I have been talking to a couple about their finances over the last year. He works in a consulting firm and she stays at home with their daughter. We first started talking about the priorities in their financial life: student loans, emergency fund, new house and retirement. Before this discussion started, they were paying off their student loans as quickly as possible, yet they had only a small amount of money in ready cash in case something happens. They came to me because they wanted to look into increasing their retirement contributions. In discussing their situation, they also wanted to look for a bigger house because they were planning on having another child in the near future. However, they had fear around buying a new home and having two mortgages if they could not sell their current home quickly.

It was important for them to understand what their goals were and in which order to handle them. He had recently changed jobs and had some extra income to allocate to different goals. We discussed how some of the logic out there can seem to place certain priorities on goals (e.g., the rush to become debt free or save early for retirement). They had student loans, yet at favorable interest rates where it was not financially adverse if they slowed down their accelerated repayment plan. They also wanted to put in the full 401(k) contribution. Yet, in looking at their situation (both around age 30 and having some money saved for retirement already), taking one year off was not that big of deal if other goals needed to be addressed.

One of their questions was what kind of home could they afford? He had received a nice raise so that they could afford a bigger home. So we discussed the price range that they could comfortably afford and discussed the tools they could use to avoid being pinched by two mortgages at once (including saving up a few months for dual mortgage payments and buying on a contingent basis on selling their current home). We also discussed how he may work in a different city in a year if the new venture he and his company were working on did not work out. Thus, they put off buying a home for a year. They were still going to look around and save some money for the down payment to be ready when his job outlook was more secure. They also decided to slow down their student loan repayments, to put just enough money in their retirement plan to max out their 401(k) match and to save the rest for a healthy emergency fund and for a down payment on house and/or bigger car for their second child.

During that year timeframe, they were told that the new venture was working out, so they could buy a new home without the fear of relocating. In looking for their homes (in planning for the upcoming year), they found most of the homes they wanted where just outside their upper price range by 5 percent to 15 percent. Instead of settling for a cheaper home or buying a house outside their comfort zone, they decided to wait a couple more years to see if he was able to become partner at his company to afford the type of house they wanted.

After this decision, they had a large emergency fund from the money that they were going to use for a down payment for a new house. Thus, they were able to increase their 401(k) contribution to max it out. They also decided to make a Roth IRA contribution with the extra money. The wife also asked if they should lock some of the extra money away in a CD for a better return. We reviewed their current risks. She was 6 months pregnant at the time and his job was relatively secure for at least a few years. They had a good catastrophic medical plan that would cover at 100% of anything above a certain level in case something happened. They were also thinking about a new car, yet had not decided to buy one yet. So there were some risks, yet nothing that their emergency fund couldn’t handle. However, the money they could earn in a longer term CD was only going to be $100 greater compared to leaving it in their savings plan after taxes. Thus, was it worth the loss of flexibility? She decided that it wasn’t.

The decisions that they made turned out to be wise moves. A few weeks after our discussion on CDs, she went had some complications and was rushed to the hospital. Luckily, the hospital was able to help her out of immediate danger and put her on bed rest. They still had several weeks of worry about what would happen if something else happened before the baby was delivered.

From a financial standpoint, this situation was not going to have too much of an adverse impact on them because their health insurance was going to cover everything over a certain limit at 100 percent and because they had an ample emergency fund to handle the deductibles and other costs. If they kept to their accelerated student loan repayment to become debt free or if they bought a house outside their price range or if they put their extra savings into their retirement savings through out the year, they would not have had such a large emergency fund and may have had even more financial stress, on top of the stress of worrying about the health of their baby.

Morale of the story: Thinking through financial decisions before having a major life event is critical. And, sometimes, the wise financial advice to earn a higher return (in CDs or 401(k)) may not make the best sense in the short-term. I am sure my clients would agree. Even if he needs to work 3 more months past his planned retirement age because he did not max out his 401(k) for one year or they turned down a higher return in a CD, it was worth the peace of mind of focusing on the health of their son knowing their short-term finances are handled. The added financial stress of a bigger home outside their means or not having an ample emergency fund would have just added to an already stressful situation. Their lives were stressful enough during this time, let alone adding a financial stress because they cut their finances too tight.

