Taking Charge

In our Workplace Financial Literacy series better known as Taking Charge of your Finances, we spend some time talking about goals. In it we have a talking point that reads, “Your direction will determine your destination”.  We are confident that this is never truer than dealing with your current financial situation.

If your situation a going the wrong way, meaning you are living above your means, your destination should be pretty clear. Divorce, bankruptcy and job loss are just a few “destinations” you will find yourself.

I hope that you will take a step back and see the direction you are heading. If you don’t like the destination it is never to late to change. Looking for some inspiration, check out our UPCOMING EVENTS page for area events that may have what you need. Want a professional to talk with CONTACT US we are here to serve.

Nothing is FREE With a Loan

I say this because at my lunch appointment the other day a business associate of mine begins to talk about his recent refinance experience (keep in mind he has no idea about my affiliation to Lighthouse) and how his personal friend, VP of a local bank got him a 3.85%.  I was interested but unlike most people it was not because of the rate he received but how and why he came to believe that he got such a good deal. 

I nod excitedly so to bait him into giving more info and he gladly does. It turns out that his wife and him were not exactly looking to refinance but they had just talked about needing a cosmetic home improvement. It just so happened that this friend the VP at the local bank called and mentioned that they could get this improvement for FREE if they refinance into a 30 year mortgage.  So they paid for the work ($14,000) lowered their interest rate and the best thing according to him is that the monthly payment stayed the EXACT same, hence they got the floors for free.

Now my associate is stuck with at mortgage payment for another 30 years and will be paying 3.85% on this improvement for 30 years as well. What he should have been advised is that a 15 year mortgage would have a monthly cost of close to his old payment but rather than the $14,000 addition to the loan they could have saved $100,000 or more by going to the 15 year structure.

Good advise is to talk to at least 3 mortgage professionals before you decide on what to do with your financing. Buying a house or refinancing is often the largest single investment most people will make and should not be done with emotion but rather logic.

Top 10 Shopping mistakes at Christmas

Top 10 Shopping mistakes at Christmas

We’ve all paid “stupid tax”—making costly decisions with zeros on the end. A lot of those decisions happen when we’re caught up in the emotion of the Christmas season and procrastinate a little too long.

Make this year different!

Here are the top 10 Christmas shopping mistakes and how you can act differently:

Not prioritizing.
Instead of getting stressed out with all the parties, baking and shopping, in addition to your normal daily life, set some priorities before you’re bombarded with a million requests. Think about which things are “must do” and which are “would be nice to do.” It’s all right to say no to keep yourself sane. Shopping for gifts is more fun when you’re not completely stressed out.


Not using a budget.
Before you make a gift list and head to the mall, set aside a reasonable amount of money for gifts. Make a commitment that you won’t add $20 to the fund every week just because you saw something cute that your niece would love.

Using credit cards.
Once you have your budget finalized, stay away from credit cards! You will still spend 12-18% more if you use plastic, and you’ll be paying it off come 2009! Doesn’t paying with cash sound more freeing than having a credit card balance looming over your head? You bet.


Buying for everyone.
Do you really need to buy gifts for every family member and friend you have? That can get overwhelming and expensive for everyone. Talk with them and work toward an agreement to draw names for gifts or donate money to a common cause.


Not listening.
Listen to the hints your loved ones drop about what they need or want this year. Maybe your Aunt Sally mentioned that she would love someone to help her in the garden, or Cousin Bob keeps losing guitar picks. A thoughtful gift like this will mean a lot.


Not having a thought-out list on paper. 
If you think you can spend time in “Christmas retail world” without getting distracted by all the shiny toys, you’re in for a big surprise! You’ll be more likely to buy impulsively if you do it that way. Write down what each person you’re buying for would like and stick to the list. Stay focused! 


Not shopping around.
“Shopping around” doesn’t mean you have to spend 24 extra hours running from store to store to save 10 cents. Take a look at your gift list and do some comparative price-checking online before you head out into the retail and traffic madness. This will save you money, time and stress!


Waiting until the last minute.
Procrastination is not the most appealing gift out there. Don’t find yourself stressed out on Christmas Eve just because you didn’t invest a little bit of time to plan. 


