The End of the Beginning

Today will conclude my First FPU class that I have coordinated. It was a lot of fun. I look forward to coordinating another one. If you have ever taken one of these classes, you feel like you have walked away with more family. Sometimes closer knit than your own family. This course allows you to be vulnerable to others in the group. More than likely, someone else in the class is in the same seat as you. Talking about finances has been a faux pas for a very long time. We can talk about anything with people but finances. For some reason that seems to be too sacred even to talk with your spouse about sometimes. This class helps break that mold that everyone has painted in your mind. It allows you to be open and honest and hear what has worked for other people. This course is not just simply watching a DVD that has Dave Ramsey speaking, but the fellowship and friendships you are able to make in this class. It also gives you a support group. To cheer when it is time to cheer and to cry if necessary if it requires tears. These people want to see you succeed as much as you want you to succeed.

The beginning of class obviously everyone is very motivated to get going and beat debt. However, some find out it is a longer road out than they thought. That is when the group can help support you emotionally and give you those ideas that might help you get over the hump.

Throughout our class, we shared many stories with one another, shared ideas, shared recipes and shared our time together. It was awesome to see a lot of my class cut up their credit cards. My wife and I cut those up shortly after we were married. Since our honeymoon, my wife and I have not used a credit card to make a single purchase! Do you know how liberating it is to know that I do not have to pay for something I may have bought 6 months ago? It is AWESOME!!!!

So today marks the end of the beginning for many of my fellow co-workers. They will be out there fighting the fight of Freedom from debt! May the Lord help keep them focused on paying off their debts. It will be awesome to see them be able to GIVE like no one else when they achieve this goal! GO TEAM FPU!!!! I am proud of you and look forward to hearing many of your success stories!!!

Feeling Grateful and Humble,

Your Financial Health Moment!

The Big Picture is out of Focus

With the Holiday season approaching us, often times we can get out of focus. I want to encourage you today to stay focused. Too often, we tend to stretch things around the holidays. If you are unable to afford gifts for the family, make them something. If your family normally exchanges gifts with one another, ask them if it is ok for you to bow out this year. TELL them you are trying to straighten out your finances and are unable to afford gifts for everyone this year. Do not be too PRIDEFUL to tell your family this.

Last year my wife and I were just married and did not have a whole lot of money. Instead of using credit cards and going into debt to buy gifts, we told our families that we were not going to be able to afford gifts this year. Our families were very understanding and did not want us to buy them anything if we could not afford it. We bought our parents and grandparents gifts, but did not buy our siblings gifts. We have 10 siblings between the two of us. We were focused. We cut up our credit cards long before Christmas came along, but if you have not cut them up already, DO SO NOW! Do not be tempted to use the plastic this holiday season.
With this holiday season, give yourself a gift! Give yourself the gift of Financial Freedom! Do not jeopardize your future for a few gifts that will probably get returned or not used. Enjoy your family and friends. Do a white elephant gift exchange over a carry-in dinner with your friends or family. Enjoy this Thanksgiving and be thankful for the simple things in life! Happy Thanksgiving all!

The trickery of debt

Debt is a very tricky thing. It some times is elusive. You often wonder how the number became so large and how you are going to pay it off. I did some research for myself this past weekend on how much debt my wife and I had. My findings, a little more than what I thought we had. It was not a large number difference between what I had found and what I had thought, but it reminded me that I always have to stay on top of it.

If I am going to have goals on beating debt, I have to remember to follow my game plan. Some times I want to stray from that game plan because I want some instant gratification. (I know, a nerd wanting instant gratification?) It is true. Sometimes I just want to go out and buy things. I am not talking about clothing. I want to go out and purchase tools. I want to purchase tools that are going to help me build cool things. I want to one day build furniture and other neat little trinkets for my house. I have always been interested in working with wood and woodworking tools. I get a thrill out of building something with my hands. I have not been able to build anything recently, so I have had the itch to build. I have to keep myself out of Lowe's and Home Depot so I am not tempted to buy these tools. I do need to go to one of these stores because my toilet is running continually and I need to get a piece that will help stop the running.

I do have enough self-discipline to get in and out of one of those stores to purchase this piece. However, I may just want to look at the tools and dream. I believe it is ok to dream; just as long as you know you cannot have it right now. Delaying that instant gratification so that one day you can be debt free and working or doing those few things you love to do. One of my hobbies will be woodworking. I envision having my own little shop set up inside my garage and having one of my son's out there helping me. (That is if the good Lord blesses me with a son in the future.)

