Category Archives for Uncategorized

Clothes Do Make the Budget … With Healthy Choices

At some time or another everyone dreams of being successful and famous. Some very successful people have figured out that the secret to their successful morning means dressing in less. We’re not talking about going to work barely covered, we’re talking about simplicity–that is pairing the closet down to the same kinds of clothes–and wearing them over and over. It’s the joy of a streamlined, simplified closet.

Before you dismiss it as boring, let’s look at who has done it.

  • Steve Jobs: The Apple co-founder wore a black mock turtleneck, blue jeans and New Balance sneakers.
  • Mark Zuckerberg: Facebook’s chief executive wears a grey t-shirt or hoodie. Recently I saw him in a grey suit and I had to do a double take because he had broken his own dress code.
  • Albert Einstein: The famous physicist wore a grey suit, no socks, and unkempt hair.
  • Barack Obama: President Obama pared his closet down to only blue or grey suits.

Simon Cowell, Angelina Jolie, Karl Lagerfeld, Michael Kors, and the list goes on…

These people have figured out that they don’t have to think about how to dress for the day. They wear the same thing.




Mornings in my house are chaotic. The dog needs fed. My spouse has to get to work, and the kiddos need nutritious lunches to take to school, and I need to steal a little time to pull myself together for the day. I hope you are telling yourself about your own getting ready for the day story right now. Life for each of us is different, but we can relate in the hecticness of getting everyone to the right place at the right time, with all the necessities to succeed for the day.

In a perfect world the clothes are laid out and lunches are made the night before.

Yada, yada. Who lives in a perfect world? I sure don’t. What about you? What if you had just one less decision to make each morning? What if it started by having less clothing?

Most of us don’t have someone to get the kids ready for us, and we have to prepare our own lunches etc. We have even less time to accomplish more than the people above, and we have to do it on our own.

They may be onto something.

What if mental morning health starts by redefining your closet with fewer items and less to think about? And, that success affects the amount of green stuff in your wallet. You may be surprised that you’ll actually have a healthier, fatter wallet, and more Benjamins to spend. If you are getting out of debt, it could be the way to get momentum and pay off some smaller debts on your way to bigger changes and more financial freedom.

Courtney Carver, a former advertising sales executive started the experiment about six years ago.

“You are really learning what ‘enough’ is,” she said.

For her the financial payoff was in excess of $5K annually.

“When I go to shop, I’m not lured in by the marketing,” she said.

A minimalist wardrobe doesn’t have to be devoid of fashion and creativity. Let’s see how it is done.

Chivalry isn’t dead. I’d address a lady’s closet first, but she will probably read through the men’s section to see how she can help him through the less is more approach. The converse may not be true.

A man’s simplified closet

We recognize that individuals are different. Please adjust as dictated by your needs. Most men can easily manage with this list from the Unclutterer:

  • A navy blue suit in a four-season wool fabric.
  • A charcoal grey suit in a four-season wool fabric.
  • Three white long-sleeve dress shirts and at least one light blue long-sleeve dress shirt. If you work in a corporate environment, you’ll need more than this to make it through the week (less than 15 total, however). If you work in a casual environment or from home, these four long-sleeve dress shirts will very likely suffice.
  • One short-sleeve knit polo shirt.
  • A cotton-blend front-zip jacket to wear with jeans or khakis.
  • A small collection of silk ties (the number varies with how many days in a year you wear them). Your collection should contain at least a solid color tie and a striped tie that work with both of your basic suits.
  • Seven white undershirts and 14 pair of underwear.
  • Two/four pair of jeans.
  • Three to five additional shirts that are appropriate to your social schedule. If you’re a t-shirt and jeans guy, let these shirts reflect this.
  • A heavy sweater in a solid color. Black and solid grey v-neck sweaters always seem to be in style.
  • Two pair of dress khakis and a pair of khaki shorts.
  • A set of athletic pants and a t-shirt you wouldn’t mind if paint were spilled on it.
  • Pajamas
  • A swimsuit

Don’t confuse a fewer number of clothing items with being devoid of fashion. If you are a man who takes heed about fashion you can still do this. Even Don Draper can do it.  It might look like this. men's wardrobe

A woman’s simplified closet

When thinking about fashion, people think high designers and Paris. A woman wants to feel fashionable, and her style can easily reflect her desire, while being simple. Here are tips courtesy of Bellatory:

  • Neutral Colors: Predominantly black and white, but can also include navy and denim, cream, and shades of grey.
  • Mix and Match: By keeping it simple, everything mixes and matches together.
  • Attention to Fit: Clothes are neither figure-hugging or baggy and are a comfortable fit.
  • Quality, Natural Fabrics
  • Prints: not too many patterned or floral fabrics, maybe because they are harder to mix and match. Instead, Breton stripes, or limited power pieces.
  • Texture: To add interest to an outfit, they may include textured fabrics such as tweed or lace.
  • Footwear: Suitable styles for walking around Paris are flat ballet pumps or sandals, and in the winter a pair of boots. Medium height heels are also an option if they are suitable for walking around. Shoes are also in neutral colours for easy mixing and matching with the clothes.
  • Accessories: This is where the fun comes! Chic women focus on a few well-chosen, good quality accessories to pull an outfit together and provide and individual look. Accessories enable you to play dress up. They may include a neutral coloured leather bag, pearls, a silk scarf, a beautiful necklace or bracelet, or hosiery.
  • Scarves: Wearing scarves and tie them in a variety of different ways.

It might look like this.

woman's wardrobe

Anyone can do it

If you are new to simplifying your mind, your morning routine and your closet, but think you’d like to give it a try, start small. In my house we begin each New Year by turning all the hangers backward. As items get worn, washed, and returned to the closet, they get hung from the front. Any hangers facing backward by the end of the year get pulled, bagged, and sent to Goodwill. If an item hasn’t been used in a year someone else needs it worse me.

The key is to buy high quality items that last over time, and multiple washings, versus ones that fade and wear out quickly. It is easier to shop when you know what needs to be replaced. It’s easier to avoid sales, and items that won’t leave the closet too.

Consider the freedom in these:

  • You will have more disposable income.
  • You will have more time to live your life.
  • Mornings will feature less stress.
  • Laundry days will be easier.

