Tag Archives: Money Management

November 21, 2011

Why You Need To Celebrate Progress

By Chris LoCurto
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“People are afraid to celebrate winning the battle, because the war hasn’t been won yet.” – Kent Singletary

I was having a conversation with Kent, our Momentum Coach, and we were talking about completing the Financial Peace University (FPU) Baby Steps. That’s when he shared with me the above quote. (Yes, I could have written it into this paragraph, but it’s much better as a stand-alone quote.) He said people (especially men) are hesitant to celebrate accomplishing Baby Step 1 of FPU, which is getting $1,000 in an emergency fund, because something might happen and they would have to use that money.

He pointed out that people don’t celebrate what can be taken away. Think about the kinds of cards you can buy at Hallmark – birthday, anniversary, etc. But you don’t see a “Great job losing 10 pounds!” card. The same thing is true for emergency funds. Something might happen, and they will be forced to pull money out of their emergency fund for…wait for it…an emergency!

But that’s what it’s there for. The sad thing is, people feel like they’ve failed if they have an emergency and they have to use the emergency fund. How is that possible? Well, to be honest, it’s because of the financial roller coaster we’ve all been on with our money since we started our lives as adults. We started using debt. We didn’t watch where we spent our money. We’re a culture that celebrates permanence; therefore, we don’t place as much value on the things that might last only a short time.

According to The Wall Street Journal, 70% of Americans are living paycheck to paycheck. That means that all the money coming in is going right back out again. With life being this tight, any unexpected event is going to be a financial crisis. And what do we do when we have a financial crisis? Well, considering we don’t have cash to handle it, we go into debt. Thus, the pensive feelings when we finally have an emergency fund. These crises leave such deep mental scars that we’re still just waiting for the next bad thing to happen.

We get confused thinking that unless the fund stays at $1,000, we weren’t successful. The truth is, most people have never had that much money in their account on purpose! We also worry that if we have to use the money, and someone finds out, they will look at us as failures. It’s just not true! And if someone does, get that dork out of your life. Look for people who enjoy celebrating milestones.

So what do we do? Here are some suggestions:

  • Celebrate – Make it a point to get excited that you have that money! (Especially you men!) Get up and dance a jig. Or the Hokie Pokie. Or the Macarena. I don’t care, just get happy!
  • Celebrate with others – Again, as humans we are naturally concerned with what others think of us. If you see somebody doing something right, go crazy telling them how well they’ve done. They’ll soon begin to feel it as well. Then it will be okay for them to experience the fun! And don’t be afraid to celebrate the same win again if you have to go backward temporarily.
  • Plan for emergencies – Planning for an emergency doesn’t mean one will happen. It just means you are prepared. What if there is an emergency? What then? Well, since you’ve been working like crazy to protect yourself against emergencies, then it’s okay if you need to use that protection. By the way, stop calling this failure!

Always remember that we don’t get into financial trouble overnight. Therefore, it will take some time to get out. Celebrating the Baby Steps is just a way of saying along the way that you have no intentions of going backward for good. If we do for a time, it’s only for a time.

Question: Have you ever felt this way before, or noticed someone who has? Is there someone you need to celebrate with today?

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28 comments   |  tags: , , , , , , | posted in Financial

March 15, 2011

Does My Bottom Line Look Fat?

By Chris LoCurto
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When I was 15, I worked at Mountain Mike’s Pizza in my hometown of Truckee, California. It was a great restaurant that was always rockin’, and we were always slammed.

The reason? We made a killer pizza! Everything that went into the pizza was fresh. Every day we grated cheese, cut vegetables, and sliced meats. We even made the dough every day. The best part? We used an actual pizza oven! We didn’t use a conveyor belt that made a pie in five minutes. When you ordered, you knew it would take up to 20 minutes, but you were getting a real, old fashioned, full-of-flavor pizza. Not a piece of cardboard with some rubbery meat on top.

Because of the fresh ingredients and the time it took to make the pies, Mountain Mike’s pizza cost more than the fast pizza company in town. And while we delivered, we couldn’t guarantee that it would be there in 30 minutes. There’s an old saying: “You can have good, fast or cheap – pick two!” In my opinion, the other company chose fast and cheap, but there was no doubt that our pie was better. Over time, they won out on the mass scale.

Interestingly enough, the fast pizza company is now struggling to get repeat customers due to their product’s lack of taste. Over time, they continued to cut costs with cheaper products in an attempt to get more margin and more market share. While that worked for quite a few years, it’s now backfiring on them, forcing them to spend money to make a better pie. They’re spending tons of money marketing the fact that they took their product to a point where fast and cheap wasn’t enough to satisfy the customer, and now they have to fix it. Eventually, even on a mass scale, quality matters.

