by Elisabeth Donati | Dec 18, 2013 | Financial Literacy, Latest News, Train-the-Trainer, Uncategorized, What you can do
December 18, 2013
Happy Holidays!
I’m currently in the Caribbean, about to be the matron of honor for the lady I stayed with a few years ago. She’s experiencing a lot of stress before the wedding and in a lot of pain. It is so interesting how we human beings interpret our lives in ways that bring pain instead of joy.
I wanted to touch upon the holidays to invite you to check in with your own experience this season. How is you feeling so far? Are you enjoying your days, getting ready for however you do this season? If you aren’t, you might want to stop, regroup and choose differently. Remember, it really is all about choice and only you can choose to create the experience you want.
I personally don’t celebrate the holidays in a traditional way. I do, however, enjoy the time to reflect on the past year and think about the year to come…and find my way to warm waters in the south that I can swim in and enjoy.
I did want to share one of the things I found myself teaching this year to all sorts of people…Rarely is anything an emergency.
Being in the Caribbean, you really get a good sense that nothing much is an emergency. Everyone is very laid back and relaxed and I find myself falling into afternoon naps, slow walks with an 11 year old I could bring home in my suitcase and just overall, slowing down. I’m not sure why we Americans (especially) get into a pace that’s not healthy for our bodies and spirits, but most of us do. I’m planning on bringing that peace back with me again.
Now for my little gift to you…
If you’re sitting there reading these words, you probably understand that there are many things you can do during the holidays but the things that bring you the most pleasure and joy are the things you do to bring others pleasure and joy. Isn’t it fun how that works?
And because most of you are on my email list because you really care about making sure your children and students learn how to handle money wisely, I wanted to make sure you had the opportunity to save a little moolah this season making that happen since often times it does take money to bring others pleasure and joy.
2013 HOLIDAY COUPONS for you!
Since I’ve made our Camp Millionaire Curriculum available online, we’ve had a lot of people take advantage of it. No traveling, no flight. Just sign up, log on, watch the videos at your leisure and start teaching the program in your classroom, youth group or for any group of kids ages 10 and up.
Use coupon code HOLIDAY2013 to receive $100 off this new Camp Millionaire Online Program.
OR, if you’ve been dying to get your hands on The Money Game to teach your kids about money, use Coupon Code MONEYGAME2013 to get 25% off either the Downloadable Kit or the Ready-to-Play version.
And if there’s something else you have been wanting from our financial literacy store, use Coupon Code HOLIDAY25 to get 25% off!
That’s all for now.
Miss E (aks Elisabeth)
Your Financial Literacy Lady
by Elisabeth Donati | Sep 12, 2013 | Financial Literacy, Financial Literacy Principles, Uncategorized, What you can do
Because I am the proud owner of many financial education websites and several financial literacy blogs, I receive, almost weekly, requests from other website owners requesting that I post a link for their sites on my blogs and sites.
My usual response back to them is, “OK, show me the link.”
Side bar: I have a policy of never posting links to websites that deal with credit scores, credit ratings, mortgages, loans, or debt consolidation.
Invariably the person is asking me to post one of the many links I refuse to post on my sites and blog.
Occasionally it’s a legitimate link and I’m happy to do it…especially if they’ll reciprocate and post a link to my sites from theirs…but this is rare.
Back to the point of this post…
I find it intolerable that we have become a country that is primarily focused on credit scores and credit ratings. I never hear people talking about how much money they’ve saved or invested but I DO hear people talk about their credit ratings.
Do you realize that almost everything we see on TV, hear on radio and read in the papers and in magazines is designed to get us to BUY something? And that credit score that a lot of financial educators think it’s so bloody important to teach our kids about plays right into the hands of every one of those companies trying to get us to buy something.
Don’t get me wrong…there’s nothing wrong with buying things…and there’s nothing wrong with learning how to borrow money wisely in order to acquire assets that pay us passive income over time…it’s just that so often we either don’t need the thing we’re buying or the thing we’re buying isn’t going to affect our lives in a positive way. Go ahead…think about the last few things you bought…especially if you borrowed money (from anyone) to buy those things.
That’s all…just wanted to pop in and remind you that it’s WAY more important to be saving and investing instead of borrowing, buying and getting into debt and I think our kids need to learn why everyone wants them to have a high credit score!
Oh, by the way, I invest between 10-15% of every dollar I earn and make into individual stocks. I also continue investing in my companies (I have more than one:-).
How about you? Let’s start talking, and teaching, about what’s really important!
