My 2Cents!~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~A Newsletter all about Living with Abundance, Ditching Debt and Collecting Cash.
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------------------------------------------------------------------------------------------Janine Bolon, Editor janine@smartcentsinc.com
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In this issue -- Note from the Editor: -- It’s Time to Become Contagious! -- Change the Way you think about Money. -- October’s Book: “Debt is Slavery” by Michael Mihalik -- Winner’s answers: What was the single best thing I did to save money? -- Reader’s story of fighting debt -- Blog Spotlight: -- Charity Spotlight: -- WHO WE ARE
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Note from the Editor ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dear Frugal Friends, This past week yours truly was highlighted in MSN Money. I wish to thank Liz for interviewing me along with the five other couples who have become financially independent before we turned 50. Many of you have signed up to the newsletter courtesy of Liz giving you my web address and I enthusiastically say, Welcome to the Frugal Friends Network! It is great to have you with us. Also this week, a buddy of mine, Michael Mihalik, sent an article that he thought would assist folks in the current climate of mortgage and money loans. He encourages all of us to change the way we think about money by using the perspectives he gleaned after overcoming huge debt right out of college. Michael is our highlighted author this month and I encourage those of you who haven’t read a financial book this year to grab Michael’s, “Debt is Slavery” and start reading. To see my review of the book, pop by the blog at: http://themoneymuse.blogspot.com/ Today I get to announce the winners of the free book give-away that we held last issue. There were three winners who were able to get copies of Rob Bennett’s book, “Passion Saving” and the runner up entries received copies of my book, “Ditching Debt.” I put all the winners’ answers up for everyone’s review. Remember if you have a tip to share or a question to ask, email me at Janine@smartcentsinc.com. Lastly, Check out this month’s blog and charity spotlight. These are sites that will assist you or you can assist them on your path of wealth accumulation and debt-free living. Wishing you abundance, Janine ------------------------------------------------------------------- It’s Time to Become Contagious! By Janine Bolon ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ As many of you already know, I’m a scientist by training. It is in the very marrow of my bones to think and act in geek-speak. I edit and write this newsletter with an eye of analysis and make sure that what I and others have to say is worth the time it has taken you to read. It is very important to me that you never waste a minute of while trying to become debt-free and eventually, financially independent. With this in mind I approach each issue of My 2Cents with a jaundice eye for anything that does not promote the goal of efficient time management. Don’t worry, this article is not going to be an attempt for you to squeeze yet one more goal onto you’re already busting calendar of obligations, responsibilities and meetings. What today’s message focuses on is your ability to make time so you can find the joy in your life. Many of the folks that I have mentored over the years have lost much of the zest they have for life due to their burden of debt or financial responsibilities. I don’t want that for you frugal friends. I don’t want you depressed as you save money and down because you can’t figure out how to start an IRA while you’re saving for your kid’s college fund. What I want for you is the same peace of mind and calm that I have when a new problem hits and I have no idea on the HOW! That’s right. During the time that Brad and I were working on becoming financially independent we had many crises hit our bank accounts. Brad got cancer (don’t worry he is fine now) and we had medical deductibles to pay and prescription medications that were out-of-pocket. I was also eight months pregnant with child number two and was looking at a whole list of expenses coming up within our growing family as well as relatives living out-of-state. If it hadn’t been for my past experience at handling financial crises, I could have very easily snapped under the pressure that was looming overhead. What saves my sanity when financial woes are larger than the income? Here are some of the tricks I use to break me out of my stupor. 1. What do you want out of life? This is the question I always ask myself. It is the question that saved us so many times when we could very easily have managed to lose our financial way. I often tell my clients and students that if you don’t know what you truly want, you’ll never get it. You’ll wander through life being a victim without a thought as to the path you’re walking on. So, for starters, why are you working to get out of debt? What is the purpose of your life? This is a challenging question to answer and in next month’s edition I’ll work you through some of the steps Brad used to find his purpose in life. I use Brad as an example because it took him five years longer than me to figure out what he wanted. 