The Value of Preparing Personal Financial Statements

Sometimes big business gets maligned, but as individuals we can probably learn a thing or two from them. One way is the preparation of personal financial statements.

Sure, that might not be the most exciting thing to learn from large corporations. Furthermore, financial statements are generally made public because they need to be. There are requirements of publicly traded companies when it comes to filing of financial statements, so they pretty much have to be done whether or not an organization wants to.

Beyond the required aspect, however, such statements can tell a lot about the health of a business. The high level statements can tell investors quite a bit, while more detailed financial analysis can help a business make decisions.

Okay, so maybe you’re wondering where I’m going with this. Why should we as individuals care about such financial statements?

Well, it can be really helpful to put together financial statements in order to help us understand our finances. Here are two in particular:

Balance Sheet

As a snapshot of where we are financially, this gives us a picture of our situation at any given point in time.

We can look at our total assets and liabilities when putting together a balance sheet. Even more, we can assess the composition of them as well. For example, assets could be made up of retirement accounts, a home (also a liability), cash, and so on. This allows us to get a better sense of asset liquidity, which might sound like a bit like financial chemistry class :) It can be similarly important to understand our debt as well.

When you prepare balance sheets periodically, let’s say every 3 months as an example, you can track progress. Ultimately, the measure to track is the difference between assets and liabilities, which represents net worth. Seeing progress over time with our efforts to increase net worth can tell us how successful we have been.

Income Statement

While the balance sheet tells us where we are at a given point in time, the income statement helps us understand how we got there and where we are going.

The key is that we can see our total income and total expenses, and what the difference is. I like to view this as a business would, in that it’s our profit. Thus, we want to maximize income and minimize expenses in order to increase that gap. Yeah, common sense – but the income statement helps us diagnose things.

In terms of expenses, we can figure out where are spending our money. Is there room to cut in some areas? That could help us increase that aforementioned gap.

My Questions for You

Do you put together personal financial statements?

If so, how often do you prepare them?

Do you have any other suggestions in terms of analysis that one could put together to understand finances?

Help a Reader: Life Insurance and Remarriage

Below is an email I got from a reader.  Sharing it anonymously, I’m doing so to get feedback that she was interested in receiving.  If you have any feedback for her on her situation and concerns, please feel free to share them in the comments below.

I recently discovered my husband had his two adult children down on his life insurance as beneficiaries. He said it was an oversight and that it was an accident. So basically I tried to say it’s not an over site as you have to type in your beneficiaries and my name was nowhere to be found on the document, not even as a contingent.

When I try to discuss this with him he gets mad, says he’s sorry, it was an oversight and I’m making a big deal out of an accident. That’s he’s sorry and not going to continue to discuss or keep having this conversation, even though I feel hurt and betrayed. I’m less upset of the money as it’s not but $100,000 is the fact I’m his wife and should have been at least 50% and his adult children 25/25.

This is more about I feel he lied, and won’t admit it. is hurting me, he gets so defensive and tells me, I’m wrong. And I need to drop it. Please post your feedback. Could he have accidently named his kids and not me as an oversight? Or did he type in their names and not wife and partner for 10 years.

We begin couples counseling soon. But I want to hear from others. Can you make an oversight like this or is this BS and he knew exactly what he was doing? Please tell me what you think, as I’m losing my mind. It’s nothing to do with money, it’s trust, and lies. What do you believe?

Readers:  any feedback for her on the whole situation?

10 Ways to Spring Clean Your Finances

ways to spring clean your financesSpring could not get here fast enough.  Here in the Chicago area, we have experienced quite a winter.  In my lifetime, this has been the most extreme one that I’ve seen.  This winter has yielded a snowfall total that is in the top 5 ever recorded here, and I don’t recall a season with as many below-zero days.

With the upcoming thaw comes the annual ritual of spring cleaning.  I know that in my home, there is some purging of “stuff” that is needed, as well as reorganization of things. That, with some deep cleaning while the windows are open, just seems like a good thing to do around this time of the year.

