The Dollar Stretcher : The Dollar Stretcher

Are Goals Magical?

Gary — Sat, 21 Nov 2009 15:01:00 GMT

They might be. No, I haven't lost my senses. Just consider this before you come to a conclusion (about either the magic or my sanity). I've noticed that we're much more likely to achieve our goals if we tell someone about them. If you think about it, you'll agree that it's true.

So what's the deal? Certainly the act of telling someone about our goal didn't move us closer to successfully reaching it. So is it magic?

I think not. It's probably just that by telling someone else we've crossed a line in our minds. We've really committed to our goal. We've given that goal power to affect how we live our life. We've even put ourselves in a position where the friend that heard our goal could ask us whether we achieved it.

So I don't think that goals are magical. But, I do believe that telling someone else about our goals increases our odds of success. So I think that I'll tell a close friend about my current goal.

This blog entry originally appeared in "Financial Independence" a daily email that helps people to achieve their financial goals. To begin to receive this free daily encouragement click here.

Hope for a Spendaholic

Gary — Mon, 16 Nov 2009 16:02:00 GMT

I have been married 40 years, I am 59 and am a spendaholic. I have been following Dave Ramsey's plan and trying to get my credit cards paid off. We have no money and no retirement. Is there any hope for us?

Yes, there is hope for B. It might take awhile and may not be easy. But just because she didn't overcome her spendaholic tendencies in the past doesn't mean that it cannot be done.

Let's tackle the problem on two levels. First, the things that she can do to get the problem under control today. Second, the longer-range things that she can do to uproot the source of the problem.

B. says that she's using the Dave Ramsey plan for paying off her credit cards. Good for her. Dave's plan is very workable. It's one of two common plans for paying off debt that are very similar.

Both pay the minimum on all accounts. One pays off the smallest balance first and pays accounts off from smallest to largest. The idea is that you get re-motivated every time you close an account.

The other, ranks them in terms of interest rates. They pay off the highest rate first and works down from the highest interest rate to the lowest. This is the fastest way to pay off a group of accounts. But, you'll need to keep yourself motivated.

Depending on how much debt she has, it may take B. awhile to pay down all the accounts. She'll need some patience and determination. It took awhile to accumulate the debt. It will take awhile to pay it off.

At the same time that B. is reducing the debt level, it's important that she stop her spending. She can't get out of debt if she keeps spending. So that has to stop now.

Based on past experience, her willpower and good intentions cannot be trusted 100% of the time. So until B. can control her spending urges, she'll need to use some physical means to assist her will power.

That means recongizing where she's vulnerable. Is she more likely to be spending cash? Using credit cards? Ordering over the internet? Or by phone?

Whatever the vulnerability, B. will need to devise a plan to protect her when willpower is not enough. That may mean limiting the amount of cash she carries. Or freezing her credit cards in a block of ice so she has to wait before charging. Blocking certain internet sites or TV shopping channels.

Once B. has made it hard to succumb to her spendaholic urges, then it's time to try to find what's causing her to spend. I'm no psychologist. But I have worked with many people and their finances. Money is generally not the root of the problem. It's most likely to be a symptom of something else. Often people spend in an attempt to make some emotional hurt feel better.

B. will want to look for a pattern to her spending. Is there a particular emotion that she's feeling when the urge to shop is strong? Knowing what emotion goes along with her spending will allow B. to watch for the emotion and when it surfaces she can guard against spending. A little like an early warning system.

She might also want to seek outside help. Many places have Debtor's Anonymous meetings.

Or B. could find professional psychological help. Either to help her find the source of her spending or to deal with the source once it's found.

There's no reason for B. to give up hope. She can make it almost physically impossible to spend. That alone will solve most of the problem. And if B. is able to identify the emotional root and deal with those issues then she can be free of her spendaholism forever!

Small Steps = Big Goals

Gary — Fri, 13 Nov 2009 16:31:00 GMT

Part of accomplishing any goal is the daily discipline to take the next small step. So don't let yourself be talked out of doing the small things. Successfully doing the small things will guarantee the success of the big things.

Finding the Positive

Gary — Wed, 04 Nov 2009 19:10:00 GMT

Trying to change our behavior is often a challenge. Especially if it's a long-standing habit that's been repeated thousands and thousands of times. But, just because it's a challenge, doesn't mean that it can't be done. In fact, when you stop to think about it, even behaviors that you've had for years can be changed in a month or so. That's pretty remarkable.

How many people do you know who always seem to find the negative? Whether it's the dessert at a restraurant, the guest list at a party or the present they received from Aunt Mary, they'll always find something to be unhappy about. No matter how good everything else was. I admit that I find it tiring to be around people like that. It's almost as if the negativity has completely drained their life force and is now going after mine!

