Money matters can be tough on a relationship

Are you a money hoarder or a money spender? If you’re married, the general assumption is that you’re married to the opposite. So, if you’re a hoarder, you probably married a spender.

Why? Because more and more studies show that money is much more a part of your relationship than you actually believe. Psychotherapists are now calling money the number one problem in relationships, even over sex.

You may be reading this, saying to yourself “My partner and I both overspend” or “my partner and I both save money.”

However, when it gets down to it, studies show that if a two people in a relationship is one or the other, one of the partners will learn how to be the opposite. For example, if you are an over spender, your partner may learn to become a hoarder, because someone has to save money for the two of you.

As I stated before, money is much more a part of your relationship than you probably know or are willing to believe. This is because money issues don’t always come out as a problem in your relationship. The money issue may be masked as something else, like your house renovations, for example. The topic is not money per say, but the topic is about what your money represents.

Another problem with money in relationships is that there are several gender differences. For example, most men will buy clothing and wear it until it’s torn up so bad that it may as well be used for a rag, while women will buy a new shirt once a week, just because they like it.

I can think of several times that I have been looking for something to wear and found an item of clothing that I bought and never wore, hanging in my closet with the tags still attached. So, I’m living proof that this gender difference does exist. There’s another gender difference that has a direct effect on your relationship with money.

Most men are raised to think that the world is a win or lose game. In everything men do, there is always a winner, always a loser. So, men don’t’ see themselves as part of a team when they are in a relationship, while women on the other hand, can easily be offended for not being consulted on a big purchase. On top of this, one psychotherapist notes that men seem to believe that money equals power, and power equals respect. The psychotherapist goes on to say that “power and control are not compatible with intimacy. Relationships succeed in money matters only when both partners are willing to display their vulnerabilities to each other.”

I believe that there are many other differences between men, women, and the role of money in our relationships; however I think it’s important that we always go back to the basics. Remember that although you feel one way, your spouse may feel another way. Always take your spouse’s feelings about money into consideration when making decisions that involve money. If your spouse is not one to talk about money, ask them leading questions to get the conversation started. The more you talk to one another, the more you know, and the more you know, the better you can equip yourself to deal with money problems in your relationship.

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Are you sitting there today thinking “man, I’d really like to write a book” or “It would be awesome if I could just open my going green store”? You’re right it would be awesome. So why not go for it?

Colonel Sanders began building KFC at age 65!

Did you know that some of the most successful entrepreneurs didn’t get started until they were past retirement age? Colonel Harland Sanders (Yes, KFC Colonel Sanders) didn’t venture out into the world of entrepreneurship until he was 65 years old. In fact, he used his first social security check to open his business! His business is still thriving today. If your dream is to write a book, here’s another “older” entrepreneur. Sylvia Lieberman creator of Archibald Mouse Books and author of “Archibald’s Swiss Cheese Mountain” didn’t write her first children’s book until the age of 90!

When I saw this, I thought “Why start businesses you can’t finish?” But really, who starts a business that they ever “finish”? Businesses are always passed down to family members or close friends, even other owners in a business if anything ever happens to the owner. The business usually lives on for a quite a while, even after the owner is long gone. So, why not start a business that you can’t finish? Everyone else does it!

My point is, you’re never too old (or young) to start accomplishing your dreams. Don’t let negative thinking be the barrier that keeps you from going after your goals. If you think you’re too old, then you probably are. I don’t mean this in a literal sense of course; I just mean that as long as you think a negative thought, that negative thought will run your life. If you think you’ll never do it, you never will. The only way to succeed in life is to know that you can. Never doubt yourself, no matter what the doubt may be. Positive thinking will be the flame that sees you through a tough night. I can guarantee that!

If you have a dream in life, go for it. You only get one life to try to make that dream come true and getting to the top if half the fun! After all, Life is a Journey, NOT a destination!

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1. Misunderstanding the Loan

As with almost any financial transaction, those participating in the transaction must be aware of the contract into which they are entering. Due to the financial ignorance of a large portion of American society today, we have seen the pitfalls surrounding the lack of understanding when it comes to loans as a whole. Whether it is with credit cards, mortgages, or home equity lines of credit, it appears that the vast majority of Americans just don’t get it when it comes to understanding the financial responsibilities of loaned money.

2. HELOCs Sway With the Financial Breeze

The thing about a HELOC, is that while it might seem like a great idea when the economy is trending upward and home prices are appreciating, when things on the downslide and a homeowner is underwater on their home, taking on such a loan might appear in hindsight, somewhat moronic. Their vision blocked by the rising tide of economic success, it is the homeowner’s inability to foresee the inevitable economic valleys that lie ahead, which can be the downfall of a HELOC.

3. Misrepresentation

Of course, we can’t just blame “Joe Public” when it comes to calamity in the financial world. Financial institutions are also to blame for many of the misunderstandings when it comes to home equity lines of credit. Shady phrasing, terminology that could stump a CPA, and adjustable rates that might seem more in line with a credit card than a home loan, are just a few of the banks’ methods of pulling the wool over the unsuspecting eyes of the average consumer when it comes to a HELOC.

4. Misuse

I may not like big banks, and Dave Ramsey might not like HELOC loans, but it isn’t the banks who are forcing people to take out loans for things that they should be saving up to purchase. It appears that many people consider a HELOC an extra savings account to be used for their personal enjoyment purposes.

5. Abuse

The misuse of such loans can swiftly turn to abuse. A home equity line of credit may, by some, start to be viewed as a new type of credit card, only there to promote their immediate indulgence, and avoid having to delay their childlike gratifications for any extended period of time.

6. The Carousel of Debt Consolidation

Some will use a home equity line of credit as a docking area for unrelated debt where they consolidate debt from other areas into a HELOC, just pushing the inevitable payment of such debt away to be dealt with later. Moreover, if they don’t fully understand the terms of the HELOC, they might be making a poor choice when it comes to the associated interest rate they could be facing compared to that of their previous debt.

7. Poor Saving Behavior

Being able to waylay the consequences of purchases and debt can also promote poor saving behavior. Knowing that one’s purchasing whims may be satisfied by use of a HELOC is detrimental to the common sense saving practices that once ruled the not so recent past.

8. Debt Cancer

Not only do home equity lines of credit often encourage misuse, abuse, and poor saving habits, but they may also promote taking on further debt. By using a HELOC to consolidate or pay off credit cards, one is reopening the devices that may have created the need for the HELOC in the first place. This can invite a relapse into the cancerous debt that continues to eat away at assets.

9. Credit Crunch

Rather than a safety net only to be used in the most dire of financial situations, a HELOC may instead become a crutch. Making use of a HELOC crutch might buy a homeowner time, but it may not repair the financial injuries he has suffered.

References and Further Reading

Sheyna Steiner. Bankrate.com. Ramsey: Home Equity Loans Dangerous. [Online]. 2007. http://www.bankrate.com/finance/financial-literacy/ramsey-home-equity-loans-dangerous-1.aspx

Tom Becker is a writer who blogs about managing money for a comparison website based in Australia called www.moneycompare.com.au where it’s easy to open a savings account with a high interest rate for the maximum return on your investment.

