I ran to Wal-Mart yesterday to pick up a few things I needed for dinner and had the strangest checkout line experience.  The lady in front of me turns around and insists that my husband buy me a bracelet.  When he says he isn’t going to be buying me a bracelet she says “Well, you must not be married then!”  I informed her that we are indeed married and she puts her finger in my face and exclaims something to the effect of “I’ve been married for 35 years!  Never Again!”  Then she puts her finger in my husband’s face and yells “NEVER AGAIN!!”

Um… ok?

She then proceeds to tell us what a good husband and father he is, so now I’m confused.  So I ask “Are you still married?”  Because why is she screaming about how she will never be married again if she is currently married to a good guy?

“Oh, yeah!  We’ve been married for 35 years!”  she says, looking me dead in the eye like she wants to fight me.  Ok, whatever crazy lady.  She tells me how he was a rocket scientist for the government and how she has four degrees.  Then she starts pulling stuff out of her cart to show me all the stuff she is buying for her husband.  She pulls out a big wad of cash and says “Cash!  You have to pay for stuff with cash when you are retired because your income gets cut in half!”

To which I think “Well, if you had paid cash your whole life you would have saved enough to retire well.” But, again, whatever.  I just smiled.

She gets to the front of the line and starts talking to the cashier.  (This is the actual point of the story here but I couldn’t go on with my life without sharing the entire experience.)  So she starts talking to the cashier, a cheerful elderly lady, about being retired.  The cashier says “Yeah, I was retired for 30 years.  I retired when I was 50.  I’ll be 80 soon.”

Hold up.  Hold up.

She retired at 50 and was retired for 30 years but then went to work at Wal-Mart at the age of 79.  Think about that!  Was going back to work a choice?  Of course I have no idea about her situation, but it’s highly doubtful.  Maybe she just wanted something to help her keep busy but then why not go hold babies at the hospital for a few hours a week.  Why be a cashier at Wal-Mart?    My guess is that she had no choice.

What can learn from this?  Well, for one be sure you can retire before you retire.  The last thing I want is to have to go back to work at 80.  I would rather work a few years longer to be absolutely sure that I have enough money.  Annuities also solve this problem since they guarantee an income for life.  So some good financial planning might have helped here.

Also, we can take away the lesson on the importance of saving for retirement.  The only sadder than having to go back to work at 80 is never be able to stop working.  At least she had 30 years of retirement.  She wouldn’t have had that if she hadn’t saved anything at all.

So don’t be a cashier at Wal-Mart when you are 80!  Start saving for retirement today!

After I recovered from the shock of what I had just heard the crazy lady in line turned to me and called me a F-ing B (only she used the real words) and then patted my husband on the belly and walked out of the store.

I told you it was a strange experience.

Can you believe that we are almost through the first quarter of 2012?!  Insane.  I feel like it just got started.  I wanted to go through the goals I set up for this year and see how I’m doing so far.  Below are the goals I had laid out and then I will give my progress  in red.

Work

• Set up a designated work area. I’ve been working a lot more in the office.  
• Work only in work area.  FAIL!  While I’ve been working in the office a lot I’ve been working on the couch a lot too.  I need to limit this.  I’ve noticed I get very annoyed with my family when I’m trying to work in the living space.  It’s not their fault.  I just need to get up and go into the office.
• Set up an idea board showing open projects along with the next step that needs to be taken on each project.  Super Win!!  I made the board and I’m loving it.  
• Start the  “Money Talks Club”.  A local get together where we can talk money.  I started my group and we have met 5 times.  Some great people have attended.  I love this group! I believe it’s existence is what is going to lead to my success this year. 

Family

• Only play in play area. Avoiding work when I’m supposed to be playing will allow more quality time.  As mentioned above.  Big Fail!

Finances

• Earn at least $25,000 from all sources I am not on track for this at all, but I have some irons in the fire that should help me reach my goal.  I’m currently at $1,900 for the year.  I have a lot of work to do!!
• Save an average of $2,300 per month, which would be $27,600 for the year. That’s a lot, but if I make $25,000 it’s possible.  I’m actually on track for this but it’s a fluke.  We got our tax returns and my husband has been working a ton of overtime.  I need to earn more money to make this happen long term. 
• Put $6,000 of saved money into a car fund for the eventual replacement car This fund currently stands at $340.  Not on track!
• Pay the balance of saved money ($21,600) to the mortgage on the rental property bringing it to $49,900.    Again, income dependent
• Reallocate the money in my IRA (I’ll feel more confident about this if I read some books on investing.)  I have someone who can help me do this… I just need to ask them. 

