Credit Cards are Evil

Dr. Marten boots rock when you pay cash!

Don’t use credit cards unless you have the financial means to pay the card off in full every month.  There’s no points program in the world that’s worth carrying a balance on a credit card, as the interest, which is the fee paid for the privilege of borrowing money, no matter how low, accumulates at an alarming rate.  The minimum payment calculation equation was not created with the consumer in mind, but instead leans toward bringing in the maximum amount of interest to the creditor. 

When you leave a credit card balance unpaid in its entirety by the monthly bill date, you get charged interest on the outstanding balance.  If you continue the next month without paying off the entire balance, you end up being charged additional interest on the same balance AGAIN, as well as on the interest that was added the month before!  Effectively you’re growing your balance every day you don’t pay off the full balance.  In many cases, if a balance is strung along over many years’ time, one can end up paying more interest payments than the amount of the original credit card debt.

It’s sounds simple not to use credit cards for purchases, but it’s actually quite complex when you consider that the norms in our society include borrowing liberally to leverage our purchase power, especially when it comes to education, transportation, housing, and small business.  Basically it’s financial peer pressure.

I was given the basics as a child.  I learned to make money early-on by watching my mom take odd jobs to come up with enough money to make ends meet in our household.  Not just any job, but jobs that she could complete while still attending to my sister and I, as well as all our activities, i.e. Living Large.  She worked as a part-time secretary in the mornings, and conducted market research studies on Playboy magazine readers who “just liked the articles” on weekends so she could cart me around to play practices and auditions after school.  She walked door-to-door during the daytime verifying contact information for local phone directories so that she could attend my sister’s tennis matches in the afternoons, and she secret shopped and sampled products at stores during high-traffic hours so that she could pick us up from school and take us to the counter at Kresge’s dime store for a burger at lunch occasionally.  I may have had an allowance as a child, but with my first part-time job in my early teen years, I quickly got the idea of making my own money.  I also quickly learned that I could only spend so much on clothes and candy and outings before my wallet or bank account was empty.  Those years were fun and simple when it came to money….work more or spend less if you wanted to save for something big.

Then college came around and despite taking years of trigonometry and calculus in high school and establishing financial independence with the money I’d earned from my part-time jobs, I had never been exposed to the concept of credit and interest.  I just knew you couldn’t spend what you didn’t have…that is until I strolled through the line of credit card vendors in the commons that first week of college.  “Buy it today and pay it off later,” they flaunted as they handed me my free dorm-room-shower-caddy for opening up a revolving credit account at 21% interest.  “Establish your own credit history,” they boasted, and I was fished-in on the independence reel.  I started using the cards for little things just to use it….a movie at the 400, a pack of smokes, or a few books for school, but soon it turned into bus tickets to visit friends for the weekend, a pricey pair of Dr. Marten’s, and a tattoo to match the image.  The purchases added up and the interest began compounding; the bills started showing up at an astonishing pace.  

I’d pay this one with the little money I had at the time and hope nothing else showed up until I got my next work-study paycheck or made a few bucks typing papers for fellow classmates.  Never once did I sit down and write out a budget of what little money I was actually bringing in on my full-time student and part-time employee status or what large amounts of money I was spending in the little time I had between work and class and homework and partying.  Had I done that I might have been able to balance out the scales early in the game. I had no concept of interest. While I could easily calculate the interest rate into dollars on the balance, I didn’t get the idea that the unpaid balance left each month after the minimum payment was made would just keep getting re-penalized monthly, compounding to the balance, ultimately increasing your balance each day.  I just kept running, trying to make more money to pay more debt.  Creditors’ reminder calls started coming in as I got behind on payments and soon escalated to threats of home-visits and repossession of purchases.  While dreaming up new ways to dodge the calls and throw off the creditors provided hours of free entertainment to my roommates and me, it was actually super stressful, extremely overwhelming, and sometimes downright scary.

Ultimately I turned my personal finance situation around, but I continued to feel the social pressure of leveraging my purchase power with extended credit well into my 30’s.  I was challenged to “stretch” on the mortgage of our properties by lenders and “trade up” on the car for just an extra hundred a month, and even to finance my cell phone for mere pennies extra each month.  I look back now and can’t believe the thousands of dollars I wasted on unnecessary interest payments because of the need for status and instant gratification. 

