks (and not more often if I'm lucky) "I chose poorly" to paraphrase the Knight in Indiana Jones and the Last Crusade, eat something I shouldn't and wake up in the middle of the night. Charlie Rose is always on then. And I always for some reason catch the UN Under Secretary General for Humanitarian Affairs, John Holmes on Charlie Rose.
And I'm always convicted of two things: we need to feel grateful for our lives here in the developing world. And we need to be conscious of the truly poor in our world. Most of all we need to make our kids aware of how well off we are.
I know gas is up. Gas went up here 14 cents in two days. Food is really up also. And there are people really suffering here, especially truckers who bring us goods and food. It's painful. But most of us have cable, internet, food, safe housing and at least available health care. We will probably survive this recession pretty well in comfortable homes.
My daughter's dad is from
I'd like to tell our kids to be grateful for what we have but in my case it's the other way around. My kid's friend, Samantha, is turning 9 on Monday. She has cable. She has internet and a safe home. Her dad repairs wheelchairs. Her mom is a teacher's aide. They work side businesses to make ends meet. Guess where she's having her birthday party?
What is a Rich Person's Attitude Toward Money?
May 13, 2008
It's great to examine our own attitudes toward money. We all have them and once we think about them, we know where they came from - our families. But once we have identified our attitudes about money, let's look at how rich people look at money.
Here's one: We can do anything we really want to do. And be profitable at it. This truly is the land of opportunity. Here we can sell Beanie babies or webkinzs or old junk cars and really do well. This land truly is filled with acres of diamonds. We just have to mine them with lots of hard work and wise planning.
Here's another: It takes hard work and wise planning but that's doable.
Here's another: Money is a blessing to us, our families and all people around the world. Most average rich people are givers.
Isn't this attitude toward life and money a breath of fresh air? It sure beats believing we are at the mercy of big corporations or the government. Rich people take control of their finances.
It's time we did the same. A change in attitude will probably make us richer.
What's Your Money Attitude?
May 7, 2008
What attitudes do we have about money? Ok, I know, I want some of it. But that's not an attitude. That's an instinct. I want more because that how we are hardwired.
But what's our attitude about money? Do we cherish it? Do we think it's the root of all evil? Do we think we'll never get any? Do we think we deserve cable and iPods and the like? Are we grudging if others have more land or more toys than we have?
I grew up probably upper lower class, not dirt poor but certainly not middle class. I remember being stunned when I went to a friend's house in an upscale neighborhood. His mom had a whole walk-in closet just for Christmas decorations. I was amazed. A whole room just for decorations. Also, I never realized my friend was well off. He never mentioned it or showed it off. His dad was a contractor who built the house himself. He came from nothing and worked hard. He dressed in jeans and flannel.
This was a revelation. They felt differently than my family about money. They didn't mistrust it. Or believe it was for someone else. They felt if they worked hard and planned for it, they'd have enough. My family never planned and never thought they'd have any.
I've watched people over the years and listened to their attitudes about money. Some feel it's a blessing. Others believe they will never get any. Others think it's evil. But one thing I know. As long as they were not destitute, people's attitude about money determined their wealth and not the other way around.
What's your attitude about money? And how does it affect what you do?
What's the Most Important Thing to Teach Kids About Money?
May 6, 2008
This morning, my kid was asking what money is called in different countries. She's fascinated by Irish Dancing, by bicycles in Honduras (huh?) and the pyramids in Egypt. And she wondered what they call their money. I had no idea in Ireland, so I skated by guessing it was the Euro. In Honduras, it's the lempira and in Egypt, it's the pound. How's that for pulling information out of your hat at 7:30 in the morning. (I cheated - my kid's dad is from Honduras and when I worked for American Airlines in another life, I got to travel to Egypt- cheap. I'm a bit of an Indiana Jones fan and love to adventure travel - at least I did before I hit middle age).
So it got me to thinking what do I really want to teach my kid about money other than how to manage it, how to make money, how to invest, how to live well and how to give. The most important thing I want my kid and all kids to know about money is that how we take care of our money reflects who we are as people. Are we kind and thoughtful or do we just want it all and think we deserve cable and mp3s? Are we in the middle, sometimes thoughtful of others and sometimes like a kid in a candy store?
As my kid grows we'll be having many conversations about how our handling of money reflects what values we choose to follow.
Steal Gas? Or Ride a Mule?
May 1, 2008
Now people are stealing gas with the prices up. Just yesterday, someone stole about 400 gallons of gas from a food bank truck. The money it will cost to replace that gas could have fed thousands - people also in need.
But the most unique way to beat the price of gas I've heard
of comes from a farmer in
Ok, what's your solution to beat the price of gas? I'm not riding a mule and I'd make a terrible thief. I'd be the first to get caught. We'll probably be eating a lot of Ramen noodles and tracking our expenses really carefully.
Send us your unique (and legal) solutions.
A Billion Here, A Billion There, A Billion Hungry
April 30, 2008
Last night, I woke up around 3 am hungry. And tired and unwilling to get up, I tried to go back to sleep. But I couldn't.
I woke up hungry because I had not eaten enough the day before, something I do on occasion in efforts to watch my weight. I've lost 60 pounds and don't want it back. But I ended up crying early this morning because Jan Egeland, a former UN Relief Coordinator had cited that a billion people in the world each night go to bed hungry and fearful of their existence because of war and extreme poverty. Many don't have enough food, healthy drinking water or medical care. Many are afraid of dying from poverty or the violence of war.
A Billion is about a fifth of the world's population, almost 20 percent. The world's population is estimated to be 6.6 billion.
