Crewman Number 5

Robert Zoellick, the head of World Bank, an organization that offers developing countries financial and technical assistance, is stepping down after his 5 year term. And he’s saying some not very nice things. Things like a prediction that we will see a recurrence of the panic of 2008. But it’s alright. He has a recommendation. “Government bail outs.”

I wish you could see the look I’m giving him right now.

Seriously? When did bailing a company out ever end well? Sure the people working for the company have a temporary reprieve and more time to get off of the ship they should have seen sinking. But let me remind you where that bail out money comes from. Two places: our pockets and the US Mint. We’re getting closer and closer to the piles of money that Germany saw buying bread after World War I. It’s all foolishness!

I’m sorry. I shouldn’t be so hard on people. And truth be told, I’ve never made enough money in a year to contribute substantially to the government’s tax pool to consider myself in any way responsible for paying for those bail outs.

But would you like to know where those bail outs, like AIG’s $182.5 billion and Chase’s $25 billion, began? Let’s have a story time with Uncle Jack, eh?

Once upon a time, big banks decided to take unnecessary risks with their customers’ money. Things went bad, and they lost their money. When it came time for them to give their customers their money back, they didn’t have any to give! They called in all of their investment partners and said, “You give us our money!” But no one in the whole kingdom had any money. So the king said, “I’ll give you some of my money,” and he had lots of money made to send to those banks. In the process, the money became less and less valuable, because the currency kept splitting up the standard, which was used to back that currency up, into smaller and smaller pieces. And then the people went on their way, oblivious to the fact that the money they held was worth a fraction of the money they had saved. The end.

Wasn’t that a sad story kids? Well it’s true. But don’t jump off the ledge yet. There’s an easy solution: small banks and credit unions. There are rules in place that don’t afford smaller institutions the same risky practices that got those financial giants in trouble. And with a credit union, you get even more power. Not only are you a customer, your money represents you. You have a say and power in the decisions that the credit union makes. Your voice can be heard. And best of all, they join the greatness of local, small business with the convenience of a large network.

Credit unions alone won’t be able to save you from Zoellick’s “impending catastrophe”, but it’s certainly a start.

(Source: http)

DAY 1: Building a Budget

This is probably the hardest step in anyone’s road to financial freedom. I grew up with parents who were determined to teach me to budget at a young age. I was given an allowance and told to split it between savings, spending, and charitable giving. But I never really took in the lessons they tried to teach. It was just going through the motions. I never thought about why I was saving or giving or what-have-you. And that’s the way most people operate these days.

I just Googled “living paycheck to paycheck” and clicked on an article from Business Insider.

Living paycheck to paycheck is extremely common nowadays. But, did you know that this trend occurs in families regardless of how much money they make? Even after a substantial pay increase, somehow we still find a way to use it all up.

Dave Ramsey’s “Foundations” class teaches that the first two steps to becoming financially free aresavingandmaking abudget. The best part about Dave’s budget? He allows you to put a line in for money to blow! Budgeting always comes with a stigma of not getting to enjoy yourself or your money, but that does not have to be the case. You just need to prioritize. I read recently, and forgive me but I don’t have a source, that the average American spends 110-125% of his or her income. That’s nonsense. How can we possibly expect to get our national financial house in order if we can’t even govern our own?

According to the Associated Press, US consumer spending has risen .3%…in just this past April! At the same time our spending is increasing, we’ve experienced the first rise in unemployment rate since November and slowed income.

Howard Dayton, CEO of Crown Financial Ministries, wroteYour Money Map: A Proven 7-Step Guide to True Financial Freedom. In it, his first step is…can you guess? Yes! SAVING!

Saving is obviously the most important part of a budget. That goes without saying. But to get there, you need to sort out everything but that which you absolutely need. I’ll give you a tip. If that list includes anything but shelter, food, and clothing, go over it again. From there, you can determine what’s most important and what can be cut.

I’ll be doing this carefully during this trip to Poland. When I come back, I’ll show you my budget (as much as I dare). Until next time!

(Source: http)

So I’ve done it. I graduated. The diploma’s coming after this Poland trip, but for all intents and purposes, I’ve graduated. I’m in the proverbial “Real World”.

I won’t lie and say I’m overly thrilled. It was easy, living at school. Scheduled meals, one small room you have to clean and live in, the same people every day. Consistency. I crave consistency. Most of all, I crave the consistency of having something that I’m working on for a good portion of the day and school or a job fits the bill. Now? School’s over and more than a job, I need to start building my career.

But that’s what this Real World is about, I suppose. Forming your own consistency. Using your self-discipline to give yourself that activity during the day so that you’re not wasting your life away. I think the older generations call this “responsibility”? Does that sound familiar? Judging by the way I perceive many of my peers, and yes even myself, it may not sound familiar at all.

Now I’m not saying I’m a layabout by any stretch, but as soon as I got home from school, I wrote a list down on a sheet of paper to schedule my summer and give myself that responsibility. I was determined to learn more about responsibility than I ever had been, in the plan to be independent and responsible for myself in 6 months.

The foundational item for the rest of the list was financial responsibility and security.

Before this year, I would have shrugged off any questions about finance. Yeah, I knew about it, knew roughly what to do, but my apathy only led to disasters. I’ve dug my fair share of monetary holes. But this past semester, I took a class about financial freedom and stewardship, and I was actually amazed. You don’t know me well enough to know how impressive that is for a class, but I was legitimately amazed. I was amazed at what I was missing, at what I could achieve, and actually how easy it could be. All it takes is discipline.

So, in that vein, I’m going to begin a project. I’ll be forming a budget and a plan, based on the Dave Ramsey material my class was based on, and if you’re someone who follows me and cares, you can do it with me. When someone knows that they’re not alone in a pursuit or struggle, and even more so when they know that they have accountability to continue, perseverance comes much quicker.

I’m going to be reading some books I got in the class and posting reviews about them, lessons I’ve learned, and any key phrases or tips listed. I’ll also be reviewing my progress on this plan every day and trying to expand my knowledge of the subject by paying more attention to the financial world and researching financial topics that strike my fancy.