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Phil
Supporter
Username: Barleyrooty
Post Number: 1026
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 6:40 am: | 
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A friend of mine (no, really!) is looking for help with her budgeting and spending - she's always lived on the edge but now that she's starting to earn a little more she's finding that she's still spending it all.
Does such a "helper" exist? What are they called? Accountant? Financial Advisor (not really - she's not looking for investment advice)? Human Personal Organizer? (Sounds like a living palm pilot)
Thanks,
Phil
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Smarty Jones
Citizen
Username: Birdstone
Post Number: 554
Registered: 10-2005
| | Posted on Tuesday, April 25, 2006 - 8:20 am: |
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no. Anyone who claims to be a helper is either:
1. Selling you insurance.
2. Selling you overpriced mutual funds.
3. Or taking your savings for their own profit.
Hate to be a spoilsport, but just giving you the facts.... |
greenetree
Supporter
Username: Greenetree
Post Number: 7396
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 8:30 am: |
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Why wouldn't an accountant be good for this? Even if it's just for one or two sessions. There are also a lot of "Gurus" out there now. What about a book by Suze Orman or some such person? I've never read the books, but these people have columns online, in magazines, etc.
Sportsnut may have some ideas here; I think he's a corporate accountant.
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Smarty Jones
Citizen
Username: Birdstone
Post Number: 556
Registered: 10-2005
| | Posted on Tuesday, April 25, 2006 - 8:31 am: |
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Accountant...see Number 3. |
greenetree
Supporter
Username: Greenetree
Post Number: 7399
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 8:40 am: |
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Smarty- you could say that about anyone who provides a personal service that you shouldn't theoretically have to pay for bcause it's a DIY. Like a lawn service or house cleaner. Or PeaPod. Or handyman for small around the house fixes.
On top of that, if one doesn't have any savings because one doesn't organize one's finances very well, one would only be temporarily diverting some of those non-savings which would otherwise be spent elsewhere for the professional advice. Consequently, there would be a budget and a plan to actually obtain savings. |
Brett
Citizen
Username: Bmalibashksa
Post Number: 2290
Registered: 7-2003
| | Posted on Tuesday, April 25, 2006 - 8:43 am: |
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I found the best way to create a realistic budget is to discuss it with a few of my peers. I sit down with two of my friends quarterly and we discuss expenditures, investments, and other things. It was a little weird at first, talking about money and comparing them to a friend, but it has been pretty useful. Heck we found the money to pay for a wedding. |
joy
Citizen
Username: Joy
Post Number: 434
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 8:48 am: |
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How about Quicken - it has a budget feature. |
Smarty Jones
Citizen
Username: Birdstone
Post Number: 557
Registered: 10-2005
| | Posted on Tuesday, April 25, 2006 - 9:00 am: |
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I agree with you, absolutely...if you want a service, you have to pay for it. The issue here is that the reason our Hero is broke is because she's buying too many services. This will become yet another $$ service. I question the morals behind a "Professional" charging for this service, because you are inherently marketing yourself to somebody who by definition can't afford you.
The first step in this 1-step program is....stop spending $$. Hiring yet another professional violates step-1, and the plan is sunk before it started.
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greenetree
Supporter
Username: Greenetree
Post Number: 7405
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 9:06 am: |
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There are places that makes sense. But if someone really needs help and for whatever reason books, software or friends don't do it, what should she do? Keep misspending and never get out of the hole? Or spend some one or two more times to develop a plan to get out of the hole? It seems as if it were so easy to get up one day and say "OK, I'm going to stop wasting money" she'd do it.
I also have a problem with painting everyone in the finance world as a liar and thief (which is what I'm getting from your statements) with one broad stroke. Like any other profession, there are good, honest people and a few rotten apples. |
Smarty Jones
Citizen
Username: Birdstone
Post Number: 559
Registered: 10-2005
| | Posted on Tuesday, April 25, 2006 - 9:21 am: |
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I did no such thing. I'm in the finance profession, and I certainly don't have that self-image you just described. Who said anything about Thiefs and Liars? "The planning type", such as yourself, would respond very well to a financial budget/plan and working with a professional. And assuming you could afford it, it would probably make sense.