Had I not calculated my interest expenses in a budget, though, I might not have come to my senses enough to stop using credit cards unless I can pay the balances off in full.  It all comes back to budgeting, which is part planning and part monitoring.  If you can see what you’re spending, you can see where you can cut expenses, and high interest payments, which provide you with zero return, are a glaring example of what to add to the chopping block.

When it comes to purchasing, cash trumps credit cards.  Buy what's important to you, spend what you can afford, live within your means, and ix na the credit cards.   They can lead to financial disaster if not completely understood.

Money Smart Week in Chicago

Many of you have asked me for resources on how to succeed in the financial rat race.  On your mark, get set, GO: Money Smart Week in Chicago is your answer!  FREE live and online classes will be offered in the city of Chicago the week of April 18-25, 2015, on a slew of financial topics ranging from Retirement Savings to Women and Money to Cost-Saving Tips for Homeowners.  

The Federal Reserve Bank of Chicago’s public awareness campaign, is designed to help consumers of all demographics better manage their personal finances. Money Smart Week programming takes place all over the US through the collaboration and joint effort of hundreds of organizations across the country.

Become a Budget Superstar, Understanding Medicare, How to Stretch a Buck, Energy Savings, Implications of Same Sex Marriage, Wills and Trust, Credit Repair, How to Start a Business with Very Little money, Love and Money, Property Tax Appeals, are but just a few of the incredible classes offered.  For a list of classes in Chicago and Illinois, click here.  For a complete list of classes across the country, click here. 

While you may have a general idea of how your child’s college will be payed for, if you’re not 100%, check out Smart Money Week’s Learn How to Pay for College, where you can get online tutorials on Starting the Process, Understanding Student Loans and Grants, and Borrowing Responsibly.

Bottom line:  do not miss the opportunity to get the information you need about your finances.  You will be Living Large in no time!

How Do You Spell Relief?

Hooray!  The freakin' PARCC, a controversial new standardized testing system, is over as of yesterday in our school.  Did the sky fall?  Nope.  Did the opposers make a dent?  I don’t know.  Do the proponents feel vindicated? I don’t know.  Do I care?  Nope.  Am I curious about the results of the tests for my child?  Not really. 

I more just wanted it to be over so people would “stifle it” as Archie Bunker would say, as I heard some of the craziest comments come out of people’s mouths and experienced more than a few awkward “ice breakers” trying to lure me into conversation about an issue I care absolutely nothing about.  Here’s some fun examples:

Parent (and School):  “I let my kids decide if they wanted to take the test or not.”

Initially it sounded insane to me to ask your kid if they want to take a test or not, DUH….NO.  I’m envisioning the fast-forward button pushed where grown children who were given and took the chance to opt-out of PARCC testing, were up for an interview at a company where personality/admin/financial/whatever testing needs to be administered as part of the screening process and candidates says, “I’m going to choose not to take the test.”  That’s a surefire way to take yourself out of the running for said job.  To be fair, I’ve turned down testing myself (only drug) on occasion in my young adulthood, as the timing wasn’t right, but it wasn’t because my parents taught me I could choose if I wanted to be tested or not….I just knew I would fail, which is another whole issue in itself.  As a follow-up, most of the parents’ kids who had been given the option without any parental nudging (at least of people that I know), actually chose to take the test. Might our kids have a better appreciation of the testing’s importance than we do? Could be.

Parent:  “I’m not having my child take the test because it’s conducted with paper and pencil, and that’s nothing like the real weighted test next year, so it’s not considered good practice.”

“A sphincter says what?” as Wayne Campbell would say.  Do we not still use paper and pencil in this world?  Might the opportunity ever arise when our children might need to use a writing utensil in a pinch to get their point across?  Might they benefit from the lesson of flexibility when it comes to testing, and everything else for that matter, as many times in life you don’t get what you expect, and isn’t that when character comes out….how you handle change?  Additionally, the subject matter of the test is the same, regardless of the vehicle to assess the topics.

Parent:  “They’re hiring test scorers on Craigslist!  Grading won’t be done properly by people making $11/hour.”

Wow.  Do you need the president to grade your kids’ test?  Seriously, did you ever make $11/hour and if so, what did you do?  Was it important or not?  I’ve never had an unimportant job and I can assure you I’ve completed some tough tasks for $11/hour and moved on to $12/hour, then $15/hour and so on.  Do you know that many of the people in Chicago, cripe, people living in this neighborhood even, make about that hourly rate?  Would you not feel a parent from this neighborhood capable of grading your childrens’ tests, if trained to do so?  On another note, Craigslist is still a great place to find employees and jobs, and that’s ll the grading is….a job.  End of story.

