by Elisabeth Donati | Dec 8, 2011 | Financial Literacy, Uncategorized, What you can do
What I have noticed most in the past ten years of being entrenched in this financial literacy business (and it is a business even though there there’s more passion than profit in it…more on that later), is that human beings tend to make their lives complicated.
Most of these ‘complications’ take money and I have found that the people I have coached, usually didn’t stop to consider how much those complications were going to cost them.
What do complications look like? Well, this is where someone else might watch their words but I just like to call things as I see them, so here goes.
1) Houses: too big, too many, too expensive. All in the guise of ‘the investment’ and not wanting to pay taxes. Well, I have news for you. You pay those taxes whether you own the house or not. If you rent, they are built into your rent.
Now I know what you’re thinking…but what about owning my home when I retire and not having any more payments. That would be great if that’s what most people were still doing and if houses didn’t cost an arm and a leg now (at least where I live…it still makes sense in some parts of the country). Most people I know, regardless of age, still have mortgages…often because they got sucked into the ‘let’s take money out of the house and invest it in another house’ idea. Oh goody, now you have two houses to worry about.
The problem I see often is that the second house, hopefully a rental, doesn’t bring in enough cash flow to 1) pay for a property manager or 2) warrant the effort on your part playing said property manager.
What are your options? Well, it really depends on your lifestyle. If you’re married with children, you might really like owning your own home. But on the other hand, if you’re like me, and you like the freedom that comes from not having to be financially beholden to a house, then you might just want to rent and invest your money in something else.
2) Kids: too many, too late. Seriously…I love kids. You know that or I wouldn’t be teaching them regularly but again, I’m speaking from years of coaching experience and talking to people at financial seminars and such.
I notice that though everyone says how much they love their kids…and I certainly wouldn’t trade my son for anything!…if they had to do it over again, they admit they’d have one or two and have them earlier in life.
3) Pets: too many, too big, too small a house, wrong reason. OK, you know exactly what I’m talking about. You get the dog because your son or daughter says ‘they’ will take care of it but we all know who usually ends up taking care of it…YOU! And then the dog (or cat, or fish, or cow) gets sick and costs you thousands of dollars you didn’t have earmarked for a pet’s medical bills. You have no idea how often I talk to someone who is in serious debt because their pet got sick.
Again, don’t get me wrong…I LOVE dogs and cats and horses and cows and you name it, I’ll pet it but I’m so happy it belongs to someone else.
4) Cars: too new, too expensive, too little gas efficiency. Here’s the scoop…every summer we get scholarship applications from parents who want a scholarship to send their kids to our Camp Millionaire programs. We require them to complete simple income and expense statements and 99% of the time, the CAR PAYMENTS and expenses are sky high…often in excess of 30-40% of their low incomes. You can only imagine the rolling of the eyes I do when I see these figures and they want ME to give them a break!
Seriously, what are these people thinking? I teach our kids to buy used cars, pay them off and drive them until they die. And IF they want to buy a new car or a fancy car? Great…create the monthly passive income to service the payments or make enough money to buy it outright.
5) Stuff, aka Piddlyjunk: Look around your house and you know exactly what I mean. Look in your closet…what percentage of the clothing do you actually wear. Look in your garage (or better yet, don’t!). Look in your closets, your drawers, your sheds. Look under your clothing at the exercise equipment you bought with good intentions.
Piddlyjunk is everywhere and it’s only job, other than to make you happy for a brief moment, is to prevent you from being financially secure sooner.
Now there is nothing wrong with piddlyjunk. It’s just most Americans waste too much money on it…money that probably should have been invested rather than spent.
OK…I’m finished for today.
My point and invitation to you is to take more time considering how your choices are:
1) Going to complicate your financial life and,
2) Going to increase your financial responsibilities.
Then simply ask yourself how else you could satisfy that ‘want’ and uncomplicate your life instead?
Just something else to think about as we approach the new year.
by Elisabeth Donati | Nov 17, 2011 | Financial Literacy, Latest News, Uncategorized
When it comes to money, my son knows all about swiping debit and credit cards. He’s really good at spending money, both his and mine! When it comes to the finer points of saving, banking, and managing, however, he’s got some room to grow. (Having a financial education advocate for a mom is no guarantee, I’m sorry to say!)
