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Posts Tagged ‘Personal responsibility’

If you save it, then you choose how to spend it!

Friday, March 12th, 2010

Today’s article is titled Spending a school fund on CNNMoney.com.  It brings to question a subject that many of us either don’t think will ever happen, or, at least we hope it won’t!  The question?  What happens when your child decides not to go to college, and you’ve saved lots of money in an ESA, 529 or other savings account for them to use on that schooling?  Worse, what happens when you have 2 children, and 1 of them used the college fund, and the other decides against school and says you should just give them the money?  I bet you can guess my answer!

If the child decides not to go to school, there will be penalties in an ESA or 529 account that isn’t used for schooling, so you can just kiss some of that money goodbye.  Now, this isn’t a totally terrible thing, since had you not saved it for education, the money would’ve been taxed anyway, but I’m sure it will still sting a little.  I don’t have a huge problem with a child that decides not to go to school, financially anyway, because it’s not impacting your budget, only (possibly) their future. 

My problem, as I’m sure our regular readers know, is with the child who asks for (demands?) the money you saved for their education, to be paid out to them in cash, since you paid for their siblings education.  In spite of what your child seems to think, your money is NOT their money.  I know that you want to be fair with your 2 children, but this money was set aside for their education, not for their amusement.  It’s your money, and if the child decides not to go to school, it should STAY your money!  Like the article says, if the child wants money, tell them to get a job! 

Spoiled children and silly parenting.

Wednesday, March 3rd, 2010

One of my best friends shared a story with me the other day that I felt compelled to share with our readers today.  She was at her salon, getting a haircut, when a mother came in with her 5 year old daughter for a manicure.  Big deal, you might say, until I tell you that the manicure was for the daughter, and while she was there, she also purchased the 5 year old a spa package!  What silliness!  What 5 year old child needs a manicure, much less a spa package!  Does she need a massage after having such a hard day?  A facial, to get rid of all those blemishes and wrinkles?  Seriously, what possible reason could a child need a spa package?  There isn’t a good reason.  This is simply an example of a mother being overly indulgent and not realizing the damage that that kind of parenting can cause. 

Instant gratification is having a lack of impulse control, and, conversely, delayed gratification  is having the ability to wait for something you want (i.e. willpower or impulse control).  In our society we tend to think of children as having no impulse control, and learning this ability as they get older and become an adult.  Well, what happens when the child isn’t taught impulse control, and grows up with the same attitudes they had as a child?  We think that these children grow up to be the people who struggle with any vices that require willpower/impulse control, such as spending money and overeating etc.  These people still have the “I want it now” attitude, and whatever “it” is, they don’t deny themselves the treat, because they “deserve” it.  Can you imagine what the little girl with the spa package at age 5 will act like as an adult if she  doesn’t learn to have self control (which is not likely to be learned from her mother, I’m sorry to say)?  So, what’s the good news?  If you struggle with impulse control, you can learn it as an adult.  You just have to take each instance where you need willpower and ask yourself why you need the item now, and if it’s worth it.  It’s not easy.  You will fail on occasion.  But every time you don’t fail, that’s one step closer to mastering the skill!

Delayed gratification is one of the biggest tricks up the sleeves of people who succeed.  They know how to wait for what they want.  Knowing this, as a parent, make sure you teach your child how to have willpower, and as an adult (who lacks willpower), decide that you aren’t going to fall victim to your childhood whims of instant gratification and help yourself succeed!

Your bank and overdraft protection…

Friday, February 26th, 2010

Today’s article, Banks use scare tactics to get you to sign up for overdraft protection, addresses the new bank overdraft “protection” law that basically says that you have to voluntarily sign up for the overdraft protection to let your bank keep processing your debit card transactions even after you run out of money.  As far as I’m concerned, at $35 per transaction, overdraft protection is no service to it’s customers, and certainly shouldn’t be anything someone would voluntarily sign up for!

Now, I’m sure you can tell from above, we believe if you can’t keep a minimum amount in your bank account, or can’t keep from overspending because you aren’t diligent, then you shouldn’t have a bank account, and should operate on a cash only (money orders to pay bills) system.  However, if you choose to have  a bank account, and struggle to keep funds in it, then use the other services that many banks offer, that don’t come attached to a ~$35 fee PER TRANSACTION! 

