The 4 Hooks of Motivational Training

Speaker at Business Conference and Presentation.I have attended many educational events – conferences, workshops, online courses and webinars – for several industries over the past few years.  I was for a short time an agent for a network marketing company in financial services: I hold a Series 6 license and am life insurance licensed in ten states.  Although I have gained eye-opening insight and understanding, attending these events has also been a very valuable lesson in the strengths and weaknesses of the mindset conditioning that the network marketing and real estate industries in particular use to “hook” reps and students, respectively.  I have become very familiar with what I will call “motivational training.”

I believe that this style of training sprouted from the self-help movement of the eighties and early nineties.  Susan Powter of ‘Stop the Insanity’ fame comes to mind.  Her brand of tough love in encouraging people to change their eating habits to gain control of their lives and health earned millions from books, tickets to speaking engagements and exercise videos. During this time Tony Robbins’ star was also on the rise. He too had lengthy infomercials on how to take control of your life, but his approach was far more “gentle,” for lack of a better word, and holistic.  Even though their approaches were very different, in my mind they built the framework for the motivational style of training so popular today.  Ms. Powter and Mr. Robbins showed how profitable “motivation” can be.

Today, “gurus” are all over the place.  They have learned to combine the tough-love and gentle approaches.  They are usually people who have achieved demonstrable success at something and have built a following based on their story of how they accomplished their goals.  The point and purpose of motivational training is the up-sell.  These events follow very familiar layout that will conclude with an “ask” – buy a book, a course or series of courses or mentorship/coaching.  Whether the story of the road to success is entirely true or not, clearly the story in and of itself can prove just as profitable, if not more so, than the work itself.

Success on hook

The following are four common “hooks” you may hear when attending educational industry events.

Hook #1: The Warning

The idea is that they will help you avoid the costly and painful mistakes that they made.  This idea is reinforced by the altruistic desire help as many people succeed as possible.  I am not doubting anyone’s sincerity.  I just believe that we have to be our own teachers.  When you have your own experience, including failures, then you are in the best position to know what works best for you, given your unique set of skills, talents and interests.  And that is what a person will be able to make the most out of an investment in coaching.

The Warning:

  • You can’t do it by yourself
  • Mistakes can ruin you

Hook #2: Cost Versus Value

“If you paid $30,000 for coaching that leads you to 3 deals that earn $10,000 each or even 1 deal earning $30,000 and you can build a fortune going forward on the lessons you learned, what did it really cost you?”  That would make the service in effect free.  However, there is a huge caveat – “if.”  If you’re given an action plan; if the coaching is personal; if the coach follows through with what has been promised; if you follow the action plan; if you are able to devote the time and effort necessary.  The truth is, only about 5% of the people who attend such workshops will take action and of those few achieve the results they were expecting.  For most it will be nothing more than a very large donation to that guru’s bank account.

Cost v. Value

  • Hand-hold coaching from an industry expert
  • It pays for itself

Hook #3: Impatience

We want to see results fast.  Diet companies make a fortune every year on our desire to see results fast, with little effort.  Patience requires discipline.  Discipline involves consistent long-term implementation of a plan toward a goal.  The gurus know how to tap into this tendency in our culture to want to jump ahead and enjoy the evidence of hard work, without actually doing the hard work.  And that very well should be expensive.

Impatience

  • Huge profits in 30 or less days
  • Be the envy of suckers slaving away for “the man”

Hook #4: Insecurity

Many of us don’t believe we can do great things.  Guilt in knowing that we are not living up to our full potential is an extension of that self-perception.  Flashes of motivational quotes and inspirational videos are meant to dig into the sore spot and bring home the point that the program, product or service offers a way out.  The gurus know this feeling is fleeting.  We are very good at settling back into a comfortable, familiar routine.  So it is imperative for the speaker to pull on the string of insecurity to compel as many in attendance as possible to pull out the credit card or take out the HELOC or pull cash out of a retirement account to pay handsomely for the promise of finally attaining the success and feeling of accomplishment that so many lack.  They also know that there is at least $3trillion sitting in liquid and a little less than liquid accounts in this country.