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In order to understand the effect that inflation has on prices, we need to understand three relationships:

1. The relationship between an item and its value
2. The relationship between supply and demand and prices
3. The relationship between dollars and prices

Once these three relationships are understood the overall effect of inflation on prices will be clear.

What’s the Real Value of Something?

This is a question that is almost always left out of a discussion of inflation and prices, but it is essential to understand that there is a difference between value and price.

If there was a world without money, the value of an orange would be expressed in terms of how great it tastes, or the nutritional benefits of the vitamins it provides. In the same vein, the value of a gallon of gas would be measured in the number of miles that can be driven in your car when that gallon is poured into the tank. If that gallon of gas allows you to get to your job for a couple days, then the value would be quite high.

While the value of an orange or a gallon of gas could be different to every individual person, it is important to see that value is not based on, or even related to money. If there was no money, things still have value.

Supply and Demand and Prices

Before we get to the relationship of inflation on prices, we need to understand supply and demand.

From our example above, if there is a frost and the orange crop is damaged, the price of oranges will go up. It’s important to note that this raise in price is not inflation. It is a common misunderstanding that inflation is a result of rising prices, but this is false. Inflation can cause prices to rise, but so can many other factors — the most notable of which is supply and demand.

The way governments measure and report inflation is actually flawed for this reason. If the Consumer Price Index (CPI) goes up, as a result of the price of oranges or other products going up, then the government reports inflation, but it would be more true to say prices are increasing, and it may or may not be caused inflation.

Dollars and Prices

Finally we can look at the relationship between the cost of an item and number of dollars available in the economy. In order to create a manageable example, we’ll take our orange and imagine eating it on an island country where the sum total of all money available is only 100 dollars.

If we go back to the “value” of an orange in this economy we could express that value (which is based on the benefit derived from eating the orange) as 1/100^th of the total value of all the goods available on the island. Obviously this is just an arbitrary figure, but in reality, since our money is finite, the principle is sound… everything has a price which is a reflection of its value, that can be expressed as a fraction of all the money available to spend on any possible item for sale.

Now let’s double the total amount of money available on the island, due to the island government creating a stimulus package.

Now there is a total of 200 dollars available on the island, but the value of an orange has not changed. It still has the same great taste and health benefits. Therefore still has a value, when expressed as a percentage of all available money or 1/100^th.

But now there are 200 dollars so 1/100^th of 200 dollars is $2. The price of an orange, due to the government stimulus package which doubled the amount of money available, has also doubled from $1 to $2.

This is the essence of inflation as a result of money supply. This should help us understand what MUST result from the government’s recent bailout package.

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Unfortunately, for the pooch, the Queen of Mean made a bone-headed, estate-planning blunder that resulted in her Maltese getting a $10 million haircut.

What was the error and how could she have avoided it?

In August of 1997, Princess Diana tragically passed away, leaving her two sons, William and Harry, a considerable fortune.

Unfortunately, both Princes could have avoided Britain’s 40% estate tax, or approximately $14 million, had the royal family the benefit of wiser counsel.

How did Di’s lawyers botch things big time, and what should she have done differently?

In February of 1987, legendary artist, Andy Warhol, left behind an estate of $500,000,000.

However, because Warhol made one common, chowder-headed mistake, the foundation formed after his death was allowed to open a museum to honor the legendary New York artist … in Pittsburgh!

What did Warhol do wrong, so your readers don’t make the same mistake and end up buried in some cornfield in Nebraska?

For fascinating answers to questions like these, may I suggest your readers turn to The 101 Biggest Estate Planning Mistakes where Herbert E. Nass, Esquire, has assembled every bone-headed blunder … foolhardy foul-up … and chowder-headed mistake he has seen in his renowned, 25-year career as an estate attorney for the rich and famous.

On page after page you’ll discover all the dumb things people do — before they keel over.

• You should put your Will in a safe deposit box, right? Wrong! Where should you store it. Page 113.
• You can assign a Power of Attorney for your estate planning, right? Wrong, again. When you drop dead, your POA drops dead with you. Page 117.
• You can avoid probate with a revocable trust, right? Not so fast! Certain conditions have to be met, and, unfortunately, many high-priced lawyers either forget to tell their clients what those are, or don’t know themselves. Page 150.
• Your confidential estate documents are safe with your attorney, right? Not always. Attorney Nass has heard more horror stories about Wills accidentally getting tossed into a dumpster by retiring attorneys than he cares to admit. Where should you store your vital papers? Page 129.

Herb’s new book is not expensive. At Amazon you can pick it up for less than fourteen bucks. That’s what clients pay Attorney Nass if they spend 1.3 minutes in his Lexington Avenue office.

Take oil baron, John Paul Getty who requested that his body be immediately buried on his private ranch after his death. Unfortunately, because his legion of fancy lawyers neglected to follow the steps on page 223, Getty’s body was embalmed and refrigerated at the Forest Lawn Memorial Park cemetery … for three years!

Take multi-millionaire Wall Street mogul, R. Theodore Ammon. Unfortunately before he was murdered, his high-priced New York law firm did not think to update his Will to reflect his bitter divorce proceedings. As a result his wife, Generosa, who re-married the murderer, was entitled to almost everything. Page 105.

Note: Generosa did not make the same mistake years later. When Generosa passed away, her Will left her jailbird husband, nothing.

Whew! So far I’ve given you just a taste of what your readers will find inside The 101 Biggest Estate Planning Mistakes.

But if you’d like to speak with Attorney Nass personally about how to prevent disgruntled relatives from making your Will “disappear” (page 52) … or the inexcusable dumb error Anna Nicole Smith’s attorneys made when drafting her Will (page 124) …

… I’ll just have to make sure Attorney Nass is not in with a client (at $595/hour) that growls, purrs, barks, hisses, or sleeps hanging upside down on a jungle jim.

You see, ever since Attorney Nass represented a cat named Ming with a $200,000 trust fund, it seems his clientele has become, well, furrier or more feathery.

If you don’t know the story, Ming’s owner had passed away, and it was Attorney Nass’s job to make sure all of Ming’s pet food, medical care, and catnip were provided for during Ming’s lifetime. When Ming finally went to kitty heaven at age 10, the trust dictated that the remaining funds would go to Ming’s caretaker, a doorman in Ming’s building. However, because Attorney Nass needed to make sure Ming’s death was not the result of foul play, he arranged for an autopsy which confirmed Ming had indeed passed away from natural causes. With the coroner’s report in hand, Attorney Nass was able to deliver the substantial balance of funds to the doorman and his family.

In this case, everything went according to plan. However, unless you know all the possible pitfalls of estate law, things can go wrong.

Really wrong.