Just something to think about as usual.
by Elisabeth Donati | Sep 9, 2013 | Burning Financial Questions, Financial Literacy Principles, Latest News, Uncategorized
I have been traveling this month (September 2013) to visit family, making the rounds to Portland, Oregon to visit my son and my sister and her family, on down to Corvallis (my alma mater…go Beavers) to visit a long-time girlfriend and then over the Cascade Mountains to visit my house-bound mother who has COPD (this is doctor-speak for smoked cigarettes for decades and now can’t breath without the help of an oxygen machine) where I clean, re-organize, run errands and so forth for a week or so.
I also get to connect with my younger (but taller!) brother who I adore in ways he probably doesn’t know.
While doing all of this traveling and visiting, I also get to meet a lot of people who, for whatever reason, seem to need to share the trials of their lives with me. The sharing of those trials is what today’s blog is about.
Sidebar…
A little about me…I have always wanted a simple life; a life that didn’t take a lot of money to maintain and a life where I felt purposeful. I’ve never seen the point of ‘finding’ my one purpose because quite honestly, I have never believed in that high pressure idea. I noticed early on that if I was helping someone with something, I felt great about it and realized that that was living my purpose.
OK, back to the story…
What constantly amazes me is how so many human beings have chosen to create such complicated, overwhelming and expensive lives that cost a fortune in time, energy and money to maintain.
The sadder piece is that these same people don’t seem to be enjoying the lives they’ve created because they don’t have enough TIME to enjoy them…they are too busy working to support their created lives.
How to Create a Simple Life
All of this expressed stress and overwhelm gets me thinking about my own continual quest to make life as simple and easy to maintain as possible. I believe it comes down to one thing…THINKING AHEAD.
Notice I didn’t say setting goals or planning or changing your belief system or any of the other common notions being presented by today’s new-age money and lifestyle gurus.
I said THINK AHEAD…specifically, think about every choice you make concerning your lifestyle:
- Partner…are they high maintenance or not? Are they healthy or now? Will their habits keep them safe and healthy or….?
- Cars…are they going to cost you a fortune in gas, maintenance and insurance? How much do you have to work to afford the payments if you’re about to take on a car loan? Is there a less expensive way to acquire reliable transportation that is easier to support?
- Homes (rental)…are you taking on too high a monthly rental payment for your current income level? Could you be sharing an apartment or home with someone else to cut costs or chores? Cooperative living is increasing in several age brackets for just this reason.
- Homes (purchase)…can you really afford it? Do you really want to owe someone that much money? Do you really want to be strapped to a building without the freedom to leave it anytime you wish? (Security is a myth). Have you fallen for the ‘but you can write off all of the interest’ idea to the point where you’re working harder than ever to make the payments for that house that’s giving you such a wonderful write off?
- Children…do you know how much having one healthy child costs to raise? How about two? Three? Have you thought ahead to the amount of money you’re going to have to be making when they are teens (unless you buy into my idea of getting them to create businesses as early as possible to make their own money).
- Pets…do you know what it costs to feed a dog for 15 years? What about getting them shots, taking them to the vet when they get hit by a car or develop hip issues (and they will)? Note: don’t get a bird unless you want a lifetime companion that never grows up!
- School loans…yes, I said school loans. Contrary to popular belief, they are NOT investments. They are huge unpleasant chains around yours and your children’s futures. Borrow money for education wisely!
I could go on but you get the idea.
The point is to THINK AHEAD…as far ahead as you can…when you’re about to make a choice that may affect your time, energy and money for years to come. The challenge seems to stem from our inability to realize we WILL get older and we may just not want to continue living the same way we lived in our 20s or 30s.
If you really want to be tied to whatever it is you’re thinking of buying or acquiring and are willing to support whatever it is you’re about to add to your life, then go for it.
If you realize, like I do, that many of the things that you might enjoy in life come with huge time, energy and money requirements, you might just want to choose otherwise.
What I can tell you from personal experience is this…every time I make a choice that makes my life simpler, I breath easier and every time I make a choice that complicates any part of my life, I feel the burden of that choice and wish I’d chosen differently.
How to Uncomplicate Your Life
My coaching clients often ask me how to uncomplicate their lives once they have already made the choices that are costing them too much time, energy and money to maintain.
My favorite answer (and I often remind myself of this) is something I remind myself of all of the time and that I coined a couple of years ago:
“The only way to stop doing something is to simply stop doing it!”
Yes, sometimes it takes a little planning to stop doing something but it’s almost always worth it!
OK…go uncomplicate some aspect of your life and let us know how it feels!
by Elisabeth Donati | Mar 25, 2013 | Financial Literacy, Uncategorized, What you can do
By Jim Garnett, a/k/a Ask Mr.G, a member of the ICFE’s Board of Educational Advisors.
