the american dream + people who don’t matter

Instructing people to build wealth by giving them “how-tos” is like telling the obese to lose weight by eating less and exercising more (been there done that!). Duhh, but so what? How does that help anything? They already know what they should do but they aren’t doing it. It’s the same thing with people struggling with their finances- everybody with financial problems already knows they need to spend less, save more and invest smarter – but they aren’t doing it. 

I sincerely believe it’s because traditional financial advice focuses on the numbers, the $ sign – not people. It’s all about the money – not the problems people have with money….and this is what fascinates me the most. The reasons behind WHY people treat their money the way they do. Growing up in a poor family, we had zero knowledge about finances…..but I often wandered why friends and family of ours lived in crappy houses but had big huge fancy tv’s. Their priorities and what they valued where different than those of the social class above them….which ultimately fascinated me with how each social class values their money and why the rich get richer and the poor get poorer. Being on both sides of the coin (growing up poor and then building myself out of poverty), I truly believe that it’s a mind set…..people keep themselves poor….but then blame it on every other outside force-they’re job doesn’t pay enough even though the job pays plenty they just wracked up too much credit card debt-they HAD to buy a brand new BMW when a gently used less flashy name brand car would have sufficed, not having enough self control for delayed gratification so they go out and buy it NOW…on credit cards and then the cycle continues. This sounds all familiar to me, I watched my family go thru the cycle and it’s not about how much money they have or don’t have…it’s their reasoning and their poor decisions that are keeping them in the hole.

Luckily, I noticed this early on and knew I wanted to be different. I didn’t want to live in a run down trailer with a leaky roof, a bad well and rickety old windows. I didn’t want to have 10 kids and then be mad at the world that I couldn’t afford to give them experiences. I wanted to travel, I wanted to live a life comfortably …and most importantly, I wanted to break the cycle of poverty. I never intend to be “rich” in terms of $ signs, I wanted to not struggle and worry myself sick over where the next electric bill would come from, how I would come up with the money for my daughters cheerleading shoes or gas money to get to work. I wanted to see the world with my family, I wanted to start a college fund for my children and save for a comfortable retirement….so we had to change our way of thinking and how we treated our money.

THAT’s what I want to help you do…think differently about your money and stop trying to impress others who really don’t matter with things that will have no value later in life. Do you see the cycle…people buy fancy houses, cars, items to impress their friends and family and then have to work long hours (at a job they hate) to pay for the stuff that they used to impress people that really don’t matter.   It’s a vicious cycle that has made many of us bitter…… doesn’t the american dream sound fabulous!?! <sarcasm>

hidden rules of social classes…

“How much do you really know about the day-to-day struggles of the poor in the U.S.? If, like me, you find yourself comfortably in the middle class, you might find it difficult to understand the worldview of a person in generational poverty.  This raises serious questions about the appropriate moral responses to such situations, given our call to be in solidarity with the poor and to transform sinful social structures.” -Ruby Payne.

I had the opportunity to listen to Ruby Payne speak once a few years ago. I sat in awe as she spoke on stage. Before I became solely self employed, I once had a job in the human service field. Part of our training requirements was to go to this training that dealt with learning more about the hidden rules of social classes. I left there with a headache as I tried to absorb everything like a sponge. The topic of her entire presentation (that day) was to have a hands-on approach to seeing what it was like for families to live on minimum wage. We were given (fake) money and had to allocate where it was going to go and what was going to get paid. We were learning how to work with families of all social classes so that we could have a better understanding to how they prioritized certain things over the other.

If you’re not familiar with Ruby Payne (and why would you be if you aren’t interested in this topic)- she is an expert on the mindsets of economic classes and overcoming the hurdles of poverty, she has trained hundreds of thousands of professionals who work with people from poverty, from educators and school administrators to community, church, and business leaders. She is amazingly awesome!

So why was I so intrigued? Well, everything she was talking about resonated with me to the core. I grew up on the left side of the chart……and as she talked about “the rules” I had so many ah-ha moments! You see being in poverty is not only a “money” issue…it’s also a mindset. Let that sink in…..a mind set. I truly believe that in some strange way, when you train yourself to think differently, it may affect how you look at your finances. By adjusting the way  you think about money could change the way you handle/manage your money.