You might have recently seen a fast-food chicken restaurant running commercials apologizing for its lack of a quality product. Now there are claims that some fast-food places use almost no actual meat in their meat products. For one company after another, lack of quality is starting to make a difference.

This is an easy trap for a small business owner to fall into as well. If your focus is solely on the bottom line, it isn’t difficult to find ways to make it bigger. If it means cutting more than just expenses, though, you have a problem. If it means cutting quality, you’re going to lose in the long run.

So am I saying you can’t cut expenses? Not at all! Once you have a product that is selling, and you see that people like it, do all the research you can to see where you can cut expenses while delivering the same or better quality. There’s nothing wrong with doing everything you can to grow your bottom line. The issue is when you stop producing the thing you produce in the way that brought your customers to you. You must make a profit, but make it while making others happy.

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2 comments   |  tags: , , , , , , | posted in EntreLeadership, Leadership, Small Business

March 4, 2011

You Can’t Have That!

By Chris LoCurto
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Today we are in Kansas City for the EntreLeadership 1-Day event teaching business owners and leaders how to grow and build their business. And I just want to say that I am a capitalist! I have no problem with someone leaving the cave, killing something, dragging it home, and keeping it!

My New iPhone 4 Arrived today! - June 29, 2010

The Bible specifically says the diligent will prosper. If I decide to put my energy into creating a product that changes or enhances lives, and I make money for that, what’s the problem?

There is this crazy idea that you shouldn’t be able to make a lot of money for your hard work. If you do, you should give it all away. Who came up with this idea?

I don’t know who came up with the idea, but I do know who brings it up all the time. It’s always someone who doesn’t have anything. Someone who isn’t willing to work their tail off to obtain a better standard of living.

Someone who thinks that life and money should be handed to them. This is the same person who wants to partake in luxuries but doesn’t want the company who makes those luxuries to have any money.

Question for ya: How would Apple research, develop, and get the iPhone out to market if it didn’t have any cash? “Didn’t a lot of this stuff start in a garage somewhere?” Yes! And do you remember how long it took to get to market? Be reasonable.

Does this mean that I don’t think businesses should give? Not at all. In fact, David Green, CEO of Hobby Lobby, recently gave $70 million to a university. $70 MILLION! Now ya can’t do that if you don’t have any money, can you?

On the way back from lunch today, I saw two people standing in a median, each with a stop sign on a stick that read, “STOP CORPORATE TAKEOVER.” That’s right. Two healthy-looking people, in the middle of a workday, denouncing corporate “greed” to everyone who drove by.

I didn’t see that they were getting much support. After all, most of us were on our way to earn our living by working for those “greedy” corporations who pay us.

I believe most people are not upset about what other people have. They’re upset about what they don’t have. Again, the diligent prosper. If you want more, instead of being jealous of someone else, try working harder. Or come up with other ways to make money.

Don’t be a hater! (That’s street lingo.) I once heard that the difference between jealousy and envy is with envy, you want what someone has. With jealousy, you want what they have, and you don’t want them to have it.

Let’s just work on getting what we want and not worry about what others have, mmmkay? Please share some situations that you’ve experienced.

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2 comments   |  tags: , , , , , , , , , | posted in EntreLeadership, Financial

March 1, 2011

Celebrating Progress

By Chris LoCurto
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“People are afraid to celebrate winning the battle, because the war hasn’t been won yet.” – Kent Singletary

A few weeks ago, I was having a conversation with Kent, our Momentum Coach, and we were talking about completing the Financial Peace University (FPU) Baby Steps. That’s when he shared with me the above quote. (Yes, I could have written it into this paragraph, but it’s much better as a stand-alone quote.) He said people (especially men) are hesitant to celebrate accomplishing Baby Step 1 of FPU, which is getting $1,000 in an emergency fund, because something might happen and they would have to use that money.

He pointed out that people don’t celebrate what can be taken away. Think about the kinds of cards you can buy at Hallmark – birthday, anniversary, etc. But you don’t see a “Great job losing 10 pounds!” card. The same thing is true for emergency funds. Something might happen, and they will be forced to pull money out of their emergency fund for…wait for it…an emergency!

But that’s what it’s there for. The sad thing is, people feel like they’ve failed if they have an emergency and they have to use the emergency fund. How is that possible? Well, to be honest, it’s because of the financial roller coaster we’ve all been on with our money since we started our lives as adults. We started using debt. We didn’t watch where we spent our money. We’re a culture that celebrates permanence; therefore, we don’t place as much value on the things that might last only a short time.

