I’ve Paid For This Twice Already…

Frugal living and debt reduction tips for a better financial future. This is one family’s story.

Archive for the ‘Make Money Not Excuses’ Category

Make Money Not Excuses Overall Review

Friday, May 30th, 2008

This is the final review of Jean Chatzky’s Make Money Not Excuses and how it relates to me and my financial situation and outlook. The first review is here, Chapter 1 is here, Chapter 2 is here, Chapters 3, 4, and 5 are here, Chapter 6 is here, Chapters 7 and 8 are here, and Chapters 9 and 10 are here.

Overall, I would recommend giving Make Money Not Excuses a read, especially if you’re looking for some quick bits of motivational and actionable advice. For me, that was the biggest benefit to reading the book – not the specific topics (although they were all good) as much as the bite-sized format and the way the pieces were presented. Everything was written in a way that encouraged change without belitting your reasons for not changing until now. In fact, as I mentioned previously, I actually was motivated to do a few things in the process of reading the book, most notably sorting through old CDs and putting a large portion of them aside to get rid of. And I actually did sell a number of them at our last yard sale, so I followed through with that action.

For me, this is a book I think I will keep on the shelf under my night table and randomly open up and read a chapter or a segment when I’m feeling in the need of some positive action. I think the format will really encourage me to get re-energized and re-motivated when I feel stuck. The tone is encouraging without being preachy but also has just the right blend of “get up and take action” mixed in. If you want to read a lighthearted book that gives you some motivational techniques to get going on things you’ve been putting off, this book in my opinion is worth a read.

Make Money Not Excuses Review: I’m Too Old Or Don’t Want To Think About It

Friday, May 23rd, 2008

This is the penultimate review of Jean Chatzky’s Make Money Not Excuses and how it relates to me and my financial situation and outlook. The first review is here, Chapter 1 is here, Chapter 2 is here, Chapters 3, 4, and 5 are here, Chapter 6 is here, and Chapters 7 and 8 are here. Next week will be the final overall review.

Is there such a thing as too old to even start saving for retirement? Is it too late for me? How about all those things we just don’t want to think about – like death, divorce, and disability? Sometimes it feels like things are better just not thinking about them. There’s nothing we can do about them, after all, and if we just don’t think about them, maybe they won’t happen.

But the truth is, of course, that not thinking about things doesn’t make them not happen – it just makes us very unprepared for them when they do.

Chatzky admits that the idea of saving can be overwhelming, especially when you haven’t been a saver before and you feel like there’s not enough time left to make a difference. I know I’ve felt that way myself and I’m only 34 – I bemoan the time gone by and feel like time is just slipping through my fingers and nothing I can do will make a difference. I think it is a by-product of how we try to encourage people to start saving young. Sometimes we feel like if we didn’t start saving in our twenties, then, what’s the point?

But the truth is that it is not too late. Yes, it will be more difficult but the longer you keep waiting to start – the more difficult it will become. Older savers have other reasons to be optimistic, including that you may be in your prime earning years, and your kids may be grown (giving you more money available to save). Also – old age isn’t what it used to be! Many people don’t completely retire, but work part time from 65 onward, because they want to. Chatzky says to repeat to ourselves – it’s not too late, it’s not too late – and then take action. There are a number of strategies in the book on how to take action once you’re ready, but to me the most important idea is to just DO it. I think that is where a lot of us get hung up – once we start doing something, we can move forward but the inertia to starting itself can be almost crippling. Don’t delay! Make a move now.

The last chapter deals with all the things we don’t want to think about, and reminds us of course that not thinking about them doesn’t stop them from happening. This chapter focuses on putting a protection plan in place – a will, a living will. a health care proxy, durable power of attorney for finances, health insurance, life insurance, disability insurance, and a prenuptual agreement. For me, there are a number of things on the list I’ve done well, a few I don’t even know what it is, and one I didn’t need (the prenuptual agreement). I have a long way to go though to be as prepared as I need to be. So I should take my own and Chatzky’s advice and start… now.

