Spring Clean Your Way to Extra Money

As you know, today is the first day of Spring and if you have had a winter like I have, you couldn’t be more excited.  With the change of seasons and the beginning of warmer and longer days, there is no better time than right now to do a little spring cleaning and make yourself a little extra dough in the process.  Below are some great examples of how you can spring clean your way to extra money:

  • Literally spring clean – By spring cleaning your house and organizing your closets, you are sure to find many items that you are no longer using – items that you can sell.  If you have just a bunch of odds and ends, have a garage sale or two in order to get rid of your treasures.  If you have more expensive items, list them on eBay or Craigslist.  Either way, stop holding onto items that you are no longer using and let your “trash” be someone else’s “treasure”.
  • Spring clean your expenses – This is a great time of year to spring clean your expenses.  Look at your budget and reduce every item that you can.  And never be afraid to shop around or ask for a discount.  The worst thing that will happen is that they will say no, but you won’t know until you ask.  I recently reduced my monthly expenses by $60 just by making 2 phone calls and receiving loyalty discounts.
  • Check your taxes – We are only a few weeks away from April 15th and many of you are receiving or have already received tax refunds.  A tax refund is simply your money that the government has been holding for you.  Stop letting them keep your money and start taking your money home with you every month.  For example, if you received a refund of $2500, you overpaid $200 a month to the government that you could have brought home.  Use the withholding calculator on the IRS website to determine what your true deduction should be, adjust your W-4 with your employer accordingly and start keeping your money.
  • Learn to enjoy free – During the winter it is harder to find inexpensive or free things to do with your spouse or your kids.  But now is a great time to begin to take advantage of the weather – whether it is going to the park, bicycling, having a picnic, or any of the other great things that the outside offers.  Spending money isn’t the only way to enjoy life and this time of year is the best time of year for that.

These are just a few of the many ways that you can make a little extra money this spring.  I hope you find these suggestions helpful and I hope everyone has a happy first day of Spring!

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What Do You Know?

I have always loved the quote from Maya Angelou – “When we know better, we do better.”  This had significance in my life because for so many years I didn’t have the knowledge that I needed to succeed in the area of money.  I knew I was supposed to save and I knew certain things, but I didn’t have a deep knowledge of how to win with money.  I wish I knew then what I know now.

But for many of us, just because we know better, doesn’t mean we do better.  I teach people everyday, people read my books everyday, other teachers bring forth knowledge everyday through radio, television and other sources.  Yet our personal finances are a disaster.  Only a very low percentage of people in this country actually have money in savings and even fewer are saving for their future (retirement).  But we know, don’t we?  We know that we are supposed to live on less than we make, we know that we are supposed to save and invest, we mathematically know that debt is just throwing money away, yet we continue to do it.

Why?  Why is it in the area of money that we know better but yet we do not do better?  Simple – personal finance is 90% emotion and 10% math.  You see, the knowledge is only 10% of the formula.  It is the 90% that we have to get under control if we are ever going to have money.  That is the knowledge that I have today that I am most proud of and that is why my latest book “The ABC’s of Personal Finance” is my favorite.  Because it addresses the 90% as well as the 10%.  I still struggle with the 90% – it will never go away – but knowing that it exists, knowing what the big monster is that I have to slay, helps me to fight it everyday and win in the end.  Yes, my emotions still get the best of me, more than I am happy with, but knowing makes me stronger to fight the daily battle of emotions with my money.

If you feel like you are not winning in the area of your money, maybe this knowledge is what you are missing.  Maybe you need to start doing what you know and not what you feel.  Is living paycheck to paycheck making you happy?  Is that huge mortgage or car payment bringing you joy?  You shouldn’t work as hard as you work and be miserable.  Here is one more kernel of knowledge for you today – the 80-10-10 rule – give 10%, save 10% and live on 80%.  Using this formula, you will always have money.  Start there – start somewhere – you do know better – you just need to start doing what you know.