Travel

• Get a cabin in Flaggstaff for a long weekend (Research cabin prices) Not started. 
• Visit Crater Lake (Find out if this is a day trip or if we will have to spend the night. Research prices.)  I’ve decided not to do this after researching it.  It would cost like $50 and I hear it’s not that great unless you see it from the air, which we’ve done.  
• Disneyland!  DONE!
• Wyoming at least once (Talk to Dad in the spring) Not started
• New England to visit my family (Research prices and find some money.)  Not started. 

Education

• Read at least 3 books on marketing and sales. I have some downloaded onto my kindle… I just need reading time and motivation. 
• Learn some basic web design.  Not done at all. 
• Read at least 2 books on investing. Not done at all. 

Personal Development

• Work on trust (I don’t have actionable items for personal development. I just try to not bail on situations when I’m pushed to far in this area. I will try to take opportunities that stretch myself both trust and patience.)  I’ve been actively working on trusting.  
• Work on patience (I worked on bravery and patience in 2011. I’m hitting patience again because, well… it takes time!) Two people actually called me patient in the last month!!  Amazing.  And I was patient on a project when I wanted to give up and right after that it started to take off.  So my patient work is paying off.  

Several years ago my friend and I tried to go to the zoo. Tried, as in, attempted but was unsuccessful.

The plan was that me, my friend, and 5 children under the age of 6 would go to the zoo for super cheap because my friend had season passes. Sounds perfect! Before we even left the house I could tell my friend was having a bad day. Just one of those days where you wonder why you ever thought having children was a good idea.

The Zoo

We arrive at the Phoenix zoo and it’s packed. Fuller than I’ve ever seen it. We had to park in the super far parking lot, you know… the one that isn’t even paved. So we trek to the front gate pushing strollers and carrying enough stuff that someone might think we are going camping. We wait in line for what seemed like 45 mins and when we get about 5 people from the front my friend realizes she can’t find her wallet. She digs around in her overstuffed back pack but it doesn’t turn up. She starts to panic so we pull the caravan over to the side and she starts to just unload everything. The backpack, the diaper bag, the under the stroller storage area… nothing. She runs back to the car while I watch the kids. Nothing. Now she’s freaking out. She goes through her bags again, no luck.

So she breaks it to the kids that we won’t be going to the zoo. They start crying. Which makes my friend start crying. Which makes me start crying. We were doing that weird laughing crying thing because the whole situation was just ridiculous. The kids were disappointed and my friend was frazzled and I was just feeling bad for everyone.

The Gift

Then a lady comes up behind me and takes my hand. She says “Here, take your kids to the zoo.” When she walks away I realize that she left a $100 bill in my hand. $100! I go find her in line and try to give it back. I explain that my friend just lost her wallet and we aren’t going to go the zoo either way and that we really didn’t need the money. She refuses to take it back. My friend goes and tries to give it back. She refuses again.

So we make the mile long hike back to our cars. While my friend was packing up the car she found her wallet in the trunk. Which was a huge relief. Now that she didn’t have to run home and deal with that mess we decided to just go to the park and have a picnic lunch, which turned out very nice.

As we were leaving the park I thought about breaking the $100 bill and just handing out $20 to people. How fun would that have been?! But I actually felt embarassed to do that. Who would think it would take bravery to give away money? For me it does I guess.

We agreed that we would spend the money doing something fun for the kids since we missed going to the zoo. But that never happened. For two or three years the money sat in my sock drawer. We never did anything with it, but I also couldn’t spend it since it wasn’t my money. It was our money as a group.

For a long time that’s how the story ended, with my sock drawer being $100 richer. That always bothered me. It was not a fitting ending for such an amazing act of generosity.