Next week I’ll give my final thoughts on the book as a whole and start my own action plan – I’ve got so many things I need to start and hopefully I can manage to make progress on a few of them before my last post on this book. Now there’s some motivation, tell the internet you’re going to. :)

Make Money Not Excuses Review: Saving and Investing

Friday, May 16th, 2008

For the foreseeable future, every Friday afternoon I will be reviewing a section of Jean Chatzky’s Make Money Not Excuses and how it relates to me and my financial situation and outlook. The first review is here, Chapter 1 is here, Chapter 2 is here, Chapters 3, 4, and 5 are here, and Chapter 6 is here.

Chapters 7 and 8 talk about saving and investing. Many people are intimidated to start doing one or the other or both, or simply can’t find the motivation to start, even if they want to. I know this rang true for me – as an adult, saving was always something I was going to do “in the future”. There was always something on the horizon that once I just got past that, I would start saving. Same with paying down debt actually, it was just never the right time.

Which doesn’t work, as we all probably know. If you’re constantly waiting for the perfect time to learn about saving or investing, or just to start saving or investing, you’ll never start. Life happens, and it will never be the perfect time. That being said, there are a number of points from the two chapters I’d like to highlight.

In the saving chapter, Chatzky has 5 Steps to Saving More listed, which are basic concepts but I really think summarize the path to a saving mindset – which is the basis of becoming an effective saver:

  • Eyes on the Prize (specific goal and plan)
  • Know What’s Coming In
  • Know What’s Going Out
  • Make Changes (reduce unnecessary expenses)
  • Automate To Force Your Own Hand

Basically, quantify what you are saving for, how long you have, and what you’ll need, and then figure out where you really are financially. Only then can you really make meaningful changes to bolster those goals. Once you have, and this is what I have yet to do, automate savings so that you can’t sabotage yourself.

I also really liked the section in the saving chapter that talks about why savers stay out of debt and non-savers don’t. Everyone thinks they are the exception, but Chatzky breaks down some numbers and shows how fast the money can add up if you’re not paying credit card bills and interest. And I have seen that for myself – once we eliminated our credit card debt, it really felt like we had more money available to be able to attack the student loan. On paper our expenses and income are still too close for comfort (and to meet our eventual savings goals) but it really does feel like we can make even faster progress now. As I’ve stated before, going into more debt if we have an emergency just is our last resort option now – we want to progress forward, not backwards.

In the investing chapter, the reasons one doesn’t invest really rang true for me, especially the last two:

  • Investing bores you
  • Numbers make your eyes glaze over
  • You don’t speak the language
  • You’re scared

The problem is, if you let fear or intimidation control your actions, you end up making an even bigger mistake.  We want to retire, and saving alone probably isn’t going to do enough for us.  We need to invest so that we can have a future at least as good as the present we have.   So what do we do?  Start.  Dip your tow in the water, as Chatzky says later in the chapter, and start investing.  Chatzky also has a lot of tips on asset allocation, different investment vehicles, and other specifics, but I feel like the core advice is something that we’ve all heard but need to hear again and again until we actually start listening to it – begin.  The chapter as a whole is a good read just to become familiar with investing terminology and start feeling like it’s all more familiar.  Familiarity will eventually lead to comfort, which leads to actually doing something.

Which brings us to the next chapter – I’m Too Old – It’s Too Late For Me.   Come back next week for ideas on what to do if you feel like you’re too old to start.  I’ll give you a hint – you’re not.  ;)

Make Money Not Excuses Review: But I Have Nothing To Wear

Friday, May 9th, 2008

For the foreseeable future, every Friday afternoon I will be reviewing a section of Jean Chatzky’s Make Money Not Excuses and how it relates to me and my financial situation and outlook. The first review is here, Chapter 1 is here, Chapter 2 is here, and Chapters 3, 4, and 5 are here.

Love to shop? The next chapter of Make Money Not Excuses is especially for you. I have nothing to wear is about more than just clothes – it is about the internal love of shopping. Yes, I know not every woman has it (and many men have it as well) but the desire to shop is in many of us, even when we don’t need to.

