Archive - Finance

## Guest Post: Trivial Costs Don’t Mean Anything

I had a friend e-mail me some thoughts about money the other day, and I loved it!  With his permission, here are Joe Hall's thoughts …

I started thinking the other day about all the "little" things people daily spend "just a little" money on.  Stuff like soft drinks, Starbucks, cigarettes, vending machine snacks or whatever.  All those things seem "little" because the amount paid for them daily seems "small."

Then I thought about this: what if there was only one day a year you could pay for those things?  (In other words, folks had to buy all their Starbucks, snacks, cigarettes or whatever for the year up-front, in one single payment).  Can you imagine the shock … and maybe even the re-ordering of priorities?

• 1 Coke + 1 Snack from the vending machine at work
• 0.75 + 0.75  = \$1.50 x 5 work days/week = \$7.50 weekly x 50 weeks per work year = \$375 (pay now)
• 1 Starbucks coffee per day; Monday-Friday
• \$4?  x  5 =  \$20 per week x 50 weeks per work year = \$1000 (pay right now)
• Sweet Tea with Lunch
• \$1.50  x  2 lunches per week = \$3  x 52 weeks per year = \$156 (due today)
• Cable TV Service
• \$29.95 month  x  12 months = \$360  (pay right now)

I hope that makes sense … it sure came as a shock and made an impression on me about how easy it is to fritter money away on a daily basis, without realizing how "little" things get Super-Big in a hurry.

Joe's thoughts reminded me of a book I read written by an official "www.JosephSangl.com" Financial Hero – David Bach.   He writes about the "Latte Factor" – the money that we tend to unconsiously spend throughout our day.  He believes  (I agree with him!) that this money would be better directed toward savings, eliminating debt, or investments!

Thanks, Joe, for sharing!

If you have something you want to share, click HERE and send it my way!

## Out Of Sight Expenses

When our daughter was born, I went around telling everyone that my baby cost \$10 because that was all I had to pay out-of-pocket.  That was ten years ago when 100% payment HMO plans were hugely popular.

Have I ever said I used to be broke?

I made ridiculous statements like this because I failed to recognize the out of sight expenses.

While it was true that I paid only \$10 out of pocket for my daughter's birth, I later connected back to reality and discovered that the birth cost substantially more than that.

I failed to recognize the out of sign expense of: payroll deducted health insurance premiums

I had actually paid over \$200 every two weeks for three years with little to no use of the insurance.  I had actually paid more than \$15,000 to the health insurance company for my daughter's birth.

Have you looked lately at your "out of sight" expenses?  What "set it and forget it" expenses are you paying for?

Here are a few that I regularly see:

• Taxes
• Health insurance
• Disability insurance
• Accidental Death and Dismemberment (AD&D)
• Auto insurance
• Home insurance
• Property taxes
• Car payment

Did you know that companies recognize our "set it and forget it" behavior?  They know that most people are not going to pay close attention to these costs, so they use it to their advantage and push through price increases that are largely unnoticed.

Save money by checking out the "Top 5 Ways To Save – Without Selling Anything" section of our Next Steps site.

## Phrases That Americans Like To Hear – So Marketers Use Them

I have been observing advertising a lot lately to see what words marketers are using these days to get their hooks into our wallets.  I know they do a lot of research to find out the "sticky" words that will resonate with a potential customer and move to become a real money paying customer.

Surprise.  They are using words we like to hear.  Here are some of them.

"Save \$20 on purchases of \$50 or more."

• I have never saved money by spending money.  Ever.  I have spent less, but I have never seen my savings account balance go up when I purchased something.

"Save 15% on purchases of \$125 or more."

• Comes complete with an asterisk that says "restrictions apply" (that is a nice GOTCHA!)

• The word "SAVE" has to be the most repeated word in sales …  I guess that it helps us with buyer's remorse.

"\$1 Sale!" or "Dollar Days"

• We apparently like anything that costs a dollar.

"Buy A Linen Grocery Bag – Save The Planet"

• I have saved the planet three times because we now have three of these bags.  Too bad we forget them at home at least half of the time.

I also saw the words "Deals", "Spend Less", "Free Shipping", "Smart Prices", "Easy", and "Budget".

My favorite line I have seen recently is …

Buy a bundle.  Save a bundle.

What words have you seen marketers using lately?  Anything new?

By the way, I like to really save money.  You can save money too – without spending a dime – by visiting the "Budget Boosters" section of I Was Broke. Now I'm Not.'s Next Steps Site HERE.

## It Is Easy To Be Broke

Many of you know that I write a weekly column for the Sunday newspaper (I would love for it to be in YOUR Sunday newspaper as well).

Recently, I wrote a fun article called, "It Is Easy To Be Broke".  Here it is …

As I walk through bookstores or browse Amazon.com for new book titles, I realize that a lot of the offerings are how-to and self-help books.

There are titles such as “How To Build A House,” “How To Be Happy,” and “How To Be Physically Fit.” I am sure that these books are extremely helpful, and I have purchased several of them. They have been beneficial to me.