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For instance, debt collectors can’t tell you that your wages will be garnished if they really have no intentions to garnish your wages or no means to do so. They also can’t call you at work if you’ve asked them not to or call you during certain hours of the day (they are allowed to call between the hours of 8 a.m. and 9 pm in your time zone, regardless of what time zone they are in), just to name a few.

So what do you do if you feel like your rights have been violated? You read up on the Fair Debt Collection Act (passed in 1977) to verify that they are actually breaking the law. If they are in fact breaking the law, there are several things you can do.

1. File a complaint with the Federal Trade Commission against the collector.
2. File a complaint with your state’s Attorney General.
3. File a complaint with the Better Business Bureau.
4. File a civil suit in your state or federal court for up to $1,000, including damages.

It’s important to know that the most influential advocate in your situation is you. Always advocate for yourself and don’t be afraid to ask questions. You can even keep a log of the number of times negative things have happened. In my opinion, this is the BEST way to safeguard yourself should you need to go to court. Keep a log of anything that the collector told you that you felt was wrong in any way. Make sure you date and timestamp your log. Make sure you do this every time the collector calls. This way, you have data that backs up your story.

Also, don’t be afraid to ask to speak to a supervisor if an agent is being rude and threatening. If they get in trouble for that, then so be it. They should.

The point is, no one has the right to threaten you with false threats. No one has the right to make you feel like you did something wrong simply because you can’t pay your bills. Always try to work out payment options with your collector, but if you can’t and the threats continue, don’t be afraid to file a complaint. It will only help you and someone else later down the road.

[This article was featured in the Carnival of Personal Finance at a gai shan life.]

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Turn a negative into a positive

How many of you have been fired or laid off and are currently looking for another job? Maybe the answer isn’t looking for a job. Maybe the answer is creating a job.  It sounds crazy but more and more people are starting their own businesses in these tough economic times. The idea is that looking for a job that isn’t there won’t make you any money. In fact, it will probably only make you lose money. However, creating a job that there’s a need for will have a much better chance of surviving the times.

In the 1920’s, Madame Alexander did just that. It was hard for a woman to find a job anywhere, much less in a good environment where the income was decent. So, she started her own. After growing up in her father’s home where he fixed broken porcelain doll, she decided that maybe dolls should be made out of a more durable material. Granted, she may have seen a Raggedy Ann doll and thought the idea was great, but she knew that more than just the Raggedy Ann doll would sell. So she created her own, and she sold them. It took a lot of door to door sales and looking for the right place to pitch the idea, but eventually she got a loan and paid for her company twice as fast as her loan company advised that she needed to.

My point is, if she could do it in the 1920’s, why can’t you do it today? You don’t necessarily have to have a ton of money to start your own business. It could be a small, simple business that you see a need for. It doesn’t have to be a multi-billion dollar company. It just needs to be something that you can live off of. In fact, most people trust small businesses much more than large businesses. I personally never want to lose touch with people, so I will always choose a small business over a large one. It’s much better than feeling like just a number.

I’m not going to go throwing ideas out at you, because it should be something that you need, something that you know other people need. Maybe you should get together with a group of friends with the similar interests as you; you never know what you might come up with. Remember, a job is better than no job right now, so if you can make your own…why wouldn’t you?

Any ideas on something that EVERYONE needs? Something that would be easy to start a business doing? Share them here!

[this post was featured in the 227th Edition of the Carnival of Personal Finance at Fabulously Broke in the City.]

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Suze want's you to know how she overcame adversity

Not Orman. Losing her money only gave her the drive she needed to become such a successful advisor herself. See, the money that her advisor lost, was given to her by restaurant customers who wanted her to succeed. I believe that she has definitely fulfilled their wants by succeeding at being much more than a restaurant owner. She’s now one of the leading financial advisors out there.

What does Suze Orman say to do in these tough economic times? She says save…and then save some more. For most people, especially college students like me, saving is easier said than done. She reiterates what my grandmother has told me for as long as I can remember: “do I need it? Or do I want it?”. This is a struggle for most young people. It’s sometimes hard to pick between needing and wanting something, especially when you want to have a good time.

I find it hard to answer the question “Do I need a vacation? Or do I want a vacation?” I mean, we all “need” a vacation, right? That’s not necessarily the case. It’s perfectly fine to need a break, and to take a break, without going to the beach. Orman points out that the times are really, really…really bad and may not get better for five or six more years. She also points out that even though you may not be affected right now, it’s very possible that you will be affected later.

The probability of you losing your job is higher today than it was yesterday. The probability of you getting further into credit card debt is also greater today than it was yesterday. Pay off your debt as soon as you can, if you don’t, Orman advises that the credit card companies will surely come after you with higher interest rates. Suze advises to “hope for the best, plan for the worst.”

The tough economic times are not all bad though. Orman is happy to see real estate prices today. She’s glad to see that in a lot of cities, rent is not always cheaper than mortgage and she states that soon, people will be able to buy homes, and afford them. Even people who never thought that they would be able to buy a home, will probably be able to buy a home in the near future.

For me, it’s important to remember that the economy is not all negative. Orman advises that even people who struggle to get by daily should still try to save…whatever they can. When I hear that by me saving today, it may help me buy a house tomorrow, it makes it a lot easier to try to save.

So remember this while shopping: the economy is bad, and you need to make a decision on whether you need or want an item. Also, remember that saving $20 today may put you in a better financial situation tomorrow. The most important thing to keep in mind is that in all the negativity, there is a glimmer of hope in the future!

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Turn getting the axe into a positive

When you are terminated from a job, your first thought is probably “what do I do now?” and the answer to that question is to get out there and start looking for a better job.  Once you realize that there’s a better job out there for you and that everything happens for a reason, you need to get moving on finding that great job.

Career counselor Marty Nemko says that you should start job searching immediately because every “nanosecond of wallowing” only makes your feelings of self-pity worse. Not only will worrying about what you’re going to do waste time, but it will also only make the stress of losing a job worse.

Once you decide to get yourself back out on the job market, take the fast track. Send your resume to every ad in the paper that catches your eye. Send your resumes to as many employers as you can find. Remember, the worse thing that can happen is that you won’t be what the employer is looking for. If you’re not what they want, at least you are getting your name out there and there’s no harm done.   Some advice given by Marty Nemko on this subject is “cram the entire search into one week.” Applying to any large amount of jobs in a week’s time will be stressful, and won’t be easy, but once you have applied to jobs you are interested in, all you have to do is prepare for the interviews!

Another good thing that you should consider doing while looking for a new job is networking. Network with all of your friends and family. Send a mass email and ask if anyone knows of an employer that is hiring. Post your job seeking information your social networking sites and on your blogs. It’s important to remember that being fired is not something to be embarrassed about and you should not be scared to ask for help. Sometimes networking is the key in finding a new job.