Yet, I still find debt to be deceitful. You think you have paid off a good chunk of it, only to find out that a large part of that went to paying the interest on the debt and not very much on principal. This is why debt can be so tricky. You may have paid $12,000 towards your debt, but only be down $7,000. What happened to the other $5,000? Well, that was all applied to the interest you owed on the debt(s). Getting out of debt is a MARATHON. If you try to sprint the first mile, you will tire and not have enough energy to finish the last 25.2 miles. Remember to pace yourself. Getting into debt was easy, getting out of it is the hard part.

Have you ever read the story of the tortoise and the hare? The tortoise wins EVERY time! So be the tortoise today. Slow and steady will win you this race. Stop letting debt trick you. Make your game plan and follow it! Have a path. Make it a path to success! Only YOU control your destiny! Only YOU stand in your way of becoming debt free!

Attitude, Goals, and Perception

Only you can control your attitude. In order to beat debt, you need to have a positive attitude about it. Think of anything you have ever wanted to accomplish before in the past. You had a positive attitude and outlook on it. It is the same way when handling your money. If you do not have a goal to reach for and things set in place to reach those goals, then you will most likely not see the end result of being debt free.

I was listening to Tom Stanley's "The Millionaire Next Door" and he said that 80% of millionaires today are first generation wealthy. 80%...that's A LOT! These people knew where they wanted to go and had goals. All of these people were frugal with their money. They were not wearing the newest and most expensive clothing. The way Tom Stanley described them as dull normal. They were not driving the newest model of luxury car. In fact, most of them were driving American made cars that were a few model years old. They owned the cars outright.

In America, the media has done a great job of showing off people who are not wealthy, but are wearing Armani Suits, driving around $100,000 cars and have multi-million dollar homes. These are normally your celebrities and athletes. Want to hear something scary? Most of these people go bankrupt or run out of money shortly after they retire from movies or their sport. YIKES! You wonder how someone can run through a "modest" 110 Million Dollars??? They do what I just said, consuming all the "good stuff" They were able to sustain that lifestyle while they were earning a paycheck, but they did not SAVE any of their money to be able to sustain it after they were retired.

Am I saying you can't have nice things? NO. Absolutely not. What I am saying though is most millionaires live in modest neighborhoods where their neighbors are mechanics, salesmen and the likes. Their neighbors aren't Michael Jordan or the CEO of JP Morgan. They drive around nice cars, but not luxury cars. They wear clothing more than once and do not really care what people think about what they look like or even care if they know they are millionaire's. They do not feel the need to flaunt money and "rub it in" to anyone. They are normally very good givers and do not have a problem giving money away.

Last thought. If you were to win a million dollars tomorrow, how would you spend it? I know I would pay off my student loans, my car and probably purchase a modest little house for my wife and I, give some of it away and then invest the rest. The reason I know what I would do with it is because I have goals. I know exactly what I am doing with each and every paycheck and dollar that comes into my household. I have sat down and INVESTED time into my financial well being. My wife and I have goals set for our household. What about you? Do YOU have Goals set for your household?

Feeling greater than I deserve,

Your Financial Health Moment

Building a strong team

Building a strong team? What does this have to do with money and becoming debt free? A lot actually. Look at all the great people you know in your life. Did they not have a strong team surrounding them? Did they not have mentors helping guide them? If you ask them, I can guarantee they have surrounded themselves with other great people.
I watched Warren Buffett and Bill Gates last night on CNBC (I am a nerd). These two are probably the two richest people in the world. Both of them built a great team.(Both of them also give away a lot of money) Warren Buffett went to Columbia University to study under Ben Graham. Ben Graham was Warren's mentor. Every time you hear Warren Buffett speak, he almost always mentions something about Ben Graham. He saw the person who was the greatest at what he wanted to do and LISTENED to him, studied him and his habits and then went out and did it better!
I was at a Young Professional Network luncheon the other day. Mike Bray, Head Notre Dame Basketball coach was talking. He talked about networking and surrounding yourself with people who do what you want to do. His goal was to be a coach obviously. He went and worked under a HS coach in Maryland, who is now in the hall of fame. He put himself in situations and around people who could get him to where he wanted to go.

Ok, so what does this have to do with money. Here it is. If you want to be wealthy, you have to do what wealthy people do. Surround yourself with people who can teach you what you need to know. For example, I want to be another Dave Ramsey. I do not want to be him exactly because he already has Dave Ramsey. I want to be me, but I want to LEARN from Dave. I want to soak up as much knowledge as I can from him. You ALWAYS have to keep LEARNING. If you stop learning, you fall behind.