Kids figure this out when they are young. They fall in love with a favorite shirt, and wear it over and over until it is threadbare. Or, sleep in clothes because they love the feel. They wake up the next morning, roll outta bed, and don’t care if they are a wrinkled mess, or if they coordinate. They don’t care what they wear. It’s parents who are prideful about what kids wear. Kids wear what they love. Maybe we should do the same.


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It’s Called A Tax REFUND For A Reason

(This is the first in a four-part series about the wise use of your Federal Income Tax Refund. With the exception of this first post, the advice in this series applies to any windfall – lottery winnings, gifts, even yard sale proceeds.)

It’s that time of year again. Our mail boxes are filing up with envelopes marked “Important Tax Documents”, the TV is littered with ads for H&R Block, Jackson Hewett, TurboTax and the like – heck, even the podcasts I listen to are advertising for TaxAct and TurboTax. We all know what that means: the deadline for filing our tax returns is looming.

I’ve also noticed something a little more subtle. I’ve recently noticed a lot more commercials – especially on radio, for some reason – for big-ticket electronics. Just this morning, I heard a commercial for Visio that blatantly pulled back the curtain to reveal to the world just what that company intended to do. The ad to which I am referring specifically addressed the consumer’s upcoming tax refund, as in, What at you going to do with your tax refund? Why not buy a Visio TV? (or something of that nature).

Please understand I’m not villainizing Visio, there are plenty of companies doing the same thing, it’s just that I heard the specific Visio ad today, which prompted this post.   

It’s no wonder companies like Visio are out to get your hard-earned tax refund money. The problem is… YOU!

Yes. You. Well, maybe not you, but someone like you… and me.

The problem is, too many of us don’t realize that our tax refund money is OURS. I’ve heard too many people refer to their tax refund in a way that indicates they believe their tax refund is nothing more than their annual gift from the government, and therefore, why do anything more than use it to buy a gift for yourself – like a new TV.

Let’s start by breaking down the term “Tax Refund”. It’s one of those terms we’ve heard so much that we don’t even think about what it really means.

So, what is a tax, anyway? The dictionary defines tax (n) as a compulsory contribution to state revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions. Don’t lose that first part – “a compulsory contribution”. That’s a fancy way to say the government takes it from us whether we want them to or not.

Google did a good job defining tax. Let’s see what it has to say about refund. Refund (n) a repayment of a sum of money, typically to a dissatisfied customer. Perfect! That means that in order to get a refund you had to pay something in to begin with. If you pay for something, you would have, presumably, worked for that money, right?

OK. Let me just pause for a moment to address those of you who are sniggering at me, saying under your breath something like, Yeah, but what about those get a refund when they didn’t pay anything in taxes to begin with? Or, those who get more back than they paid? I’m not talking about that; that is a political discussion I’m staying away from. Please don’t even waste your time in the comments writing about it – get your own blog.

What I have to say below is applicable to anyone who gets a refund. 

Too many people don’t see that a tax refund is not a bonus you get from the government once a year. A tax refund is you proving to the government that it took too much of your money so it has to give it back to you – you are the dissatisfied customer to whom the government must repay money.

A tax refund is YOUR money. Not just because your name is on the check, but because it was yours all along – the government took too much so they have to give it back. So you can look at this a couple of ways.

A tax refund is either: a) a bonus from the government or b) a forced savings account that pays out annually.

I remember growing up, the bank we used was always advertising its Christmas Club and Vacation Club accounts. I never used one, but I knew plenty of people who did. The premise behind these clubs was simple: The bank automatically took a predetermined amount from your checking account on a regular schedule (weekly, biweekly, or monthly) and deposited it into your Club account. While these deposits were in your name, they were inaccessible, much like a Certificate of Deposit (CD). (A CD is a commitment to keep money on deposit for a set period of time for a guaranteed rate of interest – withdrawing early can result in forfeiting as much as all of the interest and even some of the principal.) The Club accounts had a maturity date where the bank would cut a check to the depositor for the amount saved. People loved these accounts because they were forced to save a set amount of money that would be paid out to them at a set time – Christmas Club paid out in late November (to pay for gifts) and Vacation Club paid out in early June (to pay for vacation).

What’s the difference between these Club accounts and your tax account with the IRS? Essentially nothing, other than you don’t know how much your refund will be until you complete your tax return.

Why does this matter? And what do we do now?

Check out our next post. Or, sign up for our newsletter and download the entire series with exclusive bonus content in our FREE book What to do With a Windfall (click here). 

You may also be interested in:

Part 2: Get A Guaranteed Return

Part 3: The Emergency Fund: An Umbrella in a Downpour

Part 4: The Pinnacle: Financial Freedom

Get A Guaranteed Return

(This is the second  in a four-part series about the wise use of your Federal Income Tax Refund.With the exception of the first post, the advice in this series applies to any windfall – lottery winnings, gifts, even yard sale proceeds.)

In the first post in this series, we discussed the real meaning of a Tax Refund. In this post, I will explain how to get a guaranteed return on the investment of your refund. 


Like I said, it is a Tax Refund. That it is the government returning money to you that it took from you in the first place. Let’s say it a different way: The government took more of your money than it was entitled to, so it has to give some of it back. In summary, a tax refund is your money because it already was your money. It is not a gift. It is more like a forced savings account.

The shortened version: A tax refund is the annual payout of your savings. (Kind of like the Christmas/Vacation Club accounts we talked about in the earlier post.)

Now that you’ve saved your money, what are you saving for?

You don’t know? Really?

Well, I’m not exactly surprised; it’s hard to know what your saving for when you don’t know how much you’ve been saving. Most of us don’t know how much we will be getting back each year because we’re not diligent about monitoring our withholding percentages and/or the tax code is too complex for us to comprehend. As for me, I’m guilty of both – especially the second.

Again, the complexity of the tax code and the distribution of refunds in excess of contributions leads to a political discussion that I’m not hosting here. Please don’t waste time in the comments on politics or the like.

A Guaranteed Return

That said, if you have not already, you are probably about to receive a check (or direct deposit) from the government for the forced savings account held at the IRS. Needless to say, the federal government is not paying any interest on the accounts that it has held for the last year. That does not mean that you must settle for this money to bring you no returns.