So when we're worried about gas and prices of food here, it would do us all good to remember that we are really lucky. I got up and fixed a bowl of warm hot cereal and ate a piece of chicken. Ok, I can eat some weird things for breakfast. And I sat in my comfy red recliner in a warm bathrobe and flipped on the TV. What much better can it get for us? Yes, gas prices are almost $4 and food is going up. But those billion live on less than a dollar a day. At least, we have adequate food and water. Now, I need sleep.
Spend Your Tax Rebate on You!
April 29, 2008
Well, you could spend it on some gas. Maybe not a lot of gas, but some. Or you could spend it on food. Both have gone up recently.
Here's what I recommend: Spend it on you!
Ok, I don't mean go out and buy an iPhone or a flat screen TV. I would really like a flat screen TV but mine is working just fine. Here's what I mean. Use it to improve your financial situation. If you're in debt, buy Dave Ramsey's book, "Total Money Makeover" and use it to follow his baby steps. Step one is $1000 in the bank for emergencies and step two is pay off smallest debt first to the largest.
The TV or phone you could buy will be long dead. What's even better, your kid will see you investing in tough times. Historically, the market has always returned 10% over time even in the toughest of times. I'd say spend a few bucks on something you like such as a great video you've always wanted (about $20) and give some to help the very poor around the world, because even in these tough times we are still the richest in the world. And then save to insure your future or your kid's future.
Hillary's Coming To Town
April 24, 2008
Today, Hillary Clinton is coming to my town. And while I won't say if I'm for her or Obama or McCain, I am using this as a great tool to teach my kid about the process. She's almost 9 and real happy a woman might be president. She doesn't understand the issues yet, but her enthusiasm for the election is palpable. She follows it more closely than I do.
It's great to teach kids by doing and this will be an excellent opportunity. She's also bringing her own money to buy anything beyond the button I promised her. So I'm knocking out two teaching lessons in one. An electoral lesson and economic lesson. It can't get any better than that.
What's Your Favorite Four-Letter Word?
April 23, 2008
Ok, I love this question. The other day I was driving and a car came right toward the passenger's door behind me and my daughter's friend in that seat had a look of sheer terror. I swerved out of the way stifling some juicy four letter words. My kid, fearless as she is, paid no attention to the car about to cream us. She turns to her friend and says "Mom often talks like that." Not that I use four letter words, you see, but that I stifle those words.
So the question became what is my favorite four letter word. I do hate to hear them on TV. And I hate to hear people use them - unless it's me. And of course, I have to clean it up for the crew. I got it. It's not fish or love. Or pure. Or food although that's a close guess. We finally got it - it's know. Which is closely related to my other favorite word "No."
There are some things we should all know. Like don't drive like a maniac. And know the state of your finances. Know how to manage your finances to weather bad times and how to make your money grow. Know - it's a great word.
As for the other four-letter word - I'll just have to use that old Southern word "dadgummit." Or like my daddy use to say - "dadjimmit."
Earth Day: Go Green, Save Money
April 22, 2008
Today, I left my reusable bag, actually all of them, when I went to the local health food store and got some of the best bacon in town. We got a good laugh out of it. And I will take all my bags to the car later to prepare for future trips.
But what is really intriguing about this Earth Day is David Bach's new book Go Green, Live Rich. Bach is giving us a new incentive to go green. By helping the planet, we can save money, not spend more to convert. When we go green, we can end up richer, significantly richer. He says that by making some little changes like improving our fuel economy, sealing leaks in the house, turning back the thermostat and brown bagging our lunch, we can save over $3700 a year. That money invested for 30 years could be worth $678,000. Awesome.
I'm going to read Bach's book asap to see what else we can do and help ourselves while we help the earth.
Also, we often feel that those before us were wasteful and used a lot of energy. Not if you had met my grandfather. I hear his advice in my head regularly. Get your car maintained regularly - it saves gas and saves your car. Bunch your trips together to save time and money and gas. We never had A/C (we live in the mountains where it's pretty cool anyway). My grandfather would have thought it was wasteful. Turn off the lights - can you hear your parents telling you to turn off what you aren't using. I buy produce in season from locals like my parents did. We threw food out to the varmints as my mom would say. Composting may sound like a new, fancy word but I remember my parents and all our neighbors returning to the earth what we didn't eat. My grandfather would be 106 if he were still living; he died ten years ago. While he wasn't a treehugger and never heard much about going green, he did a lot to save resources because he felt it was the right thing to do.
You Call The Shots
April 17, 2008
I've been absorbed in this book by a 23-year-old entrepreneur. It's called You Call The Shots by Cameron Johnson. He's already got enough to retire if he wanted to.
I really think it's important that all kids have financial training and that every kid know that they can become rich while performing ordinary jobs. They don't have to sell beanie babies at age 9. They can become teachers, and if they have a solid financial education, they can end up really wealthy.
But here's what is awesome about Cameron:
1. He feels that it's important to live a balanced life. Family and friends come first.
2. He didn't do it for the money. He just enjoyed the work. (So we should all find work we love.)
3. He takes an idea, and instead of running with it, he thoroughly investigates it to see if it will really work and if it will be profitable.
4. He never borrows money to expand. Instead, he finds inexpensive ways to expand the business to make it grow and earn more money.
5. He didn't take the money he earned and buy a lot of stuff. He didn't want to be showy and make his friends feel he was different. He invested it.
6. He always stays on top of his money. He knows where it goes. Always.
7. Honesty comes first.
Sounds amazing for a 23-year-old. That's what many of us are trying to learn at 40 and 50. It's great to call the shots at such an early age.
What Would Happen If We Educated All Kids About Money?