This person, is not a planner. The notion of going to a professional to assist, is psychologically similar to the Monthly Gym membership mentality. It's a cost that feels good to the buyer, who says "I'm finally spending my money in the right way...I'm doing something good for myself...etc. etc..."...and walks out the door spending another $1,000 a year they otherwise would not have spent. And goes for a month.
Hiring somebody smart in the financial services industry is an expensive venture, and is worth EVERY PENNY if you find the right person. Even though I am capable of doing 100% of my own Household Finances, I don't. But I can afford it.
This individual does not need accounting expertise (she's in the RED), nor do they need Investment (no Capital) or Insurance (nothing to insure) guidance. This individual needs to say no to the Short Term decisions. It's very easy to sit down with a long term planner and create the plan. That's not the issue, it's the execution, and NOBODY will follow a spender around during their short term decisions which stack up at the end of the month causing RED INK all over their bank statements.
There is an AMAZING article in last weeks Economist that addresses this very concept, except it's focus was on why people don't max their 401k contributions. (Short term brain trumps long term brain). Even if a perfectly designed budget was created, it wouldn't matter. The short term brain is running the show with a spender, and the budget would not be adhered to.
Hiring a professional budgeter would satisify the short-term need to spend (and feel good to this person who is finally "spending money the right way!")....but would only add to the long term debt/costs, and would further drive this person in the red. This is bad advice. The solution to this situation is far more simple. Clip the credit cards. It's the most proven, effectual, low cost way of changing behavior known to man/woman. |
greenetree
Supporter
Username: Greenetree
Post Number: 7406
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 9:36 am: |
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No. Anyone who claims to be a helper is either:
1. Selling you insurance.
2. Selling you overpriced mutual funds.
3. Or taking your savings for their own profit.
I apologize for interpreting that as a negative slam on those in the industry. I never suggested that this woman hire someone permanently. If she has friends like Brett's and is comfortable sharing details, that would be great.
You are right in that Planners have an easier time budgeting. But, that doesn't mean that everyone finds it that easy. Clipping credit cards, maxing 401k and automatic savings out of every paycheck are no-brainers. For some people.
I.e., you clip the credit card and stop shopping for new clothes every weekend. Or eating out 3 nights a week. But now, your mom's birthday is coming up, you want to take her to her favorite restaurant and buy her a pair of earrings. It's not that you can't afford it, but you don't have the card anymore. Where in the budget does the money come from? Is there a budget for this kind of thing? Is there a budget at all?
There are people out there who are bright, accomplished and have no idea where their money goes or how to control it. I've worked with a couple friends (as an amatuer) to sort things out and both were completely amazed at where their money went. It's kind of like incredibly smart, accomplished women who date guys who are turds.
But I digress......
If someone has no idea where to start in making a budget, why not give them the benefit of the doubt and say that having someone (even if they have to pay) help them draw it up may be a good idea. If they don't have the control to excercise it, that's another issue. But let her start with a solid foundation.
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Jennifer Pickett
Citizen
Username: Jpickett
Post Number: 207
Registered: 4-2005
| | Posted on Tuesday, April 25, 2006 - 9:42 am: |
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Hey Phil-
I took a class from an adult school on general personal finance concepts- perhaps that would could be an inexpensive alternative to hiring someone if she can find a class to suit her needs. They give you lots of worksheets and insure that you spend 6 hours thinking about your finances during the class. Also, the teachers of these classes often are from firms that provide these types of services if she still needs assistance.
