Spending Money to Save Money – Promoting Opportunities for Success and Minimizing Risk of Failure

For those of us focused on saving money, the idea of spending it may seem a bit uncomfortable, especially if our personal finances seem perched on or near the edge. Nevertheless, there are times when spending money now can help us save more money over the longer term. To do this, we need to hone our skills at seeing opportunities and risks; opportunities for success, and the risk of things not going as one might hope. I certainly don’t consider myself to be a pessimist, I rather think of myself as an optimist and a realist, but it seems to me that success generally takes a bit of work, whereas failure can often come along and bite us on the backside with a bit more ease. After all, it’s no effort at all to allow things to happen to us, whereas success requires that we make it happen. In the end, perhaps it’s all a matter of personal perception, but for most of us, we’re eager to welcome success while we tend to cringe at the idea of failure or setbacks. Read more »

Waiting to be Shot is a Default Financial Choice for Some – Work to Avoid This Undesirable Approach to Personal Finance

I learned the expression "waiting to be shot" when I worked for a small engineering and consulting firm about 25 years ago. We used the expression to refer to employees who weren't performing well, they knew it, and yet they didn't have the courage to go find another job where they'd be more successful. The idea of waiting to be shot isn't limited to demanding enterprises and indecisive employees. For some of us, it's very much a part of our personality, and it's often reflected in how we manage our personal finances and the many things that can influence our financial well being. If we recognize the problem, we can perhaps do something about it. After all, there are much better alternatives to "being shot." Read more »

Convenience Versus Cost – A Financial Mindset

We all view the world through our own particular perspective, and an observation that I’ve made over the years is how people are willing to trade more of their money for something that’s more convenient. It leads me to believe that many people have more money than time, and others have more money than the good sense to handle it wisely. For me, it’s easy to trade off convenience to save money, and often it’s the right choice, but not always. I am reminded of the classic comparison of how a woman takes her car to the local oil change outfit and is on her way back home in 90 minutes and it cost her $30. Meanwhile, the guy spends half the day with a couple of his buddies and $75 by the time all the materials, supplies, trips to the auto parts store and a case of beer are taken into consideration. Well, that might not be exactly representative of men and women make decisions when it comes to time and money, but I still think it’s a good one. Read more »

Building Wealth – Money of Stuff? Go for Stuff

Last month I argued in favor of building wealth with money. There certainly are a lot of positive points to consider. This month I'm taking the side of stuff and arguing that as we pull ourselves out of debt and start building some wealth, we ought to be focused on having things, possessions, personal property, real property and other materials and physical resources instead of money. Am I changing my mind? Not really, I’m just looking at the other side of the same coin and being equally enthusiastic about it. Read more »

Building Wealth – Money or Stuff? Go For Money

money in the hatAfter we pull ourselves out of debt, we'll probably want to start building wealth. It's one of the rewards that we can offer ourselves for having overcome the debt demon. And, there's nothing like the accumulation of wealth to put some meaningful (and visible) distance between you and your former indebtedness. If we're going to create wealth for ourselves instead of others, I think it's best to have our eye on that target as we start to bring ourselves out of debt. So, let's look at what form our wealth might take. When it comes to building wealth, there are various approaches and any number of focal points. Here's the first of a brief three-part series about which focal point is better, money or other more tangible items like a house, land, vehicles, or tools in the workshop. I think the answer lies somewhere in between the two, but for today, I'm going to argue the money side of the discussion. Later, I'll discuss why having "stuff" instead of money is good, and then I'll present arguments to show why a balanced approach is worthwhile considering. For today, let's focus on money. Why might we try to accumulate money as a way of building wealth? Several reasons come to mind quite easily. Consider the following: Read more »