According to The Wall Street Journal, 70% of Americans are living paycheck to paycheck. That means that all the money coming in is going right back out again. With life being this tight, any unexpected event is going to be a financial crisis. And what do we do when we have a financial crisis? Well, considering we don’t have cash to handle it, we go into debt. Thus, the pensive feelings when we finally have an emergency fund. These crises leave such deep mental scars that we’re still just waiting for the next bad thing to happen.

We get confused thinking that unless the fund stays at $1,000, we weren’t successful. The truth is, most people have never had that much money in their account on purpose! We also worry that if we have to use the money, and someone finds out, they will look at us as failures. It’s just not true! And if someone does, get that dork out of your life. Look for people who enjoy celebrating milestones.

So what do we do? Here are some suggestions:

  • Celebrate – Make it a point to get excited that you have that money! (Especially you men!) Get up and dance a jig. Or the Hokie Pokie. Or the Macarena. I don’t care, just get happy!
  • Celebrate with others – Again, as humans we are naturally concerned with what others think of us. If you see somebody doing something right, go crazy telling them how well they’ve done. They’ll soon begin to feel it as well. Then it will be okay for them to experience the fun! And don’t be afraid to celebrate the same win again if you have to go backward temporarily.
  • Plan for emergencies – Planning for an emergency doesn’t mean one will happen. It just means you are prepared. What if there is an emergency? What then? Well, since you’ve been working like crazy to protect yourself against emergencies, then it’s okay if you need to use that protection. By the way, stop calling this failure!

Always remember that we don’t get into financial trouble overnight. Therefore, it will take some time to get out. Celebrating the Baby Steps is just a way of saying along the way that you have no intentions of going backward for good. If we do for a time, it’s only for a time.

Have you ever felt this way before or noticed someone who has? Is there someone you need to celebrate with today?

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4 comments   |  tags: , , , , , , | posted in Financial

February 22, 2011

Playing Bankers and Indians!

By Chris LoCurto
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The Wall Street Journal recently reported something that I just had to share; banks and Indian reservations are now hookin’ up to do payday loans. Some of them are charging 300% for the loan! Now let me give you some background. Payday loan companies have been charging outrageous rates to customers for years. Now granted, I think it’s absolutely stupid to get loans, and getting one on a paycheck is even worse. So it could be said that if you are dumb enough to take out a loan with a high interest rate, you deserve what you get. The problem is, that doesn’t take into account desperation. And really, that’s why payday loans exist: desperation!

What payday loan companies don’t consider…or care about, is how they take someone who is already in a bad situation and compound it greatly by charging them an insane interest rate. All in the name of the mighty dollar. Now, if you know me, you know I’m a capitalist. All throughout the Bible, God tells us to work our tails off and to build wealth. Never does He say that if you just sit around and pray for it, He will give it to you. Instead, He says that the diligent prosper.

But taking advantage of someone to the tune of 300% is absolutely ridiculous. I seriously don’t understand how someone can go home at night and sleep when doing that each day. The crazy thing is they don’t seem to have a problem with it. In fact, one of the chiefs was asked about how much money the tribes are making off the loans: “We don’t want to brag, ” said Bill Follis, a former loan office at a bank who has been the Modoc chief since 1974, “But it’s good.”

The good news is that some states are doing their best to get rid of these companies. Seventeen states have either banned payday loans or put a cap on the amount that can be charged. Because of this, the amount of payday loans are down 24%. The bad news is that Indian reservations have their own sovereignty; therefore, they don’t have to abide by the state laws.

Here are three ways to avoid the “need” of a payday loan:

  • Get an emergency fund – As fast as you can, get $1000 set aside that is only to be used for emergencies. Pay minimum payments on all of your bills and stop investing completely for now.
  • Live on a budget – You have to start by spending every dollar on paper on purpose before the month begins. Also, for thirty days, collect a receipt on everything you purchase, even if it’s a pack of gum. At the end of thirty days, categorize the receipts and lay them out on a table. You will be blown away when you see where you actually spend money.
  • Stop spending money – You have to realize that the only way to get out of crisis, is to quit putting yourself there. It is vital to live on less than you make. That way you can use what is left over to accelerate getting out of debt.

The important thing to remember is that when you have an emergency fund, a budget, and a debt elimination plan, then a crisis becomes just an inconvenience.

What are your thoughts on the tribes and banks doing this kind of business?

 

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January 18, 2011

No, You Can’t Have That!