It is important to remember that good jobs will just fall into your lap. In fact, some jobs are not even posted in the newspaper advertisements. Some employers depend on networking and word of mouth to get their hiring news out.  So, if you know what you’re looking for and you know of a company that has current positions with people doing what you want to do, pick up the phone and call that company. Just as there is no harm in sending your resume to anyone that catches your attention, there’s also no harm in calling and asking if the employer has any openings. The worst thing they can say is that they’re not interested.

Remember that looking for a job is not the only thing you need to do after you lose your job. Experts say that while looking for a job after being fired, it is important to cut out needless expenses in your budget. Do you really need that meal at that restaurant, or could you cook your own meal at home for less money? If you happen to be a compulsive shopper like me, it is probably best that you just stay away from retail stores, and especially from the mall. Saving money during this difficult time is one key to keeping stress and anxiety levels low.  

Losing a job is a stressful event no matter how you slice it, but making sure that you do everything possible to stay afloat while job searching will help you face the stressors you will face. So, if you get the dreaded pink slip, get out there, get going, stay motivated, and find yourself a better job!

This story has been featured in the Carnival of Personal Finance at Christian PF.

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Even Billionaires Are Going Bust in this Recession

With today’s economy, it’s easy to think that you’re the only one that’s being directly affected by the losses on the stock market or by the rise in prices on food at your local supermarket. It’s also easy to feel like the only people being affected by the recession or the middle and lower class people, blue collar workers.

Unfortunately, this is not the case. Even the world’s most wealthy people are bleeding money. Now, don’t get me wrong, I do not feel sorry for these people. In my opinion, if you can lose over 5 billion dollars and still have a net worth of 13 billion dollars, you’re doing pretty good. If you’re on a “billionaire” list, you really don’t have as many worries as the rest of us. Yes, you may have to sell one of your fifteen homes, but you still have electricity, food, a home, and clothes on your back.

It absolutely sickens me to think that these people, still making billions of dollars after huge losses in the market, think they have it bad. They don’t know what bad is. Until you can’t pay your power bill or you wonder how you will feed your family this week, you don’t have it as bad as most of the people in the U.S. right now. I have been there, and struggle every day to keep from falling that far again.

On the other hand, I think it’s important to realize that we are not the only ones losing money from the recession. It’s very easy to think that you and your neighbors are all struggling, but it’s not easy to think that a billionaire even knows what the word “struggle” means when it comes to money. But according to some numbers, these billionaires may be learning to associate money with the word struggle.

Forbes agrees. They recently noted that “They’re reeling as much as everyone else,” in regards to billionaires. Effects have been seen globally. I had no idea until today that a former Icelandic billionaire (Bjorgolfur Gudmundsson) sold the soccer team that he owned in order to pay off his debts. I also learned that a German billionaire Adolf Merckle took his own life after his business suffered losses that he undoubtedly thought he was unable to come back from.

While these stories don’t make me feel sorry for the “billionaire community” as a whole, it does help to know that I’m not the only one suffering. I’m not saying that I want everyone to feel what I feel and to go through what I’ve had to go through. It’s just that for once, it looks like the people who seem to always be ahead, actually may begin to know what it’s like to really feel the economic downturns that our world has faced before.

I hope that since these billionaires have suffered losses and suffered from the recession that maybe they won’t take it for granted again. I can only hope that if they recover their money, they realize how precious it is and give more of it away to charitable organizations. Maybe for once, they’ll realize that they own over 50 percent of the world’s wealth and it should be taken care of rather than being spent on frivolous things.

Maybe everything really does happen for a reason, and maybe we’re all really not alone.

[this article was featured in the 210th edition of the Carnival of Personal Finance at Urban Dollar]

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In this article, to investigate my idea, I asked a friend to recall how she first started using credit…

The day I turned 18, I began receiving two to three credit card offers by mail, daily. As a teenager, I thought this was awesome! If I was receiving these “You’ve been pre – approved!” offers, then that means I must have pretty good credit, right? I thought that the more offers I got, the better my credit must be. I did not see in a need in reading the fine print, because to me, if I had a credit card, I could buy whatever I wanted, whenever I wanted!

I moved away from home and went to college only to find that I was never approved for all of these offers I got in the mail. How was I supposed to change my credit score if I never got approved for credit? Then, my sophomore year of college, my whole life changed.

I received an offer from Household Bank for a credit card for people with no credit history. This was an awesome opportunity! I signed up, got approved, and started spending. There was no stopping me from buying whatever I wanted, until I got my first bill. I opened the bill only to find that my $150 in purchases had turned into a $175 bill. How did this happen?

I did not educate myself with the literature I received from the credit card company. I was unaware of the fees for everything from signing up, to an annual fee, to an APR on all of my purchases, even though the idea of charging fees for borrowing money has been around since the early 1900′s. For me, my credit cards were a way to buy things that I otherwise would not have had the money to buy and trust me, there were a lot of things I wanted to buy.

One credit card turned into two and two quickly turned into five. Why did I have all of these credit cards? I only really needed one that I could use anywhere, but department store cards were so hard to resist. If I had a Target card, and got rewards for using it, Why not get rewards for shopping at Target?

As you can very well imagine, this got me into a lot of trouble. Even after I learned my lesson, paid my cards off and closed some of them, I fell into the same credit card trap. I paid my Victoria’s Secret balance down to zero and closed it, only to go back into the store and re-open it one week later! I just could not resist those awesome rewards for “VIP Angel Card” holders.

Four years later, I’m still paying off my credit card debt, as if I don’t have enough student loan debt to go around. The best advice I have for any young college student looking to build their credit is this: Get one card, put it in a locked safe, throw away the key, and then put that safe in block of ice and in a deep freezer. This way, in order to use that shiny new credit card will be to unfreeze your safe and call a locksmith! Oh, and in case you were wondering, lock smiths aren’t cheap either!

As we see, credit card companies are in the business of getting young people hooked on credit (and the thought of instant gratification of their wants) because they make a lot of money from the practice. I believe in personal responsibility, but it does have an eerie familiarity to a scene of a crack dealer giving out free sample across from the school yard.

Image provided by Koramchad

[This article was featured in the Carnival of Personal Finance at Weakonomi¢s.]

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But what I was curious about was the stories the don’t make it onto CNN; what effect is the credit meltdown and global recession having on normal people in their day to day lives..

So I asked 5 strangers to write down what they had learned as a result of the tough economic conditions. Like I did, I think you’ll find the stories very engaging, and you’ll see how powerful of force money is to shape people’s lives.

Lesson #1. Hiring People who are Over-Qualified

This past year has been an eye opening experience to say the least.  Everywhere you look, people are being laid off.    My family owns several small retails businesses in the midwest and had to do some hiring to find new employees this past year.  We advertised for both manager and sales associate positions in both local newspapers and Craigslist.  We found that the people responding to our ads were not just retail experienced individuals, but people who had been laid off at major factories in the areas.

When we were calling people for interviews, we found people who were desperately looking for full time management positions offering full time benefits and pension plans.  This response was kind of amazing to us until we had the pleasure of actually sitting down and discussing the position with these folks.  We heard stories from women who were in desperate search to find work while their husbands were laid off.  We heard stories from men who applied for our positions with the hopes that we were a major retail chain offering management positions.    One lady explained to us that about 75% of her town was employed by either of two local factories, both of which were doing heavy lay offs.

