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Money Problems? Jump On Board

When he isn’t leaving silly comments on Add Vodka, Average Joe can normally be found at Average Joe’s Money Blog (creative names aren’t his strong suit), where he writes about saving money, staying motivated and whatever else he finds humorous that day. He’s also co-host of the podcast Two Guys and Your Money. 

I’ll bet you have problems.

Major money issues.

Sometimes it’s hard to sleep.

When your credit card gets denied do you smile and tell the clerk, “Oh, I gave you that card? The strip doesn’t work right.” Then do you hand over the next one, hoping that this one has a “good strip?” I’m sure the clerk never realizes that by “good strip” you mean “one with money available.”

Maybe you make a ton of cash, but you’re behind on your taxes. You haven’t paid them in three years and you know, deep down, that it’s only a matter of time until The Man catches up with you.

Worse yet, your problem might be that you just don’t understand all the terminology of investing. Like one of my favorite songs from the band Camera Obscura: “I should be suspended from class, ‘cause I don’t know my elbow from my ass.” Maybe you’re just hoping someone will take control for you.

But this class is your financial life. And it’s not graduate school…this is more like Personal Finance 101. Yet you still don’t know.

Do any of these sound familiar? Are any of these partly the reason why you thought you’d read Add Vodka? Maybe glean a little financial knowledge while Daisy entertains you?

It’s a Good Start.

First, Daisy’s very funny. Second, she owns a good head for money. She can teach without preach. I need to learn that lesson.

Here’s the thing: I was that guy. I didn’t know about money.

Let’s go stronger, Joe: I was clueless.

So, you know what I did about it.

I became your financial advisor.

My Story

…okay, maybe I wasn’t your advisor, but I was an advisor. I managed $60M dollars for clients. I worked with about 180 families at a time, helping them make financial decisions. I was a fee based guy. You paid good money to follow my lead.

–and I didn’t know much about money. I was the guy in the song: I should have been suspended from class. I didn’t know my elbow from my ass.

Then I made a ton of money, and because I was technically self employed, I owed a lot of tax. I was that guy who didn’t pay taxes for three years. That’s because I owed an astronomical sum and hadn’t really planned for that (again, see “I don’t know my elbow….”)

And, because I owed a bunch of money, my credit cards all were in jeopardy of going away. I had that “Oh, I gave you THAT card?” look down to a science. It isn’t polite to let the lady at Target know you’re praying when she swipes your credit card.

credit: tolleyconsulting.com

You Can Change

I wish you could have gone into client meetings with me. You would see something uncomfortable but also more than a little interesting: you would have seen people financially naked.

I didn’t meet a person who wasn’t a little self conscious in their financial birthday suit.

Everyone had problems.

1)  I worked with a man who had 2.4 million in savings and didn’t know how an IRA worked. He was pretty embarrassed when I showed him that he had an annuity inside his IRA and didn’t need the dual protection. He was wasting over $20k a year in unnecessary fees.

2)  One client had over 30 credit cards and $125k in credit card debt. Her husband had no idea (or so he wanted to believe…but I think in his gut he knew something was amiss). We cut up credit cards for nearly an hour before she stopped pulling more from her purse. They just kept coming and coming….

3)  One guy owned a business that had created a net worth in the range of $40M dollars.  He had to call someone to find out if he had a no fee checking account. He didn’t.

4)  A nice family had severe medical issues for two of their sons. They were busy keeping up with the Jones’ and had no savings. They’d been borrowing money from his retirement plan and now couldn’t pay it back because they had to cover the bills. They owed about $18k in taxes.

5)  MANY people didn’t understand their 401k plan or work benefits package. Disability insurance? “I’ll check what I’ve got at work.”

6)  MOST people didn’t know anything about investing. Zip, zero, nada. And insurance? They’d heard insurance was bad so they really didn’t want to talk about it. Understand it? No. Talk about it? Learn? No.

7)  EVERYONE had embarrassing situations to share. Often I felt like a priest in the confessional. I’d learn to listen and nod. If you think I’m judging the people in the above scenarios, I’m not. How could I?  I was right there with them.

It All Starts With You

We all start from somewhere. I remember waking up one day and deciding that instead of saying “this needs to change” I said “I have to change.” Just a couple words made a powerful difference. I was in control and it was time to take charge.

My situation was bad, sure, but so was everyone else’s! Further, it really didn’t matter if my client had credit card issues or couldn’t understand why an annuity was bad. It was about me.me.me.me.me. Normally I’d call that selfish. This time it was taking control.

Joe’s 5 Steps to Change

I became a change agent. I started working on ME and began thinking about how best to help you. Powerful change required a mindset shift, that, while not as easy as some finance gurus will have you believe, did require only five steps:

1)  Take control.Make a decision and stick to it. Example: I will call an accountant today and figure out my taxes.

2)  Write down everything.  I owned a 529 plan for my kids. I didn’t know how it was invested. I created filing systems for all of my investments. Started using Mint, a budgeting software. I needed a dashboard to quickly look in on my money.

3)  Talk about money. Enter the conversation. I’m amazed by how open the financial community is on Twitter and Facebook. Not the Wall Street crowd. They’re shrouded in technical jargon that (by and large) is irrelevant. I’m talking about the everyday community. Follow people like Daisy, Jeff Rose (Certified Financial Planner), Financial Samurai, or people openly stumbling through it and winning, like Andrea from SoOverDebt. These people are open about money and because they’ve felt the pain of real life before, won’t judge you.