Forgetting to plan for next year.
Throughout the next year, look for outrageous sales on things your loved ones will need. If you time the sales just right and clip some coupons, you could land a major discount on something you were going to buy in a few months for a birthday or wedding gift. Remember to have a list and budget for this, too.


Forgetting why we celebrate.
If this season becomes all about shopping and gifts, you’ve missed the whole point. People—not things—matter. The miraculous birth of a baby who changed the world is what matters.


Budgeting for Christmas

Has Christmas ever surprised you? How about that statement on the 3^rd for January? Ever found yourself regretting this time of year instead of enjoying it with family and friends?  If this so than pay attention to the following 5 steps that will insure you have a Merry Christmas.

Action 1

            Budget, by that I mean take the time and download our free budget from our website. Budget Link.  A budget is the most important part of any financial planning process. At Lighthouse we believe in 8 Disciples that will lead you financial independence. Discipline 1 is the Budget and can be applied to our Christmas planning. A few important things to consider are your total available cash to spend, who will you be buying for and finally how much will you spend on each person. Remember budgeting 101 you can’t spend money you don’t have.

Action 2

            Plan, not just plan by having a budget but plan how you will shop for those on your Christmas list. This is important because if you are like most people you will blindly shop for random persons only to find yourself returning home with stuff for own closet. A great technic is to pick out a couple of persons on your list and head out for them. Allowing yourself to focus on only a couple of task will help you be more successful in sticking to the budget.

Action 3

            Communication.   What does this have to do with Christmas budgeting? Plenty, just let me tell you how talking with others has put the fun back in Christmas. You see, the idea that we have to get everyone something for the holidays because they want and are planning on giving us something is just not true. Talk to your family and friends about gifts. Let them know that you would like to present them with something but do not want anything in return. Or if finances are tight let them know that your Christmas envelope is being deposited into a retirement account, college funding, used to pay down the house or pay off some debt. You never know you may just inspire someone to live debt free.

Action 4

            Avoid the crowds has more to do with the psychological weight that shopping can have on a persons spending habits. Ever find yourself buying something just to get out of the store? My favorite is the false deal. Just because it seems that everyone else wants or thinks something is a deal doesn’t mean it is. Some tips to avoid the crowds….How about shopping online, before noon (best on the week days) or try less traveled locations ie. Avoid shopping malls or outlets.

Action 5

            No credit cards you are only delaying the payment and paying more for the product. Stores have been heavy with the extra discounts to those who use their credit cards when making purchases. Trust me when say that they make money when you use your department store card. More and more of our clients have larger department store debt than car payments. A very successful line when presented with the question at the checkout “If you sign up for a credit card today we can give you 15% off?”  Simply say no thank you with a smile and ask if they have any other way of receiving such a discount.

Hope these actions can help as you journey out to do your Christmas shopping this year. If you have any suggestions or some actions that you have found to work for you please share we would love to hear.

A New Old Trend

There is a new trend of an old problem I am seeing in my office every week, parents with adult children who are in tough financial situations. We are seeing more twenty something’s being brought into our office at the request or insistence of their parents. Many times these young adults have gotten themselves in a ton of debt with student loans, car loans, credit card loans and debt associated with moving out on their own.  As the parent of two twenty somethings, I feel their pain. We have watched one of our sons make tough financial choices that have had dire economic consequences. I am sure I would have made some of the same mistakes back in the day if credit was as easily available to me then as it is today to them.

As parents, we want to help them or even fix their problems so they don’t have to feel so bad or suffer through such pain. Again, I know how you feel and have bailed out our son several times only to see him continue to make poor decisions and get back into financial troubles. I also have seen many parents bring their adult kids into our office and pay for financial coaching only to see the child go back to their old ways.

As mean and evil as this must sound, as parents we must encourage and equip our kids to make lifestyle changes but not take on their burdens and enable them. They have to want to change because it is good for them and they see the benefit not because we want it for them.  In the short term it is really harder for us to step back and let them feel the full weight of their decisions and the actions that follow them than to step in and fix the problem by writing a check or taking over car payments for them. In the long run, they learn more and change both their attitude and behavior toward debt. There is also a pride a confidence issue that they pick up as they dig their way out of the financial hole they put themselves into. If we step in and circumvent their consequences, they never learn and move on to make even bigger mistakes. We want to through them a life preserver so they can save themselves, not jump in and rescue them and possibly be involved in a double drowning.