Recognize the Good Amidst the Goofy – Consider the Flip Side

Sometimes we do things that are goofy and they can lead us into financial trouble. At other times we engage in frugal behavior and some of that can appear to be equally goofy. What can make our frugality appear misapplied is the minimum way in which the activities appear to save money or otherwise reduce our burden of debt. Saving a nickel here or there is just plain goofy, right? Well, what might appear goofy at first, could be beneficial if only we take the time to look at the flip side. Examining the opposite side of the coin can help give us a "would you rather have this instead" perspective, and that can be just enough to help us see the good in it. Often, outward appearances can mask a healthy mindset. Even if we don't appreciate the savings we see, we might appreciate the mindset that drives it, and sometimes the mindset is never more clear than when we examine the flip side of things. Read more »

Avoiding Debt by Minimizing Large and Recurring Expenses – Rethinking Personal Vehicles

One of the keys to avoiding debt is to know how it overtakes us. Without a doubt, debt has many helpers in the form of large and recurring expenses. I'd like to share with you a few pages from my own playbook when it comes to handling large and recurring expenses. Specifically, I'm interested in speaking to the issue of motor vehicles. It's a good topic to address because transportation is typically 15% of the household budget of Americans...often more than what we spend on food. Cars tend to be a large expense, and even without a monthly payment, they're a recurring expense. And, as we're all aware, the price of insurance, fuel, tires and maintenance continues to climb. Read more »

Encouragement is a Key to Personal Financial Success

Where do our lessons in personal finance come from, I mean, besides the school of hard knocks? Did someone show us how to balance a checkbook or properly use a credit card? Did we have a teacher or mentor, or did we learn mostly by example? However we learned about handling money in a responsible manner, I'd be willing to bet that encouragement played an important role. Encouragement is important in just about everything we do. Without it, we're less likely to maintain interest and be successful. So, encouragement in the personal finance arena is especially important. Read more »

Getting Out of Debt – Practical Steps I Took to Slay the Beast

My last article about getting out of debt spoke to the idea of attitude. Without the right attitude, we'll go nowhere fast. As promised, I'm going to share with you some of the techniques I used to extricate myself from a world of debt (including consultation with a bottle of wine). I'd like to get down to specifics about how I put my attitude to work and the results I obtained. These techniques worked well for me in my particular situation. Of course, what worked for me won't necessarily work for others, but it's probably worthwhile getting it out in the open as an example to see if it might work for you or someone you know. Read more »

It’s Just Like Money in the Bank – Financial Adages Help Us Learn From Others

For some reason I started thinking today about the old saying, "It's just like money in the bank." Perhaps that was a hint that I ought to get back to the series I started a while back on financial adages and what we might learn from them. After all, there is a kernel of truth in just about everything we hear, but when an old saying gets passed on from one generation to the next, it's much more than just an old saying...it's more like wisdom dressed up in the robes of a legend. Read more »

The Value of Money – Four Different Perspectives

The value of money varies according to who you talk with.

Sometimes we're challenged in the world of personal finance simply because we don't understand the value of money. If we don't, we're in trouble because one of the functions of money is to help us establish the value of things. It's easy to say that something is worth 15 dollars, but it would be odd to hear someone say, "That's worth 15 heads of cabbage." It doesn't happen very often because money is how we establish value in the marketplace, so we need to get a better handle on its value. Value is a matter of perspective, so let's look at some. Read more »

Getting Out of Debt – Selling Your Stuff Works…Kinda

If you're one who is focused on getting out of debt, one technique is to sell your personal possessions. It's something many of us have done. In fact, I've purchased many an item from a neighbor trying to raise money for his basic needs. I've always questioned this approach because no one has an endless supply of "stuff" to sell. What happens when you run out of items to sell? Besides, the things that are easy to sell are most likely those that are the most useful, and it seems those items are the very ones that a person might care to keep. Read more »

Reduce Expenses and Get Out of Debt – Use Mental Toughness

When I was a two-mile runner in high school, many of the runners complained about aches in their sides from running long and hard. It was just part of the game. If we were going to push ourselves, it was going to hurt. During a race, you can't just stop and rest a while when it starts to hurt, you have to keep going. Nevertheless, the pain and fatigue affected many runners and their ability to improve their times. Our track coach offered a solution, he called it "mental toughness." It's a concept that stuck with me and has served me well. Sometimes we just need a mental image, a concept, a focal point to help us achieve success. This was the concept for me. Read more »