Monday, December 17, 2007

Getting rid of cable/satellite

I admit it....I like TV. I like it a lot. I use it to relax late at night, to start my mornings with a cup of coffee and the news, and to stay current on the latest hit shows like The Office. But it kills me to pay over $50 a month for this privilege.

This week, I've been thinking about how I could reduce my expenditure on TV programming, while still having enough channels to scratch my TV itch. One caveat: I won't even consider a solution that doesn't include a DVR.

Here's what I have now:
Dish Network "America's Top 100" with Locals
HD enabled w/ DVR
Total monthly cost: $55.

After exploring several options, here is what I have decided to go with:
  • Samsung SIR-T150 (HD tuner/receiver) - bought for $35 (including shipping) on ebay
  • Silver Surfer HD Antenna - Included as part of the ebay deal, but these can be found for about $10 on amazon.
  • DVR subscription - $6.95/month. ReplayTV 5040. (The normal monthly rate is $12.95, but I get a discount since I also still have an [inactive] Panasonic showstopper 2020 on my account qualifying me for the multiple unit discount.)

This solution will allow me to receive 6 channels in HD (for watching live) or to record them in Standard Definition (via my DVR).

My Total Savings: $48/month

If you are not a gadget geek like me, and don't have a couple of DVRs sitting in the closet, I saw plenty of Tivo Series 2 machines on Ebay/Craiglist in the $50 range. Those will require a $12.95/month service charge.

Had I started from scratch, it would have been:
$35 ebay for tuner and antenna.
$50 ebay/craigslist for Tivo
$12.95 monthly for Tivo

Curious as to whether you could receive HD channels over the air? Check out your address at and find out.

Tuesday, December 11, 2007

Using a credit card for purchases less than $1

It seems that I'm always given weird looks by store clerks and friends when I pay for an inexpensive item (something less than a dollar or so) with a credit card. I understand, of course, that the store owner may have to pay a flat fee + % on the transaction, but I doubt the clerk knows or cares about that.
To me, using a card on these types of small transactions makes perfect sense from the consumers' perspective. Here are some advantages:

  1. I don't have to get back a handful of coins.
  2. It slightly reduces the purchase price (via cash back bonuses).
  3. I don't have to go to the ATM constantly. ($100 in cash can last me months!)
  4. Keeping all of my daily purchases on the same card can help answer the question, "Where did all of my money go?"

That being said, this only makes sense if you are paying off your "daily spending" card at the end of every month. If you aren't doing that, you're probably better off paying cash.

Friday, November 30, 2007

6 ways to save $3900 per year on your family's groceries

When Benjamin Franklin said "A penny saved is a penny earned" he was right. But that's because good ol' Ben lived before the 16th amendment to the constitution was passed in 1913 -- the amendment that gave our federal government the power of Income Taxes. So these days, if you are in a 30% tax bracket, a penny saved is worth about 1.43 pennies earned. So if you or I can save $1000 a year, it is the equivalent of earning an extra $1428!

Which brings me to my point. Coupons.
To be specific, let's talk about grocery coupons. I realize some consider them to be archaic in our internet-connect world, but they are a powerful tool for reducing your expenditures (effectively increasing your income).

Consider this. In a typical month, I purchase about $150-$200 worth of groceries for just myself, a single individual. These are groceries I have to buy regardless of whether I have coupons or not. However, by just clipping the coupons from my Sunday paper I can easily save $75 or so from that bill. That's $900 a year in savings, and I'm just a single person. And to my point earlier about income taxes, saving $900 is equivalent to earning nearly $1300.

For a family, the savings are magnified even further. If a typical family of 4 is buying $150/week ($7800/year) of groceries, a savvy couponer could cut that in half. Saving $3900 a year! Remember, in a 30% tax bracket, that's like earning an extra $5570!

Think I'm exaggerating? I'm not. Here are tips to help you take a bite out of your grocery bill.

