Financial Freak Show

I don’t really buy into the idea that where you are is where you’ll stay (if that’s the case I’m in serious trouble!) I believe you can change your lot, at least in this country. I also believe you make your own bed – if you like it or not. I don’t believe in consoling people financially and telling them “it’ll be okay….everything will be fine” when they are wallowing in their own mess and everything really won’t be okay. I think sometimes a tough approach is what’s needed.

Consoling people often will only prolong the discomfort but blunt honesty, no matter how uncomfortable, is more likely to get results. With that said I do feel compassion has a place in personal finance but only to the extent that one is not enabling or encouraging non-productive behaviors. I think the most productive approach is to help a person by giving them the tools they need to change themselves not fix it for them. If a person does not learn from his mistakes (or the mistakes of others) he will likely repeat the same mistakes until he does learn, again only prolonging the pain.

So here is what I do when faced with a question about someones misbehavior….I do my best to answer honestly, I don’t pull the punches, I answer the questions I’ve been presented and let the chips fall where they may. I realized sometime ago the only person that could fix me is me. So I don’t try to fix others (that’s their own miserable job) instead I work on my own issues and encourage others to do what they need to do to help themselves. 

Spend your energy truly helping others to help themselves and real progress can be made, handing a drink to a drunk, sugar coating your advice, telling them things will work themselves out and you’re, many times, only prolonging the pain of lessons they must learn for themselves.

Remember….“Build a man a fire, and he’s warm for a day. Light a man on fire and he’s warm for the rest of his life.”  -author unknown

Has a tough honest approach in your past had a positive outcome? Did it change the way you or someone you know was misbehaving?

To clean up our financial mess the first big step I took was to come together with my wife and get on the same page regarding our money (now doesn’t that sound like a fun discussion?)  From my experience this is often one of the hardest steps to actually accomplish for most couples. In many cases one person takes on the responsibility of the household finances for one reason or another and the other person is sort of along for the ride. Maybe one person likes to be in control, maybe one person doesn’t want the responsibility or the stress, maybe one thinks they’re smarter, or maybe one’s a nerd and gets off on this stuff, or maybe it was never even talked about previously and this is just the way chips hit the table. Either way unless you’re on the same page with your spouse it’s likely your household finances will not be in good order over the long term. Remember the preacher-man said “and now you are one” remember that line? Note what the preacher-man didn’t say…. “and now you are one except for the money part only one of you will need to pay the bills and carry the stress of the finances until death do you part”  (In other words you take care of it until one of you kills the other!)

Merge your money or separate the accounts – His money & Her money. This takes place, when for one reason or another, when a couple operates their finances separately from each other. In many of the cases where I’ve seen this I’ve noticed it is usually due to one of the people not wanting to bare themselves financially to the other person. They keep their money almost a secret from the other person. According to a USA Today article the FPA’s survey of financial planners nearly 55% of couples hide financial assets from one another. Hmm, I wonder what other secrets they might be keeping. (more…)

I’ve talked to many people that have well above average incomes but are not able to live a peaceful life at a level that co-insides with their income level and in many cases they are almost broke! FYI, according to the US Census Bureau, the US household median income in 2006 was $48,201.00. While talking with these people I realize in most cases thier financial situation is completely their fault! I know some will think that’s a bit harsh and uncalled for but stay with me here for a minute. Trust me I know “life happens” and sometimes it kicks the hell out of you and sometimes we can’t do much about it. I get that, I really do. People do get sick, people do lose jobs, marriages do implode, people do wreck cars coming home from parties, and yes a Peruvian stripper can steal your wallet when you’re not looking! In most though cases it really comes down to how you live your life both before and after these challenges arise. It usually comes down to you.  This brings me to a very powerful 100-something year old quote I found some time ago while reading:

Did you ever observe to whom the accidents happen? Chance favors only the prepared mind     -Louis Pasteur (1822-1895)

Maybe you didn’t make yourself invaluable in the workplace, maybe you failed to give your relationship the attention it needed, maybe you could have paid down debts to eliminate risk, maybe you could have cared better for your health, maybe you could have given a bigger tip to your stripper friend, and maybe you could have worked harder to build a solid financial foundation to plant your family on top of so when it rains (and it will rain) you’re still on a solid footing. Maybe you had a part in what happened.