They were also lucky in having a good catastrophic health care plan. It would have been different if they had to cover 20% of their costs. In addition, she was already a stay-at-home mom, so there is no loss of income which some may have depending on their disability plan.

In watching an Oprah show on The Secret the other day, I was reminded of an important rule of the law of abundance – to give – or in other words how can I be of service? Many times we get caught up in the struggle for money that we forget how we can help others. We are looking more for how to make a buck than how to give someone a good quality product. Yet, many people are probably wondering, if I focus on service/giving will I just be taken advantage of? or will I be rewarded for my service? So, let’s take a minute to look at some of these questions.

Why is service so important?

Usually our focus in our society is on receiving with thoughts such as:

• How can I increase income by $10,000?
• How can I become a millionaire?
• Can I make more money in business for myself than working for a company?

However, what we fail to recognize is that for each act of receiving, there is an act of giving. We usually focus on receiving because we know there are opportunities that we missed over the years (such as not paying off our credit cards quickly enough or not taking full advantage of our 401(k) match or not getting paid what we believed we deserved). However, there is only so much that we can do to improve the efficiency of our receiving before the return from our efforts begins to diminish. Thus, it may make sense to work on our giving portion, as well, because as the saying goes “as you give, so shall you receive.”

Many people have given at work and feel that they never received what they gave. So, does it make sense to burn ourselves out by giving too much? The question is not how much did you give rather how did you give? Many times we give our energy in a very scattered manner where our energy goes everywhere and accomplishes next to nothing. Thus, turning up the level of energy that we give does not accomplish its purpose. The real question is asking your boss, “How can I serve you?” to make sure your energy is focused where it has the most effective (as I discussed in Ask for a pay raise discussion instead of demanding a raise).

When we give (be of service), we can not help but to have it come back because energy flows in a circular pattern. The receiving may be delayed, yet “no good deed goes unrewarded”. Even in the act of giving, many people feel better just knowing that they are helping that it feels just as good as receiving.

Why shouldn’t we focus on making money?

I remember reading a book from an author who said that if you want to become rich than just do. He said writing a book was easy because you just need to write it and put it out there. It sounded to me that he would recommended rushing a product out even if it isn’t your best work (as evident in his book). Well, this was the only book of his that I ever bought (even though he is a semi-popular author who has written many books). Ask yourself, would you buy a car if it had poor quality? Maybe once, yet there is a reason we do not have Yugo cars anymore and why American car makers are suffering. Even though the quality of American cars has improved, it is hard to improve your reputation once it is ruined. By focusing on making money, we often lose focus on service. You need service to stay in business in the long run.

In addition, per the law of attraction, we get what we think about whether we want it or not. There is a paradox in wanting more money. When we want more money, it is usually coming from a feeling that this is something lacking (in other words, we feel poor). If we want to be rich, we actually may remain poor because as I wrote a while back, we get what we have not what we want. If our focus is on being rich to avoid being poor, we can become so desperate trying to avoid being poor that we rush and make stupid mistakes. It is one thing to want money and go for it; it is another thing to rush after it like a fool because “a fool and his money are soon departed”. The key is to see what you have is already enough and work towards an even more prosperous future. This way, you get more of what you already have.

What if I am taken advantage of if I give too much?

I have been thinking about this lately because at time I (for a few moments anyway) feel that my clients take advantage of me on occassion. In my wife’s and my business, we have a lot of clients cancel appointments at the last minute. At times, it is good for me to have a cancellation in that I have extra time to write and spend time with my son. At other times, I feel cheated that I prepared to meet with my clients and then (if I am lucky) got a call that they are not coming. For me, it is alright to have a client cancel every once in a while. It is not that big of deal because my wife and I do not live paycheck to paycheck where I would be desperate for client to pay my bills. I use the cancellation as an opportunity rather than seeing it as an inconvenience. Yet, am I being taken advantage of by giving in to easy?