Another team that you need to be surrounded by is your family. You and your whole family need to be on the same page! You are a dynamic team with dynamic parts. Let each part do what it is best at. If one is great at keeping the books, let that person keep the books. If one is great at bargain hunting, let them bargain hunt. I think you see what I am saying. Your whole team does different things great. Let them work at their strengths.

One last thought. After building your team and surrounding yourself with mentors, LEARN and apply what you have learned. Do not be afraid to go after your dreams. You have been blessed with specific talents handed to you by the the Almighty God. Work in your strengths. Be the best you can be at that particular thing. Sometimes going after something means taking a risk.

Are you willing to take that risk today? Are you willing to discipline yourself to take the step of becoming debt free? Use your God given talents wisely. We only have one life to live here on earth. What will be your LEGACY?

Training to become a Champion

When training to become a champion in something, we tend to work really really hard at it. For example, If I wanted to train for a marathon, I would go get the advice and possibly train with someone who has already ran a marathon or a half marathon. They will know the ins and outs of the training and what kinds of foods I should eat. Or another example is training to become the best Quarterback in the league. How would I do that? I would probably go to Peyton Manning and figure out what his regimen is and repeat that. He is probably one of the best QB's in the league.

This leads me to my question. Why do people not get training in their finances? YOUR finances are yours. You are the only one who can train that muscle called your finances. Why would you not be willing to get help from someone who has already started the journey, or even finished the journey and training of beating debt? I think I know why. People are afraid to let other people know they are struggling. People do not want other people to know how unrich they are. Most people you see living in upscale neighborhoods are NOT rich. They are one lost job away from losing it all. Or one pay cut away from filing bankruptcy. Most of them put all of their "things" on some form of credit. Do those people make a lot of money? Sure, but what do you consider a lot of money? If someone is making $200,000/year but their payments for their things are $150,000/year ($50,000 to maintain those things) are they any more ahead of someone who makes $40,000/year and spends all $40,000? I would say NO. They just have more expensive "things". Could you imagine what you could do with $200,000 or even $40,000 if you were debt free? A LOT!!!! You could save a lot, give a lot and spend whatever you wanted on what you wanted or needed. Your money would be working for you instead of the other way around!

Here is my challenge to you. If you are able, please go and talk with a financial advisor today. Make sure he is a teacher! If you do not understand something ask questions. If he does not explain things well, leave. If your wife has a weird feeling about them, leave! If you do not like the way they are treating you, leave. If they are friendly and want to teach you and coach you on how to get out of debt, stay. If they want you to invest right now, leave. Why take away from your debt dumping power until you are out of debt? If you cannot afford to see a financial advisor, please order some stuff from Dave Ramsey or check it out at a library. He has a lot of good information on how to start your journey to becoming DEBT FREE!!!!

Training to become a champion does not happen over night. It is a lifetime pursuit. If you lose track of where you are heading, you lose sight of the end goal. Will you change your finances today? Are you willing to train like a champion? The choice is yours. No one else can make it for you! Good luck on the journey ahead.

One last thought. It is ok to not have a lot of "things". Things just clutter your house. As long as you have food on the table, a roof over your head, power to keep the lights and heat going and some form of transportation, you are blessed! Remember, the Wii or XBox360 is a toy, not a necessity. If your kids are upset because you sold it, too bad. They will get over it and they will find something else to do. You are training to become debt free. You are running a marathon. Sometimes we need to shed (sell) things in order to make us lighter (less things) so we can accelerate (dumping debt) to the finish line (being DEBT FREE!!!!)

Envelopes? What does that have to do with Money

If you go and ask your grandmother or great grandmother, you will see that they most likely used some sort of envelope system. It may not be as sophisticated as the one Dave Ramsey has created, but it is probably something similar to it. Your great grandparents used to SAVE money before they made a purchase. If they did not have the money they needed in that envelope, they just went without until they could afford it. (I know, going without something until you can afford it...BLOWS my mind!) Why would anyone want to wait for something when they can have it now via a charge card? That is why your grandparents are not in the same financial bind you are in. They actually have the discipline of saving up for a purchase and waiting until they have the money to go out and buy it.

