Tag Archives: money

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Financial DNA

  By remymartini • November 16, 2012 ,

Your life experience creates your financial DNA, not your inheritance or bank account.  The way you grew up, what your family and friends taught or did not teach you about money, what you researched about money and what you did with the knowledge.

For obvious reasons DNA does not start at birth, it starts the moment you start to want things. Not just things that you necessarily pay for, but when you’re a baby or toddler and want your teddy bear or want something done your way. Even though as a baby or toddler you’re not exchanging money for your teddy or something done your way, typically there is some trade off between you and your parents. The gave you the teddy to keep you quiet. That was your payment to them. You give them a goofy face and they pay you with a sucker. That is when your Financial DNA starts. For every desire there is some trade off.

As you get older those trade offs start to turn into chores and money. If you want to go out, make sure to clean your room and take the trash. If you want a car, get a job and save money.

Just like if you have an inherited disease that is based in your DNA, you can have money troubles because it’s engrained in your Financial DNA. If you have the habit of just asking for money and receiving, you don’t have realistic expectations of how the real world works. When you get into trouble and your family constantly bails you out, what expectation do you have when your family is not around?

To understand what your Financial DNA looks like, take a look at your past and how your grew up. Think hard about these questions:

  • What did your parents teach (or not teach) you about money?
  • When you wanted/needed something what did your parents do?
  • If you got into trouble, how was the issue resolved? Did you rely on friends and family or did you get out of the trouble yourself?
  • When you have to make a financial decision, how do you make that decision? Do you do your research or discuss with a trusted individual?

These are just a few questions to help figure out your individual Financial DNA and of course I would HIGHLY recommending to talking a a professional if you feel stuck or want to get their personal thoughts.

Let me know what you’ve discovered on your path to understanding your Financial DNA. Whether it’s gaps or clarity, I’m always here to help.

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Money & Motorcycles

  By remymartini • November 9, 2012 ,

For those that don’t know, I use to ride a motorcycle. I guess I would still ride a motorcycle if I didn’t sell it years ago when things got financially tight. Car VS Motorcycle was a tough decision for me since I LOVED my bike and it saved me TONS in gas. However, given the seasons here and the fact that I occasionally like to buy build it yourself projects that are impossible to get on a bike, I had to make the hard choice of selling it.

I tell you this story because it’s part of my financial journey and even I have to make the hard decisions. Those that are logically are probably going “PSH… that’s not a hard decision, it’s only logical to sell the motorcycle.” Yes, of course you’re right and I made the logical decision, but that didn’t make the decision any easier. I had put time and memories into that motorcycle. I had my first wreck on it and then built it back together myself. It wasn’t a horrific accident, just dirt and gravel around a curve and threw me off in a field. 95% of the fairings had to be replaced because they were shattered, but I was fine. I had put money, effort, and time on my first motorcycle (it will not be my last) so having to make the decision to sell it was hard.

We come up with issues everyday that require logical decisions to be made but emotions will linger. Many times when I’m talking to my clients the basis of each decision is because of finances. Things we have to cut back on, find alternatives for, or eventually decide to sell. There are memories, time, and finances wrapped into each decision. Having to make the decision to sell car because it has payments to purchase a used car instead can be a logical one, but it doesn’t make it any easier at times.

Motorcycles:Accident::Money:Debt

Another reason to reference motorcycles and money is that there is another correlation that I can thank my friend Dawn for. We often discuss financial dilemas and brainstorm about marketing. She mentioned that many people don’t respect the money they make and if you don’t respect it, it will ruin them. For those that aren’t motorcycle enthusiast, it’s the same concept. If you don’t respect the bike and you think that you are invincible on it, it will eat you alive. When you ride you have to respect the power that is underneath you, just as you have to respect the money that you have coming in. The moment that you think you know EVERYTHING that the bike can do, it will surprise you and it’s typically not in the way you would like. Once you think you know EVERYTHING about money, it will eat you alive and possibly bury  you. Having the understanding that there is always more to learn about a motorcycle or money will keep a healthy balance of respect to either.

The Moral

Moral of the story is make sure you understand that there will ALWAYS be more to learn about money no matter what position you may hold, including myself. Keeping yourself open to learning more keeps a healthy amount of respect for growth.

As always, I would love to hear your thoughts. Do you have a story where money has eaten you alive or the lack of respect on something has caused detriment to your life?

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The Power of “No”

  By remymartini • November 7, 2012 , ,

The very root to many monetary issues small and large can typically be found to be from one simple little word, or the LACK of one simple word. “No”

Whether it’s choosing to say “No” or avoiding saying “No” is your issue, you’re not alone. It can be for many different reasons. Typically it’s not a conscience decision to avoid saying “No,” it’s an emotional decision.

Let’s take a moment to review some typical scenarios to think about where to say “No” but maybe choose not to.