2. Don’t worry about HOW you are going to come up with the money, worry about the amount! This may sound totally stupid, but it is the focus I used many, many times to dig ourselves out of financial issues. I never knew the HOW to anything, but I would instead focus deeply on the exact money that was needed and then I would start asking everyone I ran into if they needed someone to do odd jobs for them or I would hold a garage sale or do medical transcription for a time from home. This sounds stupid, I know, but I would make every effort I could to raise money by my own work and soon a contract, buyer of a quilt I had made or some other fortuitous event would occur that would attract the very person I needed so I could earn the money required. 3. Double check your expenses. If you’ve been serious about getting yourself out of debt and into financial abundance, you’ve been tracking your expenses. Now that you need money, take a look at what you have been buying that will have to go on hold until the car repairs are made or the furnace replaced. You’re already used to doing this to some degree, but I want you to make it an art form on your daily purchases. Remember, keep buying the chocolate and ice cream if it helps you to keep your stress down, but monitor your bigger expenses to see if you can get a better deal on the tires for the pickup (yes, we are from the Midwest and still own a pickup!)or figure out a way to hold Johnny’s birthday party at your house rather than paying for one of those party places that have so many lights, noises, videos and sugar that your kid becomes sensory overloaded in the first minute he walks through the door. (You know the places I’m talking about!) 4. Relax. Yea, right. I can hear you laughing at me on this one. But it is true. Keep saying to yourself, “It’s going to be alright”, “A way will present itself!” “I know there is a solution to this!” Having a positive outlook no matter the amount of the financial crisis is the beginning to a solution. If you allow yourself to be glum before you ever begin to fix the problem, you’ll not have the energy or mindset to find the answer or even be open to the solution when it comes to you. And trust me, it will come to you. It always does to those who are looking. That is the key! Are you looking or have you accepted defeat? Basically, I’ve taken a round-about way to show you the power of positive thinking. That is the single greatest key to wealth I know. Brad and I were always looking for alternatives, opportunities and solutions even when our road to financial stability was dark as a moonless night. I’m not saying this is a “Don’t worry, be happy” philosophy. I couldn’t ever get myself over worrying; I’m not even going to try that tack with you. However, I am saying that you need to stay positive. Remember the adage, Positive thoughts and actions are contagious. So, it is time for you to be like a virus and start reproducing those positive thoughts about being able to find a solution. Then I strongly recommend you take those positive thoughts and start replicating them as fast as a virus does. (Check out the math sometime, it’s fascinating!) By looking for positive things to come your way, they will. By being grateful for them, they will multiply and then within a matter of weeks you’ll see that your problem was handled. Right down to the penny. Right down to the wire. As a girlfriend of mine said, “God loves a photo finish.” Change the Way You Think About Money by Michael Mihalik ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Recently, there has been a lot of news coverage about the troubles in the housing and mortgage markets. Easy credit is drying up, interest rates are rising, and the number of home foreclosures is skyrocketing nationwide. Most articles place blame on bad lending practices, people borrowing more money than they can afford, and risky products such as adjustable-rate, interest-only and negative-amortization mortgages. However, the root cause which underlies all of these problems goes unmentioned – a change in our attitude towards debt. Americans used to be taught to avoid debt, but today we have been persuaded to embrace it. Consumer debt continues to hit all-time highs, yet we are still deluged with advertising to borrow more and more: - No interest or payments until 2009! - 0% financing on all 2008 models! - Transfer your balance for an initial interest rate of only 2.9%! - Consolidate your debt with a cash-out refinance with no closing costs! How can we turn the tide on this credit tsunami? We have to change the way we think about money. Here are two changes people can make to their thinking that will have an immediate positive impact on their spending habits: 1) People need to realize that borrowing money subjects them to financial servitude – a form of slavery – in which their bills determine when and how much they work, often at jobs they don’t enjoy. As a friend of mine said, “I almost bought a new couch on credit until I realized that I didn’t want the next 6 months at work to just be about paying off my new couch.” This was especially meaningful since my friend doesn’t like her job. I’m not saying that we should never buy new furniture. However, buying anything with borrowed money can lead to financial servitude, which can have devastating financial and psychological repercussions. 