After reading the quote above I realized there are certain people around me that seem to have crazy things happen to them almost every day. They seem to live life running from one fire to another. Does this remind you of someone you know, maybe even yourself? These people are usually easy to spot since they start most conversations with “you’ll never believe what happened to me”.  I think if you were to write down every retarded thing that’s happened them in the last 6 months you would likely find a common  denominator…THEM! It’s them…it’s how they live their lives. They have no focus, no self accountability, no self control, no drive and no discipline to change. Many poeple though do have the ability to recognize their positions and fight like hell until they either change it or die from it.

Lets take a minute and try an exercise, take a friend’s crazy life and write down all the nutty things that have happened “to” them in the last six months. Now have a good laugh at their expense, don’t tell them you did this though – it’s bad form! Then the next time they say “you won’t believe what happened to me yesterday” extend a bit of grace and maybe a little advice because we all know we’ve all been there. Now get off your lazy butt and do the same thing for your life. Make a list of your recent crazy happenings. Then make a list of what you’re going to do about it (note the only person who fix something about it is you….not your mommy, not your boss, and especially not the government!) Unlike many people who refuse to take responsibility for their lives, be a FinancialFreak and take control of your situation and work like hell to fix it!

Another great quote from Louis Pasteur sums it up pretty well:

When you work seven days a week, fourteen hours a day, you get lucky.

 Comment and tell me and the other readers what you’re going to do about this starting today. (A little accountability never hurt anyone right?)

When faced with the issue of my personal debts there was really only one way to fix the problem (I’ll put this in bold so nobody misses it). Pay it down then pay it off! We had to spend less money than were was making and pay as much as we could towards the debts. That’s it, it was really that simple, there were no shortcuts here. We’ll there was one other option….don’t do anything at all and let the bankruptcy courts wipe a majority of the debts away, but we didn’t really like that option. Those who stare their challenges in the face have the chance to overcome and win and those who refuse to face, or even worse avoid them altogether, will often continue to struggle until they are forced to face them. In our case we were forced to face it because it was beginning to put up a fight against us (and every month it was getting closer to defeating us). Well we could have ignored it a bit longer but I knew deep down inside the only place that would ultimately lead me was to a life of financial mediocracy. So in my case it was either face it now or face it forever.

Just about everybody I know has faced the issue of debt at some point. There are countless reasons this issue could be brought to the top of someone’s “Crap you should really clean up in your life” list(s). Some of the common causes of this are a job loss, an illness, divorce, or just plain dumb money habits. Some of these are major changes in their financial situation many consider outside of their control. In my case it was all brought to my attention through a publicly humiliating moment involving my new Cadillac and a nearly empty tank of gas in the middle of the night somewhere in Oregon.

No matter how the issue is brought to your attention the first step is always pretty much the same. You must identify the root cause of the problem. In my case I had been spending more money than I had been bringing in. It was really that simple and there was no room for excuses here; this was all my fault and now it was all my responsibility to myself and to my family to clean up the mess.  Step one was now complete I found the cause of the pain – and once again it was me! Once you’ve identified the problem you need to determine where you stand. This step is pretty easy as well. When dealing with money and numbers everything is factual and absolute – the numbers only lie if you allow them to lie. So here is your chance to be a FinancialFreak and stare into face of what many refuse to. Write down how much you owe and who you owe it to – every damn penny! No shortcuts here.  Now add it all up – this part sucks. Now you know where you stand. Are you disgusted with yourself? I know I was the night I finally sat down and took that step. Now that you know where you stand you can devise a plan to properly address the issue and remember “How you do anything is how you do everything” So don’t try any shortcuts here, just stare it in the face and start fighting to resolve the issue. 

What shortcuts have you taken in the past? How did that work for you? Did you learn any lessons? Please feel free to share so that others may avoid the same fate and/or embarrassment!

I now this has little to do with personal finance but it caught my attention and reminded me that we all can make mistakes. This story reminded me that no matter how bad you screw up somebody else has already 1-uped you.

 Thank you James Earl Ray for keeping the dream alive

This was the quote engraved on a plaque to be presented to actor James Earl Jones honoring famous black Americans and was to be presented to the actor at a ceremony held on Martin Luther King Junior Day in 2002.

 FYI…James Earl Ray was accused of the 1968 assassination Dr. Martin Luther King, Jr.

 Think anybody lost their job over that? Can you top that one?