<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > Category: Education
 

Viewing the 'Education' Category

Tired of Keeping Up With The Joneses

May 13th, 2011 at 06:11 pm



The original post can be found here: Debt Free

You know them. They’re the family driving the shiny new cars, wearing the fancy new clothes, going on lavish vacations and sending their 2.3 children to private school. They have no financial worries, no need to budget, no money fights, and no concerns about retirement.

Hey everybody…It’s the Joneses! Everything in their world is easy. They have it all! Or do they?

“It’s not fair…” you may say. “Some people just seem to have it so easy. How do they live so well while I struggle just to pay the bills?”

It’s a good question. How can these young couples in their 20’s and 30’s buy the big house, drive new cars and go out to nice dinners every night? When Katy and I were newlyweds, we lived in a 600 sq. ft. apartment, drove 15 year old cars and regularly had to say no to going to dinner with friends.

Journalist and Author Shira Boss observes, “How we fit in and how we measure up are such an integral part of our financial well-being. We construct a fantasy world around those who have more money, and glorify their lives.”

Everyone in our culture seems obsessed with Keeping Up With The Joneses. But here’s the big secret….the Joneses…are broke

When you begin to ask the “Joneses” in your world, it turns out that they don’t own anything. Their big fancy house has a big hairy mortgage. Their cars, boats and stereo systems are all financed. And their big income is completely spent on payments before their paycheck even hits the mail. They have walked right into the trap of looking good but living broke! With credit cards, home equity loans, and “easy monthly payments,” it’s easy to look like you have more than you really do. But it’s a house of cards, and it won’t stand. Just ask the 2 million people that filed bankruptcy in 2010.

Vacations aren’t nearly as relaxing when you are still paying for them 3 years later. And the shiny new car isn’t as fun to drive when you are scrambling to come up with the $500 payment. The big house is no longer a blessing when the foreclosure notices start to come. This shiny, happy existence looks great from the outside. However, inside you will often find heartache, stress, money fights and fear that the bills may not get paid. This is no way to live….and all of a sudden, keeping up with the Joneses isn’t quite so appealing.

In his book “The Millionaire Next Door,” Thomas Stanley points out that the majority of actual wealthy people got that way by living on less than they make, staying out of debt, and saving their money. But no one looks at the person driving a used car and living in a modest home and thinks, “Wow, they must really be saving and building toward a great future…I bet they’ll be able to pay for their kids’ college…they will sure be able to retire comfortably.” Everybody envies the look of wealth. But very few are willing to do the things that wealthy people do, in order to become wealthy people themselves.

How can the Joneses afford to live that way? The truth is…they can’t.

So the moral of the story is…

Stop comparing yourself to the Joneses…or anyone else for that matter. You don’t need to impress them or anyone else. It’s not worth it!

True contentment comes from within. It’s easy to think that if I just had enough money, or more stuff or this new thing, then I’d be happy. But true contentment and joy come from things that money can’t buy. What are your fondest memories? What are the moments in life that have warmed your heart and made you smile the most? Would you trade any of those for a bigger bank account, larger house or newer car?


Yours In Freedom,

Clint


Don't forget to pick up your copy of the free E-book, "Wake-Up Call: The Eye-Opening Truth About Debt, by visiting http://www.DavisCoachingSolutions.com

9 Things I Will Teach My Kids About Money (and you should too)

April 19th, 2011 at 06:36 pm



The original post can be found here: Debt Free

Katy and I don’t have kids yet, but we hope to start a family in the near future. And it’s important to us to pass on healthy attitudes about money and possessions to our kids, and to equip them to be in control of their money and stay debt free.

A wise man once told me that you shouldn’t give parenting advice unless you have kids. However, I do know personal finance. But I want to be careful in writing this to not overstep my bounds. So, I write this post to my future self. And hopefully these will help you as you guide your own children.


9 Things I Will Teach My Kids About Money!


1. Money Doesn’t Grow On…
It’s cliché, but many kids are shocked when they graduate only to realize that money really doesn’t grow on trees. Most parents feel that kids should do certain chores simply because they are part of the family, such as doing dishes, cleaning their bedroom, etc…and I agree. But you can also assign extra projects and pay them “commission.” If they don’t do the work, they don’t get paid…just like real life. This teaches them that money has to be earned, and it gives them an income that you can now teach them to manage.



2. You Can’t Buy Happy
In our American-dream mentality, we often believe that more money and more stuff will make us more happy. But this really isn’t true. The happiest people in the world have learned to be content with what they have. Often times, having more money just makes life more complicated. Money can be used for a lot of good things, but it is not a prerequisite to a happy life. Teach your kids to value things that will allow them to be truly happy – contentment, generosity, relationships, and fulfilling their life-purpose.


3. You Have to Live on a Budget
Money is not a limitless resource. Like adults, kids have to plan how they will use their money. Otherwise they’ll just spend mindlessly and end up broke. If your child earns $30 per month, help them to plan out on paper how they will spend that money…save $5, buy dad’s birthday gift for $15, and so on…Help them develop this habit now so they can start off their life being in control of their finances.


4. Follow the 80-10-10 Rule
Along with budgeting, I want my kids to learn this simple formula…80-10-10. The first 10% of any money they receive should be given, either to our church, another ministry, or a charity they care about. The next 10% should be saved for the future. The other 80% is theirs to spend as they please, but it must be budgeted. This will help them develop these giving, saving, and spending habits for the rest of their lives.



5. Avoid The Debt-Trap
I want my kids to understand the dangers of debt. When they’re old enough, discuss credit cards, loans, and car payments with your kids. Help them understand that buying things on credit ends up costing more than if they had paid in cash. Growing up, I was taught by example that credit and debt were the way to buy things. It only follows that as an adult I racked up over $50,000 of consumer debt. I want to make sure my kids understand why and how to avoid this debt-trap.


6. Companies Want Your Money
The average American sees 1,500 ads per day. Corporations want our money and our kids’ money. Watch the commercials on your kids’ favorite shows. These companies work hard to turn our kids into consumers. That’s why it’s important to teach them not to believe everything they see on commercials and TV. As they get older, help them understand that these ads are designed to get them to spend money on stuff they don’t really need.


7. Money is Not the Goal
I remember a teacher asking what I wanted to be when I grew up. I said, “I want to be rich!” I want my kids to know that accumulating a bunch of money and stuff is not a worthwhile goal. Money is not an end itself…it is only a means to an end. What good is a million dollars if just sits at the end of a balance sheet? I want my children to know that it’s not the number that counts; it’s what you do with it.



8. Make Goals For Your Money
Money itself shouldn’t be a goal, but mindless spending is no way to handle finances. It’s imperative to teach our kids how to set reasonable and achievable goals for their money. This includes short term goals, like saving for a video game, and long term goals, like saving for their first car. Setting goals helps us to stay motivated and focused, and this is a skill kids need to start learning early.


9. Dare to Not Compare
As a child, one of my friend’s parents got a brand new car, and I was jealous. In her wisdom, my mom told me, “We could have a new car. But you don’t know what they may have had to give up in order to have that car.” There will always be people who have nicer, newer, better and more. But as I said above, having more money and more stuff doesn’t make you more happy. We need to teach our children to be thankful and content with what they have, to handle their money wisely, and to not let other people determine their happiness.



If you are a parent, you know better than anyone that children learn from our example. If you don’t have control over your finances…budget, debt, savings…your kids will likely follow suit. However, if you can get control of your money now, your kids will have a much better chance of winning with money when they are on their own.

Let us know if we can help!


Yours In Freedom,

Clint




Join the conversation…What financial wisdom are you/will you pass on to your children?