April 16, 2008
What would happen if we did actually educate every young person in junior and high school about money - about how money really works, about how rich people really get rich especially when they come from nothing, about how to make interest work for you, how to invest. What if we taught them that borrowing is Not the American way of life? What if we taught them to do work that they love? How different would our country look?
Maybe not every kid would get it right away, but if our culture as a whole frowned on debt ...And smiled on investing, purchasing with cash and working with the talents God gave you....how different would America look?
I think America would look vastly different. We probably wouldn't have the mortgage crisis because consumers would have known better. We wouldn't have an economy driven by lenders. Wouldn't that be wonderful! As we grew older and amassed more money, we would buy more. I think in the long run our standard of living would go up.
And for those credit card companies and other lenders, well, maybe they could go find work that they really love.
Gas Prices Almost $4! What to Do?
It's tax day but even worse than that is the price of gas. By June, it's predicted to be around $4 a gallon. So what are we supposed to do? I don't know about long term but I can tell you a good way to save long term.
Ok, I've tried limiting my driving, and combining trips. That's worked somewhat. We're doing as much as possible for the environment and to save us some money by combining trips, keeping the car well maintained and staying around the house more.
But I've found an ingenious way to spend only as much as
much as before gas prices skyrocketed. Here it is. Cook. Yes, cook. I really
stink at cooking and being a single parent with an 8 year old starving every 10
minutes, it's all up to me. I decided to be a cross between Betty Crocker and
The great thing is we're using organic and eating healthier.
But spending less on food even as food prices increase.
If you can find your weak spot, and mine was obvious, you
might be able to counter the gas price increase. Just don't cut out investing.
Prices are low now. It's the time to buy! The stock market has always increased
over time even in worse recessions. You know, buy low, sell high. And get some
kabobs.
Investing Now? In A Recession?
All around us we hear how bad the economy is. Houses are in
foreclosure and gas is predicted to go up to around $4.00 a gallon by June. And
many people report that their 401Ks are declining. Everyone wants to run for
cover.
Don't Shop When You're Hungry, Don't Shop When You're in a Lousy Mood
Ok, I usually forget to grocery shop until I'm hungry.
That's when it seems like the car has taken control and is guiding me like a
missile to the best grocery store in town with awesome bacon on its bar. I can
tell when I am shopping with hunger. I feel like a hungry hunter stalking the
lines of the grocery stores. And I do spend more.
So I guess we should focus on getting happy and spending less. But I also tend to get real generous when I'm happy. So what should we do? I would guess have some real good goals, a spending plan and leave the credit card at home. And buy those self-help materials at discount stores! But I still plan to buy the best bacon in town once a week. It's worth every penny.
Who Should Teach Our Kids About Money?
April 8, 2008
April is Financial Youth Literacy Month so when we consider how to bring our youth out of financial illiteracy, we really need to be careful who we get to teach our teens about money.
All of us are really influenced by marketing, and truth be told, I like marketing. I like the Ben and Jerry's carton design and I love the Geico commercial with Little Richard. There's no doubt we are all influenced by marketing. But more or less as adults we all know it. Here's the rub. Kids don't. That's why advertisers really go for them. Because a consumer gained now is most likely a consumer for life.
When it comes to teaching kids about money, lenders have a stake in teaching them. So before you choose some organization and lessons to help teach your kids, find out who is sponsoring them. All over our campuses, credit card lenders are luring young teens just out of our parental nests with sub sandwiches and t-shirts. Young people love those freebies but soon end up way in debt. That sandwich can end up costing a college student thousands of dollars in debt.The Jump$tart Coalition whose mission it is to "prepare youth for life-long successful financial decision-making" is made up of several organizations striving to see every young person educated about money. Some really good groups are in there including AARP, Boys and Girls Club, Girl Scouts, NAACP. But there's also a member of the Board of Directors who sounds innocuous but in reality is VISA. I think Jump$tart is good as a whole, but I don't want a lender educating my kid. So be careful. Look at the lessons and see who is really offering them. Even if Visa does offer a really good lesson, they are influencing young people with their brand. Studies show that if people do pay off their cards every month, they still end up using 12 to 18% more dollars than they would with a debit card or cash. So who wins? The credit card, not us or our kids.
Really rich people who came from nothing don't credit their financial success to credit cards. They get interest to work for them. They usually carry one card, if at all. They read the fine print. So when you look at a potential financial program for your kid, see who's behind it.
Don't let the fox in the hen house.
April Is Financial Youth Literacy Month
This is no April Fool's joke. Seventy-nine percent of our
teens graduate from high school with little or no financial education beyond
balancing a checkbook and establishing a credit card account. A few four years
later, many of our kids are about $16,000 debt and have several credit cards.
And they are even more clueless about their money. Most of what they know is
the crushing weight of debt. They know little about how interest works - it can
work for you or kill your happiness.
Guess who is educating our teens about money? Yep, lenders.
They are all over easily picking up our young people with promises of subway
sandwiches and t-shirts. A few years after taking them up on the sandwich our
kids are thousands of dollars in debt. Our kids will wander years in the desert
of financial illiteracy and try to catch up in their forties and fifties when
it takes lots more money to play catch up. Most millionaires don't credit their
financial independence on credit and borrowing. It's time for us to teach our
kids about money!
Let's make April Financial Literacy Month for our kids, grandkids or some neat young person we know and give them the hope of becoming one of 3% of Americans who are ordinary millionaires. Let's give them financial knowledge to power a better life for them and for our world. Give them Dave Ramsey's high school program. Or become their financial coach with my book, How To Raise A Teenage Millionaire or for younger kids, get Prosperity4kids.com's Design Your Child's Financial Future. Or check out money camp at Creativewealthintl.org. Because if we don't teach them the secrets to true financial prosperity, someone else will. And they will suffer for it.
