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What are Your Montly Payments Costing You?

December 30, 2010

Once a month I teach at our local community college, Crowder College.  I work with high school seniors in the Upward Bound program.  The program is designed for seniors who are planning on attending college that are first generation college students, and many come from a free or reduced lunch economic background.  Upward Bound begins working with the students early in high school and then are a free resource to the students when they arrive at the institution of their choosing.  (I like teaching them because that was me in college, but I didn’t know about the program at the time).

The topic I’ll be covering in the coming month in my class is preparing to earn an income.  I will teach the students about tax with holdings, work life balance in college, basic budgeting, and yes even retirement savings.  I want these students to learn early how to earn and spend wisely.   A report from the New York Times discusses some of the topics I plan to teach as a few of the top reasons students drop out of college.  I’m telling you all of this because I want to share a resource that I’ll be using in the class.  I’ve created a spreadsheet that I used for budgeting, when I used to budget, now I use something closer to the balanced money formula, made popular by Elizabeth Warren.

To use the spread sheet the students will be given typical expenses for the average household.  They can adjust the amounts as they see fit.  Next they can enter their realistic expected income.  Once they do, I put in a formula to show how much money they have left over, or how much they are in the hole.  The eye opening part of this doesn’t occur here though.  On a seperate tab, near the bottom of the page, a tab called “the cost of stuff.”  The purpose of this tab is to show them what our indulgences now cost us, now and later in retirement.  (Please note the spreadsheet as it appears was created for a married couple on two incomes.  I left it that way so the students could see what average income with modest expenses will look like).

I wrote this post for two reasons.  One, to share the spreadsheets with those who might find them useful, and two to see what input you might have for soon to be college students.  What advice would you give them.  Be honest and tactful in your responses, as I will link my website that they use to this blog post.

 

 

Here is a link to download the spreadsheets. Budge&Debt Worksheets

Switching to an Even Better 2011 (Part 2)

December 23, 2010

Last week I began a series on How to Switch to a Better You from a fantastic book on creating change called Switch, by Chip and Dan Heath.  This is the second part of a three part series that pulls information from the book to share practical examples of how you can bring positive change in 2011.

Script the Change

Sometimes when we are trying to bring about change in our lives decisions become clouded by old habits and the new challenges of trying to follow through on change.  For example, you want to reduce your debt but it seems every time you start something else breaks down or demands your money.  Or, you begin a diet and exercise routine, then your work schedule changes or a new season of soccer begins for your child and it interrupts the change you were trying to make.  The authors of Switch suggest you can manage these setbacks by scripting the critical moves, or setting absolute priorities that are non-negotiable for a set amount of time.  Here’s what I mean.

Example: You are trying to pay off your credit cards and build an emergency savings of $1,500.

Short Term Rules: For the Next nine months (or however long it will take)

1. All money earned will be put towards meeting the minimum needs of the household. Any money left from meeting minimum needs is used for building savings then reducing debt.

2. The best solution to any problem that arises is one that costs the least money up front (even if it will cost more money in the long run and even if it is a lower quality solution).  Example: car breaks down, or washer quits.  Don’t go out and purchase something new.  Look for the lowest cost solution, even if it means yet another repair, or buying something used for the short term.

3. Options that will fix a problem quickly are preferred over slower options that may seem emotionally difficult. Example: When trying to boost your income to start savings, you may want to consider selling everything around you that is not absolutely necessary.  It’s easy to get emotionally connected to the stuff around us but when the “stuff” is between us and reaching goals it makes the decision a lot easier.

These three examples are just one way you can focus on a specific goal and establish short term anchor points that can guide your decisions when making decisions that will ultimately determine if you are successful in reaching your goals.

We Suck at Self Evaluating

Why is it that we do a better job at predicting the length of time that a friends relationship will last and grossly overestimate our own?  In the book Switch, this truly human error of ours is known as a positive illusion.  It turns out the human brain is a positive illusion machine (except of course for Debbie Downer).  When it comes to our own decisions and self perceptions most people give themselves top marks.  Examples from the book.

