Thursday, January 31, 2019

It Doesn’t Have To Be this Way

You’ve heard it. I've heard it. Or have we?

 “The definition of insanity is doing the same thing over and over again and expecting different results.”

I’ve walked down this path countless times.  I expected things to be different without a shift in my focus, a change in my attitude, or the use of a different approach.  Honestly, all I had was a whole lot of “nothing” and a heck of a lot of “frustration”.

Has that ever happened to you?

We know something has to change but what we sometimes don’t realize is that it begins with us.  This theory applies to everything and anything we need fixed: our health, relationships, or finances; and even the simple things in life, like an Internet connection that has a frequency of its own. 

One current problem is the way personal finances are handled. The latest survey indicates that that 46% of Canadians are $200 or less away from financial insolvency at month-end.  This statistic jumped from 40% in the previous quarter.  Apparently, this news is better than the 2017 numbers when MNP said more than half of Canadians were living within $200 per month of not being able to pay all their bills.

Those numbers are staggering. As I read, I feel the anguish and frustration in the responses.  If the poll is accurate, nearly half of Canadians are on the brink of a financial disaster.  It isn’t only frustration in these numbers; the fear is real, describing a financial situation at its worst. 

In a Global News interview, Kelley Keehn, a personal financial educator, shared tips for changing behaviour to attack the money problems. As I listened, I nodded in agreement.  I have written about these strategies in my blog posts as well.  

Any Certified Financial Planner® Professional or credit counsellor will tell us the same thing.  The only way to attack our fears and money problems is with action.  Doing the things we are encouraged to do is the way to fight back and gain control.

Honestly, I sometimes feel no one listens.  Like Kelley, I feel people get discouraged, say “Whatever!”, and walk away defeated.  But I believe it doesn’t have to be this way. Everyone can start with small steps and walk away encouraged. 

If we can’t increase our income, then the only thing we can do is decrease our spending.  When we tap into other useful resources, Gail Vaz-Oxlade has a list of tips to put into action. Below is one we can borrow and apply in our lives. Like she points out, “What do you have to lose?”  

Gail writes:
Figure out what it takes to live modestly for a month.  You’ll need to cover your regular bills like mortgage or rent, utilities, car payment, gas for work, food.  Once you think you’ve got the bare bones covered, look at how much cash you think you’ll have to spend.  Planning to spend $600 this month on everything from groceries to gas to your sister’s birthday present? Cut that in half and challenge yourself to live on less.

Before you throw your hands up and say, “Ridiculous,” just try it.  There’s no failure here.  It’s an experiment.  It’s to see whether it can be done.  After all, even if you miss by $150, you’ve still spend much less than you thought was possible.  Hit the mark and you’ve experienced living modestly and saving money at the same time.  Double whammy!

Frankly, even if we aren’t in financial difficulty, a couple of wrong turns between now and then can place us unintentionally in a mess of financial doo-doo. So perhaps we need to pay attention and listen to the advice handed out. There is nothing wrong in learning new skills in money management from the experts.  And there are plenty of skills to learn! We only need the desire to make the necessary changes so we are not included in any future grim statistics.

Everyone should consider doing Gail’s homework assignment.  If you happened to be the one who does, feel free to share the results of your experiment in the comments below.        

Thursday, January 17, 2019

Turning Your Finances in the Right Direction

Dear Younger Me. 

The premise of the song, “Dear Younger Me”, written by the band, MercyMe, is to provide advice to a younger self.   I love the idea of writing a letter to myself filled with advice of what to do and not to do in life and with life.  My mature perspective would come from grounded experiences that taught me valuable lessons. 

Of course, my letter would be written with the anticipation that I would listen to myself.  But who am I trying to fool?  We all know when we are young we feel invincible. We have our whole lives in front of us filled with opportunities we hoped we would and could achieve.  Yet somehow life turns in the completely opposition direction than we predicted.

…Of course, we will make mistakes.  Sometimes, the worst mistake is mismanaging our finances.  Painful and sometimes devastating mistakes may destroy our credit and dreams.

I wished there was a magic fix to make our financial woes go away.  Unfortunately, there isn’t one.  Sheer determination and a solid commitment are the tried and true ingredients.  Let’s not forget…education is a requirement to turn your finances in the right direction.

When we desire to learn something foreign, a couple of basic examples instantly come to mind. To properly handle a gun, we would take a gun safety course.  If we were interested in quilting, we would sign up for a sewing class.  Naturally, when we are fine tuning our finances, we would look for suitable venues.

Three Options to Improve Your Financial Outlook.

1.  Dive into a book written about finances.  

Any one of these three might be of interest.  Remember to take the ideas which fit your situation best.  Not everything written is applicable to your needs. 

Moolala, Why Smart People Do Dumb Things with Their Money (and What You Can Do About It) by Bruce Sellery.