Paying it Forward

And then the great recession hit. Another one of my friend’s husband got laid off and after a solid six months of looking still had no job leads. The summer was coming to a close and I knew that my friend had 4 kids to get ready for school with a very tight budget. So I asked my zoo going friend if she minded if I gave my other friend the $100. She was all for it! It had already been arranged that I was going to give her a bag of hand-me-down clothes. I typed up a letter explaining the history of the money, put it and the money in an envelope and dropped it off along with the bag of clothes. I was all prepared with a speech about paying it forward but luckily she just called to say thank you.

I LOVE that the lady who gave us the money did that. I’m just positive that she carries around a $100 bill for situations like that. So she can help people if the time arises. $100 is enough money to actually change someone’s situation if they are stuck. It will fill a tank of gas. It will get a room for the night. It will replace a flat tire. It will feed a family. It will take a couple of crazy women and their kids to the zoo.

Do you have a story about paying it forward?

There are so many good things on which to spend money. Here’s a list of things to avoid!

Extendend Warranties: Just say no. Extended warranties are a numbers game, and those numbers favor the seller. If you are really that concerned that your new purchase is going to break then you shouldn’t be buying it. Save your money. If you want to have some fun when the clerk asks you if you would like the warranty respond by asking “Why, is this product no good? Is it going to break? Oh well, maybe I shouldn’t buy it at all then.”

Checking Accounts: If you are paying for your checking account please stop right now. Know the rules you need to play by to keep your checking account free. If you can’t do it, change banks. There are plenty of banks that offer truly free checking. Find one.

Anything a telemarketer is selling: A great rule of thumb is that if they approach you then you shouldn’t buy it. No matter how good the deal is if you didn’t go looking for it then you probably shouldn’t buy it. If you really feel you must have whatever they are selling get a number to call them back and do some research first. If they won’t let you think about then that is a huge red flag. Hang up!

Late fees: There is no excuse to paying late fees. If you are paying these fees please take some time this month and get organized. If you have bills that are due at weird times of the month and this is throwing you off then you need a budget and an emergency fund. A couple of hundred dollars in the bank will save you from ever having to pay another late fee.

Vanity Plates: It’s expensive enough to drive these days. Keep a bit of your money out of the state’s hands by going with standard license plates. Express yourself with a $2 sticker.

Your Own Money: ATM fees, rapid refunds, settlement consolidations, ect. There are a lot of ways to pay for access to your own money. Don’t do it. Plan your cash needs ahead so you don’t have to use a fee laden ATM. Wait those extra few weeks for your tax return. And those settlement consolidations companies (“It’s my money and I need it now!”) are to be avoided. Don’t pay for your own money!

The 1st Generation of Anything Electronic: Skip the newest of anything that comes out. There will be bugs and you will over pay. Let them work out the kinks on someone else’s dollar. In a few months you will spend less on a better version.

Name Brand OTC Medication: The rules governing medications are so strict that the generic version is just as good. You are paying for the emotional comfort they created in their advertising. Go generic to save a couple bucks and buy something that is truly comforting, like ice cream.

Car Washes: The place down the street from me charges $25 for a car wash. $25! And there is always a line. For $5 in quarters I can wash both my cars in the do-it-yourself stall type car wash around the corner. For the cost of a couple of squirts of soap and a bucket of water I can wash them in my driveway. Put that extra money in the tank instead.

New Books, Movies, or Video Games: There are so many options for buying used media. Most books get read once and the sit on a shelf. And most people take good care of their movies and video games. Video games especially. A lot of people buy video games with the full intention of selling them when they are through. Do your wallet a favor and buy these items used.

Have you spent money on any of these things? I know I have. In fact, I think I’ve spent money on all but two things on this list. Do you have anything to add to my list?

Asking for what you want is critical to meeting your goals, but it’s a surprisingly difficult thing to do. I know I struggle with it all the time. When I ask someone for help I worry that I’m bothering them, or taking advantage of them. What’s weird is that I don’t worry they will say “No”. I’m actually more worried that they will say “Yes”! If they agree to help me I worry they won’t follow through or they are secretly mad at me for “making” them help.

The reality is that no one gets anything done alone. We all need help. We only have so much time, knowledge, and energy. No one has every contact, every skill, and every resource needed to achieve their dreams. The more you ask for help, the more access you get to the resources of others. And the big secret is that people want to help you! Think about how willing you would be to help someone if they asked.

