The Dollar Stretcher

As we've discussed before, our Money Tapes are thoughts that go through our mind telling us what we believe to be true about money. Typically they've been with us a long, long time. We've accepted them as part of our reality.

But what happens if one of our Money Tapes is false, or isn't true all of the time? What happens then?

Often the results are a train wreck that you're not even aware happened.

Let's consider an example. Suppose that you were raised to believe that your value was determined by what you produced by your hard work. So naturally, you've worked hard all of your life. Often putting in extra hours and even skipping family events so that you could produce more.

When a special project keeps you from your son's birthday party your Money Tape plays: "You're most valuable to your family when you're working hard." Believing it to be true, you plow into the special project and plan on apologizing to your son when you get home.

But the Money Tape is only partially true. Working hard is important. But so is being present at your son's birthday party. In fact, it's very likely that the party is more important.

Since you believe your Money Tape you think you did the right thing. And, you're surprised when your son isn't that interested in your apology. It's only years later that you realize how much he wanted you to be there. In short, a train wreck that you weren't aware of.

The moral of the story? Listen for and question your Money Tapes. Make sure that they're true for the specific situation you're facing. Otherwise you may think that you're doing great, even though your train is hurtling off the tracks!

What's your experience with Money Tapes? How have they affected your life. We'd love to hear your story.

 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!

Gary

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!

Gary

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!

Gary

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.

Even though I don't get to spend much time writing anymore, it's still one of the hats that I get to wear. There's something exhilarating about having a blank screen in front of you and being responsible for putting something useful on it.

But, I'd be dishonest it I didn't also say that there's something a little terrifying about it. Here you are alone with your thoughts at the keyboard. What if you get a case of writer's block? What if you don't have anything valuable to put into words?

I think that facing a new year puts us all in a similar spot. No, it's not a completely blank slate. You still have last years' debts or savings. And, your boss probably won't become suddenly nice at the stroke of midnight (although that WOULD be a Cinderella story!).

But you do have an opportunity to say what you want 2010 to be for you. Your future has not been predetermined. Think of it as having a blank screen to write on. What would you want to write on this new year? Something personal? Something financial? Something relating to your spouse or children?

One other thing about writing. Generally you have to revise what you've written. Change a word or two. Maybe add or drop an idea. Done well each change brings you closer to the finished product you want.

The same is probably true of our blank screen for 2010. We'll probably will want or need to make some improvements as we go along. Changes that will move us towards the ending we want.

So don't hesitate to write on the new year. In fact, I'd encourage you to do so. My hope is that whatever you do write on 2010 will bring happiness to you and to your loved ones.

Keep on Stretchin' those Dollars!

Gary

       

Have you ever wondered why we celebrate the new year. It's just an arbitrary date that acknowledges that the earth has circled the sun one more time. And, as an excuse to party it's really unnecessary. People who like parties really don't need more than the rising or setting of the sun to throw one. So what's the big deal about Yew Year's day?

Clearly the attraction is not just limited to the United States. Societies have been picking a date to celebrate the new year for thousands of years (think of the Jewish and Chinese new years). And, today the new year is celebrated at one time or another in very many societies around the globe. Why is that?

I think there are two reasons that people mark the new year. One, is that we instinctively know that periodically it is good to have a time of reflection. A time to evaluate what has come into our lives and how we handled it. A time to compare what we've done to what we hoped to do. A look at the road that we've travelled.

I also think that we also know that sometimes we could use a fresh start. An opportunity to put the past behind us and mentally look at today as the starting line. A new starting line. That's probably why so many people make New Year's resolutions. They want to say that today is a new day and a new chance to be what I was meant to be.

So even though I'm not a big party person, come midnight on December 31st I'll raise a glass in a toast and kiss my favorite girl. And, spend a little time the next day looking forward to what I want to accomplish in 2010.

Hope that your New Year is a happy and prosperous one!

Gary

Perserverance is the hard work you do after you get tired of doing the hard work you already did.

- Newt Gingrich

Admittedly Newt Gingrich is a controversial character. But, we're going to step away from that controversy to focus on what he said. And, that rings true no matter what your politics.

We all get tired working sometimes. Nothing at all surprising about that. The decision you make at that point is the critical one.

Will you focus on your fatigue? And quit? Or will you perservere and continue to work towards your goal? The choice is your's.

We're about 60% through the month of December. We've been focusing on our financial transactions. But it's a busy month. With a lot of financial activity. You're tired. Just like everyone else. It's crossed your mind to quit. So now the choice is your's. You can say that you've put in enough hard work. And quit. Or you can say that you're tired, but your goal is worth pursuing. And continue to focus on your finances today.

So what's it going to be? Your call.

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. 

Merry Christmas to all my Frugal Friends!

This is a very busy time of the year so let's keep this short and sweet. Naturally my hope is that you and the ones that you love would have a truly blessed Christmas and all that comes with it.

I'd like to take a moment to ask a favor. The holiday season is meant to be a happy time. And, for most it is. But, not for everyone. Many have a heavy heart as the holidays approach. We've lost a father, mother, spouse, child or someone else who was and is still dear to us. It will be hard to face the holidays without them.

If you're that person, please don't stay stuck in despair. I doubt that's what your loved one would want. Be honest with yourself. Part of the reason that you miss that person is that they wanted good things for your life. So as a way of honoring their wishes have a happy holiday. And, when you smile take a moment to remember a happy time with that loved one.

If you know someone who is grieving, please take the time to do something to encourage them. It probably won't cost much (if anything) and could be the best gift that you give this year.

Keep on Stretching those Dollars!

Gary

       

I suspect that a little daydreaming is healthy. Letting the mind meander where it will is probably a good way to let your creative side emerge. But you wouldn't want to let that creative side make important life-changing decisions alone. That would be too dangerous.

And so it is with our finances. It's fine to dream of a new ride and think about how great you'd look behind the controls. In fact, it's probably helpful if your goal is to save money to buy a car. But it would be a bad idea to follow that daydream into the dangerous waters known as an auto showroom. The moment a sales-shark gets a whiff of your daydream you are just a bait fish.

The only way to protect yourself is to think about your finances before you head off for an appointment with Jaws. Hopefully you'll be smart enough to know that you don't swim with sharks and decide to stay out of the water.

And, it's not just the great white shark that's dangerous. We need to focus on the smaller financial items, too. Even a little shark can kill you if it gets enough bites!

Keep on Stretchin' those Dollars!

Gary

 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.