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Saturday, December 24, 2016

How to Create and Succeed at Personal and Financial Goals in the Coming Year

Goals have been a central part of my personal, professional, and financial successes for as long as I can remember. I remember setting personal goals even as a child, such as personal summer reading challenges and savings goals, and that initiative has continued into adulthood. Goal-setting was a major part of how Sarah and I were able to bring about our financial turnaround, for example, and goal-setting was also a major part in building The Simple Dollar.

As I’ve continued in my life’s journey, however, I’ve discovered a few things when it comes to how I set goals.

First, I’m much more likely to succeed at goals that I view as fun. I set a reading challenge of some kind for myself pretty much every year – this coming year is no different – and I almost always succeed at them. This year’s challenge is centered around reading a certain number of what I consider to be challenging books, ones that are going to stretch my thinking, and I’m really excited about it. I view that goal as incredibly fun, even though I know it’s also good for my mind.

Second, I’m also much more likely to succeed at goals if I feel as though my back is to the wall in some fashion. Our financial turnaround was centered around the really big goal of debt freedom, but I don’t think I would have chased it with the same intensity if it weren’t for the fact that Sarah and I had put ourselves in a real financial pickle.

If those two factors aren’t true, I often have a hard time succeeding at goals. Goals where the philosophy is that I want to improve some aspect of my life but I don’t feel as though I need to do so are challenging because there’s a day-to-day motivation lacking behind those goals.

Today, I’m not going to talk about the easy goals. I’m going to talk about those hard goals, the ones that don’t seem fun and don’t represent something that you feel like you have to do, but you deeply want to. Financial independence falls into that category, as does weight loss for many people, to name two examples. They’re challenging goals. They’re often goals that people deeply want. But, at the same time, people often aren’t in a situation where they have to do it.

Many people like to use the turning of the calendar year as a time to start a major personal goal, and that makes a lot of sense. A fresh calendar year often feels like a fresh start.

Break It Down Into Daily Bits

The biggest problem with giant goals is that they tend to lack immediacy. They often feel so big and so distant that it doesn’t feel like you can really make significant progress toward that goal any time soon, which leaves you feeling helpless and hopeless and thus abandoning the goal.

The trick is to break that giant goal down into small little steps, things that you can do today that will inevitably lead to the completion of your big goal and the success that you desire.

I personally like the method presented by Gary Keller in his book The One Thing, in which he specifically goes through breaking down a “big idea” goal into daily bits.

Let’s say you have a big five year goal in mind. What’s the one thing you can do in the next year to make it happen?

Now, you’ve got this big singular thing you can do this year. What’s the one thing you can do in the next month to make that happen?

Now, you’ve got this big singular goal for this month. What’s the one thing you can do in the next week to make that happen?

Now, you’ve got a singular goal for this week. What’s the one thing you can do today to make that happen?

The answer to that last question is the most important one, because it focuses solely on today. It centers you on something you can manage to accomplish today, not some big pie-in-the-sky challenge.

For example, let’s say your five year goal is to get your master’s degree.

The one thing you can do this year to move toward that master’s degree is get into a master’s program and be ready for the start of your classes.

The one thing you can do this month to move toward getting into a master’s program is to prepare application materials for the master’s program at three target schools.

The one thing you can do this week toward preparing those materials is to figure out what materials you need to submit to those schools.

The one thing you can do this today toward figuring out what materials to submit toward your target program is to find schools with strong master’s programs in your field.

So, right there, you have something you can do today to get you started. It’s something tangible you can do right now. You can find a few schools that you might want to apply to. To achieve that one thing for the week, you’ll have to find the application and admission requirements for those schools and find ones that you’re likely to get into, and then during the rest of the month, you’ll be preparing those applications and getting them ready to submit. The rest of this year can be filled with other steps for getting ready, such as making temporary career changes to make room for this new initiative, and then you’ll move on in subsequent years to nailing that master’s degree.

Let’s take another one – let’s say it’s a weight loss goal. In one year, you want to lose a significant amount of weight.

