Money Can’t Buy Happiness or Can It?

Grandma

This beautiful lady is my grandmother.  I was thinking of her yesterday as I do everyday.  Yesterday would have been her birthday.  She is in heaven now, but she lived 102 wonderful years here on this earth.  Having lived that long, she obviously did a lot of things right.  The thing I remember the most is her smile.  She always had a smile.  Even if she was fussing at my daddy in her later years, she would smile while doing it.  She was happy no matter where she was – when she lived alone because my grandfather was in a nursing home, when she lived alone after he died, even when she was in a nursing home.

Now I’m sure she had moments – my family tells stories sometimes that I find hard to believe.  But this is because her overall demeanor was happy and positive.  When I began my journey to go from $200,000 in debt to financial freedom, my grandmother was one of the first people I looked to to learn from.  Not because she had money, but because she didn’t.

How could she be so happy and be poor?  At the time, I couldn’t understand it, but now I can.  She was happy with life.  She lived everyday to the fullest and I believe this contributed to her living longer.  She also was very content.  Even when she needed clothes, she always wanted that money to be spent on someone else, usually a grandchild.  She didn’t need “stuff”.

I just read a great post from the @DebtFreeGuys about whether you are a “TP” or an “EP” – things person or experience person.  Most people can’t afford to be both and they go broke trying.  That is what happened to me.  I was trying to own everything my parents owned as well as take trips and do things that I enjoyed and convinced myself that I deserved.  Today, having gone through everything I went through – from bankruptcy to financial freedom – I can truly say I am an “EP” just like my grandma.

Now to answer the question posed in the title – money cannot buy happiness, but many times it takes money to do what makes you happy.  It takes money to buy things and it takes money to have some experiences.  What makes me the happiest is the beach (or the lake).  For me to go there and to hopefully one day live there, that will take money.  But how I do it will determine how much.  I don’t need granite countertops, 3 bedrooms, fancy amenities – I just need a bed, a bath, a kitchen and oceanfront.  This will cost me less than trying to have the experience and the stuff.

Determine your dreams – what makes you truly happy – and set up your finances accordingly.  Budget, set goals, and save to pay cash for those dreams because debt can turn a dream into a nightmare in about 3 seconds.  Live the dream and be happy – live to be 102!

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College – Is It Worth the Investment?

Clemson's Tillman Hall
Clemson’s Tillman Hall

Today on Twitter, I was participating in a chat on this very subject.  And, as always, I was truly fascinated by the answers to the question and a little concerned.  As a majority, we tend to see college as a must.  We even go so far as to look down on those without a college degree.  But realistically, college isn’t for everyone and in many cases isn’t even necessary.  College is only worth the investment if it is needed and if it is approached wisely and with a plan.

I was blessed to have the opportunity to go to school debt free.  And it was understood that I would go to college when I graduated, basically for the reason I stated above.  No one bothered to ask me what I was passionate about – no one bothered to help me find out what I would love to do every day if money wasn’t a factor.  I just went to college and got a degree in a subject that I was good at in school and had a decent pay grade in the workforce.

And I was miserable for the first 15 years of my adult life.  Many of our youth are heading to college because they are pressured into believing that it is the next logical step.  Guidance counselors are giving out the emails of all students with decent grades to colleges so that they can bombard them with propaganda to come to their school.  The pressure is high and as a result is creating a problem in this country.  We currently have $1.2 trillion in student loan debt.  And much of that debt is for degrees that were never finished or never used.

When deciding for yourself or helping your child decide what to do after high school, consider these 3 tips and consider them in the order that is presented.