Mind Your Own Business

This sounds harsh when someone says it to us, but it can actually be sound advice.  Minding your own business can effect all areas of your life in a positive way including your finances.  One of the reasons you may not be seeing the success that you would like to see in your finances may just be that you have your hand in other business and not your own.

When we are not happy with our lives, we have a tendency to peer into other people’s lives, sometimes secretly hoping that they are having a worse time than we are and that somehow this knowledge will make us feel better.  But this is just a temporary feeling.  Eventually, our own reality pops up again and you either have to face it or stick your nose somewhere and hope for that small feeling again.  It is a vicious cycle that gets you nowhere in the long run.

The best thing that you can do for your happiness, your finances, your marriage, your relationships, your job and your life is to mind your own business and focus on you.  And if you turn your story into a happy one then you won’t need that “feeling fix” you get when you are in someone else’s business.  And let’s be truthful, we don’t like it so much when other people are in our business, do we?

And parents, this goes for our adult children also.  I am the mother of  five children and four of them are grown and own their own.  It is very easy to always want to know everything they are doing so you can make sure they are doing it “right”.  But the truth is, they have to decide what is right for them and when they make mistakes, they have to learn.  And as a parent, it is very hard to sit back and watch sometimes, but it really isn’t any of our business.  We are the author of our story and our story only.  Everyone else is the author of their stories and we need to respect that.

You can’t run away from your problems by sticking your nose into someone else’s.  You will still have your problems and now be burdened with the knowledge of someone else’s as well.  Focus on you – focus on your life – focus on your story.  When you focus on one thing and focus well, that is the thing that you will have success in.  So focus on your life (marriage, finances, job, raising great adults, health, etc.) and see great positive changes happen.  I guarantee it!!

The Sparklers of July 4th

Next week is the week of July 4th, the day we here in America celebrate our independence.  And for many, like myself, it is a time of vacation and family.  One of my favorite things about this time of year, besides my freedom, are the firework shows that go on all around us all week.  I love to watch them shoot up into the sky and explode into pretty colors.  My favorite is always the end when a lot go up at one time and make a beautiful display.  The thing I hate most about firework shows are how short they are.  Each firework shoots up, is beautiful for a few seconds and then is gone and within 15 minutes or so, it is all over.

I’ve noticed over the years that our “stuff” has become like a 4th of July firework.  We see something, get so excited and just have to have it at any cost, buy it and bring it home and within a few days or weeks, it’s gone from our minds and we move on to the next “thing”.  How much stuff do you own that you are still paying for and either you don’t use it or have no idea where it even is?  How many vacations have you gone on that you are still paying for at Christmas and how many Christmas presents have you bought that you are still paying for at vacation time?

The wonderful thing about fireworks are they are free.  You can participate in their beauty, enjoy them for a short while, and then go on about your life.  But when you go into debt for “stuff”, you don’t have that as a choice.  And with every month of payments, your sparkler loses its sparkle.  Instead of looking at things the way we do fireworks, we should try to look at them as investments – meaning things that we want to keep around for a while and we want to get our money’s worth out of them.  Also, make sure that you pay cash for your things so that when the sparkle wears off, you can sell it, give it away or  keep it without regret.

It is okay to have things and go on vacations as long as you can afford them.  Don’t allow them, however, to steal your freedom (financial).  Fight for your financial freedom everyday just as hard as we fight for our freedom in this great country of ours.

Have a blessed week and a very happy holiday!!  See you on the 8th.

Budget 101

Yes, I am writing about the dreaded “B” word.  Most of us hate the word budget and even more, we hate doing a budget.  However, I have found that a budget is one of the biggest wealth building tools you can have.  In my book, the chapter on budgeting is disguised under “S” for Spending Plan.  There are two reasons for this:  one is to make sure people read this chapter and don’t skip it and two is because a plan is a positive thing.  Budgets need to be thought of as positive tools, not negative jails.  If you went to build your dream home, you would not just start building and never have a plan.  You would plan everything out and only start building when it was to your liking.  And along the way, you would make changes as situations change, always improving.  The same is true to build your dream financial situation.  You must have a budget to lay out your money and tell it where to go.  You will always be making changes as you go.  Your budget will not be the same this month as next and in 5 years, it should be completely different.