2) People need to realize that money is time. Every time you spend money, you are spending the time it took to earn that money. For example, if Bob nets $10 an hour, a $300 leather jacket will cost 30 hours of his time. If people looked at money in these terms, they would be more discerning about what they purchase. As Benjamin Franklin said, “Do not squander time, for that is the stuff life is made of.” Bob can always earn back the $300 he just spent, but he’ll never regain the time it took to earn it. Does that mean we should never spend money? Of course not. However, we can minimize waste by evaluating purchases based on how much time it takes to earn the money required to make the purchase. I know what it’s like to be buried in debt. I also know what it’s like to gain control of my finances, pay off my debt, and create a life of financial security. But before I could change the way I handled my finances, I had to change the way I thought about money. I came up with 10 ideas and techniques that literally transformed my life. You’ve already learned two of my money principles. Apply them to your own life and see the positive changes that will occur. --------------------------------------------------------------------- Michael Mihalik is the author of Debt is Slavery: and 9 Other Things I Wish My Dad Had Taught Me About Money. Learn how you can use his ideas and techniques to gain control of your finances, pay off your debt, and become financially secure at www.octobermist.com. --------------------------------------------------------------------- Winners of Reader’s Contest for a Free Book “Passion Saving” by Rob Bennett ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I know my answer will seem simple but the single best thing I have done to save money… And I bet this single thing could help most people… STOP going out to eat… I have a savings of over $1200-1400 per month just by doing this one thing!!! This does not include groceries… This was money my husband and I were spending on breakfasts, lunches, & dinners. –Melissa, OH ------------------ The best thing I have yet done to save money was to put my husband in charge of the major savings accounts! He is so good at not touching it, I have assumed several times that we don't have it anymore! But there it always is, working up slowly and steadily. His strength has rubbed off on me until I have begun to implement my own personal savings. The second best thing has been to not buy things just because I have a coupon for it or it's on sale. I have a friend who actually once in a while gets money BACK from the store when she has finished using all her coupons, but I think I probably save more over all by making from scratch the things I really want and not buying things I wouldn't anyway if they weren't such a "great deal". Besides that, what I will be paying in medical bills by always serving discounted prepared foods will most likely far surpass any money "saved". (I suppose if these quick meals were what I already served anyway, I would gain from the coupon clipping) -Ember, UT -------------------------------------- The single best thing I did to save money was to actually make a commitment to DO IT!!!! I had every bizzare thing flung at me, that in the past, would have sent me bawling my eyes out and yanking my money out of savings! But not this time! I had made a commitment and I stuck to it. Miracle of all miracles...now I have had some unexpected opportunities opened up to me to bring in even more money to do the 60/40 with and it feels SO good! Thank you! Theresa, Mesa, Arizona ------------------------------------------ How could I come up with only one thing? LOL! I have used cash in individual budget envelopes and saved a bazillion dollars. I never use more than is in my allotted envelopes each week. Julie, ID ----------------------------- Single best thing I've done to save money is to have money deducted from my check before I received it: different jobs, it has been a savings bond purchase or direct deposit into savings account. Savings grew without my really noticing it in my check. CJ, TX 35 years ago I bought a collapsible laundry rack for drying laundry. The only thing I fully dried in the dryer was towels. I never dry anything with elastic in the dryer. Everything else gets a five minute fluff and gets hung on the rack. Through three children, and two of us, we have saved a ton over the years. Of course, on good days, things go outside in the air and sunshine. That’s the best dryer in the world. By the way, our home is all electric. -Dee ------------------------------- My best money saving tip is to shop at home...No not on the internet. Use your imagination and look around your home for solutions to problems without spending any money. When I needed a place to keep my library books separate from my own books, I thought about a basket. I looked in my closets first. No basket of the right size and shape. Then I looked at my tables. By moving a bowl of sea shells, I was able to use the shelf under my end table. No money and it met my needs perfectly. Look before you buy anything. -Anne October’s Book: Debt is Slavery by Michael Mihalik ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Michael and I have never met in person, but we were on a Canadian talk radio show earlier this year and had many similar views on how to get out of debt and live a life of abundance. Michael and I hit it off because his background is Aerospace Engineering (He truly is a rocket scientist!)and I was a pharmaceutical biochemist.