Archive for March 2007

What makes a person willing to manage their money well?

Personal financial counseling is a blast!  I LOVE meeting with people and showing them how Jenn and I were able to start managing our money well instead of having our money manage us.

As I have spoken with hundreds of people on finances, I have been seeking the answer to this question.

"What makes a person willing to manage their money well?"

I use a similar approach for every single financial counseling appointment.  I ensure that I understand where they have been in life and where they are wanting to go.  I make sure I understand how each person feels about their current financial situation.  I assist them in putting together a BUDGET that uses the Magic Formula: INCOME – OUTGO = EXACTLY ZERO.  We work together to calculate their DEBT FREEDOM DATE.   I show them how to use Cash Envelopes for the spending categories that they feel they are most impulsive on (groceries, restaurants, spending money, clothing).

Even with all of this new knowledge, there are still people who will walk right out and continue life making decisions that will rob them of financial freedom.  The will continue to make decisions that will rob them of their ability to win big-time.

Don't get me wrong – MANY people make life-changing alterations to the way they manage money.  The issue is that I am on a crusade to help people with finances, and it hurts to see someone reject a better way and continue on their current path.

So again, the question I am asking is, What makes a person willing to manage their money well?

What made you start to manage your money well?  What key learning happened?  What key tool did you obtain?  What event happened?

Let the discussion begin! 

Money Saving Ideas

More money saving ideas, courtesy …

1.  Gardener? Talk to friends/family about possibly obtaining some bulbs/divisions/corms/tubers of perennials.  Free flowers are awesome!  I have obtained surprise lilies, day lilies, dianthus, coral bells, rudbeckia, iris, and other AWESOME plants for FREE.  I love FREE.  Anyone have any? Smile


2.  Seek out a cash-only, no insurance doctor.  You will pay 1/2 of what you would to a doctor who participates in insurance programs.  Why?  Because a doctor who deals with insurance needs at least two full-time people to chase insurance companies and payments.  You will feel better knowing that you have prepaid your bill, got a better deal, AND did not have to deal with the insurance company.

3.   Buy a used car that is 2 to 4 years old.  Most of the sharp depreciation in value is done by year 3 and when you lay down CASH for the purchase (remember – no debt!) you will get a better deal!  There is something about seeing 100 $100 bills laying down on the hood of a car that makes a car dealer or individual sell a $12,000 car for $10,000.  Try it!

Hey, I used to not negotiate anything, but I was B-R-O-K-E!  No longer!

My Magazine Order with Delta Skymiles

OK OK OK – so the response to my magazine order I wrote about HERE has been funny!

In response to some of the comments/questions, here is the list of magazine subscriptions I ordered.

On a personal note, I am anxiously awaiting my first issues of "Teen Vogue", "Diabetes Forecast", and "Glamour".

While I was reading "Details" and "Lucky" magazines, I took the scratch-n-sniff perfume/cologne samples and rubbed them all over my head and shirt.  I had at least 15 different varieties of cologne/perfume on me when I was done.  I smelled like a rose.

Jenn was only mildly amused at my behavior …

Financial Counseling

Over the past three months, I have been able to meet with 123 people in 81 different one-on-one financial counseling appointments.

What an amazing quarter!  I have been honored to meet each person and hear their story.

Here are some key things I have learned through these counseling sessions.

  1. Couples who work together on their finances are in better financial condition than couples who do not work together.
  2. People who give faithfully rarely have huge, burdensome financial problems.
  3. People want HELP/HOPE not REPROACH/DISAPPROVAL (they already know that they have a problem!)
  4. Some people will just flat-out refuse to learn.
  5. You have no idea how much debt your neighbor/friend/relative has!
  6. People have big dreams/ideas/plans, but have no idea how much it will cost to accomplish them.
  7. It does not matter how much you make, only how much you give/save/spend.
  8. People pay way too much for insurance.
  9. Car payments are an epidemic.
  10. Saving money is a foreign concept for many people.
  11. Once shown a better way (INCOME – OUTGO = EXACTLY ZERO), most people will immediately switch!
  12. Schools are doing an awful job of teaching money management.
  13. Parents are doing an even worse job of teaching money management.

What have you learned as you have learned to manage your money better?

Free Magazines

While I was updating my address for my Skymiles account at Delta Airlines, I noticed that the miles I had were going to expire in a couple of weeks.

Well, I had tried to use these miles a couple of years ago for a trip for my sister-in-law.  Although seats were available on the plane, Delta would not allow me to use the free ticket on the flight.  They did offer a flight that was two MONTHS later, however.  FRUSTRATING …

Anyway, my miles were due to expire, so I decided to cash them in on a few free magazine subscriptions.  It only takes 300 to 500 miles to get a year's subscription to most magazines.

So I did what anyone with expiring miles would do … I got a subscription to EVERY SINGLE ONE of the the 32 magazines available!

Allure, Daily Variety, Glamour, Details, Latina, …  The list goes on!  The order was placed around Christmas so now all of the magazines are arriving.  In PILES.  Piles and piles of magazines are showing up daily.

I finally got around to looking at a few of the magazines last night.  What a load of JUNK!  I was reminded again of how crazy this world is!  There is a jacket that looks like it was thrown into a trash bin and washed in a septic tank – all for $3,000!  For a mere $1,000, I can buy a purse that looks like it was made from a dog’s hide.

The marketing for some of this stuff is crazy!  Another article mentions in passing that the cost of the meal for three people was $930.  A mortgage payment for a single meal.  It is written to sound cool, but I want to throw up.

I walked away from reading these magazines reminded once again of how the hooks are into the wealthy.

Let me tell you this – just because you have $1,000,000 in the bank does not mean that you are doing well!  If you are making $300,000 per year, a $1,000,000 should be a mere start!  You should have more like $4,000,000!  Are you managing your money well?  Or are you spending it like you’ve got it?

Is excess is OK?  Are $930 meals acceptable?