How To Ask For Help

One key factor in effective asking is to be specific. If you are going to ask for help you can’t just say “I need help with my kids.” You have to be specific. “Will you watch my kids on Saturday from 12:00 til 3:00 so I can work overtime?” Now, that’s a question someone can answer! You are a lot more likely to get what you need if you specifically ask for it.

I’m trying to drill this into my kid’s heads. “I’m hungry” doesn’t get you fed around here. “I’m bored” doesn’t get you entertained. I answer those questions with “Well, decide what you want and then come ask me.” They almost always get what they ask for if they are specific. Usually their requests are very reasonable.

Another asking tip is to not take no for an answer. Keep asking! Eventually you will find someone who is willing to help. Let’s use our babysitting example again. You need someone to watch your kids on Saturday from Noon to 3:00. The first person you ask might say no. You don’t just throw up your hands in defeat. You ask someone else, and someone else, and someone else. Eventually you will find someone who is willing to do it.

Kids know this intuitively. They know if they just keep asking and asking eventually they will get what they desire. The marketing industry even has a name for it “the nag factor”. They know that if they can get kids to ask their parents over and over, eventually their product will be purchased.

Read This!

One of my all time favorite books is “The Aladdin Factor” by Mark Victor Hansen. This book talks about the power of asking for what you want. It’s a powerful concept. I’ve owned this book for probably close to 15 years and I’ve read it several times. It’s all tattered and earmarked, and I love it. I took the book out so that I could refer to it while I wrote this article and I’ve read almost all of it. I can’t put it down! It is filled with amazing stories of people asking for, and getting, what they want. Some of the stories are of people who raise money for a special project. Some are about making amazing things happen. Some are about the value of persistence in the face of failure. All are motivating and powerful.

I love lists! I make lists for everything, from to do lists, to bucket lists, to what to watch on TV lists. But where my finances are concerned I like my shopping lists best. I rarely go shopping without a list. Why? Because shopping lists save you time, money, and stress.

Shopping lists save money. I consider making a shopping list kind of like shopping from home. You take a look around and decide what you need. You can make your shopping decisions without the glitz and glamour of the store. There is no wandering around the store to see if there is anything else you need. You won’t see that shiny object calling your name. “ohh, look at that! How have I lived so long with it?” I know when I wander a store out of boredom they can usually sell me something I don’t need.

If you make your grocery list from a meal plan you are also setting up you can save a ton of money on groceries.

Not only do shopping lists help you curb impulse purchases, they help you say no to your kid’s cries for items too. Lists take emotion out of shopping.  ”Gee, sorry, that Lego set, … not on the list!”  You’re like the doorman at the cool club.  Only the cool club is your shopping cart.  It’s your job to keep those not on list waiting in line.

Shopping lists save time. When you make a list you are sure to get everything you need. You dont’ get home and realize you forgot eggs and then have to make another trip. And of course, again, be exposed to all the shiny things!  No need to run to Target because you need one thing. Might as well wait til you need a few things. You won’t forget what you need since you wrote it down… on your list.

You also save time by being more efficient.  You can go straight to what you need and getting out of the store in record time.  Lists help you shop like man!

Shopping lists save stress. I don’t know about you, but lack of time and money are high up on my list of things that cause me stress. (I don’t actually have a list of things that cause me stress, but maybe I should!) Since using shopping lists save me both time and money, they also reduce my stress. When I write something down I no longer feel the need to remember it. It’s one less thing rattling around in my brain. That leaves me room to concentrate on more important things.

Do you keep lists? Do you love them as much as me? Which is your favorite? Am I crazy? (Yes)

If realistically you spend $300 a month on gas then you should budget for that.  If you only budget $200 you are going to get frustrated on the 20th of every month.  That frustration is going to lead to guilt and anger.  Which is only going to make you throw your budget out the window.

When making your first budget start with what you know.  You probably have a good idea of your income, as well as major expenses like your mortgage or rent, car insurance, debt payments, etc. But for a budget to be complete you need more than just the major expenses.  You need to know where ALL your money is going.  So, for at least a month you should track all your expenses.  I personally like collecting receipts because it gives the store, the date, and an itemized list of what I purchased. That way if I don’t get to the receipt right away I will still have the info I need.  But you could also keep a notebook if you are able to truly write down everything you spend, or even use Mint.com or The Birdy.

