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: -- Why am I on the Planet? by Janine Bolon -- Lost Opportunities by Gary Foreman -- How Do You Want to Spend Your time? by Anne, United Kingdom -- December’s Book: “Overcoming Underearning” by Barbara Stanny -- Reader Tip: Changing the Face of Window Shopping -- A Frugal Friend’s Victory: Taming the Monster with Jennifer! -- Blog Spotlight: Kiplinger’s Money Basics -- Charity Spotlight: Dress for Success -- WHO WE ARE
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Note from the Editor ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dear Frugal Friends, The holiday season is here for many of us and it is time to start planning. This issue is chocked full of tips and perspectives on how to live with purpose as well as having an attitude of abundance rather than scarcity. I know it is hard having Christmas/Hanukah/Kwanza (put appropriate religious holiday here!) staring you in the face and a check book that reads near the red. However, don’t fret. There are resources to guide you through the money maze with creativity and a smile rather than with fear and a grimace. First I’ve written the most talked about exercise I ever give my clients who wanted to take control of their finances. It is you discovering your purpose in life. After you have this exercise the rest is in the details, as they say. Jennifer of California also gives us some tips on how to gain control of debt. Second, Gary Foreman, editor of the Dollar Stretcher and dear friend of mine has written about the opportunity costs of purchases. His perspective will help you as you go about the shopping trials of presents procuring. Third, we have Anne, one of our Frugal Friends across The Pond giving us her useful tips on time management and planning. I always have a great need for that, myself! Lastly, if you find yourself getting overly stressed or totally panicked as January approaches; remember the Frugal Friends Network. We’re here to help you or at least give you an arena to vent your emotions with folks who understand your pain/fear/guilt/shame. Don’t keep it all inside. Email me and tell me what is going on, if I can’t help you, I’ll find someone who can. You’re not alone on this journey of financial stability and debt-free living. As of this edition of the newsletter you have 3,200 Friends walking this path with you! So take advantage of this fantastic community and I’ll pose questions to the Network with each newsletter: Janine@smartcentsinc.com. Happy Thanksgiving to the North American Folks and Happy Holidays to the rest of the Friends around the globe, Janine ------------------------------------------------------------------- Why am I on the Planet? By Janine Bolon ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In the last issue of My 2Cents I promised you that I would discuss how to find one’s purpose in life. I am still reeling after all the emails I got from readers who wanted details, details and more details for finding one’s reason for being on the planet! First of all realize this, most people don’t even ask the question, “Why am I here?” If they do ask the question they are likely to furrow their brow for about 15-20 seconds and then move on to the next crisis in their life. You are not that sort of person. You are learning and/or living a debt-free lifestyle and that puts you into the category of “living consciously.” What is living consciously? That is where you make the mental effort to determine what your purpose in life is and then you spend the rest of your life living up to the expectations you’ve placed on yourself. Does this scare you? Take a deep breath right now and calm yourself. This is not like taking a math exam. What you’re going to do is take out a piece of paper (or pull up another screen on your computer) and start writing/typing what it is you want most out of life. What makes you happy? What activity causes you the most joy? As ideas form in your mind, write them down and don’t EDIT your thoughts. The reason most of us have difficulty figuring out what we want out of life is that we don’t allow ourselves “room” to think. We edit our thoughts before they hit the page. For this exercise don’t do that! As thoughts occur splash them on the page as quickly as you can and you will be amazed at what comes out of your head. Stuff that you haven’t thought of in years will make itself available to you as long as you relax your mind, let your thoughts percolate and don’t punish them for existing by editing them with the following statements: Oh, that can never happen, I’m no good at… (fill in the blank!) Who am I kidding, I’ll never have enough money to…(fill in the blank!) My wife/husband/children/parents will never let me…(fill in the blank!) Many of you know that I ask all my readers to write out their obituaries or eulogies. This exercise seems most morbid to folks when they first hear about it because we don’t like to think about our mortality. Well, dear friends, I hate to be the one to break it to you, but none of us get out of life alive! So, start planning on how you wish to be remembered. What is it that you want said at your funeral? If you could write out the speech given by your best friend after your demise, what would it say? This single exercise has motivated many of my clients to change jobs, change houses, get-out-of business, start a business, you name it. What I’m saying is this, writing your obituary is life changing. Many of us are not living according to our purpose. This is why we are uncomfortable, we spend too much and we feel restless despite society telling us we should feel