Did I already say that spring could not get here fast enough?

Well, this time of year could also be a good time to take stock of our finances as well.  Now, many of us do this at the end of the year or at the beginning, as a part of resolutions and then taxes.  But that’s often a matter of gathering information, setting goals, and getting ready for tax time.

How about actually getting into the nuts and bolts of our money?  There are plenty of things that we can do to spruce up our finances and get a better handle on things during this time of year.  Along those lines, here are 10 ways that we can spring clean our finances:

  1. Rebalance our investments.  It’s a good idea to periodically rebalance your investments.  Let’s say that you target 60% of assets to be in stocks.  If there has been a run-up in stock prices, your mix will likely be even more weighted toward stocks.  For example, you might find your 60% allocation becoming more like 70% since the other asset classes might not have performed as well.  Rebalancing can help get things back in line to where you want them.
  2. Review your insurance policies.  Are your coverage amounts meeting your current needs? Can you get a better deal elsewhere? Taking some time to go over your existing policies and making sure they work for you is a worthwhile exercise.
  3. Take stock of your professional network.  Wait, what?  What does this have to do with money?  Well, I think it can have quite a big role in your finances.  Building up a network is something that many people don’t pay attention to, but I’ve seen some people accumulate a ton of wealth by being very good at networking.  It can only help you, and at times and places you might not otherwise imagine ahead of time.
  4. Get a copy of your credit report.  You don’t want to be held back by any mistakes on there.  It’s good to keep an eye on things and be proactive.
  5. Take inventory of your possessions.  While many of your big-ticket items may be the same from year to year, you may make some notable purchases from time to time anyway.  The ultimate goal here is to have an accurate accounting of possessions for insurance purposes.
  6. Review your college savings for your kids.  Whether it’s a 529, other accounts, or a combination – you should pay attention to how the money is growing.  Adjustments in your allocations can be made as necessary.
  7. Review your estate plan.  If you don’t have one, depending on your age you may want to consider developing one.  What you want to do is make sure that you have everything protected as well as possible, to account for different events, while ensuring that assets can ultimately be distributed according to your wishes.  It’s not fun to think about, but it would seem to be a good thing to review from time to time.
  8. Organize your tax documents.  Once tax season is over, make sure that you file away your final documents in a safe and secure place.  Don’t let papers sit around for an extend period of time, as you never know what could be lost.  With prior year tax returns, it’s good to be organized.
  9. Review your 401(k) contributions.  If you’re maxing out your contribution, it’s hard to go higher than the limit!  But if you’re contributing below the limit, it can be helpful to take another look at things periodically to make sure you’re not leaving money on the table.
  10. Collect unwanted items to sell or donate.  Hey, if you’re going to do a real spring cleaning anyway, why not get something for your unneeded or underutilized stuff?  You can sell on craigslist or some other avenue, or simply donate to those who might truly need it.  Either way, you’ll be a little bit richer for your efforts.

My Questions for You

Do you do any “spring cleaning” of your finances?

If so, which of the tasks above do you periodically do?

Do you have any other suggestions?

6 Steps to Help You Earn a Prosperous Retirement

steps to retirementHow would you like to have $50,000 saved up for retirement, and then try to feel good about your chances for a comfortable old age?

Well, you would be in company, as according to data referenced in a recent retirement article on Moneywatch, 66% of workers have less than that amount saved for retirement.  So actually, you might be ahead of the curve with that kind of money!  And actually, with 28% having less than $1,000, the $50,000 figure is nowhere near the bottom percentiles in terms of savings.

Another thing it’s nowhere near is the point of being sufficient to meet retirement needs.  Just how is someone going to survive on $50,000 retirement funds?  Well, apparently many people do (or will have to), since two thirds of workers have less than that.  Of course, it also depends on how old the people are. A 30 year old with $50,000 is in a much more hopeful situation than a 55 year old with $50,000.

