Posted in Budgeting for Everyone, Building Wealth, College & Student Loans, Credit Cards, Debt Free, Raising Your Income, Saving for Your Future, Winning with Your Money, You and Your Money

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

 

Posted in Building Wealth, Debt Free, Raising Your Income, Winning with Your Money

#1 Money Myth

Do you know what the number one money myth is?  Well, of course, that is a matter of opinion, but in my experience, I believe it is this:  You must have debt to function financially.

This is a big myth and I want to bust it right here and now.  You can live a very good, normal and wealthy life without ever having debt.

First of all, if you never have debt, you will always have money.  Your income, whether great or small, is your greatest wealth building tool.  Therefore, if you waste your money on buying things without cash and spending large fees and interest for that privilege, you are giving away your most important financial tool.

Many people, old and young, live with the notion that you can’t make certain purchases without going into debt and this is simply not true.  Even people who don’t use credit cards believe that the only way to buy a nice car or a home or to go to college is with a loan.  And this is simply not true.  If you never have debt, you can save up and buy a nice car or home with cash or work and cash flow your way through college.  This may take longer than debt would, but that means the truth is a lack of patience not a lack of ability.  For me, debt was the easy way out.  I wanted something so I just used debt to get it and figured I would deal with it later.  But nothing worth having ever comes easy.  And a life debt free and financially free is definitely worth having.

The other main justification for debt is that you have to have a FICO score in order to have anything.  This is not true. A zero FICO score is more impressive than a high FICO score because it means you have used cash and wisdom to get the things you have.  The only way to achieve a zero FICO score is to not have debt.  A FICO score is equal to a “I use debt for my financial solutions” score.  Every element that makes up the FICO score involves the word debt and debt equals risk.  You must have debt to have a high FICO score, but a zero score should be your goal.  You can have everything that you want and need with a zero FICO score with the added bonus of having wealth as well.

So now that the myth that you must have debt to exist, financially speaking, has been busted, what is going to be your excuse for keeping your debt?  I hope you can’t find one because this will be the first step in getting rid of your debt once and for all.  No matter what your debt situation is currently, with time and hard work, you can obtain the ultimate goal of no debt, a zero FICO score, and wealth.  What could be better than that?

Posted in Budgeting for Everyone, Building Wealth, Credit Cards, Debt Free, Raising Your Income, Winning with Your Money, You and Your Money

Red Flags to Indicate That Your Finances Are In Trouble

Most of what I teach and speak about is from personal experience.  And today’s topic is one of those times.  When we are in the middle of the storm, we are usually too stressed to know what is happening.  We are just trying to stay afloat and not drown.  This describes my financial life from about age 20 to age 30.  I started out in the world after college making decisions that everyone around me were making instead of making wise decisions.  And my boat just kept sinking further and further.

Unfortunately, as many of you know, I actually hit bottom by filing bankruptcy and then swore to myself to never end up there again.  Thus began my journey to financial freedom and what I do today.  One of my biggest goals, always, is to make sure I share knowledge and personal experience in hopes that you can decide to change your financial situation, if you need to, before hitting bottom.

As I look back, just like most bad times in our lives, I can see so many red flags that were there, but I couldn’t see them for the storm.  I want to share with you today some of my red flags in hopes that if you are experiencing any of these that you will decide today to do what you need to do to change your finances immediately. Here we go!

  • Stressed out about money or fighting with your spouse – Are you always angry and not sure why?  Are you always fighting with your spouse and not sure why?  Odds are that you are stressed out, in one form or another, about money.  You may not even realize what the problem is.  If your finances are not healthy, it will cause you stress which will show up in every area of your life from kids to your job to dealing with people on a daily basis.
  • Have a balance on your credit card – This is known as revolving credit.  Credit cards were originally designed for convenience, before debit/credit cards were available.  The original purpose of a credit card was to use it when you couldn’t use cash and then pay off the bill at the end of the month.  If you cannot pay off your bill every month, you cannot afford what you are buying and are spending money you do not have.  You are not financially healthy if you are spending more than you make and you will never have extra money if you keep this up.
  • No emergency fund – If you do not have any emergency fund, you are living your life praying something doesn’t go wrong.  But one day life will happen and if you don’t have money set aside, you will have to use some form of debt (loan from family, pay-day loan, credit card, etc) to cover the emergency.  And all of these forms of debt are really bad and begin a vicious cycle you may never get out of.  Picture a hamster on a wheel.  This could be you.  At the very least, scrape together $1000 – $1500 and put it in a savings account for when life happens.  Make your ultimate goal to have a 6 month emergency fund, but start somewhere.
  • Robbing Peter to pay Paul – This simply means you are spending more than you make.  If you have to use a credit card to pay a bill or buy groceries, this means you do not have money for even your basic needs.  Most of us, unless we have a special situation, make enough to provide for basic needs.  So what are you spending your money on that makes you unable to pay your bills with your income.  Use a spending journal (writing down every dime you spend) for a month or two and learn where your money is going.  Once you know and are aware, you can make the changes you need to stop robbing Peter to pay Paul.
  • Using overdraft protection even once a month – If you are using your overdraft protection on your checking account even once a month, you are spending money you do not have.  First and foremost, cancel your overdraft protection immediately.  Go to your bank and tell them you want it removed from all of your accounts.  When I did this, my bank said “You realize if you don’t have the money, your transaction won’t go through.”  I replied, “If I am spending money I do not have, I should be told no.”  People are spending $100’s of dollars in fees every month using this crutch.  Remove the crutch.  Only spend money you actually have.  This may mean something has to wait, but so be it.
  • If you can only get non-traditional loans and mortgages – I believe, from experience, that no loan is a “good” loan, but if you find yourself in a pickle and the only way out is a non-traditional loan such as a pay-day loan, borrowing from a friend or family member, needing a cosigner for your loan, and paying over the going rate of interest, then you obviously are financially unhealthy and you need to look for another way to solve your problem.  The same goes for mortgages and buying a house.  If the only way you can buy a house is using an interest only loan or a sub prime loan or a loan with a high interest rate, you are not ready to buy a house.  If you think there are only 2 choices to a situation, you are not looking hard enough.  Think outside of the box to find a solution that is healthy and not toxic.
  • Having an attitude of “I will take care of it later” – Later always comes and most of the time we are not ready for it when it does.  My best example was with my taxes.  I needed more money per month to spend on my “stuff” so I lowered the amount of taxes being taken out of my check so my check would be bigger.  I thought “I will just take care of it in April.”  Well, April rolled around and I didn’t have the money to take care of it.  And before I knew it, a few years had gone by and I owed them $5000.  You do not want to owe the IRS or anybody for that matter.  If you can’t take care of life today, then your finances are probably unhealthy and need a change.
  • Considering bankruptcy – I help people everyday who are considering bankruptcy to find another option and get out of debt on their own. Only about 10-20% of people considering bankruptcy actually have no other choice.  But if bankruptcy is even on your radar, you are financially unhealthy.

I know today’s blog is lengthy, but all of these red flags are very important.  I wish I had known what was happening as it was happening.  Hindsight is always 20/20, but it would be nicer if life was 20/20.  If you have even one of these red flags, decide to get financially healthy today.  If you need help getting started, you can always contact me.  Make 2013 your healthiest year yet.