Financially overwhelmed

by glblguy | Posted in Money Management | 14 Comments

stressed

Do you ever feel financially overwhelmed?  Over the past two weeks we’ve had to pay property taxes on our rental home, home owners association (HOA) dues for our current home and rental house, our car registrations came due, a few bills were due, and another misc expense.

Under normal circumstances, none of these issues should have been a problem, as I would normally have saved for each of them and had the money in my savings account.  But due to us moving and having to float two mortgage payments for a bit, I had to dip into those savings to cover things.  I didn’t have to dip too much, but enough to make me have to scramble a bit and tap the emergency fund to cover all of the expenses this month.

Even though the money was there, I was stressed.  I was watching my hard earned and diligently saved money just flying out the door, all in one week!  In hindsight, it was a bit silly and we had the money to cover everything, so I’m not sure why I felt so overwhelmed and stressed, but I did.  Any of you ever feel like that?

I think my biggest issue was I felt out of sorts for not having all the funds in the right places like I normally do.  This coupled with feeling some guilt about having to pull money from my property tax and home owners associations funds to cover normal expenses.  See, I fund my property tax and home owners association accounts throughout the year, so that when they come due all I have to do is transfer over the money and make the payment.

To be perfectly honest with you and myself, when it comes to finances, I have a bit of OCD.  I’m also pretty confident that much of that is due to my integrity.  See, when I write articles here on Gather Little by Little by little, advising you to follow particular things or suggesting that you “do this” or “do that”, I hold myself accountable to follow those practices myself.  When I don’t, I feel guilty and get frustrated with myself.  After all, I’m supposed to be the “expert” since I write the personal finance blog right?  Ha!  Well guess what?  I make mistakes, get stressed, and even overspend every so often, just like everyone else.

Talking the talk and walking the walk are two different thing entirely.  Writing about what to do and actually doing them 100% of the time is hard.  Money is stressful.  But I’ll bet you knew that already huh?

So how about you?  Ever get frustrated or overwhelmed with your finances?  Ever have those moments where you just want to throw all the bills up in the air and yell?

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I made it to round 2 and need your help!

by glblguy | Posted in Misc | 2 Comments

Free Money Finance continues March madness and my article made it to Round 2!  If you have a minute, I’d really appreciate it if you would head over and vote: Game 2: Appreciate.

If I win, FMF will donate $500 to my charity of choice, the Amercian Diabetes Association.  My now 9 year old son was diagnosed with type 1 diabetes in November of 2006.  He’s been quite a trooper through the whole thing.  He makes me very proud of him each and every day as I watch him struggle daily with the illness.  Researchers have made some significant breakthroughs in the past couple of years towards possibly finding a cure.  I feel like they are so close to a major breakthrough!

Anyway, one again if you have just a minute or two, please head over to FMF’s March Madness Round 2 and vote for my article by voting Game 2: Appreciate.

Thanks!

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Educate yourself on personal finance and money

by glblguy | Posted in Money Management | 14 Comments

8-ball

A survey done in 2006 by Entrepreneur magazine revealed that “70% of Americans say they are good or excellent at managing their finances.”  Did that statistic shock you?  It did me.   Statistics from a 2006 government survey show that “96% of all Americans will retire financially dependent on the government, family, or dependents.”

“It isn’t what we don’t know that kills us, it’s everything we know that ain’t so” – Mark Twain

Since so many people believe they are good at money, they fail to learn the basics of managing their finances and thus end up falling into the second statistic and living off of others.  Also as a result of the false belief that they know what they are doing, 43% of Americans spend more than they earn each year, the average household carries some $8,000 in credit card debt, and personal bankruptcies have more than doubled in the past decade.

In order to live a life of truly being good or excellent at something, we must not only teach ourselves the basics but also continually educate ourselves on the topic.  Managing our finances are no different.  As good stewards of the money God has provided us, we must swallow our natural pride and spend time learning and improving our financial situation, regardless of whether we think we know it or not.   There are many ways to do this:

Books

I love to read books.  Since my little personal finance epiphany, I have read well over 20 different personal finance books and I haven’t stopped.  I continue to read personal finance books and just yesterday received Jay Peroni’s new book The Faith Based Investor.  I can’t wait to get started on it.  My favorite personal finance books include:

  • The Bible – I personally prefer the New King James Translation, but there are many many other great versions.  For those of you saying: “Hey, that isn’t personal finance”, think again.  From Proverbs, to Psalms, to the parables of Christ, the Bible is full of money wisdom.
  • Dave Ramsey’s – The Total Money Makeover – Hands down the best book for getting your finances under control.
  • Does Your Bag Have Holes? – I just recently finished this one and it’s one of my all time favorite personal finance reads.  If you are a Christian, this book should definitely be on your bookshelf.
  • The Millionaire Next Door – Incredibly insightful book for understanding how real millionaires live their lives.  It’s not all about big homes and fast Italian cars.