The scary stuff you get in the mail from the bank, that says your debit card will stop working and the like is true, because OF COURSE it should stop paying people if you don’t have any money in your account!  That is the way it is supposed to work!  The card is not supposed to let you spend more than you have!  Overdraft “protection” is like you receiving a mini loan from the bank…kind of like those payday check cashing places, but wrapped in a prettier sounding name.  Ignore these letters from the bank!  You don’t want to keep paying $35 a transaction loan fees for the rest of your life!  DO NOT opt in to this plan, just learn to watch your account and don’t over spend. 

If you absolutely CANNOT LIVE without overdraft and refuse to be on cash only (hard headed, aren’t you??), then there are a couple of alternatives.  Many banks will allow you to link your checking account to your savings account to prevent overdrafts.  Some will also link it to a line of credit (not something we recommend) to prevent these overdrafts from happening.  Neither of these programs are free, but they are cheaper than overdraft, and won’t catch you off guard either, because, let’s face it, if you don’t have the money to cover your purchase, you definitely don’t have the money to cover your $35 a transaction overdraft “protection”.

If or when you start receiving these notices from your bank, do yourself a favor, and “just say no” to overdraft protection…instead, be more diligent with your account, or switch to cash!

Why spending today costs more than you think…

Friday, February 19th, 2010

Once again we look to Dan Miller and his 48 days blog (visit the links section of our website for more info on Dan Miller) for an interesting article.  Today’s article, Look rich-die broke was inspired by a sign in front of a car accessories shop in Florida that read: “Rent your wheels and tires here”.

Like furniture rental places, you can apparently also rent the rims you’ve been dying to have for your car as well, that way, you can look cool, and rich, even if you’re broke.  Dan Miller has a knack for talking about topics that are important to me, and there are few things that get my blood boiling more than people who spend themselves into debt chasing status.  He highlights the new book from Thomas Stanley, author of The Millionaire Next Door and The Millionaire Mind, both of which are excellent books (I will be buying and reading this newest addition to his works).  This new book highlights some of the habits of the truly rich (as opposed to those who only appear rich), which, in general, does not include renting your rims. 

Read the post, and go buy (or check out from your local library) Thomas Stanley’s newest book, Stop Acting Rich.  Let’s all begin to be open minded to the idea that having fancy things (for status) and spending obscene amounts of money on weddings and “McMansions” are not the real way for the average person to become wealthy.  Once you stop believing you are going to simply luck into a fortune, or become famous and rich out of the blue, you can focus on becoming rich the way most people do…through saving, working hard, and striving to be the best at their passion so they can advance themselves in that particular field over the years.

Obsession with Hollywood not good for the pocketbook…

Wednesday, February 17th, 2010

Personal confession: I love reading fashion magazines.  I like to see what trends are out there, to know what the best beauty tricks and products are etc.  Unfortunately, part of that world is the celebrity.  Magazines put them on their covers, they include their opinions on everything from decorating to politics (yes, because acting in action movies with big budgets qualifies you more than the average person to decide what’s wrong with this country) and they make them larger than life.  Now, as much as I love looking at the pictures and reading the articles, I can’t stand the obsession with Hollywood and being famous.

What do I do with my fashion knowledge??  I use it to shop for bargains at retail stores that aren’t going to break the bank.  Some people, however, think that they have to have what’s in the magazine, and what the stars are wearing, and they blow through their credit card limits barely noticing as they chase the current trends.  These poor people would rather be in debt than off trend or insignificant.  They chase celebrity status and think they are entitled to the best things in life.  I feel very bad for these people, because they don’t understand the damage that they’re doing to their lives, all in the pursuit of fame and appearances.  Do a google search for how to become famous, get 80 million results…search for how many people become famous, and get no relevant or accurate results.  For many people, this is an obsession, and it will cause them a lot of heartache throughout the years if they don’t change.

So, what are a couple of ways to turn the negatives of obsessing over fame and status into a positive?  Well, deciding to become the best at what you do, even if it means you’re not famous or on TV, is a good start.  That way, you’re pouring your energy and ambition into something that is likely to help you secure a decent lifestyle and a comfortable retirement in the future, and you’re not distracted by what is not likely to happen.  Also, challenge yourself to either save everything you were spending on those expensive lifestyle goods, or challenge yourself to find the absolute best price on them.  You’d be surprised at how much money you can save, if you just stop paying attention to the designer label!  

Remember, being an adult isn’t about age…it’s about character, attitude and actions…don’t let your actions reveal you to be a child, only out to get attention and the latest, coolest toys.

