Less obvious financial counselors

There may be less obvious counselors or influencers who you often refer to for financial advice which you should use caution before acting on their counsel. These counselors increase your spending and can help you acquire more debt.  They don’t necessarily always have your best interest in mind.  And sometimes, they don’t even realize it.  Who are they?

Uncle Sam as a financial counselor

While the United States government wants to provide incentives to stimulate our economy, they don’t always think about the impacts to the national debt and to you as a wise money manager.  Stimulus packages, such as those for cars and houses may very well help the economy and business perform better, but they may not be the right decisions for you personally. Always keep your objectives in focus, and carefully weigh the incentive and the impacts on your personal situation before taking action.

Quick tip: If the incentive is leading you into debt, put the brakes on and reconsider.

Sales clerks and advertisers as financial counselors

Advertisers (and sometimes sales clerks) can be entertaining, but are focused on counseling you to spend money. It’s their job to find every reason in the world why you need their product. The more advertising (or selling opportunities) you allow into your life, the greater the chance you have of purchasing something.  Guard well what you take in from media as well as what environments or situations you put yourself in that could cause you to spend money.

Quick tip: Does the purchase add value, or is it a need?  If not, put the brakes on and reconsider.

Friends as financial counselors

Everyone and their brother wants to tell you about their new purchase and counsel you as to why they got a great deal and how you can too.

I’ve been wanting a big screen TV for years and I finally found a great deal at the local electronics mega store. Go check it out!

How often do you hear the following conversation take place in your neighborhood? Unfortunately, it’s probably not often.

My wife and I have started living on a spending plan and we’ve found we can save an extra $200 per month and apply it to our debt reduction plan.

While some friends are wise counselors, be careful of the advice or counsel you decide to adhere to when managing your finances.

Quick tip: Ask yourself if the conversations always lean towards spending vs. saving or giving.  If the former, put the brakes on and reconsider.

Family as financial counselors

Unfortunately, some family members haven’t always made the wisest of money choices in the past and may have continued on an unstable track into the present.  While some parents can be wonderful counselors, I caution you to not repeat the history of any money making mistakes of your family.

Quick tip: Use good judgement.  It’s often known when family members are spending happy and accumulating debt.  As is the advice with friends, determine if the conversation is spending or saving oriented.

Final thoughts

I’m sure there are plenty of other counselors that don’t exactly lead us down the best of paths even though they may mean well.   I think the key is to pay attention and make wise decisions based on your plan and what is best for you. Again, even if you’re not confronting a financial obstacle, it may be wise to visit with a counselor a few times a year and review your spending plan to establish some accountability.

Can you think of other financial counselors in which you should use caution before acting on their guidance?  If so, please comment about them.

Personal Finance Round Up

I’m pleased to announce my article, The Cone of Uncertainty and How it Impacts Your Personal Spending Plan, was included in The Carnival of Personal Finance #221 – Labour Day Edition this week hosted by Financial Highway.

A few of the articles I enjoyed reading around the personal finance blogosphere this week

• 42 Ways to Radically Simplify Your Financial Life @ Man vs Debt
• Frugal Living Isn’t Always About Trade Offs @ MoneyNing
• Buy More to Save More? You’re Doing it Wrong @ Borrow From None
• Gone Phishing How to Avoid Being Caught by Scammers @ Get Rich Slowly

Did you read other articles you liked and would like to share?  If so, please comment about them.

Something for free

Ready for some weekend fun?  Pop some popcorn and enjoy some cheap entertainment from Blockbuster.  I have an affiliate coupon to try Blockbuster Total Access FREE for 2 weeks!

Picture by Picture Perfect Pose.

“Listen to counsel and accept discipline, that you may be wise the rest of your days. Many plans are in a man’s heart, but the counsel of the LORD will stand.” Proverbs 19:20:21 (NASB)

Whether it be in finances or other matters of life, I’m humble enough to say I don’t know everything.  In fact, always on my own strength, I will fail.  I think it’s especially important to seek counsel in our finances.  There are too many temptations that are presented before us each day.

