Keeping Perspective

"No matter how rich you become, how famous or powerful, when you die the size of your funeral will still pretty much depend on the weather."- Michael Pritchard

Spending Habits: Needs vs. Wants

Another excerpt from "Developing Discipline in Spending:"

"One of the best financial lessons we can ever learn is the difference between needs and wants. The agreed upon needs of humanity our simple: food, clothing, and shelter. Does that mean caviar, high-fashion one-of-a-kind outfits, and million dollar penthouses? Of course the answer is no. Most of us can easily see past that exaggerated example. But when it comes to less obvious questions, although in theory we may know the answer, in practice we all too often rationalize unsound choices.

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Developing Discipline in Spending

Here's an excerpt from "Developing Discipline in Spending."

"We know we should cut expenses, we know we should save--we know, we know...blah, blah, blah. But do we do it? Maybe yes, maybe no. For those of us who answered no, I think what largely dictates our spending is our psychological relationships with money. Perhaps we subconsciously think that buying more will bring happiness by filling some void we have. Perhaps we value being able to keep up with the Jones', whether we financially can or not. Maybe we despise money and are unwilling to let it rule our lives so we consequently do little planning ahead and end up even spending more. Or maybe we're just lazy. Although knowing why you have trouble limiting spending is helpful in eliminating the problem, the end result is the same regardless of what particular element you're ailing from: undisciplined spending leads to financial uncertainty and bleak futures."

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"Economic Survival Tips" from Donald Trump

I found "Donald Trump's Economic Survival Tips" a fascinating read. He lists some specific advice for investors in these uncertain times, but he also throws out some general positive encouragement that I think can help us all.

"Is your life half empty or half full? Half is better than zip. Count your blessings."

"Realize that fear is the exact opposite of faith."

"Resolve to be bigger than your problems. Who’s the boss?"

"Don’t negate your own power. Whatever you’ve been dealt, know you can deal with it."

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*********************

I previously mentioned some getting out of debt ideas, but I went ahead and formalized them into a full article. If you're interested in a more in-depth read, you can click on the link.

Getting Out of Debt with a Debt-Elimination Calendar
"How to begin today the process of paying off creditors and getting out of debt using a debt-elimination calendar as explained by Marvin J. Ashton."

Couples Finance: "We Can't Afford It"

In Robert D. Hales' speech "Becoming Provident Providers Temporally and Spiritually," he addresses the notion that couples have to spend on one another. He shares two provident living lessons he has learned with the help of his wife, the first story having been inserted below.

"The first lesson was learned when we were newly married and had very little money. I was in the air force, and we had missed Christmas together. I was on assignment overseas. When I got home, I saw a beautiful dress in a store window and suggested to my wife that if she liked it, we would buy it. Mary went into the dressing room of the store. After a moment the salesclerk came out, brushed by me, and returned the dress to its place in the store window. As we left the store, I asked, 'What happened?' She replied, 'It was a beautiful dress, but we can’t afford it!' Those words went straight to my heart. I have learned that the three most loving words are 'I love you,' and the four most caring words for those we love are 'We can’t afford it.'"

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Financial Fitness Quiz

I came across this Financial Fitness Quiz, run by Rutgers (The State University of New Jersey). It has twenty financial questions that together can identify your overall present circumstances of managing finances.

What I found most helpful is that based on your answers, the results of your test give tailored suggestions for improvement with embedded links providing further explanations. The test also requires answering some mandatory demographic questions for research purposes, but no identifying information is collected.

Give the Financial Fitness Quiz a try for help in identifying where some personal weak spots are in your present managing of finances.

Teaching Kids about Finance

In Marvin J. Ashton's Guide to Family Finance, three of the twelve principles he lists in order to achieve improved personal and family financial management talk specifically about teaching children--teaching children about money, working and contributing. Here are his recommendations.

"Teach children to make money decisions in keeping with their capacities to comprehend."

"Based upon appropriate teaching and individual experience, children should be responsible for the financial decisions affecting their own money and suffer the consequences of unwise spending. “Save your money” is a hollow pronouncement from a parent to a child. “Save your money for a mission, bicycle, doll house, trousseau, or car” makes understandable sense. Family unity comes from saving together for a common, jointly approved purpose. In our home we found it unifying to have a child save for a major project; then, when the amount was achieved, we matched it with a predetermined percentage. Incentives are a powerful force in motivating and achieving desired behavior."

"Teach family members early the importance of working and earning."