1. Purchase a Sunday paper and clip coupons for items you already need to buy. Don't fall into the trap of buying stuff you don't need and won't use just because it is inexpensive.
2. Go to stores that double or triple coupons. It's a great feeling to turn a $.75 coupon into a $2.25 coupon just by walking into the door. Stores typically post their coupon policies at the customer service desk, but don't be afraid to ask.
3. Match your coupons with weekly store sales. If an item is on sale for 50% off, matching that sale with a coupon will often make the product nearly free! See below for sites to help you find these deals.
4. Don't be too brand loyal. If you have a coupon for a different brand of Ketchup which makes it 1/3 of the price of your normal brand, give it a try.
5. If you find a good coupon, get extras! There are plenty of ways to do this. The easiest way is to use a service like "" which allows you to order as many specific coupons as you like. Also, if you find lots of valuable coupons in a certain week's paper, you can always go buy another paper. Definitely worth your $1.50.
6. Print grocery coupons for free online. There are lots of online coupon sites that allow you to print grocery coupons. However, almost all of them pull from the two major sites: and
You can also find some good coupons for Pillsbury products on

Websites to help you along the way: - Find a forum specific to your local grocery chains and share weekly deals with other users. - Check the "Grocery Deals by State" section for a list of the best weekly grocery deals from your local stores.
- Coupon clipping service that will mail you any coupons you need for a moderate fee.

OR join a yahoo group of like minded savers:

Tuesday, October 9, 2007

No time for another degree? Free online Berkeley and Stanford classes

Every now and then, I'll find something online that I've seen before, but forgotten all about. That happened this week when I rediscovered the massive webcast directory offered free from the good folks at University of California Berkeley. This directory offers all of us the opportunity to take a class from one of the top-rated schools in the country from the comfort of where ever your internet connection finds you, without paying a dime.

There is a similar offering from Stanford (though only audio from Stanford, no video that I can find) available for free download from iTunes.

While there don't seem to be many related to finances or business, I'm spending an hour right now watching an "Intro to Astronomy" lecture (one of my all-time favorite college courses).

Hundreds of webcasts and podcasts from Berkeley available here.

Free podcasts from Stanford via iTunes.

Audio and Video classes from MIT.

Tuesday, October 2, 2007

How to calculate: Municipal bonds vs. Federal bonds

Municipal Bonds (or Muni Bonds as they are often called) are bonds issued by a city or county to finance the local budget, usually denoted for specific projects like new schools. Muni bonds are extremely low risk for the investor, since cities can always raise taxes to raise money. (However, there was a famous defaulting of muni bonds in California in 1994.)

The great thing about municipal bonds is that if you purchase them from the state in which you live and pay taxes, they are state tax free most of the time . (Be sure to check the individual bond you are buying.)

Like other bonds, your profit on a bond is determined by two pieces: the stated coupon rate (the interest rate they pay you), and the price you paid for the bond relative to the par value (usually $100). This is usually calculated for you and stated as the Yield to Maturity, or YTM.

Should you buy Muni bonds or Federal bonds? Here's how to figure it out:

First you need to know your federal and state tax brackets. Pull your tax return from last year (you should keep those somewhere safe and organized) and find your taxable income. Then consult the "tax schedule" for the Federal and State taxes. (I've linked the federal schedule. You'll have to google a term like "North Carolina tax schedule 2007" to find for your specific state.)

For example, if you live in NC and had $50,000 of taxable income in 2006, that puts you in the 25% federal bracket. That also puts you in the 7% NC state tax bracket. That's a total tax bracket of 32%. To compare the return on a federal govt. bond to the return on a muni bond, simply plug in the following formula.
Muni rate / (1- tax bracket)
So if you have a choice between a muni bond paying 3.5% and a federal govt. bond paying 5.4%, which should you choose?
The Muni bond is equal to a taxable bond paying .035/(1-.32) = .035/.68 = 5.14%
Therefore the federal bond is better for you.

