John Cain

Have You Already Given Up?

January 23, 2009 By John Cain 3 Comments

The age-old list of New Year’s resolutions is common among most Americans. Eat less, learn more, play more, exercise more, and save more are fairly typical items on our lists. As you’ve probably witnessed though, most resolutions are left by the wayside before too many weeks have passed. It’s been three — are you still holding to yours?

One of the reasons our resolve gives, is that the resolutions are sometimes created as mere tasks without a clearly defined goal attached. What enjoyment do we get out of eating less? At least for me, the answer is “not much”. For resolutions to be meaningful and have a twinkling chance of success, the motivation for an end result should drive them. Therefore eating less shouldn’t be the resolution, but losing 15 pounds by July 4 or being able to fit into a certain size dress.

When it comes to money, the majority of people think that saving money is a worthy task, but it is so easy to venture away from that resolution. Saving money for the sake of saving money is not likely to be an extended successful venture. It is too difficult to withstand the onslaught of competing monetary demands without some other motivating factor. I have been a big money saver for years, but it is only recently that I have kicked it into hyper gear. The reason is that I now have a goal; a difficult, but worthy one nonetheless. My new goal for the family is to pay off our mortgage and be completely debt free within 6 years. We’ve only been in the house 4 years, but I want the freedom that comes from being completely debt free and that has made all my delayed gratification tasks that much easier to bear. By keeping our eyes on the “prize” the penny-pinching and budgeting becomes tolerable and even a little fun.

If you resolved to save money this year, consider changing that to a specific, achievable goal. For starters, I’ve given a list of goals that might make those tough money decisions a little easier.

Buy your next vehicle with cash
Develop a savings nest egg of $25,000 (or some other suitable amount)
Pay off your home mortgage in 5 years (or some other designated time period)
Pay for your child(ren)’s college education
Buy a boat
Take a 2-week vacation to Hawaii
Buy a vacation villa in Hilton Head or some other beachy location
Purchase that large screen television
Save enough to invest in the stock market
Retire at age 59

The above list is by no means exhaustive. There are hundreds of other worthy goals. The trick is to pick one that will really drive you. If you can make a goal the focus, saving money will be much easier.

Have You Mistakenly Identified Greed As Ambition?

November 26, 2008 By John Cain 2 Comments

Ambition is one of the elements that made the United States an economic powerhouse. The drive to work hard and succeed spawned innovation, efficiency, and opportunity. Over the course of time ambition was a characteristic of millions of Americans and put them in positive financial situations. What some may not have known, but are beginning to realize is that Ambition has an evil twin brother, Greed. Greed has fooled many people by masquerading himself as Ambition. Without careful discernment, it is sometimes difficult to distinguish between the two.

As the U.S. now teeters on the brink of economic depression, people are beginning to see Greed for who he really is. He has left a great amount of financial destruction in his wake. Up until now, most were praising his acts of business-building and financial investments in the name of Ambition, but we’re all beginning to see how Ambition isn’t always who we thought he was. For illustrative purposes, let me point out a few ways that Greed has snuck in and set people up for a great fall.

As stated before, Greed is a cruel look-a-like for Ambition. Whereas Ambition is about diligence and desire to succeed, Greed is about the desire for more. The great American dream of homeownership comes from the result of ambition. Foolishly buying homes through sub-prime mortgages is a characteristic of Greed. Ambition is starting a business and growing it through hard work. Greed is taking a business and stretching it to the limits financially and ethically in order to make the most amount of money possible. Buying a luxury SUV is Greed’s way of exhibiting so-called “status”, while Ambition is content to rest on the laurels of success without showing it to everyone else. Greed sacrifices family and friendship on the way to gathering financial status and power. Ambition accepts financial status and power as long as they are obtained fairly, ethically, and without endangering relationships. Time spent pursuing financial status is one telling indicator of Greed. He will devote long hours to gathering that extra dollar, working 2 jobs, and making substantial investments of time, simply to pile up income. That focus is what subtly ruins families and endangers our economy when Greed can no longer be contained.

Greed on the part of many Americans got us in this disastrous financial mess, and now we should all be closely examining ourselves and which “brother” with which we have personally aligned. There is nothing wrong with desiring financial stability, comforts, and material pleasures. However, once we are no longer content with a good life, we run the risk of letting Greed control us.

