financial literacy

October 12, 2011

I will be hosting a weekly radio show based on the premise that for the last 25 years, Americans have been sold a destructive system of personal money management—a system that never worked and never will. It's time for an approach that works. It’s time to spend smart, invest successfully and live the life you want. That’s Money Smart Radio.


April 29, 2011

Last week, I talked about the Rules of Money, and where there is money there is SPENDING.  We couldn’t get through Financial Literacy Month without talking about how we spend our hard earned cash.   If you want to do well financially, there is a sure-fire way to do it. Spend your money wisely. Remember, one of my Money Rules says it all: It really isn’t about how much you make, but what you do with it that counts.

In my book about personal money management, Money Smart, I share the 10 Rules of Spending Wisely.  Yesterday, I shared the first of three Spending Rules, and here is the next rule that will help you get the most from the money you spend.

Spending Rule: Always Look at the Annual Cost

To understand the real impact of your spending choices, always look at the cost over a year, not just at the cost today. Let’s say you spend $4.50 for a fancy coffee, or $10 to eat lunch out five days a week. Those seem like small expenses, but the annual costs are $1,125 and $2,500, respectively. That’s $1,875 and $4,165 before taxes; $142,000 and $318,000 in thirty years at a 6% investment return. This is what you are actually trading away with those small purchases. Remember to also look at how much sooner you can stop working, or spend time at something you’d enjoy more. This doesn’t necessarily mean you shouldn’t spend that money. It’s your life and your choices (or financial trades). Just be sure you take the time to calculate the annual cost and fully understand the true size of the trade involved in your purchase.


April 28, 2011

Last week, I talked about the Rules of Money, and where there is money there is SPENDING.  We couldn’t get through Financial Literacy Month without talking about how we spend our hard earned cash.   If you want to do well financially, there is a sure-fire way to do it. Spend your money wisely. Remember, one of my Money Rules says it all: It really isn’t about how much you make, but what you do with it that counts.

In my book about personal money management, Money Smart, I share the 10 Rules of Spending Wisely.  Over the next few days I will share three of the rules for getting the most from the money you spend.

Spending Rule: Know Your Priorities and Stick to Them

A great way to make this rule a reality is to take a couple of minutes and make a simple list of every immediate smaller purchase you want or need to make.  I’m talking everything except normal weekly food purchases. New underwear, dishwashing liquid, toothpaste—you name it. Add to this list any larger purchases that are now at the top of your priority list (a new couch, TV, etc). Then just keep updating this little list whenever there’s something to add or delete and whenever your priority sequence has changed.  Doing this, I almost never have to make a special trip because I ran out of something. Most importantly, I know what I want and what my priorities are when I walk into any store.

When you are out shopping and see something you want to buy other than normal food or household supplies, and it’s not on your list, don’t buy it! You especially need to avoid such impulse purchases when the item is more than $25.  If you still want the item after you’ve left the store, sleep on it. If you still want to buy it when you wake up, and it involves a significant amount of money, look at your priority list and decide what you’re willing to trade to get it. If you like the trade, then fine, go buy it.

Now that you have your list, you know what you are about to buy and what you will be purchasing fairly soon. When you’re out shopping and feel like it, take a look at the various offerings for your next purchase(s). Think about the exact item you’ll buy when the time comes. I have come to love what this pre-shopping does for me. I end up buying so much smarter and being so much happier with my purchases.  This simple strategy also greatly reduces buying again too soon because I bought what I really wanted.


April 27, 2011

Once again I want to offer a huge thank you to Gena and Jeff over at Ha Nui Loa for volunteering to review Money Smart, my personal finance book, and for inviting me to guest post on their blog.

I connect strongly with their message of living simply and I also participate in the slow-living way of life. While there may appear to be a discrepancy between the topic of money and simplifying your life, I can guarantee you that there’s a very strong relationship between the two.

Money isn’t the most important thing in life—living the life you truly desire is.  I wrote Money Smart to give people tools to manage their money, create their own financial freedom, and build the life they want to live now. Living simply often plays a vital role in focusing on what is most important in life and creating financial freedom.

Take a moment to visit Gena and Jeff, and check out my post, Creating Financial Freedom and Living the Life of Your Dreams.

You can also find Gena and Jeff on Facebook and Twitter.