Money Crashers » Personal Development

Treat Your Money Management Philosophy Like A Marathon

Erik Folgate — Fri, 14 Mar 2008 02:51:29 +0000

I didn’t run a marathon last weekend, but it felt like it for someone who has never trained for long-distance running until this past January. I always played basketball when I was young, and basketball is a series of fast sprints, not methodical long-distance running. I ran in the Gate River 15k Run here in Jacksonville, which is a pretty well-known 15k run. I didn’t run it to compete, I ran it because I had never done something like that before, and I wanted to say that I had done it. I ran it in about an hour and 40 minutes, which is pretty slow, but I was proud of myself for jogging the whole time. Like the personal finance nerd that I am, I was thinking about how running long distances relates to becoming wealthy. The obvious cliche is that becoming wealthy is like running a marathon. The slow, methodical individual will become more wealthy than those that have short spurts of wealth building over a period of time. But, there was something else that I learned about money management when training for and running a long distance.

Momentum and encouragement will help you achieve your financial goals two-fold.

When I trained for the run, the longest run that I completed without walking was 6 miles. I kept telling people that I would probably just walk a little bit after I hit the six miles, and they all kept telling me that it’s so much different when you run on race day. I didn’t believe them, but then I started running and watching all of the people cheering for us and finding myself being motivated by the fact that 50 and 60 year olds were running beside me. I thought to myself, “if they’re not stopping to walk, I sure as hell am not going to stop either!” It was the encouragement of others and the momentum of running with thousands of other people that helped me to complete the run without walking.

You can be amazing at crunching and analyzing numbers, and picking value stocks, but if you don’t combine the human component of personal finance to your wealth building strategy, you’ll have a much harder time reaching your financial goals. Dave Ramsey teaches people to pay off their smallest debts first, because it helps build momentum for paying off larger debts. He knows that the math tells us we should pay off our highest interest rate debts first, but if you get crazy and pay off your debts in 12 to 18 months, the interest rate doesn’t really matter. Sorry for referencing Ramsey for the second time this week, but his debt snowball method of paying off debt it a great example for the power of momentum.

Surrounding yourself with people that encourage you to change your financial habits is also helpful for achieving your goals. People with no money will make fun of you for sticking to a budget, passing up going out to eat, and clipping coupons. But rich people will applaud you for it, probably because they did those little things to help them become wealthy. They were once in your shoes, and they know that encouraging others goes a long way. Don’t listen to those with no money for sound financial advice. Don’t listen to me when it comes to your finances. Read the information on blogs and verify it with your own research. Come to your own conclusions about managing your money. If you truly pursue wealth building the real way, the running a marathon way, you’ll find that the human component has a bigger role than you think.

The Importance of Helping Each Other With Financial Problems

Erik Folgate — Thu, 13 Mar 2008 01:34:14 +0000

I was reading this article by Jeffrey Strain from TheStreet.com and he gives five ways to help other people with financial issues from your own personal experiences with managing your money. One of the things he listed was starting a personal finance blog. This is what I did two years ago, and my goal was not to act like I knew everything about money and I wanted other people to know it, but I had a revelation about money. I made a 180 degree change about the way I managed money, and I wanted to share that with other people. My goal for this blog is not to see how much money I can make from it, if that was my main reason, I would have stopped a long time ago. My goal is to help other people with the things I have learned about money and research the things you want to know about. So, if you do learn anything here, please don’t keep it to yourself. Share it with someone else. With the housing market going down the drain, gas prices continuing to rise, and the economy on the verge of a recession, people need help with their money!

Here are the five ways you can help others with money according to TheStreet.com:

Pass Along Books and Magazines.

Participate On The Internet

Start a Financial Blog

Start a Personal Finance Study Group

Start a Finance Book Club

Passing along great personal finance books is a great way to help someone in need. Think about all of the books that sit on your bookcase and collect dust. Recycle the book and give it to a friend or family member that you think might benefit from it. Participating on the internet is also a great way to help others. I have made a big effort in the past year on this blog to facilitate an environment where you all participate more in what I write. When you agree or disagree with me, I want to hear it. When you have something else to add to my article or a personal story about the topic, we want to hear it. I have learned more in the past two years about personal finance from the comments you all write, than any book I have read so far. I believe in the power of learning from other people’s failures and successes. After all, it’s just money, so don’t be shy about telling your financial blunders and your financial success.

If you have a story about how you recently helped a friend or family member with their financial situation, I’d like to hear about it in the comments section.

