Monday, May 28, 2012

You Can Do It!

Lately it seems like too many of my conversations begin and sometimes end with the problem of convincing people they can do something to improve their financial situation. All too often we have been persuaded that we are nothing more than bits of straw caught in a hurricane of forces beyond our control. Leaders of both parties seem to spend a lot of time telling us that we are victims, instead of celebrating our victories. Guess it gets them votes. Way too much time is spent by the psycho babble, self help movement exploring the sources of our neuroses in an attempt to avoid taking individual responsibility for our current situation.

Draw a circle on a piece of paper. Inside the circle write down everything you are currently doing with your money. Outside the circle write down everything you would like to do with your money. No, don’t write down, “Win the lottery. Move to Hawaii.” It isn’t that kind of exercise. However, “Save $6,000 for a two week vacation in Hawaii,” would be something totally cool to write down outside your circle.

Here are a list of suggestions from an article found at entitled, 10 Ways To Improve Your Financial Health Even If You Only Do One Thing.

1. Grow Your Emergency Fund
2. Pay Off Credit Card Debt
3. Put 10% of Your Income Toward Retirement
4. Pay Off Your Mortgage Before Retiring
5. Track Your Spending
6. Envision Your Future
7. Improve Your Credit Score
8. Live Below Your Means
9. Act Like You Can’t Just ‘Throw It Away’ (this one is a little weird. The author means pretend you have to keep everything you buy forever. You can’t throw it out or sell it. Obviously he hates American consumerism.)
10. Move Your Money Around (Move it from poor investments to better investments)

I am liking the “Even if you only do one thing,” suggestion. The circle exercise in the second paragraph actually comes from Neuro-Linguistics Programming (NLP). Like the author of the article, NLP suggests doing just one thing to improve your situation that is outside your current comfort zone. Pick something, anything, from your list of things you believe will improve your life. Then Just Do It! Understand you will have good days and bad days. On the days when you fail, renew your resolve, and just try again. This isn’t rocket science. You can do it! Really, you can!

Saturday, May 26, 2012

Saint Thomas the Engineer

In the end it isn’t about money. It’s about life. We learn to manage money, make wise decisions not as an end in themselves but to benefit and to be a blessing to ourselves and others, not only in our life but after our passing. My father-in-law understood this truth. Although his life in this world came to an end 8 years ago, the chain of blessings that he nurtured throughout his lifetime continues until this day.

For most of his life my father-in-law was a little more than comfortably middle class, but hardly wealthy. In the last few years of his working life he earned what most of us would call a pretty decent income. With this money he provided for and protected a wife, a son, and a daughter. In fact, I would say, he spoiled them more than was healthy. If he had any shortcoming it was that he loved too much.

My father-in-law spent very little on himself. He always had pretty decent cars, his last couple of vehicles I would describe as entry level luxury, perhaps a step down from what he could have purchased at that stage of his life. In his later years, along with his wife he saw a bit of the world in package tours. That was about it. What he didn’t spend on his family he put in savings and investments.

Of course he was a pillar of his church, a Sunday school teacher, a deacon, a giver. Numerous men and women looked to him for guidance as a model Christian. They have told this to us again and again after his death. My mother-in-law would get aggravated when other women would ask her what it was like to live with a Saint (really). He also supported and cared for his mother-in-law for many years until it was physically impossible to continue caring for her in his home. His brother-in-law died early without much of an estate or pension. His sister-in-law was really never able to earn enough to support herself after her husband’s death. My father-in-law stepped into the gap, making up the difference when events, like the death of a car, required his financial intervention. His sister-in-law told people my father-in-law was better than a second husband. At times she said she felt like his second wife. My father-in-law’s money continued to support both his wife and his wife’s sister after his death. My mother-in-law paid her sister’s rent in a senior high rise until her sister was no longer capable of independent living.

The last years of my mother-in-law’s life were terribly expensive. Besides the cost of frequent trips to the hospital, she required 24 hour a day home health care to maintain the fiction of independent living until the end of her life. It was what she desired. My father-in-law paid for it.

Now my mother-in-law is gone. There is enough money remaining in the estate to provide generously to our retirement and to guarantee than more than enough will be made available to pay his sister-in-law’s medical bills until her death. I also suspect there will be enough to bless his niece and nephew in retirement once his sister-in-law passes.

