The Biggest Loser Part 1

Would you be surprised if we told you that:

1. 2 out 3 adults are considered to be overweight or obese, and that
2. More than 1/2 of Americans say they are financially insecure.

In other words most Americans are fat and broke.

A sage family doctor once advised that losing/gaining weight was all about math. Consume less calories than you burn, you’ll lose weight and consume more calories than you burn, you’ll gain weight. Apparently we (Americans) have mastered the latter and need to work on the former. In other words, eat less, move more. Problem solved.

The second problem is not much different than the first and could be solved by another KISS principle: spend less, earn more, which is 1 of the 4 principles to achieving financial security:

1. Spend less than you earn.
2. Pay yourself first.
3. Avoid consumer debt.
4. Be a generous giver.

Spend less than you earn. Whatever amount of money you earn over some period of time, spend less than that during that same period of time. So if you earn $5,000 per month spend less than $5,000 per month. Now as simple as this sounds, not adhering to this simple principle is the fundamental cause of financial instability.

It is just like consuming more calories than you burn. Now if you just read that last sentence and you said to yourself "I don't consume calories, I eat food."; that's a potential problem.  You can't begin to know how much food you can eat daily without gaining weight unless you know how many calories are in the food you eat. You don't burn food, you burn calories. As soon as McDonald's started posting the number of calories that was in their value meals was the day that I stopped eating at McDonald's because I couldn't afford it. Prior to this, I measured the cost of the meal in dollars, now I also became aware of the cost in calories. It was a sad day.

Of course we all know how much something costs in dollars, but unless we understand how much we can spend each month and be willing to commit to spending no more than that amount we will find ourselves creating debt. So how do you accomplish this herculean task? You create a budget. What is a budget? It is simply a listing of all of your monthly expenses broken down by categories. The best way to develop a budget is to look at your expenses for the previous 2 or 3 months to establish recurring categories (i.e. mortgage, electric, water & sewer….) and amounts. (There are some really good FREE online Budget Apps) for helping you with this.) Some of those expenses are fixed as to the amount each month, and others vary. Some are needs and others are wants. As you look to manage the budget you will find that reviewing the “wants” items will be where you can most easily make changes to bring your budget in line with your goals. For example, if your mortgage is $1,500 per month, changing that is not going to be easy. Low hanging fruit will be items like dining out, 2,600 channel cable bills, etc… By the way if you have a separate category for Rita’s for the past 3 months there is a pretty good chance you are struggling with Problem #1 above (1 regular size swedish fish with chocolate custard = 550 calories). Yikes, that’s like 20% of your total allowed daily calories. We’re not judging; we’re just saying.

You can manage only what you measure, and what you measure you can improve.

So what’s the deal with the title of this posting “The Biggest Loser”?  Well, we are looking into creating a contest for our clients to see who can be the “biggest loser of debt” over the next year with a prize to the winner. Please subscribe to our blog for future details and for a discussion on the other 3 principle of financial security.

Spend less than you earn. Create a budget as both a road map and a tool for being a net saver each month. We have a lot more to say about this subject, so feel free to call or email us. As a reminder we are offering, until the end of the year, FREE Basic Financial Planning services to our clients and referrals of our clients. Go to our webpage at Your Personalized Financial Analysis and follow the instructions to get started or call us at 717.295.8881.

When to take a Multi Vitamin?

So I was speaking with one of my children who lives in Cambodia in a very rural area (I won't mention her name because I don't want to embarrass her). Being the concerned father that I am, I asked her if she was taking a good multi vitamin. "Sure" she said. Usually when she was starting to feel sick. But she didn't think they worked very well because she usually still got sick.

Okay, so let me think about this... private school from pre-k to 12th grade, 4 years at an academically sound private college (and yes she graduated, I saw her walk) and this is her take away for good health: Take a vitamin when you feel like you're getting sick? Hmmm.

But then it started to make sense to me, and I realized that she was not alone. No, I am no longer talking about vitamins, but that could be true also. What I am talking about is that Ed and I have often had a client call us about a need to review their financial situation which involved a "sudden" concern. Now the topics of the "sudden" concern ranges from how to pay for college, having enough money for retirement, is their enough money for my wife and kids if/when I die, how will we pay the bills if I become disabled, will I have enough money if I have to go into a nursing home, etc...

Now I have to tell you Ed and I always feel a little good about this new found wisdom of our clients because these are common issues that we alert our clients to quite often. Did I mention "often". Yes, good because it is very often. But that warm, satisfied feeling sometimes doesn't last long when the college fund is for Johnnie who is starting his senior year at high school, or the retirement funding is for Bill and Marsha who would like to retire in 5 years, or Francis who is now very concerned about the cost of long term care because she is having a hip replacement in 4 weeks, etc..

Just like a multi vitamin which is most effective taken well in advance of and as a preventative to getting sick, financial solutions are best developed and implemented well in advance of the time they become "sudden concerns".

For the rest of this year, Ed and I are offering FREE financial consulting and a FREE Basic Financial Plan to all of our clients and to anyone referred by an existing client. Please contact us for details at 717.295.8881, or go to our website at Crosswalk Investments (Click on "Financial Analysis" under the "About Us" section to begin creating your individualized Financial Plan.)

Now I am wondering what else I didn't teach my kids. Is there a statute of limitations for parenting?

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Disclaimer: The daughter referred to in this blog may or may not have actually said the exact words attributed to her and I may or may not have taken a little literary license.