I felt bad that we did not have more positions to offer.

Jayda, St. Louis, MO

Lesson #2. I’m Happier Now

First of all, I saw this coming.  With the Bill Clinton era lowering the qualifications on home mortgages and the home lending bubble being ready to burst I knew what to do.  Fuel prices also showed me to hold onto money as hard as possible.  So, at the point when I knew, due to past years trends, to bail out of the stock market, that let me keep the whole worth of my money.  While other people were loosing money each day in their 401k, I was internally laughing, telling them they should have listened to me.

This whole time since fuel prices came up, I have been cutting back in every way possible.  I learned how to cook more kinds of meals.  Though attrition, I’ve replaced incandescent bulbs with compact florescent or LED lights.  So I stayed ahead of the curve, in cutting costs.  And I love coupons now, I can’t get enough.  I do still eat out some, but it’s two for one now.  And forget fast food meals almost all together, they are too expensive for the quality of the food.  So the quality of my life went up, while the cost of it went down.

Sad thing is, it usually takes money to save even more money.  So I did spend where it would help the most.  On other things that didn’t cost money to cut costs, I lowered the normal temperature to save on heating.  I purchased window fans, to cut down on heating and cooling as well.  This economic downturn has done a world of good for me.  I have a greater net worth, lower debts, and I’m happier.  Now the only issue is when to reinvest to take advantage of the last gold mine of the downturn–the stock market.

KB – Greenville, USA

Lesson #3. 101 Ways to Server Mac ‘n Cheese

I remember the days when I was able to open the freezer and gaze upon the abundant choices of meats I had.  These days, the recession days, I open my little chest freezer and stare down dispiritedly at the little shriveled frozen green bean that had escaped from the bag before I had a chance to boil it.  I haven’t yet managed to work up the energy or desire to crawl into the freezer to retrieve the lone bean, or the money to fill the freezer with more meat, but I have managed to become a creative cook.

If this recession has taught me anything at all, now that my freezer has been relieved of all of its meat, it is the value of a food product that has been in existence for as long as I have been alive! I have discovered the amazing things a creative parent can do with a 79 cent box of macaroni and cheese!  In the recent months I have managed to make this cheesy carb into a main dish, a side dish, a cold dish and even a dessert!

For 79 cents and a splash of milk you can serve this age old favorite spread neatly beside a pile of whatever vegetables you have available, a slice of buttered bread and a tall glass of Kool-Aid.  For a bit more you can create a masterpiece casserole!  Simply make the macaroni ‘n cheese like the directions say, toss it in an oven safe dish with a handful of vegetables, a few cut up hot dogs, sprinkle on some crushed corn flakes, warm in the oven and Viola! A feast fit for, well, maybe not a king, but definitely fit for my hungry family.

Maybe macaroni and cheese was created for a depression, maybe it was created to withstand a recession.  In any case, it has become a staple in my family and will doubtless stay that way for a long time to come.

Tina, Mayville, USA

Lesson #4. Recession = Simplifying

During this current recession, I have had time to sit and think about what I really want to do with my life and the things that are important to me. My husband is in the construction business, mostly residential, and I am a stay at home mom to two sweet little girls. We have learned to stick together as a family and ride out the bumps together.

Although we have lost a third of our income, we really cannot complain. We can still put food on our table and although we may be forgoing the amusement parks, we can go to the zoo and pack a yummy lunch. Who said being poor put you at a disadvantage?
We are using our limited financial funds to find resources that are more valuable in our community. We are no longer eating at upscale restaurants, instead I have learned to cook, which my husband just loves. We are cooking Cornish hens at home with tomato and mozzarella salad and it is literally only costing us a few dollars.

I still worry about our future, and being able to provide our children with the best, but for right now I am enjoy a simpler life.

A.R. – Louisville, u.s.

Lesson #5. Daddy’s Advice Saved Me

If someone asked me what I’ve learned from the recent economic downturn, I wouldn’t hesitate in answering.  I’d say that the lessons I learned from my father served me well.  I was able to take all of the practical advice he taught me about money and put it to good use.

“Never buy anything on credit if you have the cash,” my dad would say.  “Save your money for a rainy day.” As a child of the depression, he knew what it was like to be poor.  His father – my grandfather, was a wholesale produce distributor in New York City.  They always had fresh fruit and vegetables on the table, though not much more.

So over the years, I saved my money diligently.  I invested conservatively – mostly in bank CDs.  I maxed out my 401k at work and participated in employer cash match programs.  I didn’t take elaborate vacations, buy expensive cars, spend money on the latest and greatest electronic gizmo or max out my credit cards. Except for a modest mortgage on my house, I do not owe anyone any money.

I’ve learned that even though my job was recently eliminated as part of the recession, I still can make it – for several years, if necessary, just by relying on my savings. I don’t need a handout from anyone and I’m not frightened about my future.  I know I will make it – because I heeded the advice my dad gave me.  “Never buy anything on credit if you have the cash.”

Thank you, Daddy.

SuzyQ – Glen Allen, Virginia

If you’ve learned any personal life lessons as a result of this economic crisis, please leave a comment. I’d also like to thank the people who bravely stepped up to tell there stories for us all to learn from.

[This article is part of the Carnival of Personal Finance (#200) at MoneyNing.com]

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• Lessons Learned from the Economic Meltdown – 5 Personal Stories
• Is the Media to Blame for Our Tough Economic Times?
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But what I was curious about was the stories the don’t make it onto CNN; what effect is the credit meltdown having on normal people.

So I asked 5 strangers to write down what they had learned as a result of the tough economic conditions. Like I was, I think you’ll find the stories very engaging, and you’ll see how powerful of force money is to shape people’s lives.

Story #1. Money is No Object

Money is no object. Until you realize you have none. I’ve seen this coming for a long time and I’m no stranger to adversity. But I never thought it was going to hit me all at once. I lost my job last month. There’s nothing like instant poverty to give you an unpleasant wake-up call and teach you a few things about how far you can stretch your budget and your imagination.

For instance; I learned that the bills and junk mail I shred make an excellent subsitute for kitty litter if you run out and can’t afford more. Who knew?

I also realized that once you get used to the after taste, the “government cheese” isn’t so bad after all. Besides, if you get really hard up, you can heat it and use it for caulking. Who knew?

Did you know that Top Ramen is only .12 cents a package in fine grocery stores nationwide? I didn’t, until it became a main staple in my household. Apparently people have been eating this stuff for years. Who knew?

I found out that you can get a $3.00 haircut by a student at the local beauty college. I also learned that you need to buy a $7.00 hat to cover up the apocalyptic catastrophe that once kept your head warm. That wasn’t totally cost effective after all.