However, if you were in the 40% total tax bracket:
The Muni bond is equal to a taxable bond paying .035/(1-.40) = .035/.6 = 5.83%
Since 5.83% is better than the 5.4% you could get from a federal bond, the muni would be better for your situation.

NOTE: This assumes you are thinking of holding federal or muni bonds in a taxable account. If you are considering purchasing bonds for a non-taxable account such as a Roth IRA, you should not consider munis, because interest payments on all types of bonds are tax free.

Monday, October 1, 2007

Teachers: Use a "Summer Savings" Account and save $34,000!

A friend who is a elementary teacher in our local public school system recently told me that most teachers opt to receive their salary in 12 equal payments. However, they could opt to receive it as 10 equal payments, and then receive nothing over the summer.

I ran the calculations, and found that for a teacher earning 34k/year, it would save $144 to take the 10 payments instead of 12 and set aside 1/6th of their salary each month into a "summer savings" account earning 5%. Assuming a 3% salary raise each year, at the end of 30 years, that slight change will have saved $14,000! That's not chump change!

If you rolled the yearly savings into a Roth IRA, at the end of 30 years (assuming 10% interest), you'd have $34,000, tax free!

To make it even easier, most banks and credit unions will do this monthly deduction into a sub-account for free!

Sunday, September 30, 2007

The Rule of 72. How long will it take to double my money?

There is a simple mathematical rule that I learned as a kid that I have never forgotten -- the "Rule of 72." This is a very simple way to find out how long it will take to double your money at a certain interest rate.

Here's how the rule works.

Suppose you want to know how long it will take to double your money at 10% interest. 72 divided by 10 is 7.2. Therefore it will take 7.2 years to double your money if you are earning 10%. If you are earning 7%, it will take a little over 10 years. (Because 72 divided by 7 is roughly 10.) There is no need to figure the exact calculation, because this rule is only for estimating -- but what a powerful little rule it is.

Thanks to several readers who pointed out that this rule is mathematically derived from the "natural log" of 2 which is 0.69. So, it could technically be the "Rule of 69," although 70 or 72 seems easier for quick estimating.

Friday, September 14, 2007

Previous Performance is not an indicator of Future Results

Have you ever noticed in small print at the end of every mutual fund commercial or magazine layout they say "Previous performance is not an indicator of future results."? Ever wonder why? While they may be legally bound to do so, there is also quite a bit of mathematical truth to that statement. Let's take one of my favorite examples, offered in Larry Swedroe's "Rational Investing in Irrational Times" book. (A great read, by the way.)

Imagine giving a room full of 1000 kids (or adults for that matter) a coin and telling them to flip it and try to get heads. Half of them would get it right. Taking the remaining 500, 250 could repeat their performance -- getting heads twice in a row. Continuing down this path, half of the kids would flip heads each time taking our winners down to 125, 62, 31, 16, 8, 4, 2 and eventually the final winner on the 10th flip. So did the kid who flipped heads 10 times in a row demonstrate skill at flipping heads? No, his odds of flipping heads on his next flip are still 50/50, just like everyone else. He just illustrated a statistical fact. That random acts produce a bell shaped curve. A very small percentage of kids flipped almost all tails, and a very small percentage flipped almost all heads, but the vast majority were somewhere in the middle. The problem is that at the beginning of the game, there would have been no way to identify the "genius" with the head-flipping "talent."

So while I agree that some investors have more skill and prowess than others, scores of academic studies have shown that chasing the "hot hand" on Wall Street is an unwinnable game for multiple reasons, but here are the two biggest:

1. Previous performance was enhanced by chance, and not purely a result of skill.

2. As more money flows in due to success, the manager must find more and more opportunities. The more money the fund manages, the less likely they will be to beat their benchmark.

All of that to say that you really should pay attention to the mutual funds when they say "Previous performance is not an indicator of future results." It's quite true.