Opportunities for imparting wisdom to my teenage son are getting harder to come by. He can smell a contrived conversation a mile away and, if I so much as utter the word “budget”, he heads for the hills. So when the chance to teach him something arises naturally I get excited. When it happens unwittingly, I’m over the moon and grateful!
Situation Arises
My son needed to withdraw some money from his savings account and had been putting off doing it himself. In my mind, he was either being lazy or suffering from a lack of confidence.
Opportunity Reveals Itself
Instead of scolding him or demanding he “just do it” (which I’ve been known to do), I drove him to the bank and walked him in. I grabbed a withdrawal slip and held his place in line while he filled it out. We approached the teller together and I prompted him to show her his student ID. While she completed the transaction, I asked her (for his benefit) if he could withdraw money without me as long as he showed her his ID. She said “yes”.
Meaningful Moment Occurs
As we walked back to the car, my son thanked me for going in with him. (Sigh.) And then he told me that he thought he was “probably ready to do it himself next time”. (Sigh.)
Why the sighs?
In our fast-paced, hi-tech world, teens can seem so confident, full of themselves, and resistant to our help that we forget they still need our guidance. They need practice and prompting and reassurance because, somewhere inside all that bravado, is just a kid still learning how to be an adult.
Here was an opportunity to help my son take another step in the right direction. I could have easily ignored the chance in front of me out of personal frustration. My sighs are an expression of deep gratitude that I did it another way.
by Elisabeth Donati | Nov 11, 2011 | Financial Literacy, Financial Literacy Principles, Latest News, Uncategorized
Author: Mr. or Ms. Anonymous Attorney
I got this in an email today and it’s good information from an attorney. Even If you dislike attorneys, you will love them for these tips.
Read this and make a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice! A corporate attorney sent the following out to the employees in his company:
1. Do not sign the back of your credit cards. Instead, put ‘PHOTO ID REQUIRED.’
2. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the ‘For’ line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won’t have access to it.
What's in your wallet?
3. Put your work phone # on your checks instead of your home phone. If you have a PO Box use that instead of your home address. If you do not have a PO Box, use your work address.Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary. But if you have It printed, anyone can get it.
4. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place.
I also carry a photocopy of my passport when I travel either here or abroad. We’ve all heard horror stories about fraud that’s committed on us in stealing a Name, address, Social Security number, credit cards..
Unfortunately, I, an attorney, have first hand knowledge because my wallet was stolen last month Within a week, the thieves ordered an expensive monthly cell phone package, applied for a VISA credit card, had a credit line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more.
But here’s some critical information to limit the damage in case this happens to you or someone you know:
5. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them.
6. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one).
But here’s what is perhaps most important of all: (I never even thought to do this.)
7. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and also call the Social Security fraud line number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the Internet in my name.
The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit..
By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the credit checks initiated by the thieves’ purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away this weekend (someone turned it in). It seems to have stopped them dead in their tracks.
Now, here are the numbers you always need to contact about your wallet, if it has been stolen:
1) Equifax: 1-800-525-6285 1-800-525-6285
2) Experian (formerly TRW): 1-888-397-3742 1-888-397-3742
3) Trans Union : 1-800-680 7289 1-800-680 7289
4) Social Security Administration (fraud line): 1-800-269-0271 1-800-269-0271
We pass along jokes on the Internet; we pass along just about everything. If you are willing to pass this information along, it could really help someone that you care about.
by Elisabeth Donati | Oct 7, 2011 | Financial Literacy, Financial Literacy Principles, Latest News, Uncategorized
Have you ever made a mistake that cost you money? Lots of money? And when you thought back over how it happened, you realized it was simply a lack of attention to detail on your part?
Of course you have. We all have. I know I have, and recently I might add. It started out being a $1600 mistake, but with the help of the company, turned into a $300 mistake instead. (Insert heavy sigh here!)