In thinking about this article, I have learned that the situation where clients repeatedly cancel is not about me being disrespected by a client rather more about my client not respecting their time and money (or their health in the case of my wife’s business). Missing an appointment is a fact of life. There is times when something comes up (like the flu) where an appointment needs to be cancelled. However, when clients put other things first (in a non-life or death situation), they are really disrespecting themselves. They are putting other things in front of improving themselves. At times this is needed, if it is not a common occurrence while for others it is a constant occurrence. It is similar to an article I wrote a few weeks ago in resistance keeps you in the struggle, where a client put working on her business ahead of doing her budget. By putting off her budget, she was only making it more of an uphill struggle to getting her business going. By running around at the last minute all the time to find money to pay her bills, she wasted a lot of time that she could have put into marketing. So, her avoidance of a budget was about disrespecting her own time (her time that she could have used for other things).

So next time you feel disrespected in anyway, see the situation from the other person’s shoes and what they are probably going through. If they are disrespecting or taking advantage of you, they are probably disrespecting themselves at the same time. For example, they may be trying to cheat you out of money. Yet, they are only disrespecting themselves, feeling that they need to cheat others to be able to get ahead (lack of self-worth – not able to do it on their own). If it is a minor occurrence (a few bucks), let it go because it is not worth the energy worrying about. When it happens repeatedly, you can help the person by showing them how they are disrespecting you or by setting a clear boundary with them. For myself, when clients are constantly canceling, I talk to them about it and I can either charge a fee for their cancellations or stop seeing them until they get serious about dealing with their finances. Being of service does not mean that you need to put up with being a punching bag for others.

Do we always see the outcome from what we give?

No, many times we are not going to see a direct result. This is a problem that many businesses are facing with their employees. We live in a society where people want instant gratification. Thus, when businesses can not give an instant raise, workers get disappointed because they give so much and get no reward. No wonder there is a rush to start your own company these days where they can get an instant reward when they get a new client instead of waiting for a raise as an employee. However, many people do not understand that wanting this instant gratification gets in the way of their happiness by needing a reward to be happy. In addition, even though they want an instant reward, they do not want to instant penalty to goes along with it (for example, an employee getting docked financially for making a $10,000 mistake or being docked a days pay because their attention was on an argument with their spouse instead of on their job). We always want instant gratification, but not the consequences that go with it (such as paying $10,000 for a mistake when they own their business).

Life is not about instant gratification. We should be grateful for this. If all our thoughts came to us in the physical form instantly, we would instantly have that $1 million that we wish for, yet we would also have all our other negative thoughts as well (for example, get cancer when we fear of what would happen if we get sick). This is why they say “patience is a virtue”.

You never know when being of service will pay off. You meet someone when volunteering that can help you to get your next job or to help you start a business. Sometimes when you blog, you can get noticed by a larger publication and turn you hobby into a full time job or you may get $20 from a grateful reader. You never know how things will work out. All you can do is your best and know that everything is well, thus there is no need to receive right away because everything is working out the way it should.

If you have other questions that you like me to answer, please leave me a comment or e-mail to let me know how I can be a service to you.

The other day, I read a news article that said a car is one of the 5 things that you should not buy new. I also had a friend ask me a few days earlier if it was a wise decision for her son to buy a new car now before he enters medical school. It got me to think about how accurate the financial advice that buying a new car was a bad move due to a new car depreciating immediately once driven off the car lot. This may have been true in the past yet may be more folk lure now because no one has questioned the advise recently.

In the old days when the market was limited to car dealerships that made a larger profit on a new cars and low balled used car trade-ins, the difference in new and used cars could have been significant, especially if you bought a new car every few years and received a bad deal on the trade-in. Yet, now that the car market has gotten more efficient with the internet, a lot of the financial disparities in new vs. used cars and dealer vs. 3rd party cars have diminished.