fine. When you actually take the time to write out how you wish to be remembered you begin to see what you need to do to find pure joy in your life. Now, I warn you, many folks have no idea HOW to do all the things they want to do in life, but that is not the point. What you’re trying to do here is determine what impact you want to have on this world of ours. So, this month’s assignment is to write your obituary/eulogy. I know the holidays are on there way for many of us and that you have so much to do, but this is the perfect time of year to figure out how you wish to create your life. Then the next time we meet, I’ll discuss with you how to go about setting goals and making the day-to-day details fit into your overall plan. Does that sound good? If you have problems with this exercise or you get stuck, don’t forget to email me and I’ll happily give you some pointers. Janine@smartcentsinc.com Remember if you are having trouble with this then there will be other readers having difficulties. I’ll post my answers/tips in the next issue or on my blog (http://themoneymuse.blogspot.com) The blog has a more tips on finding purpose so stop on by. Lost Opportunities by Gary Foreman What you give up to get something else ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Sometimes it's helpful to take a concept out of its original environment and see how it fits someplace else. Today we're going to examine an economic theory and see how it might apply to our personal lives. The Economist website defines ‘opportunity cost' as "The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) the something, but also the economic benefits that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else." To put it simply, for everything you get, you give up something else. That's an important concept. Let's consider an easy example. If you spend $15 on a pair of jeans, you do not have that money available to buy a pizza. The “cost” of the jeans is not only $15. It is also giving up a pizza. Another way to look at opportunity cost is the amount of time we give up working to buy a product. Suppose you make $12 per hour. Our tax rates are all different, but you can pretty much expect to pay about 1/3 in Social Security and federal, state and local income taxes. That leaves you with $8. Let's further suppose that you go out to lunch with co-workers every day. And a typical lunch costs you $6. Add a tip and sales tax and that lunch brings the total to $7.20. So you give up 54 minutes of your life every day to work just to pay for lunch. How about a different situation? Remember that an opportunity cost is what you give up by making another choice. For instance, suppose that you choose to spend $100 on a credit card, knowing that you'll pay the minimum when the bill comes due. In effect, you've given up about $140 in the future to make that purchase today. That's because finance charges will be added to the cost of your purchase. We face opportunity costs with our time, too. I can choose to spend an hour watching TV. But that's an hour that I won't be talking to my wife, playing with the kids, doing home projects or sleeping. Of course, watching TV might be the best use of that hour. Still, it's a good idea to think about it before you spend the hour. Sometimes the difference between choices is surprising. Suppose you spend $1 at break time five days a week. No big deal. Right? But if you didn't spend that dollar every day and put it in a bank at 3% interest, you'd have $3,000 in ten years. Or $7,100 in 20 years. Or $20,000 in 40 years. So by choosing that $1 snack each day, you've given up a new car when you retire. A good trade-off? Only you can decide. There's also the possibility of trading money today for time tomorrow. For instance, you could use the money from those work day snacks to allow you to retire 3 or 6 months earlier than you would otherwise. Is it unusual to think of “banking” a few minutes each day towards an early retirement? Perhaps, but it does give you a new perspective on spending. But, what about credit cards? Don't they make it possible to buy the things that we want? Yes, you can use your plastic to do that. But credit cards are deceptive. They lead you to believe that you can spend more than you make. And, for a short time, that's probably true. But eventually you get to a situation where you can only afford the minimum payment each month. Once there, you're back where choosing to spend on one thing prevents you from buying something else. And, you've also made the choice of paying interest to the credit card company on the monthly balance instead of having that money for other uses. So how can you use opportunity costs to help you live a happier life? By thinking of the alternatives before you spend your time and money. Even though something looks good, if you stop to compare, you might find something else that you'd prefer to spend your time or money on. ___________________ Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website (www.stretcher.com) Gary has been wonderful at promoting authors like me and giving us a forum to submit articles and assist readers each month. He and I have been working together for over 2 years. You'll find thousands of articles to help you make the most of your time and your money. Visit The Dollar Stretcher and get the help you need or post your ideas on debt-free living to help others today! How Do You Want to Spend Your time? By Anne, United Kingdom ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Having read Janine Bolon's book, “Money its not just for rich people!” and being familiar with her 60/40 principle