And that’s basically the point of this chapter. Even when we say we “need” to shop, often, it isn’t really need, it is a want. There are definitely times when we need to shop. But as I illustrate with my grocery shopping analyses, even when shopping is needed, sometimes wants creep into that picture as well. There is nothing wrong with shopping, per se, but when indulging is a higher priority than our overall financial well-being, it helps to take a step back and see what it really going on. Chatzky says that knowing what prompts you to shop can help you channel that desire into more productive pursuits. She talks about unconscious shopping – when we shop just to shop, which is different from shopping to fulfill a need or even to fulfill a specific want. Sometimes this is indicative of a bigger problem like compulsive shopping, but sometimes, it is because we’ve associated shopping in our brains with certain feelings, and when we feel this way, we unconsciously gravitate towards shopping. The twelve reasons besides want need that she identifies for shopping are:

  • Because you’re feeling blue (retail therapy)
  • Because you want to feel powerful
  • Because you want to be someone else
  • Because you just don’t want to be you
  • Because you deserve it
  • Because you’d rather shop than go to the movies (bonding)
  • Because no one – and I mean no one – can tell you what to do
  • Because you need a friend (or at the very least a compliment)
  • Because you’re on autopilot
  • Because you don’t want to die
  • Because it looked good at the time
  • Because you can’t stop

And, as everything in the book, not everything applies to every person. The book goes into detail explaining each of these, and I found myself in quite a few more than I would have previously realized. I like to shop. I enjoy it. And I realized that some of the time, I divorce “shopping” from the end result of “possessing”. I may see something in a store that sparks my interest and I think I want it, but I don’t think through to picturing myself using it in the future, I just focus on the immediate wanting it. These are the things that invariably end up in a closet somewhere after half a dozen (or less) uses. I also do this with children’s clothing. I’ll see something, on sale or at a yard sale, that I think is cute, and I won’t consider if my child actually needs it, or even think past it being cute to if it suits my child. I will bring it home, it’ll go into rotation, and either never get worn because my child already has 15 other t-shirts or pants or whatever, or it’ll be something my child never wears like overalls. I used to dress my son in overalls all the time when he was 18 months old. He is three, almost four, so that was a long time ago, and he refuses to wear overalls now. Yet once in a while, somehow, I buy overalls.

So what to do? Chatzky says to stop shopping and start living, and lists 5 crucial questions to ask yourself when you shop:

  • What am I doing here?
  • What was the trigger that sent me here?
  • How do I feel?
  • Is the thing I am about to reach for something I need? What happens if I don’t buy it?
  • What happens if I do buy it?

Starting to ask myself these questions once I read this book has all but broken me of one of my past favorite pastimes – clearance shopping. And that is a good thing. I used to head straight for the clearance rack of any store I went into. And, in fact, would go into stores just to check out their clearance rack. And yes – great bargains can be found on the clearance aisle. But if the bargain is something I won’t really end up using, don’t need, and almost don’t want, how much of a bargain is that? I would acquire stuff just to acquire it. Breaking myself of that habit has gone a long way towards improving my finances as well as the state of clutter in my house. This is not to say I never visit a clearance rack – but now I only do when I have a specific need for something I think I could find there, and I try my best to not pick up other random deals unless they make sense for me and my family. Staying out of Target completely has done a lot more for me than hitting the clearance racks there every Wednesday right after they do their big weekly markdown at the one near my house.

At the end of the chapter, Chatzky addresses a topic that she’s written another separate book on, involving her debt diet. She doesn’t go into a lot of detail here about it, but basically, all this shopping may have put us into debt, and this is a plan for getting out. She equates getting out of debt to a diet because it makes it easier for many people to wrap their head around. The rules of the diet include but are not limited to not using credit, making a list when you shop, shopping online vs at stores, tracking your spending, and more. There isn’t a lot of new information here but it is presented in a way that may make it more accessible to some people – if I wasn’t fully immersed and obsessed with getting out of debt already, this part of the chapter might have spoken to me more.