Parent:  “Are you having your kids take the PARCC?” 

Another Parent:  “No.  I don’t have any issue with it.”

Parent:  “I didn’t either until everyone started sending emails, posting social media warnings about it, and lobbying at school and in the media for other parents to join forces against it.  Now I don’t know what to do.”

Another Parent:  “Well what do you think now about the test?”

Parent:  “It doesn’t bother me, but I’ll probably opt out because everyone else is.”

I have no sidebar on this other than JONES is probably not your last name, so quit trying to act like one.

Look, I’m not trying to stir the cauldron here on an issue that is finally lying peacefully, at least for this week, at the bottom of everyone’s laundry list.  I just want to point out that regardless of all the pros and cons and lobbying and digging in heels over the testing issue, it’s over and it didn’t kill anyone, at least no one that I know of.  From my vantage point, the kids were happy for some candy in the classroom (another issue to throw people off the deep end) and a break from the unending homework (go ahead, you know you want to jump back on the homework is evil train).

Shall we just relish together in the fact that this is over for now and our kids were left unscathed and we’re left without anything to talk about?  That’s how I spell relief!  

Community is About Participation

Scene from Hoosiers

Most of us are part of various communities, whether we want to be or not, based on our affiliations, associations, and sometimes just the physical location where we live.  Some of us simply exist in the communities, many participate, and still others take leadership roles within the groups.  We all usually reap the same benefits and suffer the same hardships bestowed on the group at large.  It’s an honor system of sorts, you do right by your clan and they do right by you.  Yet some are weary of taking lest they have to give.  But community is not about tit for tat, as in a monetary system.  Community is about taking ownership of the success of the whole group, which includes helping those individuals in need within the social unit, and accepting a leg up yourself when you’re not able to go another mile on your own.  Sometimes you give, sometimes you take, sometimes you go stretches without doing either one, but you do it all without ever expecting a payout or an IOU hanging over your head.  

Being part of a community has always been important to me as an individual.  From a young age, I actively gravitated toward specific groups that shared similar interests, likes student athletes, performers, and practical jokers.  I didn’t want a label, I just enjoyed talking and sharing stories and ideas with other like-minded individuals.  I felt part of something larger than myself, and while I felt no obligation to contribute to the individual communities, I WANTED to, so I did.  In turn I just naturally experienced lots of good will from the groups and their members.  

As I got older, the investment in the communities I submerged myself in became greater, yet the yield was more than I could even measure.  The time, energy, and loyalty I gave to the radio broadcast community, the gay community, and later my work community in real estate was substantial, yet I attribute almost every win during those time periods to a collaboration between me and my clan.  Without the support and camaraderie of my tribes, my success is uncertain, as I am only one man, with limitations and faults.  Yet as a participant in a group, even a small one at that, my accomplishments echo for days and my failures are absorbed and put into perspective without complaint.   

While I never thought much about my natural attraction to communities, now as a parent, even a two-parent, above-average wage-earning household in an affluent neighborhood filled with what can only be described as “white people problems," I thank my lucky stars every day for the various communities that support, nurture, and provide direct friendship and care to me and my family.  While I am completely capable of surviving on my own, I would never want to because my life would be sub-par.  Who would pick up my kids when I’m running late, drop me at the train station on the way our of town, or leave chicken soup at my door when I was sick?  Who would shovel my walkway in an unexpected snowstorm or pay the babysitter when I’m out of cash or let the roofer in when I’m at work?  Who would invite me over when I need a break from my spouse or family or keep my kids overnight when I have to attend to an emergency?

I simply don’t think I’d be able to do it on my own, at least without questioning if there is a God or a point to this life.  

I know it takes courage to give of yourself, lest your trust be shattered.  It also takes faith to take of what is given to you, as it’s really not about your worry over a tally sheet, but acknowledgement that you are not perfect, are not able to be in 3 places at one time, and are not SuperMan/Woman, because that shit ain’t real.  It’s about surrendering to the idea that we are not in complete control of our lives and that we all need to “get by with a little help from our friends.” 