4)  Get comfortable with your financial body. It’s your skin. Be comfortable in it. Own it. Then, just like you would if you were out of shape, begin developing muscle. Read Add Vodka. Stop by lesser blogs, like Average Joe’s Money Blog (shameless plug).

5)  Begin eating the elephant. Whenever I would get freaked out by all the change that needed to happen in my life, I would go back to the old joke: “How do you eat an elephant?” Answer: “One bite at a time.” By focusing on only the next step, I’d hold off my anxiety and

The meeting with my accountant led to an efile of back taxes. That led to a letter and visit from the IRS (Ever had an IRS visit? Even when you’re pretty sure it’s coming it’s still more than a little intimidating.) That opened a discussion on paying my taxes, which was the first step to catching up. One nerve-wracking bite at a time. To get there, I just had to take a first step.

Now it’s your turn. Take the first bite.

Do you have money problems?

 

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24 Comments

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  2. I really enjoyed this post. You are right and as cliche as it sounds you have to start somewhere.

  3. I loved this post! So compelling, and the analogy about the elephant is one I’m going to use in conversation. Reading it made me squirm-but that is a good thing..finances make people uncomfortable because they are so tied to self esteem.

  4. We are all super busy these days and we can’t know everything, but finance is extremely important. We can’t stick our head in the sand and ignore things we don’t know about because this will have a big effect on our future. Reading PF blogs is a great way to get started.

  5. Crazy post Joe. Loved it. I tell people at work all the time that they have to take control of their retirement accounts. I bet almost half of my coworkers don’t know what they are invested in. Whatever the default investments were when they started is what they are in now and that is crazy to me.

  6. I’ve been following your blog for awhile, AJ and I didn’t know all of this stuff!

    What a great story!

    I’m glad that you turned things around and took the first step. My first step was confessing my horrible situation to my wife/girlfriend at the time. Then it was about getting on a budget and working with all of the creditors I owed.

  7. Hey, thanks for the comments, everyone! Thanks also, Daisy, for letting me hijack the site for a day.

    Brian – You’re right on. Get started from wherever you are!

    L.Bee – It made me squirm writing it. I only stopped squirming when I realized everyone was in the same place.

    Savvy – Thanks! I agree.

    Sean – Amen, brother!

    Joe – I agree. People can learn so much just by reading. Even if it isn’t always the world’s best advice, just the fact that people are talking about money puts you in a group of like-minded people.

    Debts – Thank you! It’s scary to hear how little people know about their 401k…and by extension their life savings.

    Bog – Thanks!

    Jason – I’m a multi-faceted man, Mr. Larkin. 😉 When I first read about your situation it was so eerily similar…..

  8. Joe, you made me so uncomfortable with your stories! ACK cutting up credit cards for an hour! But yes, I’ve been there. And DANG it sucked. But now, armed with a plan, and a much more open mind, I’m confident I won’t be buried again.

  9. Thanks for sharing that story with us! It just added an entirely new dimension to you in my mind.

    But your mistakes add value to your message. Most people would feel even more uncomfortable talking to a “perfect” person who never makes financial mistakes. The fear of judgement would likely be too great.

    The sum total of our life experiences are what make us the person we are right now. It’s up to us to make that person a positive or negative influence on others.

    For you it’s a +!

  10. Well put! Most everyone I know has had a “DOH!” moment when they fully realize their financial situation. Usually something triggers them (rejected card, bounced check, etc.) to step back and start asking themselves about how they got where they were. Then writing down EVERYTHING (aka, a “budget) really exposes had bad things are.

    For me, it was that I had no savings and was about to get married in a month. I had credit card, student loan, and personal loan debt, and no plan for how to handle finances in marriage. Luckily, someone dropped a Dave Ramsey audio book in my lap, and I got my stuff together with the quickness! Thank you for asking the hard questions here.

  11. You’re the bomb, Joe. This is an awesome post. I loved reading your personal story, and was very intrigued with your corporate money management experience. You presented some worthy suggestions, ended the post beautifully with “Now it’s your turn. Take the first bite.” Classic!

  12. For me, it was years of going, “Oh, I just don’t make enough money yet,” and racking things up on cards. Then finally one day actually writing down my budget and going, “Oh… I actually do have enough money. Crap.”

    Not quite the hour long credit card cutting session, but it did the trick for me!

  13. Financial birthday suit…I like it! I would love to have been a fly on the wall during some of your meetings. I had my epiphany in January right before we started the blog. It was Jeff’s idea and I never would have gone along with it if I didn’t think we really needed something to help catapult us out of our stupidity.

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  15. I’m a big fan of that elephant phrase. Whenever I get overwhelmed, I just go back to basics…take those first steps. It’s interesting to hear those stories about how your clients didn’t know certain things…and even you not paying taxes for three years. Thank you for being so honest!

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  17. Nice to “meet” you Joe, and thanks for sharing your story!I bet you have seen just about everything as a FP (I used to be an accountant, I’m a mess with my own money but was OK with other people’s, go figure!).

    Love the elephant analogy, I use it a lot too.

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