As a veteran financial counselor I have counseled multiple hundreds of smart people with serious financial problems. These people had different incomes, different occupations, and were from different social status. Yet their financial problems seemed to be the results of making very similar “money mistakes.” I have attempted to list these “money mistakes” below.
Being comfortable with debt.
It is hard to understand how anyone could choose to be a slave. Yet, history tells us that some slaves chose to stay with their masters after they were freed. That’s what they had known for generations, and they were used to it. Some of them went on living just slaves even though they were free. Why? Because over time they had developed a “slave mentality.”
Proverbs 22:7 warns us, “The rich rule over the poor, and the borrower is slave of the lender” (NRSV). Debt enslaves us. It takes away our freedom to choose to do with our money what we wish. Constant exposure to debt cultivates a “debt mentality.”
But imagine what it would be like to not have a mortgage payment or car payment? Wouldn’t that be freeing? Think what you could do with that money if you were out of debt! You would not need much money to live, you could seriously put money aside for the future, and you could give money to people, your church, or other organizations that are important to you.
It’s time we stopped thinking about debt as an old family friend that has moved in to stay with us forever! We need to kick him out and send him on his way!
Not knowing what we spend.
The only part of the budget process most of us know is “what we make.” The part we do not know is “what we spend.” This money mistake results in 40% of Americans spending more than they make each month, with most of them being unaware that they do.4
How can this be? Because when they run out of money, they use credit cards to continue spending. An illusion is created that actually keeps them from knowing how they are doing financially. Bills are paid on time so they assume they are doing fine.
It is absolutely essential for us to know how much we are spending each month. Without that knowledge, there is no way to know if, where, and how much to adjust our spending so that it is less than we make.
To know how to get to a destination, we must know where we presently are. That’s why the first step in money management is knowing what we spend.
Acting like credit cards spend money instead of borrow money.
The illusion created by such convenient credit card usage blinds us from the realization that each swipe of the card is very similar to securing a loan at our local bank. Money has been borrowed, not spent, and each transaction is one in which we have created a debt.
Reality is not as the college student recently told me, “I am so glad I have a few credit cards, ’cause no matter how broke I am, I always have money.”
Focusing only on monthly minimum payments.
Focusing on the monthly payments to the exclusion of the entire debt will usually lead us to purchase things we cannot afford and pay double or triple for them.
This money mistake caused the single mother of three to think she had paid $24,000 for her new SUV when in reality she had paid $45,360! To “help her afford it” the dealer let her pay for it over a 7 year period instead of the usual 5 years!
Borrowing to “pay off” debt.
Borrowing to pay off debt normally does not work. It is similar to digging a hole in our front yard in order to fill in a hole in our back yard! This “money mistake” yielded some pretty disastrous results:
- Their borrowing did not actually “pay off” debt – it merely moved the debt to a different location. Now they had a 2nd mortgage on their home or a loan from their 401(k).
- The debt they paid off (usually credit cards) reappeared within 3 years. This occurred because their borrowing made it unnecessary to change their spending habits.
- Equity borrowing turned an unsecured debt (credit cards) into a secured debt (2nd mortgage). That’s why the interest was less – the bank would rather loan against your house than loan against your name.
- 401(k) borrowing often had a 10% penalty attached if the person was not 59-1/2, plus the monies borrowed were taxed as income. At times 40% of the monies withdrawn “disappeared” in penalty and taxes.
- When it came time to move, their house produced very little profit and there was nothing to put down for the down payment on the next home.
- When it was time to retire, they could not because they still had house payments because they had borrowed against their home and it was not paid off.
Co-signing a loan.
Co-signing is a promise to repay another person’s debt if for any reason he does not. The liability assumed is for 100% of the debt, thus, if $5000 is the total amount borrowed, the co-signer is responsible for the entire $5000 if the other person defaults.
The co-signer’s credit score can be affected if the primary signer makes late payments or misses payments on the loan. Presently, 75% of student loan co-signers end up making payments on the student loan.
Having no emergency savings.
A recent survey asked people if they could get $2000 for an emergency? The results revealed that 55% of the respondents said they could get the money within 30 days, but 92% of those people said they would need to borrow the money from family, friends, bank loans, or credit cards. Another survey revealed that 28% of the 1000 people surveyed have absolutely nothing in savings (Blake Ellis – CNNMoney June 25, 2012).
In other words, many people are simply not prepared for emergencies.
Creating debt for tax benefits or to establish credit.