Take a leap of faith today.  Ask someone for a hand.  Offer a kind word or assistance to someone “just because.”  Build a bridge of trust.  Your community is what you make of it. Think you don’t have a natural community?  I bet you do.  What about your fellow pre-/grade-/middle-/high school parents,  your daily carpool counterparts, and the neighbors that live around you, they are all examples of community by association.  Co-workers in your department, people you wave to on your morning walk or Starbucks run, or the members of your support group.  We all have a basic connection with our unique groups and people in them based on repeated exposure, whether it be through work or kids or shared interest.  We have a choice, though, whether we will participate in that community around us.  

Maybe you don’t crave social outlets or collaboration or belonging…you like to be on your own and do your own thing.  Okay, that’s cool.  Then seek out other people like yourself that pride themselves on being in control, even though we all know you’re not, and join forces with them.  The specific group you surround yourself is not nearly as important as the act of participating within a group at all, even if just by association.  Fake it to make it if you have to.  The odds of you accidentally giving of yourself to your posse or accepting aid by default that you incidentally need will increase exponentially just by bridging the gap with people and accepting the tie that binds you.

What do you have to lose?  Maybe a little time or energy.  What do you have to gain?  A potential lifeline that keeps you afloat.  It’s worth the tradeoff in my book.

Hands Free Mama Giveaway!

Many of you already follow Rachel Macy Stafford’s blog and are in tune with her Hands Free Journey of letting go of distractions and perfection in order to live a fuller life based on what really matters.  I was fished in, hook line and sinker, after reading just one paragraph a few years ago in one of her posts, which highlighted the impression your kids and the people around you get when you’re busy working, playing, or talking on your mobile device in their presence.  It went something like this:

• Whatever you’re doing on your phone is more important than me
• You are my model and you are showing me how I should use my own cell phone

If you haven’t checked out her HandsFreeMama site, I would highly recommend you doing so immediately.  It completely changed my outlook on life, and my behavior soon followed suit. Stafford’s first book was recently published and it instantly hit the New York Time’s Best Seller List.  

Hands Free Mama details the pitfalls of multi-tasking all the time, adding to the already warped pace of our world.  It provides an easy guide to just setting down the technology and going “hands free,” even if just for small bits at a time until you are able to fully confront your addition.  The result is re-establishing honest-to-goodness live interactions with people and rediscovering those things that are near and dear to your heart by being fully present.

One lucky reader will receive a FREE copy of Hands Free Mama, compliments of Zondervan. 

Required disclosure:  Zondervan provided the book, valued at $15.95.  All opinions are my own.  I will provide the randomly selected winner the paperback Hands Free Mama book.

Simply click below to enter.

a Rafflecopter giveaway

Living Life Large

Do you live comfortably, or even well within your means? Do you whole-heartedly enjoy those things in life that are most important to you? Then you, my friend, are Living Large. You've got values and beliefs that drive you to make the decisions you do. They dictate how you spend your money and your time. When financial situations change in your world, you make adjustments to accommodate.

If this doesn't sound familiar, but you want it to, or if you are in need of loosening the monetary noose around your neck a bit, read some of the posts about Living Large. The essential concept is based on cash, as you can only spend what you physically have in your possession. If you live your life based on this, you'll build a pretty solid financial house. If you spend spend less than what you make, even better...that means you're saving some, whether it be a reserve account, a college fund, or a rainy day stash.

Living within your means is achieved by always keeping the economic balance in check by constantly monitoring the money you have coming in and comparing it to the money you have going out. Keeping track will create an awareness of your expenses, which will allow you to create a budget, or picture of your financial affairs. Massaging the budget regularly, by bringing in more money to cover expenses and cutting costs to stay within your bounty is the final step of Living Large.

While it sounds super simplistic, and the numbers part of it really is when you lay it out on paper, the day-to-day adherence to your plan can sometimes prove daunting. Unexpected expenses or breaks in income, impulse buys, and pressure from family and friends can add up to straying from your budget, often-times resulting in debt.

Give yourself permission to take charge of your financial picture on your own terms. Satisfy the need for monetary peace in your life. Put some effort in and get some tips and you will be Living Large in no time.

Fruit of my Labor

It's embarrassing to even call it labor.  I made a few clicks on a website, printed out a form, filled in the blanks, and sent it to the state.  A few weeks later my unclaimed money showed up.  It's that easy.

If you're looking for money you forgot about and don't want to dig through the junk drawer to find it, check out your state's unclaimed property website.  Take a step, even if its a baby step, toward Living Large, by living well within your means while enjoying the things in life that matter.