The Internet

I’m finding myself reading more on the internet these days than I am reading books.  Why?  The internet is free and current.  In particular, I love reading blogs.  Here are just a few internet resources I highly recommend you check out and begin reading:

Most news media websites have money sections as well, including MSN Money Central, CNN Money,  and Yahoo! Finance.

Take Training

Training is offered in most local communities from a number of different sources including: Community colleges, Colleges, local government, credit counseling organizations, certified personal financial planners, and churches.  One of the best training courses you can take is Dave Ramsey’s Financial Peace University, offered by many area churches.

Many of these training programs are free or offered at significantly low prices as part of public education opportunities.

Attend Seminars

Seminars can be expensive, but can be well worth the money spent.  Just be careful and thoroughly research them as unfortunately some are scams.  Two seminars I am particularly aware of are: Dave Ramsey Live and Suze Orman Live.  I searched and searched for a decent directory of personal finance seminars, but couldn’t find anything.  I’ll be writing more about seminars later.  For now, just keep your ears and eye’s open as they are frequently mentioned on the radio, TV, and on money related websites and blogs.

Listen to audio training

Whenever I am spending more than 10 minutes or so in my car, I always make sure I either have an audio CD or podcast to listen to.  I think it’s important to utilize any “free time” we may have, and listening to audio books while driving is a great way to not only get to where you are going, but to learn something at the same time.

Most books are available at Amazon.com and at your local library in audio format.  One of my favorite things to do is visit iTunes and download lots of podcasts to listen to.  One of the recent podcasts I’ve enjoyed listening to is Frugal Coast to Coast hosted by Lynnae from Being Frugal and Jenn Fowler from Frugal Upstate.

Learn from friends

One of my favorite ways to learn is by talking to friends about money and investing.  BUT, be careful.  While it’s fine to talk to people and get their advice, only take advice advice from those that are wealthy or at least heading in the right direction.  Don’t forget, 70% of people surveyed say they are good or excellent at managing their finances and aren’t.

I know from my circle of friends, that only a small handful really know what they are talking about and I’ve come to really trust their advice and input.

Don’t be afraid to talk about money with others.  We all have money, use money and most of us have some level of money problems.  Overall I think we would all be better off if we were open about our money issues.

How do you educate yourself about finances?  Have some great seminars, books, or blogs you read that you think others might benefit from?  Share your links, resources, and input by adding a comment.

Photo by: Jeff Kubina

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Will there be another economic stimulus check?

by glblguy | Posted in Economy | 13 Comments

stimulus-check

With the recent announcement of President Obama’s $787 billion economic stimulus bill, there are probably at least 787 billion different questions.  One of the top ones is “Will there be another economic stimulus check?“.  The answer is No, but…

Tax Impact

The President’s new bill takes a different approach to stimulus efforts.  Instead, the new economic stimulus bill will utilize tax cuts as one of many approaches to stimulating the economy.  Millions of US workers will begin to see about $52 extra per month in their paychecks, starting in June.  This is from a $400 tax credit that will be given out through the remainder of the year.

Couples will receive up to $800, or $104 per month.  For 2010, the tax credit would be right around $38.80 per month and $77.60 for couples per month, assuming the credit was spread out for the entire 2010 year.

Other key features of the bill that will directly impact you

The tax credits are just one of the many stimulus efforts included in the bill.  Others include:

  • Sparing middle-income and wealthy tax payers from having to pay Alternative Minimum Tax.  AMT was designed 40 years ago and never adjusted for inflation correctly.
  • Extension of the $1,000 child tax credit to more low-income families
  • First time home-buyers who purchase homes before December 1st, would be eligible for a $8,000 tax credit
  • People who buy new cars before the end of the year can write off sales tax
  • Homeowners who make their homes more energy efficient can write off 30% of the costs, up to $1,500
  • College Students (or parents) are eligible for tax credits up to $2,500
  • If you lose your job and utilize Cobra to continue your coverage, the government will pickup 65% of the total premium for the first 9 months of coverage.