May I live up to even half of his standards.

First Timothy Chapter 6

[6] But godliness with contentment is great gain.
[7] For we brought nothing into this world, and it is certain we can carry nothing out.
[8] And having food and raiment let us be therewith content.
[9] But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition.
[10] For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
[11] But thou, O man of God, flee these things; and follow after righteousness, godliness, faith, love, patience, meekness.


[17] Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy;
[18] That they do good, that they be rich in good works, ready to distribute, willing to communicate;
[19] Laying up in store for themselves a good foundation against the time to come, that they may lay hold on eternal life.

Saturday, May 19, 2012


I have seen conflicting reports listing financial problems as high as the number one cause for divorce to as low as the number five cause of divorce. No matter how many divorces are caused by financial problems, I am certain that every divorce causes financial problems, a lot of financial problems.

It isn’t unusual for one partner in a divorce to misuse money as a weapon to damage the more responsible partner. Of course there are the cost of lawyers and the court system. If a couple had money problems before a divorce, operating two households instead of one household will certainly not make things any better.

Then there are the residual entanglements. Alimony is less common than a generation ago, but it is still awarded by the courts. If there are children involved, there will most likely be child support payments, a source for a great deal of bitterness and recriminations. In the case of joint custody, pretty common these days, each child needs two rooms and two sets of furniture instead of one room.

Even retirement becomes problematic. Pensions are divided according to some formula involving the overlap between time of service and the years of the marriage. In some cases this burden is not triggered until retirement, giving the partner earning the pension incentive to work until death, if not to have enough unencumbered pension, at least to deny their ex any of “their” money.

This is not an article about when divorce is appropriate or inappropriate. It just gives one more reason to try and save a marriage. It is frequently said that it takes two people to make a marriage work. Ultimately that is true. However, in the short run (which can be years) one partner who is willing to suck it up and carry the load, no matter how unfair, can singlehandedly support a marriage until the problem partner gets back on track. One of my heroes is a woman who did just that. She carried her marriage through some pretty bad times. Now her husband tells anyone who will listen his wife is the only reason their marriage survived. He praises her publicly whenever the subject arises. She just smiles. I believe she not only has her reward in this world, but a greater reward in the world to come.

Matthew 19

When Jesus had finished saying these things, he left Galilee and went into the region of Judea to the other side of the Jordan. 2 Large crowds followed him, and he healed them there.

3 Some Pharisees came to him to test him. They asked, “Is it lawful for a man to divorce his wife for any and every reason?”

4 “Haven’t you read,” he replied, “that at the beginning the Creator ‘made them male and female,’ 5 and said, ‘For this reason a man will leave his father and mother and be united to his wife, and the two will become one flesh’? 6 So they are no longer two, but one flesh. Therefore what God has joined together, let no one separate.”

Sunday, May 13, 2012

Put Your Lights On

Hey now, all you sinners
Put your lights on,
Put your lights on
Hey now all you lovers
Put you lights on,
Put your lights on

Here’s an idea that takes off where my last post ends. When you pray, pray with your eyes open. You might just be the answer to someone’s prayers. Generosity is a part of money management. It is also a part of a good life. The rapper Everlast wrote the song Put Your Lights On after suffering a heart attack. When life or death is a crap shoot, it tends to focus what is important, becoming a light in a world filled with darkness.

There's a darkness,
Living deep in my soul
I still got a purpose to serve
So let your lights shine,
Deep into my home
God don't let me lose my nerve,
Don't let me lose my nerve

If you are still breathing air you still have a purpose to serve. Open your eyes turn your lights on. Look for opportunities to be a blessing. Don’t limit your vision to money. Give your time, your treasure, your emotional energy, and the gift of your open heart, wherever the Spirit leads.

'Cause there's a monster,
Living under my bed,
Whispering in my ear
And there's an angel,
With a hand on my head
She say I got nothing to fear

As you learn to open your wallet, your eyes, and your heart, God will give you more responsibility and more opportunities. Just remember there’s an angel with a hand on your head whispering in your ear, “You have nothing to fear.”

