Archives for June 2015

Challenging Your Money Mindset – Part 2

CoinsThis is the second in a series of three posts I am writing that explore the unexamined ideals about money.  Part 1 covered the middle class and not spending your future earnings in a search for happiness.

Today, I am going to talk about the differences between the money mindset of an average person and a wealthy person.  Your relationship with money can be as complicated as your relationship with a person. It will define your life, whether you like it or not. It can give you security or cause you to teeter toward destruction.

Rich People’s Secret Affair

I’ll let you in on a little secret.   At one point wealthy people, or someone in their family, were just like you. They were toiling away at a job, day in and day out. At some point, the rich people took a different fork in the road and decided to keep their money. They saved and worked, worked and saved. They did other things, too, such as invested the money they kept so it worked for them making even more money, but the point is they did not spend everything they made. This might have taken decades or just years, but regardless, rich people like to keep the majority of their money, at least they should if they want to stay rich.

Being rich isn’t about spending; it is about keeping. Anyone can do it, at least to some extent. You might not be able to spend like the rich, you might not be able to earn like the rich, but you can save like them.   Even if it isn’t much at first, you can still save something. Start somewhere.

It’s worth mentioning that you often see athletes and celebrities out spending money on ridiculous parties, yachts and mansions. What you don’t see is that many of them end up broke. Don’t model your life after theirs.

Two Ways to Think About Salary

When the average person gets a job, he or she looks at the new salary and thinks, “Great, this is how much I can spend.” They go to a real estate broker, who looks at their salary and says, “Great, this is how much you can borrow.”   They subtract their new house payment from their salary, plus a few more necessary expenses and the difference is the amount they can pay towards a new car. So they march down to the dealership and buy a car that uses up the entire payment, if not over a smidgen.

Now, their budget it balanced. No room for savings, but that’s okay. They can charge any emergencies that come up to their credit card and as they get raises they can save at that point. They get their first raise. Saving it crosses their mind, briefly, but then they realize they haven’t had a vacation in a while. Or they are jealous of their friend’s housekeeper. And so on…you get the picture.

Now an alternative attitude toward the same salary…

You look at your new salary and think, “Okay, I am trading my life for this amount of money, what is the best way to use it?” First you plan a decent amount to save. You’ve done your homework and you know that 10% is the bare minimum, but who wants to do the bare minimum? You decide on 20%. You need a place to live, so you research and examine all of the expenses in your life and decide that you are willing to borrow an amount that puts your house payment at around 30% max.   You keep driving your current car and stock away money towards buying a new one when this one is no longer reliable.   New raises provide more opportunity to save for rainy days, retirement and other big things like vacations. None of your salary is spent on credit card interest or penalties, since those are wasted expenses.   You remember that working is trading bits of your life for money, so why waste those bits on interest?

I am sure you can see the difference in those two mindsets. One is reactive and reckless and the other is deliberate and planned. Which one do you think will lead to a more secure and lucrative future?

What if You Were Rich?

Imagine for a moment that you have worked hard, kept your money and saved up enough to be considered a millionaire. To do this you might have kept the same car for fifteen years or never upgraded your house. You made do with what you had while you watched others around you snatching up luxuries like wildflowers.   How would you feel if those same people, who were busy spending while you saved, complained that you were lucky, that it isn’t fair, that you aren’t paying enough taxes?

Prolific articles condemning the rich and blaming them for the imbalance of wealth in our country clutter the Internet. Yes, the rich are getting richer in some cases.   The more money you have, the easier it is to make money. So why spend all of yours?

Instead of blaming and castigating the wealthy, why not learn from them? Yes, there are rich people who take advantage, who manipulate others, and who play system. It’s important to remember that those characteristics run the gambit across all income levels. Many wealthy people are worth admiring and emulating.

For instance, I commend Warren Buffet for his frugality. My favorite fact is that he lives in the same house he bought in 1958 even thought he is the second richest person in the United States.

Get Smart!