Parents love your adult children well. Teach them and inspire them to do thing correctly concerning finances but don’t fix finances for them. It will only delay and magnify the pain they must go through to grow into the adult you raised them to be.    

Normal No More

Recently my wife and I have been asked to share that we are paid off $56,000 and are debt free except for the house in front of the entire congregation at our church. At first we felt uncomfortable in doing so. I mean from the people I see here at Lighthouse our story is not nearly as dramatic. At Lighthouse we have couples who have gone into debt from events like illness, loss of job, death of a family member, addictions, or even those that have been a victim of crime. They have clawed and battled their way back in a much more inspirational way. The truth is most people have not gone into debt in such a way. I know that was not how it happened to us.

A few days later it started to make sense we were normal. If you don’t believe that we were normal these stats can help like 55% of the US population lives paycheck to paycheck, the average student loan debt is 14K or the average car payment today is almost $400 a month.  It was normal to have debt and normal to live paycheck to paycheck. What makes it uncomfortable is that we now have to stand up and tell people that we are weird!

So we are going to do this and we are now excited about it. Not that we have an exciting story to share, we kind of just let the debt happen to us because that’s what we thought was normal. We are excited to reach out to all of those other normal couples and share with them how good it feels to be weird. 

Taking Charge of your own Personal Finances

Today I came across a great quote by the author Jack Canfield and it made me think as I saw all the people protesting on Wall Street with promises of taking it to other cities. The quote is as follows: 

“There is only one person responsible for the quality of the life you live. That person is you. If you want to be successful, you have to take 100 percent responsibility for everything that you experience in your life. This includes the level of your achievement, the results you produce, the quality of your relationships, the state of your health and physical fitness, you income, your debts, your feelings-----Everything!... You have to give up all your excuses.”

I agree with almost everything Jack is saying here with the exception that bad things can and do happen to us that are outside of our control. I think he makes a great point. Why don’t each of us including the people protesting on Wall Street, stop and take responsibility for ourselves. If my economy stinks, I need to work on my economy.

Where do you start to fix your personal economy? Why not start at your own home. Just think of it, if each one of us would take some time, effort and training to work on our own economy and fix our little world at home, what would it look like?

I would start with where I was, if it were me (and it was me back in 1998-1999 when I hit bottom). 

I would take a snapshot of my financial life. First I would write down how much money I would be bringing home. Next, I would write down a budget of my monthly expenses including my rent, insurance, utilities, food, clothing, eating out, medical, car repair and more. I would spend every dollar on paper on purpose before the month started. I would then subtract my total from my estimated budget from my total income coming in the door. This would then give me a number I could use for paying off debt, savings, emergency funding or funding for short and long-term priorities.

Lets say, my cost of living exceeded my income, what then? Time to adjust. I could choose to increase my income (work extra hours or a part time job), tighten up my budget, sell something of value or contact each of my creditors to ask for better rates and lower payments. The choice is mine. There is no bail out program for me or you out there. Wall Street is not my problem or my solution. I need to spend less than I make, that is my problem.  This is a touch choice but it is an option I have. I may not have chosen to loose my job, but I can chose to work 40 hours a week looking for a new one or starting a side business or working evening to help pay the bills.

Personally we did this six years ago. We were over $265,000 in debt including a house, car, camper and consumer debt (credit cards). Over the next 5 years we worked extra, tightened up the budget, sold lots of stuff and paid off all our debt. This included our home

This was such a great feeling but it was only the first step. The next step is what I call the world changer. Once you get your personal economy going in the right direction, and I am not talking about starting after you become totally debt free, start sharing your journey and teaching others.  We have spent the last five years leading small groups through a program called Financial Peace University at our local Church.  If each person would just help three people a year who would help three people a year, who would help three people a year. You know where this ends don’t you?

Over the next decade we could help educate, equip and inspire one street, one neighborhood,  and one city at a time. No longer would we be paying all this interest rates to the big banks owned by wall street, we would be saving money and paying cash and helping local charities.

So if you want to make a statement about the economy to Wall Street, start at home and take care of your own personal economy and then go help a neighbor, relative or friend do the same. It works every time, spend less than you make and you have money to save, give and buy what you want. Lets go punish those big guys on Wall Street by taking responsibility for your own personal finances.