(Major geek factor here!) After the radio show, Michael and I continued to correspond and traded books. I will review his book, “Debt is Slavery and 9 Other Things I Wish My Dad Had Taught Me About Money.” On my blog, http://themoneymuse.blogspot.com/ Also, visit Michael’s web site and read more about his systems as well as order a copy of his book for yourself! http://www.octobermist.com/ Reader’s story of fighting debt: Susan living in Texas ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Susan calls herself a debt warrior and after reading her story I’m sure you’ll agree like I did that she is a fine one. Her commitment to cut debt out of her life will grant her the abundance she craves. I share her story here because people who take extreme measures with their life choices are the ones who eventually become financially secure. Fact it people if it were normal to be wealthy everyone would be there, right? Here is Susan: I currently have about $23,000.00 in credit card and $6,000.00 in medical debt so I feel like it is necessary for me to become a warrior in the ways that I approach reducing this albatross. 1. I traded in my 2004 Hyundai for a used car at the Hyundai dealership and eliminated car payments of $350.00 per month versus ruining my good credit with repossession. Granted, I had about $2,500.00 left on the balance of my newer car but I felt that the balance (transferred to a credit card at .99% interest) left me with a lot more disposable income to work with each month. The used car I purchased had belonged to my younger daughter who wanted a new car. Incidentally, I had purchased this used car for her five years earlier and I knew the maintenance was impeccable so I felt that I was getting a bargain and I was. I let her use the $500 she got as a trade in and then I paid another $500 to re-purchase it. Are you still with me? I know it's a little convoluted and it sounds like I am robbing Peter to pay Paul; however, the modus operandi at work here was this, "eliminate mandatory monthly payments to allow for more money to live on and stop using credit cards." We dummies have to learn the hard way. (You’re no dummy, Susan, you’re working to get yourself out of debt! Dummies don’t do that!) 2. Another move towards debt freedom was a no-brainer, I moved to the apt. complex next door and reduced my rent by $355.00 per month. My previous apartment was beautiful and a little luxurious but I am becoming almost medieval about my reducing my debt so I was determined to make it work. Only thing I really miss are the washer-dryer hookups; I have my washer and dryer stored in my spare room and now I have to use the laundromat. Oh yes, and I hang my wash in my apt. I have a rack and then I string up laundry lines on the door hinges (secure & sturdy.) 3. The unexpected happened in January of this year. I would drive my little used car on the weekends only and rode the bus to work most of the time. Life was manageable and I could handle it. But as they say, "Life is what happens to you while you're busy making other plans." And so Life chose for Wal-Mart to perform a faulty oil change on my vehicle and two weeks later when I am driving home from work in the rain, the engine just stops and it is completely fried, no warning lights, nothing...just died. The mechanic who towed my car to his shop stated that the oil filter was bad, etc., etc... Anyway, Wal-Mart made restitution on the actual cash value of my little 1986 Chevy Nova with only 79,000 miles. Nevertheless, I loved that car which had been so reliable for the eight months that I had it and I always felt like I had let it down. In the final analysis, I have chosen to look at this as an added bonus for debt repayment. I don't buy gasoline, pay for maintenance, registration and/or inspection, and I have developed legs of titanium. So in the long run maybe this will expedite the elimination of debt and qualify me for the Boston marathon in the process. Some of us are slow learners but I think it is finally making an impact on me. Don't use credit cards unless you absolutely know that you will have the means to pay the debt in full each month. Save for an emergency fund and above all, live below your means. My life is simpler and in some ways more peaceful. (Driving is usually stressful anyway.) When absolutely necessary, I rent a car with my credit union Visa debit card. Onward... :) Blog Highlight: http://blogs.savingadvice.com/ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Welcome to Real People, Real Finances, a place where you can blog about your personal finances among the supportive help of others. Writing about your money and money management is an effective way to help keep your personal finances in order and attain your money goals. Join our network of personal finance bloggers and share your thoughts, issues, goals and daily musings about your personal finances and money today. Do You Have a Question or Charity or Blog for the Next Newsletter? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If you've got a question or charity or blog you want me to address in the next newsletter, please send it to themoneymuse@gmail.com with the subject line "Newletter Question/Charity." My 2Cents will feature a question and a charity and a blog each issue from the Frugal Friends Network. If you wish to remain anonymous, not a problem! Just state that in your email.
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