Today, we have a “guest speaker”…

Wednesday, February 3rd, 2010

Today, we have an article written by a friend and business associate.  It isn’t exactly in our normal scope of what we write about, but for those of you thinking of starting your own business so that you can earn extra income and get yourself out of debt, this is for you:

Small Business Tips, By Douglas C. Howard

A Message to Employees

As a small business owner, one of the hardest aspects of running a business is finding the time to do it yourself, or be willing to delegate the task to someone else.  The first course of action provides the benefit of knowing that the task was done specifically how you, the owner, wanted it done, in a timely fashion, and you do not have anyone to blame for failure except yourself.  Delegation, of course, means that you may benefit from someone else’s expertise, frees you for other important tasks, and allows your employees the chance to prove themselves.

Of course, the pitfalls for the first course of action, are that you do not have enough time to do everything, you must find some way to balance running your business with your life, and you may not be the best person to handle that specific task.  The downside to delegation is that you have to trust someone to take care of the task, they may not do it exactly how you would have or would have wanted it done, and they may not do it in a timely fashion.

“A Message to Garcia” is a short essay by Elbert Hubbard written in 1899.  No doubt many of you have already read and studied its message, being that of a short work.  But its message is still relevant today, more so than ever.  I recently ran across it and thought a brief summary of the work would be great as “A Message to Employees”.

“A Message to Garcia” is set during the conflict between Spain and the United States and takes place in Cuba.  Of course at that time, communication had to take place in person or via courier, if telegraph were unavailable.  The essay centers on an Army Lieutenant by the name of Andrew Rowan.  General Garcia was the commanding officer of insurgents located in Cuba.  He was located somewhere in the mountainous region of Cuba and would be difficult to find and communicate with.  A message had to be gotten to him so that his forces could be mustered.  How was a message to be gotten to Garcia?  President William McKinley and other commanding generals were unsure, until Lt. Rowan was suggested, stating that he was the person for the job, “if anyone can.” 

Rowan was summoned, given the message, told the general location of Garcia, and was sent off on his way.  He was not told how to do the job, or how to find Garcia, nor did he ask.  He was simply delivered to Cuba on one side of the island, and three weeks later picked up on the other side of the island, having completed his task.

So I ask employees, “Are you the Rowan of your company?” 

If you strive to be the Rowan of the company you work for, here are some general tips.

First, be available for assignments, any assignment, without hesitation.  The owner of the company or your direct supervisor may not want to ask you do something that may seem so menial, but if it is a project that they can get off of the “to-do” list, it may help them immensely.  If you are adaptable to whatever task is at hand, you will become indispensable to your company.

Second, be reliable.  If your boss asks you to get something done in a timely manner, have it done by that deadline.  Often other deadlines must be met down the line, so do not be the weak link.

Third, ask for guidance on the task, but figure out how to get it done on your own.  This is a fine line to walk, but the more you can do on your own, the more burden you relieve from your superior.  The more burden you relieve, the more grateful your superior will be.

Fourth, take action.  So often people get bogged down in the details that they become apoplectic and unable to even start a project.  Often times procrastination prevents even the first step from being taken, which is most often the hardest step to take.  As I write this, I have had to stave off turning on the television, checking my email, researching other issues not relevant to this article at hand, getting up to grab lunch, and a hundred other minuscule thoughts that crossed my mind to prevent me from writing this article.

Fifth, be diligent.  After taking the first step, be diligent in taking the next several steps.  Eventually you will come out on the other side.  See the preceding paragraph for an explanation.  Whether it takes an hour or three weeks, staying on task, will eventually get it done.  And it will show your employer that you do not need constant hand-holding or someone looking over your shoulder to make sure that you are getting your work done.

I hope this is helpful.  Since “A Message to Garcia” is short, it is well worth the read.  It is considered public domain and a copy of the complete text can be found at HowardLawGroup.com on the “Small Biz Tips” page.

Douglas C. Howard is an attorney based in Frankfort, Kentucky that assists small businesses with their legal needs and has taught “Entrepreneurship 101″ for the Thornhill Community Education Center and posts tweets and other updates on Twitter under his Twitter name, LegalPreneur.

From Wikipedia:  Elbert Hubbard was an author and philosophers who edited and published two magazines, The Philistine and The Fra. The Philistine was bound in brown butcher paper and full of satire and whimsy. (Hubbard himself quipped that the cover was butcher paper because “There is meat inside.”)  Owing to his prolific publications, Hubbard was a renowned figure in his day.