Letting Her Light Shine!
April 1, 2008: Last week, we spent spring break in
at a little hot dog joint, and most of all, Esther and Duella. We checked in to a medium priced hotel which had a complimentary buffets, you know the kind with bagels and waffles, fruit and sometimes eggs. But truly amazing was the lady who put out the buffet. Esther welcomed us with a bright beautiful smile that shined.
She was genuinely interested in all the people at her breakfast, she helped
kids pour batter in a waffle iron and made sure the buffet was always stocked.
She went beyond the call of duty and expected no tip.
All You Need To Do Is Ask
March 20, 2008
Last night, a friend of mine described writing her book like giving birth. She put so much into the process of writing like she did when she put so much care into the nine months of pregnancy that she didn't give much thought to what happens afterwards. Most of us operate like that. We think about getting the initial project done that we don't think about how to get it off the ground. For raising kids, it's what comes after the dirty diapers and spit. For writing a book, it's how do we get it out in the world.
So when we approach life like that, what do we do? We could try to figure it out on our own. But that's the hard way and it's a very limited approach yielding little results. What we can do is ask others for help. Ask experts. Ask coaches. Ask older or more experienced folks who have done with great success what you are trying to do.
Ask and it shall be given to you. Ask, ask, ask.
Let Your Kids Fall Flat on Their Faces
March 19, 2007
Like most parents, I want to rush in and make things all better for my kid. And I have done it often enough. But if we want our kids to become responsible adults, we have to give them plenty of opportunity to try and fail. Or try and win. When we as parents do that, we win either way. I have heard this often enough but saw it played out when a friend of mine with two kids had to bite her lip when her daughter lent money to her younger son who was in a frenzy to win a cheap furry toy in one of those claw machines. Bit by bit the sister lent her brother over $15 in the course of 30 minutes and he didn't win a thing.
The mom made a brilliant but painful decision. She stood back and the kids played out a painful lesson that is better learned earlier than later. The sister learned that caretaking her brother will net her nothing in the long run. Better learned now than when they are in their thirties and the amounts are much greater. The brother learned how painful it is to borrow with nothing to show for it. And he had to work off the money for weeks and weeks. I doubt he'll do that again.
And for the mom, she didn't have to lecture or even open her mouth except to say "I'm sorry that happened." Sometimes parenting on money is best when you step aside early to let them fall flat on their faces.
Young People Really Listen to Us And Want Financial Education
According to US News & World Report, most young people
in college are racking up higher student loans and less credit card bills. But
that's only because college students are using student loans to pay credit card
bills. So that's debt and more debt that will rob them later of wealth. Nellie
Mae states that most graduate students wished they had more information about
reducing debt. Over 60% of those grad students surveyed wished they had learned more in
high school about managing their finances.
Recession Proof Your Teens
March 12, 2008
Everyday, there's more and more depressing economic news on the TV. Warren Buffett says we are in a recession. Recessions don't last long, but when you are affected by it, life really stinks. Prices really are going up at the gas pump. So is food.
The truth is the better financial shape you are in, the easier you can ride it out. There are many good financial people full of integrity and good advice to help those in trouble not only weather this out but also to come out better than you came in. But it's an excellent time to teach our kids about finances. Teach them what financially successful people do in good times and bad. They don't go into debt; they live below their means but don't feel deprived. They enjoy their friends. They do work they love. They do their work very well. Often they made average grades in school, but they found what it is they enjoy doing and do it well with every fiber of their being. They make financial goals.
Recessions are cyclical - they come and they go. If we teach kids how to really take control of their money each and every day, they'll be ready to ride out recessions. And even take advantage of them. Because now that we're in one, it's a great time to buy.
Do It With Love
March 4, 2008
I was going to write about the big news, the economy in Recession. But this morning I heard about a boy with Downs Syndrome who changed the atmosphere and culture of a grocery store by giving more than customers expect and with an attitude of serving them. He did it with love. It's a simple truth and very valuable to all of us, especially our teens.
I've been in many stores lately where the workers, many of them teens, hardly look you in the eye. Often, I can pick out who hates their job and who enjoys it. At our local department store, often the cashiers throw the clothes we have just bought in the bag wadded up. I'm not an immaculate housekeeper, but I'll go out of my way not to iron. It's great service to take a minute to fold them quickly in the bag. I avoid stores where the service and culture is not friendly. I avoid like a plague a health food store downtown because you can feel the lack of kindness when you walk in the door. I will go a few miles further to one where the managers and owners say hello when I walk through the aisles, where the cashiers are smiling or genuine.
I think the big lesson for all of us is to do it with love and go the extra mile for those we "serve." It's a great lesson to drive home to our teens. Their lives will be much richer in every way for it.
Who Will Save Our Economy?
February 21, 2008
Right now, we have adopted a culture that says it's ok to be in debt. We have a cultural norm where having little money is ok. It's good to spend money. We're expected not to save. It's expected that we need a lot of stuff. And the question is - is that good?
The answer to a great economy is financial prosperity for all. And if we have a handle on our finances - no debt, a healthy savings, a great working knowledge, then we won't need economic stimulus packages where we are asked to spend. It's weird. We give them money in taxes and now they are giving it back to us to spend. I know, recession is a fear. But here's one crucial way to save our economy and ourselves. Get our own financial house in order. It may not be the only way but it's something we can all do. And when we aren't strapped and when we don't make critical financial errors (like buying a house with an ARM), we have more to spend in the long run.
But maybe we'll end up like Burt of Burt's Bees. He sold his company for buckets of money and he's still living in a tent. Not me. I like my nice comfy bed, my TV with a great picture (it's 22 years old) and my savings.
Can We Be As Happy As Denmark?