Many people I talk to are discouraged by the interest rates on deposits at their local banks. So discouraged, that many think the only alternative to a 0.01%APR savings account is to just spend the money on something they want – even if that is dinner or a big screen TV. Where’s the return there? (Hint: There isn’t one.)

So, what’s the best way to invest your tax refund and get a decent return?

It is much easier than you may think to get a guaranteed return on your investment – and you don’t need to pay a financial advisor to get that return. Do you know of any stocks or bonds that guarantee you a return of 5%, 8%, 15% or even 25%?

Don’t think too hard. I’ll answer for you – you don’t know of any such investments.

Mind you, I’m not talking about the one your cousin Willie’s neighbor Frankie’s uncle Louie heard about from a guy at a poker night somewhere. I’m talking about a legitimate investment that pays a legitimate, guaranteed rate of return.  

Or, maybe you have heard about it… If you think of it differently.

According to, the average credit card interest rate (depending on the type of card) at the time of this writing is between 11.61% and 16.60%.

Follow me, here. I know I just went from talking about investments to talking about credit cards and that might seem like a bit of a jump. Just to be clear, credit cards are the opposite of investments – the former can cost you money while the latter can make you money. However, we are talking more about returns than investments.

Let’s think of it this way: If you carry $1,000 balance on a credit card that has a 15% interest rate, you’re paying $150 per year in interest. If you use your $1,000 tax return to pay off that balance, you are saving $150, effectively earning you a 15% return on your $1,000 – a return that is nearly guaranteed.

Notice I said “nearly” guaranteed. Yes, you paid off a $1,000 credit card with a 15% interest rate – you are guaranteed to make a 15% return on that $1,000. However, you will lose your return if you turn around and use that card to create a new balance. Paying off a credit card only to use that credit card again is no different than just blowing your tax refund. The only difference is that you are more likely to experience the discouragement that comes with realizing you’ve undone something that you were proud of doing. That’s a negative return.

This same principal works with any type of debt, whether you pay off the debt completely or not. Say you’ve got a car loan with a $15,000 balance at 7% and you get that same $1,000 tax return.

On the car loan, you’re paying 7%, or $70 per $1,000 owed, in interest – each year. Your monthly car payment is the sum of the interest that has accrued on the loan in the last month plus a calculated amount of principal. The principal portion is the part that pays down the loan balance.

If you use your $1,000 tax refund to pay down the balance of your car note from $15,000 to $14,000, you’re saving $70 per year, every year – that’s $350 over five years. Not to mention, you will pay your car off sooner.

It is exactly the same principle with your home mortgage, only you’re likely paying a lower interest rate over a longer period of time. Let’s say you’re paying 4% with 25 years left on your mortgage. Reducing the balance by $1,000 this year will save you $40 every year. Over the course of 24 years, that’s a savings of $960 – you will have nearly doubled your money. And, that’s just if you use your tax refund to pay down your mortgage this one year.


If you consistently use your tax refunds for this purpose, just imagine

  • how much money you’ll save in interest and
  • how it will feel to actually own your stuff free and clear of any liens.

Just wait, though, don’t start writing checks just yet – not for TVs and not for debt reduction. Just put your tax refund in a safe place until you read the next post: What’s the Value of An Umbrella In A Downpour? (coming soon)

Check out our next post. Or, sign up for our newsletter and download the entire series with exclusive bonus content in our FREE book What to do With a Windfall (click here). 

You may also like:

Part 1: It’s Called a Tax REFUND For a Reason

Part 3: The Emergency Fund: An Umbrella in a Downpour

Part 4: The Pinnacle: Financial Freedom



The Emergency Fund: An Umbrella In A Downpour

(In this – the third in a four-part series about the wise use of your Federal Income Tax Refund – we discuss the value of an emergency fund. With the exception of the first post, the advice in this series applies to any windfall – lottery winnings, gifts, even yard sale proceeds.)

Despite the guaranteed returns that come from paying off / paying down your debts, you may not be at that point yet. If you are drawing breath and have a pulse, you can be sure that tough times (a/k/a rainy days) are coming. An emergency fund can be an umbrella in a downpour. How much is that worth? It’s nearly priceless.


If you’re just joining us, we have been discussing what exactly your Federal Income Tax Refund is, and the things you can do with it other than buying a new TV. To recap, in the first post, we discussed that it’s called a Tax Refund because the government took too much money from you and you proved they had to give some back. Then, in the second post, we discussed how you can get a guaranteed return on your money over and above what banks are paying on savings accounts by using it to pay down your debts.   

Basic Emergency Fund

However nice a guaranteed return on your investment might be – and it is very nice – there is something much nicer.

An emergency fund.

What is an emergency fund? you may be asking.

An emergency fund is the barrier that stands between you and debt or maybe (eek!) more debt. To go with the analogy in the title, when you’re experiencing a [financial] rainy day, an emergency fund can be your umbrella. It can be the thing that protects you when everything seems to be going against you.

An emergency fund is a kind of self-insurance.

Let’s look at it this way: Tomorrow you’re on your way to work and you run over something in the road and shred two tires and bend the respective rims beyond repair – total damage $800. How are you going to pay to get your car back on the road so you can get to work? If your answer is “I’ll use my credit card.” You definitely need this article.  Actually, if your answer is anything other than “No sweat. I’ve got that much in the bank; I’ll just pay for it.” You need this article.

An emergency fund is that extra money in the bank that allows you to pay cash to cover emergencies instead of using your credit card. It is the buffer, the margin, between you and broke. If you have an emergency fund, you may be broke (i.e. out of money in your checking account) but you’re not poor (i.e. no money to your name). Broke is a temporary situation, so broke people make sacrifices. Poor is a mindset, so poor people do stupid stuff (like use credit cards).

I’m a huge Dave Ramsey fan, and I completely believe that before you go paying down or paying off your debts, you need to first establish an emergency fund. Check out Dave Ramsey’s Baby Steps for more detail on his plan. As for me, I’ll just say that if you’re used to being poor, you can’t even imagine how great it will feel when you get the comma for the first time.

What’s ‘the comma’? you may ask.

The Comma, is like magic. The comma is the difference between $999 and $1,000. See it there? The Comma means that you have FOUR figures in your savings account instead of just two or three.

