Save it!

“Couldn’t afford a new car in December?  Take your tax return to Bad Decisions Car Dealers and see what you can afford now!”  So goes the local car dealership ad reminding everyone that the money they get back from the government needs to be spent as soon as possible.  This commercial is one example of many.  The cell phone company I worked for in my previous life referred to February/March as “second Christmas” because the tax refunds would find a way back to the stores for a phone upgrade.

First, a caveat – I don’t know your financial situation.  We are all individuals and we all have our own take on personal finances.  It’s possible you bring in way more than you need, you save 30% of it, and you are reading this while you wait to board a plane for a weekend in Paris.  With that said, my advice to you if you encounter someone telling you to “spend your tax refund here”?  Run.  I know this seems very Scrooge-like, or just un-fun, but your best option for the return of your money from the government is to save it.

Yes, save your money.  We could go through plenty of statistics showing how little Americans are saving each month, but my bet is that you already know the truth.  We aren’t saving enough of our take-home pay.  No judgment here, just reading the numbers for what they are.  If a person wants a new car/iPhone/super-gadget, they won’t be getting the slow head-shake from me.  My hope for that person, and everyone reading this, is that at least 10% of their income is being saved in a secure spot.

The 10% savings rate is the foundation of the Perpetual Wealth Code™ (PWC).  We’ll post a more in-depth description of the PWC and how you can use it to your advantage in the future.  In the meantime, feel free to contact me with any questions you may have.

So, you joined the cult?

If you live in certain parts of the Midwest, it’s likely you have heard of Farrell’s Extreme Bodyshaping (FXB).  The intensity of the program, the results that people see, and the commitment of the members have led some to lovingly refer to FXB as a “cult”.  Well ten weeks ago I had had enough of the growing waistline and the lack of physical activity, so I joined the cult.  Imagine Harold Ramis challenging Bill Murray to do five pushups in the movie Stripes and you have an idea where I was starting from.

Long story short, I graduated.  After ten weeks of punishing 6AM workouts, I’m officially through with the FXB boot camp and I would recommend it to others.

Now that I’m through the ten weeks, I’ve been thinking about how similar the worlds of physical fitness and personal finance really are.  Okay, I was thinking about this during the program as well, but clearly my arms were too sore to type.  Keep reading for a few of the parallels between fitness and finance.

It is SO much easier with a coach to guide you when you are starting something new. 

I was a runner in a previous life.  I was also a swimmer at one point and I have lifted a few weights, so I felt like I knew how to work out.  In the case of my journey into the FXB gym, I didn’t have any idea what I was doing.  The instructors, thankfully, are trained to take it slow at first so the fewest number of students puke.  They didn’t tell us this, I’m making assumptions.  The point is not that we were all out of shape, it’s that we never would have known where to start without having a coach to guide us.  In the case of FXB, once someone gets started, they can quickly master the basic moves and start taking advantage of the more advanced coaching.

The Perpetual Wealth Code™ (PWC) is like an FXB experience for your finances.  Just as the physical results from putting in the effort at the gym are real, your financial security and flexibility will expand with this process.  There is a flood of information out there about how to manage your money, so a guide is extremely helpful both in the early stages of using the PWC and with the more advanced strategies.

When you are doing something new, especially if it is good for you, it’s easy to get thrown off track. 

The ten-week program includes six days each week at the gym, along with a relatively structured nutrition plan.  At the end of the program, there were a handful of people who were honored for perfect attendance.  They were in the distinct minority.  Most people who went through the class did not make every workout, due to vacation, work travel, sickness, and so forth.

The nutrition component of the program is even more important but cannot be tracked for everyone.  Let me just say, from personal experience, sticking to the nutrition plan is much tougher than making it to every class.  And the results showed.  Lesson learned, stick to the plan.

I wish there was a fun spin to this, but the fact is that responsible spending is like eating (a great) salad.  Both are good for you in many ways, and should absolutely be your default routine, but staying the course can be a challenge.  Why not eat this donut?  I’ve earned it.  Why not buy the new iPhone?  I have a credit card.  The list of decadent food and unconscious spending could go on and on.  Just keep in mind that saving (like a healthy lifestyle) does not mean denial of all things fun, it means living your own values and focusing on what you really want.

You are a product of your environment.

It’s well known that we are the average of the five people we spend the most time with.  In the case of the gym, fellow participants mattered just as much as the instructors.  It’s easy to think that we all would have worked as hard as possible if those around us were taking it easy, but that’s just not the case.  Good nutrition is even harder to maintain if you are surrounded by people who tell you French fries are healthy because they are a vegetable.

We are all individuals so we all adjust our spending, or our eating, based on things specific to us.  I’m not saying that just because your friend Betty eats a Moon Pie, that means you are destined to eat one.  The same as Jimmy buying a new iPhone won’t automatically lead you to the local cell phone outlet.  The pattern, however, is that if you are surrounded by people who don’t follow your eating plan or who don’t have the same values about money, it will be more difficult to get where you want to go.  Be clear about what you want for your financial life and why it is important to you.

So, ten weeks has flown by and I’m strong enough to type out a new post.  Getting back into fighting shape is still a work in progress, but I’m always ready to talk about the Perpetual Wealth Code™.  Feel free to reach out if you have questions about how to feel more secure and flexible with your finances.