February 20, 2008
The big news on the happiness front is that
A friend yesterday told me one interesting fact about
So how do we get some of
Show Your Kids The Guts and The Money
February 19, 2008
Sometimes it takes someone else to convince our kids. I've been trying forever to get my kid off the junk all her friends eat and onto vegetables. I know we need to model it for them and I do, but something else worked the other day that can apply to many different things including teaching kids about money.
We happened on a Dr. Oz, Oprah's featured medical doctor, helping people to lose weight. No big deal, we see that all the time. Here's where my kid stopped. Dr. Oz brought out organs, and of course, my kid loves the guts and glory. Oz says we may all look the same on the outside but our insides are vastly different depending on what we eat and how we exercise. And proceeded to show a healthy heart vs. a heart that had eaten lots of unhealthy food. And he went on to show intestines, kidneys, the whole bit. It was dramatic and gross. My kid wheeled around to the kitchen and bagged up all unhealthy food except the cheez-its. Including my coke. Ok, I'm happy and she's eating fruits and vegetables.
Sweet Valentine Money
February 14, 2008
So, take your valentine's gift and be weird with it.
Credit Cards Make the Rules
February 13, 2008
If you have a credit card, and most people do, you better check your interest rate. And what's more, most credit card lenders put in their contracts that they can change rates, fees and other charges whenever they please. Often, they don't have to notify us. I'm not on a diatribe for people to cut up their cards. I have, but there are a few people who do pay on time and cards work well for them.
But here's what I think the lesson is for us. First, banks made risky subprime loans knowing they were a bad choice. They did so to make really big profits, and they knew the house of cards will fall one day...sooner or later. Sounds greedy, but to be honest, we have all been greedy before. This is a reflection of us. They went for the short term profit knowing the long term consequences would be bad. Haven't we all done stuff like that - either on a big scale or in little ways. So here we are. Foreclosures for those who took out the risky loans.
And then we are all paying with credit cards jacking up rates to make up for the loss of profit. What can we do about it? First, use credit sparingly if at all. But most of all, we can take responsibility and get educated about our finances. Then we won't take out subprime mortgages or risky loans. We can get in financial shape. By reading and listening to the good old boys and girls who have made a lot of money and kept it.
Preparation Is More Than It's Cracked Up To Be
February 12, 2008
I was listening to Click and Clack on Car Talk a couple weeks ago - not because I love them. I do; they are really funny, but my 8 year old little girl loves them. And that's when I finally got it. I am prepared for financial emergencies with an emergency fund, but when it comes to car stuff, I wouldn't even begin to know how to prepare for an emergency except to have an emergency fund and a cell phone to call when something breaks down. I mean, I do oil changes and tune ups but then I wait for things to break down.
Click and Clack stunned me when they said take your old car to a reliable mechanic for a diagnostic. Then it might last longer. So since I already had an appointment to have a cv axle fixed with my honest mechanic, I asked to check my 8 year old van out top to bottom.
This isn't a car lesson, because I know little about cars. But here's what it's meant to me. I was ready to buy a new one. But here's what my mechanic told me. For about $600 maintenance, this van can last another 50,000 miles more with regular maintenance. So what are the savings to me in dollars. I can postpone buying a new car for a good while and keep saving for a better and better car to buy with cash when "Jenny" the van does bite the dust. Then that car will last a lot longer. She probably saved me thousands of dollars. And I'm not waiting for an emergency. All thanks to my kid. I think this preparation is a good thing to teach our kids, but thank goodness my kid's preference in radio shows taught me. And she's saving us a bundle.
Your Best Money Now - Giving!
February 7, 2008
Recently I dropped my beat up old van at the shop of a very honest and very hard to get in mechanic. I actually had to pull strings to get into him the first time. He's that good and that honest. I don't know him that well but he looks like the average millionaire next door. Someone with integrity as his number one value. His garage is well run and clean but nothing fancy.
But what struck me is that he had a book on Muhammad Yunus, the Nobel Prize Winner who started giving small loans to poor people who could not get traditional loans. They were at the mercy of loan sharks. He's helped bring countless people out of poverty with small loans. Now that's a weird book to find in a hole in the wall garage. And yet, my mechanic fits the average millionaire profile. A giver.
As a single mom struggling at times, I have found it hard to give, but have always found it to be the best thing in the world. Just give to what you're passionate about. For me, it's Mountain Care, a non-profit adult day care here that helps elderly and disabled people not quite ready for a nursing home go somewhere and have a blast singing and socializing while their caregivers work or have a break. Last week, one of the red hat ladies rolled out Friday in her wheelchair laughing and telling everyone she would see them on Monday. She died in her sleep that weekend, no doubt smiling. The director cried but said they had done their job, helping her red hat friend and her family have a wonderful time in the end of her life. This is the place I am passionate about. I now know what my mechanic is passionate about. And the great thing is that the better we manage our money and succeed the more we have to give.
What are you passionate?
Your Best Money Now - How Many Ways Can It Rain?
It was raining Monday and I started thinking.
I'll give you lots of reasons. It always rains. That's something my parents never did - save for a rainy day. So when the roof leaked, they borrowed. Or when my mom was sick and air conditioning would have been a great blessing, they didn't have the money for it. They turned to my brother despite the fact that they earned more than he did. And that was lost on me until it really started raining on me.
Here's how it can rain:
Outpatient Knee Surgery - more than $20,000 ($4,000 for me after insurance pays its part)
Roof leaks - $5,000
Furnace breaks down - $2,000
My kid has bad teeth - I'm supporting one of the dentist's kids through college.
The van (just serviced) breaks down five hours from home - cost to rent a car and have it fixed - $1400. I got a new mechanic.
