April 23, 2008

Living With Less

Filed under: Broke, Materialism, Money Tools — Emily @ 8:31 am

Recently Oprah did a show about Living With Less. She introduced her viewers to two families who live wasteful and, I think somewhat unconscious lives. I recommend you follow the link above and check the story out for yourself, but I’ll give you a quick recap here too.

The Dominguez Family

First was the Dominguez family. They admitted to being wasteful in many ways:

  • heating or cooling the house to the same temperature outside
  • throwing leftovers and other perfectly good food away
  • cooking three or four different meals for dinner because the kids are picky eaters
  • drinking half of a water bottle and then throwing it away

Oprah also highlighted the fact that the family spends a lot more time with their personal electronics (ipods, dvd players, Tvs, video games, cell, phones, etc) than they do with each other.

The Keegan Family

Next was the Keegan family. They waste a lot of electricity and food; they go through a roll of paper towels and many paper cups and plates a day. The kids are addicted to consumer items including vanilla steamers from Starbucks and video games.

Oprah challenged each of these families to live with less–to turn off the TV, to take the bus to school, to share the same meals, to drink tap water, to eat out less, to use less electricity, and to generally think more about their consumption.

After the week long challenge, the families ultimately found they were happier and more connected. They both claimed they would continue to make changes and live a simpler, less consumer oriented life.

I loved that one of the moms, Kriss Keegan said, “We were checked out. We’re checked in now.”

Shannelle

After the families, the viewers were introduced to Shannelle, who had been living a life centered on consuming just a few years ago. She was making 6-figures, eating out most nights, wearing the best and most expensive clothes, and was completely unaware of how her lifestyle was affecting her. “Before I saw the Debt Diet show, I was focused on just consuming and not really knowing what I was consuming,” she says. “I had the hottest, the latest, the cutest, the best. I lived in 675 square feet, and I couldn’t understand where my money was going.”

Shannelle, after watching Oprah’s Debt Diet show, made serious changes to live on less, and do more for herself (like styling her own hair). Her new philosophy: “I want to make sure that I only use what I need, not what’s available to me,” she says. “Life is not about spending. It’s about living.”

Harpo Studios

At the very end of the show, Oprah told the viewers that her studio goes through about $41,000 a year in disposable cups. After staging a “no paper cup” day at the studio, she decided to make it permanent.

What can we learn from this show?

What struck me about the families highlighted was how unaware they were of their lifestyles. It seems to me that their lives were lived in reaction to what was going on instead of deciding how they wanted to live and making it happen. They weren’t considering what was going on and if that was really how they wanted to live.

In Business

Take Oprah, for example, she feels very strongly about “going green,” recycling and not wasting precious resources. I’m sure it was a shocker to her when she realized how much money she was spending and how much trash she was creating through the use of paper cups. That’s not okay with Oprah, so she made the conscious decision to change the situation and bring it in line with how she wants to live her life.

In Parenting

If you’re a parent, think about how often you just let your kids watch TV, play video games or spend hours texting because it’s easier? When our kids are engaged in electronics they are quiet, they’re not making any trouble, they don’t require any brain power from us . . . we parents can do what we want. But we’re reacting to life instead of looking at the situation and thinking about how we really want it to go. If you’re looking at what’s really going on, you know you are the parent; it’s your job to raise this child into a responsible adult. You know video games and TV do little to help with that responsible adult role. You know you only have a limited time with your child. So, you decide to put down what ever you’re doing and take a few minutes with your child: read a book, ride a bike, help with homework, do a science experiment.

In Finances

Same with finances. Mr. Dominguez’s comment at the end of their segment was “Some months, I have to borrow money. If I get a bonus, I can pay back my mother or friend. Right now, I’m on the brink of, borderline, where I’m going to lose everything.”

I’m sure it’s not really okay with Mr. Dominguez to ‘lose everything’ over cell phones, half empty water bottles, a thermostat set too high, and a garbage can full of perfectly good food. I’m sure he and his family could sit down and make some decisions about how and where they want their lives to go and then figure out what role money needs to play in getting there.