  • Only 2% of high school students believe their leadership skills are below average
  • 94% of college professors report doing above average work

In a study by Elizabeth Newton she tested our self perception and the perceived intelligence of others in a simple game.  The game was tappers and listeners.  Tappers received a list of 25 well known songs such as Happy Birthday, The Star Spangled Banner, Mary Had a Little Lamb, etc. Their job was to clearly tap out the song with their finger (no humming allowed).  The job of the listener was to, well . . . listen and guess what song was being tapped.  Between sets of tappers and listeners 120 songs were tapped and the listeners guessed an astonishing 3 songs, or 2.5%.  Here is the interesting part, before the tappers began they were asked what percent of the songs do you think you can clearly tap, the tappers guessed they could clearly tap at least 50% of the songs.  They predicted listeners being able to decipher one out of every two songs, when in reality they heard one in forty.  Tappers could hear the song in their head and felt they were communicating clearly.  When the listener couldn’t figure out the song the tappers were probably thinking, “How could you be so stupid.  This is so obvious.”

What’s the point?  When we are trying to bring about change in our lives we can be very reluctant to change because of our established self perception.  Harvard business professors have noted that in the absence of dire threat people will keep doing what they’ve always done.  Most people have to be convinced and clearly see their house of cards is about to fall before they are willing to consider change.

Shrink The Change

The idea of shrinking the change is using mental tricks to get us moving on tasks we are reluctant to begin.  For example, exercise or budgeting.

Shrinking In Use

Let’s face it, we all know that exercising and good money management are essential in two key areas of our lives, but sometimes mental road block keep us from getting started due to the perceived size of beginning.  In their book the Heaths suggest we shrink the change using a five minute drill.  Promising ourselves we’ll start an undesirable or difficult task, but we only have to stick with it for five minutes.  In their book they explain it this way:  Pick out the messiest room in your house and set a timer for five minutes.  After the timer goes off you have permission to quit and pick up the task at a later time.  The reality is once you begin, chances are you’ll work past your five minutes to complete the task.

The 5 Minute Drill

This same strategy could work for budgeting.  People hate sitting down to organize and file bills or to update and review budgeting software.  Committing to stick with it for only five minutes may be the trick you need.  You could also use the same type strategy for running.  Instead of thinking about running for three miles, promise yourself you’ll go out and jog through two songs on your iPod.  Remember you can stop after a short time if you want to, but chance are you won’t.

Do you recognize any of these methods that could work for you?  What other methods have you used to institute change in your life?

How to Switch to a Better Year and a Better You in 2011

December 15, 2010

A few weeks remain in this year.  Did you conquer every resolution and make every change you hoped to make this year?  If not, a little Switch may be in order.

This past year I read a book titled Switch: How to Change When Change is Hard.  The focus of this book (and the next few posts here at 5k5k.org) is how making a Switch and changing your life, health, finances, work, and circumstances in life may not be as hard as you think.

People Hate Change

The adage that people hate and resist change isn’t necessarily true.  The authors in Switch argue that people voluntarily and excitedly bring change into their lives in ways that dwarf the resolutions we fail each year.  We move out of our parents home to begin a new journey.  Many people get married a few years after moving out, and not long after is the largest change of all is bringing a new life into the world.  All of these changes are massive in the actual affect they have in our lives and completely voluntary.  So why is it that a goal to lose a few pounds, eat better, or any other resolution seem impossible each year?

