January 2010 - Posts - The Dollar Stretcher
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The Dollar Stretcher

The Dollar Stretcher blog will explore people and money.

January 2010 - Posts

  • Your Personal Balance Sheet

     Here we are already entering the 2nd month of the new year. With the holidays over, it's a great time to focus on our finances.

    Sometime over the last few weeks you should have received statements on all your savings, investment and retirement accounts. This is a great opportunity to work up your Personal Balance Sheet (PBS).

    A PBS is an important document for all of us. It's effectively our financial scorecard. A PBS lists all of our assets at their current value and all of our liabilities (i.e. debts). Total all of your assets. Then total all of your debts.

    Hopefully the assets are worth more than your debts. Your "Net Worth" is the amount that your assets exceed your debts. Your goal is to increase your financial net worth as you get older. Not surprisingly, the more debt you have the harder that is to do.

    For more information about how to calculate your net worth visit here.

    BTW, just for the record I recognize (and I hope that you do, too) that your value as a human being is not equal to your financial net worth. It probably should be called your 'financial' net worth, but in common practice it's not.

    Finally, a suggestion. This is the type of thing that we're working on in our daily enewsletter "Financial Independence". Not only are we learning about financial tools like PBS, but we're also discovering the Money Tapes that often rule our financial lives. If you'd like to take control of your finances just send an email to: join-fi @ hub.thedollarstretcher.com

    Keep on Stretching those Dollars!


  • New for 2010

    Wanted to talk to you about two new things that we're doing in 2010. If you visit the website <www.stretcher.com> you may have already noticed the first. It's called "Frugal News" and you'll find it on the right side of the page near the bottom. We want to use it to help you keep up with everything you need to know to get the most for your money. We cover as much as we can here at TDS, but we can't be everywhere. So we're happy to let you know about other articles that could be helpful. We'll find as many as we can ourselves. But, if you know of an article that others might enjoy, please send us the url by email.  We'll try to include as many as possible in the Frugal News section.

    The other thing that we want to do this year is to provide more time and money-saving ideas on video. We'd like to start with submissions from you. The best tips and articles have always come from our readers. We really believe that if you add up all of our readers and visitors you'll find more money wisdom than in any other place on earth. So we're asking you to share those ideas via your videos. They don't need to be overly professional. We're looking for good ideas, not Hollywood production values. So if you'd like to share your thoughts, just shoot your video and send it by email.  Knowing the great ideas you have, I can't wait to see what videos we receive.

    Finally a hope that you're managing to stay warm this frigid winter! If you're looking for more ways to keep warm visit our Winter Heating Section. Keep on Stretchin' those Dollars!


  • Frugal Fatigue

    It's not that I'm so smart, it's just that I stay with problems longer. - Albert Einstein


    Recently I was approached by a reporter. They were doing a story on people who were tired of the effort it takes to control their spending. What suggestions, she asked, did I have for people who were struggling and thinking of just giving up?

    A little time brought to mind some of the things that I've seen people do who continue when the easiest course was to quit.

    The first is to make a decision. Once you've decided to pursue a goal, do not question it. Unless you have significant new information, you have no reason to doubt your original decision. So don't trouble yourself with questions. Just continue along the path you chose to follow.

    The second involves breaking big goals into smaller pieces. They say that success breeds success. I believe that's true. Dividing a big goal into smaller goals allows you to have some smaller successes along the way. Each one helps to motivate you to strive for the next small goal. Pretty soon you've accomplished the big goal.

    Rewards are the third tool to accomplish financial goals. Most of us want to know "what's in it for me?" That's only natural. So put something in it for yourself. If you're paying off a credit card, treat yourself to a small reward at predetermined points along the way (i.e. after $2,500 has been paid down or when the balance is reduced by 25%). Looking forward to the reward takes your mind off of the struggle.

    Reminders can also be helpful. If you're saving for a vacation, you'll find that a picture of the campgrounds on the refrigerator can be a great motivation. Some people put a card in their wallet to remind them of their commitment to reduce debt. They see it every time they reach for cash or a credit card. It can help you resist needless purchases.

