goals

Why You Should Skip Making New Year’s Resolutions

January 2, 2017 By Alexa Mason 6 Comments

It’s that time of the year again. My guess is that you’re beginning to think about putting together a list of New Year’s resolutions if you haven’t already begun to do so. If you have started and you’re planning to make some this year, I think you should consider skipping them. That’s right. Don’t even bother making them. Take a stand and boycott the whole tradition. Refuse to get suckered into a yearly game that gives the impression that it’ll help you do the things you want, but actually does you more harm than good. How do New Year’s Resolutions hurt? Let me explain the ways:

They’re a Delay Tactic

First and foremost, these resolutions are nothing more than a delay tactic. They’re an easy way to delay something that you know you should start the moment you think about it instead of waiting until the beginning of the year. Think about it. If it’s important enough that you want to make the change and resolve to do so, shouldn’t it be important enough to begin right that moment? Instead, you’ll wait until the New Year. I believe that if something is important enough to make as a New Year’s Resolution, then it’s something that’s important enough to begin working towards the minute you decide it’s that important. Learn to begin goals immediately. Once you have decided the change you want to make, commit to begin planning how to reach the goal starting that day rather than delaying them to some arbitrary date in the future.

There’s Too Easy an Out

Even worse than the delay, these resolutions provide you with an easy cop-out which allows you to quit and not feel bad about it. The problem is that most people never follow through with the New Year’s Resolutions they make, and everyone knows it. The result is that nobody will hold you to any resolutions you make because they don’t expect you to keep them. At the first sign of difficulty, you’re in an easy position to give up and nobody will say a thing. It’s different if you make solid goals and announce them to friends and family. In this case, they are much more likely to ask about the goals and try to hold you to them. This is especially true if you ask for friends and family to support you in trying to reach them. When you do this, it makes it much more difficult to quit, and you’re more likely to work through those difficult stretches than if you simply make a resolution.

There’s a Lack of Preparation

Another problem with resolutions made at the beginning of the New Year is that they are often made without the proper preparation needed to succeed. The fact is, making successful changes to your life requires a lot of work, stamina and discipline. If you don’t do the initial research and preparations to make sure that your resolution succeeds, you’ll likely never achieve it. Most New Year’s Resolutions are simply statements made without any of the proper planning in place which makes them much more likely to fail.

They’re Too Broad

When the proper planning hasn’t been done, the resolutions people make are often unrealistic because they’re so broad. Achieving goals isn’t instantaneous. You don’t get to the top of a mountain in a single step. It takes a lot of planning, effort and small steps along the way. No matter how much you wish, you aren’t going to be able to wipe out all the credit card debt which has been building for years in a couple of months. You’ll need to work at it one step at a time, chipping away at each of the debts that need to be retired. If the resolution remains broad without any focus on the important steps needed to reach the ultimate goal, the resolution will almost always end in failure.

They’re Often Absolute

Another problem is that these resolutions tend to be absolute with little to no room for the obstacles that are bound to happen. This makes giving them up easy the first time an obstacle arises, since they’re often made as “all or nothing” statements where any deviation means you fail. Life, unfortunately, often deals a number of setbacks on the way to reaching a goal. If there is no recourse on how to proceed when an obstacle occurs, then the goal will likely be abandoned. For example, if the resolution is “I will save $100 a month,” then failing to save a $100 any month can be seen as a failure. If, however, you make a goal to save $1200 with an average of $100 a month, it doesn’t matter if you only save $80 in January as you can make up for it by saving $120 in February.

They’re Made for Wrong Reasons

Too many New Year’s Resolutions are simply made for the wrong reasons. If you’re 100% committed to accomplishing something, then it is a goal worth pursuing. If you are making a resolution because it’s something that you would like to change, but aren’t willing to put in the time and effort needed to make it happen, then it’s going to fail. For many, New Year’s Resolutions are nothing more than things they wished they could change without having to make any effort. In order to succeed, you’ll need the passion that will only come from you firmly wanting to reach the goal. If you aren’t, it’s better not to make it until you’re ready.