I hope nobody feels too badly about reading these figures, but I think it’s important to say it as it is:  that’s just not enough money.  These figures seem consistent with a prior post on people being unable to cover a $2,000 expense, which revealed how little money people appear to have on hand.

In these situations, maybe the job of retirement falls to social security.  That’s not exactly much money either in terms of cash flow, so perhaps grown children will have to be helping people.  It’s not uncommon in other countries to have kids help parents, and maybe that will become more of a trend here out of necessity.

Anyway, this brings to mind the need to focus on the basics so we don’t end up in this position, and actually make ourselves more likely to be comfortable.  Here are 6 steps to take to help earn a prosperous retirement:

Protect your career and cash flow

We will always have expenses, so there is some level of money that we need to have on hand to meet regular life expenses.  If we lose income, we’ll quickly have to raid our savings.  That’s no way to build a retirement nest egg.  The so-called don’t lose money rule provides some good insight on this!  Thus, we need to make sure that we invest in and protect our career.

Generate multiple streams of income

So, if the career or main source of income dries up, we could be completely messed up financially.  However, by not putting all our eggs in one basket and diversifying a bit, we can open up other avenues to earn income.  Multiple streams of income can not only be a good way to hedge our bets, but hopefully prosper as well!

Pay yourself first

Sure, there are some basic financial needs that come first.  However, many other expenses are probably discretionary when it really comes down to it.  I’d suggest paying ourselves first, and making sure that we’re regularly saving money.

Invest in yourself

One constant in life is change, and that means that we have to keep pace and adapt.  No matter what many might say about education being overrated, I’d say that education and net worth go hand-in-hand – as long as there aren’t excessive student loans involved.  Beyond that, always trying to do our best and put ourselves in the best position to succeed can help improve our income and earning potential.

Remember that Rate of Return Matters

It’s great to make money, and even better to make it and save it.  But stopping there is almost like, using a football analogy, fumbling the ball at the one yard line.  To score retirement success, we should make sure that we earn a good rate of return on our investments.  Every percentage point counts!

Stay healthy

If we aren’t healthy, it could make it harder to work.  Maybe even impossible to work, depending on the circumstances.  If we can’t work, we won’t make money unless there is passive income has happening.  Thus, keeping healthy is vital to giving ourselves the opportunity to earn money for our regular needs as well as retirement.

Additionally, the more health problems we have, the more we have to spend money on health care.  The cost of health care in retirement is something that many of us overlook, but it can be absolutely staggering.  There is no shortage of people who can relay stories of elders who spent inordinate sums of money on major health issues or care.

If healthy, we can live life to its fullest.  That way we can not only be able to voluntarily retire, but enjoy it as well!

My Questions for You

Do you follow each of these 6 steps?

Can you share your most important tip for retirement savings success?

What do you think of those figures indicating that a majority of workers have less than $50,000 saved for retirement?

Your Vision and Mission Statements: Business Plan Basics

When it comes to the plans you have for your business, your vision and mission statements are what set the tone for how your business will be run, and how your business plan will be received by investors. Solid vision and mission statements will provide your business with the path that it needs to succeed. As a part of your business plan, these statements become the anchor of your blueprint and can act as your guide to help your business function on a daily basis. An effective mission statement must be a clear, concise declaration about your business strategy, according to Patrick Hull, contributing writer for Forbes.

When potential investors are reading your business plan, your vision and mission statements will provide them with vital information about your company, including what you believe in and what you intend to achieve in the future. Each word included in your statements needs to be powerful and meaningful, and each should have a big impact. You need to make sure that you get your point across and that those reading your business plan know exactly what your company is trying to do.