What happened doesn’t matter; it’s how I did it that tells the story. And it only took a couple of minutes to make the mistake.
The Dastardly Details (if you want them!)
There I was, needing to place a pretty big order with the printing company that prints some of our booklets and manuals. The company is Mimeo and they are awesome I might add.
We have this great relationship with the Cherokee Nation and every few months, they order our Camp Millionaire Curriculum and Financial Freedom Playbook for new and/or additional teachers to teach financial literacy to their community. We love what they are doing and so appreciate the difference they are making. And honored to be part of it, of course.
Well, here in the office, Jan and I have acronyms for everything: CM is Camp Millionaire, MO is Moving Out, CWW is Creative Wealth for Women. The problem started with this naming situation. You see I needed to order 250 of our CM Playbook but we also have a CCK (Creative Cash for Kids) Playbook.
You guessed it. I didn’t take the time to review (where was Jan when I really needed her eyes?!?) or look close enough to realize I clicked the wrong playbook and put it in the cart. The prices are about the same and I don’t have them memorized so I clicked, clicked, and clicked and went on to the next project.
Fast Forward
A few hours later something niggled me. You know that feeling you get when the Universe says, “Hey, something seems not quite right here! Pay attention!” and you have to stop what you’re doing and go check something?
Sure enough, that’s what happened. For whatever reason (this happens to me a lot), I realized what I had done but IT WAS TOO LATE! Most of the order had already been printed. Luckily for me it hadn’t been bound and my rep at the company was incredibly sympathetic. He gave me a huge discount to reorder the right product, reinstated our credit that we order with and talked to billing about only charging me for the actual cost of the paper for what was printed.
Huge Costly Mistake Widdled to Small Costly Mistake
In the end, what might have cost me $1600 ended up costing me $300. I feel incredibly grateful that the lesson wasn’t more expensive. And it prompted me to write this article.
“Paying” Attention to Details Saves You Money
That potentially costly mistake caused Jan and I to rethink our procedures here in the office for ordering things and doing all things related to money. We now only order things together so we can double check what the other is doing, we confer on all orders and sourcing projects, and we even enter items into Quickbooks and balance our checking account together.
All in all, that $300 mistake helped us put some very important checks and balances into place that will keep us (hopefully) from making any more costly mistakes in the future.
Avoiding Costly Mistakes in the Future
Here are some tips that may help YOU avoid having to shell out your hard earned cash in case of a financial mistake:
- Plan your financial actions, be them personal or business related. This gives you the space to be calm and pay attention when you do what you need to do with your money.
- Have a set procedure in place for handling financial transactions; from ordering things and keeping track of your spending to investing, buying stocks, receiving money, doing invoices, etc. Anything that involves money should involve a procedure and a thought out one at that.
- Take your time! This is probably the biggest reason we make financial mistakes (and any other kind of mistake actually). We get going too fast and simply don’t pay attention to the little details that turn into big mistakes later on. Make a time to do what you need to do, pour yourself a cup of decaffeinated something, even put a little classical music on if you need to. Do whatever it takes to be relaxed so you PAY ATTENTION.
- When you DO make a mistake — little or big — do your best not to get too upset. Sometimes there is nothing you can do but get the lesson. Let the mistake be fodder for learning a little more about how you operate and what you might need to change about who you’re being around money so you don’t repeat the mistake.
I’d love to hear about your financial mistakes here. Leave your comments below and share what you did and what you learned. We’ll all learn from them!
by Elisabeth Donati | Sep 30, 2011 | Financial Literacy, Financial Literacy Principles, Latest News, Uncategorized
by Paul Richard – ICFE PresidentSan Diego, CA – A growing number of merchants won’t accept cash anymore, including many airlines, which insist you pay by credit card if you want to buy a drink or a sandwich on board. There are also news reports that the U.S. Treasury is printing fewer dollars, as American consumers move towards an all-plastic economy. It is good news for the banks, card companies and other lenders.
To add to the cost of banking is the threat of a new one percent transaction tax on all banking activity.Cash is this writer’s preferred method of doing business. No credit cards, no travel cards, no charge accounts and here are some reasons why.