Jenni |
Smarty Jones
Citizen
Username: Birdstone
Post Number: 563
Registered: 10-2005
| | Posted on Tuesday, April 25, 2006 - 10:12 am: |
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I don't want to come off as a know-it-all, and I realize it's not right to assign anybody to a box. I've certainly made wild assumptions in my post that could be interpreted as insulting the person in need. Unfortunately, this touches too close to home, as it is a perfect description of someone very near/dear to me in my family, that I've been frustrated.
There are many ways to help the person out...mine is just one.
On a completely separate note, I am posting this article, because it's terrific. I'm not trying to support my point, or engage in discussion, I just thought it was a terrific read......enjoy.....
THE AVUNCULAR STATE
Apr 6th 2006
A smarter, softer kind of paternalism is coming into style
THE ADMIRAL is one of 11 riverboat casinos on the waterways of Missouri, where riverine gambling was legalised in May 1994. The casinos attract more than 25m visits a year. But close to 10,000 people are barred for life from gambling on the riverboats. If they breach this ban, they face arrest for trespassing and the confiscation of their winnings. These riverboat exiles are not cheats or paupers. Rather, they suffer from a gambling compulsion--a ruinous addiction to risk. The state of Missouri is stopping them for their own good.
A good question, which John Stuart Mill, who raised it in 1869, endeavoured to answer in his essay against paternalism, "On Liberty". Mill's answer was that the state should repress a man's acts only if they harm others. Harm to himself alone was not a good enough reason for the state to limit his freedom.
Mill would have thrown his book at the state of Missouri, then? Perhaps not--because the people it bars from the riverboat casinos freely chose their own exclusion. Since 1996 Missouri has pioneered a scheme that allows self-confessed gambling addicts to add their own names to a voluntary blacklist. Once on the list, they can never come off it. The scheme allows tormented people to enlist the state's help in their internal battles--to give force of law to the angels of their better nature.
Such policies appeal to a group of scholars--John Beshears and David Laibson of Harvard University, James Choi of Yale and Brigitte Madrian of the Wharton School--who espouse a fashionable branch of the dismal science known as behavioural economics. The behaviouralists claim to understand people as they are, not as economists hitherto assumed them to be. Because of ignorance or intemperance, lack of willpower or brainpower, people choose badly. Predictably so. The subdiscipline now has a well stocked cabinet of horrors and curiosities, showing how people fail to exercise their choices in their own best interest.
Having documented people's inadequacies, the behaviouralists now want to save them. The iconoclasts are becoming paternalists--but of a distinctive kind. Two of them, Cass Sunstein and Richard Thaler of the University of Chicago, describe their approach as "libertarian paternalism", which, they insist, is not an oxymoron. Their critics, such as Edward Glaeser, of Harvard University, call it "soft paternalism". Whatever the label, their approach is cannier and stealthier than the heavy-handed paternalism liberals reject. Their aim is not the "nanny state", a scold and killjoy forcing its charges to eat their vegetables and take their medicine. Instead they offer a vision of what you might call the "avuncular state", worldly-wise, offering a nudge in the right direction, perhaps pulling strings on your behalf without your even noticing.
One example of soft paternalism has already attracted the interest of governments and the backing of this newspaper: employees should be signed up for company pension schemes by default. Such schemes, which typically attract tax breaks from governments and matching contributions from employers, are usually in the best interest of workers. You might say that joining is a "no-brainer", except that what little brainwork and paperwork is required defeats a surprising number of people. A soft paternalist would presume that people want to join, leaving them free to opt out if they choose. In one case study by Ms Madrian and Dennis Shea, changing the default rule in this way raised the enrolment rate from 49% to 86%.
This measure exemplifies the soft paternalists' approach: the error it addresses is glaring, the remedy unobtrusive. The switch in default rules alters behaviour while preserving freedom of choice. It spares the ignorant and the dilatory from the consequences of their mistakes, while imposing few costs on those who genuinely prefer not to entrust their pension money to their employer's custody. This, say Messrs Sunstein and Thaler, makes it both libertarian and paternalistic.