I wondered how applying it to time would work out. Well 60% devoted to work makes about 37.8 hours which would be a fair amount. I decided the other categories would be 10% to community, 10 % self investment and education, 10% to family and friends and 10% to fun. If you have a family then that 37.8 hours includes the job of being a parent and should enable us to work out what balance we need between work outside the house and the work inside the house. When you do your audit you will find out where you spend your time and gawk.....how much TV do you watch? How much traveling do you do? The secret for me is not that I want to have rigidity in this equation but that I can say NO when I am giving more than I need toward my community, it helps me to pace my time and activities and keep a balance that works for me. How would you like to spend your time? Now I can sit down and make decisions about the amount of community contributions I make and whether that is necessary and whether I would rather spend more time with the kids, or less on fun items, where my personal time is etc etc. Wealth is not just about money but finding what makes you happy, fulfilled and gives you a feeling of being the richest person on earth; it is not always money (although crying in silk sheets makes the drama more pleasurable), it is about being happy and having a feeling of well being too. If we accept that time is money I could negotiate with my time. Instead of sitting for hours on committees deciding how to fundraise, my time might be better spent by simply doing what I enjoy and donating the equivalent in cash to the charity. That may be more appealing to some people. So if you get paid £ 10 per hour (this makes it easier to do maths with), and you decide that you want to spend 6 hours on community work but the thought does not appeal.....because you would rather be out fishing, well then give £ 30 to the youth club for instance so they can pay someone who loves to do exactly that and you can go fish 3 hours with a free conscience. It will have cost you but you will have made the contribution. Go fishing but it will cost you! (You can only go fish for 3 hours because you will need to work the extra 3 to pay the money)There have been days in the past where I have made cakes, bought them again, sat on the committee deciding how we would raise the money, set the tables for the event, made posters and raised £ 30.00, and came home with 2 cakes after clearing up. Phew, I could have approached this in a different way! A light bulb moment in my downshifting monetary values was when I equated the cost of an item to the amount of hours I needed to work at a job I did not enjoy. That in itself makes you think before you shop. I have tried to teach that principle to my children and sometimes they get it, and other times I am just not cool! Now that I have my priorities I can check whether I actually spend that amount of time doing what I want to do and plan accordingly. And if you doubt Janine's method, having put it into practice for the last few days, I have received a special delivery of flowers (completely unexpected as a thank you for community involvement) so maybe it really does mean that you can flow with the universe. I had tea at school today in aid of a charity and donated half a goat or 1/6th of a carpentry set of tools, ate cake that the children made and found it very enjoyable and satisfying. Can it be that simple? I could apply that method to the harvest from my garden to - 60% to eat and share with others, 10% to preserve, 10% to share with the wildlife about me, 10% seeds for the future. Makes sense although I am still squishing the caterpillars because they are having more than their fair share. Give it a go and see what the rewards are. Let me know what the universe is giving you when you start giving your time. ----------------------------------------------- For Anne it all started with a dream to build a house that would be self reliant for its energy supply. When her personal energy supply was severely depleted she found that pacing what she did and making choices created more not less. She now actively works on the concept that LESS IS MORE. She is a fellow blogger, mom and wealth accumulator who gave me permission to reprint her post on time management. Check out her blog sometime. She has a lot to offer folks! http://downshiftingpath.blogspot.com/ December’s Book: “Overcoming Underearning” by Barbara Stanny ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I have GOT to tell you about this wonderful book I just read. I was so blown away by the whole concept that I bought 10 more copies and passed it out to my friends. This is a GREAT book! It is called “Overcoming Underearning: Overcome Your Money Fears and Earn What You Deserve”. Barbara Stanny is the author and I contacted her as soon as I finished reading it to get the inside scoop on her purpose/mission in life and how I could help others with her philosophy. There are two paths to becoming financially independent. The first is becoming a habitual saver and not spending more than you earn. The second is making more money! Well, since you’ve been subscribing to this newsletter you’ve been getting lots of good stuff on debt-free living, frugality and saving. What Barbara can do for you is get you earning more money! Now if you think this is a get-rich-quick-scheme then you need to find yourself another newsletter. That is NOT what the Frugal Friends Network is all about. What Barbara’s book entails is a bunch of questions and journaling exercises to help you break down your personal barriers to