So all in all – stop shopping to shop. If you enjoy shopping (like I do), know why you enjoy it, and don’t make the acquisition the point of shopping. Next week we’ll look at saving and investing – no, it’s not too complicated to understand! And it is important to start.

Make Money Not Excuses Review: Husbands, Organization, and Time

Friday, May 2nd, 2008

For the foreseeable future, every Friday afternoon I will be reviewing a section of Jean Chatzky’s Make Money Not Excuses and how it relates to me and my financial situation and outlook. The first review is here, Chapter 1 is here, Chapter 2 is here.

The next three chapters of Make Money Not Excuses are all inter-related to me, so I’ve grouped them together in one review. My husband does that, I’m too disorganized, and I don’t have enough time all boil down to one common thing to me – blaming some external factor that you think is out of your control for your lack of involvement in your financial situation.

First off, But My Husband Does That. I am the opposite side of the coin, in that I do all the money-management and my spouse probably would say “But my wife does that”. Chatzky says that it basically boils down to two big reasons – either he wants control, and/or you want him to have control. I know that is true in our case – I want to control our finances and my spouse does not, so I do. I have slowly been getting him more involved and aware, but it is an uphill battle for both of us.

If you see yourself in this, let go of what you were taught. The man doesn’t genetically have the right to handle the money. And honestly, for me I don’t think it matters at all who makes more. I usually make substantially less than my spouse, and yet I handle the money.

Chatzky gives some suggestions for helping you to take control of your money, including separate bank accounts (at least, in part), which isn’t ideal for us I don’t think but can work for many people, and then goes through strategies to deal with common money battles, including:

  • You Spend Too Much
  • You’re Too Cheap
  • You’re Too Controlling
  • You Don’t Tell Me Anything

If one or more of those is a common refrain in your house, this chapter is worth a read!

The next chapter is I’m Too Disorganized To Deal With My Money. I can relate to this because I am a very disorganized person who has deluded herself for many years into thinking (and believing) she is organized. I do believe that there are inherent tendencies towards disorganization some of us have more than others. However, that is no excuse for letting your finances fall by the wayside.

Chatzky says the first step is understanding the comfort of clutter. And for me, she’s right. Even though I think in my brain that the clutter drives me crazy, in many ways it is comforting to feel like you have anything you might need (even if that isn’t true). And from that comes the best part of the book (for me), Find Your Urge To Purge. This shows a lot of common excuses for keeping clutter, what you really mean when you say it, and how to turn it on its head and think of the flip side of the argument instead. It is brilliant, and motivated me to purge a bunch of clutter all at once. For example:

  • You Say: “I might need it someday.”
  • You Mean: “I’m afraid to give it up.”
  • Think Instead: “How many other things do I have I can use instead?”

The other common excuses turned on their head include but it might come in handy someday, but it still works (a huge one for me), and but it cost a lot of money.

The rest of the chapter looks at strategies to get more organized, and stay that way, including cutting down on the amount of paper than comes into your life and having a place for financial information to live. The average woman spends 55 minutes a day searching for things (I think I probably spend double…) so getting things under control will save you tons of time, which leads to…

I Don’t Have Any Time. This is the next chapter of the book, and Chatzky begins it with reasons that we feel like we have less time. The one that really surprised me was multi-tasking. I am one of the few people who still thought multi-tasking was a useful skill. But multi-tasking, or starting and stopping tasks constantly, actually wastes time because it takes your brain time to get back to the point you were at when you stopped doing the first thing when you go back to it.  So what should we do?  Chatzky outlines four simple steps to take control of our time, and by extension, our money:

  1. Know what’s important
  2. Prioritize
  3. Accomplish well what you need to, in as little time as possible
  4. Prevent things from slipping through the cracks

There are tools and tips galore for each of these steps, and by taking control of our time, we take control of our lives, including money.

Next week we’ll look at But I Have Nothing To Wear, which isn’t really me but I cannot resist a sale, so the chapter really does apply to me in a lot of ways.  We’re taking control!  We are taking charge!  And our finances will reflect it, bit by bit.