Are You Sabotaging Your Financial Life?

money gremlin… maybe not intentionally – you say you want to be wealthy, or at least secure… and yet, so many people’s daily choices about how they make, spend and save money lead to a financial dead-end.

Are you doing any of these 5 things that pretty much guarantee you end up broke?

    1. Overspend –

     Either don’t budget or avoid delaying gratification by

      going off budget

2. Acquire Too Much Long-term Debt –

   Leverage up early in life or when income is waning

3. Don’t Make a Savings Plan –

   Stems from debt and overspending AND causes overspending

4. Live with Income Stagnation –

   You don’t have the money-making skills a 21st century worker needs

5. Accept Your Poor Financial Education and Training –

    Failing to plan (which involves learning new skills) is planning to fail

At this point you may expect me to tell you it’s not your fault.

>> Income inequality is making it impossible for you to get ahead!

>> Your school barely taught you how to balance a checkbook, let alone how to make sound financial decisions and plans!

>> Your kids/parents/siblings, all keep having crisis you must, as a caring human-being, help them solve (and that always requires money)!

>> etc., etc.

Nope. I’m gonna call B***S***. And, because you’re here, reading this, I’m going to assert that you know you have some money problems and that YOU are the only one who can solve them. Just admitting that, and being willing to find and practice the knowledge and skills you need to solve your money problems is a huge step forward to solving them.

And, if I can do it, so can you. I grew up in a financially irresponsible home. My parents were always juggling the credit cards and filed bankruptcy several times. They started asking me for money when my kids were in grade school. My husband and I had some savings, had started retirement accounts and were starting to make some real financial progress.

Thankfully, I was able to help them financially several times but, I also said no a number of times. Boy, that was hard! I had to make a decision based on my priorities which were honoring the commitments I had made as an adult to my husband and my children. Only if I could do both did I offer the money. They’re gone now and I wish I could of helped more while they were alive but I don’t regret my decisions. And, I’m real certain that I’ll never have to ask my kids for money.

So, let’s talk about how these problems develop and what you can do to start solving yours.

Overspending – An inability to budget and delay gratification

The #1 solution to this problem is a spending plan. With all the free budgeting and tracking tools available online, once you make the decision to switch from a spendthrift to a thrifty spender, you join thousands of conscious consumers.

So, what stops people from using the tools? Near the top of any list is internet security. Seems we hear about a new security breach at a bank or merchant every week. One thing we don’t hear is anyone actually losing any money as a result of their expense tracking or budgeting account getting hacked. That’s because these systems import information from your credit card, bank and investment accounts but can’t make any transactions. To make a purchase or pay a bill, you have to go to a merchant or bank.

Plus, we have consumer protection laws that put the risk on the merchants, the banks and credit card issuers. When the USA switches to microchip cards in 2015, there’ll be even fewer digital money hacks. In the meantime, pay attention yes. Be fearful and avoid using tracking and budget tools? NO!

The 2 top-rated free tools for managing your spending are: and

Personally, I like PersonalCapital because it has a lot of investing tools built in. I LOVE being able to see how much passive income I received in any date range! I just spend a few minutes every week verifying my transactions and putting them into the proper category and I’m up-to-date on my finances. On the downside, it doesn’t allow you to set-up a spending plan (budget). Since my savings and recurring payments are automated, a detailed spending plan isn’t what I need.

If you need to get started budgeting or want to set-up a debt repayment plan, Mint is the better choice. You’ll be able to track your spending against your plan and make course corrections on the fly.

There are lots of others out there now – to checkout many other free online budgeting tools, I suggest you start with the review at GoodFinancialCents: (

Piling on Too Much Long Term Debt –

Leveraging up early in life or when your income is waning

As most of us know, college students have been encouraged to take on huge debts that they must repay before making a start on achieving financial freedom. Maybe you’re not aware of the number of parents – those approaching retirement age – that have assumed college loan debt to send their kids to school?

The lenders are willing to extend large unsecured loans because they are protected. Student loans are not dischargeable in bankruptcy and many are made or guaranteed by the federal government. Lenders can garnish wages and confiscate refunds and other legally mandated payments (i.e. Social Security) borrowers are entitled to.