I can still remember when Nicole and I saved our first $1,000. It was the greatest feeling in the world. I knew that I was finally an adult. I knew that we could finally make it on our own. Since that time, we’ve had our ups and downs – we even lost the comma a time or two. But, that was the moment we stopped being poor – we now had choices. We. Could. Do. This. No matter what “this” might be.

Having $1,000 in my name was a pivotal moment in my life. I can’t explain what happened our savings account went from $9XX to $1,000, but it was AMAZING!  My life changed. There was a psychological change – a permanent change that happened at that moment. And from that moment, regardless of how rainy the day became, my family and I have always had an umbrella.

You might wonder how I invested that $1,000 to earn the most on it. I didn’t invest it.

Yep. You heard that right. I did not invest my emergency fund; I left it in a standard (i.e. low interest-rate) savings account. Want to know why? I wanted to keep the money liquid. I wanted to make sure there was nothing that would stand between and emergency and my money. I had the discipline not to spend it (thanks to Nicole), but I wanted to be able to spend it if I needed to. I didn’t want to put it in a CD so that I would be tempted by the forfeit of interest, or in an investment account where the money was subject to swings in the market. Any of these things might discourage me from using my cash and encourage me to use a credit card to cover an emergency expense. I was devoted to getting out and staying out of debt, and I wasn’t going back.

Emergency Fund 2.0

So, am I advocating that you only keep $1,000 in your savings account forever? No. Way. You’ve got to have a little something (i.e. $1,000) set aside just in case – because there are going to be those cases. That little something will keep you from breaking out the plastic when your dishwasher goes out or when you blow a tire on the Interstate, while you are working to pay off your debts.

Start by cutting up the credit cards. Then pay them off. Next, pay off the vehicles. Then the student loans. Last, pay off anything other than the house. After that, you’re ready for Emergency Fund 2.0. (Yes, I waaaaay over simplified that. I’ll cover the process in more detail in another post.)

Let’s face it, $1,000 doesn’t go far – especially when things really get tough.

Ultimately, you need more than a grand in the bank. An adequate-sized emergency fund will be sufficient to cover your family’s living expenses for between three and six months. You be the judge on whether you define living expenses as just the bare minimum or something more extravagant. I’ll suggest that if you ever have to use it, you’ll probably sleep better at night if you have more than the minimum to get you by.

The purpose of this fund is to provide a backstop if disaster strikes. For example, if you lose your job, you’ll need this to keep the bills paid while you look for a new job or start your own gig. This might cause some additional expenses – more gas to get to job interviews, airfare, hotels, meals and entertainment expenses for networking, additional childcare, the list goes on.

This is your safety net. Don’t skimp.


You’ve heard the saying, “When it rains it pours.” In a downpour, an umbrella is invaluable. Everyone needs an emergency fund when one of life’s storms pops up. Start with $1,000 until you get your debts paid off, then build your fund to cover you in a much larger storm.

So, what do you do if you have your emergency fund and no debt? You stay tuned to the last post in this series: The Pinnacle – Financial Freedom

Check out our next post. Or, sign up for our newsletter and download the entire series with exclusive bonus content in our FREE book What to do With a Windfall (click here). 

You May Also Like

Part 1: It’s Called a Tax REFUND For a Reason

Part 2: Get A Guaranteed Return

Part 4: The Pinnacle: Financial Freedom


The Pinnacle: Financial Freedom

(In this – the last in a four-part series about the wise use of your Federal Income Tax Refund – we discuss the value of an emergency fund. With the exception of the first post, the advice in this series applies to any windfall – lottery winnings, gifts, even yard sale proceeds.)

Let’s face it, the goal we all want is Financial Freedom – the freedom to stop being slave to your creditors, the freedom to go and do and be what you want. What sounds better than that? Nothing. Right? For many of us, though, we might as well be talking about climbing Mt. Everest. Alone. Barefoot. Blindfolded. In other words, too many people think Financial Freedom is impossible to achieve. What if I told you that’s not true? Keep reading, and you’ll see how realistic – and simple – it is to achieve.


In this series, we discussed what a Tax Refund is, and why you get one – simply, the government took too much of your money and they have to give some of it back. Then we discussed that you can get a guaranteed return by paying off/ paying down your debts – but not before you have an emergency fund. Most recently, we discussed what an emergency fund looks like, and what it is for. We also discussed that there are two types of emergency funds – the first $1,000 that you save before you get out of debt, then the 3+ months-worth of living expenses that you have in the bank for life’s big emergencies.

So, you’ve paid off your debts and you’ve got six months of living expenses in the bank. What do you do with your tax return now?

Now, my friend, is where the fun begins – you are on your way to Financial Freedom

What is Financial Freedom?

What is Financial Freedom? It is the pinnacle of your financial journey. When you reach Financial Freedom, you’ve reached the top of the mountain.

But, really, what does Financial Freedom look like? What is it?

That’s the fun part – it looks like whatever you want it to look like.

If you’ve followed the plan to this point, you’ve got as much as six months of your household expenses in the bank and you’ve paid off all your debts except for your house.


It’s an awesome feeling, isn’t it? So, what do you want to do with your Tax Refund now? That’s right, you get to choose – you have the Financial Freedom to choose what to do with your money, instead of having your creditors decide for you.

Well, that’s not really fair. Your creditors aren’t really the bad guys, are they? After all, you chose to take out the loans – it’s just tough to remember why it was so important to borrow the money in the first place.

It just feels like you don’t have a choice – and that’s why debt sucks.

Debt sucks because you chose immediate gratification (borrowing money to get what you wanted immediately) with delayed payoff (debt repayment) instead of choosing delayed gratification (saving for what you wanted until you could pay cash for it) with immediate payoff (having the cash).

That said, now that you have achieved Financial Freedom, you have choices – lots of choices. Let’s explore a few of them.

Payoff the Mortgage

Maybe, it’s time to work on paying off your house. With all your debts paid off, you’ve got a lot of excess cash each month to throw at the principal each month until your mortgage, too, is paid off. Calculate how long it will take you to pay off your mortgage at your new, larger payment – after applying your tax refund, of course.