Insecurity

  • Yes, this is great training, but you still won’t make it on your own
  • Winners recognize opportunity and take decisive action

Konferenz Saal

Now, there is nothing wrong with seeking help and inspiration.  I am not at all against doing the weekend-long workshops on real estate investing or conferences by networking marketing and other companies.  But I have also become hyper aware of the emotional and psychological hooks that can be very manipulative and often lead to disappointment down the road.

Remember:

  • Everyone starts at the beginning and there is no substitute for work.
  • If the gurus could do the work to get where they are, so can you.
  • Don’t let fear of making a mistake cost you.  You can only grow from mistakes.
  • Don’t worry about “advice” from people who cannot relate to what it’s like to take a chance.
  • Take advice and get ideas from people who relate to fighting for a vision.
  • Take advice from people who don’t give up.
  • Take advice from people who have failed a million times but have the courage to get up and keep going; their failures have provided a treasure trove of wisdom and great ideas!
  • Don’t take advice from people who talk nonsense.
  • And please do not believe people who are boastful because they are likely embellishing to create envy and false authority.

The truth is that motivation comes from within.  Nobody can give it to you.  It requires constant self-evaluation to grow in the confidence that you are doing what truly interests you and for which you have the talent.  Just because someone else has done tremendously well at something doesn’t mean that you will too, even when you give it 100%.  No one thing is for everybody.  We were each created for a specific purpose.  If we are pursuing something that is not in line with our purpose it could remain an uphill battle.  If we are pursuing things that do not engage our best skills and talents it will likely remain a very difficult journey, no matter whose advice we follow.

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Debt & Delay

cbbfb2a7It is not hard to find advice on managing money.  There are print publications, websites, gurus, apps, non-profits, licensed professionals and people we know who give us their ideas on money: saving it, investing it, making more of it and how to spend it.

One of the biggest concerns Americans have about money is debt.  In our consumer-centric culture we rely on interest-bearing credit cards and loans to finance non-essential wants, in the process racking up mountains of debt that we end up struggling to pay.  We are bombarded with ads while checking e-mail, on social media and elsewhere designed to trigger our impulse to purchase on a whim.  Temptation to consume is everywhere.  But for the small business owner, being mindful of discretionary spending is especially important; the consequences of personal finance habits can have a big impact on their business aspirations.

Debt & Delay

According to the 50/30/20 rule, 30% of your income should be allotted for discretionary spending.

098689848723_2A disheartening consequence of having unmanageable “bad” debt is delay in attaining goals and dreams.  Bad debt is debt acquired for things that have no real value.  (Good debt is that which is acquired for things that we can use to increase our net worth today that could also continue to provide resources in the future; for example, a home mortgage.)  Money diverted toward paying the monthly interest on balances carried forward on credit cards represents an opportunity cost both in the moment and the near future.  This is especially true for entrepreneurs.  Access to capital is essential to start and grow a business.  Many entrepreneurs will apply for a bank loan and solicit investors for this purpose.  After loan officers and investors read the business plan, they will want to assess the owner’s financial credibility.  They may look at the credit report and bank accounts among other things, and usually require that the owner have some “skin in the game” to share in the risk (a certain percentage of the loan amount.)  The amount of his/her own cash and/or assets that the owner is expected to have invested in the business could be sizable.  Besides that, business owners always need a cushion for unforeseen hits to their budgets.   Even the most motivated entrepreneur with the best ideas can have trouble getting their business off the ground due to perpetual financial constraints.  An entrepreneur can spin his wheels for years and years, missing out on opportunities and delaying plans, due to large amounts of avoidable debt.