Yes, there may be a cost for buying a new car versus a used car. However, it may not be as big of deal as we once thought. For example, looking at a Toyota Camry LE, the suggested Kelly Blue Book retail value for the base LE package in excellent package was:

Year………..Value……Difference
2007……$20,515
2006……$18,550…..$1,965
2005……$16,830…..$1,720
2004……$15,265…..$1,565
2002……$11,965…..$3,300 ($1,650 per yr)
2000……..$9,090…..$2,875 ($1,438 per yr)

Looking at the difference in value, it does not seem to be a large difference in driving the car for the first year. Yes, there is a larger amount depreciated in the first few years, yet that is to be expected as the warranty period and parts start to wear away. The only thing that is needed in the first year is the basic oil change. After that, tires, brakes and other things need to be replaced and are thus reflected in the price.

In later years, the depreciation of the car from year to year is less, however, so is the cost to maintain the car increases. If you are a mechanic (or mechanically inclined), you may benefit from buying an older car and keeping it running because you have a talent that other don’t. The prices of cars reflect that the older the car gets, the more likely people like me will trade it in because the probability of an expensive car repair goes up (including the risk of being stranded on the side of the road on your way to a meeting). Ask my friend’s son who as put around $1,000 into his old used car during the past year and that was with doing most of the repairs with his dad. If he went to a mechanic, the bill would have been at least double this amount.

The comparison of new and used car prices will differ between makes and models. For example, those who buy a Camry are probably buying it for its reliability and not for the “new” status symbol. If someone buys a car for a status symbol like a Jaguar or Lexus, the depreciation value of driving it of the lot may be greater as people are more willing to pay for the “new” tag. For example, a 2007 Jaguar S-class runs $48,755 per Kelly Blue Book while the used 2006 model in excellent condition is $34,630 and 2005 model is $29,365. At first, I thought that the 2007 could have added some new equipment like a GPS system, so I looked up the new 2006 value for a comparison. The new 2006 model (if there is one still out there) was $43,173 which is still a lot higher than the used 2006 model at $34,630. Thus, there is a huge price tag for driving it off a Jaguar off the lot. Yet, I do not think those that buy a Jaguar really mind this.

However, for other cars the new car price is minimized because people have become aware of the invoice price of new cars and used cars, so they know the value of a new car and what they are paying for. This has brought the value of the new car premium down significantly because many people do not want to pay for “new” when they can get a 2-3 year old used car at a reasonable price. Thus, new car dealers and automakers can not increase their prices significantly without sales dropping dramatically as people hit the used car lots for a better deal.

Thus, the reason to buy a used car have diminished and should not be based on the depreciation in the car alone. Rather the decision is the cost of tying up $20,000 in a new car versus $10,000 for a 7 year old used car and the cost of maintaining an older car. For myself, I like reliability. I choose to buy a new car and then drive it for 7-10 years before trading it in. In my mind, this maximizes the reliability factor without having to pay a dealer or 3rd party every few years for a new or used car.

This doesn’t mean that you shouldn’t look around for year-end deals that make a new car a better deal than it would have been when they first come out. My last car was a salesperson’s car driven for a year. Thus, the dealer gave a steep discounted offer for taking a slightly used car off their hands so that their salesperson could have the newer model to show off. It also does not mean that a used car is not a good deal either. You may be able to find a good used car from a third party at a discount. You may find a car from a 3rd party that is $500 to $1,000 less than what you can at the dealer. In deciding between a dealer or 3rd party, you need to consider if the extra fee added on by the car dealership is worth the cost of not running around town all day test driving cars and wondering if the 3rd party is ripping you off with a lemon that he will not fix when it goes bad 10 days after you drive it away.

The benefits of used cars have been well documented as well. A friend found a 10+ year old car for $500 and was able to fix it up to be a reliable used car until a snow plow backed into it. Yet, the cost of fixing the car up himself was significantly less than having it fixed by a mechanic.