Smart Couples Finish Rich, Steps to Creating a Rich Future for You and Your Partner, authored David Bach.

How to Eat an Elephant, One Day a Month to Financial Success, written by Frank Wiginton.

2. Follow-up on helpful articles found at websites. 

The key is to find information which interests and applies to you and is easily understood and applicable.   Money matters do not have to be complicated. 

When we need advice, the best place to find helpful solutions is from a professional.   You need to be assured your financial plan fits your goals and dreams.  When you are not certain whether you are headed in the right direction, you may check with a CFP® professional.

The Tools.

Napoleon Hill wrote, “Do not wait; the time will never be ‘just right’.  Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.”

This quote seems to fit with anything new we may try. We can’t expect perfection with our first attempt.  This is especially true about financial roadblocks. The language may be difficult.  Our understanding of the method may be awkward.  And even fear may hold us hostage, pushing us to talk ourselves out of turning things around with our finances.  Our willingness to try is the first step.  With some encouragement, know-how, and stamina anything is possible.  I believe our attempts will be worthwhile.
What is your roadblock stopping you from turning your finances in the right direction?  Please share your concerns.   

Thursday, January 3, 2019

Don’t Look Back; Don’t Give Up; Don’t Give In!

Inspiration can come from any place.  I was flipping through a book which sat on my shelf for many years deciding whether or not to keep it.  I stumbled onto a page with the heading, “Harness the Power of Positive Pressure”.

You have to read this:  

I’ve noticed that many people who begin their transformations with full force end up losing their drive after a few weeks.  One way I help them overcome that setback is to teach them how to harness the power of positive pressure.

My observation is this:  Most people in America have been conditioned (that means someone or some system has taught them) to believe they should “coast” through life as much as possible – they should avoid “pressure situations” and gravitate toward circumstances where no one is demanding anything from them.  This is not good.  It’s not good at all, especially if you’ve decided to change your body and life.  You see, contrary to popular belief, deep down inside, you want pressure; in fact, you need pressure to feel excited and passionate about life.

Real-life examples of people performing heroically under pressure can be seen everywhere:  the fireman who rescues a child from a burning building, without a moment to spare; the quarterback who scores the winning touchdown, with time running out on the clock; the doctor who saves a dying patient’s life.

The fact of the matter is, we are all capable of so much more than we might believe we are, but our ultimate potential is often smothered by what society teaches us – that pressure is a bad thing, that it hurts rather than helps our efforts to improve and become successful.  Eventually, after years of conditioning, most people see pressure as an obstacle, not the powerful, driving force it really is.

You see, the truth of the matter is that it’s through pressure or “stress” that we evolve—that we grow. 

This insight, the power of positive pressure, amazed me. 

As we venture into a new year, we could all use a fresh perspective. This simple but effective philosophy delivers encouragement as people vow to do better with their finances, health, relationships, and job performances.   

We often compare physical wellness with financial wellness.  These two are similar in terms of measuring health in both areas.  So it should not be surprising that the inspiration just shared was from Bill Phillips’ book, Body for Life.  We could have just as well read this from a book titled Money for Life.   This advice is applicable to all areas of our lives.

Let’s continue.

Think about it:  The fundamental principle of building a stronger body is the process of overcoming stress, or “resistance”.  We force our muscles to work, and this effort in turn forces our muscles to adapt.  If we put no pressure at all on those muscles, if we present them with no resistance whatsoever, what happens?  They atrophy. They dissipate. They weaken.

The same equation applies to our growth in the areas of our careers, our relationships, and our knowledge.  It is only through the right amount of pressure that we continue to move beyond the level of mere existence or “comfort”.

To harness the power of positive pressure, start with regularly subjecting your muscles to a healthy dose of stress by working out.  Then, invite other challenges back into your life.  Rather than run from pressure situations, or pretend they don’t exist, face them.  Seek them out.  In doing so, you’ll find that positive pressure brings out your best.  You’ll be raising it to a new, higher level.

And that, in every aspect of our lives, is what we should do.

That is what positive pressure can do.  

Improving our finances can be as challenging as improving our physical bodies.  No pain, no gain.  This is why persistence is important when we meet resistance.  We can so easily look back at our previous attempts to stay on track with our budgets.  In frustration, we give up and give in to our desire to escape the hard road and opt for the easy road and simply coast. 

When we heed the advice to harness the power of positive pressure, we vow to work harder at improving our financial muscles.  When we force ourselves to make changes to our spending and saving regimes, we are forcing our financial muscles to adapt.  Yes, we are putting pressure on ourselves in an attempt to become financially stronger. That’s a good practise to adopt for the beginning of a new year.

“Don’t look back! Don’t give up! Don’t give in!”

That’s your prescription for this new year. Repeat as required.

Do you have a prescription you would like to share for everyone’s benefit? Please post your comments below.