Thursday, September 13, 2007

5 Questions to Consider When Choosing a Mutual Fund

1. What are the goals of the fund?
Before you select a mutual fund, you first ought to know what your goals are and make sure you select a fund with similar goals. Obviously, every fund's goal is to make a profit for the investors, but how much risk you are willing to take and what industries you want to invest in are up to you. There are many fund families that now offer "target retirement" or "life strategy" funds which change with you as you get older. This is a great way to simplify your diversification if you don't feel comfortable doing that yourself.

2. How much are the fees?
Every mutual fund is required by law to disclose their fees to you in the prospectus (that booklet you are supposed to read before you invest). Typically funds come in two flavors, "loaded," and "no-load". A "loaded" fund will typically charge a fee either when you buy ("front-end loaded") or sell ("back-end loaded") the fund. This comes out of the money you invest. Typically these fees are about 5%.
The second type of fee is the yearly fee the fund charges to be a member of the fund. These fees can range from 0.05% up to 3%. There have been several academic studies to show that the only accurate predictor of which funds will produce better returns for their investors, are the ones with the lowest fees. Makes sense, right? If all managers basically perform the same over time, you, as an investor, will do better with the one that charges you less fees.
The third, and often overlooked source of fees comes in the form of transaction fees. While in a sense these are transparent to the investor, the effects are felt nonetheless. As the fund managers buy and sell the stocks in the portfolio, they create expenses both in the form of trading costs as well as taxes. So funds with a higher turnover percentage (for example, 50% would mean they turn over half of their portfolio every year, holding an average stock 2 years) would generate more of those fees, and create more drag on your total return as an investor than a fund with a 10% turnover.

3. Is previous performance an indicator of future results?
The short answer is, no, they are not an indicator of future results. And even though every fund is required by law to remind you of that, people pour billions of dollars every year into the latest "hot" fund. Again, the only proven indicator of better future results in the future is lower fees. Interestingly enough, the one rule that does seem to hold true is that poor performance over several years does seem to be an indicator of poor performance in the future.

4. How does this fit with the rest of my portfolio?

This is a crucial decision. When I was a younger, less experienced investor, I thought I was diversifying my portfolio because I had 4 or 5 mutual funds. However, I had no idea how those funds fit together, and how it affected the overall picture known as my "portfolio." Each fund will list in their prospectus the percentage they invest in each type of stock and bond, and you should track the percentage of each in your overall portfolio. Furthermore, you should have targets for Domestic and Foreign equities, Small/Mid/Large caps, and Bonds. There are various guides for helping you decide your allocations, but mostly it is an individual decision based on your beliefs about the market and your financial picture (such as when you will need to begin withdrawing money).

5. Would I be better off in an ETF?
ETFs (Exchange Traded Funds) have come on the scene in the last few years and made quite an impression. Although they act much like a mutual fund (holding baskets of stocks), they trade on the stock exchange like a stock. The good news is that for most small and medium investors, their is very little difference between a mutual fund and an ETF. ETFs generally track a certain index, although as time has gone on, those indicies have gotten more and more non-traditional. Because they are generally not "managed" funds (following an index instead of active management), the fees are typically lower than a managed fund, and about the same as an indexed mutual fund. Be careful, however. Just because it is an ETF, doesn't mean it is well diversified -- some can be quite narrowly focused.

Tuesday, September 11, 2007

31 Ways to Save More Money

It’s been said that a penny saved is a penny earned. Thanks to income taxes, a penny saved is actually worth about 1.3 pennies earned.

