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 -- Saving Money at the Grocery Store isn’t Really Saving! -- Life Lessons from the Hip-Hop World -- Reader Question: What Charities Can I Trust? -- WHO WE ARE
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Note from the Editor ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dear Frugal Friend, April is already here. Would someone tell me what happened to March? As I try to catch up on the busy schedule that has become spring, I have here a few tidbits that I found while touring around Southern California. I found the grocery stores and malls in the area most impressive as well as challenging as the new marketing plans are being implemented for this quarter. I discuss what it really means to save money in the first article due to my son’s query. He became confused when cashiers started telling us at several different stores about money that we supposedly saved when he only saw money “leaving” mommy’s wallet. Smart lad! I couldn’t resist talking about the financial advice given at a recent Hip-Hop Summit held in Houston. There were excellent words of wisdom being taught to the youth of the audience. It was exactly the same stuff I’ve heard for years from financial planners, accountants and attorneys. It was just in a more earthy language. As you go about preparing for Spring and all the joys of this refreshing season, take a look at your savings account and compare it with what you had in January. Has it increased? Then congratulate yourself! Has it decreased? Then set another savings goal (An easy one! Like $10 per paycheck) and work toward achieving it. This is the season for such things! Wishing you abundance, Janine Saving Money at the Grocery Store isn’t Really Saving! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Last week I was visiting southern California and I stopped by a grocery store. As the cashier finished ringing up the sales she took the receipt out with a flourish, circled an item at the bottom and said to me, “You’ve saved $12.16 with us today!” I answered, “Yes, but I spent $25.63.” She looked at me with her smile fading and rebutted, “But you saved almost half that amount.” I thanked her for her time and took my groceries out to the car. As I fumbled for keys, balanced milk jugs, and corralled children into car seats, I realized why I was so vexed. I didn’t save anything at that grocery store. I spent money. Not a penny was “saved.” I don’t care what the cashier has been told to say by her management. It is a lie to say I “saved” money. No wonder so many of my clients have a hard time understanding the concept of savings and what to do with it. All around them businesses, friends and family are using the term “savings” and it has nothing to do with money that is conserved. It mostly states how much money wasn’t spent that could have been spent. This is not savings. This is spending. As I was ruminating over this latest incident my son pipes up from the back seat, “Mom, did we really save money back there?” I started laughing. A ten minute discussion ensued where I pointed out what savings meant to me versus what savings meant to the cashier. Stay with me, I know some of this is rather basic, but I figure if my children and that sweet cashier were getting conflicting messages on savings, I’m sure other people are too. This is what it means to save. 1- If you spend money, that isn’t saving! Forgive me, dear reader, for stating the obvious. But with the latest marketing techniques you may end up confusing what it means to save. If you have money leaving your bank account instead of earning interest, then you can rest assured you are not saving. I don’t care how pleasant the person behind the counter is when he/she circles a figure at the bottom of your receipt. 2- If you resist the urge to buy something and walk away, that is saving money. Many times we buy things that we simply don’t need. We want to treat ourselves after a hard day at the office or an argument with our spouse. If we are emotionally upset, many people spend money to feel better. To resist this urge means you are saving money. Find an activity that is free and stop the spending spree. 3- If you maintain a piece of equipment over the years so you don’t have to purchase a new one, this is saving resources. My husband and I take our vehicles in every time they are in need of an oil change. With the amount of driving we do, this is a frequent event! However, by maintaining our vehicles we can usually get 10-15 years of service out of them before we start to have major issues. That is saving money! 