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Archive for the ‘Finances’ Category

Average of Five

Motivational speaker Jim Rohn famously said that “we are the average of the five people we spend the most time with.” A mathematical way to work that out is to take the income of your five closest friends and then divide by 5. It usually comes out to or close to your yearly income. The theory is that if you want to increase your wealth start to move in a circle of people that challenge you to “rise” to their level. 

On the flip side of that, if you aren’t strong in who you are and where you are going, your friends have he ability to “lower” you to their level even if you are the biggest earner in the group. All in all it’s a conversation about these theee things:

  1. Don’t let who you associate with being you down to their level. 
  2. Are you content being the average of your friends?
  3. If you want to grow and increase then find a group of mentors who are living   In the lifestyle and financial bracket you desire and spend the majority of your time with them. 

That doesn’t mean if you are on welfare and barely making ends meet that you try and hang out with Richard Branson. There are a lot of steps between where you are and where you want to be. 

I didn’t believe this theory when I first heard it it I did the math and it was almost spot on. I also have checked when my finances are ebbing to see who I am spending time with, and yes, it was proven again. I’ve surrounded myslelf with people I would class as doing better than me and realized that they motivate me to be better, do better, stretch and grow. 

It’s an interesting concept to ponder. Try it out and see what you think. You might be surprised by what experience in the process. 

Happy discovery!

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Deja vu glitch

I would say that a majority of the people I know have seen the movie The Matrix, starring Keanu Reeves. I just recently learned that there is an entire online community of people who hash out the meanings and symbolism of the trilogy. Who knew?!

If you have watched the movie you know the scene where Neo sees the black cat do something and seconds later sees it do the same thing again. He thinks its deja vu. (Insert deja vu definition here: having seen/experienced a situation before) he is told by Trinity that it happens when there is a glitch in the Matrix. (Insert my interpretation of the Matrix: the illusion of the environment around us keeping us from the truth). Patience…..there is a point to all of this…..

I feel like I am in the middle of my own deja vu Matrix glitch. For the past two years  my life has been stuck in this limbo place. No movement forward and if anything just sinking deeper into the mire. At the start of the year things dramatically changed and for the past four months I have watched things improve… the mire becoming solid and turning into steps as we climbed out of the place we were in. Sounds great right?

And the black cat walks in front of me…then I see it again. Not literally of course but a situation happened (the black cat) and I find myself back in the place I was in before the start of the year. My own personal glitch in the Matrix and I’m left sitting here trying to figure out how the hell I am going to find the red pill. 

“You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes.” Or as I interpret it, you get to see the truth and become a master of your environment, an aware creator of your life. 

I’m tired of repeating this pattern in my life. Bone tired. The funny thing is that from outward appearance the place I find myself in isn’t of my own making but rather someone else’s. However, I am a firm believer that we do co-create our reality with the divine so…… I have to own this is mine too. 

So here is my thought to ponder… how do you see past the illusion that seems so real to the truth of what is possible? Not for a minute but permanently. You know, the “I took the red pill and I can never go back” kind of permanence. The I will never “deja vu” this experience in my life again truth. I logically know what is needed. But how does one co-create with another person if they are not on the same page? Same mindset? Same truth? Same vision for something different? The struggle is real. Far too real. 

So here I am….following the white rabbit…looking for the red pill. 

One of those days

Have you ever woken up and the day just starts off stressful and never lets up? Yeah? Well, welcome to my day today.

I somehow set the alarm clock for 5:45 am instead of 4:45 am so the minute my husband and I woke up we were already running behind schedule.  Did I mention that my husband had to be at work by 6:30 and the jobsite is 20 minutes away? Or that I had to make him breakfast and pack his lunch before we could leave?

Then, our car is in the shop, and my friend was letting us use their car today but it has a blow and go. I am going on record here to say that should I be forced to have one of these or not drive I will be taking the not driving route because I CANNOT make the damn thing work. Somehow we managed to get the car going but a few minutes down the road we got caught in train traffic and had to wait and then wait some more before finally getting into open road.

Dropped ny husband off, managed to survive the “blow test” another 2 times before making it home only to have my husband call and tell me hey didn’t need him for the overtime he had gone in to do and I needed to come back and pick him up. So back I go only this time when the car beeps for me to “blow” it doesn’t accept it and next thing I know I am stuck on the side of the road with a “locked out” car I can’t turn back on, in an area with no cell service and by the way I am still in my PJ’s.