It’s Bad Timing

January is a terrible time to start your resolutions. Granted, there will likely never be a perfect time to begin, but the New Year can be one of the worst times to be making major changes. You’re tired after the holidays. Instead of resting, you make drastic changes when you may not have the physical or psychological energy to make them work. Piling on resolutions with all of the other issues that need to be dealt with at the beginning of the New Year can make it that much harder for them to succeed.

There are Too Many Made

This leads to another major problem which is that people make too many resolutions all at the same time. Achieving the goal of getting your finances in order is a monumental task in itself, but making it work while losing 20 pounds, exercising an extra 2 hours a day, reorganizing your house and quitting smoking makes success impossible. It’s important to prioritize your goals and work on them as time permits rather than mixing them all together at the beginning of the New Year.

They Have a Negative Impact

Over time, New Year’s Resolutions have a negative impact on your motivation and success. When you make resolutions year after year and the resolutions fail year after year, it becomes easy to believe that they can’t be accomplished. These failures at the beginning of each year compile to the point where it’s easy to simply give up on your goals entirely after a while.

They Don’t Work

In the end, New Year’s Resolutions simply don’t work. They are far too often made without the commitment needed for them to work. If you have goals, take the proper steps to do your research, set up a step by step plan, measure your progress, understand there will be setbacks, and make sure that you truly achieve what you set out to accomplish.

Here is a challenge you aren’t likely to see much at this time of year. I challenge you to not to make any New Year’s Resolutions for 2014. Instead, take the most important goals and begin laying the groundwork on how you can achieve them this very minute. That way when 2015 arrives, instead of rehashing the same list you are currently thinking about, you will be checking off a list of goals that you managed to accomplish during the year

(Photo courtesy of Jennuine Captures)

Your Personal Finance Constitution

September 25, 2015 By Alexa Mason Leave a Comment

Let it guide you to financial freedom…

The U.S. Constitution is more than a founding document. It is the basis of all our decisions as a nation. This Constitution Day, we’d like to honor that great document with a suggested constitution for family finances… one designed to set you on the path to financial harmony.

We the People of this family, in Order to form a better Union with our finances, establish security, ensure future Tranquility, provide for future generations, promote our family’s Welfare, and secure the Blessings of Financial Liberty for ourselves and our Posterity, do establish this Constitution for Financial Freedom.

Article I – Decision Making

To serve as a Representative, a family member must represent the best interests of the others, making this a House of Representatives that honors the needs of the family above their own.

No family member shall serve as a Representative without attaining the age of at least 18, having graduated high school and contributing income to the best interests of all.

The House shall choose a Speaker who will have the power of making final decisions when the remainder cannot agree. After a debate of the issues, where the opinions of all Representatives are carefully weighed, this Speaker will decide the correct course of action, seeking understanding and support from other Representatives.

Each House Representative shall have one Vote on matters of personal finance.

No Preference shall be given to one Representative over another.

Representatives shall assemble to discuss matters important to the financial wellbeing of the House.

No Person shall be a Representative who does not contribute to House finances or who is not an inhabitant in the House affected by the financial decisions made.

The House shall assemble at least once in every Year to address financial goals.

The Speaker shall have a Vote in the financial decisions of the House and shall make final decisions should a vote be equally divided.

The family shall choose a Secondary Speaker to serve in the Absence of the Speaker, who shall exercise the powers of the Speaker when he or she cannot do so.

When Representatives gather to make financial decisions, they shall constitute a Quorum to attend to House financial matters. A smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.

Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behavior, but shall remember the emotional ties that strengthen the House in doing so.

Each House shall keep a Journal of its Proceedings, and from time to time publish the same, and the Yeas and Nays of the Members of the House on any question.

No Representative shall, without the Consent of the others, adjourn for more than three days.