The one thing you can do this month toward losing weight is adapt yourself to a healthier diet.

The one thing you can do this week toward adapting yourself to a healthier diet is to build a manageable long-term routine of healthy eating that you can stick with in subsequent weeks.

The one thing you can do this week toward building a healthier eating routine is to eat healthy meals today and avoid unhealthy snacks.

This breaks the focus down to today. Your focus is solely on eating better today, nothing else. You’ll use the results from that routine over the course of a week to identify what works and build up an eating routine that really works for you through a bit of trial and error. At the end of the month, you should have a better routine in place that you can stick to, and if you focus on sticking to that routine and then gradually adding in some exercise (with later focused goals for a month), achieving that goal becomes inevitable.

Let’s use one more example. Let’s say your goal is to achieve debt freedom in, say, five years.

The one thing you can do this year to move towards debt freedom is to pay off your two biggest credit cards.

The one thing you can do this month toward paying off your two biggest credit cards is to make a big extra payment on the credit card with the highest interest rate.

The one thing you can do this week toward making a big extra payment on a credit card is to trim your food spending significantly. (Yes, of course you could do other things, but the idea here is to pick a singular focus and this is a pretty good one.)

The one thing you can do today toward cutting your food spending is to make a meal plan for the whole week from the grocery store flyer and the contents of your pantry, make a grocery list from that meal plan, and go on your single shopping trip of the week. (This is effectively one thing.)

Right there, you have a singular action to focus on that will move you directly toward your overall goal. The key is to keep going with step after step after step, but the advantage here is that you have one single thing you can do today to make it happen.

Focus on Actions Rather Than Immediate Results

Many people get caught up on the results end of the equation when they’re working toward the big goals or the big resolutions they’ve set for themselves. They’re focused on losing 75 pounds above all else.

The problem is that by making that number the focus of the goal, you’re de-emphasizing what it takes to get there. It also sets you up for failure because you often won’t make nice linear progress toward your goal. Often, the biggest gains toward a goal take place once you have some great habits established.

Plus, there’s the separate issue of a goal sometimes relying on the actions and choices of other people, which is outside of your control. It is always a good idea to minimize the impact outside forces can have on your goal and maximize the impact your own good choices can have on that goal.

So, rather than setting a goal that’s all about results, instead set a goal that’s oriented toward the actions you can take to achieve that goal.

Let’s stick with our examples above, starting with the master’s degree goal. That’s a very solid goal, but it’s still judged by the end result, not by the actions to get there. You might consider something like “I’ll complete every necessary step under my control to finish a master’s degree in five years.” The weight loss goal is another awesome goal, but rather than orienting it toward the weight, focus instead on something like “I’ll eat 1,500 calories per day for 300 days this year.” You can do something similar with the debt payoff goal, simply making your goal something along the lines of “I will take a positive frugal step every day this year and channel every dime of the proceeds toward paying off debt.”

For shorthand’s sake, you can certainly look at your goal as a weight loss goal or a debt repayment goal, but know that your true goal is centered not around results, but around your actions that will inevitably lead to the results you want.

Put a Few Minutes Aside Each Morning to Focus

One of the biggest obstacles for many people in terms of maintaining a daily goal or a daily focus is that it gets lost in the busy nature of our everyday lives. We have this great intention, but it resides in the mental background and we often lose track of it.

If our goal is weight loss through improved diet, for instance, we’ll succumb to eating an unhealthy quick meal, not intentionally, but because the weight loss goal is shoved in the back of our mind and made secondary to other, more urgent matters.

If our goal is spending less money, we’ll buy something without thinking of the financial consequence of it, again, not because we’ve lost that goal, but because other thoughts crowd our mind.

What’s the solution to this? So far, I’ve really only found one thing (well, two things, but we’ll get to that other one in a minute) that has helped me to keep a goal in my mind throughout my busy day, and that’s a morning routine that forces me to think about that goal head-on.