If you are going to use a service like Mint then you should check it every day and enter into your budget while it’s still fresh in your mind.  If you have a transaction that says “Walmart $50.00″ you are going to have to remember what  you bought.  Was it groceries? Clothes? A movie?  Each of those would be a different category, you will want to know how to split it up.

The Birdy lets you send a text message right from the point of purchase (or anywhere else).  That way you don’t have to keep track of your spending with receipts, it’s a one and done type of thing.

Once you know what you are spending you can create your official budget.  An Excel spreadsheet with your income at the top and then a list of categories will work.  You will want two boxes next to each category.  One for budgeted amount, and then one for the actual amount spent. You Need A Budget seems like a really neat tool for those who want a premade, yet customizable, budget.  But I’ve never used it myself so I can’t comment.

You could also check out Enemy of Debt’s very own EOD Basic 3.0 Excel spreadsheet. It’s customizable and FREE.

Use the information you collected to set categories and the amounts to spend in each category.  The more honest you were while collecting the information, the better your budget will be.

A budget can be very detailed, or fairly generic, depending on your comfort level.  If you are struggling with your spending then you may want to make it more detailed.  That way you can see exactly where your money is going.  When you can you see where exactly you are spending your money, you will be able to see where you can cut.  But on the other hand, if you are meeting your financial goals then the budget can be more generic if you find a detailed budget too tedious.

Personality also has a lot to do with how detailed your budget needs to be.  I like a detailed budget because I’m a dork. A generic “spending” category would make me crazy.  But I can also understand why entering a pocket full of receipts into a spreadsheet every night doesn’t appeal to everyone.

Keep in mind too, having a budget isn’t enough.  You must continue to track your spending so you can make sure that your spending is staying in line with your budget.  If a category is getting out of whack you can make mid-month adjustments.

Just like the budgeted amount in each category needs to be realistic, the level of detail also needs to be realistic.  If your budget doesn’t fit your life it will never work. 

Did you have a nice Valentine’s Day?  I don’t put a whole lot of stock into made up holidays but that doesn’t mean I don’t love love.  We made heart-shaped pancakes for dinner and then had a family game night.  It doesn’t get much more frugal than that.

One of the main reasons I don’t care much about Valentine’s day is that I feel loved my husband everyday.  I don’t need him to prove his love to me on a set date, he does that daily.  One of the reasons our relationship is strong is because of our common goals.  Not every single one of our goals is perfectly aligned, but for the most part we are both moving in the same direction.

Discussing, setting, and reaching goals together builds trust and unity in a relationship.  Having different goals and working against each other breaks down trust and fosters a feeling of “yours and mine” rather than “ours”.  That is why I’m a huge proponent of combined finances for married couples.  I do not suggest combining finances when you are not married, but once you are legally married then your partners actions affect you even if you have a “yours and mine” accounting method.

But that doesn’t mean you can’t test the waters of a joint account before tie the knot.  If things are serious and it’s reasonable to think that a walk down the aisle is possible someday you might want to take the leap into a joint savings account.

A joint savings account lets you set financial goals together as couple without the risk of signing over your paycheck to your significant other. Save up for a vacation together or a large purchase.  Or maybe put money aside to pay for that expensive hobby you both enjoy.  Or a fund to try every restaurant in town.  Maybe even start saving for that future wedding or down payment on your first house.  The goal can be whatever the two of you decide but it should be something for both of you as a couple.

This account serves several purposes.   First, it saves up money for some fun activities to do together.  Second, it gives you a chance to have some joint financial discussions and who knows where that will lead.  Third, it let’s you put some trust in your partner and see how well they keep their financial commitments.  Do they follow through or is there always an excuse?

Did you discuss money with your spouse when you were dating? 

If you get your taxes prepared at one of the big tax return places chances and are owed a return, chances are that your preparer will try to sell you a “refund anticipation loan”.

Just say “No, thank you.”

What are Refund Anticipation Loans?

Refund anticipation loans are loans given to you by the company that did your taxes in return for signing over your tax return.  They give you a check, or prepaid debit card, and you sign over your refund to them.  So you get cash right now, they get your refund later.  I totally see why they are tempting.  You are sitting there getting your taxes done.  Mr. Tax Guy says you will be getting a $3,000 return.  Yay!  He then asks for his fee of $150.  Boo!

