Budgeting Confession

By Leave a Comment
Feb 6 9
Budget help, how to budget

I have a confession to make…

I have been holding a deep, dark secret from you…Budget help, how to budget

I’m sorry…

Here it goes…

My wife and I have not done a budget for two months. TWO MONTHS!

This is hard for me to admit. (I sort-of do this kind of thing for a living)

The holidays “stole” our time, then the new year stole some more of our time. You know how it goes, life happens and suddenly you are behind on the important stuff.

We have fallen off the horse and need to get back on.

My wife and I did a budget each and every month for two years straight. Doing this allowed us to develop strong financial habits and make amazing financial progress. Doing a budget each month is one of the reasons our marriage is so strong. The level of communication, decision-making skills, and cooperation required to complete a budget every month for two years did wonders for us.

We have fallen off the horse and need to get back on.

My wife and I are going to do a budget for Feb this coming Sunday, even though it will be ten days late.

I believe that success is more about getting back on the horse often and quickly and less about not falling off the horse in the first place. If you never fall off the horse, you probably aren’t riding hard enough or fast enough to get anything worth while done. If you fall off the horse and take your time getting back on, you lose momentum and enthusiasm. Some people think that falling off is a sign of failure, I believe it is actually a sign of progress. If you aren’t on the horse making progress, there is no reason for you to fall off.

How about you? How are you doing?

Have you fallen of the budgeting horse? Do you think falling off is a sign of failure or an opportunity to show the world what you are really made of?

Let us know how you are doing. What struggles and challenges are you facing right now? How do you get back on the horse often and quickly?

-Derek C. Olsen

 

Can I afford to date you?

By Leave a Comment
Dec 13 0
Watching the sunset is free.

That was a question I recently got asked by a coaching client of mine…

…”Can I afford to date you?”

Well, he wasn’t asking me out, he was asking me if he could afford to date, anyone. (Specifically a girl that he has his eye on.)

I loved that he asked. The fact that he even thought to ask told me that he is being responsible. Being an optimist, I said “Yes, walks are free and watching the sunset is also free.”

Watching the sunset is free.

You see, my client was in some pretty deep debt and was just barely making it by each month. (Perhaps I should mention how much better he is doing after meeting with me a few times.)

I could relate.

His question reminded me of a period of time when I was dating my future wife. We were falling in love – fast. And the money was going fast too. I remember checking my bank account one day. It was getting low. I thought to myself there was no way that I would be able to keep spending so much money on all of our dates.

I had to say something to her.

Talk about an awkward conversation. I avoided eye contact with her and through a sheepish grin said something about money getting low and not going out so much anymore. She (Carrie, my now wife) was fine with everything and hardly said a word about it. Bringing this up with her was embarrassing for me, but I didn’t have many options. I knew I was spending more than I wanted and needed to.

What’s more, had she insisted that I deplete my bank account so that we could eat out in the hip part of town every night, that would likely mean that she would expect extravagance – at the expense of our wellbeing – once we got married as well.

What about you?

I imagine that lots of guys and girls over spend while taking someone out for a night on the town. Have you ever had an awkward conversation about money while dating someone? Have you ever stretched yourself too far financially while dating?

What about him?

What advice do you have for my client? How would you answer his question?

…”Can I afford to date you?”

On Tour

By Leave a Comment
Nov 26 2
Four Week Financial Turnaround Book Tour, Derek C. Olsen

I am on tour, kind of.

In support of my new book, in pursuit of a little fun, and to spread the word about a better way to manage your hard-earned money. Meet up with me and my new book at one or two of the tour stops. I might be giving away a few free copies along the way.

-Derek

Virtual Book Tour Stops:

Monday, Nov 26th

Tuesday, Nov 27th

Wednesday, Nov 28th

Thursday, Nov 29th
Friday, Nov 30th

Learn more about the book and purchase your copy today.

The road goes on forever…

Would you like to be a stop on the second leg of my book tour in January 2013? Contact me: Derek aT BeatnikBudget DOT com

Hey man, what’s your problem?

By Leave a Comment
Oct 17 7
How to solve a problem

You are here, you want to be there. This is your problem opportunity.

I am an optimist. I love the fact that there is always room for improvement. I believe that fact says more about how great tomorrow could be and less about how bad today is.

A chance to improve my situation is always a welcomed ‘problem’. If I ever reach a spot in life where I am totally satisfied, that would kind of suck. Don’t get me wrong, I LOVE everything about my life and I AM totally satisfied. But moving forward to new, different, and better places is what I consider the fun part of life. There is always something to look forward to and to reach for. It’s good to have ‘problems,’ they keep us moving, they remind us that it could be better.