Representatives shall receive Recognition for their Services, to be ascertained by the House. For any Speech or Debate in either House, they shall not be questioned in any other Place. House matters shall be discussed in the privacy of the home where each Representative may speak freely without condemnation.

All Ideas for improving House finances shall originate in the House of Representatives.

Every Idea agreed upon by the House Representatives, before taken to action, shall be presented to the Speaker for approval. The Speaker may return the idea to the House for discussion, noting objections. If after Reconsideration, the House decides to act on an Idea, it shall be sent, together with the Objections, to the secondary Speaker. If the Secondary Speaker agrees, the Idea shall be put into action.

If any Idea is not be returned by the Speaker within ten Days after it shall have been presented to him or her, the Same shall be put into action as if the Speaker had approved it.

Article II – Financial Contributions to the House

All financial Contributions shall be shared mutually among those who contribute to the household finances.
Contributions to living expenses shall be apportioned among the Representatives in this House.

The Speaker shall have Power To lay and collect Monies needed to pay the Debts and provide for the common Good and general Welfare of the House, but all Apportioned Expenses shall be uniform throughout the Representatives of the House according to each Representatives ability to contribute.

No Money shall be drawn from the House Treasury without a regular Statement and Account of the Receipts and Expenditures of all House Money.

Article III – Financial Harmony

Each Representative shall respect the wisdom, financial goals and opinions of the others.

When vacancies happen, due to no fault of a Representative, the House shall remain supportive and help the Representative return to fulfilling his or her role in contributing to House finances.

The House shall remember, especially during times of financial struggle, the emotional connections that bind them, acting with compassion, tolerance and financial responsibility for the welfare of the House as a whole.

Write your own family Financial Constitution to help you focus on a brighter financial future!

14 “Impossible” Money Goals That Aren’t

January 21, 2014 By Jennifer Derrick 3 Comments

Whenever you bring up a large or extreme financial/frugal goal (particularly if you bring it up at a party populated by spendy people, as I once did and will never do again), the first response is often a dismissive snort and, “That’s impossible.” And if you dare to say that you’ve already achieved said, “Impossible” goal, the response is likely to be, “Well, you’re exaggerating or outright lying because no one can really do that.”

Okay. I understand that many large or extreme goals seem out of reach. Mostly, though, what’s limiting the naysayers is their own belief that such a thing is impossible. (And their behavior, but I’ll get to that in a minute.) The first step in achieving the impossible is to want this impossible thing more than anything else. The second step is to believe that you can achieve the impossible. The third step is to behave in such a way that you make the impossible possible.

Sure, it’ll take work and sacrifice. Anything worthwhile usually does. It won’t be easy. If it were easy, no one would think of it as impossible, right? You have to match your actions to the goal. (This is where the behavior I mentioned above comes into play.) If you say you want to retire early, you have to behave in ways that make that possible. That means spending very little money today so you can sock every extra cent away. Either that or you have to earn so much that you can still spend freely while saving a ton of money. Either way, your behavior has to match the goal.

Here are some money-related things that people commonly dismiss as impossible but which are more than possible if you work at them. No, you might not be able to do everything on this list, and you probably can’t achieve all of them at once, but you can probably manage one or two with careful planning and work.

Early Retirement

I essentially “retired” from work several years ago in my late thirties. I still work, but I only take the jobs I want to do because I’ve saved enough that I don’t “have” to work. People all told me that retiring so early was impossible, but it wasn’t. I saved aggressively, beginning with my first job. And I’ve always kept my expenses low. I don’t buy stuff I don’t need and I get the best possible price on the items I do need. Contrary to popular belief, I don’t live a deprived life. I have plenty of entertainment, clothes, and food and I’m not so extreme that I’m not using toilet paper. I simply realized early on that the forced treadmill of working until I died was not something I wanted and I did everything I could to make certain I wouldn’t have to.