I also learned that thrift stores sell used goods for twice what they are worth in their present condition; but half of what you’d pay for them new. Also, since everything you buy from a thrift store smells like grandpa Joe’s house, which hasn’t been cleaned properly since grandma passed away in 1972; Febreeze is a must-have. Or should I say; must-half.

I now know 27 different ways to prepare macaroni and cheese. I also found out quickly just how much weight you can gain on a constant diet of starchy foods. Thankfully, the thrift store also carries clothing. The eighties will be making a comeback in my wardrobe. Hello, acid washed denim!

In the end, the most important thing I’ve learned through all of this, is humility.

Stephanie, Kingman – USA

Story #2. Nevermind saving your finances, how do you save your marriage?

During the economic downturn, I was preparing myself for our own budget crisis, but not prepared for the marriage crisis that would ensue. Previously, I vowed that adultery or abandonment would be the only cause for divorce, but as I later learned – most sources say that finances are the #1 reason for divorce. Even when the words, “I want a divorce” were first uttered, my first thought was preparing myself financially, rather than involving myself emotionally. How did this happen?

I thought it sad to know that before adultery, before abuse, before addiction and before the loss of intimacy, most persons would divorce over finances. My husband and I thought that we loved each other very much. However, the technicalities of our budget and the stresses of securing our finances took precedence over emotional needs. How could we focus on saving our love when we needed to save the home that physically housed our love?

Our love wasn’t expressed with lavish material gifts or expensive evenings out. Yet somehow, it found it’s conditionality with the bad news that my company was no longer offsetting our insurance premium and when my husband’s hours were reduced to a part-time position. It’s difficult for an “I love you” to cure the frustration of having to look for a second job or when you drop $500 for just one doctor visit, one lab test and one bottle of medication.

Finding the strength to stay true to your vow “For Richer or Poorer” can’t be taken on by one person alone. If we weren’t both willing to see this financial uncertainty to the end, then the life we had together wouldn’t survive. However, we both know deep down, that there’s no price that can be placed on ending our love.

Althea Deveaux, Los Angeles – USA

Story #3. What really matters

During this economic downturn, I’ve learned what’s really important in my life and that isn’t the possessions I own but the people who care about me. Thanks to this economy, I’ve lost enough freelance gigs that I barely have money to eat. Things like Sunday brunch, going out for drinks or even seeing a movie are luxuries that I can’t afford right now. The people who were around me because they wanted to “do things” seem to have vanished. My true friends have stayed and we’ve learned together how to do things for free or on the cheap.

Speaking of my possessions, I’ve learned in this economy how to shop at thrift stores and E-bay. Do I really need new winter boots that will get scruffy after a walk in the snow? Do I really need to buy the latest gadgets and other fun devices? How many coats do I need? I now make a list of items I plan on purchasing, so I can decide if I truly need them or if I am just being greedy. Along those lines, I’ve been selling items on Amazon.com and E-bay. If I haven’t worn it in a year, the item is being sold. Also, once I read a book, I either pass it on or sell it. This has served to free me from my need for possessions, thus allowing me to focus on those who truly matter to me.

Michelle, New York – NY

Story #4. Credit is the devil

I have learned that we as an American nation should not be at all surprised that we are in this mess up to our necks. In recent years, we have redefined the “American Dream” as a method of living beyond our means.

The economic downturn is the result of one thing and one thing only: credit. Credit is the devil. Because of credit, people are granted false wealth and false security. Sure, in principle, it sounds like a bowl of ice cream. But when that sweetness melts away we are left with more than we can handle. I for one made this same mistake. Fresh out of high school I was offered a new credit card at every turn.

Now I am in so much debt I can’t see straight. I have learned that credit cards of any type are bad and if I can’t afford it with what is in my pocket then I don’t need it. I can only hope that every person adopts this mentality. If we continue to live beyond our means, we will only fall further into economic crisis.

I wish that I could wave a magic wand and eliminate all credit card companies in the blink of an eye.

Unfortunately, I would have more success discovering that Unicorns really do exist. Things will not get better until we wake up and realize that nothing comes without hard work and dedication. I don’t foresee that happening anytime in the foreseeable future.

bb,  jasper – usa

Story #5. downturn vortex…

The recent unfolding of economic events in the past 1 and half years has left everyone crippled. The start of the housing crisis surely was gonna bring out the worse parts of economies, but the fall of giants like Lehman, Merill, AIG and others has shown to what extent many of these companies have invested in toxic assets just for expectancy of more gains.

I personally had invested heavily in these companies considering them to be world leaders and stable. But they have shown what kind of leaders they are and what precedent they have set for others.

In spite of facing heavy losses, one thing is clear, one’s portfolio always needs to be diversified, as in not only equity but bullion, bonds and FDs if you really want to stay afloat. I have known many friends who invested all their savings into markets and lost heavily.

Millionaires turned paupers by losing in oil slump. I personally have also decided to refrain from commodities for now when the financial downturn is taking its toll. Though I am feeling soon I will find the best of deals in real estate. One of my colleagues million dollar home sold for mere 3lac USD, Reason is he badly needed money and had no choice but to sell it.

AD, USA

If you’ve learned any life lessons as a result of this economic crisis, please leave a comment. I’d also like to thank the people who bravely stepped up to tell there stories for us all to learn from.

[this post was featured in the 195th Edition of the Carnival of Personal Finance at Stock Trading to Go]

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One Last Ride

ster in about 2 seconds flat.

That’s why there are many families these days who are changing the rules to make everyone’s lives easier when someone passes away. In some cases, they are even making it more like a game of chance. Some of the ideas are creative, and others are just a little bit weird.

Get a Head Start

I thought one of the best ideas was giving stuff away while you’re still alive. That way you know exactly where it’s going, and people can get their complaints out now rather than after you’ve passed away. It’s also a plus because it can hep you save on estate taxes if you’ve got things that are worth big bucks.

Have a Lottery

Another family decided to pull straws to figure out the order they got to choose heirlooms. That way there was no favoritism and no complaining. It was just a matter of luck whether you got the short straw or a longer straw. Sometimes nature just needs to take its course and humans need to stay out of it to avoid squabbles.

Treasure Hunt

Probably the most fun was when the person who eventually died left colored dots on the back of items. That way, everyone just had to go around and take part in a ‘treasure hunt’ to find what had been given to them. It’s hard to argue with the wishes of someone who has just passed away (though people still manage to do it).

Come Back from the Grave to Explain

Finally, some people have decided to record videos of themselves discussing their wishes. Children who are feeling sore because they didn’t get what they want will suddenly put a sock in it when they hear mom or dad’s wishes from beyond the grave.

While some of these ideas are discussed with a tongue in cheek attitude, they really can work well. It all depends on how your family tends to handle these things. Everyone hopes that family members will be graceful and remember that the ‘stuff’ is nowhere near as important as the life that left it behind. Once we forget that, we’ve lost touch with reality.

