August 15th, 2010
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Take This Job and Shove It became more than a song when JetBlue Flight Attendant Steven Slater made his grand exit and became a working-class hero.
So why did he become a working-class hero to some people? Because those people feel stuck in jobs that are less than satisfactory.
There are 3 steps be getting out of a job you hate.
1. Get out of debt by paying off all non-mortgage debt. It will take you about 12 – 18 months if you are really motivated. A great way to get the help you’ll need is to take a class like Creating True Financial Independence or Financial Peace University.
2. Establish an emergency fund equal to 3 to 6 months of living expenses. This will give you the freedom to try something new without having to worry about short-term income.
3. Find your passion. The is a wonderful book called The Passion Test and there is an online Passion Test.
These 3 steps will change your life. Are you willing to do whatever it takes to get what you want?
August 13th, 2010
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Starting August 15, 2010 banks will have to decline customers’ withdrawal requests at ATM’s and point-of-sale unless they give express permission to banks to let them overdraw their accounts for a fee. This change is a result of a change in the Federal Reserve’s Regulation E policy.
In Durango, CO this fee is running between $27 and $40
Bank of the San Juans – $27.00 fee
Bank of Colorado - $28.00 fee
First National Bank of Durango – $35.00 fee
Wells Fargo Bank – $35.00 fee
Alpine Bank – $40.00 fee
I understand that motivation of the banks; they want to make a profit. They market this service as a privilege. And it’s relatively risk-free for the banks. Most overdrafts are small, on average about $17, and most customers make good on their bad checks while banks earn fees.
This new regulation is all about banks being able to allow your debit card and ATM transactions to overdraw your account; then they cover the transaction and charge you a fee for the “privilege”.
I recommend that you don’t opt-in for your bank’s overdraft “privilege” and instead you take control of your personal finances and stop paying unnecessary bank fees.
3 steps for avoiding overdraft fees are:
- Create a budget and follow it.
- Use cash for all discretionary purchases.
- Balance your checkbook each month.
August 12th, 2010
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A recent CNN Money article featured Good Debt Vs Bad Debt. The truth is all debt is bad.
The Good debt Vs bad debt article features these statements:
- Avoiding debt at any cost is not smart
- Good debt includes anything you need but can’t afford
- Bad debt includes debt you’ve taken on for things you don’t need and can’t afford
The key here is defining NEED. We need very little of what we buy.
Basic necessities – food, shelter, clothing, utilities and transportation to get to work are needs. Everything else we buy are wants and even these basics stray into wants very quickly.
I am all for enjoying life, buying nice things and having fun; however I wish that I’d learned the truth about debt and personal finances earlier in life.
Our beliefs determine our actions and our actions determine our results and experiences – examine your beliefs to see if you might be better served by a different belief.
For me coming to understand that debt and unconscious spending steal our dreams has transformed my beliefs, actions and life.
August 12th, 2010
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Today, I received this message from a friend and thought I’d answer it here.
Hey Matt,I thought I remembered that you had been doing something with Dave Ramsey… I was curious as to your thoughts on his program, etc.
L.
Dear L,
Yes, I helped pilot Financial Peace University at First National Bank of Durango. It’s the class that helped Cheri, my wife, and I pay off $165,000 in debt and save $20,000 in 15 months.
For us it was an amazing and transformational class. It offers sound advice on how to get out of debt.
Financial Peace University (FPU) is a 13 week class taught primarily though churches by volunteer class organizers. The cost of FPU is about $100.
Each class in 2 hours long an consists of watching a Dave Ramsey DVD and then small group discussion.
To review FPU I’ll offer Pro’s and Con’s and how my class Creating True Financial Independence differs.
FPU Pro’s:
- Material is easy to follow
- It’s works if you commit to change your behavior
FPU Con’s
- Dave Ramsey is an Evangelical Christian and he quotes Bible verses (may be a con depending on your views)
- 13 consecutive weeks is a big commitment
- Many of the lessons don’t apply specifically to getting out of debt
- Success of the discussion portion depends on a volunteer facilitator
- Dave’s big goal is for you to become Mega Rich
- The 13th week is all about tithing to the church (again depends on your views)
How Creating True Financial Independence is different from FPU.