Eventually another friend came and rescued me, managed to get the car started and back to the house. My son, who was expecting a ride to work from me had to call a friend for a last minute ride and then I was jumping on business calls right up until my parents showed up to take me shopping. I was helping my dad buy new underthings for my mom.

We finish that and my husband calls for a ride home as hey didn’t need him anymore. We get him, get home and he starts working on my sons car that was in the driveway but undrivable because it had no brakes. Then my mechanic calls to say that my car won’t be ready and arranged for us to get a rental car at a discounted daily rate but that isn’t an actual answer to our problems because I want expecting to spend $200 on a rental car.

I could go on and on about this day. The drama and sh** just keeps coming my direction. For the first time all day I’ve had 5 minutes to sit down and just think. Know what I think? I think I want this day to be over and let’s start again tomorrow.

Baby step it

So I’ve set an audacious goal this year. I’ve decided that I want to be out of debt by the end of the year. I don’t have credit card debt because quite frankly I don’t like credit cards. However, we had a business and over the last couple of years we just couldn’t compete with the “large companies” so we closed its doors. That’s all good but it has taken my husband two years to get back to paid work. 

He has been working, helping a friend renovate a very old building into a restaurant and lounge. Pay will come eventually but in the mean time we were barely making ends meet with my income supporting a family of 5 and 2 business expenses. To say we got behind is downplaying our finances….. BUT….. 

Things are radically shifting around with my husband back in the workforce which of course is why we have set a goal to get out of debt. But as I said yesterday, goals require action steps. I believe you have to take baby steps toward your goals. So here is my example of how to set baby steps toward a bigger goal. 

Baby steps toward our goal:

  1. Menu planning, it’s true that planning out your weekly meals and shopping once a week for your grocery items saves you money and that money can go towards bills.
  2. The little splurges add up so cutting coffees from coffee shops makes a difference. You can literally save hundreds in a year if you are a major coffee drinker as long as you get smaller sizes, get refillable cups, or cut them out altogether.
  3. This one may sound crazy to some but setting a fun money budget works for us. We have a set $ amount that my husband and I split from his pay checks ($100) that we can spend any way we like. Why is this important? Because if you are working your ass off to get out of debt and stick to a budget, if you don’t plan for fun money you will eventually give it up because you are working to please everyone else and you feel like you get nothing for all the hard work. Keep it realistic and allow for some fun and you are likely to keep at it. 
  4. It may be counter-intuitive but I focus on paying the bigger bills off first. Most people like to pay off the small bills first so they fee like they are really accomplishing things. I want the biggest bills gone and then I use the larger payments from the bigger bills to quickly pay down the smaller ones. 
  5. Payments- I may be a bit defiant but I look at my budget and decide what I can afford to pay toward bills (outside of power, water, etc), then look at what bills are my primary focus and divide what I have to pay by the number of bills. I figure out how long it will take me to lunch off those bills and I accept it for what it is. Sound funny? Well, debt didn’t happen overnight and I can’t assume it will clear up quickly.

There are many other little steps that I am using and putting into place but this gives you the idea that you can chip away at a large goal by breaking it down into smaller, actionable steps. 

Poverty Mentality

My topic of the day is “A mistake that helped me grow”. Not exactly a topic I’m excited about. I mean, who wants to go shouting about their mistakes to the world?

I’ve decided to be courageous and talk about my mistake and how it helped me grow because I know that everyday, people make mistakes. Hopefully they also learn from them and grow as well.

I’m going to talk about “Poverty Mentality”. So, several years ago when my kids were little my best friend took a risk and told me one day that I was teaching my kids to have a poverty mentality and that I needed to stop and fix their ideas about money and finances. To say that I wasn’t angry would be an outright lie. I was pissed! I was beyond pissed but then I really spent some time thinking about her words.

She was right.

I was teaching my children to think in a poverty state of mind and once I realized I was doing it I set about changing my own perception and attitude so I could change my children’s as well. It was no easy task but I spent a long time, several years in fact, working on this and I have to say that it made a profound impact on myself, my spouse and our kids.

I had been teaching my kids poverty mentality by saying things like, “We can’t afford that….” and “there isn’t enough….”. I was teaching them to see themselves as victims to circumstances. To believe that struggle was the only way to live. I was teaching them to live from fear. Talk about feeling like a failure as a parent.