Your Vision Statement

Your company’s vision statement is a way for you to define your long-term dreams. A company’s vision is not something that should be attainable. It is something that should always be just out of reach. It is a declaration of your company’s goal, whether it is for the mid-term or the long-term. The goals you set forth in your vision statement are what you constantly strive for, what you constantly work for, what you are constantly trying to reach. A vision statement lays out the most important goals that you have for your company, and it will work in concert with your business plan. A single vision statement will also put your employees all on the same page, making them more productive by helping them achieve the goals you’ve set forth for your business.

Your Mission Statement

Your mission statement is considerably more detailed than your company’s vision statement. A mission statement outlines what you want your business to become and what you want to accomplish. While the goals that are outlined in your mission statement should be challenging enough to keep you motivated, they should also be attainable so you don’t become discouraged and lose your way. Your mission statement will help you clarify what business you are in, as well as your overall goals and objectives, according to Rhonda Abrams, author of “The Successful Business Plan: Secrets and Strategies.” A strong, well-written business plan will prove to investors that you understand your business, that you can clearly communicate your goals and objectives, and that you have thoughtfully defined your unique focus.

Your business plan is the most important document you will create for your business. It will be the document you present to potential investors to try and secure funding. To ensure that those investors read your entire business plan, it is important that you have a strong vision statement and mission statement. These statements not only show investors that you have a clear understanding about what your business is and where you see it going, but it also helps your employees see the vision you have for the business as well. The way your company functions is defined by your vision statement and mission statement, and they will work together as the guiding principles for your business as you seek to outhustle your competition. They also set the entire tone for your business plan and for your company.

What is the Best Hotel You Have Ever Stayed At?

nice view

Not a room view, but in the city of one of my top three hotels

Back when I was willing to spend more money, and spent less time thinking about long-term financial goals, I had some pretty good vacations.  Traveling is something I enjoy, and back in the day I actually did quite a bit of it.  Whether or not I should have is another question, but we’ll leave that one alone!

I’ve said this a few times here before, so forgive me if I’m repeating – but I’ve been to 47 of the 50 states, 6 provinces in Canada, and traveled to a few locales in Europe and Asia.  While there are plenty of people that have done a lot more traveling than that, I think my list is fairly robust all things considered.

However, with family responsibilities and financial needs, I don’t travel that much anymore.  Priorities change in life, and at this point in life I think traveling is overrated, at least when taken in the context of other responsibilities at the moment.  The last trip I took was to the Financial Blogger Conference in St. Louis, which was a just a 5 hour drive from here in suburban Chicago.   It was a great time, though it would hardly qualify as an exotic trip.

What got me thinking about traveling?  Well, of all things it was news about the Winter Olympics in Sochi, and hotels there.  Specifically, it was the apparent fiasco that has resulted from many hotel rooms not being up to standard, per widespread reports by journalists.  Yes, some of these folks reporting from Sochi were even tweeting remarkable pictures of their environs there, based on this article in the Washington Post.

Some of things noted included, in different individual reports at different places:

  • Water that wasn’t drinkable
  • No heating or internet
  • Elevator broken
  • Water that contains “something very dangerous”
  • Stray dogs wandering in and out of rooms

Seriously, stray dogs?

It sure didn’t seem like those people staying there were reporting back that these were the finest luxury accommodations they’ve ever had.

Thankfully, not all hotels around the globe are like that.  While I’ve stayed in a few that disappointed, most have been at least passable.  Some were actually really good.  A few have been outstanding.

Thinking it through, there were a handful that would make the cut as the best I’ve stayed at, for various reasons.  Here is a totally independent view of my 3 favorites:

Hotel Villa Franca – Positano, Italy

The views from this place were incredible.  Overlooking the Mediterranean Sea, this place was perched relatively high up to also allow for views of the village.  This is a village which is essentially built in the hills extending down the coast.  If you don’t know much about it, this summary on Wikipedia gives a sense of what the village looks like.

The big thing about staying at this hotel was not only its location in the village, but also the ambiance there.  Just a super relaxing place with great views and accessible to all the neat things to experience in that great community to visit.  The selling point to me was the atmosphere, which was amazing during that summer visit.