The moral of this story is with market pressure from the internet today, car dealerships had to significantly change their prices making the premium for driving a new car (non-luxury model) significantly less than it once was. If they did not adapt their prices, they would have gone out of business. So, the old advice of buy used may not work for everyone especially if they need to rely on a high priced mechanic to keep a 10+ year old used car running or prefer reliability because they can not afford to wait for a tow truck on the side of the road when they have a meeting to be at. Yet, if you are mechanically inclined and want to save a few bucks, a used car may still be the way to go. So, check the prices of a new car versus used car and factor in the cost of upkeep and repairs in making your decision.

For people to take control of their financial lives, I believe that it is important to prepare a budget. As I discussed before, a budget is about empowerment (see Become empowered by preparing a budget). However, then why do some people hesitate to do a budget and others a quit their financial planning process when they are asked to do a budget? A budget is an area of financial planning that many people have reluctance doing. Some men probably would rather have a prostate exam than do a budget.

If a budget was about numbers, it would be easy to set one up. It would take only a few hours to do. So then why do many people want to avoid it? The answer is in what people see behind the numbers.

• Self-worth

Because people sometimes confuse their net worth with their self-worth, they avoid putting their numbers on paper believing the numbers mean something about their self-worth. In believing that they are their numbers, they avoid looking at a budget like some people would avoid looking in a mirror, believing that what they see on the outside is who they are. However, we are what we can not see that is inside ourselves. Know that a number on a piece of paper does not change who you are.

• Fear

Fear is worrying about the future. Some people avoid looking at their budget wondering what “if” something happens. Because the fear comes up when doing a budget, people blame budgeting for their fears. However, the fear was already there, just lurking in the background. The purpose of a budget is to have a preliminary plan to handle what ever situation arises. So instead of fearing a budget, preparing a budget can reduce fears in the long run.

• Blame (victim mentality)

A part of our society always likes to point the finger at others. “They” (the government, corporations, etc.) are to blame for my financial situation is the motto for these victims. In preparing a budget, we get to see how our choices have affected our financial situation. For those who take ownership, the budget process is an easy step. For others who are the victim, doing a budget is avoided because it may mean that “they” (government, corporations, etc.) are not as responsible for the financial situation as initially thought. They may see in doing a budget that when their finger is pointed at others, three of their fingers are pointed back at them. A budget is about ownership. We are the decision maker that chooses where to spend our money. By avoiding a budget, it only making the situation worse by not seeing what our options we have to change the situation.

• Guilt

The problem with taking ownership over our financial situation is that some people may beat themselves up for their past mistakes (feel guilty). The past is a history that provides lesson to learn from to give us a better idea how to change the present. When we start reliving the past with guilt, it binds our hands that we can use to change the present situation but can not because our hands are holding the wipe that we use to beat ourselves up with. If guilt stops us from doing a budget due to condemning ourselves for a past mistake, there is no way to correct our current financial situation. The past is the past; the present is a gift because it is where we can decide to choose again. So, take the present and see the options you have by doing a budget.

• Shame

Shame is trying to hide who we are by wearing a mask. Avoiding a budget is hiding our financial situation from ourselves. Shame keeps us from being honest with what the situation is, hoping that the situation gets better on its own. When we spend time hiding from ourselves, we waste time that could be used in solving the situation. Avoiding bills, bank statements and investment summaries will not change the situation. Change only comes from looking at the numbers and taking action.

If numbers were just numbers, most people would have a budget, just like many businesses have one because it makes good financial sense. However, unlike a business, a budget can be a minefield of emotions that people do not want to pass through. We rather deflect emotions by getting angry and blaming others or numb our emotions by doing something else (like watching television, working, drinking, shopping, etc.). However, the emotions do not pass; they stay with us until they are addressed. The trick is to face them and do a budget and see that numbers are really just numbers when we do not allow other things to get in the way.