"'In the sweat of thy face shalt thou eat bread' (Genesis 3:19) is not outdated counsel. It is basic to personal welfare. One of the greatest favors parents can do for their children is to teach them to work. Much has been said over the years about children and monthly allowances, and opinions and recommendations vary greatly. I’m from the 'old school.' I believe children should earn their money through service and appropriate chores. Some financial rewards to children may also be tied to educational effort and the accomplishment of other worthwhile goals. I think it is unfortunate for a child to grow up in a home where the seed is planted in the child’s mind that there is a family money tree that automatically produces cash once a week or once a month."

"Teach each family member to contribute to the total family welfare."

"As children mature, they should understand the family financial position, budget, and investment goals and their individual responsibility within the family. Encourage inexpensive, fun projects, understandable to the children, that contribute to a family goal or joy. Some families miss a tremendous financial and spiritual experience when they fail to sit together, preferably during family home evening, and each put in his or her share of the monthly amount going to the son or daughter, brother or sister, who is serving in the mission field. When this monthly activity is engaged in, all at once, he or she becomes “our” missionary, with pride becoming a two-way street."

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Debt-Elimination Calendar

Marvin J. Ashton, a financial expert, has written and delivered several pieces on financial management and family finances. In one of his guides, he explains what a debt-elimination calendar is and how it can be helpful in reducing family debt.

"A debt-elimination calendar can help you reduce or eliminate unnecessary debt. Mark off several columns on a piece of paper. In the first column on the left, write the names of the months, beginning with the upcoming month. At the top of the next column, write the name of the creditor you want to pay off first. It may be the debt with the highest interest rate or the earliest pay-off date. List the monthly payment for that creditor until the loan is repaid as shown in the illustration at right. At the top of the next column, record the name of the second creditor you want to repay, and list payments due each month. After you have repaid the first creditor, add the amount of that monthly payment to your payment to the second creditor. Continue the process until all loans are repaid."

To see a debt-elimination calendar sample, you can visit Elder Marvin J. Ashton's Guide to Family Finance and scroll down to the bottom.

Getting Out of Debt

This is my all-time favorite quote about interest and debt. It's very frightening and discomforting, which I think is the point--debt is bondage, we need to get out!

President Gordon B. Hinckley (as First Counselor in the First Presidency of the Church of Jesus Christ of Latter-day Saints) shared this in March 1990, quoting from 1938, but it's just as applicable today--to people of faith and not of faith alike.

"Back in 1938, I heard President J. Reuben Clark, Jr., speaking from the Tabernacle pulpit, talk about interest. He said:

'Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours; it never has short crops nor droughts; it never pays taxes; it buys no food; it wears no clothes; it is unhoused and without home and so has no repairs, no replacements, no shingling, plumbing, painting, or whitewashing; it has neither wife, children, father, mother, nor kinfolk to watch over and care for; it has no expense of living; it has neither weddings nor births nor deaths; it has no love, no sympathy; it is as hard and soulless as a granite cliff. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.'"

Free Materials from Practical Money Skills

Practical Money Skills For Life aims for financial literacy for everyone. They offer a variety of free products in aiding both consumers and classrooms. If you're still in the beginning stages of getting your finances in order, some of these products might be helpful to your progress.

Some of the free items offered:

Practical Money Skills at Home CD-ROM
"The calculators and games on Practical Money Skills At Home CD-ROM make learning financial management skills easy and fun:
Games
Cash Puzzler, Ed's Bank, Financial Football (standard), Financial Football (advanced), Countdown to Retirement, Road Trip to Savings and The Smart Money Quiz Show
Calculators
Save a Million, Rework Budget, Retirement, Cost of Credit, Cost of Loans, Auto Loan, Save for College, Entertainment Planner, Gift Log, Holidays, Mortgage, Back to School Budgeting and Travel Calculator"

Practical Money Guides: Complete Set
"Covering everything from credit cards to budget basics to the ins and outs of a credit history, these brochures educate consumers on the key issues of financial responsibility."

Practical Money Guide: Budget Basics
"A budget can help you pay your bills on time, cover unexpected emergencies, and reach your financial goals now and in the future. Most of the information you need for your budget is already at your fingertips. This guide explains how to create a budget and stick to it."

Practical Money Guide: Credit Card Basics
"Credit cards can be powerful financial tools for you and your family, and as with all financial tools, they need to be used carefully. This guide outlines the basics of credit cards and the responsible use of credit."

Practical Money Guide: Credit History
"To get a glimpse of your financial future, many businesses look at your financial past. This history is contained in your credit report. Your credit report determines everything from qualifying for a loan, the rate you'll pay on that loan, getting a new job, renting an apartment and obtaining car insurance. This guide explains what credit bureaus are, why your credit history matters, and how to correct credit report errors and keep your credit rating strong."

