Clean Up, Aisle Nine: Broke Customers

A recent survey by analytics firm Precima showed that 82% of U.S. consumers intend to keep cooking at home instead of eating out even after the economy improves and they have more disposable income. On top of that, 84% of consumers plan to keep hunting for specials in grocery store fliers, and 78% are making fewer trips to the store to save on gas.

There’s no doubt that gas and consumer goods price inflation has been running wild during the past year. Americans are rapidly changing their behaviors to make ends meet and keep food on the table. Is inflation causing financial strain, or revealing deeper problems? (Is this a “chicken and egg” question?)

70% of Americans live paycheck to paycheck according to the Wall Street Journal; our national savings rate hovers around 0%. Perhaps rising consumer prices are enough to topple the financial house of cards so much of the country lives in. Rising prices expose the overextended. A written monthly budget allows you to take control of your money and reinforce your financial foundation.

Here are a few ideas for your next grocery store trip: 1) don’t shop hungry, you’ll buy things you don’t need; 2) stick to a list; 3) only use coupons for items you use (no sense stocking up on 4-for-1 canned garbanzo beans if you don’t eat them); 4) use CASH! Studies show we spend 12%-18% more when paying with plastic. Establish a monthly grocery budget using a cash envelope to monitor your spending. It’s easy: when the cash is gone, the only places to “shop” are your pantry and freezer.

Confronting your financial situation honestly is the first step on the path toward financial freedom. Don’t miss your opportunity to take control of your life and money today!

Why Credit Cards are a Bad Idea

As parents, we need to teach their children about money before they go away to college, and ideally, starting much younger than that.

Credit card companies pay universities millions of dollars each year to hand out free pizzas, clothing and credit card applications. If you do not teach your children about how to handle money, Visa and MasterCard will.

My wife and I are choosing to take this responsibility head-on because we know our children will not learn it anywhere else. Could you do the same?

When College Becomes Too Expensive

It is true that student loans are getting harder to obtain. There is a disparity between the rising cost of inflation (just over 4%) and the rising cost of college (just over 7%).

There must be a point at which parents and students discover the cost of college to be too high relative to the income produced as a result of that degree. Ten years after graduating from college, a full 80% of workers have moved on to an occupation unrelated to their college degree.

The question that has not been answered yet is where to draw that line and simply enter the work force as an apprentice or as a new business owner.

Solitaire Specialist Wanted

As summer draws to a close many people are vacationing. Those who are at work however, are probably not accomplishing much.

As I walk out of my office, one of the workers in the building normally has a game of solitaire in progress. I happen to enjoy a game of solitaire every now and then, but after about 2 or games, I like to move on. I have to believe there is more to life and vocation than hour after hour spent in front of a computer game.

Rick Warren calls this a purpose driven life and is the meaning that many of us are trying to find. I don't think that purpose is found in front of an electronic card game, but behind the covers of a book or a walk in the woods with your thoughts.

Man Your Post if You Want to Hear From God

So many of our lives have become disintegrated and compartmentalized, it's no wonder we have no idea how to get out of our current situation and make our future match what we see in our dreams.

Habbakuk 2:1 says that we need to man our 'post'. Verse 2 states that we need to write our vision down.

If you aren't hearing from God it is because you have left your post. He's trying to get in touch with you, but you're not there listening. Get back on your post and download our free goals worksheet (LukasCoaching.com/resources). Write your vision down on paper. Without clearly defined goals you will likely be in the same place you are now five years down the road. Don't you want more in life?

Shawn called into the radio show today in regards to the book Halftime that he's reading. Shawns asks, what if there is no significance in your life in the first half to be able to give back in the second half. What a great question as Shawn is not alone.

If you feel like you have very little significance in your life, regardless of which half you are in, God wants you to find it. He wants you to find your passion. Picture a grandfather who buys a toy for his grandson. After two weeks of playing with it the boy is tired. Just as the grandfather has the desire on his heart for the boy to enjoy his toys, so God wants us to find our passions and learn about our significance in life. A Career & Personality Profile is a great place to start.

Michael Phelps has Goals, Do You?

Michael Phelps is that 22 year old swimmer that breaks a record just about every time he gets in a swimming pool.

Leading up to this summer's Olympics, Matt Lauer interviewed Michael and asked him about the power of goals. Apparently Michael has been setting goals for years, but the only other person in the world that has ever seen his goals sheet is his personal coach.

In Michael's words, the two most powerful things in his life that have propelled him to greatness are his never ceasing goal-setting habit and his personal coach.

There is no way I would be so successful if I didn't write my goals on paper each year. The second reason I am so successful... personal coaching. Yes, even the coach needs to be coached.

Are you successful in your finances, career or business? Could you be? Then why aren't you doing anything about it?

Watch this short interview to find out why Michael is so successful.

From Good Idea to Great Reality

“Have you set clear, written goals for your future and made plans to accomplish them?”

This question was the premise of a 1979 study of Harvard MBA students. Only 3% participants had written goals. 13% had goals (though not in writing), while 84% of the students had no specific goals at all. Ten years later, the class members were interviewed again.

The 13% that had goals were earning, on average, twice as much as the 84% who had no goals.

And for the 3% with written goals? They were earning, on average, ten times as much as the other 97%!

Americans are some of the busiest people on the planet. In all of our tarrying, though, do we truly believe our lives are being lived abundantly? Have you signed up for that art class you’ve talked about for years? Did you start that business you’ve been thinking about? Are you aggressively reclaiming your financial freedom by getting out of debt and living on a plan?