Unmanageable, avoidable, high-interest debt can cause delay in living as well.  We probably all have a wish list of things we’d like to do and things we’d like to see.  Travel pages on Instagram are some of the most popular on the platform.  They portray idyllic destinations both abroad and at home and we can just picture ourselves on that beach or walking those shop-lined streets.  A nice trip to Morocco, Tanzania, Singapore or Brazil can cost thousands.  But most Americans have less than $500 in their savings account.  People put off weddings until enough money is saved to have the kind of wedding they would like.  In so many areas we delay living our lives to work for money to pay debt.

Or as soon as we pay debt off or down we begin the cycle again.  When we don’t have the cash to do and have the things we want we often turn back to our credit cards.  When we in the habit of using credit there is always something else for which to use it.  If we cannot save or save less than we should, we remain cash-poor and resort to credit once again.

2017 is the year to end this vicious cycle of debt and delay!  It will require discipline, planning and keeping our long-term vision in focus.

There are behaviors to void and behaviors to embrace:

  AVOID                                                                  EMBRACE

Impulse buying/Giving in to temptation                     Delayed gratification

Using credit cards                                                                 Paying with cash

Lending money you can’t afford to not get back      Paying Yourself First

Scrambling for money in an emergency                       Building an Emergency Fund

Spending Every Penny                                                      Saving 10-20% of Income

Redundancy                                                                          Reusing/Recycling/Repurposing

Spending for unnecessary things                                  Spending for experiences

Expensive outings with friends & family                    Free to low-cost events

Delayed Gratification:  Do you have a closet full of clothes that you hardly ever wear?  A house full of belongings you hardly ever use?  You were probably excited to buy them.  But you got over it quickly.  If we choose to take the time to save the cash for a purchase instead of whipping out the credit card, after a while that item may not seem as desirable.

credit_card_logos_10

Credit Cards:  Take a look at the interest payment you make on each card every month.  Have you ever added them up? Get a monthly total of interest you pay to make it viscerally clear how much your debt is actually costing you; money that you are not able to invest into your future. Remember this feeling every time you consider using a credit card to buy something you don’t need or could put off until you have the cash.

And have $1,000 saved before attacking your debt.

Lending Money You Can’t Afford to Get Back:  Judge Judy would be out of business if people would say “no” to friends and family who ask them to borrow money that they cannot afford to lend.  Such a loan is really a gift by another name.  A generous spirit is beautiful, but it should not cause you stress and damage your relationships.  Part of becoming successful is knowing when to say “no.”

Scrambling For Money In An Emergency:  On the other hand, it doesn’t feel good when you have to resort to asking family and friends for money to bail you out in a pinch.  Things happen.  There’s no shame in needing and asking for help.  Sometimes it’s unavoidable.  The best thing to do is save as much as possible when times are good, not spend it all.  An emergency fund should be at least three, but ideally six, months of living expenses.  Start where you are towards a specific target based on a realistic idea of how much you live on every month.  But strive to consistently save 20% of your net income (after taxes), before spending or paying bills. Visit www.bankrate.com to compare savings account interest rates.  I like Barclay’s.

Don’t neglect to invest – and I don’t mean CD’s!

200520930-001Redundancy:  As stated above, many of us have lots of stuff we don’t use and eventually forget about.  It is good to take an inventory of those junk drawers and crowded basements to avoid re-purchasing items we need down the road for a project or errand that pops us.  Otherwise try to sell excess belongings, especially duplicates, on auction sites like ebay, apps like 5miles, or sites like craigslist.

Spending On Unnecessary Things:  A lot of times when we shop, especially women, it can feed a need for satisfaction, accomplishment or escapism.  How about putting that money and effort toward investing in experiences?  Concerts, art shows, international travel, charity, lessons to learn a skill or develop a talent.  Good experiences that allow us to de-stress, meet new people, learn new things and really LIVE can satisfy the same needs while also allowing us to grow as individuals.

Expensive Outings:  I have a small group of girlfriends that I love spending time with.  We schedule regular outings to eat, go to cultural events and hang out.  I found myself spending much more than I would intend to and promising myself that the next time I will stick to a budget.  In 2017 I am going to be more disciplined about this.  Being honest with my friends about my need to reign in spending will help me to keep focused.  I have a specific saving and investing goal for the year and I am going to be ruthless in achieving it.