One good thing does come out of hanging around them. It's a great reminder for me to check my own attitude. Have I become negative? Do I always look what's wrong? Are my words often critical? If so, it's time to change my perspective. Because that negativity will quickly begin to sap my energy and color everything I see. Noticing what's happening gives me an opportunity to get back on track. And, hopefully I'll be smart enough to take that opportunity!

ps: I know that it's harder to see the good if you've just lost your job or there is sickness in your family. There's no denying that's true. But, it's equally true that those are the exact times that it is even more important to find some positive things to think about. Being able to see the positive is great medicine. And medicine is most needed when times are truly tough not when the going is easy.

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.

Red Minivans

Gary — Tue, 03 Nov 2009 19:12:00 GMT

Finding things to be thankful for is a bit of an art. And, unfortunately, an art that many of us are unfamiliar with. Have you ever noticed how when you buy a new, red minivan that you'll notice all the red minivans on the road? The reason is that we're looking for them. There aren't any more around than yesterday. You're just of a mindset to notice them.

I believe that the same thing is true of things to be thankful for. Our life is probably no better or worse than the day before. But if we're looking to find good things, then we're more likely to see them. So instead of looking for red minivans, how about looking for the good things that will happen in your day today?

Positive vs Negative

Gary — Mon, 02 Nov 2009 17:16:00 GMT

Today we begin a new goal for the month of November - working on being thankful. We selected that goal for a reason. When we're looking for a reason to be thankful we're looking for things that are good. We're focused on the positive. Not the negative. So no matter how you feel right now, spend some time today looking for something that you're glad exists in your world. You'll be a happier person for it.

Finding something to be thankful for tends to focus our mind on the positive. Why is that good? Because the mind cannot hold two opposing thoughts at the same time. One after another, yes. But at the same time, no. So if you're positively thankful, you cannot be negative for that moment. And, sometimes, especially when we're feeling low, to escape from the negativity even for a few moments is a real relief.

What methods do you use to find items to be thankful for? Why not share them with us?

Looking at Both Sides

Gary — Thu, 29 Oct 2009 18:44:00 GMT

I've noticed that it's very easy for me to see a situation and quickly come up with all the things that can go wrong. In fact, I've probably even thought that it was a good thing that I did so. I've always felt that if you know the worst that can come out of an event, and you're willing to accept that, then you can go in without fear.

But, it occurs to me that I should also be considering all the things that could go right. Because if I don't consider them I have a one-sided view that's really more of a distortion than a realistic appraisal. And, making decisions based on a distorted view isn't the best way to come to a good conclusion.

Keep on Stretching those Dollars!

Gary

A Body In Motion...

Gary — Tue, 27 Oct 2009 18:07:00 GMT

I don't recall it's name, but I believe that there's a law of physics that says that a body in motion will continue to move in the same direction unless some other force influences it. For instance, if you roll a ball across the floor it will continue in the same direction unless something (say a wrinkle in the throw rug) causes it to change direction.

Sometimes I think that our lives operate much the same way. We've been buying and using the same product for years. Our ball just keeps rolling in the same direction. But it probably is a good idea to change course every so often. To try something new to see whether it fits our lifestyle. So I'd ask you a question. What are you trying that's different this week?

My $4590 U.S. Debt

Gary — Fri, 16 Oct 2009 13:49:00 GMT

Wow! That's probably the only thing that you can say about it. We're getting final estimates on the federal government's income and expenses for the fiscal year that ended Sept. 30th. The experts say that the federal government spent $1.4 trillion more than they took in (source Congressional Budget Office as reported in The Salt Lake Tribune). That's a number that's really hard to get my head around. So I wrote it out: $1,400,000,000,000. (boy that's a lot of zeroes!)

But even writing it out, it's hard to put into any kind of perspective. It occurred to me that maybe I could grasp it if I knew how much of it I was responsible for. So I googled to see how many of us live in these United States. As reported by U.S. News there are 305 million of us (to be precise 305,529,237).

Dividing the $1.4 trillion debt by 305 million people means that during the last 12 months the federal government committed to $4,590 in indebtedness on my behalf. Wow times 2!

I know that it was an unusual year with all the bailouts and stimulus. But, speaking honestly, I wish that they wouldn't commit me and my kids to each repaying $4,590 plus interest in the future.

Then I thought that maybe they wouldn't repay it. After all, they have done much to reduce the federal debt in quite a few years. But even if they don't plan on cutting expenses or raising taxes to repay the debt, the interest payment is $229 a year (assuming 5% interest, which is probably a low estimate). In reality I'll probably have to pay $300 or so every year forever to cover the interest on this year's federal debt.

So as someone who takes debt very seriously I'm having a bit of trouble accepting this news. Given the economy it's been hard not taking on personal debt. But, like many of you, I'm working awfully hard to keep my spending in line with my income.

So if anyone in Washington is listening...please don't take on any more debt in my name. I don't think that I can afford it.

Is Money Evil?

Gary — Mon, 31 Aug 2009 13:20:00 GMT

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.