  1. What is your passion? – Many careers don’t require a college education.  Some require no experience, some a certificate and some a small amount of vocational schooling.  Before you can decide what education path to take, you must first decide what you want to do – not just a j-o-b, but a career and a passion.  I always throw out the question “What would you do if money wasn’t an issue?”.  The saying “Do what you love and you will never work a day in your life” is so true.  Unfortunately, I didn’t find this out until later in life, but I am so happy I did.  Because now I am doing what I love and I am guiding my 17 year old daughter to her passion – which by the way doesn’t require a college degree.  And odds are she will make more money than most because she will be working for herself.  Owning a small business is a great way to accomplish your passion and make lots of money if done correctly.  You should take some business courses, but it doesn’t require a degree – just some awesome mentoring from those who have been successful.
  2. What is the best way for me to get the education I need? – Once you determine the level of education you need, you then need to find the best way to get that education without becoming part of the statistic above.  You can pay for a 4 year degree with cash and without the help of parents, but you can only do it with a plan and determination.  You have no idea what your first job is going to be or how much you are actually going to be making.  Don’t mortgage your next 20 years if you don’t have to (and you don’t).
  3. Pay cash – This option is harder and may take a little longer, but I promise you it is the best way to invest in your future.  This is where I lose most people – if I haven’t already.  First of all, people don’t believe it can be done.  And secondly, they don’t want to do the work to make it happen.  Yes, it is easier now to sign up for the student loan.  But as millions are finding out, it is not the easiest in the long run.

Here’s the bottom line – I loved every minute of my college experience, but I wasn’t a fan of the 15 years I spent being miserable and not doing something that I was passionate about.  I was working a j-o-b to pay the b-i-l-l-s.  So find what you love to do, wisely get the education you need to get to follow that passion and do it with cash.  Live your dreams!

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The Tiny House Phenomenon

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Last week was Tiny House Hunters week on HGTV.  I love watching all of the cool homes they show and how different they all are.  My husband and I have actually considered a tiny home for a lake lot in the future.  Would you ever consider living in a tiny house?  Here are 4 good reasons to include a tiny house in your future plans:

Saving money – When living in a tiny house, you are saving considerable money in several areas.  You save on the utilities, you save on the taxes and other home costs and you can even save on groceries (not as much cabinet or refrigerator space).  The money you save by choosing tiny house living can be used to pay off debts, invest in your future, or finally have the career you want.

Downsizing – Many people have way more home then they need or can afford.  Buying a tiny home might be just what you need to hit the reset button and start over.  What I love is that is gives you more nature and less house.  Who wants to clean a 3 bedroom/2 bath house anyway when you can be swimming, boating, hiking or making smores?

No mortgage – Most tiny homes are priced low which gives you the ability to pay cash and be debt free.  Can you imagine what it would be like to not owe a mortgage/rent payment every month?  Talk about financial freedom.  I saw nice homes last week that cost less than a 20% down payment for an average home.

Contentment – One of the biggest keys to wealth and financial freedom is contentment.  Owning a tiny house is the ultimate form of contentment.  You only have 200 – 600 square feet in which to put everything you own.  This makes you step back and look at what is truly important to you.  I think if you had to, you would be very surprised at what you could live without.

Tiny houses are not for everyone.  But like with any success story, you need to know all of your options and what it could mean for your bottom line.  For me, it could be a viable option in the future because of all of the reasons mentioned above.  I guess I’m showing my age, but sitting by the lake enjoying a sunset puts a smile on my face and cleaning a 1500 square foot home does not.  But everyone is different. My goal today was simply to give you something to think about and talk about around the water cooler.

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Money Advice for My Younger Self

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On Wednesday I will be a guest on #CreditChat with @Experian on the subject of “Financial Tips I Would Give My Younger Self”.  This is something that I think about a lot and a subject I am passionate about.  As many of you know, 17 years ago I was a single mom, $200,000 in debt making $10,000 a year.  It became so bad that I ultimately filed for bankruptcy.

On a daily basis, when it comes to my finances, I have two choices:  to live in the past and all of the bad choices I made or live in the future and learn & teach what I have learned so that no one else has to make the same mistakes.  Most days I have chosen to do the latter.  This is why I love sharing what I like to call “What I Know for Certain”.  There are so many things that I have learned about money and about life in the last 17 years that I always wish I could hop in a time machine and tell my younger self.  But since that isn’t possible, I have chosen to learn and to pass on what I know for certain to anyone who will listen.  I would like to share a few with you today as a preview of the chat on Wednesday.

Money is not infinite nor guaranteed – I never personally had to see my parents go through a down time with their finances.  They did, but it was when they first married and were just getting started.  They always had great steady jobs and always handled their money properly – by giving 10%, saving at least 10% (usually more) and living on what was left.  They never went into debt for anything.  Because of this awesome example that I had, I believed that life would be perfect as long as I did what I was supposed to.  The problem was I didn’t know what to do.