Practical Money Guide: Debit Card Basics
"If credit cards mean 'pay later,' debit cards mean 'pay now.' These cards are tied to your bank account and are like paying with cash. With debit cards, you've got to have the money in the bank to cover your purchases. These cards look similar to credit cards so make sure you know what type of card your financial institution issued you."

Practical Money Guide: Identity Theft
"When your personal financial information gets into the wrong hands, the consequences can be devastating. It's critical to understand how identity theft and card fraud can happen to you. The information provided here will help you avoid becoming a victim and tell you what you can do if your identity is stolen."

Talking About Finances with your Partner

"Getting on the Same Financial Page" is an article I wrote, published by wedding planning company Anxiously Engaged, for--you guessed it--engaged people. :)

But, I think it also applies to people who are married and to people who are interested in ever getting married or having a significant other. Every couple should have an open dialogue about family finances, and here's a guide in getting there.

"You’ve found the man or woman of your dreams. You’re in love. You’re about to get married. Why should you waste time talking about finances now; there will be plenty of time for that later, right? Wrong! Although money is not explicitly the primary reason for most divorces, it is undoubtedly a recurring factor among them. Money, whether you have a little or a lot, is a potential hotbed for disagreement, contention, and discord.

"So what solves the problem? That you’re both frugal? No. That you’re both rich? No. That you’re both willing to eradicate your lives of all types of currency and primitively live off the land without any contact from the outside world? Well, maybe. But an easier approach would be to just communicate. . . ."

Continue reading "Getting on the Same Page."

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Creating a Holographic Will

What Should I Put in My Holographic Will?

"Depending on your estate, you will obviously want to include different directions in your holographic will. But in general, the following terms are included . . . "

What Should I Do Now?

"Keep your holographic will in a safe place and notify your executor where you have placed your will. Be sure to update your holographic will if your circumstances become different and any changes need to be made. . . ."

What You Need to Know About Holographic Wills

If you have kids, you should have a will. If you have a spouse, you should have a will. If you have a complicated background (i.e., like a former spouse), you should have a will. If you have any real sort of property or estate, you should have a will.

(And I won't really go into depth on this one here, but if you're an adult--regardless of circumstance, you should really have a will at least detailing your medical preferences in emergency situations. But financially, yes, it's possible you are less likely to need one.)

Here's a self-penned, explanatory article about holographic wills, one type of will legal in many states of U.S. This type of will differs from other wills in that it requires no professional notarization. Hence, it's much easier to have and regulary update. But for some involved financial circumstances it's simplicity may not be optimal.

Carefully consider your own situation to decide if creating a holographic will is the right route for you.

"What You Need to Know About Holographic Wills"

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What's in a Budget

A budget is made up of three major sections: income, expenses, and savings. All sources of income should be added and totaled making sure to subtract applicable taxes. Expenses should then be listed as line items, generally divided into two categories: fixed and variable.

Fixed expenses include housing, credit card payments, medical insurance and all those monthly bills that no matter how much we don't want to pay we have to.

Variable expenses also might include payments we don't want to make, but the amounts designated to those categories are more in our control, hence the title "variable." Food's a must, but how much we spend each month is more up to us than how much we spend on rent, in the short run, so food goes under variable expenses.

In the long run, the division between fixed and variable expenses isn't so clear, but for a monthly budget this rationale works just fine. After expenses are totaled, the value of income minus expenses should be allocated to some form of savings.

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What a Budget Can Do For You

As the last post introduces, budgets give financial direction. When you begin analyzing expenditures and isolating where your money is going, it becomes much easier to see where you can cut costs and minimize waste.

More often than not, we don't realize how much we are spending until we studiously record and monitor all the financial activities we have going on in our busy and hectic lives. Whether we are wealthy or not, wasting money—obviously—isn't in our best interest.

Proper budgeting is what gives us the ability to minimize costs and optimize our financial circumstances, not to mention what it can do in building self-discipline and self-respect.

Tune in tomorrow for specific suggestions on what's in a budget!

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An Introduction to Budgeting

Financial planners might disagree when it comes to certain topics, but I know of no one that will tell you to go without a budget. A solid budget, when adhered to, is the foundation of a successful financial household. Budgets are what make and break individuals and businesses alike.

If you have a good budget and stick to it, things can work out. If you have a bad one, or you don't have one, or even if you have one but don't use it, unexpected troubles are likely to come, and come again, and come again.