Tools for Change

  • Getting our Hearts and Mind to Agree:  Too often our heart wants to change, but our mind refuses to budge.  We feel the need to change, but we can’t make ourselves develop the habits needed to bring about true change.  Authors Chip and Dan Heath tell about students at MIT who developed an alarm clock for that very problem.  Students invented a clock that, when it went off, began to roll.  It rolls off of the night stand and starts zooming across the floor bumping into the walls.  The student is forced to get out of bed, chase the clock down, therefore eliminating the opportunity to simply hit the snooze button.  What aspect of your goals could benefit from a solution to help overcome our inherent desires?
  • Be Brutally Honest: We have a tendency to minimize the flawed aspects of what we want and blow out of proportion the changes we don’t want.  Ever justified a purchase to yourself only to regret it within a few days and never use the feature that you or a salesperson convinced you that you had to have?  Or the opposite may be true.  Your supervisor mentioned a new change initiative that caused you to drop into a self induced anxiety attack, only to find out when it was implemented that it wasn’t as bad as you feared.  Be honest about your calorie and fat consumption.  Have you ever justified an unhealthy meal because it has vegetables?  We might even look at the dietary information and see that it has 400 calories and 30 grams of saturated fat. But what if you didn’t know what that means.  Is that kind of unhealthy like eating a snack size bag of chips, or is it ridiculously unhealthy.  What if you looked at the unhealthy meal and saw a picture that showed your meal with veggies then and equal sign to a pound of bacon and 1/4 of a bag of sugar.  Be honest with yourself.  Don’t vow to “eat healthier.” Find unhealthy meals get familiar with what “bad”  or “unhealthy” looks like then eat better.
  • Find The Bright Spots: When attempting change it’s easy to feel hopeless and as if change isn’t possible.  When that happens look for bright spots of change in your past.  A bright spot is simply asking yourself, “What is working for me or has worked in the past and how can I do more of it?” The authors of Switch argue people too often become archaeologist of past failures, digging up where they have failed in the past and why, instead of evangelist of where they have been successful and how it can be duplicated.  The book Switch tells a story of problems of malnutrition in Vietnam and its devastating affects on population growth.  Non-profits and various government agencies began drafting plans to educate the country creating graphs, illustrations and pamphlets for the villages.  Jerry Sternin set about solving the task in a different way.  He began looking for villages in Vietmam that were flourishing and healthy.  He traveled to these “bright spots” to find out what they were doing differently with the same resources available.  He found villagers were using simple roots and beans that provided nutrients that other villages had, but were not incorporating in their diet.  Sternin invited the healthy villagers to visit, cook and share stories of their healthy children with the malnourished villagers.  In a short time the bright spots had spread throughout Vietnam villages.

The authors of Switch made a statement that is dead on that most of us should be aware of, but few notice.  They argure that big problems are rarely solved with equally large solutions.  Instead, they are most often solved by a sequence of small solutions over a period of time.  It seems obvious as you think about major trans formative changes, but often we seek immediate large solutions to the issues we are trying to change.

Do you have a bright spot in your past or possibly in a friend?  Bright spots can be all the encouragement you need to help you reach those goals you’ve struggled with in the past.

As I read this book my mind raced in so many areas where these tools to Switch could be applied.  I’ll be writing over the next few weeks about how Switch can be used to help you achieve your goals. Can you think of other ways you have used non-traditional methods to begin a change in your life?

Are You A Role Model for Motivation?

December 8, 2010

Do you ever wonder where your motivation comes from?  This past weekend people in the community where I live and surrounding communities gathered to run in a 5k and help raise money for area families in need during Christmas.  Runners age’s ranged from 8 to nearly 70.  The physical conditions of the runners also varied.  A few people finished the 5k around 17:40 (that’s fast) while others finished their three mile journey in about an hour.  Regardless of their physical condition each person came out and did their best.  Whether they knew it or not, each participant had an affect on those around them, both participants and spectators.

Unassuming Role Models

I knew many of the participants in the 5k personally and had a chance to speak with them after the event.  I also was able to overhear a lot of the conversations of the spectators at the run while they were at the event and during the awards banquet.  What I heard consistently from both of them was they were motivated by seeing others who were being active and competing to do their best.  Have you ever considered just by showing up to an event or training in your neighborhood you are motivating others and are in effect serving as a role model to be active?  It may seem rediculous if you don’t consider yourself a top athlete, but in a world where people struggle to find something real and meaningful you provide an example that regardless of where they are in life, they can be active and in control.  Once that idea take hold there’s no telling what impact it might have in their life.  A good example is the article I wrote about an organization called Back On My Feet.  It is a great story about how one runner is leading groups of homeless people across the country to take control of their life again.