Taking on too much & treating yourself…

Monday, February 1st, 2010

Okay, so what happens when you decide that you want to lock down your finances, follow a budget and get out of debt.  We know that getting out of debt can be a boring and tiring experience, but you can take some precautions to guard against that. 

First of all, stick to your budget, but allow yourself a little indulgence on rare occasion.  Why?  Well, it’s my opinion that everyone only has so much willpower to give to something, and eventually they will break and indulge anyway, so little indulgences keep away the big ones.  So, what types of indulgences are little?  Well, when you’ve got your finances locked down, and you’re buying basic needs only when it comes to groceries, TV and movies/shows etc., on occasion it wouldn’t hurt to buy a nice meal from the grocery.  Make that a special family night with a nice meal and some board games or something.  Or, you could save a couple of bucks every week out of your grocery budget to take the family to the movies or some other inexpensive activity.  Your choice!  The point is to indulge occasionally to keep you focused and on task, without blowing through your budget.  If you never treat yourself, you might fall off the wagon.  Notice to those of you who are “used to” treating yourselves…this does not mean you can do your normal “treating”…no mani/pedi’s, or blowouts, or daily cupcake from the specialty $10 a cupcake store, or expensive clothes/shoes/tools.  This is a small indulgence.  A $20 pick me up a couple of times a month.  If you can’t stick to that, you’ll never get out of debt.  And no, you don’t “deserve” those mani/pedi’s, because they are what got you into debt in the first place! 

Trying to do 2 or more hard things, like getting out of debt and quitting smoking (for example) at the same time, means even more added stress to your willpower.  You have to give a little slack and indulge yourself  while getting out of debt, because the alternative,in this example, is indulging in smoking.  Not cool.  And indulging a little there would save you money anyway, since once you quit smoking, you would have a ton of cash to put toward paying down your debt!

What’s the take away?  Get on a budget.  Pay off your debt.  Learn to live like an adult who doesn’t get everything they want every time they want it.  But stay on this path for the long haul by making the occasional small ticket splurge!

Oh, the insanity!

Friday, January 22nd, 2010

Just when you think you’ve seen all the silly things you can on the Internet, you run across something that makes you CRACK UP LAUGHING!  Such it today’s article, 9 reasons to love credit cards, by Liz  Pulliam Weston.  As the title might indicate to you, our readers, I’m not a fan…and that’s putting it lightly! 

The article is a little lengthy, but it’s worth the read, if only so you can laugh at it as you read.  Here are some highlights:

  • Arbitration – The author says that credit card arbitration is a fabulous feature.  Well, when I used credit cards, I never had to use this feature, even when I had problems with stores.  Also, opinions are split as to whether arbitration is good or bad.  This article says the consumer doesn’t usually come out on the winning end. 
  • Automatic bill payment – Obviously, you can set up your bills to be paid from your account.  So?  You can do that with a debit card as well, which comes from YOUR money, not borrowed money. 
  • Bulwark against identity theft – The author points out that credit card companies have laws in place to make sure they don’t charge you for fraudulent charges, after a $50 fee, within 60 days.  This is true.  However, debit cards have systems in place as well.  Within 2 days, it’s a $50 fee and a $500 fee up to 60 days.  Most banks voluntarily choose to extend the $50 fee to 60 days, and not charge $500.  So again, it’s a wash.
  • Credit Improvement – I wish people would quit focusing on “improving your credit score through credit cards!  Having cash to pay for things makes credit cards pointless, doesn’t it?  Which makes your credit score less important.  Yes, you might need it to buy a house, but if you put at least 10% to 20% down when you buy the house, and have a good income, I doubt they will pay close attention to your credit score.
  • Extended Warranties – These things are a waste of money most of the time anyway, so tauting them as an advantage doesn’t really make sense.  Period.
  • Interest Free Loans – Well, interest free loans don’t matter if you pay for what you want with cash!  If you don’t have the money for it, don’t buy it.  Want money for “emergencies”??  That’s why you have an emergency fund!
  • Purchase Protection - Some cards pay to fix or replace items broken that you paid for with a credit card.  They don’t do it out of the kindness of their hearts.  You, and others, are probably paying for it, you just might not know you are.
  • Rental Car Coverage – Your auto insurance covers this.  So, why do you need more?  A silly advantage, considering auto insurance is mandatory, and credit cards are not!
  • Rewards, Rewards, Rewards- Yes, some cards offer rewards, but that only encourages you to use them more!  Also, unless you stay in hotels a lot, fly a lot or whatever else they offer “points” for, the points are not useful.  Other rewards are usually not worth it, or are something that you could have bought outright, and saved on interest if you carried a balance.  I do know 1 person who got use out of their points, but it was her business credit card.  In general, not worth it!

