How to Pay Your Bills Without A Paycheck

The most important thing you can do to make your personal economy strong is to have an umbrella—a Contingency Fund, with at least enough money to pay all of your bills without a paycheck, for three to six months.

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Call it $10,000. Weekly, try to save 10 percent of your paycheck. It may sound like a lot, so if you can’t do 10, start with 5 percent or even 1 percent and build up.

Deposit the money automatically into your Contingency Fund; you won’t miss what you don’t see in the first place. Okay, you’ll miss it for the first few months, but soon you really will not miss it.

Until you have a fully-funded Contingency Fund, approach this with scorched-earth determination. No spending on anything that is not necessary or legally obligating until you reach goal.

How to Live the Life You Love on Your Current Income

I’ll never forget the time I asked one of my young piano students what he wanted for Christmas. It was a generic question, a pleasantry. I wasn’t looking for make, model, and serial number, but that’s what I got. He whipped out a 60-page list from his book bag. I gulped, checked to see if this child was serious (he was), and quickly proceeded with his music lesson.

Somehow I think that most of us have a bit of that kid in us. We want it all. And every bank and credit card company out there is affirming the notion and willing to make it happen.

In time, however, we reach the maximum level of satisfaction. And the more we attempt to increase that level, the more difficult it becomes to retain a sense of fulfillment. More becomes less as our feelings of satisfaction diminish.

By the looks of some of our closets and garages, we’ve been doing a pretty good job of trying to get it all. But how much of it satisfies? What portion of what we have is actually contributing to the quality of our lives?

Steps to Take When Your Identity is Stolen

While it’s not something most of us choose to think about, the truth is that identity theft remains the fastest growing crime in America. The number of identity theft incidents has reached 9.9 million a year, according to the Federal Trade Commission.

Every minute about 19 people fall victim to identity theft. It takes the average victim an estimated $500 and 30 hours to resolve each identity theft crime.

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Basically, there are two ways we can respond to the matter of identity theft: 1) Self-protect by moving into action the minute a compromise is detected to keep the damage to a bare minimum or 2) Purchase identity theft protection that detects fraudulent applications and activity to stop it in its tracks before it can create damage.

For many years, I have opted for identity theft protection with LifeLock, which has proven for my family to be more than worth the price.

While identity theft protection is quite reasonable given how effective it is—not to mention the  peace of mind it offers, not every household can justify the cost. In that case, it’s important that you know exactly what to do so you can move into action the moment you have even an inkling that your identity—or that of your spouse or minor children—has been compromised.

Living Below Your Means is the Only Way to Live

Being thought of as cheap was to me the ultimate insult. I equated frugality with digging through dumpsters in search of food and who-knows-what-else.

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To me cheap people skipped out without leaving a tip. They were slovenly in appearance, lacking dignity and self respect. Cheap people were just plain tacky. I couldn’t bear the thought of living that way and to make sure I would never be mistaken for someone who did, I charged my way through life, bent on proving to the world (and more likely to myself) that I was not cheap.

I accepted the offers of freedom that credit-card companies offered to me. It was so simple. I could have a $200 outfit and pay only $10 a month. I could fix up the house, treat the kids, have new clothes, drive nice cars—just about anything I could think of. And it worked for awhile.

I know you’re way ahead of me. You know what happened. By the time I came to my senses I wasn’t experiencing freedom at all. It was all a lie. I sold myself into bondage one dollar at a time. 

The Fine Art of the Effective Complaint

Are you ever frustrated with customer service? Have you been ripped off, taken to the cleaners, hung out to dry by a store or service provider? To claim the title of savvy consumer you need know-how and confidence to make sure that no matter what, no one ever gets your hard-earned money without your permission. It’s all about the fine art of complaining.

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START EASY. Make at least one good-faith attempt to reach a resolution for your problem at the customer service level. Don’t threaten, simply state your case and the resolution you expect. Take notes, keep a paper trail that includes the names of the people you speak with, their titles and phone numbers.

BE NICE. No matter your method of communication, do not make threats or use foul language. Wait until your anger subsides. Stay calm, keep it professional.

WRITE TO THE TOP. If you cannot reasonably resolve the issue, head straight to the top. Find the name and address of the highest level person in the company—the president or CEO. Don’t waste your time working up the ladder.

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.

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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.”

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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.

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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.