LORD, GIVE ME THRIFT, BUT NOT YET
If inertia explains why people fail to join pension schemes in the first place, improvidence explains why they save so little when they do. Figures from some American schemes suggest workers are contributing less than 7% of their incomes on average. And those automatically enrolled in the pension studied by Ms Madrian and Mr Shea tend to stick with the low, default contribution rate of about 3%.
Nannyish governments, not all of them very thrifty themselves, are exhorting the public to do better. "The American Dream begins with saving money," said Dick Cheney, America's vice-president, at last month's Saver Summit, "and that should begin on the very first day of work."
The new paternalists beg to differ. Mr Thaler and Shlomo Benartzi, who is from the University of California, Los Angeles, are urging Americans to "Save More Tomorrow". That is the name of their canny proposal to tempt workers to commit themselves today to saving later.
Under their scheme, a fraction of workers' future pay increases is diverted into their pension pot before arriving in their pay packet. People seem readier to part with tomorrow's cash than today's; and as long as they hike their saving rate by less than their pay raise, their extra thriftiness will not feel like a cut in their disposable income. Messrs Thaler and Benartzi put their scheme to the test at a medium-sized manufacturing company. After four annual pay rises, the joiners had raised their saving rate from just 3.5% to fully 13.6%. "We plead guilty to the charge of trying to be paternalistic," the authors write. But since they have not infringed on freedom of choice, they do not think it a crime.
The two authors spelt out their plan in an article from 2004 dedicated to the late Sherwin Rosen, Mr Thaler's thesis adviser. "He would not have liked this paper much," the authors write in their acknowledgments, "but we sure would have enjoyed hearing him complain about it!"
What complaints might he have made? Some economists feel about the behaviouralists much as Robert Frost felt about writers of free verse: economics without rationality is like tennis without a net. It is too easy. If appeals to irrationality are admissible, then anything goes. But behavioural economics has grown up, and part of its maturation is to show that no, not anything goes. People depart from rationality, but they do so in ways that can be predicted--and exploited. Unlike free verse, their behaviour has some rhythm and regularity.
A lack of self-control is one such regularity. Impatience has always been a part of economics: people don't like to defer gratification, and they demand compensation--an interest rate--for doing so. The behaviouralists, however, have shown that people are inconsistent about their impatience. It takes one rate of interest to make them settle for a reward tomorrow rather than today, quite another to leave them indifferent between a reward 1,000 days from now, and one 1,001 days from now. For the second kind of choice (jam later, or later still) people are quite patient, accepting an annualised interest rate of 4.3% on average, according to a recent study by Mr Laibson and others. But for the first kind of decision (jam now, or later) people are much more impatient, demanding a rate of interest equivalent to 40% a year.
This inconsistency applies to chores as well as treats, as Ted O'Donoghue of Cornell University and Matthew Rabin of the University of California, Berkeley, point out. Suppose you must either do seven hours of gruelling paperwork on May 1st or eight hours on May 15th. If asked in March, most people would prefer the seven hours. But if asked on May 1st, most would put off the work for a further two weeks. Translated into the realm of personal saving, this is precisely the quirk in our nature that Messrs Thaler and Benartzi exploit when they ask people to save more--not today, but tomorrow.
This quirk sets up an "intimate contest for self-command", as Thomas Schelling, a winner of last year's Nobel prize for economics, puts it. People act as if two different selves take turns to run the show. Resolutions founder, because the self who decides to quit drinking or start a diet in the new year is not the self who must act on that resolution when the day arrives.
Mr Schelling's own intimate contest is with smoking; he is torn between a self who craves nicotine and a self who wants to be free of it. His habit has been a tempting target for paternalists, soft and hard. A new temperance movement of surprising force has banished smokers from offices, restaurants and bars in a lengthening list of countries. This year, even Spain banned smoking in workplaces.
