Category Archives: Financial Success

Enabling Our Kids

My number one goal in life is to “Launch 4 enabled, well-adjusted young men into the world.”

During a recent gathering on our street I mentioned to a neighbor that we “helped” each of our kids get a car. He responded with, “We don’t want to spoil them, too much.” I agree with that 1,000%. We did this for 2 reasons:

  1. I know what I did to my Dad’s vehicles (sorry Dad) and there was NO WAY I was about to provide an opportunity for my kids to do the same to mine 🙂
  2. More importantly, we wanted to enable them, providing opportunities to learn and grow

First, how did we “help” them get a car. The deal was, the better the grades the more “help” they got. The result; each has a stake in the acquisition of their (used) car.

How does this enable them? It provides a TON of freedom. And, they have to feed and care for their car.  Not to mention the benefits that we as a family realize: we aren’t competing for the use of a vehicle or managing the complex logistics of each other’s comings and goings.

So, if they want to “maintain” their sense of freedom, they need to work a job and perform other simple time and financial management tasks, such as making sure they have:

  • Gas in the tank in advance of “rushing off” to school
  • Enough pocket change to pay the toll (soon realizing the benefits of getting their own EZ-Pass to simplify matters)
  • Enough funding in their checking account to pay for gas when they arrive at the pump, when EZ-Pass makes the withdrawal to replenish the account or the auto insurance company takes their monthly payment
  • Enough funding (in reserve) to pay for the unanticipated repair bill as well as the annual inspection and registration fees
  • Shoveled their car out of the snowbank (especially this year!) and still make it to school, work or Tae Kwon Do on time

And, when (not if) there are infractions or accidents (both of which cause insurance rates to go up) guess who pays? They do! On the flip side, upon demonstrating continued good grades they can realize a discount on auto insurance!

This (car ownership) also provides the opportunity to learn self-sufficiency and some basic “mechanics.” For example, when the car doesn’t pass inspection because of a bad taillight and cover, they learn where the nearest junkyard is, pay $12 for the part and install it themselves vs. paying the exorbitant fees at an auto service center (or worse, at a dealership).

Yes, the above are basics. The alternative is that we (parents) worry about/pay for these things for our kids, vs. providing them the opportunity to figure it out. Our opinion is that if they are old enough to drive they are old enough to be taking care of these things. And, finally, it significantly reduces the “sucking sound” coming from our bank account 🙂

The object of teaching a child is to help him get along without his teacher. ~ Elbert Hubbard

One might think: “Geez, if they have their own car and ONLY a part time job while going to school they must be working simply to keep their car on the road.” Wrong. These guys each have more cash in the bank (that they earned, and more importantly, saved) than some adults I know. A note for the young ladies in town 😉

If you’d like other ideas on how to raise enabled and well-adjusted kids, check out the recommended readings on this subject. And, feel free to reply with approaches you’ve used to accomplish the same.

Minimum Wage, Government Assistance and an iPhone

I don’t pretend to have an answer to the question: Should the minimum wage be increased?

But, I just read a telling article on Yahoo! Finance “Low-Wage Workers Finding It’s Easier to Fall Into Poverty, and Harder to Get Out.

When the article was originally featured on the Yahoo! Finance homepage (earlier this morning) it included a picture of a young man under a sign reading “We can’t afford to live on $8.25/houras he is texting on his iPhone.

Within the article is a comment: “As for her daughter Jer’Maya, who mimics Beyoncé’s every move on her mother’s iPhone, Ms. McCurdy said, “She’d love to take ballet and piano lessons, but there’s no way I can afford that.” This, while at the welfare office getting a government hand-out to pay utility bills.

Poverty is a terribly unfortunate situation, especially in our land of abounding opportunities. But, we each have choices. If we can’t afford our basic utilities (heat and electricity) and ballet or piano lessons for our child it is time to kill the iPhone (and cable TV).

Perhaps the minimum wage should be raised.

In addition, as a country, we can do more (better) than handing out free money: We can teach people how to “raise the bridge” (earn a living and increase one’s income) AND “lower the water” (decrease expenses).

As individuals, we each can reach-out to provide guidance, encouragement and an example to those around us (friends, immediate family, relatives, fellow workers, church-goers, etc.) to take charge of their life so as to ensure we don’t further propagate this situation (of people assuming the government is their surrogate mother). It is OUR country and OUR future. We can’t expect the government to fix this…

And, for those less fortunate individuals in circumstances absolutely preventing them from working due to health issues, (mental or physical), etc. we can continue providing them the necessary assist.

Hoping you have a great Monday and that you reach out to someone – today…

Debt Eradication

One of the most distracting things in life is debt.

It is SO easy to get into. We are constantly fed the marketing pitches via all media outlets to buy, experience, taste…To make matters worse, as soon as we turn 18 we are courted by companies making available credit cards when we don’t yet know how to discipline ourselves with this (seemingly) “free money” and/or the freedom (ability to buy/do/experience) it brings. It is anything but free (or freeing)!

A man in debt is so far a slave.” ~ Ralph Waldo Emerson

I’ve experienced this first hand by digging myself into a ditch (huge credit card debt, owning hot sports cars worth less than what was owed, etc.). More importantly, though, I followed a process (took years) to dig myself out.

Following are some simple steps that can be taken (starting right now) to eradicate (destroy completely ; put an end to) debt.

The first and most important step is to plug the leak in the boat, by committing to taking on no more debt. This may require cutting up the credit card(s) and/or locking (one) away to be used ONLY in an ABSOLUTE emergency situation (i.e., the car has broken down and needs to be fixed to get to work).

The next steps include:

  1. Take inventory of the debt. Create a list of each outstanding loan/debt account, including the outstanding balance, annual percentage rate (APR) and monthly payment.
  2. Determine the total debt payment being made each month (across all accounts).
  3. Focus on knocking down the debt. It starts by prioritizing which account to pay off first, second, etc. There are a couple of approaches to consider here, depending on what will be the most rewarding to each individual. To achieve some quick / “psychological” wins, kill (pay off) the account(s) with the lowest balance first. This will eliminate the “number” of payments made each month. To achieve “financial” wins, kill (pay off) the account(s) with the highest APR first, as these are the accounts that cause the loudest sucking sound on net worth. Regardless of the chosen approach, make the minimum required payment on each account and apply any excess cash to the top priority account. As an account is closed out, take the monthly payment amount that was previously being paid on this account and apply it to an “increased” monthly payment on the next account on the prioritized kill list. Continue to rinse and repeat this process never reducing the total monthly payment amount towards debt, just allocating the payments per the prioritized kill list.
  4. When extra cash comes in (i.e., tax refund, pay raise) apply it to the account which is currently at the top of the “kill list.”

This process takes time (potentially years, depending on how deep the hole is). The result, however, is HUGELY freeing.

There is no better time to start the process than now. In fact, just beginning the process starts to remove the distraction of debt as we are now “doing something about it” vs. letting it grow or fester.

For additional insight and methods for eradicating debt and otherwise improving on the financial front, check out the following book.

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I wish you the best in your quest to eradicate (destroy completely ; put an end to) debt.