This happened to a friend of mine with some great kids, but with two teenage boys who have lost their brains. Both boys drive before they get their license and get caught. They hide the tickets thinking it will go away. Police arrest them both. Cost: Couple thousand each; they are working it off, and of course, revoked licenses. Their dad's hair got a lot grayer.
Neighbor cuts down bushes (some of which are yours) and opens the space to a junky backyard. You feel total lack of privacy and lack of boundaries. You build a fence. It costs.
One toilet floods and other is clogged - at same time.
You are fixing basement after a flood and get dehydrated
despite drinking lots of water.
So if you have an emergency fund, it can still rain and you feel like the sun is shining. My brother sent my kid a card of a duck dancing and it said "Even though it's raining today, You can still dance!" And that's what a good chunk of money set aside can do. Let you feel like dancing even when it's raining!
Your Best Money Now - Spending
The economic stimulus package is supposed to jump start the economy so we're all encouraged to spend it. To support the economy. To be a good American we're supposed to spend money. And use our credit cards. This sounds really fun to me. And dumb, really dumb. So I'm supposed to go out and buy some junk just to jumpstart the economy when we're not even sure we're in a recession. This really ticks me off.
As you might have guessed, I really hate being told what to do. It's a blessing and a curse.
So let's look at what happened. Some idiots gave out
"subprime" loans - to people who really couldn't and probably shouldn't have
bought a house at that time. They either had too much debt or not enough income
(that's ok; there are ways to get into financial shape and actually buy a house
the smart way). The interest rates were great for the lenders, not for the
borrowers. So those idiots (and we all do dumb things at one time or another) giving
out the loans saw the promise of great profits, lots of short term profits now, and they promoted
ridiculous loans all in the name of making those precarious profits - right now. So we have this stupid mess. They knew the loans were exactly that -
precarious. They knew the house of cards would fall - and it did. But they
couldn't resist the huge short-term profits. No matter what the consequences
would be. But truth be told we've all done that once or twice (or more) in our
lives. Thomas Jefferson lived for the moment.
Be Weird With Your Economic Stimulus Money!
January 31, 2008
This idea comes from my friend, Mika Wyatt, Life and Business Entrepreneur Coach at 48dayscoach.com, and it's brilliant.
What if, instead of spending your money on an iPhone or another plasma tv, you did something totally wacky to show your kids the amazing power of compound interest? What if you invested it for them in some good mutual funds? The great thing is now the prices are down and it's a great time to buy. And in the last 70 years, even in times much more difficult than this, the market has always recovered and averaged at least 10% growth. So if you invested $500 for your teen who say is 13? At age 61, that piddly $500 you could have used to buy an iPhone would be worth about $74,000. Quite an increase. And that will come in handy for your teen when he will surely need it.
And the best part is that you can get him excited about making money grow - almost magically. It will show him how little bits of money put away when he is young can really grow. And if he saves early, he can easily become truly wealthy - even a millionaire.
How's that for true economic stimulus?
Thanks Mika for a great idea!
Lucy with the Gold Shoes and Financial Freedom
January 30, 2008
Yesterday, I wrote that the first thing to financial freedom is being prepared. And that starts with educating ourselves in personal finance, in other words really knowing what to do with our money. I think the second step is setting some goals and making a map to make the most of our money while having a ton of fun.
My mom often said that my cousin Lucy could have the most fun with a dime of anyone she knew. I think Lucy must have done something most of us rarely do - figure out what she wanted and made a plan to do it. Lucy died last year about two months shy of her 90th Birthday. She came from absolute poverty, and I do mean, absolute poverty to comfortable wealth. She was a supervisor at a local plant that came to this area in the Depression and gave many people jobs when they were really hungry. She wore gold lame shoes and poofy hair and always had style. And most of all, she was fun to be around. Really fun. And she had a great marriage.
Set Money Goals
So what did Lucy do that we could do also. We need to make a goal. Like decide that we want to have a second home in Florida and be a snow bird. That's what Lucy did. It's a bitter cold 27 degrees here this morning. While most of us just dream about spending time in Florida, Lucy and her husband did something about it. They first had the desire. And then they saved for it. They planned for it.
Make a Money Map
Then look at how you can accomplish your dreams whether it be investing in mutual funds or real estate. I know they're down now. But they will be back up. This is the time to buy. Since Lucy and her husband were having a ball anytime, in short time, they were spending our bitter cold days in Florida. This from a woman who was born to poverty. Lucy did a lot in her life. So be like Lucy. Define your goals and make a money map so you can get there.
Prepare to Become Wealthy
January 29, 2008
Henry Ford said "Before everything else, getting ready is the key to success." I read that the other day and have thought about it ever since. I really think teaching money to kids is so overlooked that kids are set up to fail or at the very least have a really difficult time once they leave home and graduate from college. Many kids are graduating with $20,000 in debt. So in preparing our kids to become really great adults, how do we prepare them for the world of finance which will dominate their lives for years to come? I think we start with easy to read, simple lessons on money. When I was a young adult, I messed up real bad and ended up in lots of debt; I asked some family members whom I love dearly and who have really succeeded in the area of money. They gave me a huge, technical book. Ok, by nature, I am the daydreaming artist who can do murals that dazzle but can't read a manual to save my life.
For most kids like me, we need a movement of parents who believe it's important to thoroughly understand personal finance and we need easy manuals that teach it. We need to get them ready to enter the adult world of personal finance by teaching them before they get out there. Here's some resources I know of appropriate for the average teenager. The Money Camp. Dave Ramsey's materials. They are easy to read. Rich Dad Poor Dad by Robert Kiyosaki. (Not his later works - they may not be appropriate for the average kid who wants to be a firefighter and hates real estate).
