Year: 2011

Contrary to what you learned from “Leave it to Beaver” or “The Brady Bunch” family peace is not something that naturally occurs.  If you want peace for yourself and your family, you have to fight for it.

One of the core requirements for peace is security. If you are currently living on more then you make, have debt, or have inadequate savings, you have no security. There is no peace while waiting for the consequences of your bad money behavior to catch up with you.

I meet people all the time who know their financial situation is precarious. They know they are one illness, one car repair, one temporary job loss away from disaster – but they act as if they are ok with it. In conversation, I hear that they know they should do something, but it sounds as if they just do not want to do the work.

Are they too lazy, self-indulgent, or stupid to make the changes necessary to give their families security?  No, they are none of these things. They are scared and they have lost hope. The debt looks insurmountable, the gap between income and expense too wide, the shame of facing their own failure too painful. So, their response is to quickly stick their heads back in the sand.

If you are one of these people, I want to give you hope. You really can change your future. I guarantee I have seen bigger mistakes; heck, I probably made bigger mistakes.

All you need to do right now is to get mad. Decide that this is not how you want to live and definitely, not how you want to teach your children to live. Make the commitment to Wage Peace for yourself and your family.

I loved this recent tweet by DaveRamsey, this is how you do it! “Get all Braveheart on your debt. Go crazy, paint yourself blue and charge into the chaos with fierceness.”

If you have successfully waged peace in your home but you have family or friends that have not, send them this post. Preface it with your story; give them the gift of hope.

If you know you need to do better but are not sure what to do, contact me and I’d be happy to get you started.

Most of my failures with money had to do with me. My intentional inattention to the future consequences of today’s money choices cost me lots of money, but my worst choices were always reserved for choices involving others.

It is easy to make particularly poor money decisions when it comes to people we care about. When asked by a friend or family member for help, we want to do whatever we can. Unfortunately, many times the choice we make not only hurts our own financial situation, it also causes much harm to the relationship.

To avoid trashing your own financial goals and ruining your relationships, it is important to set some hard and fast family rules about other people and your money.

Cash Only Living recently posted their list of 10 Rules for Dealing with People Problems. This is an excellent starting point for your family to adopt their own rules:

1. We never co-sign for anything for any one.

2. We treat people how we would like to be treated, namely, with honor, respect, patience, humor, and firm parameters so as to avoid miscommunications and other inter-personal issues. We expect the same in return.

3. We don’t take sides and we don’t like drama.

4. We do keep a separate emergency fund to help others if needed.

5. We don’t loan money to anyone for anything.

6. We don’t bail people out of jail.

7. We won’t buy from your MLM business; go to a presentation that is trying to sell us something; or become one of your MLM “downlinks”.

8. I won’t enter into a business partnership with anyone.

9. The hubby and I freely provide: someone to vent to/talk to, a free meal if you stop by the house, a place to sleep in an emergency, a free ride if you have been drinking, moral support, useful information, help with a wide variety of problems/projects  and provide other non-financial assistance whenever possible.

10. We won’t sell you anything on credit.

Having these rules in place before you need them is key. Without predetermined rules, you are bound to find yourself in a long drawn out conversation of all your legitimate reasons for not helping someone you care about. Somewhere early in this conversion, all they can hear is that you don’t care.

It is so much easier on both parties if you are to say with confidence “I’m sorry, our family has a rule against co-signing” .

What are your rules about other people and your money?

Jim Collins over at jlcollinsnh recently lamented how he is fearful that he has failed his daughter because she is not greatly interested in managing her money.

I’m with you, Jim, I often worry I failed my son in the same way. Although it sounds like you did everything right to instill financial savvy, I know I did a lot wrong.

While you, Jim:

I started her early.  Allowance.  Envelopes for spending, saving and charity.  “The Richest Man in Babylon.”  Checking account.  Saving account.  Mutual fund.  Endless conversations (ok lectures) on the subject.  What child wouldn’t love this stuff?

I, in my son’s formative years, saved too little, spent too much and invested almost no time or effort in learning or teaching sound financial principals.

Disinterest in financial matters is absolutely the norm. We spend 40 hours a week making money and another 20 spending it. But most of us would prefer not to spend any time thinking about it. The 9 basic concepts you spelled out for your daughter are definitely worth consideration.

JLCollinssnh-The simple path to wealth

It starts with nine basics.

1. Avoid fiscally irresponsible people.  Never marry one or otherwise give him access to your money. (Wow, this is a great point. Do everything else right except this and you still may end up with nothing!)
2. Avoid money managers.  It’s your money and no one will care for it better than you.
3. Avoid debt.
4. Save a portion of every dollar you get.
5. The greater the percent of your income you save and invest, the sooner you’ll have F-You money.  Try 50%.  With no debt, this is perfectly doable.
6. Put this money in the Vanguard Total Stock Market Index Fund (VTSAX)   This is the fund you already own, so just keep adding to it.
7. Realize the market and the value of your shares will sometimes drop dramatically.  People all around you will panic.  They’ll be screaming Sell, Sell, Sell.  Ignore this.  Even better:  Buy more shares.
8. When you can live off the dividends VTSAX provides, you are financially free.
9. The less you need, the more free you are.

Since my son left home, I thankfully have learned to live without debt and I’m freer (but not yet free) from the shackles of consumerism.

I still worry if his money decisions will be influenced by my new clearer thinking or by all the times when he was growing up when I was quick to flash that American Express card.

Then I remember he is  smarter, more aware and more self-disciplined than his mom so I think he’ll be fine.