So….I started saying things like, “We can get that later, just not at this moment” and “Let’s figure out how we can create this as a possibility”. I watched all my negative speaking and only allowed myself to speak positively in front of my kids. To come from a place of empowerment and love instead of fear. Positive words and affirmations didn’t miraculously change my life but it changed my attitude about life which allowed me to be open to opportunities and that changed my life.

It was the hardest thing I’ve ever done and to be honest….I didn’t realize how much my family had changed until a couple of years ago when I had an opportunity to be around a family that was “Poverty Mentality” focused and I literally found myself remembering feeling like they did, coming from the same place as they were but I couldn’t go back to that place and I wanted so badly to shake them and make them see that life could be so different if they were willing to change their mindset.

Choosing change is never easy and as I said, it took years to fix the damage I had done but change is worth it in the end and a better life for my family was more than worth it.

There is no quick fix

Just before the economy took a huge dump on everyone my husband and I both thought we were doing the wise thing by becoming entrepreneurs and small business owners. We both bought pre-existing companies with good histories and reputations in their perspective communities. It was a giant leap of faith and one that sadly, due to the economy, left us in a horrible financial place.

We discovered, after the fact, that one of the companies (my husbands) actually had around $8000.00 in debt to vendors and I cringe to say it…the Department of Revenue.  Who the heck wants to be under scrutiny from a governement agency? NOT US!  Then what little money we had as operating capital was taken right out of bank account by Child Support Services. Why? Well…when my husband walked away from his good paying job his automatic child support payments stopped and in the month between when he left his job and we actually started receiving payment from the new business they decided to just take the money. (Side note here…we have paid child support every two weeks for years.) Who knew they could arbitrarily just do that? WE DIDN’T! Then we discovered that the clients for this long established business were used to paying whenever they wanted. We could never count on money coming in from them on a regular basis. That is not a way to operate a business let alone support a family.

Then we discovered that in the other company (my business), our third partner was embezelling money, had completely screwed up the accounting books, racked up $133,000.00 in credit card debt and penalty fees with several government agencies for not submitting reports and payments on time. We terminated her as a partner but as of January last year I have been unable to take any kind of pay from the company even though I need to work it full time just to pay it’s debts.

So with last year’s economic crisis I decided I should take a serious look at our income vs. expense ratio and how best to fix it.  In other words, I wanted to figure out how to get rid of some of our debt. Overnight we went from a two income household to a single income household and the financial repercussions were, to say the least, devestating. We lost our car because we couldn’t amke the payments. We lost out home and had to live with family for almost two months because we couldn’t pay rent. We got behind on all of our bills and most things had gone to collections.

What I discovered by reading several books on the subject of getting out of debt was that we got ourselves into this financial mess and no amount of wishful thinking or prayers for quick fixes was going  to get us out of it. I guess this is where the secret hope that we would win the lottery needed to face the light of day and die a quick death so we could focus on the reality of our situation.

Did you know that according to several sources I read that it takes the average american two years to get themselves out of debt? Now, that isn’t two years of inaction. That is two years of hard work and diligence. That is getting rid of all the excesses in your spending. I mean do you really need those Starbuck’s latte’s? Then you have to create a payment plan to pay off all your debt. The most recommended way of doing this is by listing all your bills, total owed, minimum payments, how many months to pay it off etc. Then prioritize them by the fastest ones to pay off to the longest. Take all the minimum payments and add them into your budget. Of course one would think it would go without saying that you have to stop spending on credit cards, lines of credit etc. but not everyone realizes they actually have to start living without those fast track to debt options.Worse yet, not everyone thinks they can.

We had no other option then to face the bleakness of our finances. So here we are a year later taking a look at how much further we need to go but proud of how far we have come. My husband’s business has supported us for a year even with losing our car and house.  We have often had to humble ourselves and “fall on our swords” begging for our vendors and debtors to work with less than minimum payments just to get by. We’ve cut excess things out of our budget. We moved into a smaller house for less rent and cheaper utilities. We are sharing a car until we can save up enough money to buy a second car cash and believe me it isn’t going to be fancy.

We eat at home (with the rare exception) and we look at every penny that comes in and goes out making sure we are adhering to our financial plan. That being said, we have managed to buy a new television and a new washing machine and things are starting to feel like we have a handle on them financially. I don’t think we are even close to being out of debt anytime soon but at least I can see progress from the disaster our life has been. I think we are going to be okayas long as we remember that there is no such thing as a quick fix and that we got ourselves intothis mess so we can get ourselves out of it too.

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