I oftentimes catch myself buddying up to Greed and have to ask myself what my motives are for my particular financial actions. When I think about financial investments or other opportunities, I must consciously give thought to whether those risks and contributions of time are necessary to provide for my family or if they are for other reasons like extra money to upgrade cars, buy more expensive clothing, buy a home in a more exclusive neighborhood, or being able to flaunt vacations and season basketball tickets to others. Greed can easily disguise himself sometimes and make me think that I’m simply supporting Ambition. When I commit to taking a good honest look, however, I can see Greed’s burning eyes. As you think about saving and financial security, make sure that you don’t let Greed get in the way and distort what can be a nice, happy life. He’ll do it in a heartbeat if you let him. The downside might not be realized immediately or even many years down the road, but don’t be fooled. In the end, Greed will have the last word and you will not like what he said.

10 Ways to Save Money on Landscaping

October 26, 2008 By John Cain Leave a Comment

Maintaining a beautiful lawn and other landscaping features can become a costly task. If you’re dedicated to the exterior look and feel of your property, but still determined to spend wisely, there are a few things you can do to accomplish both.

Plant perennials

Rather than spend money each spring and summer on expensive annual flowers, make a one time investment in perennial plants and shrubs. They may cost a little more up front, but in the long run will save you money and time.

Grow your annuals from seeds

With some soil, water, care, and tenderness, you can start your own annuals from seed. For only a couple of dollars you can produce what would have cost you $20 or $30 at the nursery.

Establish your lawn

This one may be a little tough for some as it requires diligence and time. The best defense against weeds, disease, and dead spots in the lawn is a thick healthy stand of grass. Working hard to eradicate weeds and sowing grass seed bi-annually, you can soon accomplish this. Be advised that depending on your circumstances, this might involve tilling your old lawn, adding soil and nutrients, and lots of seed and water to get it started. Once your lawn is thick and healthy however, it is rather easy to maintain.

Buy mulch in bulk

Instead of loading up on bags of mulch at Lowe’s or Home Depot, try buying a truck load from a landscaping center. You can get about 5 times as much for your money, and even buy mulch enriched with compost, a.

Use a soaker hose

A soaker hose reduces waste by only allowing small drips of water through the hose. You can concentrate the water around trees and plants without watering your driveways and sidewalks. The loss from evaporation is also substantially less.

Use a reel mower

If you have a small lawn and mow it regularly, you should try a reel mower. Unlike gas or even electric mowers that cost money to operate, the only cost of a reel mower is blade sharpening. The cuts from a reel mower are also better for the grass because of the cleaner cuts as opposed to shearing them from force.

Create your own compost

This is becoming more and more popular as the whole “green” thing catches on. Use grass clippings, leaves, and fruit peelings to your advantage. It’s actually very satisfying to enrich the soil for free; knowing that you didn’t add to the carbon footprint.

Spray for your own weeds

Unless you’re someone who has more money than time, consider buying concentrated weed killers and treating your lawn yourself. Like most everything else in life, convenience comes with a cost. Think about whether the money you spend for someone else to spray your lawn is really worth it.

Buy seedlings and smaller shrubs

Unless you want the immediate gratification of larger trees and shrubs, buying seedlings and very small shrubs and perennials can be a big cost saver. I regularly buy trees for $2 to $5 a piece and after 3 or 4 years are the size of trees that cost $60 or $70. That is quite a return on investment. Also, depending on the plant, some of them grow very quickly and will rapidly mature. You’ll hardly remember that they were once a small little plant in a one-gallon pot.

Buy plants in the off season

Finally, my last tip is one that I use the most. When the first warm days of spring and summer arrive, everyone starts venturing out to the lawn and garden stores. You’ll rarely find “good buys” at this time of year. Instead, plan to do a lot of planting in late fall (October and November in the Southeast United States). Trees, shrubs, and bushes can be found on clearance at 75% off regular price.

If you didn’t already notice, these tips all assume that you are willing to put time and effort into your landscaping. If you aren’t, then most of these tips won’t appeal to you. If you are, they are rather simple ways to have great landscaping at minimal costs.

Ten Ways to Save Money and Lose Friends

October 9, 2008 By John Cain 11 Comments

If you value saving money more than keeping friends, I have the perfect article for you. Follow these 10 simple steps and you will not only save money, but also drive away those pesky friends.

Depending on how close the friends are, you may have to complete all 10 items on the checklist and possibly some of them multiple times. Don’t worry, though; do these enough and you won’t be bothered by those people anymore.