This is just a very few small highlights of the bill which covers health insurance, state funding, education, increased assistance for the poor, the environment, and law enforcement.

Will the economic stimulus bill work?

Will it work?  The jury is still out, and probably will be for some time. Although the initial reaction of the stock market didn’t make me feel real warm and fuzzy.  Regardless of whether it does or not, the bill will significantly increase our national debt.  How is that being covered?  By tomorrow’s tax payer.

Most forecasters expect the 2009 deficit to hit 1.6 trilliion dollars.  That is about 3 times the short fall from last year!  According to Fox business, “The national debt — the sum of all annual budget deficits — stands at $10.7 trillion. Or about $36,000 for every man, woman and child in the U.S.  Interest payments alone on the national debt will near $500 billion this year. It’s already the fourth-largest federal expenditure, after Medicare-Medicaid, Social Security and defense.”

The overall impact?  Hard to say, but most likely this will impact us, our children and our grandchildren through higher taxes and reduced government services (personally I think that’s a good thing).  The impact will also force additional borrowing from other countries.

What are your thoughts on the economic stimulus bill?  Do you think it’s a good thing?  When do you think we’ll start seeing any benefits, if any at all?  Share your thoughts by adding a comment!

Photo by: Lisa Brewster

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Establish your personal values and goals first

by glblguy | Posted in Money Saving Monday Tips | 10 Comments

integrity

I’ve been reading Does Your Bag Have Holes?, by Cameron C. Taylor.  I’ll have to say, it is probably one of the best Christian based personal finance books I have ever read.  In one section, Cameron shares some financial wisdom from a friend:

“After nearly thirty years in the financial business and having associated with thousands of wealthy individuals, I have developed a firm philosophy  about people and money.  If an individual does not clearly establish personal values and goals before making financial goals, then wealth and the accumulation thereof will begin to take on a life of its own.”

Personal values

Your personal values are the foundation of your decisions.  They drive each and every decision we make, and establish the foundation of who we are and the directions we take in life.  Matthew 7:24-27  talks about the wise and foolish builders:

“Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock.  The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock.  But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand.   The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”

Money can have a strong influence on our choices and the directions we take in life if we allow it. Money has a way of distracting us and pulling us away from the things in our lives that mean the most. Establishing your values and beliefs is like building your home’s foundation on rock.  Not doing so, is the same as building your home’s foundation on sand.

Money can distract us

1 Timothy 6:10 tells us that: “the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.”

Whether we would like to admit it or not, money can have a strong influence on us and can easily cause us to waiver from our core values and beliefs.   Many a good person has succumbed to greed and the lure of money, only to have their lives destroyed.  Note that Timothy tells us that the love of money is the root of all kinds of evil, not money itself.  The issue isn’t about money, but the value we place on money.

Often, when people are asked to list or write down their values, they list money.  If you consider money a value, ask yourself this question: What does money mean for me?  The answer to this question will help you uncover the real core value, I can almost guarantee it isn’t money itself.

Your core values and beliefs

Establishing your core values and beliefs is a critical step in the path to financial freedom, and has Cameron’s friend reminded us establishing these core values and beliefs prior to setting financial goals is critical.

Grab a sheet of paper and a pen, and ask yourself: What in life is important to me?

Begin writing down everything that comes to mind.  Don’t spend too much time thinking through your answers, just write.  Once you have the initial list, go back through and spend time thinking about each item you wrote down.  Make sure you ask the question: “What does X mean for me?” to make sure you establish the true core set of beliefs and values.

Another great exercise you can do to establish your core values and beliefs is to write down a list of people you admire and a list of people you don’t.  What qualities do each of these people exhibit that make you like/dis-like them.  Those qualities can provide a deep insight into your own core values and beliefs.

Personal values first, financial goals second

Spend some time thinking through your core values and beliefs.  Know them and understand them.  Once you do, write them down.  Writing them down will not only help you establish and remember them, but will also provide you with a list that you can re-read, reference and reflect on.

Money Saving MondayEach and every time you are presented with a financial decision, use your core values as the basis for making the financial decision.  Once your core values are established, you can then move on to creating your financial goals, a critical step in getting control of your finances and beginning to the journey to financial freedom.

This article is part of an ongoing series called Money Saving Monday. Each Monday, I share tips and techniques you can use to start saving money.

Photo by: contemplativechristian

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