What I know for certain is that money is not infinite (always there and available no matter how much you need) nor is it guaranteed.  You never know what life will bring you.  I believe that my parents always did well because of the choices they made and the preparations they made in case something didn’t go as planned.  When something came up, it was just a slight inconvenience instead of a total melt down like it was for me.  I wasn’t as prepared for those moments when there was a job loss or an emergency.  Instead I had mortgaged my future by having debt; therefore, making it much harder for me when something happened.  I actually had better opportunities than my parents did, but I didn’t handle them the same way.  Therefore my results were much worse.

Debt isn’t a given – Today young people are being told that you must have a credit score in order to exist and the only way to get one is by going into debt.  They are also told that student loans and car loans are “good” debt when the reality is no debt is good.  Debt is a burden, makes you a prisoner to the people you owe the money to and mortgages your future earnings which, as mentioned above, are not guaranteed.

What I know for certain is that debt is not a given.  You can live a perfectly good life without one ounce of debt.  A great credit score is a great thing to have, but you can get one by never going one dollar into debt.  You see, debt is owing more than you have; credit is a form of payment.  You can use credit cards and pay them in full and have a stellar score.  When I started my adult life, I tried to have everything my parents had worked 20 plus years to have.  The only problem was the only way I could do it was with debt.  This is why I ended up where I did.  At first after I filed for bankruptcy, I didn’t use any form of credit for two reasons: one is my score was so bad I couldn’t get any and the other is I knew I needed to build my financial muscles before I tried again.  Now I have 3 credit cards which I pay off every month.  This along with cleaning up my past debts have taken my credit score from very poor to great.  Debt is not a given.

Happiness can’t be bought – Everyone has that thing, maybe two things, that make them happier than anything else.  I didn’t sit down in my early life and figure out what that was for me.  I look back and see where I was just chasing happiness like a dog chasing his tail.  And for me, it always came back to money.  If I had taken the time to know what really made me smile, I could have focused my goals and finances in that direction.

Happiness can’t be bought but you can use money to reach your goals and dreams.  This is what financial freedom is all about.  On my computer’s wallpaper is a picture of my vision board (what financial freedom means to me) and on that board are grandchildren, children, travel and a lake house with boat.  2 of those items do not cost me a dime and two of those items are built into our financial goals.  Happiness isn’t paid for with a credit card; it is brought on by reaching your goals and dreams whether personal or financial.

These are just a few of the many things that I would tell my younger self if I had that time machine I spoke about earlier. But since I don’t, all I can do is make it my passion to share with others so that they never have to go through what I went through and they can start on their goals and dreams 20 years before I did.

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4 Steps to Financial Success

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Have you ever looked at what you make every year and then look at your savings and wonder where it all went?  This used to happen to me all the time.  Then finally I wrote it all down and was shocked where it was going.  At that point, I learned a great principle that turned me from the road to broke onto the road to financial freedom.  It was very simple, really, once I made the decision to take the road to success.

The principle is the 80-10-10 – give 10%, save 10% and spend 80%.  Simple right?  So why isn’t everyone doing it?  One reason is because they are like me and have never heard of it.  A main reason is choice – you have to decide to do it.  Here are the 4 steps you need to take in order to achieve financial success and every step is vital.

Step 1 – Service – You have to work for your money.  There is no money tree or a money fairy.  You have to work and in most cases, the harder you work, the more you will make especially when you work to serve others.  The most successful businesses are those that put customers first.  This doesn’t mean you give everyone everything that they want.  It means you respect people and are kind in all situations.  You also try to find the balance between what is good for the customer and good for the business.  By the way, if you are an employee, you are also a business owner – the business of you.  Rabbi Lapin talks a lot about this in “Thou Shall Prosper” – a book I highly recommend.

Step 2 – Share – You have to share your money in order to be successful.  This doesn’t mean just handing it over to any and everyone.  But you need to have a giving heart.  You need to realize there are people less fortunate than you, no matter what your financial situation, and help them out.  Some of my happiest moments are when I am giving to others.  You also need to give more than just your money – give your time as well.  Give in the way that is personal to you, but make sure you are giving something.  It will make a bigger difference than you realize.