Would you agree that there is always room for improvement?

The following thought-flow is a great road map for moving forward:

  1. How you define the problem affects how you think about it.
  2. How you think about the problem will determine how you act on it.
  3. How you act on it will determine the results.
  4. The results will determine your level of success.

The answer to your problem lies in the space between here and there. And that, my friends, is my definition of opportunity.

How to solve a problem

Define the problem: Are you defining the problem in negative terms of what is. Or do you define the problem as a potential for positive possibilities? Are you focusing on what is or on what could be? For Example: “I am living paycheck to paycheck, I hate it and there is nothing I can do about it.” Defining the problem this way will get you no closer to finding an answer. Try this, “I want to improve my situation and I believe that there is a way.” The first definition doesn’t even consider the possibility for change. The second definition not only finds the exit, but opens the door to new possibilities.
Think about the problem: Do you think that there is a solution? Are you able to carry out the necessary steps? Are you thinking about the problem in terms of the current unwanted results or in terms of making changes that will work? For Example: “I am struggling and have no idea why, I will probably always struggle. I have tried before and failed, there is nothing I can do.” (Again, no closer to a solution) Try this, “I have to make some changes, changes that I am fully capable of making. Changes that will move me closer to the results I want. I know there is a solution that will work and I will find it.” The first thought leaves no possibility of success. The second thought rightly concludes that there is an answer that can be found and fulfilled.
Act on the problem: You know what the problem is and you have thought about solutions. How you define and think about the problem will determine your actions. If you think the problem is un-solvable, your actions will support this theory. You will continue on as is and find yourself in the same spot next year. If you think there is a solution that you can carry out, you will act on it and be successful. Either way, you are now acting. Acting, either by staying still and repeating what isn’t working, or by taking new steps in the right direction.

Results: Taking action is the only way to get results. Don’t stop when you find the solution, you must act on it. You must carry out all the steps or the solution is nothing but a theory. The quality of your actions will now determine the quality of your results. Results are chosen not given. 100% of the time we choose our results with the efforts we choose to put into our actions.

How to solve a problem. Derek C Olsen

You will find the solution, if you are looking for it.

Effort in = Results out. 100% of the time. Don’t like your results? Change your efforts.

Whatever you look for, you will find. You sort of create it.
Are you looking for ways that won’t work? You will find them.
Are you looking for ways that will work? You will find them.
How can you find both? Because they are both there, they are both options. You chose by finding what you are looking for.
Everything is possible, every possible outcome is available for you to choose.
Choose wisely. -Derek

Leave an example of how you made changes to get to a better place.

How to get your spouse involved with the monthly budget, money management, and personal finance.

By Leave a Comment
Oct 3 4
Monthly Budget Date!

Money issues cause too much unnecessary strife between couples. Relationships are hard enough without money issues. Add something as powerful and systemic as money to an already challenging situation and presto! you have all the ingredients needed for struggle. Sprinkle an unmotivated partner on top and you will be left with a bitter taste in your mouth. How exactly can you get an unmotivated partner excited about managing your money together.

When it’s just you.

When you take care of all the money management chores on your own, you end up feeling alone and frustrated. Your partner might appear like they don’t care, what other conclusion can you come to? When you believe your partner doesn’t care about your financial success as a couple, you might end up resenting your partner. Not good, not fun. Maybe it’s not that your partner doesn’t care, but they aren’t as involved as you would like for them to be. Maybe they don’t even realize how it looks to you and how it makes you feel. Either way, you are frustrated. You can do something about it.

It doesn’t have to be 50/50. But you both must care. Both partners must prove that they care with action. Both partners should be involved.

Before we talk about how to get your partner motivated, lets prepare for that conversation with a few reasons to budget together. Why? Because these reasons might come in handy if and when the two of you have this conversation.