- No religious agenda
- Class is 4 weeks instead of 13 weeks
- Class is focused on helping you succeed at getting out of debt
- Class incorporates concepts from many other books and teachings
- Class is taught by me; a professional coach and facilitator who has successfully gotten out and stayed out of debt.
- A personal finance coach is available outside of class to answer your individual questions.
- My goal is for you to live your dreams and for most people that does not involve becoming Mega Rich.
I hope this helps you understand Financial Peace University and my class Creating True Financial Independence.
August 10th, 2010
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Found money is any money that comes to you unexpectedly…money you did not necessarily earn as Jimmy Buffett would say. And there are 3 things you must do every time you are lucky enough to fine some money.
I’ll start by describing what you should not do. A volunteer firefighter in Colorado won a $1.2 million home in Maryland. After selling the home and paying the taxes the found money amounted to about $200,000.
So what did she and her husband do with their found money? They took $50,000 and bought a new truck, paid off some debt and saved the rest.
- $50,000 for a new truck. Not a good choice. The truck will go down in value fastest in the first years of ownership. I would have suggested buying a 2 year-old, low mileage truck.
- Paid off some debt. I would have suggested paying off all debt.
- Saved the rest. Good and I would suggest it go in an emergency fund.
The 3 things you must do when you get found money are:
- Establish a $1000 emergency fund.
- Catch up on any past due bills and if there are none then use it to pay off debt.
- If you have no debt, other than a mortgage, then use it build your emergency fund to equal 3 to 6 months of living expenses.
Following these 3 steps make sure you are on the path to financial independence.
August 9th, 2010
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Do you know the difference between income and wealth?
Technically, income is how much you earn each year and that is determined by looking at your W2 earning statement and wealth is determined by looking at your balance sheet.
Your balance sheet will reflect your assets (what you own) and liabilities (what you owe). Assets – liabilities = your net worth.
Becoming wealthy is more about how much you save and less about how much you earn. Obviously, it’s easier to save when you have a higher income, but it’s very possible to spend nearly all you make even if you have a high income.
An excellent book on this subject is the Millionaire Mind by Thomas J.Stanley, Ph.D.
August 4th, 2010
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Money Savvy, the monthly column I write for the Durango Herald was published today.
This month I wrote about the affects of employee personal finance problems on a business.
Worker’s debt can be company’s problem
Employees with personal-finance problems can be a drag on a company’s bottom line.
The stress and anxiety that come with money issues at home can lead to diminished productivity at work, health problems and workers looking to change jobs in search of a higher salary.
Employers who aren’t concerned about their employees’ finances are hurting only themselves. Companies can do more than provide a paycheck to help their workers achieve financial security. Read More
August 2nd, 2010
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This is a very interesting prospective – I don’t agree totally. However, the best college education is the one you can afford to get without borrowing.
Check out 7 Reasons Not to Send Your Kids to College featured on Daily Finance
July 29th, 2010
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Use this tool to determine your personal finance grade.
July 28th, 2010
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Here is an excellent rent Vs own calculator that can help you make an informed decision about how to spend your housing budget. Home ownership is a dream when you can afford it and can quickly turn into a nightmare when you can’t.
The true cost of ownership is not just the PITI (principal, interest, taxes and insurance), but also the maintenance of the home and lifestyle of the neighborhood.
Home maintenance must be part of your budget and saved in your Momentum Account.
Keeping up with the Jones’ is a real thing. Your neighbors are will likely become your friends and your social reference so beware of moving into a neighborhood where your neighbors earn substantially more money than you do. Keeping up can lead to consumer debt.
Green with Envy by Shira Boss is a wonderful look into the lives and checkbooks of our neighbors.