I look at my grandparents and see two people who have saved their whole lives and are now able to retire without having to worry if the government is going to send them their social security check every month. They have enough money saved up, they could probably live until they were well into their 100's and still have money left over. Actually, with them being at the age of 76, they are still invested in the stock market. How crazy is that? My grandparents bought their little two bedroom condo on the lake with cash about 10 years ago and they recently purchased a 2007 Buick LaCrosse. Before that, they had bought my Aunt's 1986 Buick Reagle and drove it around for 5 or 6 years. So...what's my point? My grandparents have saved for what they want. Sure, they could have bought the LaCrosse when it was brand new 2 years ago. They didn't though. They waited and paid cold hard cash for it. My grandpa told the sales guy he would give him 17,000 cash and not a penny more. Talk about negotiating power! (We will cover negotiating another time) He has never had a newer car his whole life. He has worked since he was 14 and just was forced into retirement at age 76, only because the company closed their doors. He worked primarily for two companies his whole life. That is over 50 years of service between two companies. That is AWESOME! That is LOYALTY. Not something we see these days!

If you want to learn how to handle money, talk to your great grandparents or if your grandparents did not fall into the credit trap, talk with your grandparents! They will enjoy your company!

Back to envelopes. Use envelopes for things like gas, food, make-up, groceries, eating out, hair cuts, toiletries, License and taxes, car repairs, house repairs(minor), etc... I think you get what I am saying. Use it for the essentials. Use your checking account to pay your bills. Other than that, carry your envelopes around. When your envelope is low on cash or out, you can't spend anymore until you are able to re-fund your envelopes. That will create discipline.

Closing story for you. My wife and I were at Meijer one evening and she needed to pick up some make up and hair products. I told her there was $20 in that envelope she could use for this stuff. We had everything in hand and got up to the cashier and had her help us. She rang everything up and it came to $19.43. I thought Kristin had the envelope on her and she thought I had it. Neither of us had the envelope we needed for this purchase. We could have used the debit card and re-imbursed ourselves the following day, but we DID NOT! We said if we don't have the cash we will have to come back and get it later. My wife is the one who told me to put the debit card away. I was willing to use it to make her happy. She is the free spirit and she showed some serious discipline. It was AWESOME! As a nerd I was super happy with her that night!
Lesson: If you do not have the cash on you, either go home and get the envelope or just wait until you go back to the store!

Truly better than I deserve,

Your Financial Health Moment!

It is Super Tough early on in the FREEDOM BATTLE

I sent the blog out to my coworkers who are currently working through Financial Peace University with me. I asked them to comment back to me with any suggestions on things I should write about. There were a couple of key themes.
1. Instant Gratification is something not easily overcame.
2. How hard it is to discipline yourself to keep yourself on track.
I think both of these go hand in hand. One being that if you want instant gratification, it is going to be hard to DISCIPLINE yourself.

In most cases, you see something and you want to have it. Take for instance the new pair of shoes you have been staring at for about 20 minutes deciding if they are the right color and size you WANT (notice how I did not say need). Instant gratification says, "Buy them, it does not matter what the price tag is on them. You NEED these shoes."

Or how about the flat screen TV you have been drooling over for the past hour. Instant gratifications says, "You would be the coolest guy in town. You could have all your buddies over to watch all the big games. You need this TV to stay on top of the game."

In most cases you will see instant gratification win out and put yourself into some sort of debt in order to obtain these "things" that you really do not NEED, but you WANTED.

This is why discipline and having a plan is so important on battling to become FREE from debt! You also need an accountability partner. If you are married, you and your spouse need to be on the same page. If you are single, find someone who is not afraid to slap you in the face when you are envying that new big screen TV. You need someone to say, "Look Stupid! Do you want to be debt free or not. Stick with the game plan!"

Most of the time in a marriage, you will have a Nerd and a Free Spirit. The nerd is the planner and saver normally and the Free Spirit is the shopper and spender. Build a game plan, also known as a budget. There are budget sheets all over out on the Internet. I personally use Dave Ramsey's set of forms. You can find those on www.daveramsey.com. You have to sign up to be a member or go through one of his FPU courses to have free access, but it will be money well spent. I personally like using the Allocated Spending plan. You spend every dollar on paper before you even get the money. If you tell your money where to go, you have won HALF the Battle!

My wife is a free spirit and I am a nerd. She has a free spirit savings account in the bottom of her purse (loose change) I want to take my loose change and put it into a jar. When the jar gets full, take it to the bank and apply it towards a debt. See the differences. You should be able to determine which one you are fairly easily.

If you are single and you are a Free Spirit, you need to find a Nerd who will help keep you on track.

Remember, this is a BATTLE! Only you can will yourself to be VICTORIOUS! Is it hard? You bet! Is it possible? YES! Are you going to have mini battles here and there with yourself or your spouse? You can count on it. What does it take to be VICTORIOUS? Having a plan and spending every dollar on paper on purpose and then sticking to that game plan.