Two Reasons Why You Could Be In a Financial Mess

Erik Folgate — Tue, 26 Feb 2008 02:54:02 +0000

The other day, I had the TV on in the background, and a lesser known morning talk show caught my attention when they were going to have a segment on helping a single mom get their financial life back on the right track. Of course, they disappointed me with focusing more on fooling with different types of bank accounts and setting up automatic overdraft protection with a credit card on her bank account. Yeah, that’s great. Just keep assuming that she’s going to keep bouncing her checking account. That’s why she asked you for help! Anyway, they did little to correct WHY she was in the predicament that she was in, but they did ask her this one question: “What was it that got you into the situation that you are in now?” She responded by saying, it was poor decision making and the lack of financial knowledge. It made me happy to hear that she wasn’t trying to blame someone else for her situation. She took responsibility for the decisions that she made and knew that she made some decisions due to ignorance. I think she hit the nail on the head for most people that find themselves in a financial mess. I know that I can trace many of my financial mistakes back to a poor decision and a simple lack of financial knowledge.

Poor Decision Making

There are many reasons why we make poor financial decisions. But I am going to focus on three reasons: greed, quick decisions, and a lack of knowledge.

Greed. Many bad decisions that we make out of greed have to do with investing money. This is why get-rich-quick schemes become so popular. We get that thought of making millions and doing it quickly. Scam artists make it look so easy, but it’s not. Making money and becoming wealthy is never easy. It ALWAYS takes hard work, no matter how you slice it. The best way to combat the feeling of greed is to be a giver. Give your possessions away, give away money, and give your time to others. It’s the best medicine for a greedy heart. The feeling that you get when you help someone else and let go of that powerful green paper is therapeutic in itself.
Quick Decisions. Sometimes we are pressured into making quick financial decisions, and then we get home and say, “what did we just do?” The best example of this is going car shopping. Don’t ever go out to look for a car unless you are ready to buy the day that you go out. Car salesmen are in the business of turning you from a casual browser to a customer who is ready to buy. They will make the deal look so good and tell you that if you don’t jump on it now, the car might not be there tomorrow. These are all sales tactics to encourage you to make a quick decision that you might not normally make under less pressure situations. When making a large purchase or making a big financial decision, the best method to implement is to sleep on it. Take 24 hours to let the decision simmer in your mind. You’ll find that you make much better, sounder decisions when you have more time to think about it.

Lack of Financial Knowledge

The lack of basic personal financial knowledge in this country is astounding. You can go an entire 13 years in the public school system without ever learning how to balance a checkbook, buy a house, invest for the future, or formulate a written budget. I know there are some high schools that are starting to offer personal finance classes, but much of the cirriculum is coming from companies that are financially supported by credit card companies. Doesn’t that sound like a conflict of interest? The only thing a credit card company is going to teach you is how to start using their credit cards to “look” responsible and grown-up. You can also go through four years of undergraduate work at a university and never be taught basic financial knowledge. Why is this? Because, society expects you to learn it on your own or from your parents. But, if your parents aren’t good with money, then you’re stuck learning it yourself. If you weren’t blessed with parents who taught you sound principles about money, then you need to start by reading all of the financial books you can get your hands on. You can click on that link for a few books to start your journey of financial knowledge. Also, seek out a mentor. Find someone who you feel has it together with their money, and ask them to teach you what they know about money. Be sure not to look for the first person that has a big house and a nice car. It doesn’t always mean that person practices good financial principles. Look for someone that seems to be content with their life and is free of consumer debt.

Are you read to get out of your mess? Are you starting to see a light in the dark tunnel? Are you ready to start making better decisions and learning about personal finance? Focus on those two ingredients and you’ll be well on your way to financial freedom.

Update to Post: I revised the title due to comments below. This post may have come off as insensitive to those struggling with their finances due to other factors such as huge medical bills, as discussed in the comments below. My point for this post is to outline that the majority of the time, YOU are responsible for your financial struggles, not someone else or something else. The only way to help yourself from incurring large medical bills is making it a point to pay for medical insurance and keep a large emergency fund for out-of-pocket expenses associated with bills not covered by insurance. Related Posts:

Two Reasons Why You Could Be In a Financial Mess is a post from: Money Crashers

Three Ways To Know If You Are In Love With Money

Erik Folgate — Thu, 14 Feb 2008 20:26:14 +0000

Ahh, love is in the air, isn’t it? I can just hear cash registers around the country being overworked on this day that is loved by retailers more than it is loved by consumers. Call me Scrooge, but do we really need an unofficial holiday of love? If the government would recognize it and declare it a national holiday, then I’d start to like it more, because at least I would get the day off. Anyway, I’ll stop the Valentine’s negativity, and get on with my dark “love” post for Valentine’s day.