4- If you get your bank statement in the mail and you see that your savings account has increased rather then decreased, guess what? You’re saving money! You actually are in the habit of putting money aside and conserving your resources. You are a member of a minority by doing this. Only 1% of Americans save. By having a savings account where you consistently put money aside you are in the top echelon of our society. Cool, no? I realize this is basic stuff. However, I also know how many folks are using language that says they “saved” money on a sale today when they actually SPENT money on an item! You either wanted that item or not. Don’t justify yourself using the marketing babble that you’ve heard. That ends up amplifying the problem. Be part of the solution and when you say you are saving money, make sure you mean that it is money in your account! Life Lessons from the Hip-Hop World ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I was reading an article in USA Today that described how Hip-Hop artists held a summit in Houston, Texas. This group of singers, song writers and performers traded stories on losing money, saving money and how to spend money. Their audience was largely youth, but you would have thought you were in the middle of a financial planning conference. The only difference was the style of language and the amount of bling. Here are a few of my favorite tips that were given out: Bun B (started UGK): If you’re going to spend $30,000 on a diamond necklace, make sure it isn’t the only $30,000 you have. Monica: Stay away from credit cards. If you have to have one, keep only one and then keep it in your wallet! Solange Knowles: Write down what you really spend. I didn’t know what I really spent. But now I’m a new mother, so I set up a college fund for my son. Rev. Run: When I got my first check, I bought a house. If you think you can rent and it will prosper you, it won’t. Buy the cheapest house in an affluent neighborhood. Use your skills of decorating and refurbishing, and you gain equity. LeToya Luckett (original member of Destiny’s Child): Pay your tithe to whomever it may be to. Don’t worry about what the preacher’s going to do with the money. Is he gonna buy a new helicopter or a new car? Don’t worry about that…Do what God sent you here to do.” As I finished the article I bust out laughing. This is the same sort of advice I had heard over the years from financial advisors of different companies. It was great to hear it in plain English (I’m sure there are English professors who would argue that point) and listen to the stories of people who had made a few mistakes financially, like me, but managed to get their finances under control and become wealthy. Here they were, like me, trying to educate others about the basic principles of building and maintaining wealth. Some of these artists had learned their financial lessons the hard way and they didn’t want others to suffer similar fates. One singer strongly recommended that people check on their credit reports twice a year after losing $4,000 because a long time friend filled out a credit card application using his name. Identity theft is on the increase. My husband had his social security number used by a woman in Arkansas a few years ago. We had recently moved and were trying to open a new account at the local bank. The bank refused our application due to this woman’s delinquency. It took only a few days to iron out the problem, but it was a mess all the same. The take home message from the summit was this: Track your expenses-know where your money is going Put some money aside from every paycheck Give some of your money away to help others Obtain credit reports Buy houses wisely and then fix them up These are the basic steps you need to start on to build your savings to a point where you can start investing either in homes or different types of funds. You don’t need much. Many funds will allow you to open an account with $2,500. Listen to these Hip-Hop Artists; they know exactly what they are talking about! Reader Question: What charities can I trust? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dear Janine: I have some money set aside to give away, but I am unsure what charities I can trust. Are there any organizations you recommend? I don’t like to suggest charitable organizations for philanthropy because it is such a personal thing. I mean, you work HARD for your money. I think YOU should be the one to decide where the cash should go when you give it away. I recommend you find an organization that is doing something you are passionate about and give to them. Most charities are right in your own neighborhood. Look around and you’ll be amazed at the number of organizations that are helping people, animals and plants in your own community to survive the changing conditions every county experiences. However, if this doesn’t help, you can visit a great organization called www.Charitywatch.org. Daniel Borochoff is the president of this non-profit organization that keeps its fiercely independent status by having members who pay for the results of their reviews. They do not ask the charities themselves to pay for their analysis nor do they receive government or corporate grants for their work. You don’t have to buy their ratings book; they have the top 25 organizations listed on their website. Maybe you can find something there. Another place on the web that can help is www.give.org which is the Better Business Bureaus’ Wise Giving Alliance that helps rate different organizations. Between these two sites you will have many articles that you can read that give you tip sheets on how to give wisely as well as the types of questions to ask organizations before you donate. Do You Have a Question for the Next Newsletter? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ If you've got a question you want me to address in the next newsletter, type it up and please send it to janine@smartcentsinc.com with the subject line "My 2Cents Question." My 2Cents will feature a question 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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