If it’s going to take more than about two years, you may want to refinance, because any longer than a couple of years and you’re likely to lose your focus and find other uses for that extra money (i.e. you’ll end up spending it on other stuff). Right now, rates are still near historic lows, and you can get an awesome deal on a 10- or 15-year mortgage – just make sure to keep the payment at no more than 30% (ideally 25%, but with no other debt, you can probably hack 30%) of your take-home pay to keep from running into trouble in the future.

Take a moment to visualize what your life will be like with absolutely no debt.

Pretty sweet, huh. Keep focused. Keep putting all your excess funds toward your mortgage and you’ll be there in no time. That is the ultimate in Financial Freedom.


You’ve paid off your mortgage and need something to do with your Tax Refund (and all your excess cash each month), or maybe you’ve got a reasonable mortgage payment at a great rate – on a 10-15 year amortization, and you’re not really stressing about your mortgage payment.  Why not invest your money and let it work for you.

There are so many options out there. What do you choose?

Well, it seems that angel investing is all the rage these days. What do you think about going out to find a startup, maybe one that is even pre-revenue? Don’t think it’s a good idea? Me either. (In case you’re not familiar, pre-revenue means the company isn’t earning any money yet.) There are plenty of investment opportunities out there with a lot less risk.

For example, at this writing (February 2016) the S&P 500 Stock index has returned 47% over the last 5 years and 50% over the last 10 years. Find a good investment advisor who can teach you about the investments that are best for you and your particular situation. Probably something like a well-diversified mutual fund with a long track record of success.

Many folks like to invest in real estate. Depending on your market, it might be a good choice for you. However, I have to caution you about how you go about it. Debt can be easy to come by, especially to someone with few obligations and a pile of cash for a down payment. While real estate can bring good returns – especially in the long run if the property appreciates – it can also be a soul-crushing pain in the you-know-what if you get the wrong tenants or are unable to get tenants.

If investing is the way you want to go, get more advice than is in this article. Find a good-quality advisor, one who is more interested in helping you succeed than making a sale.

Make the World a Better Place

What says Financial Freedom more than having the ability save, or improve lives? Take that tax return and write a big, fat check to the charity of your choice. Your local church would love to have that money to grow its missions program. You could establish a scholarship in your grandmother’s honor for your local high school. Depending on how much you have to give, you may be able to create an endowment at the college or university of your choice. Or, you could think beyond your local area and beyond all you may know.

Did you know that 663 million people in the world live without clean water? Organizations like Charity Water take your donations and turn them into wells of clean water in places where people are currently drinking stagnant water out of swamps. If education is more your thing, Pencils of Promise takes your donations and spends 100% of them on education. For $250 you can educate a student and for $25,000 you can build a school. If neither of these float your boat, that’s OK, these are just two of about a zillion worthwhile charities that would love to use your money to make the world a better place.


I don’t need to tell you about all the things you can buy for yourself and your loved ones with the money you have left after building your emergency fund and paying off your debts. I’m not foolish enough to think you haven’t been dreaming about that Rolex, or Porsche, or trip to Europe.

After all, what good is Financial Freedom is you’re not free to treat yourself?


Regardless of what you decide to do, please do something to celebrate your Financial Freedom. After all, you’ve earned it. You’ve reached the pinnacle of your financial journey. Enjoy the view from the top of the mountain.

Thank you for reading this series. If you want to see all posts, sign up for our newsletter and download the entire series with exclusive bonus content in our FREE book What to do With a Windfall (click here). 

You May Also Like

Part 1: It’s Called a Tax REFUND For a Reason

Part 2: Get A Guaranteed Return

Part 3: The Emergency Fund: An Umbrella in a Downpour


Ours. Not Mine, Not Yours

The 1st Step in a Healthy Marriage – Combining Finances is a Decision Worth Making Together (See Part 1 Love, Money, & Marriage). 

By Clay & Nicole Akers (who will celebrate 16 years of marital bliss on April 1, 2016)

According to, June, August, September and October are the most popular months for weddings – that means, we’re rapidly approaching “Wedding Season”. If you and your significant other are one of the lucky couples looking to tie the knot in the coming months, there is an important wedding preparation you need to be sure not to overlook.

The average cost of a wedding in the US is $30,433 ( and that doesn’t include the honeymoon. It also doesn’t take into consideration the cost of all the time the couple (and the mothers-in-law-to-be) spend researching and planning – and let’s face it, daydreaming about – the wedding.

However, before you and your SO go dropping 30 Grand to celebrate your union, you should schedule some time together to discuss one of the most important parts of your lives together – your finances.

If you’re already married, please keep reading, you just might learn something, too.

Our Money

It may sound a little old-fashioned, but it has worked for us for 16 years: After you’re married, there is no “His Money” and “Her Money”, there is ONLY “Our Money”. That’s right, everyone’s paychecks get deposited into the same account. After you each said (or will say) “I do.”, the preacher said (or will say) something to the effect of “You are now one.”

One couple, one account.

Please also note that we said, “After you’re married…” None of you want to think about it during this time of premarital bliss, but sometimes things don’t work out. Even if you’re living together currently and even if you’ve been living together for a while, DO NOT COMBINE FINANCES UNTIL YOU’RE MARRIED.

Honey, We Need To Talk

Now that we’ve got that part out of the way, let’s talk about what the two of you need to talk about. Many of these things are things that we wish someone would have told us to talk about before we got married.

We have no doubt that between the two of you, one of you is more inclined toward finances than the other, and one of you is more inclined toward relationships than the other. These two may be the same person, or one may be the money person and the other the relationship person – regardless, this is one of those conversations that both the non-money person and non-relationship person are going to need a little time to prepare for. So, take a minute – right now – and schedule an appointment with your partner to spend a couple hours talking about money. Put it on the calendar, and agree to a time limit. Also, schedule an activity to do together when you’re done – my (Clay) suggestion is to make dinner reservations afterward, so that you have somewhere to be at a certain time and therefore a hard stopping point.

The Talk

Now that the two of you have agreed to meet at a set time – for a set amount of time – in a comfortable, and at least semi-private location where the two of you can speak candidly with minimal (ideally without) interruption, you need an idea of what to talk about.

The goal of this discussion is for each of you to get an idea of what the other considers “normal” where money is concerned. As with most of us, we have a hard time defining our Normal because we don’t really ever think about it, and we probably have very little with which to compare it.