I could go on and on about the things that I learned that day. And I will blog about them in future posts….but I’ll leave you with this today.

It’s a mindset……..shift the way you think!

hidden rules of social classes, ruby payne

refinance: skipping a payment….

Greg and I are in the process of refinancing our home loan to take advantage of the lowest interest rate possible so that we can pay as much as possible towards principal and not towards interest-you know, to help us pay it off faster . We thought we had a pretty low rate 3 years ago when we purchased our house but they have dropped to historical lows so we wanted to take advantage of that. It’s part of the next step for us to get even more in tune with our finances. So we have the home inspector coming later this week. I was chatting with a friend about the whole process of refinancing and the topic of when the first payment was due came up. She mentioned that her loan officer at the bank she deals with told her that she’d have a months grace period after closing before her first payment was due and that she was excited she didn’t have to make that payment because with the holidays coming up the extra cash would be nice. A huge red flag went off inside my head as she was talking……….seriously? I thought.

Ironically, this morning I wake up and start reading thru the news and I came across and article that is talking about the same thing and confirmed my initial reaction of why skipping a loan payment is BAD BAD BAD…and could cost you thousands of dollars.

Any of you who have gone thru the process of purchasing a home or refinancing a home in the past may know a little of what I’m talking about. When it comes time to discussing when your first payment is due on the new loan, sometimes things can be very wishy washy…..and they may tell you, “oh, you get to skip this month.

Real estate transactions are confusing enough-when to make your last payment on the old loan, when is the payment due for the first loan? Skipping a payment of just $500 on a $100,000  30 year loan is like  can cost you MANY of thousands of dollars later. Besides a possible late fee if the loan officer was wrong about your posting date. So even if you are told to skip a payment and there’s no way possible to apply your payment to your loan, save the money and then when you make your first payment….add in what you have saved.

Don’t be tempted to skip a payment….If you’re spending all the time researching to find the best deal, the best interest rate, why would you cost yourself thousands of dollars by skipping a payment.

The Why…..

I grew up in my fare share of “temporary housing” having moved too many times before the 1st grade. Thanks to extended family members, my teenage parents finally settled into a trailer where I would spend the majority of my childhood. We didn’t have much but I don’t remember going without, however, growing up, I was well aware that we weren’t exactly rich. In fact, money talk was so rare in our household that we hardly spoke of it…..at least in a positive light.

You see, my parents were kids raising kids trying to meander their way thru life “figuring it out”. My Dad was 17 and my Mom barely 16 when I was born….4 years later comes my sister-WHOOPS! With two kids before the age of 21 and no high school diploma-the odds were stacked against them and they had a lot to learn. I was a teenager when my parents divorced and that’s when I really started watching my Mom’s money habits when there wasn’t enough, her ability to stretch money as far as it possibly could go, or how she struggled but refused to go into debt to fulfill “wants”. All of that built a solid foundation for how I would view “money” as an adult. That very foundation has helped me get my personal finances in order…..but that’s not to say that I didn’t have some bumps/hills/moutains along the way.

Throughout college and several of my “big girl” jobs, I’ve watched people around me get out of sync with their priorities. At one point, I thought only rich, smart people could run a business. Boy was I wrong. As it turns out, you don’t need any type of degree to run your own business but don’t be fooled-sometimes those business owners who appear to “have it all together” have NO CLUE how to manage their money and their businesses are a jeopardy as we speak-yes even the ones you look up to! Using the foundation I established, growing up below the nationally recognized poverty level, I was able to put myself thru college, work 2-3 jobs at once and eventually I was able to quit my day job and build my business/dream job-debt free…with ZERO handouts.

I learned that it’s not about how much or how little you have, it’s about what you do with it. This is my journey of how I learned not to be afraid of money, not to be afraid of not having enough and my ah-hah moments that made me realize that I can live the life I want. We’re only afraid of things we don’t understand and if we take control of our finances, we can stop being intimidated by them. I mentioned a journey….because I’m still learning….but I invite you to come along on the ride, the first stop is the money tree….SIKE!

Who knows….maybe you’ll learn a little about your personal finances, business, marketing……and maybe a little something motivational along the way.