 

Family

Whether it’s your parents, kids, brother, sister or best friend, it can be very hard say no to your family and friends. Let’s think about a kid wanting to go out to the movies for the weekend. He tells his parents that he wants to go out for the weekend. The parent hand him $50 and tells him to have fun. As the parent, you failed to say “no,” so what does that me for you? Well, you’re $50 poorer for one. Next you haven’t set perimeters and now you’ve set your kids up for just asking and they shall receive. The more often this type of situation happens, the harder it will be to stop. On the flip side of this same example, what if you were the kid, what do you get out of this? Yes, you may be $50 richer, but at what cost? What does this teach you about the real world? Not much. The real world will not just say “yes” to your every desire so it’s really setting real life expectations up incorrectly and setting you up for future failure.

Think of this same example when it comes to friends and family that constantly ask for money. It can be the friend that always gets himself in trouble and needs to be bailed out all the time or the brother/sister that always leans on you to get them out of a financial jam.
Friends

Even if you don’t have friends that are constantly asking directly for money, many can still drain your resources in a different way. Do you like to go and “hang out” at the bar or go out to movies on a constant basis? Being social is completely healthy and needed for a happy life, but it does not necessarily mean it should require to you spend money constantly to keep everyone happy. Let’s say for fun you go out every weekend. The bar scene Friday nights, the club on Saturday, and maybe dinner & a movie. If you think of just the basic cost of that 1 weekend it can easily be in the hundreds, $100-$300 PER weekend. You have 4 of those in a month and it’s $400-$1200 any given month. You can still be a socialite on the weekends, but finding a way to cut costs and being mindful of what you spend. If you save what you would have spent, you’re well on your way to saving a useful emergency fund.

 

Yourself
This happens in a few ways. Spending, not tracking your spending, not saving, and putting it on credit without paying it off monthly. Think about these typical situations:

You work hard and “deserve” that night out or Starbucks on the way to work. Here you neglect to say no to spending. You’re also probably not tracking your spending which is just as important, I mean it’s a couple bucks, what’s the big deal? It can at times be ok to spend on yourself, but if you’re not tracking what you’re spending, how do you know what is ok to spend? Also many times these habits aren’t just 1 timers, they happen on a consistent basis and quickly can drain your resources.  A few bucks here and there quickly add up and you’re spending more than you know it on coffee, drinks, and overpriced nights out.

On the flip side of spending  with what you have is spending what you don’t have AND not saving. If you’re driving through those windows and charging on your Visa, Mastercard, etc and not paying off the balance each month you’re walking on a tight rope. If you’re having to use your credit cards to pay for daily expenses you will be wasting money on interest rates. Also, when an emergency hits, those credit cards will more than likely get maxed out quickly.

 

Working Hard: Saying “No”

I know it may seem silly to instruct people on how to say “no” but it can really get you to think. In the first example when it comes to family it’s about setting clear boundaries and expectations. At first it might be hard to tell your family no, and it can feel awkward to set expectations for your family but it can be the easiest. If you think about it, they love you and want the best for you, so if you can set the expectation by explaining WHY you are doing what your doing in terms of yourself AND them, they should be understand. From this example think about it like this: “I know you want to go out with your friends, so that you can earn the money you need to go out I need you to do x, y, z first.” You didn’t say no, you set the expectation that they need to earn the money they want to spend… Just like real life. Imagine that. After a few different instances just like this, instead of asking for money, they’ll ask what they need to do to be paid.

 

The harder example is telling your friends no. Setting expectations can feel a little awkward and unnatural. Though many friends can be like family, it can be strange to “set expectations” with your friends when it comes to cutting back on social events out. You don’t want to seem like you’re in financial troubles and you want to show that you can “keep up” with their own social activities. First, you don’t know their financial status and they may be trying to keep up with you so this can be an endless logic cycle. If you take the first step, you can actually be helping them cut back too if you think about it. Keep it real and honest and find alternatives that are cheaper. If you have to go out to the bar scene, you can buy the special, or choose water. I’m not a drinker myself so it makes my life cheaper. Cut back on movies to 1 a month if you go every weekend. Try movie nights at home and have a pot luck so everyone can enjoy reasonably priced food and not overpriced candy and popcorn. (Don’t you love it when you’re saving money AND becoming healthier, or at least the opportunity to become healthier)

 

Now comes the hardest person to stick with “No” – Yourself. It’s easy to tell yourself “no” because you understand the reasoning. However, sticking to it is much harder. Temptations happen everyday. It can be something that seems tiny like picking up a quick bite in the drive thru to save time. It could be something larger like getting a new car or going on a shopping spree because you got a bonus check. When you’re responsible for yourself it can be hard to tell yourself no. You work hard and deserve some bonus time to yourself, so why can’t you splurge on something little for yourself? The trouble that gets you in is consistently splurging on the “little” things. Those little instances add up quickly. It will take some training and a good support structure from friends and family but if you set goals for yourself, such as a vacation fund or Christmas fund, it will be easier to see the big picture and say “no” to the little stuff . Make sure you have short, mid, and long term range goals. When you’re out and about think about what is going to get you to those goals.  If it doesn’t contribute to that Caribbean vacation or Christmas fund for the kids, is it worth spending the money? Personally I know I can skip those run through the drive through if the alternative is sitting in the sun on a gorgeous beach.