Understand that each of us makes decisions based on what is Normal (that is, our version of Normal), and we very seldom think outside of our Normal. Until, we marry someone to whom our Normal is their Strange. Don’t be offended, though, because to you their Normal is your Strange as well.

However, when Normal = Strange and Strange = Normal, that’s when struggles occur. And, while that first post-marital fight is sure to happen, neither of you wants it to be over something preventable. That is why you two are having this discussion in the first place.

Now that you understand the goal, you can tailor the topics below to your individual situations. Here are some things we suggest you cover (this is by no means an exhaustive list):

  •      How much money do you earn from your job?
  •      Do you have a retirement account? If so, do you contribute to it regularly?
  •      What is your philosophy about debt?
  •      How much debt do you have?
  •      How many credit cards do you have?
  •      Do you have a car loan or lease?
  •      Do you have student loans?
  •      Have you ever filed bankruptcy? If so, why?
  •      Have you ever owed someone money and not paid them?
  •      What is your credit score? (If you don’t know, use a free resource like to find out.)
  •      Do you pay or owe child support, alimony or are your wages garnished?
  •      When was the last time you balanced your checkbook?
  •      Do you maintain a written budget?

This should be enough to get a conversation (and hopefully not a fight) started between the two of you. It should also give each of you some insight into the person you are signing up to spend the rest of your life with. If anything you learn gives either of you pause, or reason to reconsider your decision to get married, slow down and remember that if each of you is willing to enter the marriage with an open mind there is no reason you two cannot create a new Normal together.

He Said / She Said

He (Clay) Said:

Nicole and I met in college and got married about 11 months after we received our Bachelor’s degrees. We talked about a lot during the two-and-a-half years that we dated, we even went to some pre-marriage counseling, but we never discussed finances. Here are some of the things that we learned the hard way, because we didn’t have a financial discussion before we got married.

I knew Nicole dealt with identity theft (probably before anyone even knew what that was) and that her credit score was very important to her. As for me, I spent the first couple years of college collecting free t-shirts, um… I mean credit cards. I also spent more time spending money on those credit cards than I did paying the bills, so my credit was less than perfect – but I had made a life change in the several weeks before Nicole and I began dating. It was really embarrassing when we applied for our first mortgage just a couple months after getting married, and I had to explain the blemishes on my credit report to the mortgage company.

Shortly after I got my first job at 16, I opened a checking account at my parent’s bank. I kept this account throughout high school and college and even into marriage. The problem is that despite the fact I had a BS in business, I had no idea how to balance that checking account. So, me, Mr. Smarty-pants-new-husband, had to ask his wife how to balance a checkbook. It was a very humbling experience, and she was (and still is) a very good teacher.

Within weeks after graduation, I went out and bought my first (and only) brand-new car. I tried to discuss the purchase with Nicole before I went through with it – we were already engaged, so I knew this vehicle and its debt would be a part of our marriage. She was happy for me to have a new car, but I could tell there was more that she wasn’t saying. It turns out that she was apprehensive about taking on $16,000 in debt before our “adult” lives had really begun, but since we weren’t married yet, she didn’t feel like she could say anything. In retrospect, at the time I was hoping she would speak up and tell me not to buy the car.

Unfortunately, these are not the only stories like this that I can share; I could fill a book or two. Now, it’s Nicole’s turn.

She (Nicole) Said:

I remember the new car, and feeling confused at whether or not I had a voice in the matter since we weren’t married yet. At the time I didn’t have a car, and I knew that I would need one too. The rhetorical questions I was asking myself were: Don’t rich people drive new cars? How can we afford this? I didn’t know any rich people, so I knew we weren’t among them, but I did know that this would affect us financially. That was a lot of money. Could we pay it back? I should have been able to share these thoughts with the man I planned to spend the rest of my life with, but I found myself tongue tied. I wish we would have talked about the new car before “we” inked the papers. We would figure it out, after we were married.

The motorcycle was another consumer debt we would figure out after marriage. My heart wasn’t in it, but my head said yes. Clay wanted a Yamaha V-Star. It was souped up with foot controls and sweet amenities. I didn’t like the drain on our finances, but I could stomach it if the payment didn’t exceed $150 per month. In my head I was good with $125, but I suggested the highest end of my comfort zone. When we went to sign the papers the monthly payment read $152.46, and I was not willing to sign. I was clear. My comfort level was $150, not $152.46, and there was no way I was going to sign any papers allowing anything different. I’m kind of hard core like that. Clay was friends with the salesperson and they were talking manspeak with their eyes. The chest bump, the head nod had already taken place. This is a done deal; right, Bud? The salesperson politely excused himself so that we could talk. In the end I signed the papers while swallowing hard to keep from puking. I grew to hate that motorcycle with each payment and it changed our relationship.

Clay’s thoughts: Wow! I can’t believe she still remembers the payment amount 12 years after we sold the bike. That’s my girl. I can still remember the sinking feeling when, after hours at the dealership looking, test-riding, and negotiating, Nicole turned to me and said, No. That’s more than I’m comfortable with. I said $150.00. I should have listened to her and walked away. Instead, I talked her into it, saying I’d give up Dish Network if I could just get this bike. It was a problem in our marriage for the next two years until we sold the bike. (I lost interest in it and stopped riding it a year prior to selling.) For the record (and my pride), there was no chest bump.

Nicole’s thoughts: Okay, I concede, there was no physical chest bump, but there was male comradery, and extra pressure pressure to sign. I felt like a third wheel, when I was one of the people signing the papers.


Over the years we have learned that money changes relationships. If our relationship is to stand the test of time then we must have some non-negotiables in place regarding money. We agree before the purchase is made or we don’t spend the money. If one has to convince the other too strongly we have learned that the best thing for us is to step back and not make a heat-of-the-moment decision that will change the course of our finances, and our relationship for an extended period of time.

For those of you who are looking forward to tying the knot, whether in a week, a month, or a decade – heck, even those of you who are already married – schedule a time with your Sweetie to discuss how you each view money. We have no doubt that you will learn valuable information about each other, and your marriage will benefit as a result.