Comfortable Retirement

Even if you don’t retire early, many people think that retiring at all and being able to eat anything but dog food are pipe dreams. Again, retiring comfortably is possible, but you have to prioritize it over other things. You have to start saving early in your working years (to take advantage of compounding) and keep saving the whole way to retirement. Too many people put it off until the kids are gone, the house is paid off, or some other excuse and then there is no way to catch up. It’s too late.

Fully Funded Emergency Fund

While there is a difference of opinion about what constitutes a “fully funded” emergency fund (some advisors say three months of expenses while others push it up to a year), many people feel like putting that much away is impossible. It’s particularly “impossible” if you’re saving for retirement and other goals, as well. But an emergency fund isn’t built in one day. You build it slowly, putting in the $20 you saved by not eating out one day, or the $5 rebate check you received from your cereal purchase. And if you can bank a big amount, like a tax refund, you’re well on your way. Ideally you want to save more, but the big goal is achieved by consistently putting money in the bank (and then not raiding the fund for anything other than a true emergency).

Change Someone Else’s Life

Wouldn’t it be great if you could give someone enough money to change their life? Whether you give to a family member, through a charity, or set up a scholarship at your alma matter, it is possible to save enough to make an impact on someone else’s life. Ideally you’d like to do it while you’re alive to see the joy, but that may not happen. Instead, you can strive to save enough that you make a bequest in your will. And you might be surprised by the amount of money that people consider “life changing.” While $10,000 might not seem like much in terms of what the truly wealthy can give, you’d be surprised at the difference it can make in an impoverished country, or even to a student who can’t even dream of college without scholarships.

Self-Insure

Some people dream of being able to kick their insurers to the curb. To do this, you have to have enough money saved to cover any damage or loss to your property, or any illnesses that you may have. (And you should still carry liability insurance to cover you against lawsuits. Your state will likely require it on your car.) And you must also own those items free and clear since lenders will require insurance to protect their investments. Even if you can’t fully self-insure, it’s possible to save enough that you need only carry catastrophic insurance. You’ll pay for the minor stuff and only rely on the insurer for significant losses. (Self- insurance isn’t a dream I’ve ever had, but I have a neighbor who has achieved it on his home. He paid it off and then dropped all but liability insurance. He has enough saved to pay for a new home and contents and cannot see paying the insurer any longer. He continues to save what he would be paying in insurance premiums, further growing his savings.)

Live a Minimalist Existence

While this one doesn’t require saving or earning huge chunks of money, many people still feel that it’s impossible. Whether it’s a tiny house or simply owning a finite number of things, many people swear that it’s impossible to even downsize, let alone live a minimalist existence. The trick is to separate your value as a person from the stuff that you own or the square footage of your home. Too many people confuse “success” and “worth” with big houses and lots of stuff. If you can be comfortable in your own skin, lose your attachment to stuff, and stop caring what others think of you, you can easily live a minimalist existence. All you have to do is donate your stuff to a worthy charity, toss the trash, and then refuse to bring anything else unnecessary into your home.

Start a Business

Starting a business doesn’t always require tons of money. There are lots of businesses that can be started for very little money. What is required is discipline, a salable product or service, and commitment to making the business work. You have to be willing to put in the hours, listen to feedback, and learn what you don’t know about taxes, accounting, insurance, etc. Very few people start a business knowing everything and having everything in place, but they are willing to go out and try.

Extensive Travel

Like starting a business, travel does not always require lots of money. Luxury travel requires money, but there are plenty of other types of travel that you can engage in that cost much less. We travel many weeks out of the year, but much of it is camping in our RV or visiting destinations out of season. While luxury travel is nice, I’d much rather take more trips for less money than one big expensive trip.

Move to the Country (or the city, the mountains, or another country)

Many people dream of moving somewhere else. They want to make their dreams of a certain lifestyle come true. But many feel stuck where they are because moving can require a lot of money. Besides saving like mad to make the dream come true, you should also ask whether your dreams need readjusting. Can you downsize significantly so that you require a smaller space, which would be more affordable? Can you be happy in your second choice location if it is significantly less expensive? Sure, it would be great to be able to afford the big dream, but maybe you can be happy with a bit less if the location is what’s most important.

