What to Do While You Wait for Things to Return to Normal

Life on earth has never been perfect, but you’d have a hard time convincing some people of that. It’s not that they are ignorant. They have selective memories.

27900691_m

Perhaps you can identify if you long for the way things used to be—when jobs were plentiful, mortgages were simple, retirement accounts moved in only one direction (up) and students could carry their 100-percent-financed college degrees straight into six-figure jobs.

Now that it appears things are no longer quite so perfect, you’ve put your life on hold. You’re anxiously pacing the floor trying to hold on until the stock market rebounds, real estate sales bounce back, your loan modification comes through or some TV advertiser offers a debt-settlement scheme that returns your life to the “perfect” way it was.

Can we talk?

Stop looking back. “Normal” may be a setting on your clothes dryer, but it is not an economic condition. Every moment that you mourn the passing of the way things were, is a moment lost in the present. Concentrate on where you are and plan for how you will face the future.

We’ve Become a Nation of Softies

Compared to my grandmother, I’m a lazy bum. Instead of hiring others to do domestic services for them, she and my grandfather focused more on how much money they could sock away for emergencies and for their “old age.”

071015image

Both lived to be nearly 100. They never applied for Medicaid or government assistance* or needed a handout or financial aid. They lived in their own home (purchased with cash) until they died. They never had a car loan, but always drove a nice car.

Grandma dressed like a million bucks. She could knit and quilt, cook, bake, clean, decorate and entertain. She could as easily sew a winter coat as a new throw pillow for the sofa.

She was an elegant, wonderful lady with an eye for beauty. She single-handedly landscaped their backyard in Spokane, Wash., planting trees, digging flower beds, installing borders and flowers that turned a gravel pit into a botanical garden. She never owned a pair of pants, doing everything in what she called a “house dress,” complete with stockings and jewelry. What a lady.

Want What You Have, Buy What You Need

Years ago, I read in The New York Times that according to Yankelvich Research, the average American adult is the target of some 3,500 commercial ads in a single day. How outrageous is that? Sure, we live in a highly commercialized society but 3,500 ads? In a single day? I figured that had to be a gross exaggeration.

071315image

I decided to conduct my own test. I would count the ads I heard or saw in my typical day. I knew it wouldn’t come anywhere close to 3,500.

The next morning the radio alarm sounded and before I could even open my eyes, I needed to put two hash marks on my score pad. So prolific were the ads on television I could barely keep an accurate count and get ready for the day at the same time.

Of course I had to count every message, banner, business placard, real estate sign, billboard, license plate frame, bumper sticker, commercial vehicle and bus I saw on the way to work all the while being careful not to miss any radio ads. Good thing I wasn’t driving.

Reading the newspaper boosted my count significantly as did flipping through a few magazines. Have you ever counted the ads in a typical magazine? Try it sometime.

My Secret Financial Security Blanket

If I had a dollar for every stupid purchase I’ve made in my life, I’d be a wealthy woman. My financial faux pas have been remarkable in both quantity and quality. I’ve made some real doozies.

070815image

Take the above-ground swimming pool. Its a la carte price was bad enough. Adding everything required but not included took it past barely reasonable to absolutely ridiculous.

First, there was the heater and filter. Then a cover, chemicals and test kit. Of course we needed search and rescue equipment (this was one monstrosity of a pool) and a few necessary pool toys. Oh, and let’s not forget the cost of eventually getting rid of the albatross. Let me put it this way: There is not a lively secondary market for this kind of thing.

If I’d had the courage to consider the consequences of such a major purchase first—before making the decision to buy, I am quite certain we could have avoided that  five-year industrial-strength headache and saved one huge pile of dough.

Improve Your Life: Join a Group

Every night my friend Mary Ann does the unthinkable. She sets her alarm for 4:30 a.m. because every morning she gets up and walks three miles while the rest of the world sleeps.

070115

photo credit: Nebraska Medicine

How has Mary Ann managed to stick with this early morning fitness routine for so many years years? Simple. She knows that someone is waiting for her. Two people have made a commitment to one another to show up.

The secret of Mary Ann’s success is that she chooses to be accountable, not only to herself but to another person who shares her desire to become physically fit.

And how is this working out? Extremely well, she reports. The faster she and her buddy walk the louder they talk. And laugh. They even argue from time to time. They share their lives and brainstorm their dreams. They get so involved they don’t notice the miles clicking away. The deep friendship that has resulted from this daily event not only makes the task possible, it makes it enjoyable.

Rick Warren, pastor of Saddleback Church, Lake Forest, Calif., says the way to get involved in the behemoth-sized church is to get plugged-in to a small group made up of people whose life situations match their own.

Tough Times Don’t Last, Tough People Do

Financial discouragement plagues all of us from time to time. If you’re discouraged about your situation today, there are some things you can do to counter those feeling and attitudes. The most important is to know this will not last forever.

33647577_l

Let’s say your neighbor just came home with a brand new sport utility vehicle. You are overwhelmed by feelings of desire and envy. There was a time that you would begin immediately to find a way to get a new car, too. But things are different now. You have a new set of values. You no longer make financial decisions impulsively.

The car you have already is paid for and meets your family’s current needs. But still those feelings are bubbling up. Just as soon as you recognize them, start erasing! Replace those destructive attitudes with thoughts of your Freedom Account and the way you are committed to the cash-purchase of your next vehicle; think about not making huge monthly payments, not paying triple insurance premiums, not paying $400 for the annual registration fee, not forking over $600 for that 50,000 mile tune-up.