Still, it’s inevitable that these squabbles will appear. It’s either that something is worth so much money it never seems fair giving it to just one person, or the item carries so much sentimental value that everyone wants it as a memento. That’s probably why choosing a strategy like those listed above is so helpful. Your hope is that it ends up like this:

“The next night, heirs gathered, and one gave a brief tutorial on silver markers. Over cocktails, they made their silver selections. ‘It was fun,’ says the granddaughter. ‘Not everyone got everything they wanted, but it was equitable. There was no acrimony.’”

No matter how your family decides to divide up the riches, always remember to honor the person behind them. If you don’t get that memento or jewel you were coveting: let go and move on. That’s how the person who’s passed on would have wanted it. Family should always come before objects. Just because someone else got the trinket that you covetted, it doesn’t mean that you were loved any less.

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It seems that billionaires can be a pretty insufferable and neurotic bunch!

Psychiatrist Kerry Sulkowicz has become the ‘go-to guy’ for billionaires all over. They come to him for advice about their personal lives, and he has found that many of them are hard to handle!

Insecure & Feeling Trapped

There seem to be some common patterns with these patients.  Many of these rich men have a very difficult time coming to terms with things that have happened in their past, and they have an even harder time being modest.

One of the reasons billionaires can be so flashy is because they can from humble backgrounds in some cases. They didn’t have anything growing up, so they feel the need to overcompensate now. That leads to the desire to have a home on every continent, as well as their own island to escape to. They buy these things because they can now and they couldn’t back then. Hopefully Kerry helps them understand that having a dozen houses can’t quite compete with clearing up those old childhood issues.

Another symptom of overspending that seems to pop up among billionaires is the fact that they always need to outdo each other. Having a house on every continent and their own island is not enough if their rival also owns 8 private jets (that’s, hopefully, an exaggeration). Again, billionaires seem to have a tendency to hide behind their money to overcompensate for other issues.

The video of the psychiatrist talking about these billionaires is pretty scary! It’s not because Kerry doesn’t seem competent or good at what he does, but because he’s so jaded by these people. In fact, it seems like he’s tired of dealing with them at all.

That begs the question of whether having too much money can eventually lead to losing touch with reality.

If Kerry, who is used to dealing with people who have issues, can’t stand these people, can anyone else?

One of the main goals of making a lot of money is to have some sort of social status. It means you can finally buy whatever you want and associate with whoever you want to associate with. But, if no one wants to touch you with a ten foot pole after you’re surrounded by your money it’s essentially done you no good.

Those who view the video should take it as a warning. When a psychiatrist thinks you’re nuts and unpleasant to be around, its time to make some changes. Acquiring more homes, jet skis, and cars isn’t going to fill that hole.

Billionaires are definitely an entirely different breed than many of us are used to dealing with. Hopefully, as you reach your own financial goals you will keep track of what’s important. We don’t want to end up like one of the billionaires who essentially become social lepers because of their own hang ups.

Become rich: but don’t become annoying to be around and deal with.

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Small donations can make a big difference

I’m sure that there have been times when you’ve wanted to help someone but thought that you just didn’t have enough money to make a big difference in the cause you were concerned with. It’s hard to think that a $5 check really helps anyone at all, but it does, and it will.

Recently, a new organization has come out of the woodworks made specifically to help people who are struggling in the recession. You can donate any amount of money, whether it’s $1 or $1,000. This site helps people that are on the brink of losing their homes. Your payment may help them pay their power bill or their mortgage. Regardless of what your money goes towards, you’re helping a family in need.

It’s important to remember that the recession is not the only cause of suffering for some of the middle class community. If you think back on your life, I’m sure you will remember a time when money was tight. Maybe it was an unexpected illness in the family or a lay off at work. Maybe it was an unexpected death in the family or maybe you just simply didn’t make enough money to pay the bills that month.  Wouldn’t it have been nice to know that there was an organization out there that would help you?

What’s great about the Small Can Be Big Organization is that 100% of your proceeds go to families in need. Small Can Be Big takes no profit from your donations, so truly every dollar you donate, helps someone. You can also track where your money goes and what family you helped. You can check up on them later to see how they’re doing. This is comforting when money is so tight.

With the current economic state, it’s very easy to tell yourself that you don’t want to donate to a charity because you’ll never see the fruits of that donation, and your money may be tight as well. Small Can Be Big and other organizations like that, takes the worries of never seeing your money go to work, away. 

I’m a huge believer in karma and I truly believe that what comes around will go back around. You never know when you will be in crisis and need a helping hand. So, if you have a dollar to spend, donate it to charity. You’ll be so glad you did. Nothing is more fulfilling than knowing that you helped someone through a tough time. Honestly, it doesn’t matter what charity you choose, find a cause you believe in, and do what you can to help it. If everyone in the world did this, it would be a much better place to live.

Remember, help your sister from another mister or your brother from another mother, you never know when your sisters and brothers will be there to help you.

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That’s why you find so many in their early 20′s who are deep in debt and don’t know what to do about it. Is it possible to buck this trend and teach kids how to be rich (even if you aren’t)?

There are some people who think that being rich is just something that gets passed along or that you’re born into. There are other people who think it has to be something you sincerely want for yourself and strive for based on skills you pick up throughout life. There are still others who believe being rich is as much a natural thing as it is a mindset thing.

The evidence, however, speaks for itself. Children and teens who are taught how to manage their money end up more financially secure than those who do not. It also doesn’t matter whether your family is already rich, or if you consider yourselves downright poor. People who are rich on paper can squander their money in no time flat. People who are “poor” can manage their money wisely and end up ahead in life.

One thing is clear, and that’s that we need to teach every single child that managing money is what leads to having a rich lifestyle instead of the money itself. It’s not like our kids don’t want to learn about money either. It seems like they are ready and willing to learn, it’s just up to us to nurture their thirst for knowledge.

Consider this quote:

According to Charles Schwab’s annual Teens & Money Survey, 89% of teens say they want to learn how to make their money grow.

That’s HUGE! It’s not just a matter of throwing some financial textbooks at kids and expecting them to groan about it. Kids actually WANT us to teach them how to manage money.

We all often hear kids complain that what they learn in school won’t actually apply to their lives; now’s our chance to teach something that we know can help them and they want to learn.

A very important message here is that it’s not only the “rich” who should be teaching their kids and teens how to be rich. Every single child out there, wealthy or poor, needs to know how to manage money so they can have a happier future. No, money isn’t everything — but it sure does help!

So, what are the next steps for you and your children?

No, you’re not going to pray that they win the lottery and can support you through retirement. That’s one way to become rich, but it sure doesn’t help you stay rich! You need to teach them as early as possible how to manage their money. If you aren’t sure yourself, it’s time to do the research. Grab some books on personal finance and make it a family affair!

Some Kids & Money Resources:

1. 15 Ways to Teach Kids About Money
2. Teaching Kids About Money! : “Cool Tools” for Training Tomorrow’s Millionaires!
3. Teaching Kids About Money – Forbes.com

While you might not have been born rich yourself, you can teach your children how to be rich. It’s all about having the right mindset and financial skills in place as early as possible. Remember, kids really do want to know this stuff, so get out there and teach ‘em!