The anti-smoking leagues stay on the right side of Mill by invoking the dangers of passive smoking. The true extent of those dangers is a matter of some uncertainty. But they represent a classic externality--an uncompensated, unpriced harm the smoker inflicts on others--which can justify quite draconian measures even in a liberal's eyes.
Some of the new paternalists, however, justify smoking restrictions on less orthodox grounds. Just as one individual can inflict an externality on another, so one side of a person's nature can inflict an "internality" on another. The self who enjoys a cigarette takes too little account of the damage he inflicts on the lungs of his future self, nor the addition each cigarette makes to the strength of his addiction.
Jonathan Gruber of the Massachusetts Institute of Technology, and Botond Koszegi of the University of California, Berkeley, think these "internalities" justify additional "sin taxes" on cigarettes and alcohol. Such taxes are not, they claim, unfair to the poor, who spend a greater share of their income on cigarettes. Since the poor are more sensitive to prices than the rich, higher tobacco taxes are of greater help to them in their efforts to quit. Taking this into account, cigarette taxes are probably "progressive", the two economists conclude.
Messrs O'Donoghue and Rabin, on the other hand, suggest sin licences. Rather than charge a duty of $2 a packet, governments could make the sale of cigarettes illegal to anyone who did not buy a smokers'ID, which might cost $5,000 and entitle the holder to 2,500 packets of cigarettes tax-free. People would no longer be able to slide into a smoking habit one packet at a time. It would be clear from the outset that they were entering a lifelong marriage to nicotine.
If such a high price is too crude a deterrent, the sin licences could instead carry customised restrictions, argue Mr Beshears and his colleagues. The licences would be sold for a nominal fee, but holders could specify in advance how many cigarettes they were allowed to buy, and at what times. Those restrictions could be loosened, but any tinkering would come into effect only after a lag, of say three days. The licences would be only a minor inconvenience to people who plan to smoke a lot. But they would be of great help to people who plan not to smoke, but find themselves with a cigarette at their lips in spite of their pledges to give up.
Should liberals object to schemes of this kind? Perhaps not. By helping people to make forward-looking decisions for themselves that they cannot easily renege on later, they enlarge their freedom, making it possible for them to do things they otherwise could not do. Giving Ulysses the rope with which to lash himself to the mast adds to his choices.
But Glen Whitman, of California State University, has doubts. In an engaging tract for the Cato Institute, a libertarian think-tank, he wonders why governments should always favour the long-sighted self over its near-sighted alter ego. The immediate pleasures of gambling, drinking and idleness are real; so too are the costs of suppressing them. "In contrast to the obese and the profligate, whose short-run selves constantly trump their long-run selves, we might point to the misers [and] workaholics for whom the reverse appears to be true," he writes.
IGNORANCE IS NOT AN OPTION
Public health campaigns are a more traditional weapon against smoking. In America these began with the surgeon general's report on smoking and health in 1964, but they have come a long way since then. The Canadians, for example, have decorated cigarette packets with repellent images of blackened gums and cancerous lungs. New York's Museum of Modern Art celebrated one of these images in a recent exhibition of designs that "protect body and mind from dangerous or stressful circumstances". The packet didn't just warn smokers of the risk of impotence, it illustrated the danger with a bent cigarette, hanging limply.
Even the most ardent liberal is happy for governments to provide information or force others to do so. A doctor should tell his patient about the risks of elective surgery, for example. To leave the patient in the dark would be criminally negligent.
But how should the doctor frame the patient's choice? Should he tell him that 90% of those who undergo the procedure survive? Or that 10% die? Both statements convey identical information. But each has markedly different effects on behaviour.