Pay Cash for a Car (or house, boat, or RV)

As with many others on this list, these are goals that you must prioritize and save for. But as with the others, there are compromises you can make. If you buy good used cars, they will cost much less than new. Same with “toys” like RV’s, boats, and ATV’s. If you start saving for the replacement immediately after buying the current car, and you drive it for years, paying cash is more than possible. As for houses, you’ll probably have to mortgage your first, but if you pay it off quickly and then use your equity to buy the next house (with maybe a smaller amount in cash added on), you’l have accomplished the impossible. This won’t work if you buy houses that are significantly more expensive each time, but it can work for comparably priced homes and, if you downsize, you may even pocket some money.

Pay Cash for College

Whether you’re a student seeking to avoid college debt, or a parent seeking to pay for your kid’s college in cash, it is possible to pay cash for college. If you’re a parent, college has to be a savings goal and you have to start as soon as (if not before) you have kids. And you have to set limits. If you’re willing to save and pay $60,000 for college, for example, but your kid wants to go to a school where that won’t cover it, you have to tell them to cover the difference. If you’re a student, you have to be willing to work hard, attend state schools, and chase every available scholarship, all while cutting expenses. However, people do manage to pay cash for college every day. It’s not as impossible as it seems. It simply requires a readjustment of expectations and a solid work and savings ethic.

Live Well on Less than $20,000 (or even less) Per Year

Many people swear that it’s impossible to live well on a tiny income. What makes this “impossible” is usually the definition of the word “well.” When most people think of living well, they think of large houses, nice cars, and other creature comforts. But living well can also mean simply having a decent roof over your head in a safe neighborhood, adequate food to eat, a little entertainment, and decent clothes. That is more than possible on a small income if you are creative and willing to work a bit. Buying things secondhand, growing some of your own food, choosing free entertainment, and relying on mass transit are great ways to reduce expenses. You may also have to move to a lower cost of living area, take in some roommates, or otherwise get creative to reduce your expenses. It’s not impossible to live well on a small income, but it requires that you adjust your lifestyle and expectations. You’ll have to learn to do without things like cable TV or cell phones that other people consider “essential.”

Live without a Car

Americans love their cars and most consider life without one to be impossible. In some areas of the country this is true. Mass transit is sadly lacking in many areas. But if you live in an area with mass transit, or within walking/biking distance to most of the places you need to go, you can live without a car. You may be able to carpool or participate in car sharing programs. You can rent a car if you need to travel long distance, and some metropolitan areas have cars that you can rent by the hour if you just need to run a couple of errands. If you don’t live in an area that’s friendly to the carless and going without a car is important to you, you may need to look at moving.

Have One Spouse Stay Home

Having one spouse stay home requires, like so many other things on this list, a disciplined savings and budgeting strategy. If you want to go from one income to two, you have to plan for it. Try living on one income before you give up the second one. Save aggressively even before you have children. If you think you will require more money than one income can provide, have the stay at home spouse look for work that can be done from home. You’ll likely have to cut expenses, as well, but not paying for commuting expenses, lunches out, and employment taxes will help with this. It’s not impossible for many people to live on one income, but it may require that you learn to live with less and let go of some things like cable TV, newer cars, and meals out.

If you want to accomplish the impossible, you need to plan and prioritize in order to make it a reality. You can’t go at it half-assed, or simply hope that things will fall into place. You have to know how much you need, how much you can save, and constantly evaluate your finances to make certain you’re on track to meet your goal.

Wealth Tips from the Real Wolf of Wall Street, Jordan Belfort

December 27, 2013 By Jeffrey Strain 2 Comments

Jordan Belfort is the real Wolf of Wall Street. He’s the one who wrote the book that has been turned into the movie starring Leonardo DiCaprio. Neither paints a pretty picture of him, but they do show that he was quite successful at making money, although not in legal ways. What he obviously fails to do is create lasting wealth in his life.