wealth. Mainly, dealing with your fear and/or anger toward money. In the next issue I write up my interview with Barbara where she shares her purpose for writing the book and how it has impacted the lives of her readers. Stop by her website www.barbarastanny.com and buy her book. It is well worth the price! Reader Tip: Changing the Face of Window Shopping, Diane, Massachusetts ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I have found that we need to stay out of the stores. Period. Unless it is groceries or other necessities like toothpaste and toilet paper then it is just asking for trouble for me or hubby to go to a store and just "look around". Deadly! You can always find some little something that you want.... Right? So now it is second nature to just keep walking by a store or just look in the window and go "Oh my goodness- did you see how much that costs??" So much of what we used to spend was on things that we thought were necessities. We know otherwise now and it's a whole new way of thinking. Very liberating actually.... A Frugal Friend’s Victory: Taming the Monster with Jennifer, California ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hi Janine, I am new to your newsletter and have loved reading everyone's suggestions, tips, and stories. My husband and I are working hard to reduce our debt and I thought I would share ours. It ties in with something you were talking about in your last newsletter. As of January of this year, with the feeling that we were drowning in more debt than we knew- we finally sat down to write down ALL the debt that we were facing. When all was said and done and the tears finally dried, the numbers were staggering. We were starting the year with more than $153,000 in debt (not including our home) and a drained savings account. We had made some bad financial decisions the previous year and were really paying the consequences. I remember feeling angry at my husband and myself for not being on top of our finances (before this year, we had been financially smarter with a little debt and a decent savings). As I sat in the bath tub later that day it struck me- I could be angry and feel helpless- or I could be positive that this was not going to sink us, that we were stronger and that we would do what we had to do to make this work. And slowly but surely, that's exactly what we are doing. It is true about having a positive attitude. Sometimes things need to be bad so you learn the message/ lesson (and boy, have we learned). But the thing that has made the biggest difference has been our attitude. With a good attitude and a lot of hard work, we have reduced our debt by approx $93,000- We still have quite a lot left, but we are so ecstatic about how far we have come. We don't eat out anymore and we have made a rule about spending- that we have to think about it over night before we spend- and this has really made a big difference. By the next morning, we usually decide that we don't need what ever it was we were tempted to buy- and than we have the great feeling that we didn't spend. So that's it- we are happy at this new found feeling of being in complete control of our finances and we can't wait until the day that we can retire early! Thank for listening Frugal Friends… Jennifer S. -------------- Jennifer: Congratulations on the hard work of facing your debt monster and taming the beast! That first step can be a dozy, but if you take it with determination you can get the prize. What’s the prize? Freedom. Please keep us posted of your work and when you do hit the zero dollar debt mark email the Frugal Friends Network so we can throw a virtual party for you, okay? Wishing you continued abundance, Janine Blog Highlight: http://www.kiplinger.com/moneybasics/ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Kiplinger has launched a new site designed to teach the basics of money management and handling your personal financial life. If you're getting started, or starting over, there's numerous good articles here about budgets, investing, picking banks, retirement plans, insurance, etc. etc, delivered in the straightforward and personable manner for which Kiplinger is known. By Ben Popken http://consumerist.com/consumer/personal-finance/the-basics-of-money-301699.php Charity Highlight: http://www.dressforsuccess.org ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I have known about this wonderful organization for years. When I lived in California, there was a local affiliate where I donated clothes and money. For those of you looking for an organization that does incredible work for women, who wish to improve themselves, give this group a try. The mission of Dress for Success is to promote the economic independence of disadvantaged women by providing professional attire, a network of support and the career development tools to help women thrive in work and in life. Founded in New York City in 1997, Dress for Success is an international not-for-profit organization offering services designed to help our clients find a job and remain employed. Each Dress for Success client receives one suit when she has a job interview and can return for a second suit or separates when she finds work. Since 1997, Dress for Success has served almost 300,000 women around the world. Each year we reach more than 40,000 women in the United States, Canada, the United Kingdom and New Zealand. All Dress for Success organizations are not-for-profit entities, with Dress for Success Worldwide and its U.S. affiliates having 501(c)(3) charitable status. 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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