An abridged version of this article appeared on


Save 2016 Before It’s Too Late

     Wait. What?! Does that say Save 2016 Before It’s Too Late? Too late for what? 2016 isn’t even half over.

That’s right, we’re only a few months into the New Year, but you must act now if you want to Save 2016. I’m not saying that the whole year is about to be lost. What I am talking about is there is no better time than now to start your savings plan.

     But, I’m just not very good at saving money. I’ve tried saving and just never get anywhere before I have to spend what I’ve saved. Where do I start?

Many people get a pay increase at the start of the year. If you’re one of those people, congratulations! This a great way to start your savings plan. You are already accustomed to living on your 2015 pay, so keep living on that amount, and save the extra.

For others, it may take a little more work and a little more sacrifice to make your 2016 savings plan happen. (We will get to that a little later.)

     The word “plan” has already popped up three times in this piece. Is that important?

Let me pause here for just a minute. Probably the most important part of saving is having a plan, so let’s talk about that. Zig Ziglar said, “If you aim at nothing, you’ll hit it every time.” That is especially true when we’re talking about things that take a lot of discipline – like personal finances.

If you aim at nothing, you’ll hit it every time.

– Zig Ziglar

Now, let’s be clear, you don’t need an elaborate plan to be a successful saver. You just need to make a plan and stick to it. To get you started, I created the My 2016 Saving Plan worksheet. Before you go fill that out, though, let’s talk through it.

Success Starts with a Plan

The first thing required with any plan is commitment. This is your plan. Own it.

How much do you want to save? Be specific. Specific.

You want to save enough to go on cruise? Great! How much does the cruise cost?  Don’t know? Google it. While you’re on that cruise, what are you going to want to do? How much does that cost? Google that too. Add up all those costs and now you have your number.  

You want to save enough to buy the most awesome Christmas presents your family has ever seen? Great! How much do you think you’ll need? Depending on your family situation, this might take more than Google and a calculator. You want to buy your kids the hottest toys for Christmas 2016? Well, you’re going to have to estimate. Do your best, add up all the expenses,and, Voila! you’ve got your number.

You want to have a fully-funded emergency fund? AWESOME!  How much are 3-6 months of your household’s expenses? Experts recommend that the less “stable” your job situation, the more you need in your emergency fund. For example, a salaried employee that has a good job with an established company can probably get by with three or four months worth of expenses set aside, while someone working on 100% commission will probably want at least six months of expenses in reserve.   Look back at your bills for the last 3, 4, 5, or 6 months – don’t forget things like groceries, school tuition, daycare, and gasoline (even though you may be out of work, you may still want to keep the kids in daycare while you’re actively looking for a job). I’ll stop here on this because an emergency fund could be a whole article by itself.

Now that you know how much you want to save, when do you need it? You’ll need money for a summer vacation much sooner than you’ll need money for Christmas gifts, and you need an emergency fund yesterday, so some target dates are easier to determine than others. Be as specific as you can, and think about any lead time in your plan. You don’t want to set December 25th as your target date on buying those Christmas presents, rather you may want your target date to be in late November to allow you to have the money when you can get the best deals. Same goes for vacations, you probably don’t want to buy your plane tickets the day you leave.

You’ve got your Amount and your Target Date. Now, write out your Purpose. Be specific and use language that will keep you motivated to stay on track when things get tough – because they will.

If you’re saving for that cruise don’t put “Cruise” as your purpose; it’s way too bland and not nearly enough to get you through the rough patches. Instead, think about why you want to go on the cruise and/or what you want to experience. Maybe something like, “To take a Caribbean cruise and experience the sights and sounds of Jamaica and Grand Cayman. To snorkel around a coral reef and enjoy discovering marine life that I’ve only seen on TV.”

If your goal is to buy Christmas presents for your family, don’t write “Christmas presents”. You will undoubtedly get to a point in the year that you will want to sacrifice your savings plan for something more immediate, and you will need more than “Christmas presents” to keep you focused. Why do you want to buy those Christmas presents? You want to see the faces of your children and/or grandchildren light up with delight when they realize that they will be the envy of the neighborhood/school when they get to show off what you bought for them. Write that down. Use their names. Try something like, “To see the joy on Katie’s face – and hear her squeal with delight – when she realizes that I bought her the ‘it’ toy for Christmas.”

In like fashion, don’t just write “Emergency Fund” if that is your goal. An emergency fund is an insurance policy that ensures you and your family will have some cushion and be able to continue living as you’re used to if you should lose your job or if some other financial hardship befalls you. A better Purpose may be something like, “To create a financial security blanket that will act as a lifestyle insurance policy for my family should any financial hardship come our way.”

The next step is the most important step – and it’s the hardest one. You have to start. When are you going to start? Write that date in the blank – and set it in stone. You WILL start on that date.

Starting may involve more than making a deposit. Think about what it will take for you to Start your Plan.

Do you need to open a savings account? If so, how soon can you make it to your bank to do so? Can’t make it during business hours? Many banks will allow you to open an account online. Check your bank’s website to see if you can open an account online, or find a bank that will allow you to do so.

Do you need to create a monthly budget so you know how much money you have to save? (Hint: Yes, you do need a monthly budget so you know how much you have to save. You can find some great budgeting tools on the Internet – You can even download our free budgeting tool here.) This step is going to be especially important for those people who did not see their pay increase at the turn of the calendar. If you want to save more in 2016 than you did in 2015, you need to plan how you will spend your money differently. Take some time and think through a monthly spending plan – and do this at least once each month.   

Now that you know how much you have to save, and how much you need to regularly deposit to achieve your goal, determine precisely how you are going to do it. Notice, I said “regularly deposit”, you need to commit to making regular deposits on a schedule. My advice is to automate the savings plan to the extent possible. An easy way to do this is to set up a regular transfer from your checking account into your savings account with online banking. First United’s online banking makes this very easy. Another way is to see if your employer can split the direct deposit of your payroll into more than one account. That way you can have your savings amount go directly into your savings account without ever hitting your checking account – that way there is less temptation to spend it.

Up to this point, we’ve been talking about saving for a purchase or emergency fund, but retirement is another very worthwhile goal. Why not take this opportunity to either start contributing to a retirement account, or increase your contributions? And, don’t think this has to be either save for a purchase or for retirement. If you adjust your goals and your budget, you may have enough money to do both.