The power of saying “no” is created when expectations are set appropriately for anyone that has any passing sway of your finances. Setting expectations can be hard, but not impossible. Family and true friends will understand why you are setting the expectations and might use you as a role model.

When setting expectations try:

1) Don’t give them specific numbers, just tangible reasons and goals. “Hey, I’m trying to save up for the Caribean. I’m going to hold off going out for a while”

2) Find alternative that everyone can agree upon. “Why don’t we just hang out at my house and grab a redbox movie?”

3) Communicate what’s in it for them. They could be learning from you as role model, but I wouldn’t say it like that. They can save money too so they might be able to come to that Caribean vacation with you. Vacations can be much more fun when you have friends with you. “It would be great if you could come with us. Why don’t we plan on going together? It would be way more epic if we were both partying at the island”

So what are your thoughts? I know you have the power to say no, so what is your story?

 

 

 

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Finances – A Family Affair

  By remymartini • October 26, 2012

One thing that I really enjoy doing in a financial plan is to get the kids involved in some way. It may seem like a strange concept to get kids involved into a financial plan, but it’s a great way to teach kids not only the fundamentals of money, but responsibility as well. An extra bonus I have found is that the kids often can keep their parents in line when I’m not around.

Why teach kids about finance

Listen, first and foremost, I am not telling anyone how to raise their kids. I’m just giving my honest perspective from when I was a kid and what I learned (or didn’t learn) while growing up. Education and knowledge is power so empowering your child with financial knowledge will last a lifetime. If they can count then they can start learning about money.

 

What you’re teaching them about money (and I bet you don’t even know)

One thing I know many parents want for their kids is more than what they themselves had growing up. Recently, that has translated to giving their kids everything they want, consistently saying yes, and rarely saying no. What this looks like on a consistent basis is wanting to go out with friends, having the newest phone, latest fashion, the new game console, or even paying high insurance cost because of irresponsible activity. When you constantly cave on a kid’s wants & desires it creates a sense of entitlement and gives them an unrealistic view of the world. If they ask then they receive and don’t have any ideas of what it means to earn something as well as they are not accustomed to hearing and responding to the simply “no.” Another factor to consider is if kids don’t learn the importance and value of money, they are going to rely on you throughout their adult years when things get tight. That can be moving back in because of large student loans and/or over inflated sense of entitlement for a prestigious job they’re not ready for. Also when retirement comes around for you, you may not be ready to retire if you’ve spent much of your money on your kids through their adult years.

 

How & What to teach kids about money

It’s going to always depend on the age of your child, but the earlier the better. This is a great website by President’s Advisory Council on Financial Capability that has easy ways to teach kids based off their age, so it’s a great starting point. It gives you easy ways of how to get kids engaged in everyday financial activities. The easiest thing I tell parents is to be honest one how you spend money when you’re out shopping. Say “We’ve only got $xxx to spend on Halloween. We can’t go over or we won’t be able to do y. If we spend less we can put the rest in our Disney vacation fund.” Be specific, simple, and most importantly explain the consequences as well as a reward for staying under budget.

Communicate, Communicate, Communicate

If you have goals you want to achieve as a family, let the kids know what those goals are and what they can do to help. Just like in the previous example, be specific on the goal as well as how they can help, simple in the instructions, and (this is especially important for kids so pay attention here) let them know what is in it for them. At first you want to keep it simple with 1 goal to have the kids engaged in. Once they get that down you can add more goals to their scope.

Allowance – Setting Goals & Giving Them Responsibility

Many times I get “how much is a good allowance for my kids” or “when is an appropriate age to give kids an allowance?” You may be tired of hearing this from me but as usual it depends. You really should talk to a professional because it’s going to depend on your own budget first and foremost when it comes to an amount. Also, you may find more creative ways to “pay” them for the duties you give them. Whether it’s more game time or TV time, or an upgrade to a phone or electronic device, you can find a way to give kids responsibilities and then properly reward/pay them for a job well done.

Age is going to be a parental call. Personally as soon as they can count I would give them some responsibility and then rewarding them for a job well done in some way.

Financial Chat

If the child can say “I want…” then BOOM, that’s the best time to talk about money. Give them a simple lesson of having to pay for things they “want.” If they want to acquire the things they “want” there have to be trade offs. They have to save up for those moments either through direct allowance or getting chores done around the house to help pay for those “wants.”

So what is your experience of teaching kids about money? I’d love to hear from you!

Until next time my wonderful networking partners!