It can be challenging for entrepreneurs to remain motivated and inspired.  The things of life can distract us and make our dreams seem farther and farther out of reach.  Controlling spending and debt can help to secure some peace of mind and allow us to leap forward when the right opportunity comes about.

The ‘Trial’ Temptation

 

There are many obvious ways that our efforts to save money and practice good financial habits can be sabotaged.  High interest rates, late fees and even the opportunity costs of not investing and/or saving adequately are among them. But there are other subtle little bank balance busters that go unspoken in media on household money management.   One of them is unwanted memberships and subscriptions from un-cancelled  free trial or introductory periods.

In a consumerist culture like ours it can be hard to make a budget and stick with it.  It takes an enormous amount of disciple to resist the incessant barrage of temptations that surround us almost every moment of every day, to keep spending money.  One of the ways that savvy companies tempt us to put our guard down and hopefully spend money (we don’t have to spare) is the “free trial offer”.  Trial offers can last days or even several weeks but the key is to obtain our credit card and contact information to allow us this temporary access to services and information for free.

The words “free” and “no risk” are a great way to peak interest in a product or service.  Who doesn’t want something for free if they can get it and it can be of benefit to them?  But we also know that there is usually a catch: that free trial will come with some expectation upon us to do something or give something up at some point.  It can be referrals, which businesses often find even more valuable than a one-time sale, or the sale itself – subscription or membership.  Not to mention that once we willingly provide our personal details the company has gained the ability to continue to market itself to us.

The problem with trial periods – for the consumer, at least – is that it can be difficult to remember to cancel on time.  Many people take advantage of these offers with the intention of cancelling before it’s over.  If you forget to cancel a trial membership or subscription you end up paying for something you don’t want, and if you don’t catch on for weeks or even months there is the potential for a substantial financial loss to you.  Companies have different rules regarding canceling a subscription after the trial period has expired.  Some companies will reimburse all of the subscription rate if you cancel within a day or two of the first charge; others will prorate the reimbursement based on how many days are left in the subscription.  Others disallow reimbursement of funds but will cancel charges as of the next billing cycle.

Obviously there are ways to try to prevent this mistake from happening, like adding the last day of the trial period to your calendar, but of course the easiest way to avoid the problem is to not sign up for trial periods at all.  There are times when you need to utilize a service but only for a short period of time to accomplish a specific goal. This is when trial periods are most useful and sensible.  What you want to avoid is failing to discontinue a trial period for something you never even used or didn’t find beneficial anyway.

The “Millennial Investor” Is A Thing…

Thirty trillion dollars. “Trillion.” With a “t.” That is the estimated amount that so-called millennials will inherit from their baby-boomer parents over the next few decades.  It is the largest transfer of wealth, possibly in human history.  By the way, who are these people?  Seriously.  The fact is most people are entirely unprepared financially for retirement!  Clearly these are not the kids of the millions of baby boomers who will be reliant upon social security to make ends meet.  But I digress.Wealth managers today focus a lot of energy targeting the baby boomers themselves, especially to help them protect whatever wealth they have amassed, to sustain their lifestyle after retirement.  It is a very large market.  But apparently the wealth that is going to be transferred to millennials will be an even larger market, and investment advisors are beginning to position themselves to capture the opportunity.  In the clip below, one such advisor talks about a program his firm offers called Backpacks to Briefcases.  It pairs millennial clients with their contemporaries in the wealth management game, whom they may better be able to relate.

Financial literacy is woefully lacking in our education system, even among the well-off, so this is a great idea.  The fortunate ones who will be coming into enormous sums of money will need the training that many of their parents didn’t receive in order that they may make wise decisions about managing, spending and donating their windfall.

