frugal2free

The right time to buy is...

1. When you can immediately make money (equity or capital gains) on your purchase
2. You have the money in cash or in the bank
3. You have done due diligence in finding more valuable alternatives
4. After your needs are met (if it is a luxury)
5. When no one else is buying (if it is real estate or business acquisitions)
6. When your spouse concurs with you 
7. Occasionally and sparingly
8. When emotions are in check
9. When you need to (not want to)
10. Now if it benefits others, especially your family
11. After savings
12. After charitable giving

 

 

(Photo courtesy anankkmi)

Being curious like George

My mom loved to read Curious George books to me when I was little.

Two things Curious George does best: 

1. Get caught doing something bad.
2. Use curiosity to answer his endless questions.

When I met the lady who would become my wife she too was curious. She had an insatiable appetite to learn.

She often asks a series of  questions until she has learned what she needs to. People often seek her advice on various topics because she has used her curiosity to learn deeply in several areas.

I've learned questions are often a manifestation of a humble learner.

Many people are often scared to talk openly about finances. Money conversations become taboo, squelching curiosity. Some feel ignorant about money and think asking questions will make them look dumb.

If we keep a Curious George-like hunger to learn about all things money, then we will master it. If we question all proposals for our money, then we will avoid bad investments.

 

 

(Photo courtesy Wikipedia)

 

Villains

My best friend from high school has a very intelligent father. One
day as a high school student I browsed his extensive library looking for new books to read. As I browsed a section of books  I recoiled in disbelief.

This amazing man had several volumes on histories worst villains. When I asked why he would read books about such awful people he explained that you can learn what not to do by studying villains.

Villains have several virtuous traits but are brought down by their pronounced weaknesses, fatal flaws (Achilles heels). Think Voldemort, Hitler, Stalin, Saddam Hussein, Lenin. Each led well by connecting with many people but they used their talents for selfish ends.

A money villain is a good person who has at least one fatal flaw that continually brings them to ruin.

Yesterday I overheard a mother congratulate her daughter for using a credit card when her cash ran out. Both are good people acting in villainous ways with money.

Who do you know who doesn't handle money well?

What fatal flaw do they have?

What can you learn from him/her?

Study financial villains in order to be more heroic.

(Photo courtesy Wikipedia)

The cure

There is a strange tendency for cures to come about when a troubled person's insurance money is about to run out. Therapists have a saying for it, "The cure comes about when the insurance runs out."

It's amazing how motivated people (both therapists and the troubled persons) are to find effective solutions when deadlines are pending.

What if you imposed financial constraints more often? "I will only spend $150 on utilities." or "I will only spend $30 eating out this weekend."

Would you be able to solve your money woes with less money?

How many options could you find if you set a concrete target date by which to have many solutions to your money problem?

The cure comes about because of a sense of urgency. We can choose to create urgency in our lives and reap the benefits of a cure.

 

 

(Photo courtesy Ambro)

Because of...

Winning often happens because of our custom made hurdles not in spite of random problems.
Attitude is the determinant.

Why be frugal?

By sowing frugality we reap liberty, a golden harvest. Agesilaus And the corollary: By sowing wastefulness we reap bondage, a tarnished harvest.

Form follows function

"Form (ever) follows function" was a powerful statement for architects of the late 1800s and early 1900's. Louis Sullivan was assisted by Frank Lloyd Wright who adopted Sullivan's credo. A building's function dictated its form. Purpose determined style. The why set the tone for the how. Reasons allowed  means to appear.

For self-sufficiency we should know what and why we want an item so we can buy the correct one. This helps us to avoid buying useless items or too many items.

For instance one person might get immense pleasure out of a $300 Suunto watch because he is a triathlete or an outdoorsman and needs to know more than just time. Another person might enjoy a $45 Timex Ironman because it comes with a back-light and is durable. Each are a good choice, but the purpose provides the basis for which watch to get and which ones to avoid.

The form or purpose helps us to know more about value. Its tempting to make decisions exclusively on price, but the function(s) we desire allow us to evaluate real worth. A lady could buy 20 blouses without finding a desirable one if her purpose is not clear. Or she could buy one blouse and love it if she knows what function the blouse needs to serve (e.g. comfortable/gorgeous/flattering/modest).