For similar articles how emotions may hold you back, see
Fear Keeps People from Attaining Their Financial Prosperity
Feel Guilty about Your Finances?
How Shame Affects Your Financial Health
Anger and Blame Will Not Change the Situation
Self-Worth vs. Net Worth

What do we do when there is not enough money to have what you want or even need to live on. Most people have seen this situation at some point in their life. The question is what to do. We all know the options:

1) Put it on credit card or take out a loan

2) Resign ourselves to the fact that we can not afford it and thus give up the idea of having it (hopelessness)

3) Figure out a way to pay for it (work overtime, wait until we can afford it or save money by cutting back somewhere else in the budget).

We know people (maybe even yourself) that have done one of the first two options. When money is a struggle it is easy to fall into one of the first two solutions. This is dangerous because the interest rates on credit card debt (and pay day loans) can put you behind the 8-ball and because a state of hopelessness is resigning ourselves to thinking we can’t get what we want (or need) so why even try. If we take one of these first two options, we are backing ourselves into a corner with no way out. If we take on too much debt at high interest rates, we are giving up what we want in the future due to money being allocated to debt payments (especially for interest payments). If we resign ourselves to giving up what we want, we give less energy because we see the situation as hopeless and thus we receive less abundance in the future by giving less.

So what can be done? The answer is in the third option of determining a way to get what we want (or need). It doesn’t mean that we will necessarily get it; however, we have a belief that it will and work towards our goals. I know that it is easier said than done, the trick is:

1) See beyond hopelessness

In being in a place of hopelessness, there is a deadening of energy. Money is energy. When our energy is drained, the flow of money slows down. Thus, it is important to see beyond the current situation and have a knowing that everything will work itself out in perfect order.

Note, I did not say “hope” for a better future. Hope puts into question that things will work out in the future. Per the law of attraction, we get what we think about whether we want it or not. If we think that something may not work out, we can be setting ourselves up for it not to happen. In simple terms of the law of attraction, this means when we see an event as possibly not working out, it is giving ourselves permission to give up hope at the early signs of failure and give up because we knew that it possibly would not happen. By having a knowing (instead of hope), we are prepared to work through the initial set backs to attain our ultimate goal and outcome.

2) Change our circular beliefs

Sometimes life seems like a hamster wheel. We keep on working harder and harder while not feeling like we are getting anywhere. We get in a cycle where we are doing the same thing over and over again and expecting a different result. Part of it is also thinking that life should be a certain way (for example, money should be a struggle) thus we do not see that there is an alternative, and thus money continues to be a struggle.

We need to step back and take a fresh look at the situation to see what can be done differently. We need to challenge our beliefs to see if there if there are alternatives. Maybe money is a struggle, yet does everyone seem to be struggling as much as you are? Maybe there is an easier way where money that is less of a struggle. If you think money is a struggle, you are less likely to take a step back and explore all the different options to make your financial life easier because deep down you believe that this is as good as it gets.

3) See the opportunities (brainstorm)

Even though this sounds very easy, it may be harder than many people think because we know what we know and we don’t know what we don’t know. The opportunities that we see are same ones we always see. The key is to start seeing differently for new opportunities. This is where we need to see what others are doing or see something totally new.

This is hard though because we have a tendency to hoot down ideas before they even get launched. This can be due to having a disbelief/hopelessness as discussed above. It also can be due to thinking that an idea about money can affect our self-worth. Look at the flap that Northwest Airlines got for sending “101 ways to save money” to laid-off employees. The employees did not take well to the idea of dumpster diving because they saw it as an insult rather than an idea that there are great finds depending where you look (e.g., thrift shops). For more, see Do you dumpster dive?.

So before dismissing an idea, see the merit in it and see how it can be modified to be a great idea.

4) Put things into perspective

Money has a prominent role in our society. It seems like we can not live without it. Yet, money is only money. It comes and it goes. It is important to remember that there are more important things in life than money (love, happiness, joy, peace, friend, family, health, etc.). And, what you are going through with money is only a temporary setback and not a reflection of who you are.

