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August 2009 - Posts - The Dollar Stretcher
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The Dollar Stretcher

The Dollar Stretcher blog will explore people and money.

August 2009 - Posts

  • Is Money Evil?

    Do you think that it's virtuous to be poor? Many people do. In many religious traditions holiness is in part accomplished by turning your back on material things.The idea is that to appreciate the spiritual you need to totally forsake the material. Or at least get as close as possible. Many have taken vows of poverty to pursue this goal.

    But, I'd argue that it's a not quite that simple. Money is just a tool.You wouldn't say that a person was bad because they had too many tools. Money is just a way that we have of exchanging things. By itself money has no value. It's not necessarily good or bad. It's what people do with money that is good or bad. So the problem is with the way money is used. Not the money itself.

    One of the most misquoted verses in the Bible is that "For the love of money is a root of all kinds of evil" (1 Tim 6:10). It's the love that causes the problem. When you place your affection on money you become vulnerable to troubles. The mere fact that you have accumulated some wealth does not make you bad.

    So what does this have to do with achieving Financial Independence? Good question! Actually, quite a bit.

    First, to be financially independent means being in control of our money. Not to have our money control us. So we need to be careful not to fall in love with our money. If we do, we'll begin to let money have too much influence over us. Just another way of saying money is in control.

    Secondly, a belief that money is bad could be sabotaging your desire to build wealth. If subconsciously we believe that all money is evil, then we'll push it away from us. We'll find it hard to do the things necessary to build a savings account or IRA. I've even heard people say that they have a way of 'repelling money' or that they're 'alergic to money'. We can't see our subconscious, but it has a large impact on what we do and say. Sometimes it even ruins our own plans.

    So what do you think about money? Do you have a good relationship with it? Or is it time to reconsider what you believe?

     

    Gary Foreman is the editor of The Dollar Stretcher.com a website devoted to helping people "live better...for less". This post originally appeared in Financial Independence. FI is a daily message designed to help people take control of their financial lives. To find out more check out the Financial Independece page.

  • Why I Like Failure

    This may seem strange, but I like failure. No, not because I'm some loser. I actually think that failure helps me get closer to success.

    How? That's simple. If I study my failures I'll learn about myself and the world around me. If I can get over the hurt, step back and study what happened I can learn a lot.
    A lot that help me make the changes needed to be successful next time. And, that's something that I like: success!

    Keep on Stretching those Dollars!

    Gary

    Gary Foreman is the editor of The Dollar Stretcher.com - a website devoted to helping people "live better...for less". This post originally appeared in Financial Independence. FI is a daily message designed to help people take control of their financial lives. To find out more check out the Financial Independence page.

  • Financial Drift

    Have you ever been driving down the road and been distracted by something on the roadside? If you look in that direction for more than a second, you'll find that the car is drifting in that direction. In effect you're steering towards what you're looking at on a subconscious level.

    The same thing is true of goals. Part of the reason that goals work is that they stay on your mind and almost pull you towards your destination. So, knowing that, it's a good idea to keep your goal in mind. One way to do that is to write the goal down on a slip of paper and stick it in your pocket or purse. Then pull it out a few times during the day and read it. Just that simple act will increase the probability of reaching your goal.

    Oh, and if you haven't gone public with your goal you can do that in The Dollar Stretcher Community.

     

    Keep on Stretching those Dollars!

    Gary


  • Introducing "Financial Independence"

    Hello to all my Frugal Friends!

    For awhile I've been hinting that we were working on something new. Now it's time to open the curtains and let everyone get a good look.

    Let me begin with the background. From the start I felt that The Dollar Stretcher didn't need to remind people to be responsible with their money. That they already knew that and didn't need us to bug them. Our job was to give them the info/tools to go do that job.

    But over the years (we're in our 14th year now) I've seen that model doesn't work for everyone. Guess that's no surprise. We're not all alike. Some people know what they should do and just can't seem to do it. At least not consistently. Something disconnects along the way.