Number 10. Accept dinner invitations at your friends’ house and never return the favor. Let’s face it, eating out can be expensive. What better way to get a home-cooked meal without preparing or paying for it!

Number 9. Whenever you go on a trip, to the movies, to play golf, etc., always let your friends drive and never pay for gas. At $4 per gallon, you can save a lot of money by enjoying the ride form the passenger seat.

Number 8. Borrow tools, toys, clothing, whatever…it doesn’t matter as long as you can depreciate your friend’s belongings and not have to purchase your own.

Number 7. Pay back debts without cash. Here’s a really good, but subtle way to get ahead. It’s best explained through an example. Assume that you owe your friend $50. Purchase something for him/her that is less than that amount and when s/he tries to pay you back just say “I owe you some money

Is Your Family Checking Account Philosophy Good for You?

September 25, 2008 By John Cain 2 Comments

One of the absolutely best things my wife and I ever participated in was premarital counseling with our pastor. Among other things, he brought the topic of finances to the forefront for discussion and helped us put the right plan together.

Not unlike other families, our biggest issue was that I am a saver and my wife isn’t. She isn’t a big spender and doesn’t have expensive habits, but before marriage it just was not her nature to actively save and invest her discretionary income. The counseling enabled us to see potential pitfalls of our differing philosophies and led us to devise our own method of handling our money.

We were both committed heavily to preserving our family finances. However, we both also wanted the freedom to spend (or save/invest) a small portion the way we wanted. That led us to the model of one joint account for family finances, and 2 separate individual accounts to spend as we pleased. We decided on a mutually agreeable “allowance” (if that’s what you want to call it) that goes to our individual accounts. That amount is less than 5% of our net income which keeps the focus on the family financial picture.

The beauty of this is that we effectively eliminated the majority of discussions (arguments) related to discretionary spending. If I want to spend $300 on a golf outing with friends – no problem. If she wants to buy a Christmas gift for all her cousins, nieces, and nephews – so be it. I can save as much of my allowance as I want and she can spend as much of hers as she wants. One of the biggest benefits is neither of us questions the other’s spending because it doesn’t affect our family finances.

This is in complete contrast with our friends who only utilize a joint checking account. On more than one occasion, they have expressed their frustrations with each other pertaining to spending. For example, the wife wanted and purchased a new chair for the living room. To be quite frank, the chair wasn’t needed at all; she just saw a new one that she liked better than their existing one. The husband thought he should be entitled to spend the same amount of money, so he purchased several hundred dollars worth of video games and fishing equipment to “even out” the spending. Their expenditures tend to escalate as they both feel that they should be able to spend equal amounts of money and neither one of them controls the spending decisions.

Furthermore, they consistently criticize the purchases that each other makes for him/herself. The end result is that they spend considerably more on discretionary items than they would if they operated on the same checking model as us. Neither individual has an incentive to control the spending. In the long run, they will spend much more of their discretionary income than what I think either one of them realizes.

Every couple has their own philosophy when it comes to managing joint and individual finances. It’s important that everyone finds a system that works for them. However, some of those systems simply do not work as well as others and all couples should carefully consider the options. Those systems may play a big role in incentivizing either saving or spending.

Financial Lessons We Can Learn from Our Grandparents

September 20, 2008 By John Cain 6 Comments

Your grandparents (or maybe great-grandparents) were better than you at saving money. If you think long and hard about that, most of you will probably agree with that statement. There are a number of reasons why they were better and some things we can learn from those facts. Let’s dive right into those reasons.

Awareness of Economic Downturns

Let’s start with one of the main reasons — The Great Depression. If our grandparents didn’t live through it, they certainly were made aware of it by their parents. Living through or near times of disastrous financial times, they were keenly cognizant of the potential for hard times. Knowing that any minute the income stream could be reduced to a trickle, they had to stockpile money simply to survive. Also, because they probably had less money than us, they were more susceptible to financial downturns, which further incentivized them to save.

No Credit Cards

The availability of credit wasn’t what it is today, when almost anyone with a social security number is extended tens of thousands of dollars of credit — sometimes without even asking. In the first half of the 20th century people actually had to go to the trouble of asking and applying for credit. That money was really needed for living and/or investment expenses and not just as a convenience factor. The mere existence of credit cards has turned this nation upside down in terms of spending more than we make.