I was wondering recently how come no one has written a book titled “How To Be Fat.” There could be a chapter on eating at fast-food restaurants for three meals a day followed by a chapter focused on sitting on a couch eating lipids of various forms. It would be easy to write.

The same is true for finances. I have been thinking about writing the book “How To Be Broke.” I believe it could be a best-seller. I would write a chapter about how important it is to splurge and give in to impulse spending. Another chapter would focus on how not working really helps one be broke. The final chapter would direct the reader to say yes to every single demand from one’s children.

Sounds ridiculous, right? The reason no one has written these books is because it is easy to be fat. It is easy to be out of shape. It is easy to be broke. What is the common theme to every one of these issues? Lack of discipline.

Because I know you are interested in how to be broke, let me share some key tips.

Never have a plan for your money. Planning is difficult and takes time. Who has time for boring and distasteful things like budgeting when there are so many other things we can do?

Never ask for a deal. Always pay retail. It is difficult and uncomfortable to ask for a better deal. Plus it takes time to comparison shop.

Always purchase a new car with 100 percent financing (or more). That way you can not only watch the car drop in value like a rock, but you can also make monthly payments for the next four to seven years.

Do not go to work. Work is not fun, and it requires effort. It also takes a lot of time, and it has its share of frustrations. Who needs that?

If you want to be broke, do not carry health insurance. It is so expensive, and the doctors charge too much anyhow. Plus you have never been sick, so it would be a waste of money. Ignore the fact that more than half of the bankruptcies in America are a direct result of medical bills incurred without sufficient health insurance.

That was fun! I think I may write the book.

You can read more of my articles HERE.

## Miracle Has A Picture!

I announced last month (HERE) that Jenn and I were SHOCKED, STUNNED, and AMAZED to learn that we were expecting a second child.  This child is truly a miracle.

We went to the doctor today, and now we officially have a due date of February 6, 2010!

Junior is 1.32 inches long and was moving his head, both arms, and both legs.  All of which caused his/her big sister to comment, "I think he has a radio in there!"

Below is a picture of our miracle.

## California Tax Refund IOUs

Jonathan (over at MyMoneyBlog.com) has posted a picture of his California tax refund IOU.

I had heard that California was unable to pay its citizens their tax refunds, but I had not seen an actual copy of the IOU.

Can you imagine a scenario where …

• You overpaid your taxes …
• You filed your tax return on time …
• Your state says, "OOPS!  We spent all of that, you can't have it back for at least six months!"?

Let's see how this would work in reverse where you underpaid your taxes and you owe money to the state …

• You underpaid your taxes …
• You filed your tax return on time …
• You sent the state an IOU saying, "OOPS!  I spent all of tha, you can't have it for at least six months!"

I do see that California is paying 3.75% interest which should allow the certificates to keep up with inflation.  I wonder if the interest is taxable?

Yet another reason to NOT overpay taxes.

## Michael Jackson Had A Will – Do You?

Michael Jackson had a will.  Do you?

Statistics show that over 60% of parents with minor children do not have a written will.

If you do not have a written will, the government will decide who gets what.  Even more importantly, the government will decide who will raise the children.

That is unacceptable to me.  That is why I have a written will!

You can get a written will for around a \$100 or less using an on-line service.  In fact, a written will is one of the Top 5 Things People Lack In Their Financial Plan.

Seriously.  If you do not have a written will, do not hesitate one more minute.  Make an appointment with a local attorney or prepare one on-line TODAY.

## Blogs and Websites I Read EVERY. SINGLE. DAY.

I love the "tabs" feature that Firefox (and now Explorer and every other browser) has.  Tabs allow me to have more than one "home page" for my internet browser.  This allows me to have a routine of reading websites I want to make sure I read on a consistent basis.

Here is a list of the finance web pages I read every single day:

• CNN Money  This is where I obtain a lot of excellent information regarding legislative changes that impact personal finances.  I also like the regular features on "Millionaires In The Making"
• My Money Blog  Jonathan writes excellent detailed blog posts that relate to how he is using his cash to fund his short-term and long-term dreams.
• Lazy Man and Money  The Lazy Man writes about personal finances as well as how to earn money on the internet.
• Saving Freak  This guy is a FREAK when it comes to saving money, and if you read his blog you will find out how to save a ton of money also!

Those are the four personal finance web sites I read every single day.  Which ones should I add to my list?

## Free Financial Counseling For Pastors

I am passionate about helping become financially free.

Here is something I have discovered as I speak to people throughout the nation.  Many pastors are struggling with their own finances.

This leads to many issues, and here are some of them:

• Fear.  Scared to talk about money because they are intimidated by their own financial situation.
• Hypocrisy.  Teaching on the Parable of the Talents while mismanaging their own money.
• Loss of call.  When one is perpetually broke, it is hard to stay committed to one's call.
• Stuff-itis.  When a person is broke, it is easy to fall into the trap of believing that some "stuff" will satisfy and make things better.  It is a lie, and the pursuit of "stuff" can easily tear one from their true calling.