Belfort has put his past behind him and he’s now a motivational speaker. Whether or not you believe that he deserves a second chance (he still owes millions to the people he defrauded), he does have some interesting quotes about his life and how to be successful that are worth reading. Below you’ll find some quotes that are well worth keeping in mind, and they have the potential to help you reach the financial success that you hope to obtain.

“I was a very smart kid, I was a great salesman and I was driven to make money. Those were God-given assets. But I had some God-given detriments, mainly that I was emotionally immature, insecure and I had a predisposition to instant gratification.”

Everyone comes with both talent and detriments. The challenge to long-term success is leveraging the talent and learning to overcome the detriments. If you want to know three key issues that can be financially destructive to even the most talented individuals, Jordan Belfort possessed them: being emotionally immature, being insecure and always wanting instant gratification.

“Success isn’t only about what you do. It’s also about what you don’t do.”

When people focus on wealth creation and success, the emphasis seems to be on the things that should be done. Belfort points out that the opposite is also a huge determining factor in both of these. Anyone can get rich if they are willing to compromise their values and hurt others along the way. Success comes with knowing how to create the wealth while also deciding which things you aren’t willing to do just to make more money.

“The only thing standing between you and your goal is the bullshit story you keep telling yourself as to why you can’t achieve it.”

Sometimes tough love advice is good advice. Goals aren’t easy, but there is usually a way of achieving them if you make them a priority in your life. You need to be willing to do the tough work to reach them. When you tell yourself a reason that you can’t do something, it’s usually nothing more than an excuse (or as Belfort so eloquently puts it, a “bullshit story”). Stop making excuses and commit to achieving your goal if you really value it.

“No matter what happened to you in your past, you are not your past, you are the resources and the capabilities you glean from it. And that is the basis for all change.”

You are free to make a new beginning any time you want, and there is no reason that you need to continue to do the things that have gotten you into financial trouble in the past. Learn from your past to make yourself a better and more successful person, but don’t let it define who you are.

“People tend to give up. If you have persistence, you will come out ahead of most people. More importantly, you will learn. When you do something, you might fail. But that’s not because you’re a failure. It’s because you have not learned enough. Do it differently each time. One day, you will do it right. Failure is your friend.”

In many cases it’s not always the most talented that succeed, but those who are most persistent. Many people simply give up too easily or don’t have the stamina to continue when things aren’t going right. And in life, things won’t always go right. When they don’t, that isn’t an indication of failure. It’s an indication that you learned something that doesn’t work and the next time you try, you’ll do better having that knowledge.

“When you live your life by poor standards, you inflict damage on everyone who crosses your path, especially those you love.”

Many people fail to take into account that your actions can have a lasting impact on those around you. When you make poor decisions, you don’t hurt only yourself, but everyone that is part of your life, and especially those that love you.

“The easiest way to develop a strategy for success is to model someone else who is already successful.”

If you want to be successful at something, there is no reason to reinvent the wheel. Model yourself on someone who has already succeeded the way that you want, and take advantage of the learning curve that they have already gone through before you. Take advice from others who are successful.

“In the end it always comes down to your ability to communicate your product, your ideas and you vision for the future and to get someone to buy into that with either their time or their money.”

The one thing that you can say about Belfort, whether you like him or not, is that he is a salesman. And to be a successful salesperson, you need to be able to effectively communicate your vision in such a way that the person who you’re communicating with ultimately buys into your vision with either their time or money. This isn’t just for big sales in business. This applies to your life as a whole, as well as all the personal goals you have.

“The thing with great sales people, top-level entrepreneurs and business people is that they’re experts in asking questions and based on that they know how to offer a solution…What do they value? What are their beliefs about buying and making decisions? What’s causing them the most discomfort right now?”