Again, regularly contributing funds toward your goal is the only way to ensure you’re going to succeed in achieving your goal. Determine your savings schedule – AND STICK TO IT!

Keep yourself motivated throughout the year by creating milestones and measuring your progress at those times. I suggest four milestones: Quarter-way (half way between your start date and your Half-way Point), Half-way, Three-quarter-way (half way between your Half-way Point and your Target Date), and finally the Target Date – the date you will reach your goal.  

When you reach your goal, I recommend rewarding yourself in some way to congratulate yourself for making it all the way to the goal. Yes, reaching the goal will be quite a reward, and maybe the goal is to make a rewarding purchase, but you need a more immediate reward. Your reward can be small, but make it meaningful to you. Take yourself out for ice cream, or to a movie on the day you reach your goal – after all, you worked hard to get there and you deserve it.

OK, so what happens if you’ve read this far and you don’t think you have any money left to save? Well, you’ve read this far, so you obviously want to start saving. Maybe you just need to look at saving in a different way. Check out this article about my friend Hannah, then come back and read this article again with new perspective.

Now is the time to take action and Save 2016, before it’s too late!

Make Change Make A Change

Many people struggle to get their personal finances in order. Compounding the problem is the sheer number of late-night infomercials featuring financial “gurus” selling gimmicks to get rich quick … “But you must act NOW!”

But what I discovered several years ago is that getting your finances in order is not about getting rich quickly; in fact, it may mean just the opposite. Even graduate school didn’t provide me with a formula to save as useful as the one a loved one gave me when she was ready to retire at age 70.

Her formula is simple to understand, but very tough to implement. And while it isn’t anything new, it’s probably something you haven’t tried before. And, it’s definitely not something you’ll find on an infomercial!


Hannah worked hard all her life, but never made a lot money. I think she told me that in more than 40 years of working, she never earned more than $30,000 per year. And, many of those years, she didn’t make anything close to that. For much of her working life, Hannah was a single mother raising her youngest daughter.

When Hannah was looking to retire, she invited me over to her house after church to ask for some advice on whether or not she could afford to retire. She began by telling me her story about the jobs she’d had and the ways she had worked and saved to get through the tough times.

She had a steady job in a factory from the mid-70s to the early 80s, but with the advent of automation, her position was no longer needed and she was laid off. Times were tough and jobs were scarce, so Hannah went looking for anything to bring in money. She cleaned offices. She cleaned houses. She even got a job cleaning rooms at a local motel. Eventually, she found a steady job and held it for nearly 20 years, and that was the job from which she was retiring. At the end of her story, Hannah pulled out her account statements.

She had a balance of over $200,000 in the bank!

“Wow! $200,000 is a lot of money, especially based on what you told me about your work history and about the years when you didn’t have a steady income,” I said. “Did you get a settlement of some kind? Or did you save all this money yourself?”

“I saved it all myself,” Hanna replied. “It wasn’t always easy, and I didn’t always have much to save, but I made myself save something out of every paycheck, every week.”

Hannah told me that when she worked at the motel she would pick aluminum cans out of the trash so she could sell them at the local recycler to supplement her income, which was a necessity. Many of these times, she would only have a few cents left over after paying bills and buying food and gasoline. But, Hannah made those cents matter. She made a habit of making a deposit into her savings account each and every week. Each and every week. Period.

Hannah would deposit a nickel, a dime, or a quarter into her savings account because that was all she had. Yes, you read that correctly; she would go into the bank, fill out a deposit slip, take it to the teller, and deposit a nickel into her account.

Many of us would say depositing a nickel wouldn’t be worth the time, effort, or gasoline, but Hannah would disagree.

I have to admit it’s not the time-money-gas issue that I would have had a problem with. No. My problem would have been much, much worse. I would have been embarrassed to go into a bank with only a coin or two to deposit into my savings account. Simply, my problem was Pride. I would have been too proud to admit that I had nothing to save but a nickel.

But, Hannah knew the importance of discipline and habits. She knew it was more important to reinforce the habit of going to the bank to make a deposit each week—even if that deposit was a nickel, dime, or quarter—than it was to worry about what the bank teller might think of her meager savings.

Hannah admitted she had to dip into that savings from time to time, but she always paid herself back. She effectively made loans to herself and put herself on a strict repayment plan. When she bought a car (with cash), she paid herself back. When she gave each of her grandchildren $2,000 for their high school graduation, she put herself on a repayment plan. When she went on a two-week vacation to Europe and bought souvenirs for all of her kids, grandkids, and kids-in-law, she put herself on a repayment plan. And Hannah made sure she never missed a payment on any of it—all while maintaining her habit of making deposits into her savings account each week.

Now, it doesn’t take a math whiz to figure out that it would take several lifetimes for anyone to save $200,000 by putting $0.05 or even $0.25 into an account each week. Hannah did eventually earn more money, and she increased her savings. However, she will firmly tell you that she increased her savings substantially, and well before, she increased her lifestyle. She never wore the newest styles. She never drove a “cool” vehicle. She has probably never seen the inside of a Starbucks, and would never drink $4 coffee. But now she is retired, living in a paid-for house, driving a paid-for car, spoiling her grandchildren and great grandchildren, and hasn’t had to touch the principal of the $200,000 she has invested. And she STILL deposits money into her savings account each week.

Hannah’s Financial Formula: S > P = $
(If your Savings is greater than your Pride, it will equal a financial return.)

My hope is that this real-life example will inspire you to never feel like what you have to save isn’t “enough” or that it won’t make a difference. Over time, a little adds up to be a lot!

When I first wrote this article, the woman I refer to in this story as Hannah was still alive, so I gave her that pseudonym. I also referred to her as both a customer and a friend; in reality, she was much, much more. You see, Hannah, I mean Anna was my grandmother. She was a wonderful, wise woman whom I love very much. I disguised her name because she swore me to secrecy when she asked me to look over her finances to help assure her that she could afford to retire.

Grandma went home to be with the Lord earlier this year, so I know I’m not betraying her confidence by sharing her story. She would be mortified if I shared this story while she was alive, but I know she would want you to have this information. More than that, I know she would want you to start doing this today.

An earlier version of this article was featured on