Reasons to make money decisions together:

  • Communication: Money management requires lots of talking together and decision-making. Budgeting together is like communication boot camp. If you have communication issues, making money decisions together is a great way to work those issues out. You might avoid money talks because you think those talks create communication issues. NOT TRUE. Those issues were already there and they don’t go away by ignoring them. And they aren’t created by putting the spotlight on them. The money conversation was just where they decided to pop up and say, “Hi, I was here all along, thanks for noticing and taking care of me.” Learn how to communicate well about money and it will help communication in other areas of life – guaranteed! Good communication skills are highly transferable to other areas of life and marriage. Imagine how much easier it will be to pick out what movie to watch on Friday night. Communicating well about money will also help avoid other issues that could grow from a money-based theme.
  • Success: Your financial success as a couple depends on working together as a team. Imagine a baseball team that had a pitcher and catcher that don’t communicate. That kind of team work won’t win many games. Teamwork also includes taking advantage of your strengths and weaknesses. Imagine the pitcher and catcher switching positions. If one of you is better at the math and details of the monthly budget and the other is better at casting the long-term vision and direction for your family, good! Play your positions. If you have different strengths, even better. Recognize your differences and take advantage.
  • Quality of life: Stay on top of your money and you will all but eliminate stress, worry, fear, anxiety, and fights. You might still disagree and have opposing opinions and that is OK. Practice good communication that leads to more financial success, and that will take the place of the money fights. When you take control and make good decisions together, your overall quality of life will increase tremendously. There is no good reason to worry about money. Take control and make the changes necessary to eliminate the causes of fear and worry. You might dig in and realize it’s not as bad as you thought. Or, it is bad but now you know what needs to change and you can start going about making those changes.

How to get your partner more involved:

  • Tell your partner you value his/her opinion: Your partner might not realize that you want their involvement. From their point of view it might appear that you are taking care of it, don’t need or want their help, don’t care about their opinion and are happy to do the budget on your own. Simply telling your partner that you value their opinion could be enough to get their involvement. We all want to feel important, valued, wanted and needed. Especially when it comes to our thoughts and opinions. Tell your partner that you need their help and that you think their involvement is the missing secret ingredient for success. Make it known that their involvement is crucial.
  • Tell your partner how much thriving financially matters to you: Tell your partner that having their involvement is a key ingredient for producing financial success. Trust that your partner values your thoughts and opinions too. When your partner realizes how much it matters to you, they will involved.
  • Ask why: Do you know why your partner isn’t involved? And if you do, have you tried working it out? Ask why your partner isn’t involved or motivated. You might both have assumptions and expectations that the other partners is completely unaware of. Asking this simple question without a hint of accusation can easily results in more involvement from both partners. You will feel a lot better after asking this question.
  • Ask what: Ask what needs to change in order to get everyone more involved and motivated. Perhaps your partner wants to use a particular kind of software to manage the money. Maybe they like using an annual averaging budget instead of a month to month budget that changes so much. There are lots of things that could keep someone uninterested in participating and some of them could have an incredibly easy fix. Maybe your partner prefers to budget on Saturdays when s/he is more relaxed rather than on Mondays.
  • Ask when: Agreeing on a time to do the budget together will help. Saturday at 5 PM. Each partner should put this event on their calendar and plan on showing up ready to work together. Less than an hour a month is not too much to ask. Putting it down on the calendar will help make the event happen. Putting it down on a calendar makes it more official and gives doing a budget a more important feel. Getting it down on a calendar makes it more difficult to blow off.
  • Make it fun: Budgeting has a boring and sometimes negative reputation. This is a misconception! Don’t buy into the myth that budgeting is awful and can only end in a fight. It’s just not true. Make budgeting fun. Seriously, make it an event that you look forward to. A household budget should take less than an hour to complete, once a month. Make it fun. Give yourselves a fun reward after the budget meeting like a nice dinner, a glass of wine, or a movie. Have a fun date night scheduled for the same evening that you do your budget. Do the budget and then hit the town to celebrate. You will associate doing your budget with the fun reward that you plan for afterwards. Keep in mind and even talk about what doing a budget means for you as a family. The work you do on the budget will result in increased communication and happiness as a family, financial success, and an increased quality of life. So, even if you aren’t jazzed about math, spreadsheets, and calculators, keeping the results in mind will help you both get through it.
Monthly Budget Date with my wife! See how much fun it can be?
Monthly Budget Date with my wife! See how much fun it can be?

 

My wife and I do pretty well in this area, go figure, this is kind of my hobby. But it is NOT always smooth sailing. We have different opinions and wants and needs too. I can’t imagine how we would get by without communicating and working together as much as we do. And it still feels like it’s not enough sometimes. It would be a totally different story if one or both of us weren’t as motivated and involved as we are.Good luck!  And remember to fight together, not each other.

What has worked for you? What tips do you have for us?

-Derek

p.s. The Four Week Financial Turnaround Workbook is a great tool for starting (and finishing) the money talk. Use the book as a conversation starter. You and your partner will be on the same page and working together in no time.

Would you pay interest on a corn dog?