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Suddenly, selling those girl scout cookies leads to starting their own bakery business. Having to raise money for a mission trip turns into a project that is so high in demand they have to work their little tails off to fulfill all the orders. Is this really good for our kids?

Before too many people think I want to squash the entrepreneurial spirits of our smallest citizens, I want to be clear that I do think it’s a good thing- with some caveats. Children need to be able to still be children. They need to laugh, learn, play and take the time they need to really grow up. There will always be time to take their entrepreneurial tendencies to the next level when they are older.

With that being said, some of these kids are just plain awesome!

Leanna Archer

Leanna Archer - Kid CEO

Take 13 year old Leanna. She owns her own website at http://www.leannashair.com. She creates hair formulations based on an old family recipe and sells them to people all over the world. Leanna is able to bring in about $5,000 a month and expects her profits to increase substantially over the next year. Of course, this wonderful success does not come without its downsides.

“Leanna works seven days a week to keep her business going. On weekends, she makes and packages the products at home with her parents’ help.

During the week — after completing her homework — she packs boxes for the orders she receives daily on her website.”

It’s an incredibly good thing that Leanna found her niche at such an early age! It’s amazing even. Still, I can’t help but get a touch of sadness that instead of looking forward to going to ballet class or soccer practice, she often stays home to package boxes.

Obviously, her parents seem to have a good sense of what Leanna wants, and she seems wise beyond her years, but I don’t think it would be a bad thing if the family outsourced more of the packing and production so Leanna could oversee that, but still be a kid at the same time.

Alexis Holmes

Leanna isn’t the only one with a taste for business at an early age. Alexis Holmes is another young girl who has successfully started her own business. Alexis learned how to bake from her Godfather. She got the idea of selling her treats to help raise money for local charities.

This is astounding -within two months of starting her business she generated revenues of $20,000! That’s enough to make struggling adult business owners cry. Alexis cites her mother, anther business woman, as being her biggest inspiration. The good news in this case is that she hires other young people to help out with the business, which is great because these are generally kids in crisis who benefit from having this positive opportunity in their lives.

Christina Pendleton

Yet another young CEO is Christina Pendleton. She started out wanting to raise money for a mission trip. Christina made and sold candy, and business really took off! The orders started pouring in even after she came back from her trip. Christina is a high school senior, so it’s a great thing she’ll have this extra money for college.

All three of these young women have accomplished so much at a young age. Still, it’s important to remember that they have their whole lives ahead of them to be worried about making money. For now, the focus should stay on being young, having fun, and fueling their passions because adulthood will be here before they know it. It’s hard not to get jealous that they have it all figured out at such a young age though.

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Juan Rodriguez's house

If you’re like Juan Rodriguez, you’d stay in your single-wide trailer, drink beer, and wonder when the next vulture is going to come to your door looking for a handout.

Is winning the lottery all it’s cracked up to be?

The evidence is certainly stacked up against it.

There is something about our culture that gets people very excited about getting something for nothing. The thought of paying $1 for a lottery ticket and coming away with several million dollars is a fantasy many people can’t let go of — in fact, that’s why the lotto companies can afford to keep going in the first place.

The problem with winning so much money is that it’s a complete life change that very few people are ready for. Going from near poverty levels to wealth rarely ends well. People tend to either wind up lonely, broke, or in some other kind of trouble.

Juan Rodriguez is not broke, but he also has no idea where his money has gone. He’s invested some, given some away, and bought some items (that he’s grown bored with). He still hasn’t moved out of his mobile home, and really isn’t in a hurry to.

The Life of Luxury

He thought that winning the lottery would change his life for the better. Finally, he could spend his days doing whatever he wanted to do instead of going to work in the oil and gas fields everyday. The trouble is, that gave his life purpose and now he feels like he has none. What’s even worse, everyone seems to want to use him.

“Now, people call him ‘sir’ or worse, ‘The Millionaire.’ He hates going out because he hates running into people who owe him money, or people who want money. When you’re arguably the richest guy in town, everyone always wants something.”

Is that really any way to live your life? I’m willing to bet that Juan doesn’t think so. If he could turn back time and stop himself from spending that buck on the lottery ticket, he probably would in a heartbeat. Then, he’d know who his friends were, where his money was going, and he’d have a reason to get out of bed in the morning.

Easy Money = More Problems

This kind of fast wealth almost always seems to lead to heartache. Are you still hoping for that winning lotto ticket? How about getting rich the old fashioned way? Those who are able to earn their income through hard work and smart investing seem to fare much better in the long run than those who are one of the very few people who get lucky at lotto.

Though that’s sound advice, it seems that there are only a few who will ever heed it. The lull of buying a small piece of paper with some numbers on it, and winning millions of dollars is just too strong. It’s all about human nature I suppose, which Juan Rodriguez is certainly finding out a lot about.

It’s actually hard to believe that more money could bring more problems, but history suggests it is true. Not only that but 82% of people who win the lottery actually are worse off financially in 18 months!

Do you think you’d be the exception? How would you handle winning the lottery?

~ this post was featured as part of the Carnival of Personal Finance on Mighty Bargain Hunter!

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Of course it does, right?

Well I’d say that depends on where you focus your attention.

Will he help the economy?  Will he end US health care problems?  Will he provide jobs?  Will he end the War in Iraq?  Will he help the US to regain world respect?  Will he help the Environment?

Those are some tough questions that will soon be answered when President Elect Obama takes office.

Yes, policies will be different with Obama vs. McCain. Reactions to world events will be different. Reactions to present pressures facing the country will be different with Obama.

Depending on how you voted, you may see those facts as positive statements or negative statements.

Now lets take a look at Obama’s presidential win from another point of view:

Will he make you a happier person?  Will he make you a richer person?  Will he write your new best selling novel for you?  Will he create your new Fortune 500 company and hire you as president?  Will he be responsible for giving you the ideas for your next joint venture project?

I’ll venture to say that you answered all of those questions with a NO.

For the stuff that really matters, Obama can’t really make that much difference. How fickle would your happiness be if it depended on any circumstances outside of yourself?

A Successful Mindset Doesn’t Worry about the Weather

Successful people learn something that the rest of us don’t get. You can only get to your goals by focusing on the desired results, not by focusing on the circumstances along the way.

The policies and decisions made by the president, are simply waves and wind on the ocean. Becoming rich (or achieving any goal) is a matter of paying attention to the wind and waves, but ultimately doing whatever it takes, and following whatever is the best path for you, to get to your ultimate goal.

Every ocean has waves and wind. The real question is whether or not the captain of your boat has a plan, a direction and a set of proven strategies to achieve that goal.

If you do, then the day to day circumstances of who is president will be interesting entertainment, but Obama won’t be a determining factor in the success or failure of your life in general.

…this post was is featured in The Carnival of Personal Finance on The Digerati Life

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