My favorite quote from the article:  “I get all these goodies largely because so many other folks play the credit card game so badly.  The profits they generate for the credit card issuers essentially pay for my freebies.”  So, she plays the “game” well, and you pay for her rewards and benefits.  Why not just get out of the game?  Use debit cards or cash.  You’ll save more money in the long run!

Why men should (but don’t) ask for directions…

Wednesday, January 20th, 2010

Jerrill had a very interesting point this week, and we wanted to share it with our readers.  It’s not that people don’t know this, at least at some level, it’s just that we either forget it, or don’t want to swallow our pride and undertake it…the “it”, is asking for directions.

There are very few people out there who can make intuitive leaps of greater understanding out of scarce information.   You know, the people who excel in an area in spite of all surroundings and obstacles.  These are the “genius janitors” out there, solving quantum physics equations on their lunch breaks.   They are the jungle explorers who can successfully navigate to the other side, safe from animals and disease. These are the people that make/invent the things that push civilization forward.  People like Leonardo da Vinci and Nicola Tesla.  For the rest of us mere mortals, gleaning a deep understanding of something takes work and time.   Time we don’t generally have.  Another problem?  Many of us have too much pride to ask those individuals that already have the knowledge we need to share it with us.   It’s hard for us to make progress as individuals, much less move forward and take a bunch of people with us. You know who you are!   You are the man that refuses to ask for directions and gets lost, because navigating from point A to point B seemed like such an easy task at the beginning of the road trip (Thank goodness for GPS!).  You are the person out there quietly struggling to pay the bills and building up a savings account because you were never taught how in school and never sought out the advice of someone who has it all figured out.   You know how your favorite southern couple feels about that!  Swallow that pride!  Find somebody who is “smarter” than you and ask them to share their knowledge.   Odds are, they will happily do so, and you won’t have to reinvent the wheel.   Find someone who is already doing what you want to do yourself, be it find that boutique or thrift store across town, balance that budget, or solve that physics equation! 

You don’t have to go through life without help.  Nobody does.  There are scads of things out there to help you along, some are free and some aren’t, but they are all there for you.  But you have to take the first step.  You have to ask for help, before it is given to you!

Why the mall contradicts the experts…

Wednesday, January 13th, 2010

I drive by our local mall often, and for the past several months, I’ve been watching it for signs of the recession, unemployment, and how bad the economy is suffering.  Now, as much as I believe that there are places all throughout the country that are truly suffering, with debt, falling home prices and unemployment, I have to say, it’s not happening with the same fury everywhere, the way the media would have you think.

I hate to see people suffer, and those people that have lost their jobs are in my prayers.  However, the falling home prices are only an immediate concern if you are trying to sell your house and/or have lost your job.  If you have a stable income and are contented in your home, staying there for a few years (decade, maybe?) isn’t a big deal, so neither is the drop in value.  Debt, is, as always, a major concern for us.  If you are employed, you should be making a budget, sticking to it, funding your emergency fund and getting out of debt.  If you are unemployed, then you are in an income crisis, and that should be your main concern…along with food, shelter (that doesn’t mean a “McMansion”) and basic utilities (i.e. lights, water and heat).  You can’t focus on paying people back what you owe until you get stability back in your life, so put them on hold, even if it takes a few months. 

I would like to make a point for our readers though: with roughly 10% unemployment, that means that 10 people out of 100 are out of work, which is the same as saying 90 people of 100 are employed…it’s terrible for those 10 people, but overall, it’s not a catastrophe.  And those 90 out of 100?  They are shopping!  Maybe less often than before, and they might be spending less than before, but they are shopping…at least, that’s the way it looks EVERY time I drive past/go to the mall.  The place is packed!  As usual, I can’t find parking there, and the Christmas season was just as bad as usual.  Now, like I said, I know this isn’t the case everywhere, but the media’s version that everyone everywhere is suffering terribly, in houses they can’t afford, without jobs and piling up debt.  This isn’t true either.  The truth, as usual, is probably somewhere in the middle.  Some are suffering, some aren’t.  If you are suffering, I wish you luck and speed in your job searches and in getting out of debt, and if your job and home life are stable and “secure”, work hard to keep it that way, and help those who need it, either with prayer, food donations or job contacts (etc.).