Marketing

The marketing ingenuity of today is at an all-time high. Skilled marketing experts can deftly identify and target the population to which they want to sell and make their product seem indispensable. Print, radio, television, and digital media advertisers subtly lure us into thinking that the product at hand will make us prettier, stronger, healthier, more popular, happier, and so on. That may or may not be true, but they do a bang-up job of convincing us that it is. A marketer’s job is to get us to spend our money — not save it.

No convenient entertainment

When you think of what your grandparents might have done for entertainment, what comes to mind? You probably picture them sitting on the front porch talking to friends and neighbors, or listening to the radio, or maybe playing checkers outside the barber shop. That’s quite a bit different from our entertainment options of today: video games, rental and pay per view movies, satellite TV and radio subscriptions, gym memberships, computers, iPods, recreational vehicles, and the list goes on and on. They probably spent very little money on entertainment, where we may regularly and easily pay hundreds of dollars per month.

Lived Harder

Our grandparents were able to enjoy life without the ease of switches and buttons that quickly give us what we want. How much more money would you have per month if you didn’t pay for cell phones, the Internet, electricity for air conditioning, microwaves, computers, multiple televisions, coffee makers, etc? The “regular” utility expenses to cover all the household conveniences we enjoy are pretty substantial. Without even figuring in the costs of the appliances and gadgets, the energy cost alone is fairly sizable.

Harder to spend money?

Although this one combines element of the previously mentioned factors, it was simply more difficult to spend money 60 or 70 years ago. My grandmother couldn’t simply go online, purchase a new dress, and for a few extra dollars have it rush delivered right to the door. My grandpa didn’t have the “opportunity” to bid on that slightly-used pocket knife on eBay. There were no malls and shopping outlets within a few minutes drive of everyone’s house. A “trip to town” was a big event and required a lot of preparation. Once in town, there may have only been 2 or 3 stores at which one could spend their money. Now, if I wanted to, I could sit on my back deck with a wireless Internet connection on my laptop, visit any of thousands of online merchants, and with my credit card spend thousands upon thousands of dollars in a matter of minutes.

The Moral of this Article (i.e., Grandfatherly Advice)

I can only imagine what savings advice my grandparents might give me now if they were still alive. However I suppose it might go something like below:

Be careful about the money you spend today, because you might need it tomorrow. No one ever knows when a job will be lost, the economic markets are collapse, or circumstances change requiring one to dip into savings.
Don’t go asking for or accepting credit unless it’s absolutely necessary. Except in extreme circumstances, a man should be able to live comfortably on the wages he earns without borrowing from someone else. (P.S. I’m sure my grandparents never heard about credit scores and how a little credit here and there can help you in the long run.)
Don’t be tricked into thinking that you “need” something in order to be happy, popular, prettier, etc. Remember those advertisements are there to make you spend money. No, not everyone deserves to drive a luxury sedan or sports car. No, that new mascara is not going to magically transform you into a goddess of beauty.
Does spending money on things really make you that much happier? How many gadgets does one need to be content? Do you really need to be entertained at any and all hours of the day? Try slowing down a little and living a simple life. Read a book from the library. Invite a friend over just to sit and talk. Take a walk without an iPod and iPhone.
Toughen up a little. Do without some conveniences and don’t carelessly use electricity. Although it is somewhat of an “invisible” expense, energy does come at a cost and something that we can control. The more electronic devices that we leave powered on, the higher our energy bill. Also, you won’t spontaneously combust if the temperature in your house is 78 degrees in July.
Think twice before you spend money online. If you had to hitch the horse and wagons and take a bumpy 3-hour ride to town, would you buy that floor lamp that you just purchased at potterybarn? Before you click the “Checkout” button ask yourself if you really need that new putter or are you buying it just because you think it will make your scores better? Ease of buying might tempt us into buying something even though the need doesn’t exist.

Spending money is easy, especially when you don’t think about it. Our grandparents and great-grandparents may have been better at saving money than us, but that’s no excuse for us not to save. With a little forethought and personal financial awareness, we can all become better at saving our hard-earned money.

Morals

Beware of the marketer. They can make you think you need and/or deserve their product, when in reality you don’t.
Be wary of the ease of purchasing online. Before hitting the “checkout” button, ask yourself if you would purchase this if you had to go to the store and get it.
Never, never, never take for granted the financial stability and success that this country enjoys. Most of us (including me) have enjoyed a life free from much serious worry about our country’s economic stability. Current times of war, petroleum crisis, and escalating healthcare costs should make us more cognizant of the fact that our country’s financial dominance could easily begin to collapse.

Image courtesy of neovain