Doing a budget is easy, 3rd grade math.  The hard part and the part we don’t like is the other 90%, the emotional part.  We hate to say no to ourselves and if we do a budget, we may have to say no sometimes.  But without saying no sometimes you will never be wealthy.  What if you make $3000 per month and you spend $3200 per month?  That is spending $2400 per year more than you make.  How will you know this if you don’t do a budget and how will you control this without a plan?  When you spend more than you make, you will never be wealthy.  It is not possible because there is nothing left over to save and invest.  This is also one of the two reasons we have debt – spending more than we make and using debt to make up the difference.

If you are tired of your financial situation and stress, I want to challenge you to start a budget today.  Start with July, but start today.  You can do it on the computer, on a piece of paper, or use our budget form (Tools tab on our website – www.abcsofpersonalfinance.com).  A budget is simply writing your income at the top, listing all of your expenses, and the difference is what is left over.  You want the difference to be zero.  Therefore, if you have a negative difference, you will need to cut some of your discretionary expenses or raise your income.  If you have a positive difference, you will need to decide which financial goal is next (saving, paying off debt, home project, etc.) and put the money in that line item for the month.

I had the same dream as most of you have – to be out of debt and become financially free.  I would never have achieved this goal without a budget.  I started with a spending journal first because I wasn’t sure where all of my money was going.  I did this for about 3 months and used that information to form my budget.  Knowing where my money was going helped me to pay attention to my money more and use it in a positive way to achieve my goals.  You work hard for your money; therefore, you should control how it is spent.  A spending plan is the best way to do this.  I know millionaires who still budget.  It usually isn’t written down anymore because they have formed good spending habits using their budgets as a tool, but they don’t just spend like crazy now that they have a little money.  If they didn’t continue to have limits (budgets), their money would be gone very quickly.

Begin building your financial dream house today with a good foundation – a spending plan!

“I Did It!”

This is a phrase that we use all of the time when we accomplish something that we wanted to.  It is a phrase of praise.  But this phrase has two meanings, the second being one that we rarely use.  We don’t use this phrase often enough to take responsibility for something that we did wrong.  In your finances, the best way to win is to learn to use this phrase both ways.

The phrase of praise is very important.  You need to be celebrating every accomplishment and success, whether great or small.  If you write out a budget for the first time, say “I did it!”  If you pay cash for something instead of using a credit card, say “I did it!”  If you pay off a debt, even a small one, say “I did it!”  This is why even though there are several ways you can pay off your debts, the “snowball” method is the most effective.  When I decided to remove debt from my life forever, I looked at every way I could go about it and I picked the “snowball” as my plan because I was able to pay off 3 small debts in just the first month.  I was able to say “I did it!” right away and this gave me encouragement and motivation to keep going and go all the way.

The phrase of responsibility is just as important as the phrase of praise.  If you are always blaming other people and your circumstances for your financial situation, you will never change it.  The only way to change it is to say “I did it!” and make the changes necessary to turn it around.  Owning your mistakes and learning from them will make you very successful in life as well as money.  Walking in your truth is essential for financial freedom.  And I don’t want to upset you, but the truth is you did do it.  Every dollar you spend is your choice.  You choose how much your rent/mortgage is going to be, you choose how much to spend on a car and whether to pay cash or not, you choose whether to eat out or cook at home.  You are in charge of your money, which is a good thing, because that means you can change your finances for the better without waiting on someone else.