Such dilemmas are not purely hypothetical, as Mr Sunstein and Christine Jolls, of Harvard Law School, point out. In 2003 America's Health and Human Services Department commissioned a campaign to promote breastfeeding. The original version of the adverts warned that, without breastmilk, children ran a heightened risk of leukaemia, diabetes and respiratory diseases. (They showed pregnant women roller-skating or riding bucking broncos. You wouldn't take risks before your baby was born, the adverts intoned. Why start now?) Infant-formula makers objected, arguing that the adverts should stick to the benefits of breastmilk, rather than the dangers of not breastfeeding.
How information is framed matters. People weigh losses more heavily than gains, as Messrs Thaler and Benartzi explain. They will typically bet on a coin toss only if their potential winnings are twice as big as the amount they stand to lose. Likewise, mothers will go to greater lengths to avoid the harm a lack of breastmilk might inflict than to secure the benefits breastfeeding can bring. It is not for the state to decide how mothers should feed their children, the antipaternalist would argue. But if the state is to provide any information at all, it will also steer people, whether it wants to or not. "It is far too simple, and behaviourally naive, to draw a sharp line between acceptable 'provision of information' and unacceptable 'mind control'," argue Ms Jolls and Mr Sunstein.
This acute sensitivity to losses is not the only bias behaviouralists have discovered. People also have great difficulty understanding risks. The weight a person gives to a scenario--flood, fire, winning the lottery--should depend on its likelihood. In fact, it depends on how easily it can be envisaged. People will pay more for air-travel insurance against "terrorist acts" than against death from "all possible causes". Canny governments can work with the grain of this psychology. The grisly campaigns against smoking aim to put the dangers firmly in people's minds; to turn a statistical risk into a visceral image. They have been effective, perhaps too effective. There is some evidence that people now overestimate the risks of smoking.
But such campaigns can also have nasty side effects, Mr Glaeser argues. The fear, shame and guilt they inculcate acts as a kind of "psychic tax", reducing the demand for smoking. But unlike a genuine sin tax, which shifts money from taxpayers to the treasury, psychic taxes impose emotional costs without raising revenues. By portraying a habit as self-destructive and therefore shameful, such campaigns also pave the way for hard paternalism, Mr Glaeser says. The recent wave of smoking bans rather proves his point.
THE CALLOW NEPHEW
There are many ways for a government to queer the pitch in favour of one social result (more saving, less smoking) or another. In fact, as Messrs Thaler and Sunstein argue, governments often cannot remain neutral even if they want to. Something must serve as the default option, something must come top of the menu, and information, if it is to be provided at all, must be framed in one way or another. The soft paternalists want the government to use these tools knowingly, in favour of the outcome its citizens themselves would prefer if only they had the necessary discipline and discernment.
For its exponents, this is a paternalism for the times. People are jealous of their freedoms; yet they squander them. They resent outside authorities telling them how to live their lives, but they lack self-command. They have legions of entrepreneurs dedicated to serving them better, but often they fail even to understand the embarrassment of offerings that is spread before them. Some gentle guidance would not go amiss.
But if such manipulation is sometimes a necessity, should it be made a virtue? Mill, for one, would have disapproved.
Reasoning, judgment, discrimination and self-control--all of these the soft paternalists see as burdens the state can and should lighten. Mill, by contrast, saw them as opportunities for citizens to exercise their humanity. Soft paternalism may improve people's choices, rescuing them from their own worst tendencies, but it does nothing to improve those tendencies. The nephews of the avuncular state have no reason to grow up.
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sportsnut
Citizen
Username: Sportsnut
Post Number: 2386
Registered: 10-2001
| | Posted on Tuesday, April 25, 2006 - 10:23 am: |
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Phil, unfortunately your friend is becoming the norm more and more.
My advice is simple (and free) - if your friend is really serious about budgeting I'd advise her to set up her accounts on Quicken. Have her download her banking information on a monthly basis. Make sure she includes those dreaded credit cards and have her track her spending for a few months (six or so). She needs to be dedicated to doing this or it won't work. Typically there's an "oh ••••" moment when one realizes that they've spent xxx dollars on clothing or food. But it won't happen when you spend $50 here and $75 there. It will only happen when you see at the end of six months you've spent thousands of dollars on things that you really don't need. She also needs a good friend to review the results with her and tell her things she probably doesn't want to hear.