Here are 31 ways to save a few pennies (and dollars):

  1. Decorate your home with pictures you have taken. Why pay big money for framed “stock” pictures. Sort through your personal collection and hang them around your house. If you’re not a photographer, there are plenty of professional looking photos on online picture sites that are high-resolution for printing and royalty free for personal use.
  2. Get a library card…and use it. Why spend money on books? Some libraries now have online interfaces that make it a cinch to request a book. They will sometimes even request a book from another library in their network if they don’t have it.
  3. Get a “lite” internet package. I’m too internet dependent to advocate getting rid of your home internet connection all together, but most people don’t use the bandwidth they are paying for. Call your provider and ask for their “lite” plan. Often they will have a lower-bandwidth option that is unadvertised.
  4. Get a deep freezer. This is one of my personal favorites. Inevitably, my local grocery stores will have a fantastic deal on one or two items each week. With a deep freezer in my garage, I’m free to buy 10 pounds of meat, or a cart full of frozen veggies. Not only do I get at least ½ off retail, but I have them when I need them.
  5. Don’t be an early adopter. Being an early adopter of technology is expensive. Its no secret that a new gadget is more expensive when it first hits the market, but some folks just HAVE to have it. You’ve gone this long without it. Save yourself some serious dough, and wait a few more months.
  6. Join a credit union. Credit Unions, unlike regular banks, are not trying to make a profit. Their goal is to make money for their shareholders, which conveniently enough are the members. That means they are almost always a better deal than a normal bank. If you are eligible for a credit union, it’s a good idea to join. They often offer the same features as a bank, but with better rates and fewer fees.
  7. Purchase the loss leaders. Most grocery stores put out a weekly flyer with their specials. Usually on the first page, they list what are known as loss leaders. These are items the stores sell for less than they paid for them. It sounds crazy, but realize that they are willing to take a few dollar loss to get you inside the store where you will buy a cart full of groceries. Maximize your buying power by buying the loss leaders and stopping there. When used in conjunction with the deep freezer, you can stock up on meats and frozen items on the cheap.
  8. Opt for generic prescriptions and over-the-counter medications. Prescriptions and medications are one area where the “store-brand” is absolutely as good as the branded product. Both products contain exactly the same medicinal ingredients, but one is a fraction of the cost.
  9. Never pay retail. When shopping online, it is easy to find exactly the same products sold for different prices at different stores. Spending a few minutes searching almost always pays for itself. And with Google, online e-coupons are just a click away.
  10. Grow your own herbs. A pack of 99 cent seeds will provide enough basil, rosemary, sage, and others to keep your food seasoned all year long. Put extras in a freezer bag for use during the winter.
  11. Get a high-yield savings account. If you have money sitting in a savings account, there is no reason why you shouldn’t be earning as much interest as possible. Several online banks (and perhaps credit unions) pay over 5% (at the time of this writing) on savings accounts, and your money is insured by the government, just like if it were at the bank down the street.
  12. Get rid of cable or satellite. You can likely get most of the networks in pure HD over the air.
  13. Lower your credit card interest rate. If you are carrying credit card balances at a high (more than 6%) interest rate, consolidate them to a lower interest card. There are plenty of 0% cards for consolidating balances. If you can’t pay it off by the time the promotional period ends, roll the balance to another 0% card.
  14. Make coffee at home. Why spend $3 for coffee when you can make it at home for 5 cents. Even if you buy the good coffee, it is still no more than 20 cents a cup.
  15. Cook at home. Restaurants can be fun and a great place to socialize with friends, but the bills add up. A home made meal usually only costs $1-$3. Try finding that deal at a restaurant. When you do go out, use restaurant coupons and take ½ of your entree home for lunch the next day.
  16. Pack your lunch. Going out for lunch, even at $5-$7 a pop, adds up over the month or year. Packing a lunch and bringing it to work usually costs only a dollar or two.