Why Role Models Are Needed

There are very few accomplishments I can think of where I didn’t have some type of role model who provided the encouragement I needed to start and more importantly finish tasks before me.  They funny thing is most of my “role models” were nameless and were not aware they were providing the encouragment I needed to reach my goals.  When I was in boot camp in the Marines there were a few occasions I felt like giving up.  The stress and mental games wore on me and many others in my platoon.  The Marines were aware of this and they knew the importance of keeping us silently motivated.  We were able to catch glimpses of other platoons who were a few weeks ahead of us in boot camp and we could see them getting closer to graduation.  Each Saturday we saw a new group graduate and knew that many of them had faced the same struggles but overcame them.  So if they could do it, we could too.

Getting out of debt was another example of finding and clinging to role models.  When my finances were unraveling around me almost seven years ago I felt lost, hopeless and isolated with my problems.  I doubted that anyone else had been faced with the financial battle I knew I had to win, but I found the book, The Total Money Makeover,  that told stories of others who had fought similar battles and won.  In their stories I found the encouragement I needed to persevere.  Eventually we overcame our financial struggles and through this site I am able to help encourage others.

The Biggest Loser is a perfect example of being a role model for motivation.  People who have seemingly insurmountable weight problems take on their obesity head on.  Millions of people around the world watch and become inspired to lose weight.  Somehow though we believe it takes something like that, or a perfect model of fitness to be a role model for motivation.  It doesn’t.  It takes someone just like us, however you are right now.  If others see people they can relate to who are leading the way and inspiring change, they will give permission to themselves to be changed, inspired, and motivated.

Smells Like Christmas Spirit (And Jingle All the Ks Run Results)

December 4, 2010

 

While most people were hitting their snooze button one more time to sleep in and burrowing themselves deeper in their thick comforters on a brisk Saturday morning, runners from the four states descended to Neosho share their love for running and help some Neosho families enjoy a better Christmas.  A gathering of over 70 runners rubbed their hands together, jogged in place and huddled in their cars as they waited for the 5k to begin.  At 8:00 a.m. amid the fog of their own breath and the jingle of bells tied to their shoes the runners began the 3.1 mile run.  The runner’s ages ranged from 8-68, but each of them came out to challenge themselves and give to others.  First time 5k spectators were taken with the enthusiasm of the running community and the excitement and inspiration that lingered in the air through the entire event.  If Christmas spirit has different flavors, this was the sweet combination of motivation and giving.  Everybody who attended enjoyed the run and were asking for seconds next year.  We are looking forward to serving up another helping in 2011.

 

Download a pdf copy of the Jingle All the Ks Overall Results

Jingle All the Ks 2010 Overall Results

Share Love for Running and Share Your Christmas

October 21, 2010

How do you share your love for running?  Do you proudly wear your latest race shirts on casual Friday?  Do you sport a 5k or 26.2 sticker on the back of your car? What if you could share your love for running and help families enjoy a better Christmas than they would have had.  It’s simple, you run a 5k (3.1 miles) and children and families enjoy a Christmas that wouldn’t have been possible without you.

5k5k.org has been working for the past several months with area business and the local paper, the Neosho Daily News, to put together a benefit run for a program called Share Your Christmas.  Each year the Neosho Daily News selects a few families who live in the Neosho area to help them have a better Christmas.  The Daily News helps to provide everything from the meal to the gifts under the tree.  Since giving has been decreasing nationwide due to the current economic climate, 5k5k.org wanted to put together an event to ensure this program is able to do everything they’ve done in the past and hopefully even more.

Here is a short video from last year from The Neosho Daily News editor, Rick Rogers regarding the Share Your Christmas Program

The event will take place on December 4th, at 8:00 a.m. at the Morse Park Soccer Fields.  The starting line for the run will be at the southwest corner of the soccer fields, just behind Kwik Mart.  Please register as early as possible.  If you plan to register the morning of the event, please arrive at least 30 minutes early to ensure a prompt start.  Participants who register for the run can provide gifts instead of the typical registration fee.  Runners are encouraged to bring pre-loaded gift cards from local retailers.  Runners who give gift cards with values of $20 or more will receive an event shirt and more importantly the satisfaction of knowing they’ve helped someone have a better holiday season. If you would rather just write a check that’s okay too.  Checks can be made payable to 5k5k.org or The Neosho Daily News.  Download a registration form here:Jingle All The K’s Registration Form, or they can also be picked up at The Neosho Daily News located at 1006 W. Harmony, Neosho, MO. Further registration information can be found on registration forms.