5) Be aware what you feel (guilt, shame, lack of self-worth) – don’t let these emotions cloud your judgment

What does it mean if you can not afford what you want? Does it affect how you feel about yourself? We buy things sometimes not knowing the real reason we are doing it for. Emotional shopping plays a large part of this. However, we usually do not recognize it until it too late, after the shopping spree. So take a breath and ask yourself how you feel. Does watching others who have things that you want and can not afford, make you feel depressed or angry? If so, recognize the feeling and avoid shopping until the feelings pass. They say not to go to the grocery store hungry or you will buy more. The same goes for going shopping while depressed, angry or upset.

6) Really know what is a need vs. a want

I have written about this before where we get confused on what is a want instead of a need. Many needs we have today are really wants (for example, cellular phones, air conditioning, dish washer, etc.). There are no problems with having wants, as long as we know that we have a choice over what wants we have instead of buying it because we believe it is a need. We see life in a whole new perspective when we see we have power of choice (of wants) instead of when we see our struggle of just getting by on only needs.

7) Know your actions today affect you tomorrow

Understand the consequences of your actions. Will buying what you want tie your hands in the future? How much will you need to pay on credit card debt? Are the future consequences worth your current happiness for having what you want now? Know that if a vacation is 5% of your budget and you decide to finance it, it is just pushing the payment until later along with possibly a large amount of interest. Thus, you may be limiting your options in the future if your debt burden becomes too large.

These steps may be good in theory, yet what does it really mean in day to day life. As an example, imagine wanting a vacation to Hawaii that will cost $3,000 yet you do not enough money (alternatively this could be $300 for a car repair). You may think that your choices are:

1) Put it on credit cards

This may end up costing you $6,000 when interest is factored in (or $600 for car repair)

2) Give up hope –

By giving up hope of having a vacation or car repair may lead you to be disgruntled at work because they are not paying you enough for the vacation (or car repair). Your boss seeing you disgruntle makes a note that you may not really want to work there which he will remember the next time he is forced to let someone go due to cutbacks

3) Work through the situation

a. See beyond hopelessness

Know that you have a choice to take this vacation to Hawaii (this car repair) if it is what you really want (or need), yet you need to look at the options first.

b. Change your circular beliefs

Know that money does not need to be a struggle. You can get the extra money for this vacation or car repair if give up your disbelief that it will happen. If you believe that there is not enough money for the vacation, then you are right because you will not see options (give up in hopelessness).

c. See opportunities

Put your budget on a piece of paper and see what you rather give up to have the vacation (e.g., cut back on eating out or delay buying that new car for a few more years to save money) or you may decide to work overtime knowing the payoff at the end is the vacation in Hawaii. For a car repair, you may have to give up going to the movies or eating out to pay for it, for now.

d. Put things into perspective

As you see your friends take exotic vacations, you may feel down that you have to delay your trip, yet would you rather spend time with the family at home versus taking the vacation and end up stressing over how to pay for it the whole time you are there? For a car repair, remember that it is a temporary set back that you can overcome.

e. Be aware of your emotions

As your friends take a vacation, your self-worth may be low thinking that you can not provide for your family as well as they can, avoid making a financial decision from this space because it will lead you to problems. This includes getting a car repair because if you are stressed on making ends meet, you may over look that fixing the car can cost you more than going out and buying another used car.

f. Really know what a need vs. want is

A vacation is still a want, yet some people are blurring the line thinking that they can not be happy without it thus makes a vacation appear more of a need. A car repair may be more of need than a want. Yet there are alternatives like living on one car and carpooling.

g. Know how your actions will affect you tomorrow

If you put a vacation (or car repair) on a credit card (and not pay it back immediately), you are not only putting future vacations at risk because your vacation now is using up money for future vacations but also putting more at risk because you are paying interest. This reduces your future flexibility because you are required to pay more of your future income to credit cards with little or no choice anymore.

You may choose not to take a vacation or may decide putting off making the car repair because you do not have enough money. Yet, making the choice from alternatives gives you control over your finances. It gives you more power to make things happen in the future. You may decide to save a little each year until you can afford your dream vacation. Alternatively, giving up in hopelessness just keeps your hands tied and will keep you from getting what you want.