  17. Never buy a brand new car. Most cars depreciate 30% of their value in the first 2 years. Buying a good pre-owned car with a few miles will save you thousands over buying a brand new one.
  18. Use index funds. With all of the money you are saving, it is a good idea to begin investing. But too often, new investors get sucked in by “advisers” who put them in funds with outrageous fees. Sometimes as high as 5% of the amount invested. On the contrary, index funds and ETFs usually charge only a fraction of 1% and over the long-haul have beaten most managed funds.
  19. Install energy saving CF bulbs. Now that the price of compact fluorescent bulbs have come down to about $2-$3 per bulb (if you buy a 5 pack at a chain hardware store) it is definitely worth your money to install them. They last for several years and typically use 1/3 of the energy of a normal bulb. In a house with 40 bulbs, that’s about $300 in savings per year. (40 75-watt bulbs replaced with 23-watt bulbs, average use 5 hrs per day at $0.09 /kWh.)
  20. Install a programmable thermostat. Programmable thermostats only cost about $30 at a hardware store and can save you hundreds of dollars per year. During the summer, program the thermostat to allow the temp to rise a few degrees while you are at work, and begin cooling before you return. In the winter, do the opposite. Most of these thermostats even have weekday and weekend settings.
  21. Make purchases with a credit card with cash rewards. (Steer away from ambiguous “points” systems.) Many credit cards offer rewards, but most these days have moved to ambiguous points systems where it is nearly impossible to ever cash in on your rewards. However, there are cards out there that pay cash rewards every month. Getting 1% back on all your purchases should be your minimum goal. (Of course, always pay off your purchases at the end of the month.)
  22. Don’t purchase alcohol at a restaurant or a bar. I love a good beer as much as the next guy, but paying $6 for a beer that I can buy at the grocery store for $6 for a 6-pack just doesn’t make sense.
  23. Sell some unneeded clutter on ebay. Everyone has books, CDs, clothing, and whatnot that are just taking up space. Cash in on those things by selling them on ebay. You’ll likely get more than you think (and the buyer pays shipping).
  24. Clip coupons and use them wisely. Coupons can save a ton of money on groceries and other items (and many grocery stores double or triple face values). But don’t purchase something just because you have a coupon, and make sure that the final price after coupon is worth paying. Sometimes its not a good deal even with a discount.
  25. Try store-branded items. Many store-brands are just as good as their branded counterparts. The only difference is advertising. Companies have to pay for the advertising overhead by charging more for their product. At least try the store brand. If you don’t like it, don’t buy it again.
  26. Resist the urge to spend on impulse, no matter how small the cost. Get out of the habit of purchasing on impulse. A newspaper here, a pack of gum there, a magazine – they add up to big numbers by the end of the month. If you don’t believe me, keep a log of all of your purchases for a few weeks. Another way to avoid buying on impulse is to always go to the store with a shopping list, and only get those items.
  27. Use the lowest octane gasoline recommended for your car. There is usually absolutely no benefit to buying the “premium” gasoline for your car. If you don’t believe me, read your owners manual.
  28. Get a space heater. If you are a single person or couple living in a house, don’t waste money heating the entire house all night. Place a safe, thermostat-controlled space heater in your bedroom to keep you warm and save on energy bills. Also, buy an extra blanket or two.
  29. Don’t burn the pilot light in a gas fireplace during warm months. If you read the small print on your gas log fireplace, it will tell you how many therms of energy it uses while it is not being used. It can add up to $5-$10 per month depending on gas prices.
  30. Reduce your text messaging. Most text messaging is unneeded, and at $0.15 a message, text message conversations can add up to many dollars at the end of the month.
  31. Drink tap or filtered water instead of sodas. Most bottled water is no better than tap water, and sometimes even worse because of the lack of fluoride. Get used to drinking water instead of sodas. It’s better for you and will save a bundle. If you are uncomfortable with tap, get a filtered pitcher.
For more ideas, check out a similar posting I ran across on the fivecentnickel.