Step 3 – Save – This is mandatory to have any kind of money when you need it.  If you spend everything you have (and more), how will you ever have extra when something goes wrong or when it is time for you to retire?  In the formula above, the savings part is just 10%.  That is all it takes and if it is invested well, it will grow without you doing anything else over time.  If you think you can’t save, start somewhere, even $10/paycheck.  Over time you will see how freeing it is when you have the money to cover an emergency and that will motivate you to do more.

Step 4 – Spend – You have to spend as well.  Of course there are your needs – shelter, food, clothing.  But if you have financial success, you can also have your wants as well – cell phones, cable, vacations, eating out, etc.  We all should be able to live on 80% of what we bring home.  But many of us haven’t set up our lifestyle to do so.  This means it will take a little time, but the 80-10-10 rule will bring you financial success every time.  And it is never too late to start.

How the Masters Will Change Your Finances

  

Many of you, like me, were glued to the television this weekend to watch history in the making. As I was watching the game and the interviews afterwards, I realized that there are several things we can take away and change our financial situations for the better. 

  1. Dream big – The winner, Jordan Spieth, said in a video when he was 14 that his dream was to play in the Masters. He was dreaming big even at a young age. If we could dream half as big, our finances would change in an awesome way. You have to have dreams and goals in order to succeed whether in money, career, or relationships. It is never to late to start dreaming and you are never too old to dream. 
  2. Never give up – When Jordan didn’t win the Masters last year he didn’t say “Oh well. I guess it wasn’t meant to be.”  He practiced and went out again this year and not only won but set several new records. When something doesn’t work in your finances, don’t give up. Never give up. Keep trying new things until you find what works for you. Everyone can become a champion but who does is determined by who wants it the most. 
  3. Learn from others – Jordan biggest inspiration is his kid sister who has special needs. He is amazed at how she conquers challenges that most of us will never face. You can learn from others too. I did. When I was $200,000 in debt and had to start completely over, I learned from many sources – my parents, my grandmother and of course, the Bible. You will never know it all. I still learn something new everyday and I’m comsidered an “expert” in my field. Never stop learning and always be open to the little lessons all around you. 

The more I watched, read and listened to stories about Jordan the more impressed I became. Here was a young man who loves what he does, has fun at it, and therefore, has success. Whether you watched the game or not, I hope that you will take away these few tips, use them and change your finances in an awesome and positive way. Set goals and dreams and then set out to break them!  

Tips for a Successful Tax Day

  

April 15th is fastly approaching. Many of you have already filed because you are getting a refund, but many of you haven’t knowing you may owe in the end. But you have nothing to worry about. Here are some tips on how to have a successful tax season and beyond. 

  1. Only pay what you owe – your goal every year needs to be to break even with your taxes. This is what the withholding calculator on the IRS website is for. Owing the IRS is not convenient and giving them too much every month resulting in a large refund is taking away money you need. Using the withholding calculator will get you very close and keep things easy and stress free. Make sure to use the calculator in Feb and again in Sept to keep yourself on track. 
  2. Receipts, receipts, receipts – Make sure you do not take any deductions that you cannot back up with a receipt. And keep those receipts with your copy of your return for 7 years. The 2 main reasons for an audit are random screening and red flags. Either way, receipts will make this process simple should it ever occur. 
  3. Use a professional when necessary – if you have a lot of deductions or sources of income, are self-employed, basically anything other than a simple return, hire a professional. It will be worth every penny to make sure you take all allowable deductions and to make sure your return is accurate. 
  4. Owe money – don’t panic – if you owe this year don’t panic. You can set up an installment agreement if you do not have the cash on hand. You will want to pay it off as soon as possible and use the withholding calculator to fix the issue going forward. But not filing because you owe is a serious mistake. One reason is it is against the law. Another reason is there is an additional penalty for not filing on top of everything else. It is not worth it and not necessary. 

Most people hate taxes and tax season. But there is no need. Taxes are part of life. How you handle them will determine how stressful they are to you. My final advise – file you taxes whether you owe or not. If you do, set up an installment agreement and pay as soon as possible. Use the withholding calculator to fix the future and move on with your life. If you set things up right, April 15th is just another day.