Though it’s extremely difficult to build a large net worth without using leverage, it’s a double-edged sword that must be used correctly to avoid serious long-term financial injury.

I believe your total debt (excluding a mortgage) should never exceed your annual income (and the lower the better). If you decide to purchase your dwelling, that payment, including the principle repayment, interest, taxes and insurance (PITI) should never exceed 30% of your gross income. That also assumes you save 10% of your income and keep the loan interest rates low (the prevailing rate for good/excellent credit scores).

But honestly, people who live financially free lives rarely have consumer debt. They save and pay cash or use the zero percent financing offers those with excellent credit can get and keep their funds invested and earning them money.

If you’ve already taken on too much debt, you’ll need to go on a debt reduction diet! That’s the one that requires you live well below your income level by cutting all unnecessary expenses, driving older cars, living in smaller spaces, and not purchasing new clothing or going on vacations until the debt is repaid.

Failing to Make (or follow) a Savings Plan –

caused by your excessive debt and overspending 

ALSO, causes your overspending

If you’ve never developed the saving habit, I pity you. Not only will you almost certainly not join the ranks of the financially free, you probably live with a mountain of stress (living paycheck-to-paycheck). You know you need to have some savings; even if it’s just that $1,000 “emergency fund”. A cash cushion will change your life for the better, almost immediately!

I’m betting your bank already offers you free inter account transfers. And savings accounts are almost always fee free (if yours isn’t, change banks). So, open an account or find that old one with the $5 balance and set-up an automatic transfer from each paycheck. Ten percent is the target amount but even $5 will do for a start.

Once you have the “emergency fund”, open another account and make a savings plan for a longer-term goal. Want to be able to buy a newer car in 2 years without borrowing? Research the cost of the car you want and divide the number by 24. Have your “car payment” deducted from each paycheck and transferred to your new account.

It’s hard to believe but once you become a saver watching the balance in your accounts grow becomes addictive – so much that you don’t even miss those daily lattes and vending machine treats you may decide to skip to make your accounts grow faster!

Income is Stagnate – You don’t have the money-making

and entrepreneurial skills a 21st century worker needs

Yes, it’s true, your wages probably aren’t keeping up with costs. The transition from manufacturing to services has caught a lot of middle income earners in the wage stagnation trap. To extradite yourself, you’ve got to take control of your career and make plans to get the type of skills that are more valuable.

In the U.S., the tax codes favor business owners over wage earners so your long-term plan should include starting your own business. And it’s never been easier to join the entrepreneurial ranks. No, I’m not suggesting you quit your 9-5 to become a full-time artist but offers a way to find buyers for artistic products.

A side-gig is what you’ll want to start with. Maybe it will turn out to be a full-time gig but for now, just look at your skills and find a way to make an extra income with them. Many people start with selling their excess stuff or craft items on Ebay and Craigslist. Take a look at what others are doing to see what’s possible for you.

You say you have no skills? B***S*** again! Even if your only skill is playing with your dog you can parlay your non-working time into an extra income. Checkout and or Prefer people? Help the elderly in your community; go to, and to find opportunities.

General purpose sites like and can help you find short-term jobs that you can fit into your schedule. If you’ve already purchased that new car and need some help paying for it, and are looking for drivers in many areas.

Poor Financial Education and Training – Failing to plan

(which involves learning money management skills)

is planning to fail

Well, maybe you can cross this one off your list – you did make it all the way to the 5th item. But, it’s an ongoing process. Returning the is a good start. You’ll find plenty of free education online these days but it’s up to you to pursue financial education and the training you need as you become more money smart.

If you’d like to discover where you need to focus, take the Money IQ test at: You’ll answer 25 questions about how you manage your finances and get an overall score as well as a score in each of the five sections so you can plan to fill in the gaps. Return to the test as often as you like to see how your Money IQ grows!

Any more excuses? I hope not. Your financial future can be more prosperous if you simply avoid making these five mistakes.

Live Long and Prosper, Leah the

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