Maybe you can add more, but here is the deal.  I believe that Christ-followers should manage their finances according to God's Word.  You can call me crazy, but I believe that the leadership (pastors and staff) should MODEL this.  Pastors should not be highly leveraged in debt and trapped in stuff-itis.

And here is the key:  It does not have to be that way!

If you are a pastor who is struggling with your finances, we want to help you.  My team is available to provide FREE confidential one-on-one financial counseling for you.  We provide this service on-line, and it works.  We are not going to sell you anything.

Of course, our time is limited, so we only want to counsel pastors who are COMMITTED to making a change in their finances.  Your commitment is to participate in at least three consecutive monthly sessions.  The first session will last 1.5 hours.  The following sessions will last less than one hour.  Your commitment is also to have your spouse participate in all meetings.

If you need help, and you do not know where to turn.  We are here to help you.  If this is you, click HERE and request counseling.

Tell us the following information:

• Your name (and spouse's name)
• Location
• Why you feel that you would benefit from financial counseling
• Your commitment to the process

We have been counseling pastors for the past three years, and the results have been AWESOME!

## How To NOT Save Money

There are so many "How To" manuals, lists, books, and articles.  I have written many myself, but today I want to write a "How To Not" list about saving money.

How To NOT Save Money

• Take all of your spending money with you to the store
• Fail to prepare a spending plan BEFORE the money is actually spent
• Always pay retail price
• Buy it as soon as you see it – always give in to impulsive decision-making
• Always buy things brand new
• Buy expensive items that depreciate in value (cars, boats, Ty Beanie Babies, etc)
• Buy more items than one can possibly use "because they were cheap"
• Eat at restaurants for at least two meals every day
• Never ask for a better deal on insurance or have insurance policies at multiple companies

Any that you want to add?

## 1,000 Posts

Yesterday's post was the 1,000th post on the website.

I remember when I first started the blog back in January 2006 that I was so excited about the opportunity to think out loud about personal finances.  I knew that I would use those writings to begin a book.

I have seen a lot of people burn out on blogs over the three years because of "lack of something to say" or "no time" or "Twitter".  All of these were valid reasons for them, but I am three years into this thing and have even more stuff to write about!  I am PUMPED and FIRED UP about what is going on with this crusade, and I can not WAIT to see what happens next!

Thanks for being a loyal reader of JosephSangl.com.  It is my hope that the content shared on this page and the Next Steps page is helping you become the best manager possible of the money you have and will receive.

So, let's throw a little celebration, shall we?  Since you all are the reason we have been able to teach and speak to tens of thousands over the past three years, I want to give away some resources.

We will be giving away copies of I Was Broke. Now I'm Not. and it's related I Was Broke. Now I'm Not.Group Study Guide .

Here's how this 1,000th Post Celebration work.  I want you to give the resources away to someone else.  Send my team a note using THIS LINK HERE telling us who you want to give these materials to AND tell us WHY you want them to receive the materials.  The first five people that send in their gift recipient AND tell us WHY they chose them will win.

You have just read post number 1,001.  We will be celebrating post number 2,000 before you know it!

## Newspaper Article – “Money Help”

Many of you may not know that I write a Sunday article for the business section of our local newspaper, the Anderson Independent-Mail.

The article I wrote this week was focused on small businesses and how important it is to keep business accounts separate from personal accounts.

You can read that article (and nearly a hundred others) HERE.

I would love to expand this article to other newspapers.  If you have a newspaper that you feel would benefit from a weekly business columnist, you can have them contact me HERE.

## Small Business Class – June 3, 2009

I am PUMPED about teaching the next installment of our small business class at the Anderson Area Chamber of Commerce. It will be held at the chamber on June 3 from 8:30AM – 10:30AM.

Topic of this session?

Understanding the Financial Impact of Business Decisions

- Using income statements and pro forma income statements to make business decisions

I have utilized income statements to evaluate the current state of my business as well as to investigate the potential impact of future business decisions.

The goal of this class is to explain what income statements are and then review PRACTICAL examples of how income statements have been used to make business decisions using pro forma income statements.

If you have ever asked yourself one or more of the below questions, you should attend this class:

• How much money did we make last month (quarter, year, etc)?
• If I purchase this new equipment, will it be worth the investment?
• If I change location, what is the potential impact on my business?
• If I acquire this business, what will my financials look like?
• If I sell this line of business, what will the impact be on the remaining business?
• If I open an additional store, what are the "must have" costs?  And can we afford it?

I LOVE talking business, and I hope to see you there!

## Credit Card Law Changes

President Obama recently signed into law several new changes to credit card lending.

Here are some things that stand out to me:

• 80% of American households have a credit card – Half of those carry a balance
• "Some get in over their heads by not using their heads." – President Obama
• People under 21 won't be able to obtain a credit card without a job or a co-signer
• Customer must be over 60 days late before rates can be increased on existing balances
• Consumers must receive a 45 day notice and explanation before interest rates can be increased
• There are more than 700 million credit cards in circulation in the United States – more than two cards for every man, woman, and child