I encourage you to share your love for running by sharing your Christmas.  While prizes will be given away to top finishers in both male and female age groups, we want this event to promote, more than anything else, wellness and the spirit of giving.  Please consider registering today.  If you have further questions please leave them in the comments section of this blog entry.

I especially want to thank these community sponsors for helping make this even possible.  Please thank members of these organization for supporting this event.

Advisor Kevin Hatfield 451-2805

Free Applications to Organize Your Life

October 21, 2010

Last spring I continued to work on my CFP (Certified Financial Planner) certification. In the course my professor, an estate planning attorney recommended I check out INC Magazine as I shared with him some of my entrepreneurial itchings. The price for the subscription worked out to about $1.00 per issue, so I figured for the cost I could definitely find some information worth keeping. September’s issue contained a wealth of useful information but one of the huge bonuses I wanted to share with all of you is the free software mentioned on page 54 of September’s issue.

Ten years ago people paid hundreds of dollars for powerful software to help them with everyday life. Now, if you know where to look, you can find it for free.

(From INC.com)

BEST FOR BASIC ACCOUNTING: QUICKBOOKS SIMPLE START FREE EDITION
The free version of QuickBooks lets you create invoices, print checks, handle payroll, and manage up to 20 customer accounts. There are plenty of free bookkeeping tools on the market, but QuickBooks is the best option for growing companies, because it’s easy to step up to the paid version ($99.95), which lets users track more than 10,000 customers.

BEST FOR SYNCING WITH OUTLOOK: GOOGLE CALENDAR SYNC
Many businesses are switching to Google Apps because it’s cheaper than Microsoft Exchange. But not everyone wants to abandon the familiar look and feel of Outlook. Use this tool to sync from Google Calendar to Outlook or vice versa. Or perform a two-way sync based on a schedule you set. Unfortunately, some of Google’s features — like e-mail reminders — won’t work in Outlook.

BEST FOR ORGANIZING OUTLOOK: XOBNI
Think of Xobni (pronounced ZOB-nee) as a supercharged search engine for Outlook. Search for a name in the Xobni sidebar, and it will find the person’s contact information, previous e-mails, Facebook and LinkedIn profiles, Hoover’s data, and recent attachments. You can search for keywords as well and even place Skype calls without leaving Outlook.

BEST FOR TRACKING TASKS: DOOMI
Simple but elegant, Doomi allows you to create a to-do list and check off tasks when you are done. To keep yourself on schedule, you can customize a completion time for each task. Finished tasks are stored in a separate list until you clear them — great for viewing the day’s accomplishments. We just wish Doomi synced with Outlook.

BEST FOR WORD PROCESSING: ZOHO WRITER
An excellent alternative to Microsoft Word or Google Docs, Zoho Writer lets users collaborate on a document online, in real time. It also has an offline mode, so you can work on documents even without Internet access. Zoho Writer can also be used to post directly to a blog. Zoho’s 18 other free apps include a customer relationship management tool, database software, and an applicant tracking program.

BEST FOR VIEWING PDFs: FOXIT READER 3.0
Foxit is one of the best programs for viewing and modifying PDFs. It uses less memory than Acrobat Reader, launches almost instantly, and allows you to convert PDFs into simple text files. Plus, unlike Acrobat, it lets users annotate documents (draw graphics, highlight text) without paying extra. Now, if only Foxit’s PDF Creator and PDF Editor programs were free, too.

I wish I would have found this next one about a year ago, before I purchased an external hard drive to back up pictures and documents and files I wanted to save. Lightening has struck our computer twice in the past year (That’s why I couldn’t post on Thursday) and file back up has become more important than ever as people save more and more important documents to their computers.

BEST FOR AUTOMATIC BACKUP: MOZY
Mozy will store 2GB of data online for free; just choose what you want to save, and Mozy automatically backs up the files whenever changes are made. It’s a great way to protect your most sensitive information in case of an emergency. Plus, you can access your documents from anywhere. If you want to store more, upgrading to an unlimited account costs $4.95 per month.

Has anyone found any other free or cheap applications that are useful? How could you use some of these in your everyday life/business?

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