    Finally, it's helpful to have friends to encourage you and share experiences. Most long journeys are much easier if we have one or more people to walk with us. So find a frugal living partner at work or in your neighborhood. Or join an online discussion group. Not only will you find help, but you'll become stronger when you encourage others. In fact, we have one specifically on Frugal Fatigue.

    So don't let the length of the journey discourage you. The total distance is not that important. All you have to do is to stay on track for today. And, that's something that all of us can do.

    Keep on Stretchin' those Dollars!


  • Financial Advice for a Picky Eater

    I have a 5 year old that is a very picky eater. Will not eat veggies, except green beens or corn. Meat only hamburger or ham. Can you give me some suggestions as to what dishes I can make? My husband and I are tired of eating the same meals. Thank you.


    Sonny asks a good question, although at first I wondered if it weren't better suited for a parenting column. But given more thought, it occurs that it really helps illustrate a point about raising financially responsible children. How so? Let's take a look.

    We'll begin by considering what Junior is saying when he refuses to eat anything but hamburger or ham. Part of it is good. He's exploring how much control he has over his world. And, although I'm not a child psychologist, that strikes me as healthy. It's all part of the growth process.

    The bad part is that Junior is attempting to dictate his surroundings. In effect, he's telling Mom and Dad that he expects them to feed him only the things that he likes. And, it's up to them to perform to his standards.

    Sonny, understandably, wants to make her child happy. But making him happy now could set the stage for much unhappiness later. Now might be the perfect time to teach Junior a better way of relating to the world around him.

    What does eating peas and carrots have to do with finance? In this case quite a lot. If Sonny gives in to Junior's demands, he'll expect that others will, too. Not only at dinner, but in other areas. It will be an unhappy surprise for Junior when they don't.

    He won't know how to handle it when a boss expects him to perform a task that he doesn't like. He'll rebel when a purchase doesn't make him as happy as he expected. In short, he'll expect to get his way all of the time. And, as we adults know, that's not the way that life works. Especially our financial lives.

    So what can Sonny do to avoid mealtime boredom and a lifetime of financial frustration for Junior? She can begin by serving Junior a variety of foods. Whether he likes them or not.

    If dinner tonight consists of chicken and mashed potatoes, then that's what's available for Junior to eat. He may fuss and demand something different. That's when Mom and Dad need to tell Junior that nothing different will be prepared for him. He can choose to eat the chicken and potatoes or wait until the next meal. It's his choice.

    Chance are Junior will run away refusing to eat dinner. Don't chase after him. If he asks for a snack that evening, inform him that you're willing to reheat the chicken and potatoes for him. If that's not acceptable he can wait till breakfast.

    After a day or two, Junior will realize that Mom and Dad aren't going to give in. He'll be faced with a choice. Eat the healthy meal that's presented to him or go hungry that night. It won't take long before he discovers that chicken isn't so bad!

    It's important not to get into a fight with Junior or to try to force him to eat. That could be bad for your relationship with your child. Just prepare a healthy meal (as a good parent should) and offer it to your child. Then give them the opportunity to eat if they're hungry.

    Ok, now let's tie this back to Junior learning about personal finance. It's important for all children to learn that we don't always get what we want. Trying to do so will mean spending money that we haven't earned. Buying things that we can't afford. And, then expecting the world to fix the problem that we created.

    Junior is much better served by learning early to adjust his wants to the world around him. He may want hamburger every night, but chicken is good, too. He may want a new luxury SUV. But he can afford a less expensive used cross-over. Not everything he sees in the store fits within his income.

    So to answer Sonny's question, she can make whatever dishes that she and her husband like. Not only will they be happier, but in the long run Junior will be happier, too.

    Gary Foreman is the editor of The Dollar Stretcher.com website and various enewsletters including Financial Independence. To learn more on teaching children about money click here.

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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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