These are just a few of many topics regarding money. They represent my humble opinions, obtained from lots of reading and research.   I am not a financial expert; therefore, before you take any action, do research on your own. It’s your money, so it’s worth it. If you take anything away from this, I hope it is the following:

  • Becoming wealthy is usually not a result of luck or social advantage; it’s from sacrifice and hard work.
  • Act like a wealthy person and keep the money you make – then make it work for you.
  • Take control of your finances; be deliberate.
  • Instead of grumbling about rich people, identify the honorable ones and make them your role models instead of celebrities known for squandering.

Good books to read: The Millionaire Next Door and I Will Teach You to be Rich.

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Summer is here!

This summer I will be vacationing with my family in Colorado. I have been there three times in my life, all of which occurred over twenty-four years ago. When I was a freshman in high school, my family drove an RV through southern Colorado, visiting Pike’s Peak, Colorado Springs, Cripple Creek and others. The remaining two trips were band trips, one as a freshman and one as a junior. I think our band performed in some contest, but I was more interested in the skiing. Out of all three trips, this is one of the only pictures I have:

Age 15

Me in Colorado at age 15

Where do I start? First, how disappointing that there are no pictures of mountains in my collection? That will be remedied on this trip. Second, my hair is big and frizzy, but not much has changed there. I think that is about all that is wrong with this picture.

Oh, the butt on the wall? I would like to inform you that I have pictures of two other girls cupping the butt, so it wasn’t just me. I think the question you should really be asking is why was the butt there to begin with?

I am looking forward to the downtime of my vacation. I am going to read, I am going to hike, I am going to manage my kids, and I might have a drink or two.   Here is my ambitious reading list:

  • Yes Please by Amy Poehler – I am almost done reading this and am hoping to finish.
  • Summer Sisters by Judy Blume – I heard this was a quick, light read, which is perfect for vacation.
  • Funny Girl by Nick Hornby – I probably won’t get to this one, like I said this is an ambitious list for a week long vacation.

The rest of my summer is going to be filled with spending quality time with the kids while they are on break, blogging, and finishing the last revisions on my novel. I will be attending the Writers Digest Annual Conference in NYC at the end of July, where I will get the opportunity to pitch my book to a bunch of agents, speed-dating style. My expectation for the event is not to get published, but to network, get insight on the publishing industry, and learn a plethora of new things at the educational sessions.

If you have any additional summer books to suggest, please comment below. I am always working on my to-read list. Have a wonderful summer!

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Challenging Your Money Mindset – Part 1

Old TV Money Face

This is the first in a series of three posts I am writing that explore the unexamined ideals about money, which many of us hold as truths. These are typically passed down from our parents or other authority figures, beginning when we are young, and we have accepted them with little or no analysis. Unfortunately, these monetary topics tend to be the ones causing the most strife in a person’s life.

When encountering a new concept, we often get defensive because we feel defined by our mindset. To grow as a person, you must open your eyes to different ways of doing things, and you must put away any defensive attitudes toward the dogmas that you hold dear. Putting your ego aside when you are learning enables you to truly understand new ideas. This approach will either validate your current beliefs or lead you to change your beliefs altogether.

Today, I am going to talk about what it means to be in the middle class in current times.

My Money Mindset Evolution

I myself went through the process of challenging my money mindset when I found out I was pregnant with my third child. In an overwhelmed haze, my husband and I discussed how our life was going to change, and we both agreed we would need a bigger house. As a middle class family, we always assumed we would upgrade our house because that is what you do. Our 1,600 square foot, four-bedroom, two-bathroom house would be tight for a family of five. We were convinced that moving was a necessity. Once we reached the decision that many parents of big families reach, I set out to make our move a reality.

I have always been a proponent of not carrying around debt, other than a mortgage and maybe a car loan. In order for us to move, it required us to amass a 20% down payment to get the best interest rate. Since this was just after the housing bubble burst, most banks were requiring it as well. Undaunted, I came up with a plan utilizing our current investments at the time combined with aggressive saving. In two years we would have enough to move comfortably – with the required down payment while also retaining our emergency fund. I sat staring at the amount that we would have at the end of those two years. I thought about the next step, handing over that big sum of money and taking on an even greater loan. I said, “No.” Out loud. To my computer.

We had a home. It wasn’t perfect, but it was good enough. A bigger, fancier house didn’t compare to the power that came from saving. What that number at the bottom of the spreadsheet represented to me was freedom. It was a step towards retirement; it allowed us room to spend money on travel and on experiences. That was the turning point for me. That’s when I moved from being a money spender to being a money keeper.