6 Ways Money CAN Buy Happiness

I believe it’s true that money cannot buy happiness. Think about all the miserable people you’ve read about—celebrities, professional athletes, perhaps friends or family who just happen to also be the rich. If money could buy happiness, wouldn’t they be the happiest people on earth?

While money can’t buy happiness, it can buy and do things for us that can make us happy.

34401485_m

Recently, I read a fascinating book, The Myths of Happiness: What Should Make You Happy, but Doesn’t, What Shouldn’t Make You Happy, but Does, by Sonja Lyubomirsky.

This book is a heavy-duty read, as one might expect from a psychology book. I found it to be thought-provoking. The author offers specific ways we can use our money to further our personal enjoyment and happiness.

Spend money on small pleasures. Small things like a good cup of coffee, a new DVD or a picnic can result in small boosts of happiness that accumulate to produce a large impact of longer-lasting happiness.

Spend money on fundamental feelings. When you spend your money on satisfying pursuits rather that stuff to impress others, the result is happiness without the addiction-like desire for more and more.

Spend money on others, not yourself. When we invest in others rather than ourselves, the result is a lasting sense of happiness.

Spend money to open up more free time. Spending money for a housecleaner, for example, frees up your time to do things you truly love.

Spend now but wait to enjoy it. There is something to be said for anticipation and delayed gratification. Together they can create happiness.

Spend money on experiences rather than possessions. The experiences don’t have to be a Caribbean cruise or European vacation. Family Game night can bring the kind of happiness that does not quickly fade the way a new pair of shoes might.

While this book offers an exhaustive study on what makes us happy (the author weaves extensive scientific research—more than 700 journal articles), it’s an easy read. And I came away from it with two things: 1) A clear-eyed vision together with practical tools and steps for how to build the healthiest, most satisfying life, and 2) A clear affirmation that despite everything, happiness really is a matter of choice.

The Most Critical Six Months in a College Grad’s Life

Graduating from college is one of life’s most thrilling events. Finishing my degree, walking the aisle and receiving a fancy document in a leather-bound case remains one of the high points of my life.

A diverse group of young adult graduates

Leaving college life behind, I was ready to live life to the fullest, whatever that meant. I was so over living under campus rules, grueling classwork, never-ending papers, mid-terms and finals. I was ready begin life in the real world.

Unfortunately, I still had a lot to learn about managing finances. I knew nothing and worse, wasn’t aware that I knew nothing. What was there to know, anyway?

Sadly, I am not alone. Today’s graduates are smart but generally financially ignorant. For college graduates gearing up to enter the real world, I offer the following for starting off on the right financial foot.

The decisions and choices you make in the first six months after graduation have the power to set the course of your life, for good or bad.

Of course, you’ve been a poor starving student long enough. You deserve a new car. And certainly you need a better apartment. And some decent clothes. Oh, and who could possibly deny you a European vacation to celebrate this amazing achievement? Followed by a couple of weeks’ vacation to rest and relax. You’ve been through so much.

You reason: Things are looking good in the employment department, you’re only young once, it makes sense to do this now before you’re tied down with a job, a home and kids. I could go on, but I’ll stop. And you should too. Stop thinking like that!

Taking on a car loan, the obligation of a lease on an apartment or condo, climbing credit-card balances—all of that may seem innocuous, given the great job you plan to land somewhere, somehow. And that will backfire on you. Instead of launching you into the real world, it will send you into a downward spiral that collides with unpaid student debt, negatively impacting your life for many years to come.

STOP, DROP AND ROLL. You learned it in elementary school for fire drills. Now apply it to your financial life. If anyone offers you a contract to sign—for a car, an apartment, a credit card or other legal obligation—Stop! Drop the pen and then roll out of there fast.

KEEP DRIVING YOUR CLUNKER. Yes, it’s embarrassing. That car you had to drive while in college is a pile of junk. It’s just not you! And those are exactly the kind of thoughts you need to get rid of. First, you are not what you drive. Your car is simply a means to get from here to there. Keep it. Love it. Be grateful.

MOVE HOME.  Whatever it takes, do not create any new debt during these critical six months, and possibly much longer. If that means moving back with home for a while, do it.

TAKE A JOB, ANY JOB.  You need cash flow, so take the first job you can get. Then keep looking. Perhaps you’ve heard the term “stepping-stone?” There is nothing wrong with this. Keep your eye on the goal and get to work reaching it. Stop whining and feeling sorry for yourself.

MAKE PAYMENTS. You need to immediately begin paying back your student loans, whether a little or a lot. Do not luxuriate in the six-month grace period. That is not some kind of gift. Interest is accruing every day (unless you have subsidized loans, which almost no one has these days). That means every day your debt is growing because the interest you owe—but are not paying—is being added to your principal balance. Next month you will pay interest on that interest, too. Ever heard the word “compounding”? Bingo. My best advice is to create a payment plan to do it in five years or less. Then just do it. Get it done!

AUTO SAVE. Even though in debt, you need to save money. You cannot continue to live on credit. I am a big fan of any kind of auto pay or auto save. When you set this up, you eliminate the need to make a decision every payday. “Should I save money this week or go to a movie?” “Should I save this week or get those really cute shoes that are finally on sale?!” If you have to make that same decision over and over, pretty soon you won’t. You’ll get lazy, you’ll stop saving and just keep spending.

But if you are auto-saving even $25 a week, you’ve eliminated that irritating decision. You’re on autopilot and that’s a nice way to roll.

Soon, you won’t miss the money. It will be out of sight, out of mind. I cannot stress just how important this is. If you master this concept and turn it into a lifelong habit, you will be thousands of miles (and dollars) ahead of your peers.

Finally, please accept my heartfelt congratulations on a job well done. You made it—not to the finish line but to the starting gate!