John Chapter 9

[30] The man answered and said unto them, Why herein is a marvellous thing, that ye know not from whence he is, and yet he hath opened mine eyes.
[31] Now we know that God heareth not sinners: but if any man be a worshipper of God, and doeth his will, him he heareth.
[32] Since the world began was it not heard that any man opened the eyes of one that was born blind.
[33] If this man were not of God, he could do nothing.
[34] They answered and said unto him, Thou wast altogether born in sins, and dost thou teach us? And they cast him out.
[35] Jesus heard that they had cast him out; and when he had found him, he said unto him, Dost thou believe on the Son of God?
[36] He answered and said, Who is he, Lord, that I might believe on him?
[37] And Jesus said unto him, Thou hast both seen him, and it is he that talketh with thee.
[38] And he said, Lord, I believe. And he worshipped him.
[39] And Jesus said, For judgment I am come into this world, that they which see not might see; and that they which see might be made blind.
[40] And some of the Pharisees which were with him heard these words, and said unto him, Are we blind also?
[41] Jesus said unto them, If ye were blind, ye should have no sin: but now ye say, We see; therefore your sin remaineth.

Saturday, May 12, 2012

Play By a Different Set of Rules

I try to write articles that I believe will be useful and interesting. I also try not to be too repetitious. This can be hard because there are certain messages that need to be repeated over and over again until Americans start to believe there is a better way, that they can escape financial bondage, and be free.

If a foreign enemy tries to fight the American military using American rules they will lose every time. In WWII the American military learned control of the air was everything. American doctrine begins and ends with air superiority if not air supremacy over the battlefield. It doesn’t matter if the battle is on land or sea, the American military will control the sky. Whether the engagement is on land, sea, or an amphibious assault by the Marine Corp, our enemies face an integrated machine consisting of men, aircraft, weapons, vehicles, communication systems, intelligence satellites, and computers. It is the most formidable military in world history. The only way to neutralize this power is to play by a different set of rules. In Vietnam and currently in Afghanistan our enemies did not play by our rules. They found ways to neutralize the effect of air power. Roadside improvised explosive devices triggered by cell phones are not something that can be easily controlled by air power or sophisticated integrated military systems.

If you play against the major banks and credit card companies by their rules you will lose every time. They are the most powerful and sophisticated financial weapon systems ever created and they want to use this power to make you their debt slaves, forever.

Don’t bite the hook.

If you did bite the hook, it is time to play by a new set of rules; starting with, don’t borrow any more money. You can not get out of a hole by digging a deeper hole. Freeze that credit card in a large block of ice or cut it into small pieces. Quit believing that a degree that carries an average of $40,000 in student debt is the road to a good life. It isn’t. It is a road to a decade of slavery. Drive an old used car until you can afford something better. Put off buying a house until you can pay 20% down, avoid that mortgage insurance.

Instead of borrowing, begin to save. Get that emergency fund in place. It will take years to reach the goal of a fully funded 6 month emergency fund. Don’t beat yourself up. Just put away a little every month. Once you have a pretty good stash in the emergency fund start investing in stocks. Start small. Carefully building a diversified portfolio of stocks and bonds over the course of many years, works.

Sell some of your stuff. My house is crammed full of more stuff than I can believe we have managed to accumulate over the 37 years of our marriage. It’s mind boggling. Sell the kid’s old moped rusting out there in the garage. How about that dining room table in the closet under the staircase? Is that thing doing you any good? If you are debt, get rid of stuff. You can always buy more (with cash) when you can afford it.

Take a part time job or work some overtime. There was a time in my life when I was actively seeking overtime. My regular pay covered my basic expenses, but overtime gave me a life. I learned if I worked overtime whenever my boss needed me without complaint, he would give me overtime when it really wasn’t all that necessary. It is harder now, I’ll grant you that, but it really wasn’t all that easy working in a textile mill during the recession caused by the first oil shock in 1973.

Pay down that debt using a disciplined systematic approach. The debt snowball, the debt avalanche, and the debt snowflake are three of many. They all work, but only if you relentlessly attack your debt. Never surrender. The Afghan insurgents have a saying about the American military, “You have the watches, but we have the time.” You will defeat your enemy if you have that attitude.