I got excited. I read blogs about finance, I consumed information on reducing our tax burden, and I read books about investing.  I discovered that the way I had always viewed money wasn’t the only way, or even the best way. This was a catalyst for challenging other areas in my life.

Sometimes it can be hard to go against the grain. To ignore normal ways of portraying success is a difficult hurdle to get over. As is living in a smaller house, or not having as fancy things as your neighbors. Who ever said that life was supposed to be comfortable all of the time? In discomfort we find what we are truly made of.

So go ahead, expand that comfort zone! Now for some money mind-melding…

The Middle Class is not Getting Screwed

You may have heard that the middle class is getting screwed, squeezed out, on thin ice, etc. People also say the rich are getting richer and the middle class is getting poorer. Is this something you have heard?

If the middle class is getting poorer it’s because they are spending money like they are rich, or at least an income bracket or two more than they make.   They aren’t living like the typical millionaire, who is actually keeping their money. They are trying to live like their combined friend list on Facebook.  They don’t stop to think that Person One is taking a vacation but not buying a new house. Person Two is buying a new house, but having to skip vacations for a while. All they see is Person going on vacation and buying a new house. So they want it all.

We are also a bored nation. The typical family in the United States has few genuine challenges to worry them. Stores overflowing with food are on every corner, as are pharmacies with medicines to help when we get sick. We have bigger houses than ever in history to keep us safe from the elements. We have cars, planes and trains to transport where we need and want to go. We have computers and phones to help us to the point we rarely need to use our brain to remember anything. Sure, things aren’t perfect, but we are living similarly to how royalty lived just a few generations ago.

We live isolated from family and friends in our big homes. Our lives include limited socialization and limited passion. We distract ourselves from the monotony with television, video games and shopping.

Because of boredom and because of isolation, we buy. We buy big houses. We buy stylish clothes. We buy fancy cars. We buy the hopes that these things will fulfill us, and will prove that we are going somewhere, that we are successful.   These feelings never last and we are left with emptiness again, boredom. So we buy more. With debt, we spend future wages on something instant gratification convinces us that we need today.

When the dust settles, our future selves look at the mountain of debt that was built and feel wronged. Frustration over the unfairness of life consumes us, just as we consumed our future. Instead of casting the blame where it belongs, which is ourselves, we attack things like taxes, businesses, rich people and the shrinking middle class. It’s everyone else’s fault that we can’t have everything we deserve. It’s easier to give up our power over our situation, than to take ownership of it and realize that it was our fault all along. We stole from our own future.

Be Thankful

The best way to combat the feelings that you don’t have enough is to practice gratitude. Be thankful for what you do have.

You know what helps me when I get frustrated with our small house? I work on it. I plant new plants, I paint it, or I fix something that has needed to be fixed for a while. Every time I pour love into my house, my love for my house returns in equal measure.   Take care of what you already have before rushing to buy something else.

Just as the journey is more important than the destination, life is more important than stuff. The family inside the house is more important than the structure.   The person inside the clothes is more important than the fashion. The idea is to strike a balance and make sure you don’t short-change the things that are the most meaningful.

If you still struggle, remember this: People really don’t care what you have. They don’t care about the car you drive or your house or your clothes.   Your stuff is a fleeting thought that flashes through their mind as they do a quick comparison. Then they move back to worrying about themselves! 

Get Smart!

These are just a few of many topics regarding money. They represent my humble opinions, obtained from lots of reading and research.   I am not a financial expert; therefore, before you take any action, do your own research. It’s your money, so it’s worth it. If you take anything away from this, I hope it is the following:

  1. Harness your power over your finances. You decide how to spend it or how to save it. You are not a victim.
  2. Address the core cause of your boredom, or whatever pushes you to make poor money decisions. Get a hobby, be more social, or get out of your comfort zone (this one in particular is a big rush after you take the initial scary step).
  3. Be thankful for what you have. Not just with words or thoughts, but with actions. Lovingly take care of something or fix something. Polish something that’s tarnished. Your rekindled fondness of it will surprise you.

To challenge this part of your life further, here are a few great places to start:,, and for a real kick in the pants,

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