I met with “Susan” this week and asked if we could review the record she was keeping of what she spent her money on; her expense log.  She pulled a notebook out of her purse with some apprehension and quietly told me that it was “pretty embarrassing.”

Susan went on to tell me that she had been afraid to keep this record; that she feared it would make her look like a bad person because of what it revealed about her decision making.

She continued, “This morning, I reviewed my notes and they confirmed my worst fears.  I made a lot of really bad decisions.”

This is a very common reaction when people first begin keeping records of their spending and taking responsibility for how they manage their money.  They feel like the record they keep is full of bad news.  It was fun to tell her that the record is actually full of GOOD NEWS.

“Susan, your expense log may feel like bad news, but it’s really full of good news; and, here it is.

•    “First, you took a really big step in choosing to keep this record.  It took real courage and commitment.  It’s very important that you give yourself credit for taking this big step.

•    “Second, each of us has a personal board of directors in our minds.  Think of your board as those little voices that are always whispering “good choice”, “smart move”, or “ooo, you could have done better”.  This board is always looking at what we’ve done in the past and what we can do in the future with the goal of helping us do our best.  When you reviewed your expense log this morning, your personal board of directors expressed its disappointment in some of your spending choices.  As the CEO (Chief Excellence Officer) of yourself, you agreed with your board of directors and said, “yes, I could have done better”.  The GREAT NEWS is that you took a responsible step and decided that you wanted to make changes in your future spending decisions.

•    Third, the even GREATER NEWS is that your get to make your own plan for making those changes!”

By now, Susan was smiling as she realized that her fear of confronting what she thought was a real weakness had turned out to be a winning move as she took a big step toward financial independence.

Want the secret weapon that Susan used in this real life story?  Here’s what you can do …

1.    Identify three areas where you do not like the choices you have made about how you’ve spent your money.

2.    Set a goal of what you want future decisions to look like.

3.    Write down how you want to reach that goal.

4.    Promise yourself that you will make the changes that will enable you to reach this goal; and, continue to write down your expenses so that you can measure your progress.  (Bonus … if you just sighed and thought that this is too much work, take a second and write down just 1 thing you spent money on today.  Just one.  How long did that take?  Don’t let your emotions fool you into overestimating how much time this will actually take.)

5.    Set a date when you will review this record and decide if you have reached your goal.

Susan left our meeting with renewed confidence that she could control her money rather than have her money control her.

Ironically, the effectiveness of this process is not confined to personal finances.  It can be applied to all aspects of life.  Our internal board of directors is always conducting an on-going performance review … looking at our goals (or lack of goals), the plans we’ve created for reaching those goals, the progress we’ve made toward the attainment of the goals, and rendering a judgment every day; exceeds expectations, satisfactory, or unsatisfactory.  When we receive the board’s daily verdict, we choose how to respond.

•    We accept the accolades for a job well done and vow to keep up the good work;

•   We take credit for the accomplishments and responsibility for the shortcomings and make a plan for improving performance where it is needed; or,

Well, the third choice is giving up; but, that is not an acceptable choice.  The board of directors is not an external body that we can choose to ignore.  Rather, it is a living, breathing, part of who we are and it will always be whispering in our ear.  It cannot be disregarded.

Has your board of directors conducted today’s review? If it has, you know what you want to work on.  If not, there is still time to make today’s review a favorable one.

An Old Idea is New Again

Once upon a time, in a time and place long ago, Santa never bought presents for all of the good boys and girls with plastic money.  He only used green pieces of paper with pictures and numbers on them.  When he didn’t have enough green papers, Santa would tell the store what he wanted to buy and ask the store to hold it for him.  Each week, when he got paid, Santa would go to the store and give the manager some money as a partial payment on the toy that the store was holding.  When the toy was completely paid for, Santa would take it to the North Pole and have the elves wrap the present and put the name of the child for whom it was intended on the package.  The North Pole was a very happy place.