Another important aspect to be a successful salesperson is to understand what the other person needs to be solved. This also applies to many other aspects of life. If you can help people solve the problems that they have, you’re going to be successful. A key component of doing that is to actually listen to what others are saying so that you can figure out what their problems are that need to be solved.

11 Steve Jobs Money Tips Everyone Should Follow

August 12, 2013 By Danielle Warchol 4 Comments

Steve Jobs is often associated with ingenuity and the man himself has often been called a genius. While most people recognize Steve Jobs for his contribution to the technological field, much of his advice can also be taken into consideration when it comes to financial matters, just as Bill Gates and Warren Buffet. Jobs gave plenty of advice on starting your own business and what to watch out for when it comes to investments and loans, and here are a few pieces of advice you should consider when it comes to your own finances:

Losing Money Can Be a Learning Experience

It’s well-known that Jobs has, at one time or another, lost money because some of his products didn’t take off. But Jobs was not only ambitious, but pragmatic, and believed that losing money was a learning experience. No one enjoys losing money, but when it happens, you should figure out how to avoid falling into a similar situation. Use the situation as a learning experience to try to avoid such problems in the future.

Never Lose Money You Borrow

Jobs suggested that it’s never a good idea to lose money that you borrow from a friend or investor. Losing the money you borrow from someone not only puts you in a worse financial situation, but it means that people are less likely to loan you money in the future. While sometimes this situation is unavoidable, you should always do your best to borrow money only when you know you’ll be able to eventually pay it back.

Learn From Others

Learning from others and their experiences is another great tip to keep in mind. You never know which of your acquaintances may have had the same money troubles you’re currently suffering from. They may have advice to give you to ease your struggle. On the other hand, someone else may have a strong financial background and can point you in the right direction as you work to get out of debt or make a big investment.

Focus is Important

Jobs also often stated that having focus is important no matter what goal you’re trying to achieve. If you want to save money, you need focus. You can’t just decide to save on a whim, putting money into the bank one day and then forgetting to do so for the next couple weeks. Trying to achieve any monetary goal, whether it’s climbing out of debt or putting money aside for an emergency fund requires a strong, focused plan.

Persistence is Also Important

Additionally, persistence is also important. It can be hard to save money or climb out of debt, but you need to force yourself to follow whatever financial plan you’ve outlined. Persistence will not only help you reach your end goal, but it will make you feel better about yourself in the long run.

Push Yourself Toward Your Goals

Job has also commented that it’s important to push yourself towards your goals. He never would have created so many Apple products if he had not pushed himself to find the best computer design. If you have a certain financial goal in mind, push yourself towards achieving it. It may take hard work and sacrifice, but the final outcome will be more than worth it.

Look at the Positive

You also always need to look at the positive side of things. For instance, you might need to start cutting expenses in order to stay within your budget or start paying off debt. But instead of focusing on the negative aspects, instead focus on the positive aspects. Your financial situation could always be worse, and cutting out those daily trips to the coffee shop might not be the worst thing you have to endure.

Less Is More

Jobs was always a proponent of “less is more”. His Apple products are sleek and minimalistic and hew often stated that it was better to focus on one thing and ignore the 1,000 other requests being thrown at him. When it comes to making financial decisions, sometimes less is more. For instance, instead of trying to set aside money in ten different accounts, pool your money into one big savings. Instead of trying to create a complicated savings plan or a complicated plan to get out of debt, chip away at one area first before moving onto another.

Own Your Mistakes

Owning your mistakes is another tip Jobs has often given to people seeking advice. Failure is not always something to be ashamed about. Sometimes you need to own up to your mistakes so you can learn from them. For instance, if you’ve made poor spending decisions or have spent your entire savings account, don’t blame anyone else for this fact. Take ownership of your mistake and find a solution to fix the problem.

Make Tough Decisions

Lastly, Jobs has always advocated for making tough decisions. Success doesn’t come overnight and sometimes tough decisions are the only ones that matter in the end. Most financial decisions are tough decisions, but they’re usually necessary decisions. Don’t be afraid to make them.