By Leave a Comment
Sep 19 3
corn dog

“Some Oklahomans Take Out High-Interest Loans To Go To State Fair”

That is the headline for the story.  Dare I go any further?  You really can’t help it, can you?  You just have to check this story out to see what is going on.

WATCH THE NEWS STORY VIDEO HERE:  Would you pay interest on a corn dog?

Leave your reaction in the comments section below.

Here is the text from the story.  Check out the math at the bottom!!  That is one expensive corn dog!

OKLAHOMA CITY -

Would you pay interest on a corn dog? Or how about a cinnamon roll? Some people say yes and are taking out high-interest pay day loans to go to the state fair.

People are taking out high-interest loans for more than bills. They’re actually borrowing money to go to the Oklahoma State Fair. Statewide Finance has seen about a 20 percent increase in business since the fairgrounds opened.

Kids over 6 cost $5, adults $9, and a wrist band to ride all the rides costs $35. That’s $98 at the gate for family of four, if only two get wristbands for the rides.

D’Aneglo Robinson shelled out the cash for his wife and boys.

“As expensive as it is, if we didn’t put aside for it, we wouldn’t have been able to come ourselves. I definitely understand taking out a loan,” Robinson said.

“Last week we put seven new loans out, just for the fair so that’s pretty good,” said Stephanie Johnson with Statewide Finance.

News 9 did the math. If you borrow $175 at a 206 percent interest rate, which makes the total charge of the loan $99.75. You pay back $274.75.

Site credit: http://www.newson6.com/

Link to the story: http://www.newson6.com/story/19568158/some-oklahomans-take-out-high-interest-loans-to-go-to-state-fair#.UFiT4dPs5-s.facebook

Who paid for your points, miles, rewards, and cash-back?

By Leave a Comment
Sep 13 14
credit card points, someone has to be losing, right?
credit card points, someone has to be losing, right?

I’ve never had a credit card.  When I requested my credit report I got a letter that said I don’t exist instead.  When I tell people I don’t have a credit card I get interesting reactions.  My favorite is this one…

“I pay my card off every month and get amazing rewards, cash back, and airline miles.  Why are you passing up all that free stuff?“

True, I could easily get a card, pay it off every month, and get all that amazing free stuff.

credit card points, someone has to be losing, right?

I hate the credit card industry so much, I want nothing to do with it.  I have seen what happens to some people when they get into trouble with credit cards.  I totally disagree with the predatory tactics some credit card companies use.  On the flip-side, I absolutely agree that anyone who gets into trouble with a credit card chose to do so.  I believe in personal responsibility and I am not blaming the credit card companies for others lack of self-control.  Free money in one hand, a stranglehold with the other.  Something isn’t right.

So whats the problem?  Is there some evil lurking below the surface?  Maybe…
One day after hearing again about all the amazing stuff I am passing up, I was frustrated.  I couldn’t give a good reason for passing up all that amazing stuff.  The free lunch smells funky.

Then it hit me.  Who is paying for all that free stuff?  The credit card company is the one that actually writes the check out to the person who “earned” the rewards.  But how does a credit card company make money?  Two ways:  1.  Merchants pay the credit company per transaction or a monthly fee to use their service.  2. Interest payments from all the people who are in debt.

Conclusion:  Who is paying for your flight, points, rewards, and cash-back?

Answer:  The person who is paying 23% interest on their card because they got behind(and never should have signed up in the first place).  Are they not paying for part of your free flight or lunch?

The way I see it, there are three parties involved.  The credit card company, the person in debt, and the person getting a free lunch.  Please feel free to knock me off my moral high-horse in the comments section below.  Maybe I have it all wrong.  Either way, I am staying away from this 3-sided situation.
Besides all this, you can’t retire on airline miles.  And finally, the credit card company is not rewarding you for being a good person or making smart decisions with your money.  Trust me, they know exactly what they are doing and they work all things in their favor.  But that is another thought for another day.
-Derek
Not only do I have a problem with Credit Cards, I have a HUGE problem with Mint.com too.

Why I am against automatic budgeting software and apps like mint.com

By Leave a Comment
Aug 29 15
Picking a fight with mint.com
Picking a fight with mint.com

I am picking a fight with mint.com!  (Don’t click that link!  I just want them to know I am coming!)Actually, I am picking a fight with all of them.  Mint just happens to be the obvious one that everyone knows about.  My wife and I used Mint.com for about 3 months.  We stopped because it was more trouble than it was worth.  We spent more time trying to figure out how to set it up and make all those annoying adjustments than we did improving our finances.  We created our own system that works great.  Here, I will give it to you, and teach you how to use it.