I’ve often heard Dave Ramsey mention he has a good marriage.  He and his wife have spent time with a marriage counselor in the past to make it even better.  There was not any particular issue that made them decide to go to counsel, but they decided to seek this avenue for further growth.

Why couldn’t we do that with our finances too?  Maybe debt is not a problem, or our goals seem to be getting acheived.  Ah, but are we only looking at our finances through our own eyes?  Perhaps counsel will allow us to see new paths to financial peace and prosperity.

Who do you seek counsel from today?

We all have financial storms.  The severity of the storm depends on how well we’re prepared for it.  If we don’t have money in savings and are swimming in debt the financial storm might turn into a hurricane.  However, as the unexpected storm approaches and we have 3 – 6 months of living expenses in savings we might downgrade that storm to a rain shower.

Manage financial storms

To manage a financial storm, you must become a good storm forecaster.  Financial storm forecasters see the storm on the horizon and make changes to account for what lies ahead.  Of course no one can be perfect at forecasting as you probably understand from watching your favorite weather man, but paying attention can make a dramatic difference in the type of storm you have to weather.

Anticipate changes

The first question we need to ask ourselves is: do we see clouds in the sky?  In other words, do we anticipate life changes within the next year?  Good examples of these might be a new addition to the family, moving, poor company performance where we’re employed, health complications and more.  All of these things may be good indications that we’re going to need to spend some money and we need to get prepared.

Is it really a financial storm?

After seeing something on the horizon, we then need to ask ourselves – is the storm really a financial storm?  Questions we might ask to identify a financial storm include the following:

• Is their cash on - hand in emergency savings that might be sufficient?  If so, this may downgrade the urgency.  Emergency savings is there for a reason.  Sure it was hard work building it, but it’s their to use for an emergency, so don’t hesitate when you need it.
• Is it truly a need?  In other words, can we wait several days or longer before making a decision?  If so, delayed spending may bring clarity to help us really determine a want from a need.
• Is it money required for health, shelter, food or transportation?  Generally, these areas rank highest on the family priority list.  If the expense is lower in priority, we need to try to delay the expense as discussed.

Steps to deal with a financial storm

So, we have determined this is a storm and action is required.

1. Don’t panic!

There is hope in God.  God can do amazing things when it comes to our finances by way of trusting Him.  There is a reason for this storm which may be unknown to us. Trusting God in the situation, no matter how grey or ominous it looks, will bring peace and comfort.  Pray, stop and listen for guidance!

Seek first his kingdom and righteousness, and all these things shall be given to you (Matthew 6:33, NIV)

2. Involve others who can help

We can’t be afraid to ask for assistance or counsel.  We need to seek assistance from a financial counselor or church pastor.  Believe me, having another perspective on the situation can be valuable, especially if it helps us make a decision that would prevent the use of credit cards or debt.

The way of a fool seems right to him, but a wise man listens to advice (Proverbs 12:15, NIV)

3.  Conduct serious and focused brainstorming to identify options

There are too many ideas to list and it depends on the size of the storm, but the below may be a good start if a series amount of cash is required.

• Sell a large asset such as a boat or motorcyle.
• Have a yard sale.
• Get a temporary part-time job.
• Reallcoate budget spending to account for the expense, i.e., cut out entertainment or eating out for a defined period of time.
• Slow down the debt payment plan or seek credit counseling assistance to decrease payments if there is no wiggle room in the budget
• Seek assistance from family.

A last resort

The last resort would be the use of credit or debt.  This is a hard thing for me to mention because of my strong desires to pursue debt free living, however, if health is involved or other serious issues this may be necessary.  However, we shouldn’t take this step without financial counsel.  If credit is used, the important next step is to put a debt plan in place to pay it off and get back on track.

Financial storms, while unpleasant, are a test of our faith and can help us determine quickly how orderly we are managing our finances.  The better prepared, the less severe.

What are your thoughts on steps to take to manage financial storms?  Can you think of other steps that may be important to consider?