Mandarin Oriental, San Francisco

Maybe I have a thing for hilly communities by the water :)  Anyway, I’m a huge fan of visiting San Francisco, but have almost always stayed with people I know.  On one occasion, however, I had the opportunity to stay in an upscale hotel there, and it was a great visit.

When you’re in a city as expensive as San Francisco, you don’t always get a lot for your money.  This place wasn’t exactly inexpensive, but it was fantastic.  A totally different experience than the Italian hotel I referenced, this one was like a retreat in the middle of the city.  Really nice rooms, and outstanding service.  The best part was having incredible views of the city.

Four Seasons, Chicago

Okay, so we live in Chicago.  However, this was an ultra-rare hotel stay in town that we had the opportunity to take.

It was outstanding.  The location is as good as it gets, right by the Magnificent Mile off Michigan Avenue.  In other words, close to the best (in my view) restaurants in the U.S. between the coasts, and excellent shopping and entertainment.  The hotel itself was plush, with luxurious rooms and great service.  The health club was actually pretty good too.

Just a winning experience all around, and a real treat to stay there.

Bottom Line – while I now operate on a more realistic and practical budget, which means very little traveling, I do appreciate those past experiences.  When it comes to hotels, there really are some that can be more than a few steps above the norm.  And they won’t have people live tweeting pictures back as the journalists did while visiting the Olympics :)

My Questions for You

Have you ever stayed in any really nice hotels, that really appealed to you for whatever reason?

What was your favorite, and why?

Setting Long-Term and Daily Goals to Improve Wealth and Health

setting winning goalsDo you like to set goals for yourself, whether short-term or long-term?  By this, I truly mean actually setting the goals and trying to reach them.  Sometimes it’s easy to say this, but not always done in practice.

For example, some of us are planners nature – as opposed to those who thrive on spontaneity.  While of course we need a balance of both, it seems like many of us tilt one way or the other.

I’m in the former group, being a planner.  Really, always have been this way to varying degrees. Also, I’ve been actually following plans to varying degrees over the years, sometimes well but many times not as well as I intended originally.  It’s something that I’ve been working on getting better at in recent years, and have developed some habits that have helped me along the way.

Here is my current process to keep me focused:


Each year, around the New Year, I’ll take stock of where things are overall in different areas of life.  Typically, this focuses on money and health for me, though it makes sense if people also think of relationships too.  After all, health, wealth, and relationships are interconnected in many ways.

In terms of money, it means different areas: making (especially career-related goals), saving, and investing.  Primarily the first two are part of goal-setting, with the latter a bit less controllable.

I’ll set goals that are at the following intervals: 1-year, 3-year, 5-year, and 10-year.  This is intended to cover short, intermediate, and long-term.  Does this sound very planned to you?  Perhaps excessive?  I could totally see this seems way to much so to many.  It might not work at all for some people, but it does for me and keeps me pointed in the right direction.


At the beginning of each month, I’ll go through what I would like to accomplish.  Some of these things might be specific tasks to be completed, or they might be progress markers for activities with a longer-term time horizon.


As each week commences, I’ll figure out what I’d like to (or need to) do for the week.  As a part of this, specific deadline dates will be noted.  Sometimes this neatly fits into that particular week, but some things that come to my attention might get planned out for later.  It’s sort of fluid this way, as need to be flexible.  Life doesn’t run off templates!


Each day, I’ll go through my list for that specific day.  I’ll prioritize them based on importance/urgency, and go from there.  Ideally, the ones at the top of the list will get done first, and subsequent priorities tackled in order.

This rarely gets done perfectly.  However, it gives me some structure, and at the very least I’ll usually start with the most important things early on.  Not sure about you, but it works for me to handle the important/urgent things when my energy level is highest, which is usually early in the day.  If things don’t get done, they’re going to be low on the list – the way it should be.  Plus, it feels great to get key things done early, and removes or alleviates some potential stress in the process.