When implemented correctly, a budget is the framework that directs all spending, saving, and other financially-related activities. Living without a budget is like aimlessly wandering around with no direction—you don't know where you're coming from, where you're at, or where you're going. Budgets give direction and stability to otherwise lost financial lives.

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Saving Money: How to Get Free Samples Without All the Spam

Recently I wrote about how signing up for free samples and coupons is a great way to save money. Here's a follow-up post about how to do so carefully in order to minimize spam and other unwanted interactions.

"In the digital age we now find ourselves in, there is no better or more convenient time to access great offers 24 hours a day, seven days a week. With the touch of a fingertip, you can request cool free samples, coupons, and other offers. But how should you go about doing it?

1. Set up an Email Account Strictly for Free Samples

"Many free sample offers require you to submit a valid email address, some even requiring you to click on a link sent in a confirmation email. In order to actually profit from the best deals, it is imperative for you to have an email address you can access.

"Submitting a phony email address will automatically trigger many secure systems--alerting the company of falsified information and preventing you from ever getting the free sample you so desire. On the other hand, submitting an email address that you use everyday for routine communications will likely fill your inbox with spam faster than you can finish typing in your mailing address. Neither approach produces very pleasant results.

"Hence, set up an email account that can be used strictly for free samples. When you need to access an email and click on the confirmation link, it won't be a problem. And if the inbox gets filled with spam, it won't be a problem either. . . .

Continue reading for tips on Being Cautious Giving out your Phone Number and Only Requesting Samples You Actually Want.

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Protecting Against Identity Theft in Three Parts: #3

Identity theft, the stealing of someone's personal or private information, can happen to all of us, regardless of how cautious and conservative we are with our personal information. However, taking certain precautions will greatly decrease our chances of falling victim to such a painful and distressing crime.

3. Monitor Account Activity

Periodically review your account histories for accuracy of your purchases and activities. If anything looks suspicious, contact the companies you deal with. By catching misconduct early, you can preempt further damage. Review your credit report every few months as an extra measure in preventing identity theft and/or catching it early on.

Following these steps and taking additional precautions to protect ourselves from identity theft means more work for us, yes. But the payoff is incalculable when it comes to minimizing the damage that could otherwise take place with identity theft.

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Protecting Against Identity Theft in Three Parts: #2

Identity theft, the stealing of someone's personal or private information, can happen to all of us, regardless of how cautious and conservative we are with our personal information. However, taking certain precautions will greatly decrease our chances of falling victim to such a painful and distressing crime.

2. Vary the Information You Divulge

The principle of storing the financial documents of various accounts separate to minimize damage is most effective when separate accounts actually have varied personal information. No, I'm not talking about using a different name and birth date. How many of us use the same username and password for everything? And the same security questions and answers?

In order to protect our accounts, we should be varying the information we use for each one. This way, even if someone knows how to break into our credit card account, he or she would have an extremely hard time accessing another account without extra information.

Tune in tomorrow for Part 3. Again, if you can't wait, you can read the rest of the article here. :)

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Protecting Against Identity Theft in Three Parts: #1

Identity theft, the stealing of someone's personal or private information, can happen to all of us, regardless of how cautious and conservative we are with our personal information. However, taking certain precautions will greatly decrease our chances of falling victim to such a painful and distressing crime.

1. Keep Usernames and Passwords Secret and Separate

It is important to keep private your usernames and passwords for financial accounts. Work with secure sites only when making transactions, and don't give out your personal information to third parties. If you're going to write the information down in case you forget, record sensitive information as cryptic as possible. Use clues to remind yourself rather than explicitly spelling everything out. If your helpful reminders were to ever fall into the wrong hands, you would want the papers to be as useless to others as possible.

Financial documents with sensitive information should, within reason, be stored separately—passwords separate from usernames and one account separate from another. Keeping information about all of your financial accounts together is always asking for trouble. If someone finds your banking information, you should feel comfortable that they won't understand what the password is from simply having hold of your username. Similarly, you should be able to feel comfortable that just because your banking information wais stolen, your credit card accounts weren't also included on those records.

Tune in tomorrow for Part 2. If you can't wait, you can read the rest of the article here. :)

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Combating Unemployment

I recently wrote an article published on Associated Content entitled "What to Do in Times of Unemployment" detailing three general avenues many successfully pursue during times of unemployment.

"We all hit rough financial times here and there, especially in these trying days of global economic uncertainty. When pitfalls occur—and they will—it's important to maintain hope and to optimize the unpleasant circumstances we're faced with. Regardless of our specific situations, we all have things to still be grateful for and opportunities to still pursue. Although finding the best route for you to follow will, of course, depend on your particular scenario, here are three general avenues many successfully pursue during times of unemployment.