Friday, June 8, 2007

Rule #1: Spend Less than You Make

Plan the Work. Work the Plan.

Before builders break ground on a new home, what do they do? They study the blueprints and make a plan for how to move forward. They don't just start building walls wherever seems like a good place! The same applies to our finances. Before you can start getting out of debt, saving, investing, and preparing for your future, you have to have a blueprint -- a plan of how you are going to get where you want to go. At the heart of this plan, there is one simple, but critical thing that must happen. It is so simple that a 3rd graders understand it, yet adults of all ages seem to forget. That rule is this:

Spend less than you make.

It is that simple. Spend less than you make.

Now I know you may think that advice is ridiculously simple and far below your intellectual level. But consider this…the average American has $9,000 of credit card debt, and that number gets higher every year. How does that happen? It happens by them spending more than they make. In other words, they have more money going out than they have coming in. Those may have been big purchases, or they may have just been lots of little ones, but it adds up just the same.

It is often so easy to forget how fast small purchases can add up. A cup of coffee, a dinner out, a trip to the movies -- none of these by themselves are big expenses. But put them together and they add up quickly. I'm sure any of us who use a credit card have experienced the feeling of looking a string of small charges and thinking "Those charges can't possibly add up to this balance!" Even I have been guilty of breaking out a calculator (ok, I admit it is more likely a spreadsheet) and double checking the figures. Over a month, small charges can add up to one giant number!

So how can we handle this situation? We have to make a plan, and we have to stick to it. Then at the end of the week or month, we can compare how our spending compares to our plan, and make adjustments as necessary.

Before you can take control of your financial life, you first need to know where you are. Think of this as a doctor examining the patient before prescribing a method of treatment. So before we can get started with a plan, we first need to do an examination.
We will start our examination with three basic questions. They are:
1. How much money do you have coming in?
2. How much money do you have going out?
3. Where is that money going?

Thursday, June 7, 2007

Dan's Bio

Dan's Bio
Dan holds an MBA from UNC-Chapel Hill and a Bachelor's in Computer Information Systems. Professionally, Dan is a Product Marketing Manager for a Fortune 100 company.

Don't Be Afraid....You Can Do This

Not too long ago I had a conversation with a friend in her mid-20s about her finances. Like a lot of people, she knew that she was not making the best financial choices. She knew that she was in debt and had no plan for how to get out. Why? Because she was afraid. I don't say that as an insult, I say it because I think a lot of you reading this can relate. She was afraid -- just like someone who would rather suffer in sickness than go to the doctor.

I understand why she, and perhaps you, are afraid of your finances. To take responsibility for your financial life takes courage. And the deeper you are in debt, the more courage it is going to take. But if you make the decision that you are going to take control, then you will. Imagine if you had a close friend who was 100 pounds overweight. It is likely that from your perspective the solution to their problem would be simple. If you could write them out a plan, it would likely say something like "eat less and exercise more." But to that person who is so overweight, the solution is not nearly as simple. To them, the problem seems insurmountable. They may outwardly say their weight doesn't bother them, but inside, they feel trapped. And sometimes their coping mechanism is to eat more. They know they should do something about their weight, but instead, they put it out of their mind, deciding it is just not something they can deal with. A few years down the road, it is likely that the friend will have gained even more weight, because ignoring the problem only allowed that problem to consume them further.

Maybe you are in debt. Maybe you are just lost in all of the financial lingo flying around, or maybe the whole thing just seems like a burden you would rather not deal with. Unfortunately, just like that obese person, putting the issue out of your mind does not make it go away. In fact, in many cases, ignoring the problem allows it to grow and grow -- until one day you are hundreds of thousands of dollars in debt, or in your 40s, 50s, or 60s without a penny to your name.

Just like you could have helped the severely overweight friend by encouraging him or her to exercise more and eat healthily, I'm here to tell you that taking control of your finances can be just as simple. But like the overweight friend, you have to decide that today is the day. Today is the day that you take control of your finances, instead of letting your money control you. Today is the day that you decide to be courageous, decide that you are smart enough, and decide take back control. Just like losing weight, the road to taking control of your finances will not be easy. There will be times you have to delay buying that thing you really want. You may have to make some significant changes that affect how much money you have coming in and going out. But you can do it. Make that decision right now. You can do it.