Writing your goals down requires you to transform an intangible idea into something physical: words on paper. Unless you crumple your goal list and throw it away, the paper becomes a source of accountability. Our Goal Setting worksheets will help you establish specific goals for seven areas of your life: Financial, Physical, Personal Development, Family, Spiritual, Social, and Career.

Feel free to get creative with the way you record and track progress toward your goals. Some of our clients post a progress chart on their refrigerator as a constant reminder of their goal to be debt free. I keep a note card in my wallet of my goals for the year, checking them off as they’re achieved.

What are your goals? It’s time to write them down and begin experiencing the power of turning an idea into reality.

It's Getting Harder to Lease a Car

Leasing a Car is the Most Expensive Way to Operate a Vehicle.

A Marketwatch article addressed many issues that families are facing in a changing economy. Many families have felt the pinch of rising gasoline and food costs.

Most people do not realize that leasing is the most expensive way to operate a vehicle. Both Kiplinger’s magazine and a working calculator point out this obvious fact. I for one am glad that car leases will be slowing down in the near future as I have seen many families get stuck in a lease they cannot afford.

A better option is to bank a car payment for a few months and buy a car with cash. In America we need to live below our means, get out of debt and save enough to buy a car with cash. It is not an easy plan, but doing the right thing never is.

Avoid Getting Clobbered by Credit Cards

Parade.com points out some best practices to watch out for with your credit cards:

1. Your rates are raised without warning
   You may have been paying your bill in a timely fashion, but if you fall behind in payments to another creditor or if your credit score drops for any reason, it can trigger a jump in the rates on all of your credit cards. Even more surprising: If you charge close to your limit without exceeding it, your rate can jump too.


2. Your due date changes
   Don’t assume that your check must arrive at the same time every month. Some banks have been accused of abruptly switching payment due dates. Others may try to trip you up by specifying that your bill is due by a certain time of day on the due date. Many banks have narrowed payment periods from 31 days to 20 days.
   
   Keep in mind that if even one payment is late, banks can raise your interest rate to as high as 28% as a penalty. Average late fees for large banks rose from $19 in 1995 to $35 in 2007.


3. Extra charges and penalties
   Card companies tack on significant fees for all sorts of services: cash advances, balance transfers, conversion of foreign currency, paying off your balance by phone, and more. Going above your credit limit may trigger the biggest penalty of all, leading to rates of more than 30% a year.


4. Misleading introductory rates
   Your mailbox is probably filled with offers of alluring low-interest credit cards—3%, 2%, 0%. These rates are usually just come-ons, and they may jump to as high as 30%. And it gets even worse. If you transfer a balance to a card with a 0% promotional rate, you may soon learn that the 0% rate applies only to the balance you transferred, while all future purchases accumulate at a much higher rate. And when you make payments, they’re applied to the debt with the lower interest—so the higher- interest debt keeps building.


5. Mandatory arbitration
   When a credit-card company claims you owe money, your legal rights are limited. At least 75% of cards have clauses that say disputes must be resolved in private arbitration forums, according to a recent survey. So when a disagreement arises, a consumer can’t take it to court—a serious issue if you’re a victim of identity theft.

Maybe it's time to get rid of your credit cards for good.

Parade.com

The Financial Reality Our Kids Face

We covered some great topics during today's show about Kids & Money. In order to equip you with more information about the financial world your kids live in, check out these statistics:

> In 1983, companies spent $100 million marketing to kids; in 2007 they spent $17 billion.

> Kids age 8-12 spend $30 billion of their own money annually, and influence an additional $150 billion worth of spending for their parents.

> The average college grad has more than $3,000 in credit card debt and $19,000 in student loan debt. (8.5% of college students drop out due to debt/financial obligations; 6% drop out for academic reasons)

> 32% of college students say they were "not at all" or "not very well" prepared for managing money on campus (2006 Key Bank poll).

> 35% of children would like to learn more about money management from their parents; 42% of parents say they haven't taken any steps whatsoever to discuss financial basics with their kids (2006 Capital One study).

If we aren't teaching our kids to responsibly give, save, and spend their money, the credit card companies will be happy to fill the void. Bad habits and behaviors are never easy to change, but there's definitely no time like the present to begin a paradigm shift. Today can be the day you take back your family tree and strike a path toward financial freedom.

What are you doing to teach your kids about money?

As our oldest, Ava, becomes older we're trying to teach her more about money. If you think your child's school or church will teach them about money, think again. I'm afraid the burden is going to fall on you as parents.

Don't let them go off to college not knowing anything about money.

For ideas on what to teach your kids and when, listen to the Past Due Radio Show.

Here's a picture of our oldest Ava in the studio with me. I brought a visual aid with me, which incidentally doesn't work well in radio.

Think Before Emailing

If you email a prospective (or even a current) employer, make sure you think about your content before hitting send. The New York accounting firm KPMG LLP says that about 1 of every 10 thank you messages (emails) they receive have some sort of smiley face in them :).

That may be OK if you're applying for a job at Apple (or maybe not) but it surely does nothing to accelerate your credibility.

During every step of the hiring process, pretend that your prospective employer is looking for any reason not to hire you. They really are. You cannot let them down at any level because they will find someone else. Don't let a ;) stand in the way of getting your dream job.