Did you know that money destroys individual lives and families every day? I’m sure you did, and you might even be the recipient of the dangers that the love for money can bring with it. It’s not that money has an evil side to it. Money is an object, it’s neither good or evil. But, money becomes bad when it is put into people’s hands with bad intentions. Similarly, people who pursue it endlessly make it look very bad. On this Valentine’s day, I want you to take a strong look at yourself and see if you may be in love with money and how to kick it to the curb if you are in love with it.

Your family life is suffering. Ask yourself, when is the last time that you spent quality time with your spouse or kids? Could this be because you are endlessly pursuing more money by taking more hours on at work or taking on more leads/jobs. Do you find it more pleasureful to earn money than to spend time with your family? Are your thoughts consumed with becoming rich beyond belief?
Your physical life is suffering. When is the last time that you spent some time on yourself? When have you exercised last? Do you find yourself constantly stressed out and pushing yourself to extreme fatigue, just to get ahead in life and make more money?
You’ve become more greedy. You may find yourself giving less at church, or never thinking about giving to charity. You may actually start mentally making fun of those that ask for charitable gifts, and your heart becomes hardened to the thought of giving.

How to stop loving money so much. The first thing you should do once you have realized that money or the pursuit of money is running your life, is to talk to someone. Talk to your spouse, best friend, spiritual leader, or a family member that you really trust. Ask them if they’ve seen the same patterns that you’ve began to see in yourself. Some of you might say, “I know I’m not in love with money, because I don’t have any of it”. This is such a common myth to think that just because you’re not rich that you don’t love money. In the Bible, Matthew 6:21 says, “Where your treasure is, there will your heart be also”. The constant pursuit of becoming wealthy to the point where it controls your life is just as bas as those that have a bunch of money but hoard it. Once you’ve confessed to someone your problem, the next thing to do is start becoming a generous person again. Start giving money. Even if it’s not much, the simple act of giving can cure your infatuation with money.

What I’m not saying: I’m not saying that becoming wealthy or desiring to become wealthy is a bad thing. What I am saying is that when the desire and drive to become wealthy takes over your life, there is a problem. And for those that have money who boast an arrogant attitude about it and hoard their money, have a problem as well. Money is a powerful thing. You can do so much good with it and so much bad with it. Treat it wisely, and remember that it will never bring you lasting happiness. Happy Valentine’s Day!

Strategically Invest In Yourself to Build Personal Wealth

Erik Folgate — Mon, 22 Oct 2007 13:43:43 +0000

I was sitting in a computer science class back in 2004, trying to figure out the foreign language that the professor was speaking (computer language, not an actual foreign language), when I realized that this wasn’t for me. I may have been investing in myself, but it was a bad investment. I came to the realization that I liked tinkering with computers, but I hated learning binary code, writing meaningless programs, and learning about every intricacy of a processor chip. Some people love that stuff, and they are fantastic at comprehending it. It wasn’t for me. I switched my major, and moved on. Getting a college degree can be a great investment in yourself, but it can also be a very bad investment in yourself if you don’t get anything out of it. My philosophy has always been that you get more out of an undergraduate degree just by surviving for four years rather than what you actually learn. Developing writing skills, personal responsibility, setting and achieving goals, time management, and money management are all skills that you either sharpen or dull while in college.

I am challenging you to think past a college degree. Your self-improvement does not stop when you leave the college campus. The value that you bring to a company and to society must constantly be improving in order for you to be a successful person. Ask yourself this question today, and every day that you wake up in the morning:

“What will I do today to invest in myself?”

Will you learn a new trade? Will you read a non-fiction book? Will you begin taking classes towards a certain certification? Will you break an bad habit? Will you exercise? What will you do today that mentally, physically, spiritually, and financially makes you a better person?

This sounds like a post about self-improvement, and it is, but I want you to be encouraged that you have all the ability in the world to turn your financial situation around whether you are 20 years old or 60 years old. You hold the key to your own destiny. Stop thinking about what the government is going to do for you, what your family is going to do for you, or what your employer is going to do for you. Start thinking about what you are going to do for you. If you treat yourself like you treat your financial investments, you’ll find that personal wealth will beging to increase.

I am fully convinced that people who want to work in a career that they love will make more money than people who work in jobs just because it pays well. I am fully convinced that people who strive to constantly learn something new every day will be more wealthy than those who read engage in mindless activity every day. Mindless activity is great sometimes when you need to unwind, but try to do something each day that improves yourself. You just might find that your financial situation will start to improve as well. Related Posts:

Strategically Invest In Yourself to Build Personal Wealth is a post from: Money Crashers