Finally, prayer works. Your brothers and your sisters have your back. You have their prayers. Now say it after me, “Citibank Mastercard! You are going down.”

Friday, May 11, 2012

The Evolution of an Emergency

It occurred to me the other day while presenting the Dave Ramsey lecture on budgeting, there is an evolution how budgets might work as a student of money management progresses through life. Consider a typical emergency, $1,000 car repair. They happen.

Before living on a monthly budget, this kind of event could constitute a serious emergency resulting in a visit to a credit card, or something worse like a payday loan company. A loan from an 18% credit card paid back at the rate of $200 a month would result in six months of payments, $1,200. At such a time in a person’s life this could constitute a very serious problem.

After building even a $1,000 emergency fund, a thousand dollar emergency while quite unpleasant and painful only costs $1,000.

After living on a budget for a time, our student simply goes to the auto repair envelope, a real envelope or a virtual envelope in a large single bank account. When the time comes, the money is there. The emergency has no effect on the monthly budget whatsoever.

Finally, after years of consistent effort, the mortgage payment is gone. The unfortunate car owner shrugs their shoulders and thinks, “Well, a little less is going into savings this month.”

You can get there. Step by step. Year after year. You can improve your financial condition and your life.

Sunday, May 6, 2012

Horses and Chariots of Fire

You’re not helpless and you’re not alone. If you don’t like something, do something to change it. I am not talking politics. Ultimately no organization, political or commercial exists to promote your interests. I am talking about doing something with and for your family, friends, neighbors and yourself.

If you don’t like the big four banks, don’t do business with them. There are plenty of credit unions and local banks that still exist. As readers of this blog know, I love my credit union.

My cousin dislikes processed food so he grows, buys, and promotes organic locally produced foodstuffs.

I know several people who dislike and distrust what Charles Hugh Smith terms our sickcare industry. They take control of their own health with alternative healthcare providers, like naturopaths and chiropractors.

My particular causes:

I hate what debt slavery is doing to my neighbor, so I teach them how to get out of debt.

I fear for the future of my generation (the baby boom) because they have done such a wretched job preparing for retirement, so I teach them the basics of investment and how to live on a budget.

There is more.

I don’t do such a good job in some areas of my life, like diet and exercise. Is there somebody in my neighborhood or church that would be willing to guide me into some reasonably convenient, affordable changes to my diet?

In some pretty desperate third world countries they have things like burial societies and savings clubs. Just ordinary people join together in cooperative organizations that provide an insurance service to protect the members from expenses like funerals, which can run up to ½ a year’s wages in some societies. The society owns a small cemetery. The members pay both a subscription fee and provide sweat equity, like digging graves for their friends and neighbors. The savings clubs act like a communal emergency fund. If a member is faced with an overwhelming problem, the rest of the membership votes how much to give to solve that problem and under what terms the loan should be repaid.

Years ago I suggested an investment club for my church. Its primary purpose would have been an opportunity to learn. Members could come together, share research and jointly come together and make an investment decision. Cost of membership would have been set low enough that anyone could participate, say $20.00 a month. Profits, if any could be shared with the church. I still think that is a good idea.

What if a group of broke friends (for the sake of this argument 10 couples), started a savings club for their emergencies? What if each member contributed only two dollars a day, less than a pack of cigarettes or the proverbial cup of Starbucks coffee? In one year, without any interest that would be $14,600, a pretty decent start to an emergency fund.

All that is required is that one person decides that enough is enough, turns around, takes his brother by the hand, opens his mouth and says, “I care and I will help.”

2nd Kings 6:

15 And when the servant of the man of God was risen early, and gone forth, behold, an host compassed the city both with horses and chariots. And his servant said unto him, Alas, my master! how shall we do?

16 And he answered, Fear not: for they that be with us are more than they that be with them.

17 And Elisha prayed, and said, LORD, I pray thee, open his eyes, that he may see. And the LORD opened the eyes of the young man; and he saw: and, behold, the mountain was full of horses and chariots of fire round about Elisha.

18 And when they came down to him, Elisha prayed unto the LORD, and said, Smite this people, I pray thee, with blindness. And he smote them with blindness according to the word of Elisha.