Part-Time and Freelance Work

"When you can't find full-time work, look for part-time work in the mean time. It's a simple concept that works for many in the in-between time of having full employment. But, because so many are currently unemployed or underemployed, even part-time work can be challenging to find. It's important to be humble and realistic. Having an elitist attitude about what work is beneath you will surely result in a less productive job search. Of course there are jobs we really don't want to take, and we don't have to. But there are other jobs that are only marginally less than favorable, and it's for those offers that we should be open and flexible.

"When we can't find part-time employment, engaging in freelance work can often produce means to get by, or at the very least, means to get by better. A paycheck is a paycheck—it's still going to help. Freelance work such as writing, participating in market research, and operating call centers certainly may not result in the best pay ever, but it's something to live off of while still looking for other work. . . ."

Continue reading the article for the next two sections on Education and Volunteering.

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Rebuilding Your Credit Score

Although the three major credit bureaus of the United States won't divulge specific information on what makes up a credit score, the following general factors have been released.

By optimizing these indicators, your credit score will increase:
1. Payment History
2. Ratio of Credit Limit to Actual Debt
3. Length of Credit History
4. Types of Credit Used
5. Past Credit Applications

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Checking Your Credit Report

Credit reports contain your credit history as recorded by credit bureaus. In the United States, you are entitled to a free credit report from each of the three major bureaus every 12 months.

That means every four months, you should be checking your report with one of the agencies to make sure your history is being reported accurately. Credit reports are what determine your credit score.

Checking your report, consequently, is a free way to keep on top of how lenders see you. Go to https://www.annualcreditreport.com to retrieve your credit reports from the three major bureaus: Experian, TransUnion, and Equifax.

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Saving Money with Free Samples and Coupons

One of the easiest ways to save money is to take advantage of the great deals that are abundantly, and freely, available.

Below is a link to an article I penned reviewing five free sample sites and the pros and cons of each, one of which is my own blogspot--We Love Free Samples. Here's my open take on my own site, and you can click on the article link for details on the other four sites.

"We Love Free Samples may be a simple blogspot, but it is updated constantly with the best offers from every other free samples site I have seen. Because sample links are double checked (and by a human), very few—if any—spam offers make their way into the site's offerings.

"Pros: The site is best at providing links for tried and true offers. If you want to make sure that you're requesting samples only from the most reliable venues, We Love Free Samples is likely your kind of site. The posts are always straightforward, giving you the directions you need and saving you from the nonsense that you don't.

"Cons: Only conservative offers are posted. If you don't like to play it safe, then We Love Free Samples may not be for you. If you want to chance getting those high-risk, high-return samples, then you will probably want to check out the other free sample sites in addition to just this one."

Continue reading The Best Online Resources for Free Samples and Coupons.

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Tracking Your Finances

I use the software Quicken to manage my personal finances. Before I had Quicken, I just used Excel. The software isn't as important as your personal commitment in being a disciplined financial manager. No software in the world will take care of everything on its own.

Even if you have online bill pay, automatic account downloads, and any other frill and thrill you can imagine, if you aren't ever going to open the program, you're still going to have a mess on your hands.

Start small, then work up. Build some discipline with free or low-cost programs instead of thinking that a high-priced software program will take care of itself. Maybe try Quicken's free and simple online version before shelling out $60 for the Deluxe edition.

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Creating a Personal Balance Sheet

Creating a Personal Balance Sheet will help you identify, financially, where you are now and what it will take to get to the place you want to be.

Balance Sheets account for everything you own (assets) and everything you owe (liabilities). And you only have to use one easy formula. Think Aloe Vera. A = L + OE. The sum of all your assets are equal to the combination of the sum of all your liabilities and "Owner's Equity," which in the case of households, is termed "Net Worth." (But the formula A = L + NW is clearly less catchy. Hence, everyone still remembers "ALOE" anyway.)

Directions: Get a piece of paper. List all of your assets on the left. Then all of your liabilities on the right. The difference between assets and liabilities is net worth. Calculate your net worth.

So what does it mean?

If you own everything on credit, you're going to have a small net worth. If you have no debt and a lot of property and possessions, you're going to have a high net worth.

Minimizing debt and (wisely) increasing assets lead to a healthy financial future.

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Welcome!

So I'm going to start a "Family Finance" blog, obviously. :) I hope it becomes a helpful resource in living providently and well.

I graduated in business management from Brigham Young University's Marriott School of Management. I've studied financial basics extensively, from both corporate and personal standpoints, and hope I can share some of what I have learned.

Let me know if you have any questions! And thanks for stopping by!