- Spend less using cash. Most people are simply willing to spend more when they use credit cards than they do when they use cash. The day-to-day cash spending rates drop. There are far fewer impulse purchases too, because if there is no cash available there will be no splurges.
- Cash makes budgeting easy. Draw out a certain amount of cash once a week and budgeting becomes automatic. One thing we all do when spending cash, we count how much is left over after a purchase. Hardly any credit card buyers check their credit available after their purchases.
- Reduce indebtedness. Credit cards were originally designed to be used for convenience, however a growing number of card holders now use them to accumulate debt. Using a card for convenience means paying the account in full at the end of the accounting period. Using the cards for debt means consumers will pay a lot more in the end because credit card interest rates are higher than most loans.
- Cash makes me think about what I spend and why. Brett Arends, a writer for Smart Money magazine, remembers back when he got his first job, he writes that he started calculating how much everything he spent cost in terms of hours worked. That new CD cost two hours of his time, and so on. It was a good discipline.
- Identity theft potential is minimized. Many people worry about handing out a credit card or details every time they make a purchase because of the prevalence of credit and identity thieves. Using cash cuts down on the risk and increases privacy.
- Cash helps local people. The cash spent at local merchants and their suppliers is keeping some fellow citizens in work. On the contrary with credit cards, the interest and other fees are helping finance bank executives, their marketing teams and call centers overseas.
Paul Richard
is the President – Executive Director of
Institute of Consumer Financial Education (ICFE). The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
by Elisabeth Donati | Sep 23, 2011 | Financial Literacy, Latest News, Uncategorized
“Learn how to be financially free today.”
“Be all that you can be now.”
“Learn to play a bigger game!”
“Propel yourself to another level!”
And on and on…
Are you at all tired of being made to think that being who you are, where you are isn’t enough? Quite frankly, I think a lot of adults would be less stressed if they stopped listening to the media, the seminar gurus and others who tell them they aren’t OK just the way they are.
This is true both in how we live in general and how we choose to do money.
Your Financial Drummer
Personally, I love having an old car that’s paid off and gets great gas mileage and has the old fashioned windows you roll down by hand. I’ve always thought this is a much better option if you ever end up plunging it into water (not that I think that is ever going to happen, mind you:-). Never mind my iPod won’t plug into it. I don’t care.
I love that my clothes don’t have other people’s names on them and I’ve never cared for fancy purses or makeup or fancy anything else for that matter. I have always worn what felt comfortable on my body and gave me joy to put on and move around my world in.
I enjoy having to budget my vacations. It makes me appreciate the experiences I plan and pay for.
I’ve never worn a suit and I get a kick out of wearing my toe shoes with anything and everything. You couldn’t pay me to wear a suit or heels. I have never worn ‘appropriate’ clothing and I’ve never known anything bad to come of it. Heck, for those of you who have been to my trainings, you know I teach barefoot because I am a better teacher when I’m connected to the world physically.
I’m grateful I don’t own any real estate! Been there, tried that. Didn’t like having to be responsible for so much stuff. I prefer renting and love that my landlord takes great care of my house. I’ve never needed to own a home to feel secure in my life day to day. Security is highly over-rated and rarely exists anywhere except in our minds.
What’s my point?
I just want you to notice two things:
First, whose life are you living right now? One that you’re comfortable in most of the time or one you think you should be living because you’ve bought into levels, classes, better thans and worse thans?
Second, are you inviting your children to grow into their true selves or forcing them to grow into any number of society’s acceptable roles…roles you might even live in but don’t care for yourself?
If there’s part of your life that isn’t you or you’re force feeding your kids into a life that you sense isn’t them, stop.
One of the nicest compliments I ever received from someone who met me years ago was a card that said something to the effect that I just seemed happy marching to the beat of my own drummer.
What beat are you marching to?
Just something to think about.
1) Houses: too big, too many, too expensive. All in the guise of ‘the investment’ and not wanting to pay taxes. Well, I have news for you. You pay those taxes whether you own the house or not. If you rent, they are built into your rent.