Debt for Tax Benefits. It is good to claim every deduction that you can on your taxes, but it is often not good to spend money in order to get a tax deduction.
An example would be the deduction one is allowed to take for interest paid on a mortgage loan. If I paid $10,000 of interest and was in a 25% tax bracket, I would receive a tax deduction of $2500. If I absolutely had to pay the interest, I would surely deduct it. But if I had the choice of paying my home off and having no interest to pay, that would be my choice by far.
I would far rather have the $10,000 non-spent money in my hand than receive a $2500 tax deduction. I may pay more tax, but on the other hand, if I gave monies to charities, I would receive the same deduction.
Remember, you usually have to spend your money to receive tax deductions. If you are not careful, you can tax deductible yourself into the poor house.
Debt for Establishing Credit. One of my clients followed the advise of her financial counselor and bought a house in order to build up her credit score.
In order to establish credit, you need to pay your bills on time, but you do not need to maintain debt to do this. You can establish your credit just as well by paying your credit card balance in full each month as by paying minimum payments (and interest) on a revolving balance.
Thinking that good credit is the most important thing in life.
There is certainly nothing bad about having good credit, and there is nothing good about having bad credit. Credit is most important to people who are going to borrow money. Then it can literally save us thousands of dollars by getting good terms!
But if one plans to get out of debt and stay out of debt, good credit is not nearly so important. To those people it is viewed more as the ability to go into debt with good terms. For people who very much dislike debt, good credit is not nearly so important or necessary.
We do not have to be enrolled as a “student in the school of hard knocks” to learn valuable lessons. We can simply obseve the money mistakes others have made and be sure we do not duplicate them.
© Jim Garnett.
The information on this broadcast should be understood to be a general discussion of the subject matter and DOES NOT constitute a legal opinion about the situation. For further information please consult a qualified attorney.
© Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023
515-577-1799
askmrg@yahoo.com
AskMrG.com
by Elisabeth Donati | Mar 8, 2013 | Financial Literacy, Uncategorized, What you can do
Back by popular demand, parents this summer have the rare opportunity let someone else make sure their teens know exactly what it’s going to take to move out and live on their own.
Most parents admit they wished they’d learned this stuff when before they moved out. This summer, teenagers can spend 3 fun-filled days at Moving Out! for Teens learning how to find an apartment, take care of a car, buy groceries and more and stay within their budget. They’ll also explore different ways to make money, explore the truth about credit cards and oh, yeah, how to manage and grow their money so they can be productive, contributing members of society. Moving Out! for Teens is presented by Creative Wealth International, June 28-30, 2013 in Santa Barbara.
“Every year I get calls from parents all over the United States begging us for our Moving Out! for Teens program.” says Elisabeth Donati, creator of Camp Millionaire,® The Money Game® and founder of Creative Wealth International. “By empowering our teens with the information they need to be fully responsible for themselves when they move out and live in the adult world, we’ve done our best to prepare them to live life fully.
This 3-day financial and life-skills workshop is open to parents as well (if their teen is willing to have them join in the fun). Participants not only get hands-on experience with things like filing out applications, buying cars and groceries, cleaning apartments and creating budgets, they also get first hand experience from the parents who often share some pretty valuable ‘been there, done that’ stories.
Space is limited to 25 teens ages 14-19. We promise to deliver teenagers back to their parents far better prepared to face the financial challenges of being an adult. For more information, visit www.campmillionaire.com or call Elisabeth Donati at 805-957-1024.
by Elisabeth Donati | Mar 7, 2013 | Financial Literacy, Uncategorized
Believe it or not, there’s a great place on your child’s book shelf for financial education books for kids. Financial literacy in the US and most other countries is hugely lacking so it’s important to make sure your kids get a sound foundation in saving and investing for their future.
Here are three great financial education books for kids. Please let us know if you know of others we can add to the list.
The first two are story books with lessons for 6-9 and the colloring book for any one who loves to color, including adults!
1. It’s a Habit, Sammy Rabbit by Sam X Renick – $5 ea. + shipping.
2. Will Sammy Ride the World’s First Space Coaster? by Sam X Renick – $5 ea. + shipping
3. Financial Wisdom Coloring Book by CWI – $8 ea. plus shipping (regularly $14.95)
If you’re interested in purchasing the coloring book in bulk or having it customized with your logo, call us at 805-957-1024.
Happy reading…
Elisabeth…Your Financial Literacy Lady
p.s. IF you haven’t signed you son or daughter up for our summer Camp Millionaire (ages 10-14) or Moving Out! for Teens (ages 14-19) programs, now’s the time to do it!