I’d say this planning and prioritizing process takes 10 minutes.  Sure, it’s a decent investment of time, but I find that it pays off and keeps me from being disorganized or scattering my attention wildly (which might otherwise be possible!).

The other thing that I do now, which has really been working, is doing a one minute review of my long-term goals every day.  You remember, the 1-year to 10-year planning I mentioned earlier?  Each day, I try to spend just a quick minute reminding myself of the bigger picture goals.

This latter step of reconnecting with bigger picture goals works to help me stay on track.  If I ever waver, which can happen quite often, this helps keep me going in the right direction.

We each have our own approach to goals, so I’m curious how you do it.

My Questions for You

Do you consider yourself a planner, or a more spontaneous person?

What is the timeframe for your goals, both long-term and/or short-term?

Four Low-Cost Foods to Help You Get Healthy and Wealthy

healthy and wealthyI think most of us want to have good health and a good financial situation.  Even if we’re doing well in both areas, isn’t there room to improve?  I thought so.

Since so many resolutions are around being healthy and getting wealthy, in some way or another, why not take steps that can help on both fronts?

I’m like many others, with resolutions that involve both health and wealth.  So far, I haven’t slipped up.  Yeah, it isn’t too far into the new year as I write this, but so often people start with good intentions then slide back into old habits after a few weeks.   Not yet, over here :)

Here are four foods that I’m incorporating more this year, in the quest to work on health and finances:


You know, what’s ironic is that kale has been used as slang for money.  How appropriate, as it’s so healthy and relatively inexpensive.

It seems like kale is all the rage.  Last year seemed to be the year of quinoa, and this year looks like it’s the year of kale.  I’ve seen bagged baby kale at stores, more food items that claim to have kale included, and even some dishes at restaurants with kale.  A local supermarket even has a stand with fresh smoothies, a few of which have kale.  This veggie certainly wasn’t so widespread just a few years ago.

Some people I’ve talked to just don’t like it.  They say it’s bitter, tastes bad, etc.  Maybe I’m in the minority, but I think it’s actually pretty good!  A bag of organic baby kale leaves can be purchased for about $3, and gives me about 4 full salads. Now, there may be some asking, is it important to buy organic? But even if there is a slight premium in this case, it’s a pretty good value for something that’s seen as a “superfood” by many.

If you haven’t read about all the nutritional benefits of kale, please do so.


Yeah, I know.  I just mentioned that it was all the rage last year.  Quinoa seems to be everywhere.

The thing is, it’s pretty nutritious and easy to make.  It’s high in protein compared to alternatives, and is quite versatile.  It can be eaten alone, or blended into different dishes.  I know of one person that even eats it for breakfast occasionally, though I find it works better for me at lunch or dinner.

I serving of quinoa can easily cost less than $1.  Pretty good, right?

Another aspect of quinoa is that it can be a part of a gluten-free diet.


I’ve written about this before, how pumpkin products have popped up everywhere.  It was amplified this past fall, going well beyond pumpkin-flavored coffee drinks.  Pumpkin flavor seemed to be in all kinds of products in many venues.  I saw pumpkin candles multiple places.

Aside from the flavor itself and the whole seasonal theme associated with it, pumpkin is said to have a good nutritional profile.  Canned pumpkin is very high in Vitamin A, has a lot of Vitamin K, and is a good source of fiber.  It’s also a low fat food.

We use a recipe for “pumpkin pudding”, which tastes just like pumpkin pie filling.  Last year, I only made it once, but will make it more often this year.  I know there are plenty of recipes out there for pumpkin, so there are different options to incorporate it into your diet once in a while.

Canned pumpkin works just fine, and is actually much easier to use than trying to deal with a raw squash.  Plus, a can be purchased for just a few dollars, and a serving (with other ingredients) should cost much less.


Another one I’ve written about, and still do have periodically.  But I’ve started to make it a staple of my morning routine once again.