Another example. Instead of considering a house as expensive or cheap based on a dollar amount, we should ask what is the purpose for our house? A place of learning? A gathering place? A place of peace? Once we are clear about the function of a house, we can search patiently for the right  house (form) and feel better about the value we receive.

Jobs, purchases, investments and contributions are all affected by what we value/our form/ reason.

Discovering and remembering the purpose of each purchase allows us to buy the appropriate product and allocate money wisely.

 

 

 

 

(Photo courtesy Wikipedia)

15 ideas and a plea to inspect what you expect

15   ideas to live better by spending differently..or not spending at all

1. Drink more water and less of anything else
2. Think more and watch less
3. Be gentle, not explosive
4. Indulge your spouse
5. Discipline yourself
6. Delight in a broad range of non-fiction books
7. Sleep more (or less)
8. Write a letter of gratitude
9. Get curious about the things you hate (ignorance breeds hate, knowledge engenders compassion and mercy)
10. Always look to buy used or wholesale, but never retail or full sticker price
11. Give away any things that consume you
12. Be a steward not a possessor
13. Accumulate memories and relationships not possessions
14. Create something. You've been given a lot
15. Remember worth is inherent, infinite and independent of works

Recently a man told me how he lost as much as fifty thousand dollars. He had delegated several assignments to a subordinate. He stopped inspecting the completed tasks. After several years he realized his mistake.

To complete any service we can do it our self or delegate. Both DIY and delegation can work well, but remember delegated activities should be inspected frequently by a reliable, independent third party. 

Shortly after my wife and I were married we decided to delegate a small job. We needed brake pads changed on our older car and thought the cost of a "car care center" might be reasonable. The mechanic quoted us over $800 and told us the entire braking system needed to be replaced! We brought my Dad with us to look at the car. My Dad is very gifted with car repairs.  He disputed the bogus claim and let us know the car car center was simply inflating the costs. We replaced the pads for much less using a different option.

Inspect what you expect so you don't lose a bundle of money.

 

 

(Photo courtesy gameanna)

Making it easy

Nudge is a wonderful book that explains how to make goals easier to accomplish.  The authors share an interesting concept called Choice Architecture.

Choice Architecture is the idea that "…small and seemingly insignificant contextual details have a major impact on people’s behavior." A change in how something is designed influences behavior.

How does this work in the  financial realm?  We can develop systems to increase our financial success. Systemic success instead of success predicated solely upon habit, discipline or emotion. Systems with the following features can make financial freedom inherently easier.

Proximity:  Develop a system that allows you to be closer to investments (book mark investment sites, RSS investment news, etc)  and farther away from unnecessary spending. Make on-line shopping or malls less accessible. Find and implement systems to allow bargains to be close-by (flea markets, auctions, ebay, barter sites, freecycle.org) and retail rip-offs to be far, far away.

Automate: Set up bills on auto-pay. Set savings and charitable giving on auto-pay. Create works that pay you automatically. Anything important can be automated so it will get paid whether you remember or not. Many people forget to pay bills because of a major life event (marriage, illness, job change). With automation everything continues on regardless of life events.

Visibility:  Put your budgets in your smart phone planner or on your desktop. Look at your future before it happens by window shopping your future. Research your ideal future so often and so richly that you can see it before it happens. Make planning your future a system.

If paying off debt was made easy, how much could you pay off?

What if paying off a mortgage was easy?

What is the architecture needed to accomplish your goals and dreams?

 Freedom from money worries is made easier by designing subtle changes that favorably shape and reshape our financial behaviors.

 

 

(Photo courtesy Salvatore Vuono)

Tricky Dog

You can teach an old (or young) dog new tricks.

You just have to make sure the proffered reward is big enough.

Part of our life-long quest is to become tricky dogs--people who want to learn and grow and experiment and invent
and create.

Tricky-dogs ask "do we have to do it this way?" Or "Why not, I have never tried it before." They are perpetually looking
for greater depth and breadth, more culture, more adventure.

Happiness becomes impeded by internalizing inane jabber such as "you can't teach old dogs new tricks." If the "old dog" wants happiness, contentment, joy, love and security then he or she will most certainly learn new tricks.

Growth comes about by internalizing a tricky dog mindset. It's wonderful to be around people who are on a quest to find opportunities and discoveries to enhance family and finances.

 

 

(Photo courtesy Photostock)