Preparing Millennials for a $30 Trillion Wealth Transfer

You don’t have to inherit a large fortune for sound money management to be relevant to you.  Any amount of money you have earned or inherited should be handled properly.  True, we are more likely to blow through money that we have been given rather than money that we have earned on our own.  But no matter the circumstance, sound financial practices matter.  For example: a guy in his mid-20’s inherits the proceeds of a large life insurance policy, pension and 401K upon his mother’s passing, totaling several hundred thousand dollars.  He uses his windfall to live the large – traveling, partying, and everything else.  Fast forward five years, the money is gone and he’s worse off than he was before.  True story. There is an expression one of my friend taught me: “It’s not what you make (have), it’s what you keep.”

From 0 to 18: Planting the Seeds of Financial Growth When Time Is On Your Side

You’re having a baby! And your first munchkin is anxiously awaiting the arrival of his new baby sister. You did everything you were supposed to do to get ready for baby: you kept your doctor’s appointments; took prenatal vitamins religiously; ate well; stayed away from cigarettes; put your feet up when you could; prayed.  And you kept your firstborn involved, talking about the little bun in the oven and how he’d get to be a big boy and help his little sister figure things out as she grows up.  The whole family is excited!  Mom came to town to help when the baby comes.  Any day now.  The baby’s room is filled with hand-me-down furniture from the first one and all the gifts of baby supplies and clothes that you received at the baby showers – one at the office and one with family and friends – for this one.  You know that what a child needs is a loving home with parents who provide for their needs, just like you had.  To that end, you and your partner are more than capable.  You both work, bringing in a combined $80- to $90,000 a year with overtime.  You own your home and have family and friends all around you.  There are good schools in your area.   You and your family believe you have done everything necessary to be ready for when the baby comes, just like the last time.  But even though you know from the first one that raising a child requires a sizable financial commitment, you never tried to budget for it.  The one thing you haven’t considered in getting ready for either child’s arrival is how to prepare for the long-term financial responsibility of raising them.

In a Huffington Post article posted 8/18/14, it was reported that raising a child born in 2013 until the age of 18 would cost about $300,000 when adjusted for inflation. Housing is the largest expense, followed by child care and education, then food. How often is it that parents sit down and formalize a financial plan in preparation for the years to come after the baby is born?  When the first one came to bless the world, did you and his father ever have a conversation about putting a plan together to protect the family’s financial future?  If so, did you take it a step further to commit to some objectives then follow through on implementing them, consistently?  Do you know how to go about these things?  Or are you comfortable just seeing how it goes?  Is there anything about the financial situation you grew up in that you would rather not repeat with your own children?

Housing is the largest expense related to raising a child.  None of us want to think about this, but there may come a time when we are called back home earlier than expected.  There are many children who have faced this reality, having to grow up with only one or neither parent because they passed away.  Would your beautiful new baby girl and her older brother be able to stay in their home if one income or more was no longer there?  At the end of those 18 years the children you raised through struggles and triumphs will be off to college or trade school.  Who will pay for it?  The time to figure this out and take action is now.  Eighteen years sounds like a lot more time than it will be.  And the more time you let go by before getting started on protecting your family’s future, the more (exponentially more) it will cost you when the time comes that the money will be needed.

Parents spend much time and energy first planning for the baby to arrive then doing all the things necessary to ensure the basic needs are in place to raise your children properly – food, clothing, shelter, education.  But while you’re building a family it is important to ensure that it is grounded on a  solid foundation.  That is, a financial game plan based on income protection and savings and investments for emergencies and education and even retirement.  I encourage you to capitalize on the advantage of time that is in your possession today.  It doesn’t have to be the overwhelming or painfully sacrificial experience you may be imagining.

Feel free to comment and share your own insights and knowledge!

Make Your List. Check It Twice. (Or more)

 

We’re nearing the end of summer. In some places the public school year has already begun. And do you know what that means? Christmas is around the corner! Sure, back-to-school season is almost over and parents are happy, I’m sure, for the relief on their wallet.  But at the blink of an eye we’ll be gearing up again for that great shopping season that retailers and consumers alike wait all year for. In our debt-dependent, consumerist society we are most vulnerable to overspend during this time.