By Chris LoCurto
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controlfreak

Image by celine nadeau via Flickr

I……am a control freak, when it comes to doing the finances at home. But I have a really good excuse for it! ;-) It comes from a bad situation I was in where I lost everything I had due to trusting someone else with my money. I was young and ignorant…and trusting, and it cost me years of heartache. And because of that, I have had this….thing, where I have to be in control of the finances, knowing where every penny is at all times. That’s not bad is it?

The problem came in when I got married. Now we had two people who did the finances, but one wouldn’t give it up. (If you’re still with me, you know which of us that was.) This became a point of contention because she liked doing the finances. But we were able to come to an agreement. I would do the finances as long as we had two things: a budget committee meeting, and I would bring to that meeting a print out summary of the finances/investments/bank statements, that way she could see exactly where everything was, and have a really good feel for where we were going.

Now, the later of the two is pretty self-explanatory. But if you don’t know what a budget committee meeting is, it’s when the one spouse prepares the budget before the next month begins and presents it to the other spouse. This gives the other spouse the opportunity to inspect it to see if it lines up with what was previously discussed, as well as give input on things left out. I.e., their mother’s birthday is that month and they’ll need to buy a present. There will be a field trip for the kids at school that will cost money. This may mean that some things need to be adjusted if the suggestions add more mullah than is available. If you’re budget is already tight, you might have to not go out to dinner to pay for your mother-in-law’s Snuggie.

Most importantly, you have to come together at the end of each month and plan what’s going to happen next month. It’s called being grownups. And, if one of you is a control freak in the area of finances, this give your spouse the comfort of knowing that everything is in place and is all right.

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December 8, 2010

The Secrets We Keep

By Chris LoCurto
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"LIES"

Image by Toban Black via Flickr

I used to date a girl whose mom handled the finances for their house. There’s nothing wrong with that, except for the fact that she would also handle spending all of the finances for the house as well. As for her husband…clueless! He would bring her check home…hahaha…his check home and give it to her. (Interesting slip of the tongue.) Since they are supposed to be one in marriage, let me say their check. Anywho, she would cash the check and burn through it faster than a cement torch. She also happened to be a rep for a multi-level product line, so she was constantly purchasing stuff that she wasn’t able to completely sell. She would then give away the leftover so it didn’t look like they were spending money on something that wasn’t working. On top of that, she had run up a BUNCH of credit card debt that he didn’t know about. The whole time he was oblivious to what was going on. She would give him his $20 allowance a week and he would be on his way. It was no surprise that her daughter, my girlfriend, had completely destroyed her finances after watching her mother do this to theirs. I didn’t stick around to find out what the outcome was, but I hope they got some help.

Come to find out this kind of thinking isn’t foreign. There was a time when a bunch of people from our office (Dave Ramsey office) went to support a friend of one of our team members by attending her “in home party to sell you kitchen stuff” party. Now, I have no problem with the company that does that, we own probably everything they have since we have supported so many friends as they sold it to help get out of debt. Great idea! The problem came in at this one ladies party when she dropped a bomb. After doing a fantastic job explaining all that they had to make our lives in the kitchen easier, she began to explain the payment processes. (Keep in mind who’s in the audience.) She said, “…and ladies, you can put it on your credit card so your husband won’t know.” Seriously? That’s your sales pitch? Lie to your husband! Great, I’ll take two of everything then!!

The amazing thing is this really isn’t that uncommon. As a matter of fact, men and women have been lying to each other over purchases for all too long. CNNMoney.com did an article highlighting 6 men and women who apparently are so ashamed of it, that they did an interview for A NATIONAL NEWS OUTLET! The genius of it all!! Not only will I hide my spending from my spouse, but I’ll tell everyone who’s willing to read about it.

I do believe you need to have an amount that you agree on that is okay to spend without approval from your spouse. Past that, if you’re having an issue discussing what you’re spending, then you have a much bigger problem than buying too many shoes. There’s a lack of trust in the relationship, and that should scare you more than if they find out you spent too much on prime sirloin. That’s why you MUST be working on your budget together. It’s okay if one person puts it together, but both need to be going over the numbers and agreeing to only spend what’s in the budget. When you spend the next month’s money on paper before the month begins, if there’s a discrepancy it won’t be hard to find. Thus holding everyone accountable. Then you can brag to the world on how well you’ve done NOT lying to your spouse.

Without naming names, do you know of someone who’s done this?If you are enjoying these posts, be sure to click the follow button.

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1 comment   |  tags: , , , , , , , , , | posted in Financial

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