“Oh but wait”, he says.  ”Instead of paying me $150 and waiting almost a month for your $3,000 I can give you a check right now for $2,700 and you just sign over your tax return to me.”

Gee, that sounds pretty good!  You don’t have to pay anything out of pocket AND you get to walk out with $2,700 in your pocket.  That seems like win-win right?  Well, it’s win-win alright, but not for you.  It’s win-win for your tax guy.

Why they suck.

The main reason the suck is because of the fees.   Refund anticipation loans are basically dressed up payday loans, and they carry the same types of interest rates.  But at least with payday loans the lender is taking a risk.  With refund anticipation loans the lender has almost no risk, which makes the high fees even more infuriating.  In this made up situation you end up paying TWICE what you would have to get your taxes done.  His fee for preparing your taxes was $150.  If you take the loan you are also paying fees to get your money early.  If you didn’t want to pay the $150, why would you pay $300?

Another reason that they suck is the time frames we are really dealing with.  First off, you have waited a year for this money, you can wait a few more weeks.  Secondly, you don’t always get the money right then and there.  H&R block will send you a check in 7-14 days.  The average time frame to receive your federal refund is 18-25 days.  So it’s entirely possible that you paid fees to get your money only 4 days earlier.  Best case scenario you only get your check 18 day early.  What is really going on for those 4-18 days that couldn’t wait?

I hate to even say this but I would rather see you put that emergency on a credit card and pay it off with your tax return 2 weeks later than to take a rapid refund check.

Have you ever gotten a refund anticipation loan?  How much did it cost you?  I couldn’t find anything online that stated a fee structure, which I take as a very bad sign.  If you have experiences with this type of loan I’d love to hear the details!

I often meet with clients who are using credit cards to fund their daily life.  With no money in savings credit cards have come through for them time and time again in emergencies.  Their reluctance to get off credit is understandable.  It’s their friend.  They know they can count on it.  It’s possible they have never had money in savings and credit has been their life line since they can remember.

Credit is their crutch.

I understand that.  Their habit is to use credit when they get in a pinch.  If they get into some financial trouble they reach for the credit card.  Their brain is not trained to reach for the money in savings.  They’ve never had money in savings.  Or maybe they’ve tried in the past and the money was quickly spent and never replaced. They learned their savings isn’t always there for them, but credit is.  There is always someone willing to let you borrow money, no matter how bad your credit is.

You can think of your savings account like your own personal credit card.  If you have $1,000 in an emergency fund, it’s like having a prepaid credit card of $1,000.  There for you when you need it.

If you are working a debt snowball (paying minimum payments on all debts except for the one with the lowest balance) then your debt might look something like this:

Credit card #1:  $5,500

Credit card #2: $7,00

Credit card #3: $12,500

With your $1,000 baby emergency fund in place you are sending all your extra money to credit card #1, let’s say you are sending $500 per month above the minimum payment.  If an emergency comes up can use the money from your Bank of YOU credit card (your emergency fund)  to cover it. Let’s say it was $400.   So now your debt snowball looks like this

Bank of YOU: $400

Credit card #1:  $5,500

Credit card #2: $7,00

Credit card #3: $12,500

The Bank of YOU card is always in the number one spot.  In our debt snowball you have an extra $500 per month that you are paying towards your debt. So you would send $400 to the Bank of YOU card and $100 to Credit card #1.  The Bank of YOU card would be paid off and you could continue on with your debt snowball.

With a small emergency fund you are putting a barrier between you and life.  If you have a $1,000 in savings and are sending $500 as extra debt payments you can actually absorb a $1,500 mishap before  you have to borrow.   As you start to pay off your debt the amount are sending extra grows.  This serves two purposes.  It gets the debt paid off more quickly but it also allows you to overcome larger and larger emergencies without taking on additional debt.

Once your debt is paid off you can grow the credit limit on the Bank of YOU card.  You can build that up to six months of living expenses.  If you have to “borrow” from the Bank of YOU then you still should back it back as soon as possible.

Once your Bank of YOU card is fully funded and prepared to support you for up to six months if necessary you are free to start building real wealth.