Time is More Valuable than Money

It may seem somewhat ironic coming from someone who helped produce gadgets that everyone thought that they must have, but Jobs was clear that what is most important doesn’t cost anything. As he said, “My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time.” In this sense, money is nothing more than a resource toward other means. If you think that money in itself will make you happy, you have the equation all wrong.

Don’t Focus on the Numbers

July 24, 2013 By Jennifer Derrick 2 Comments

Everyone loves a personal story. We like to hear how other people paid off debt, retired early, paid for college, or afforded that fabulous vacation. Personal stories are fun to read and can be inspiring.

However, too many people focus on just the numbers in these stories and then get all bent out of shape because the numbers given aren’t exactly like theirs. They complain in the comment trails of blogs or give bashing reviews to books saying, “This [whatever inspiring thing the author has done] isn’t possible in the real world. The numbers just don’t add up.”

But it isn’t the numbers that readers should focus on. Costs of living vary widely across the U.S. and around the world. What a $50,000 income will buy in one place may not even cover the basics in another. While certain money saving behaviors might work well in one area (going without a car, foregoing air conditioning, clipping coupons, etc.), they might not be possible or as cost efficient in another. The numbers will always be different based on where you live and how much you make. Unless you live in the same location as the author and have their exact job, you’ll never be able to compare apples to apples.

Yet instead of dismissing the author’s story as either an outright lie or a mathematical impossibility, stop and look at how they achieved their goal. Whether the person paid off $50,000 of debt in one year on a $90,000 income, or whether they took a $4,000 vacation on a $20,000 income isn’t the point. The point is that they took certain steps to achieve their goals. That’s what you should take from such personal stories. Don’t worry about whether their numbers exactly match what you think is possible. Focus on learning from the tips and advice the storyteller is giving you.

Almost every personal story tells you the things that they did to achieve their goal. They list the items that they cut out or reduced in their budgets. The detail the sacrifices they made. Some of their advice may not apply to you. Some of it will. But the point isn’t to give you a roadmap to follow exactly. The point is to get you thinking about changes you can make in your own life to achieve your personal goals.

Here’s an example: You read an article about how someone is able to live without a car and that they save $10,000 a year in maintenance, gas, insurance, taxes, etc. You think, “Bah. I can’t do that here, so this article is rubbish. It’s impossible to save $10,000 per year.”

But if you stop focusing on the numbers and think about what the person is actually doing, you might be able to come away with a few money saving strategies. Maybe you can’t eliminate a car entirely, but maybe there are times of the year when walking or biking is more appealing. Maybe you have some public transportation that, while not great for everyday commuting, can be used once per week or so for more casual outings. Maybe you can find a carpool twice per week, or work out some type of car sharing arrangement with a friend. Maybe you’ll be reminded to shop around for a better deal on your insurance. No, you won’t save the $10,000 mentioned in the article by trying some of these strategies, but you’ll save something.

It’s the same with larger goals. Someone discusses how they retired early and people cry, “Not possible for me! I don’t have that kind of income (or I have too many kids or I can’t give up my extras, etc.).” But they don’t stop and think, “Hey, I might not make that kind of money and I might have some limitations that the author did not, but there are things I can do to cut my expenses. Look at all the things this person does to save money. Some of it would work for me, and I’ve got access to things she doesn’t mention. Maybe I can’t retire at forty, but maybe I can manage it by fifty-five.” Just because you won’t make it on the same timetable as the author doesn’t mean that your goal is worthless or unachievable. It’s just different.

When you get hung up on the numbers in a book or a blog post, you often dismiss some valuable advice. At the very least, the story will likely to inspire you to think differently about your own spending. And that’s where change starts. You’ll only make yourself nuts if you try to make your numbers match someone else’s exactly, but you can take the advice, wisdom, and inspiration contained in the story and use it to make your own success. It won’t be the same as the author’s, but it might be even better.

(Photo courtesy of Luis Argerich)