Before you call your brother who works at Mint.com to tell on me, hear me out.  Here are a few reasons why I think doing the work yourself is the way to go.

  1. A new app isn’t going to change your spending habits for you:  If there was no speed limit sign on the road you take to work everyday, how fast would you drive?  Would you assume that it is safe to drive as fast as you want to?    It is even possible to change your habits and come out way ahead without tracking your spending at all.  This would be very hard and is not recommended, but it is possible to do.  Don’t rely on an app or website to make changes for you.
  2. It doesn’t save that much time:  My wife and I spend less than an hour on our budget each month.  We go through our bank statement line-by-line putting every expense into our spreadsheet, then make a new budget for the upcoming month.  It doesn’t take that much time.  I would argue that using a fancy software or an app takes just as long to use.  The benefits of budgeting the “old-fashioned” way far out-weigh any time that might be saved using Mint.com.
    Picking a fight with mint.com

    Picking a fight with mint.com

  3. A false sense of accomplishment and security:  Using an app gives some people a false sense of making progress.  Just because you opened the account and punched in all your information does not mean that you have improved anything.  A false feeling that your app is taking care of things for you can actually be harmful.  You could end up thinking that you are better off than you really are.  This false sense of security can come back to bite you.
  4. You don’t learn to read by being read to:  You learned to read by, reading.  You learned to read by struggling, practicing, and sticking to it.
  5. Don’t let someone else train for your marathon:  Using an app to do your budgeting for you is like letting someone else train for your marathon.  That’s just silly, I won’t even go into it.  ;)
  6. “Earning it” will bring you closer to the equation.  Doing the work allows you to know everything about your money.  Having a program track everything for you does not create an environment that is intimate enough to work.  Staying so distant from the process does not involve you enough to allow for a deep understanding of the process.  This would be like taking a nap in a movie theater.  The movie played, you were there, but you won’t know anything about it.
What do I suggest?  I suggest using the very same Excel file that I use.  I will even teach you how to use it.  And yeah, its free too.  I suggest doing the work yourself, learning everything about your spending habits along the way, and making changes when needed.  Pad, pencil, and calculator is still the best way.  Or, “screen, keys, and formulas,” in this case.
-Derek

How to create a monthly budget – 8 of 8 – Summary

By Leave a Comment
Aug 9 0
Budget help, goals action results

How to budget.  Budget help.  Monthly budget.  Excel file budget template.

If you have been searching for answers for the above phrases, I hope this series on budgeting has helped.  If you still have questions, feel free to contact me.

  • You can do it.
  • I think you should do it.
  • I believe you will do it.

Check out these other resources that will help.  Having a well-organized plan for your money will always end well.  Much better than no plan.  Healthy financial habits = healthy financial results.

Enjoy the results:

  • Debt free and loving it.
  • Worry less and have less stress
  • Have a well-organized plan of action
  • Have more confidence in your financial decisions and future
  • Create an encouraging feeling of success full of plenty of motivation

Here are the 8 steps:

How to create a monthly budget 7 of 8 Debt – Assets = Net Worth

By Leave a Comment
Aug 8 0
How to budget, budget help, net worth
How to budget, budget help, net worth

Encouragement comes from seeing the results of your efforts.  Track your progress by calculating your Net Worth.

  1. Use Pg 5 of the Monthly Budget Excel File
  2. Gather and list all your debts.
  3. Gather and list all your assets.
  4. Subtract your debts from your assets.
  5. Tattoo that number on your forehead.(Not)
Think of your Net Worth as a compass that tells you in what direction you are going.  Why figure your Net Worth?  This is your big financial picture.  It boils everything down to one number.  Doing this every quarter is the best way to track your overall progress.  If your Net Worth goes up, figure out why and do more of that.  If it goes down, figure out why and do less of that.

Sticking to a budget takes discipline.  Enjoy the fruits of your labor by recognizing your progress and celebrate your efforts.
If your net worth goes up, consider this well-earned encouragement.
If it goes down, consider that much-needed motivation.
Have you been tracking your Net Worth?  Do you have any tips for us?  Leave your thoughts, questions, advice, and experiences below in the comments section.

This is the seventh post of an eight-part series on monthly budgeting.  I invite you to subscribe to the RSS feed so that you get each post mailed directly to you.  Follow this plan, do the work, thank yourself later.

Here are the 8 steps:

  1. Bank Statement
  2. Take Charge
  3. Find The Difference
  4. New Budget
  5. Cash Only
  6. Monthly Savings Goals
  7. Debt – Assets = Net Worth
  8. Summary

-Derek

« Older Posts