What do you think? How can we prepare our kids for a great financial future?
Preparation and Safety Pins
January 24, 2008
We all know the better prepared we are the better. But that seems so out of fashion. Or really compulsive. Until your 8 year old tells you at 8:20 at night as we're getting ready for bed that she needs to get her cape ready by tomorrow morning - no later. She's playing George Washington next week. Ok, that's fine. Tomorrow. No, the teacher said, she has to have it in school by tomorrow. After stifling a few choice words, I remind her of the rule that we don't run around at the last minute unless we need 911. Literally - like when my dad fell and broke his hip or my aunt called us instead of 911 when she couldn't get out of her chair. Safety pins at bedtime on a night when it's 20 degrees outside is not an emergency. And I don't remember a note from school. She's in a swivet and I'm royally ticked. We have no safety pins.
So what does this have to do with the price of beans or the recession? A lot. Everyone is in a panic. But Jean Chatzky said before we know we're in a recession, it's about half over. The economic experts say a recession lasts 15 months. So, if that's true, we've got about 8 months to go. And how do we ride through a recession if we really are in one? First, get knowledgeable about money. Read good books about personal finance that are easy to understand like Dave Ramsey's "Total Money Makeover" and Bill and Mary Toohey's "The Average Family's Guide to Financial Freedom." Uh, that is be prepared. Don't get caught in the panic. The more you know, the less panicked you'll be. And as for me, I'm going to buy safety pins today - lots of them.
Then, make sure you have your financial ducks in a row. Like an emergency fund of 3-6 months of expenses and no debt except the house. If you have that, you won't be caught panicking. Ramsey's book shows you how to do that. And Good Morning America's Mellody Hobson said keep investing but diversify because now you're buying cheap and in five years you'll be sitting pretty. In other words, stock up on safety pins.
Henry Ford said "Before everything else, getting ready is the secret of success."
Do Our Kids Want To Become Millionaires?
January 23, 2008
Ok, I have a tween and I can tell you it's a resounding Yes!
The question becomes how do I teach her about money...because it's not taught in schools (and when it is taught , the emphasis is often on borrowing). So, what do I teach her about money? First, she earns money. She chose her chores around the house. Here's my caviat about work around the house - you have to do it with a smile on your face and a song in your heart or you don't get paid - and you still have to do the work. I got fired once for complaining about work. I realized I was in the wrong place, and furthermore, I was making people's lives miserable. It's a good lesson for her to learn early. And here's another part I do dictate (I love being the mom - or rather, the dictator, on some issues). She gives part to whatever she really wants to give to, something she feels passionate about. And she has to save some. And of course, she gets to spend a greater portion of her work money.
But now, she's busting for a Gabriella High School Musical yearbook kit. And I helped her find it on the internet - from a great company and as cheap as other places. So this pay day, she filled her giving envelope first. And then her savings and took some money to Target. And spent it as fast as she could. Here's where we come in. We shut up and let them learn. Unless what they are buying is really objectionable or obscene. And don't lend them money. After the Target shopping trip, she had a little money left over. Without a word from me, she went home and put it with her savings. And after calculating how much she needed, she asked me for extra work. She's a smart kid.
Teaching your kid to be smart with money is an ongoing task and sometimes painful but always worth it.
We'll include other techniques for teaching tweens and teens as we go along. If you have great ideas to teaching your kids, let me know!
Who Wants to Be a Millionaire?
January 22, 2008
I think that's really an obvious question? We all do. All of us want to be rich, but not really famous. Well, maybe a few of us want to become famous. But as a rule, most of us just want to be rich.
So why is it we don't? Probably first and foremost because we don't think we can - we think people who can actually sing, act or are athletic really have the best shot at achieving millionaire status. Or entrepreneurs. Well, I can't sing, that's for sure and have never been athletic at all. And I'm not a traditional entrepreneur. And yet, more and more average Americans are becoming millionaires.
So how do we become rich? I know it takes time. The average millionaire takes 15 years to become a millionaire. I'd rather have it now. But if I have to wait, I can wait 15 years - that's the great thing about being older. We are more patient - or it could be that time flies by so quickly that 15 years seems like only 5 years.
And then doing what we love, getting financially educated and making a plan. I know two people in their fifties well on their way to becoming wealthy and that's what they both have done.
What do you think? Could you become a millionaire?
Easiest Way to Become Rich
January 18, 2008
What's the easiest way to become really wealthy? That seems like a crazy question when the alarm of recession is all around us. Last night, I woke up in the middle of the night and a panel of financial experts that I really like were on Larry King Live- Kim Kiyosaki (wife of Rich Dad Poor Dad author Robert Kiyosaki and financially savvy in her own right), Jean Chatzky, Gerri Willis and Dave Ramsey.
I got to thinking how do you have fun and get rich at the same time. And this morning in the paper, there was a story about a long married couple who died recently left surprised friends $1.6 million. The husband, Willis Hatch, was a farmer and his wife Arlene was a schoolteacher. They were married 57 years and did everything together! That's pretty cool. They went to pancake breakfasts, school plays and had many friends. They died in a car wreck together leaving an estate of $2.9 million. Sounds like an awesome life all the way around. They were described by everyone in Lowell, Michigan as very happy people who didn't flaunt their money around and were frugal.
So how does someone like you and me have a great life and get rich? Real estate is great and Kim Kiyosaki and her husband and many others have done great in it. But I tried it and hated it. It's not for the faint of heart or for people who'd rather be doing anything else. But I'd say get your ducks in a row personally just like Jean Chatzky recommended. Shore up your personal finances. And Dave has the best laid out plan. Get out of debt. Have that 3-6 months of emergency money in place. Invest in mutual funds. All these experts agreed this is the best time to buy good mutual funds and real estate (whichever you like- real estate gives me insomnia) now while the price is down and in 5- 10 years you'll be sitting pretty.