    What I've come to believe is that money is often a symptom or a substitute. It's more than just a way to buy things. Intellectually we know that we should plan our grocery shopping and only buy what's on the list (i.e. nutrition for our family). But, when we get to the store our emotions kick in telling us that we deserve that expensie premium ice cream as a special treat. Many of us succumb to that emotional pressure.

    If you're just buying premium ice cream it's not so bad. But if you're cruising the malls/eBay/QVC regularly, or find yourself buying expensive toys (wide screen tv anyone?), that's something different. And, in either case you are NOT in control of your finances.

    So we're introducing a new short daily email called "Financial Independence" that's designed to help people take control of their money. Nothing too fancy or complicated. We'll try to help you accomplish a number of things:

    • Build money good habits
    • Understand how you relate to money and how that affects your money management style
    • Provide reminders to eliminate the 'I forgots'
    • Share success stories and quotes that will encourage you to success in your financial journey
    • Look for ways to build up your financial perception AND capabilities

     I'm convinced that there are a lot of people who would like to take control of their finances, but just can't seem to get there by themselves. Our goal is to provide them with a short daily email that can give them the tools to take charge of their money.

    Best of all for you, it's free. And, private. All we'll ask is your email address so we can deliver it. No personal information.

    Some of you will ask how we'll profit with "Financial Indpendence". Good question. We need to stay in business, too! Occasionally we'll include some resources that could help you on this journey. For instance, we have an affiliate arrangement with SmartSource and Coupons.com. If you're going to use grocery coupons we hope that you'll get them from our site. Other times we'll suggest a book that could help. Check the library first, but if you need/want to buy it we'd like to help connect you to Amazon or the publisher.

    So why not join the growing ranks of those who choose not to be under someone's financial thumb. Today is a great day to declare your financial independence!
    You can sign up by sending an email to or visit here. Watch for the 'confirming message'. You'll need to respond to it to activate your subscription.

    Oh, and one last thought. Don't worry if you've failed before. This time you will succeed!

     

    Keep on Stretching those dollars!

    Gary

  • Pay My Bills

    Dear Dollar Stretcher,

    I really struggle with the discipline aspect of saving money. I have heard of companies who put your money in a trust, pay the bills and give you an allowance to live on. Do you or any of your readers know anything about how these companies work or if anyone has had any bad experiences with these?

    Mary

     

    Mary has a problem that's probably more common than we care to admit. She has trouble controlling her spending. And, to her credit, she wants to regain control.

    But, I don't recommend that she use a firm to pay her bills. Three reasons why I don't.

    First, not all of these firms are legitimate and responsible. Signing up with the wrong company could have disastrous effects. Not only could you lose your money, but your credit rating could be destroyed.

    Secondly, why should Mary want to pay someone to do what she can do herself? These firms will work with her to create a budget. Once she has a budget made they'll collect her paycheck and allocate it to her various monthly bills and give her an allowance for incidentals.

    She can do that herself. You can find all kinds of budget worksheets by doing a web search for 'making a budget' or look for info here.

    She can set up a special checking account to be used for routine bills, like the electric bill. That account will only be used to pay those specific bills. In fact, if she can set it up for online payment and not even have any paper checks, that would be best. Less temptation.

    Individual debit cards can be used for things like her groceries and food shopping. One for each category. For instance, she can add the amount that she has allocated for food each pay period to her food debit card. When she's grocery shopping she uses that debit card. Since she can only spend what's on the card, she's effectively stopped when the money is gone.

    She'll probably have some incidental expenses that aren't easily put on a debit card. She can set aside a certain amount of cash to cover those expenses each pay period. Again, when the cash is gone the spending must stop.

    Anything beyond that goes towards an emergency fund or long-term savings.

    Mary may find that her income doesn't cover her expenses. That means that she must reduce her spending or increase her income.

    She doesn't say, but past debts might be part of the problem. If she has a large amount (typically $10,000 or more) of credit card debt, she might want to check out a reputable credit counseling agency. She'll want to find a credit counselling agency that's a member of one of the two associations: Association of Independent Consumer Credit Counseling <aiccca.org> or National Foundation for Credit Counseling <nfcc.org>

    The third reason that I don't recommend these firms might be the most important. Hiring someone only deals with the symptoms. Unless Mary addresses the root cause of her spending problems she will always struggle with spending issues. That will be true no matter who has control of Mary's charge cards and checkbook.