Thank You

We can all learn from these examples; we can all take a minute or an hour or a week to examine our own lives, our own spending, our own family time and consider if we are really living the lives we want to live.

Thank you Oprah, and thank you Dominguez and Keegan families for having the courage to share these stories.

February 19, 2008

A Surgeon’s Paycheck with a Teacher’s Summers Off

Filed under: Broke — Mark @ 2:22 pm

I sell business education for a living. For the last four years (almost), I’ve talked to several people each day who are struggling badly financially. I’d guess I’ve talked to close to 2000 people during that time that want desperately to change their financial situation, which means I’ve probably had the following dialogue 2000 times:

Me: What do you do for a living?

Person: (insert any profession from janitor to surgeon - I’ve talked to them all.)

Me: How long have you been doing that?

Person: (frustrated laugh) I don’t know…too long. Years.

Me: So after being in that job so long, about how much are you bringing home annually?

Person: (insert any income from a $500 disability check to $500,000 per year.)

Me: Hm. So making about $____ per year, would you say you’re getting ahead financially or living more paycheck to paycheck?

Person: (whether janitor or surgeon) Hah, paycheck to paycheck for sure. I just can’t seem to get ahead.

It never ceases to amaze me how people can be broke no matter what their income is. Clearly the janitor and the surgeon are broke for different reasons, but they’re frustrated in similar ways. It strikes me that groups at both ends of the income spectrum seem to envy each other.

Said the school teacher of the surgeon:

“It’s not like I’m some brain surgeon or something. Sure I’d love to spend every day on the golf course, but that’s just not going to happen for me. I work 12 hours a day between the classroom, lesson prep, and grading. And for what? Peanuts, and a measly pension.”

Said the surgeon of the school teacher:

“Do you know what it’s like to be on call at all hours of the day and night, weekend and holidays? What I wouldn’t give to be a teacher. Can you believe those guys only work nine months out of the year? Not to mention the two weeks they take at Christmas. Sure, I make a good wage, but what do I have to show for it? It’s not like I have any time to enjoy it anyway. And with the health insurance situation I’m seeing my income drop every year.”

Isn’t it interesting how they exaggerate the upside of the other profession and make no mention of the drawbacks?

No question there are happy surgeons and teachers out there, but I haven’t talked to many of them. The dominant emotion I come across is discouragement, but there is a specific set of emotions attached to every bit of financial pain I discover as I talk to people.

Ask yourself if you can relate to any of the following:

  • “I hate my job.” - Boredom, embarrassment, discouragement, frustration.
  • “I don’t make enough money.” - Anger, envy, shame, fear.
  • “I work too many hours.” - Fatigue, fear of missing out.
  • “I have debt I’ll never pay off.” - Guilt, shame, fear.
  • “My retirement funds aren’t anywhere near what I’m going to need.” - Fear, sense of uncertainty.
  • “I don’t have any college funds set up for my kids.” - Guilt.

My impression is that people feel helpless about their money circumstances, mostly because they’re in the habit of living their financial life as they do. When you have a habit long enough, you become convinced that it’s a foregone conclusion. The fact is it’s still a choice. You can choose to spend less, earn more, save more. The surgeon chooses to live the way she/he does, and so does the teacher.

We can have long conversations about how these people can improve their situations, and we will. In the meantime, look at your life and your finances. Do you accept that you’ve chosen your current financial reality, and that you could choose a different one? Here’s a quote to think about: “The three most powerful words in the English language are “I am responsible.”

How can you benefit from that quote? “I am responsible” is a forward thinking statement. “I am to blame” is a backward thinking statement. Focus on a better future, then develop the disciplines to realize it.

What’s the payoff? I guess you could say it’s the surgeon’s paycheck and the school teacher’s summer off. Imagine what that would be like. Based on my interviews with millionaires I think I can give you some insight on what it takes to get there.