“Carpe diem! Rejoice while you are alive; enjoy the day; live life to the fullest; make the most of what you have. It is later than you think.”
– Horace

Can you feel the holiday “crunch” beginning? In our house, the calendar is beginning to fill up with parties, family activities and much more. Around this time of year, my family sort of begins to brace itself–I’m rather busy once January hits 🙂 (as you might imagine).

As for the country, well the good news for the economy continues to sort of trickle in…we just found out that retail spending in October was up about 1.4% (driven mostly by some recovery in the auto industry) and, if you’re curious, you can get the full details here:

And the stock market seems to be moving in a good direction, and that’s always a nice thing for the national psyche (though not always indicative of real economic health, as we have learned).

“Real World” Personal Strategy
Behavior & Attitude Traits of the Poor

In my line of work, I get to conduct a real-time analysis of what creates wealth in the lives of regular families…and what drives it away. I’ve written in the past about some of the commonalities found in the financially secure…and I thought it might be useful to now focus on what I see in those who can’t ever seem to crack those ranks.

And this year is proving to be no exception, as the calendar here at the business is also filling rapidly–end-of-year appointments, tax planning consultations, etc. Do make sure that you contact us to guarantee that we can help you keep your tax bill down for 2009, while there’s still time!

But no matter how much things turn around in the national picture, regular families can continue to wallow in debt and struggle–and sometimes it’s their fault.

Now, the last thing I want to do is shame my clients and friends about the kind of behavior which leads to this situation…so, instead, I’d like to address it in my Personal Strategy Note for the week. That way, you can hold it up as a “mirror” to your own family’s financial habits and make the changes necessary.

As always, making change away from these habits can be difficult–but we’re here to HELP, not make you feel badly about it. So call or email us, and let us know what we can do to walk more closely alongside you in the road to financial recovery…

In my experience, the financially-strapped typically…

* Spend money on things they don’t need: I’m sure we’ve all got one of those friends who just loves to spend money, and buy things just to say they have them. The newest iPhone just came out? They buy it even though they already have an older version. A new TV came out with a higher refresh rate than their current one? They buy one so they can say they have the newest and latest technology.
* Don’t know where their money is going: Far too often people who are broke find themselves short because they’ve never tracked their monthly cash flow and their small expenses are adding up to consume everything they bring in. They really need to track their expenses for a month or two so that they can set up a plan.
* Like to blame their problems on outside forces: People don’t like to see themselves as the source of their problems. While people certainly have problems that aren’t caused by something they’ve done, far too often they will also try to shift blame when they should be looking at themselves. They blame their friends, family and the government. They believe that “the little guy just can’t get ahead”.
* They would rather have others think they are wealthy, than actually be wealthy: People who are always broke like to be seen as wealthy and successful, even if looking that way to others means that they’re actually forfeiting the possibility of being wealthy in reality.
* They don’t plan ahead: Money is short because they haven’t set up a family budget and a saving and spending plan. If you set up a monthly cash flow forecast, and know exactly what you’re going to spend in what categories -they’ll do much better. If you fail to plan you can plan to fail.
* They use credit habitually for “lifestyle” purchases: Delayed gratification isn’t something that they’ve heard of, and if they want something they just put in on credit. After all – it’s at a 0% interest rate for the first 3 months! One purchase leads to another, and before they know it they’ve got thousands in credit card debt!
* Always pay more than they have to: Often people who are broke have gotten there because they don’t know how to shop for a deal, negotiate or ask for a discount. You can get a discount on just about anything – from electronics to health care. Never pay more than you have to!
* Fall prey to lifestyle inflation and “keeping up with the Joneses”: Often people with higher incomes have problems with staying ahead in their budget as well because they fall prey to lifestyle inflation. Instead of banking and saving raises, they raise their standard of living – buying a bigger better house, a new car and a new wardrobe. They feel like they have to keep up appearances with everyone in their neighborhood.
* They rely on others to fix their problems: We’ve probably all known someone who is always going to their parents, family or friends to bail them out. They create a pile of debt, and then rely on the kindness of others to get them out of their bind.
* They forfeit future gains for fun today: These people often have a hard time visualizing how saving and hard work will pay off down the road, and instead live for the fun and pleasures of today. They don’t realize how saving for tomorrow can improve their quality of life today!

Obviously, I’d like to help you move past these behaviors. You may not carry every one of these traits, but just one or two can get you into hot water. If you feel that you’re slipping into any of these traps, please do let us know…we’re here to help as your Family’s Personal Financial Guide.