Christmas, for better and worse, can be a very emotional time. It raises sentimental feelings about family, friends and togetherness. Advertisers are masters at pushing those emotional buttons to create a strong impulse to buy things we often can’t afford to express to our loved ones how much we care.  The best defense is to devise a solid plan and commit an iron will, now, to resist the temptation to overspend later.  We certainly don’t want to experience another year paying off all the debt we accumulated in the name of the birth of our Lord!

Here are five things to do starting today to handle the next big shopping season like a boss!

  1.  Make a List

List all of the people (individuals, organizations, charities, etc) for whom you would like to buy a gift. Write down everyone you can think of.  You can pare down later.

2.  Get Ideas

Get an idea of what each person/organization would want or appreciate. Write down all of these ideas next to the name. If you’re really organized use a spreadsheet! As you know, vendors will be throwing huge deals at us to get our business.  This way you know what to zoom in on when your phone apps, inbox and mailbox gets inundated with offers.

3.   Estimate the Cost

So now that you have your list and some ideas about what kind of gifts each recipient may like, you can begin to put a budget in place.  Get estimates for the items.  Yes there will be sales, discounts, rewards and cash back promotions, but it’s still useful to determine how much it could cost without those benefits.  Give yourself a little cushion.  The grand total will be your Target Christmas Shopping Allowance (TCSA).

4.  Start a bank account

For the sole purpose of your Christmas budget.  This way, it won’t get mixed up with other money.  If you leave the Christmas funds in the same account that you shop and pay bills from it will be easy to have a memory lapse after a while and end up dipping into it.  Also, it will be easier to see how well you’re progressing toward your TCSA by keeping these funds separate.

5.  Save

Now comes the hard part: consistent implementation.  There are roughly three months between now and Christmas shopping season.  How much money do you need to save each month to reach your TCSA, and by what specific date would you want to accomplish that savings goal?

Knowing how much money you will need, and by when, along with clear ideas on the types of gifts you want to focus on will hopefully give you some sense of control and reduce stress when the season is upon us.  It will help with overall household budgeting as well because you aren’t waiting until the last minute to come up with a large sum of money.  You get to pace yourself.  And when the time comes you may be less likely to make hasty, financially wasteful gifting decisions.

Are Your Finances “On Fleek”? Part 1

 

On fleek: the quality of being perfect or on point; the combination of fly and sleek, synonymous with ‘on point’ (on top of things; in control of the situation) Source: http://www.urbandictionary.com

How to be on top of our finances and in control of our financial situation isn’t something that comes to most us naturally.  Many of us don’t have parents and other mentors and influencers who have the knowledge and personal experience from which to impart any real financial wisdom.  It’s one of the main areas of weakness in the public school curriculum.  Money management, after all, is foundational to life itself but I have yet to hear of a high school or middle school that teaches kids how to handle money.  We’re told to go to college or trade school and get a job but nothing about how to handle the money we will spend the majority of our time and energy to earn.  So for the most part we’re left to figure things out as we go along, which is often a journey riddled with setbacks, stress and missed opportunities.

So what does it mean to have your finances ‘on point,’ or ‘on fleek?’  A high income? Loads of money in the bank? Certainly those things have the potential to make it a lot easier. But there’s the saying, “It’s not how much you make, it’s how much you keep.”  Fortunes are made and lost every day.  The specifics of what it will take to get in control of your financial situation is unique to you, however here is a good place to start.

Top 3 Ways to Get Your Finances On Fleek, Starting Today!

1.  Keep Your Receipts.

Do you withdraw cash from the ATM and a day or two later you have no idea what you did with it?  Do you impulse shop on a regular basis?  Do you go to a store for one thing and end up getting ten?  Do you buy things simply because they’re “cheap” or a “great deal?”  In our capitalist society it’s easy to fall into these pitfalls.  One small, “insignificant” purchase here, another one there, and in a couple of days or so your wallet is light again.