Quick-cooking steel cut oats are healthy.  A meal can be nutritious, with protein, fiber, and other nutrients.  Plus, it’s filling and seems to control cravings later.

Additionally, it’s a great base to add nutritious toppings.  For me, this means ground flaxseed and some fresh blueberries.  This frugal and healthy breakfast should cost less than $1.

My Questions for You

Do you look to save money by eating inexpensive and healthy food?

Are any of these 4 foods a part of your diet?

Do you have any other healthy favorites that help you stretch your budget?

Freezing Cold Weather and Financial Illiteracy!

freezing weatherQuite often, in the personal finance sphere, there are a lot of intelligent posts and discussions ongoing.  So much is written about making, saving,  and investing money.  There is also quite a bit of discussion on avoiding debt.  Clearly, a lot of bloggers get the basics of money management, and love to share these concepts with everyone.

The thing is, when reading a number of such blogs, it can be easy to fall into the trap of thinking that most people think this way.  As in, the idea that most people make reasonably intelligent decisions with money, and have a solid understanding of both what to do and what not to do.

I don’t think this is the case, and it took a non-personal finance situation to remind me of this reality.

Recently, it has been incredibly cold here in Chicago.  Schools were closed for two days as some of the coldest weather I’ve ever experienced descended upon this part of the country.  The “polar vortex”, as it has been called, has seen temperatures go down to 15 below zero with wind chills past 40 below zero.  This just days after we had a multi-day snow event that brought over 20 inches of snow to some parts of the area.

We’ve had Siberian-like weather here.  Clearly, not the weather you want to venture out in.

Nevertheless, there are some people that just don’t seem to be fazed.

On Sunday, a day before the extreme cold hit, I was at a local grocery store getting food.  Understandably, the store was completely packed, even though the weather on that day was less than ideal (snow, 10 degrees).  It was going to get worse, we all knew it, and there was this feeling that the end of the world was coming.  Not really, but this weather was no joke, and people are smart enough to prepare.

Except a few people at the store.  They showed up wearing hooded sweatshirts and jeans.  This in 10 degree weather.  There was one guy who showed up in a short sleeved shirt and shorts.  Yes, in 10 degree (and dropping fast) temperatures with tons of snow on the ground, the guy wore shorts to the grocery store.

Wouldn’t it be common sense to realize that this is dangerous?  Wouldn’t it simply be uncomfortable?

Of course, but that didn’t stop that guy.  Nor did it stop the others visiting the store without a heavy coat, hat, gloves, etc.  Why?

Well, I’m not about to analyze why.

What I do know is that it served as another example that there are people out there who might otherwise be intelligent, nice people – but they simply want to do what it is they want to do.  All the common sense in the world won’t be enough to get these people to do the sensible thing and bundle up to avoid getting sick.

Relating this to personal finance, it tells me that there are clearly too many people that might be well-meaning, but make similarly brainless choices with money.  Taking on massive credit card debt because they “want” something, buying a “dream home” they can’t afford, or any number of moves.  People make them every day.

In other words, if people can be cray cray enough to freeze in 10 degree weather, they can be cray cray enough to make really bad financial decisions.  We just don’t encounter too many of them on personal finance blogs.

Why does this resonate with me?

Well, as a personal finance blogger, it’s another reminder that there are people that could really be helped by reading about how to manage money and plan their financial future.  There is value to these posts, because they can help people.  Validation of our efforts! Clearly, there are people that can use the help.

Also, if you’re not a blogger but currently doing a good job with your own finances, pat yourself on the back.  You’re doing something that many other bright people can’t bring themselves to do.

Like wearing a coat and long pants in 10 degree weather :)

My Questions for You

Do you ever stop to think how personal finance basics can be a total mystery to some people?

Why do you think it is that some folks reject common sense? Is it simply lack of knowledge, defiance, or both?

What do you think is a good way to get someone aligned with good money management practices, if they don’t currently practice them?