Monday, October 17, 2016

Admitting You Are Weak to Harvest Riches.

All across the country farmers are out in full force harvesting the last of the seasons corn, soybean, and wheat. It's a race against time before frost ruins the last of the crops. While technology has made the job extremely easier than it used to be. There is no time for weakness here as plenty of work still needs to be done. Long hours from dusk til dawn and a fair bit of good ol' fashioned hard work are all it takes to keep America's belly full.

You won't here a farmer say "Aw shucks I'm really bad at keeping track of all that corn, and getting the cows back in the barn. Hey no big deal it will take care of itself!". That answer won't fly on the family farm and for good reason.  If you're not running a tight tractor you can bet there won't be any milk money. Farmer's can't afford to be weak in work ethic, or discipline. Or how else are they going to harvest their riches?

There was a quote I happened to overhear on Ellen DeGeneres's* show the other day. She stated 40% of
Millennial's receive assistance to pay their rent. Basically their family members(parents), and in some cases friends, cover a portion of their monthly rent.

Hearing that got me so fired up. I couldn't believe 4 out of 10 people in my generation have trouble paying their rent. I furiously started typing this article in hopes that I can end at least some of this insanity.

Many of us are college educated, with commensurate levels of student loan debt to boot. That's not the whole issue though. No matter the income level, level of education attained, or level of debt there shouldn't be a single person unable to afford their rent. If you can't it means either one of two things.

1. You live in an area where you can't afford the rent on your own.
2. You are bad at managing your finances.

The only thing both reasons have in common are the choices YOU made as an individual. Yes it sucks to think you might be bad at managing your money, and it's not easy to admit a weakness. But the first step to solving a problem is admitting there is one. To many people do not want to fess up to mistakes. Yet it's totally OK to admit you are not the best at handling money. And if you don't ask for help, or at least try to remedy the issue, how are you supposed to fix it? You can't.

The thing is you're not alone by a long shot. The majority of Americans are really shitty at managing their money. Your parents, siblings, co-workers, and friends are more likely than not below average when it comes to managing money. They probably live paycheck to paycheck too so the amount of immediate role models might be limited for you.

It doesn't help that most of us, outside of those that studied business in college, have never had a money management or personal finance class. Why it's not required in school is beyond me, but I don't run things yet so I guess it is what it is. So ask for help, and become an absolute superstar at managing your finances.  I'm not perfect FYI. I suck at plenty of things. The difference is I can admit it when I do, and I seek the best help available to stop sucking at my weakness. You should too.

If you receive money from your parents to help you live in an apartment you can't afford you need to stop taking that money ASAP!


For one taking money from your parents might jeopardize their retirement goals. Which might cause them to need your support later in life. I think we can both see that train is clearly not on the right track since they are currently supporting you. Odds are your parents really can't afford to help you since the average pre-retirement Baby Boomer parent has only $136k saved for retirement themselves!

Two is that taking money from your parents actually makes you weaker at handling your own finances.  Even if they do have the excess cash you should not accept it. It was cited in the must read book, The Millionaire Next Door, children who accepted money from their parents for living expenses ended up worse off financially than those that didn't.


The parents created a self-reinforcing pattern of dependency.  If you haven't read the book you should read it immediately.

So what should you do if you find yourself in this situation?

You need to do at least one of two things. Either Give Yourself a Pay Raise, and go through my Original 7 Reasons of Why You're Poor.  That should be a good start to getting you potentially $1 million dollars even if you're middle class. Or at minimum follow these steps to setting a budget.

  1. Set a goal!
  2. Start tracking your money(my favorite)
  3. Review areas with high spending
  4. Define how you'll discipline your spending
  5. Set time frames to achieve limits and goals(monthly/yearly)
  6. Evaluate and re-adjust

You can put these in any order you want to realistically. Just make sure you do all of them! If you are in this situation you're likely living paycheck to paycheck. It's absurd to subject yourself to tons of stress and anxiety. If applicable you must discuss this with your significant other. Money is the one of the main reasons for divorce in this country. Which is a shame since it's entirely avoidable.

Let's take a look at the steps above. It's important to remember throughout the entire process to not get mad. The mistakes were already made, and it's time for you to fix them. Anger will not solve it now. Never play the blame game, and never say anything you'll regret. Money is very emotional for a lot of people. Stay rational throughout the entire process and this will be way easier than you expect.

1. Set a Goal(s) - You'll need to discuss this with your significant other if you have one. If not then maybe with your parents. Especially if they are helping you with rent. Setting a goal will help you get focused. This should be financial. And while you're at it set a second goal that's not financial. Don't set the second goal as vacation for yourself if you hit your financial goals. That money is better saved. Tell yourself you'll volunteer 40 hours in the next 6 months, or start a project you've always dreamed of doing. In fact people who volunteer actually feel richer. This will help keep your mind laser focused.

2. Track Your Money - Every business in the world does it, and for good reason. IT WORKS! You need to start tracking your money. Period. I provide a free budgeting spreadsheet that comes with tons of other cool projection tools. I'm also working on my own online version where you can aggregate all your financial accounts for budgeting review. You can always use a free money tracking app too. From there you need to review where your money is going. Technology makes this all to easy nowadays so there is zero excuse not too.

3. Review Areas with High Spending - Actually you need to focus everywhere but that's besides the point. Focus on high spending categories and other areas that might occasionally swing out of control. If you can save big chunks of money from these areas then absolutely do so. That doesn't mean you forget about areas where it's $20 here and there. Plug every cash leak! Every dollar helps. It might take an adjustment to some of your daily habits, but remember this is for your own well being and every sacrifice is worth more than it's weight in gold. Spending a ton of money eating out and at bars? Then you need to start making more trips to the grocery store instead. If you're clothes shopping habit is making a big dent then quit heading to the mall, and delete online bookmarks to your favorite retailers. You don't need that 20th pair of pants.

4. Figure out how you will stay disciplined - If it means paying only in cash then tear up the credit card, and don't use your debit card for purchases either. Set spending limits for each category and be strict with them. If you overshoot a spending cap one month make sure to reduce it by that amount the next.

5.Set a time frame - I prefer monthly and yearly. Each month make it a point to tackle with zest another spending category you might suck at. For yearly make it something concrete such as saving $10k, opening an IRA and maxing it out, or talking to a professional advisor. You need to set a time constraint on yourself because that will help compel you to do something about it. If you just think you'll get to it tomorrow you're wrong. Don't waste precious time. We only have one life here on Earth so don't waste it!

6. Every once in awhile check back on your plan to see how well it's being followed. Maybe a goal was set a bit unrealistically, or maybe not realistically enough. It can go both ways. If something is causing a lot of dissent in your relationship, or making you unhappy revisit that topic to find it's source. It's not worth living an unhappy life. Yet it's imperative to fix your money issues to live a completely free, unchained, and exorbitantly happy life. If you don't think this is worth it let me tell you a secret of rich people. The majority of them budget, and they do it religiously.

Let me wrap this up.

The takeaway from this is you absolutely deserve to live a rich, happy, and fulfilling life. If it means owning up to past bad decisions then so be it. You won't harvest riches otherwise. One day you'll be glad you did.

*I don't watch a lot of TV. In fact it is most likely RUINING YOUR LIFE! But the wife is recovering from surgery so it's on way more than normal right now. If you are wondering her recovery is going well, and she can't wait to get back on her bike and hit the gym.

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