Then I would do work I love and have a bunch of good friends. Then you won't have to buy a bunch of junk you don't need. Except that large diet cherry coke each morning (that's my latte factor). What do you think?
What Does Citibank's Billion Dollar Loss Teach Us?
January 16, 2008
It's amazing how quickly and in how many ways we can mess up our finances. I know from personal experience. I sometimes turn around and realize - wow, I just really screwed up with money. The truth be told we all have. But it's truly amazing when a huge company with lots of experts does it. The great thing is --- Citibank's astounding loss is a big lesson for our own personal lives. Big. Looking at what happened to Citibank can really bless our financial lives. This morning, when I heard what they did wrong, I was dumbfounded. I thought - gosh, they did what I did a while back when I blew a lot of money. Before we all panic and think the sky is falling or a big economic crisis is looming, let's breath deep. I don't think so, but Citibank's mistake can really turn our finances around if we take a page from what they did wrong.
Here's what happened. Citibank lost $9 Billion in revenue in the last quarter of 2008. $9 Billion. Can you imagine what we could do with $9 Billion?
So why did they lose $9 Billion dollars? I'm not a big expert, but the economic analyst on the news this morning nailed it. They financed risky loans for big profits. They gave people loans who really couldn't afford them. They knew it was risky and probably the whole house of cards would fall, but they did it anyway. And as one analyst said, left others to clean up the mess. So now people who took out those subprime loans are losing their homes. And are really experiencing some economic stress. Some real stress. If you've ever had real money problems, you know the stress is unbearable. You can't sleep, you can't eat. You can barely breath.
So how can their $9 Billion loss be a blessing for us? Well, for the people losing their homes, it may take a while to find the blessing in it, but it's there. And for others in better shape, but who are just not quite there financially, the blessing is right in front of us. Know what you're doing financially. Know what kind of loans are good for you not just today but in the long run. Don't take out the risky loan now. Take a couple or so years to get control of your money. Spend within your means. Even Oprah did when she made very little. If you have debt, get rid of it. Save for a great down payment and get a better loan with a better rate. Don't take the short term rewards because the risk will reach around and kill your happiness. Get really educated about money because this part of your life can really determine what kind of life you - and your kids- live! For those in deep trouble, Dave Ramsey's "Financial Peace" and "Total Money Makeover" are great. Actually, they are great for everyone. Make this the year of financial knowledge. There's no better blessing for your life. And then teach your kids!
Are Your Money Problems Really Problems or Blessings?
January 15, 2008
Most of us as parents have endured money problems or even grave failures. We often feel like we have little control over our money. We don't know what to do or how to really manage our money. It's like dieting. It's something we know we need to do, we hate to do and yet it still nags at us. It's also like the whole blasted dieting thing - it feels like very few people actually lose weight and very few people actually manage their money well enough to be called truly rich. And just like the gazillion diets out there, the multitude of financial gurus often contradict each other. And yet we want our kids to learn how to become wealthy.
When we see our money problems as blessings to change our lives, we can really learn what to do with money for ourselves and then we can teach our kids. Ok, how can having very little money be a blessing? How can not having retirement be a blessing? And how can facing losing a home be a blessing? Or having massive credit card debt be a blessing. The truth is these problems are and aren't blessings. On the surface, they really stink. But if we learn how to have peace and friends and live within our means, we can transform our money problems into great blessings. We can transform our lives into richer tapestries of meaning and material means. Isn't that what we want for our kids.
So we need financial knowledge that makes sense, something we probably never had much of. It's out there but you have to dig for the gold. Look at people like Dave Ramsey, Mary and Bill Toohey's great book "An Average Family's Guide to Financial Freedom" and Dr. Thomas Stanley's "The Millionaire Next Door." These guys will bless your life and you in turn can bless your kids.
New Year's Resolutions - New Money Pt. 2
December 28, 2007
Four days to New Year's. It's an exciting time - we have a chance to change our lives for the better in a world that sometimes seems destined to spiral into craziness. For us and for our kids, one of the most important areas that we often neglect, that we often go along with the flow is our money. Here are 7 steps to really having a great money year, materially and spiritually.
1. Reflect on what money means to you - a chance to buy new doodads, or security - a feeling that all is ok, or a chance to buy a new house or send your kids to college. There really is no right or wrong answer. This is just a benchmark to see where you are. So you can plan where you want to go.
2. What are your money habits? Do you make a plan and not follow through? Do you not make a plan at all?
3. Sit back and think about how you really want to live materially and spiritually? What would your day be like? What would your future look like? Take 20 minutes to imagine your ideal money life - then write it down. It might be to get out of debt. Or to set aside 15-20 percent in investments. Or go on vacation. Or do what you want and make really good money from your work that you love.
4. Make plans. First, see where your money is. Lay that out and make a lifetime goal. Here are some worthy goals - be debt free except the house - 75% of all ordinary millionaires cite being debt-free as a cornerstone of their wealth status. Retire with $1-2 million in assets. Then make a five or ten year plan - where do you want to be in five or ten years from now. And then lay out a year plan - like saving 15 % of your income. And then automate it. Successful companies have long term goals and short term plans.
5. If you don't know how to do all this or if it seems mystifying, make a plan to get educated. I am not math genius but since I have been in big debt, I know that having a wise money plan will eliminate much of the pain lousy money management brings and having money can bring joy if it's done right (like being in a position to give or send your kids to college). Getting clear money info is a little like choosing a diet. There are a gazillion experts out there all claiming to know what is best. First, look at w