I want the words “I did it!” to become your go to phrase.  Praise the accomplishments, even if they seem small, and own the mistakes and learn from them.  A mistake can be a positive thing is you learn from it and turn it around.  My 20’s and early 30’s would be looked out by an outsider as one mistake after another and I would be considered stupid in the area of money.  But look at me now – I am winning with my finances and I am teaching you everything I learned in hopes that you don’t have to go through what I went through.  But nothing changed until I said “I did it!”

Liar, Liar

We lie to ourselves all of the time.  No, really, we do.  We are so used to doing it that we don’t even realize it.  Lying to yourself and not walking in your truth, whatever it is, can be harmful at times and will never move you forward in your life.  This is especially true when it comes to your money.  Lying to yourself in the area of money can cause debt, keep you in debt, make you spend more than you make, have zero to very little money saved for emergencies and retirement and more.

I was reading an article a few days ago that listed what they thought were the top lies we tell ourselves in the area of money.  I mostly agreed with them so I wanted to share them with you and why I believe (knowledge and experience) that these lies can be harmful.  I hope this will help you and give you the courage you need to walk in your truth today.

  • Lie #1 – “I deserve it.”  We spend money we don’t have everyday just because we tell ourselves that we “deserve” something.  I would like to change this just a little.  I think the lie we tell ourselves the most is “I am entitled to it” and we hide that thought behind the “deserve”.  You may deserve a vacation – you have worked hard all year at your job and maybe you deserve a break.  However, you are not “entitled” to a vacation just because you exist on planet Earth.  This lie, in any form, can cause you to think that no matter what state your finances are in, it is okay to do whatever you want just because.  You can do anything you want, whether you deserve it or not, as long as you have the cash to do so.  If you are in debt and the only way you can go on vacation is to use a credit card, you shouldn’t go on vacation, even if you deserve it.
  • Lie #2 – “Money can’t buy happiness.”  Money can’t buy happiness, but it can buy freedom which causes happiness.  Therefore, money can cause happiness.  However, in most people, money causes stress and anxiety.  When you don’t owe anyone and you have money in the bank, you can be happy because you are not worried about paying a bill or dealing with any emergency.  Use you money for good by getting out of debt, saving and live on less than you make.  Then your money will buy you a “little happy.”
  • Lie #3 – “I don’t make enough to save or invest.”  This is a lie, plain and simple.  I teach children and teens everyday to take the $10 a week they make and save 10% of it, give 10% of it and spend the other 80%.  The problem is we spend 100% or more leaving us with nothing to invest or save.  If this is your excuse for not saving, the problem isn’t your income or what you make, it is your lifestyle and what you spend.  If you always live on less than you make, you will always have money to save and invest, even if it is only $10/week.  Start somewhere.
  • Lie #4 – “Debt is the new normal.”  I have written a lot about this because it is the number one myth about money in the country today.  Debt does not have to be a part of your life.  Debt is no longer in my life and I live just fine, great in fact.  We are taught to believe that we can’t function in the world without debt and we can.  You can live a better life without debt than you would ever live with debt.  Do not accept debt as the “norm”.  If you do, you will never be wealthy.  Wealthy people do not have debt, they have money.
  • Lie #5 – “College is a must and a loan is the only way to pay for it.”  This is a huge lie.  If you believe this, please read my blog “No Loan College”.  It is my most popular post to date because people believe this lie.  First step in life is to find your passion, what will make you smile everyday and will make you happy.  Then find out what you need (education, knowledge, certification, etc.) to do this out in the world.  And if it does require college, you can get a degree without ever taking out a student loan.  Don’t mortgage your future on an uncertainty.  Go for the gold, but be wise in getting there.  You will never regret it.

Love yourself enough to stop lying to yourself.  When I began my truth walk years ago, it was painful at first.  The truth hurts.  But I would never be where I am today, financially or personally, if I would have had the courage to begin that walk.  Begin your walk of truth today, push through the pain, all the way through to freedom.

 

**If you need help with your walk, give me a call or email me.  www.abcsofpersonalfinance.com