A football analogy if you will. I am a HUGE Colts fan. If you ever watch a Colts game, you will see that Peyton Manning, in most cases has a very good idea of what the defense is going to do on any given play. Because he studies the other team so much, he is able to come up with a game plan on how to defeat them. It works like that with money. If you study what is coming in (blitzes or your payroll) and going out (your receivers or your bills), you can develop a game plan and defeat the defense like Peyton does on any given Sunday. Take some time today to look over your finances. It will be the best Investment YOU will ever make because it is investing in YOURself, YOUR family and YOUR future. As Nike says and Peyton Manning does....Just do it!

I leave you with one closing thought. If you were a gazelle running from a cheetah, would you not run as hard and as fast as you could to get out of reach of the cheetah? Well, as Dave Ramsey says, You have to be Gazelle Intense when getting out of debt. Gazelle intense means running as fast and as far as you can away from debt. RUN INTO FREEEEEEEEDOOOMMMMMMM! It will be well worth the run. Just ask any gazelle that escapes its cheetah!

Why is it so easy to get into debt, yet so miserable to get out?

One of the reasons it is so easy to get into debt is because we have very little emotional connection when we swipe our plastic. We think...I can have instant gratification now and worry about the bill later. We may not say it to ourselve like that, but that is ultimately what we are thinking. Even with a debit card in hand. We know where the money is going to come out of, but we only think a little harder about the purchase than when we use a credit card.

If you do not think this is true, try carrying around $100 in cash. Make it a nice crisp Benjamin Franklin. See how slowly Uncle Ben leaves your grasp. You really didn't need that Caramel double machiatto chai latte for $6.00. If you had your plastic on you though, it would not be that big of a deal. Try it some time. I bet I am right. Do not break Uncle Ben just to spite me. Do it only if you think you NEED it.

So many times in America, the land of opportunity, we force ourselves into debt because we want instant GRATIFICATION! If you think I am wrong on this, look at your living room. Is the TV financed? Is the sofa you sit on financed? What about the side tables you had to have, were those put on the credit card? Take a look at your bedroom. What about the bed you sleep on? 90 days same as cash? 12 months no payments, no interest? Chances are if you fell for one of those two, you will have a large bill after 90 days or a year asking for all the interest gained during those 3 or 12 months. That's just reality. Very few people have the discipline to pay things off in that allotted time.

This is why it is so easy to get into debt! You think credit card companies do not know you have no emotional attachment to their plastic? The credit card industry is one of the most lucrative industries around. Sears makes more money on interest earned on their credit cards than they do in selling stuff every year. (Scary isn't it?) You do not have to think very hard when there is no emotional attachment. If you carry cash on you, it is normally a lot harder to spend than swiping that card. That is why credit card companies GIVE you PLASTIC and not CASH!

Take a little step today and destroy the enemy, your credit cards. I know I know...Mike, what if I have an emergency? Good news for you. Keep one of your credit cards open. Leave it open until you build up an emergency fund.( And no, PIZZA is NOT an emergency.) Once you have roughly $1,000 in your emergency fund (some of you will want to save a little more becuase you would feel more comfortable) then cut it up. Now that you have an emergency fund, you no longer need your "emergency" credit card. CUT THEM UP!

Carry cash. It is harder to spend. Once you are out of cash, do not go back to the bank or ATM to get more. You are done spending for the week. Create envelopes and fund the envelopes! We will get more into this on another post. For the time being, I think this is enough to chew on.

Feeling better than I deserve,

Your Financial Health Moment!

The Beginning

Blogging is a fairly new thing to me. I did it for awhile a few years ago, but this is something I want to go further than just sharing what has been happening in my life.

This is for those of you who want help with your finances. You may ask yourself, why would I listen to a guy talk about finances on a blog? That is a good question, why would you? You do not know me and I may not know you. However, I am here to offer sound advice for those who are hurting. If you have questions about a particular subject, please feel free to leave a comment and I will try and answer your question in the best way I know how, with honesty.

I may give you the advice you did not want to hear, but I am not going to sidestep the question or give you the "sissy" way out. I am here to challenge people to live a better life.

Do you feel like the weight of the world is coming down on you? Do you feel like you have no idea where your money is going? Do you wish you could have a system in place to feel like you have control over your finances? Do you feel like you have no hope when it comes to getting out of debt?

If you answered yes to any of those questions, this is the blog for you! Please follow me on my own journey of becoming debt free. I want to be there by your side to help you out!

Thanks,