    Mary needs to understand why she's spending money. Often people who have problems controlling their spending are trying to fill emotional needs. For instance they may feel loved or powerful when they buy something. What they're buying is only important to them as it relates to fulfilling that psychological need.

    There are a number of clues that could identify that she has that problem. One is if her head says "stop" and she buys anyway. Another is if she feels out of control when she's shopping or enjoys a shopping 'rush'. Perhaps she feels remorse after a purchase or hides her purchases from her spouse.

    If Mary has that problem it's good for her to be responsible for paying her bills. Being closer to her financial transactions could help her understand her buying motives. As she pays her bills a good question would be "why did I buy this?"

    Mary may find that she can't figure out what's triggering her actions. In that case she'll need to seek out a counselor who can help her work through the emotions.

    In any case, Mary should be proud of herself. She's identified a problem and has taken the first step to solving it.

     

    Keep on Stretching those Dollars!

    Gary

  • Top 5 Areas for Spending and Saving

    Brad Tuttle, a blogger with Time.com, asked a number of people involved with frugal living what things they would and would not spend money on. It's an interesting question. He's running the answers on his blog.

    I like the question. Being frugal, at least to me, doesn't always mean getting the cheapest item possible. It's a matter of balancing the cost of the item, the quality of the item, and the level of quality you need for your use. So here are the answers that I came up with.

    Where The Dollar Stretcher looks for savings:

    Anything disposable. If you're going to use it once or twice and then trash it you don't need quality. Throwing away the fewest dollars seems to make a lot of sense.

    Generic foods. Frankly, I don't care which brand of instant oatmeal I eat. The cheapest is just as good as the name brand. There are many grocery items where the generic is a great way to save some money. No need to pay for name brands' marketing efforts.

    Utility bills. I can't see spending any more than necessary for utilities. It seems silly to let lights burn needlessly or air conditioning escape to the outside. I don't know if the power company has an award for their best consumer, but even if they did, I don't want it.

    Play clothes. For daily living I just want practical. I don't need the latest styles or designers. Clothes for work and play should be functional. So I look for good quality and the lowest price I can find.

    Status items. Fancy watches, club memberships or having the latest toy really doesn't interest me. Spending to get others to think better of you seems like a foolish activity.

     

    Where The Dollar Stretcher is willing to spend a little more:

    Tools. Specifically those that are needed for my job or that are used frequently at home. Nothing worse than having an inferior tool break at a critical time. And, in this case there's a reason that some tools are cheaper than others.

    Cars. I admit that I'm a car lover, but that's not the reason. By spending a little more when I buy, I get a car (if used) that's more reliable and will need fewer repairs. I'm also willing to pay a little more for a car that has the options that I want. That way I won't be tempted to replace it in a few years to get the options that I don't have on my current ride. In both cases, spending a little now will save me more later.

    Dress Clothing. Fortunately I don't have to dress up too often. So a good quality suit or sport jacket can last me for years. Buying a timeless style and good quality makes sense. It's also a good motivator to keep me from gaining weight so I can still wear the clothes already in my closet!

    Education. In almost any form. For myself and for my kids. College, continuing education, books that can help my career, anything that helps me learn more about myself, my work and the world around me. This might not be true for everyone, but if you look at life as an adventure, you'll want to keep asking questions and looking for answers.

    Memories. The truth is I'm sentimental. So spending a little to make, record or remind me of good times is worthwhile to me. Hard to put a pricetag on a good memory.

    You might want to come up with your own lists. It's a good way to challenge how you think about spending money. If you do, I'd love to see what you think. Just send me an email with your conclusions.

    Keep on Stretching those Dollars!

    Gary

     

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Gary is a former financial planner and purchasing manager who edits The Dollar Stretcher website <www.stretcher.com> and newsletters. You can follow Gary on Twitter.com/gary_foreman
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