One day, an ogre gave Santa a piece of plastic and told him that he no longer had to take green paper to the store.  He could fill his sleigh with all the toys it could carry and not worry about the green papers.  In fact, he wouldn’t need green papers for a long time.  Over time, the North Pole became a very sad place.  There was never enough green paper and Santa received calls at all hours of the day and night from angry people demanding that he give them green papers immediately; lots of green papers that he didn’t have.

Finally, the head elf approached Santa with an idea … stop using the plastic … give the angry people green papers until all of the plastic bills were paid in full.  Then, ask the stores to hold the toys and allow him to bring a few pieces of green paper to the manager every week.  When the manager had received enough of the green papers, Santa could bring the toy back to the North Pole and have the elves wrap it in bright paper with shiny ribbons and bows.

On the day after Christmas, with no plastic swords hanging over his head threatening to make the coming year unpleasant, Santa could begin planning for the next year and getting presents ready for the good boys and girls.  The North Pole was once again a happy place and Santa could enjoy each day of the year as he looked forward to the next Christmas Eve.

How can I save money at the grocery store?

Recently, my good friend and client Carol asked me to review her family’s budget with her to determine if there were any opportunities she was missing for saving money and getting the most value for every dollar she spends.

While going through the budget, I noticed that she was spending far less at the grocery store than she had in the past.  I asked her how she had managed to cut her grocery bill while prices seem to keep going up nearly every day.  She shared her strategy with me … here it is.

  • Every Sunday, she sits down and plans her menu for each meal for the week.  Once the menu is set …
  • She creates a shopping list that lists out everything that is needed to put those meals on the table.  She then …
  • Takes the list to the pantry and crosses off those items that she already has.  With the list pared down to the items that she must buy, she …
  • Becomes the “Queen of the Coupon Clippers”.  Finally,
  • Carol goes to the store with her shopping list; and, if an item that looks good is not on the list, she does not buy it.  She sticks with her plan.

Sounds easy, doesn’t it?  Planning ahead helps avoid impulse buying.  It also ensures that all of the required ingredients are on hand when it’s time to make dinner.  Planning also helps save money!

It’s certainly well worth trying … it just might help you get more for every grocery dollar that you spend!

What happens to my money if my bank fails?

I had the pleasure of meeting with a group of “adult learners” on Wednesday and was asked a great question by a gentleman we’ll call Rob … “If my bank got shut down, would I lose all of my money?”  The short answer is “NO” … with a few provisos.  Let’s examine a hypothetical situation.

Let’s assume that Rob has a savings account at the Greatest Ever National Bank (GENB).  After his paycheck was direct deposited on Friday morning, the balance is $1,200.

At 6:00 p.m. on Friday afternoon, GENB closed and locked the doors as they have always done.  However, this day was unlike any other because at 6:01 p.m., the FDIC came in and declared the bank to be “insolvent” and closed it down … forever.  Now what happens?

The first and most likely possibility is that the FDIC will have a bank that is solvent (called the assuming bank) take over the insured deposits that GENB held … including Rob’s savings account.  We’ll call this assuming bank the First Bank of Deliverance (FBoD).  When Rob’s bank opens on Monday morning, it will be doing business as First Bank of Deliverance and Rob will be their new customer.  For Rob, life goes on as usual with no interruptions to his cash flow … his $1,200 balance is safe and available for him to pay bills, make withdrawals. or whatever else he planned to do with it..

Of course, if no healthy bank is willing to take over the Greatest Ever National Bank’s customers, then the FDIC will issue a check to each depositor for full balance of the customer’s account, up to the insured limit.  The FDIC’s goal is to pay these depositors within two business days.

The current insurance limit is $250,000 per account.  If Rob has more than one account; and, if these accounts have different legal ownership (for example, one account is in Rob’s name alone; and, Rob and his wife have another, joint, account), Rob’s deposits could be insured for more than $250,000 so long as neither account has more than $250,000 in it.

There are some wrinkles if the money is in a trust or is being managed by a fiduciary; but, for most people, the scenarios above answer Rob’s question.  For more information, visit:

GREAT QUESTION, ROB!  Thanks for asking.