Cutting up the cards is a drastic measure but effective. People (even me) have no problem charging things because they don't have to physically count out the cash - it doesn't matter whether the item 9s $10 or $10,000.
Absent all of that perhaps a good old fashioned intervention is warranted. |
eliz
Supporter
Username: Eliz
Post Number: 1413
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 10:27 am: |
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Don't laugh but Oprah has been doing this series called the Great American Debt Diet with families similar to Phil's description. There are lots of worksheets, great info on the website - it might be a good place to start.
http://www2.oprah.com/money/debtdiet/money_debtdiet_main.jhtml |
C Bataille
Citizen
Username: Nakaille
Post Number: 2572
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 10:54 am: |
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A couple of simple suggestions to start in a good direction.
1) Bank online. Set up automated monthly payments for nearly everything, including and especially current credit card debt. Make those payments at least 3x the required minimum payment. If you're trying to get rid of a card altogether cut it up but divide the balance by 10 or less so you can pay it off automatically ASAP.
2) Pare down to one general credit card (store cards nearly always have higher interest rates despite their "bonuses") and leave that one card home or deeply buried in the wallet. Let it be available for true emergencies or big-ticket items that you plan for (plane tickets, etc.) Then return to # 1.
3) Use your debit card like a credit card. It's a handy reminder that what you're spending is coming directly out of your bank account, which may influence your immediate purchase. Plus you can view your account online at any time to see what's going on. So you can see everything you're spending your money on all at once. From there you can develop a budget (just don't forget the cash purchases as well.) |
1-2many
Supporter
Username: Wbg69
Post Number: 940
Registered: 6-2002
| | Posted on Tuesday, April 25, 2006 - 11:37 am: |
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eliz beat me to it. I am an attorney generally focusing on bankruptcy, and have considered becoming a financial consultant to help people just like your friend. But I haven't, yet, so don't worry, no self-promotion here. I strongly recommend Oprah's Debt Diet (available at oprah.com) as a great Stage I for getting finances under control. Also the books written by any of the financial consultants Oprah has used for the Debt Diet plan provide great primers.
Really, a big and very hard part of this is letting go of "keeping up with the Joneses". Look around and you'll immediately see people living way beyond their means, but you don't know that that's the case. We live in a VERY spendthrift culture. We all see our peers with lots of *things*, and think we should get to have them too. It's a culture-wide value, so it's tough to let go of, but it is essential to financial success, especially if you are not high-income. Oprah's Debt Diet helps steer people to this, in addition to providing structure, great advice, and concrete short- and long-term goals.
good luck to your friend. |
kmk
Supporter
Username: Kmk
Post Number: 1195
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 12:53 pm: |
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We had friends that went to the "Money Doctor" as they called it! I will try to find out the name.
It may not be right however because I think it was probably some debt-consolidation service tied in with financial responsibility counseling.
Both husband and wife made piles and piles of money and they dressed like fashion plates and drove VERY expensive cars.
Turns out they were completey bankrupt and didn't even know it.... |
Phil
Supporter
Username: Barleyrooty
Post Number: 1028
Registered: 5-2001
| | Posted on Tuesday, April 25, 2006 - 9:57 pm: |
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Thanks everyone for the comments and suggestions! I passed them on. |
Lou
Citizen
Username: Flf
Post Number: 125
Registered: 8-2005
| | Posted on Wednesday, April 26, 2006 - 10:41 am: |
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I would suggest her to read:
- "Rich Dad, Poor Dad" by Robert Kiyosaki
- "The Millionaire Next Door" and "The Millionaire Mind" by Thomas Stanley
These books are a great start and that was all we needed. Save the rest of the money. ;-) |
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