Or do you purchase with your debit card on a regular basis?  I have broken myself out of the habit of never having cash, for two main reasons: 1) obviously there are times when I actually do need greenbacks to pay for something, but 2) paying with a debit card, just as with a credit card, can give the feeling that you have more money than you really do.  There’s a pain factor in having to reach into your wallet or purse and remove that money from your person and hand it over.  Swiping a card doesn’t involve as much deliberate thought – you don’t literally see the money leaving you.  Worst yet, it is easier to walk away without a receipt because we assume the transaction will appear on our statement.

Homework: For 30 days get a receipt for every single purchase, no matter how small, and even purchases that are unusual/one-time; don’t leave anything out.  Keep the receipts in a folder dedicated to that purpose.  At the end of the month – or throughout the month if you’re a very organized person – categorize them.  For example: gas; toiletries; eating out; transportation; coffee; breakfast; personal care; entertainment; etc.  At the end of the month add up each category then add them all up for a grand total.  You will repeat this 2 more times (come back for Part 2).

It is imperative that you understand what your spending habits are and where your money is going before you can truly be in control of your finances.  Just as how pulling out cash forces you to face the reality of the depletion of your bank account, collecting receipts forces you to view your spending in a concrete way, unlike just keeping it in your head.

2. Know Your Worth

Your “net worth,” that is.  Your Net Worth is a number that measures your personal financial condition.  Knowing this number will give you a baseline for your financial life. It will provide a frame of reference for gauging the progress of getting your finances on fleek as you learn, implement those lessons, make adjustments, and improve.  In a nutshell, you want to get to a place where this number continues to go up, or at the very least does not go back too often.  How do I calculate my net worth, you ask?  Simple: your assets – your liabilities.

What are assets?  Things you own that are of value; things you can sell.  Approximate what they are worth, realistically.  It’s easy to look up similar items on eBay, craigslist and elsewhere on the web to see what others are willing to pay for similar things.

What are liabilities?  Your financial responsibilities.  Debts and obligations. Ex., student loans, credit cards, personal loans, medical bills, etc.

There are several advantages to knowing your Net Worth.  It paints a very realistic picture of your financial situation in the here and now.  It gives an idea how far or not you have to go to at least breaking even.  Life is like a business, you want to operate at a profit.  In addition, seeing the big picture can make tackling the details much more manageable.  And it can impart more of a sense of purpose to keeping track of receipts, discussed above (more on that later).  For people with families of their own, the net worth can give a general idea of how much of a financial burden your family would be left with if, God forbid, you take your last breath before being able to get on solid financial footing.

3. Honor Your Commitments  Reputation is everything.  And honor cannot be compartmentalized.  You’re either honorable and trustworthy or you’re not.

The worst thing you can do is destroy your financial reputation.  This isn’t about being perfect; it’s about the journey to a clean slate.  Your net worth, discussed above, includes all debts and obligations and that isn’t just about credit cards and student loans.  Have you borrowed money or other resources from family and friends that you haven’t begun to return?  Have you asked for something with the promise to repay in one way or another but have yet to follow up with action?  These are things that will hurt you in the long run financially.  Not only will your loved ones no longer trust you, but the circle of people you will be able to rely on if and/or when things get even worse will disappear when word gets around.

It doesn’t take much to keep your reputation stellar as you get your money on point.  All you have to do is be your word.  Say what you’ll do then do it.  Don’t over-shoot how much you can accomplish.  Be honest about your capabilities and then be disciplined in keeping in integrity.  If a wrench gets thrown into your path, let your creditors know up front then state by when you will be able to get back on track.  Even with institutions, as long as you consistently exhibit the intention to repay, you can keep some of the pressure off.  Pay what you can afford and do it on a regular basis: monthly or bi-weekly until you get to a point where you can do more.

***What tips and tricks do you use to keep your finances on fleek? Respond below!