Each morning, I spend about ten minutes thinking about my daily goal. I envision how exactly I’m going to achieve it, how I’m going to overcome potential obstacles that might stand in my way, and how I’m going to feel at the end of the day having achieved my objective. I usually do this while I’m taking my morning shower, so that’s what’s going on in my head as I clean myself up. I usually follow that with ten minutes of meditation/prayer, which is proven to help greatly with mental clarity and focus, and then just a couple of minutes spent writing down five things I’m grateful for in my life, which brings me joy and keeps my ego in check.

I find that this little routine helps a lot when it comes to keeping the big goal for the day present in my mind even when things are busy. It almost feels like a little alarm going off in the back of my head if I’m about to do something that’s not in line with that daily goal.

Put a Few Minutes Aside Each Evening for Review

On the flip side of that morning focus session, there is enormous value in taking a few minutes to review the day in the evening, where you can look back at the successes of the day with pride and look back at the missteps with a fresh eye to ask yourself what you could have done better.

This simple act of an evening review, which I often do just after putting my children to bed, is perhaps the most valuable tool I have for finding problems in my routines and plans before they sprout into real crises. For example, this session is almost always invaluable in terms of identifying temptations before they grow into mistakes. When I identify a temptation, I actually think about that temptation directly, think about how the thing I’m tempted by isn’t really helping me with my big goal, and consider ways to eliminate that temptation going forward, usually through a minor alteration of my normal routines.

A great example of this comes from the debt repayment goal. You might spend this routine feeling proud of the fact that you took your lunch to work and ate all of your meals at home, but you might also want to consider that you were really tempted to buy a new book for your Kindle. Maybe you could get the book from your local library instead?

I often do this while physically writing in a journal, something I try to do both in the mornings and the evenings. I usually reflect on the day’s three biggest successes and one or two biggest mistakes and I find that those reflections almost always help me build a better day tomorrow.

Build a “Streak” in a Very Visual Way

There’s one other thing I do each evening when I’m chasing a specific focused goal: I continue my “streak” on my whiteboard.

I have a little whiteboard in my office that I keep in a place where I see it quite often. That whiteboard is blank except for a bunch of rows of Xs. At the end of each day when I achieve my daily goal for whatever my main focus is at the moment, I put an X on that board. At the end of a day when I don’t achieve that goal, I erase all of the Xs.

So let’s say I’ve been working hard at a goal and I have a row of 15 Xs. That looks pretty good to me, as it visually shows me that I’ve been nailing my goal and making real progress. On that sixteenth day, even if I’m really tempted to not achieve whatever my daily milestone is, that row of Xs provides a sort of additional mental boost to get things done.

To tell the truth, I usually have two and sometimes even three rows of Xs going, in different colors, because I’m often pursuing a personal and a professional goal at the same time. I just note what the goal is at the top and then follow it with rows of Xs.

This “streak” idea isn’t mine; it’s actually stolen from the comedian Jerry Seinfeld, who used this exact same technique to hone his joke writing skills.

Right now, I have two streaks going. One is a daily writing target in terms of word count, and the other is in preparation for a different professional project where I want to produce a lot of content before I launch. I’m going to start a third streak soon for a personal goal in the coming year.

Don’t Give Up Over Small Failures

It is really easy to become devastated by a small failure. You’re trying to watch what you eat and you unthinkingly eat a fast food meal. You’re trying to be so careful with your money and then you make a spending mistake.

A step backwards can feel incredibly painful, even if it comes after a long sequence of steps forward. It can feel like your progress has been utterly undone, even if that’s not true at all, and many people use that initial mistake to essentially give up on their goal.

First of all, it’s vital to remember that you’re human and that humans make mistakes. No one is perfect, no matter how perfect they try to make their lives look on social media.

Second, recognizing that you’ve made a mistake is incredibly important and a valuable step on its own. You recognize what you did. You recognize that it was not the right move. You have a negative emotional response to it. All of those things are good things. All of those things are indicative of positive progress.

Third, there is nothing in the world stopping you from moving forward again. Sure, you took a step backward, but it likely came at the end of a long run of steps forward, and you can easily start moving forward again. This is a bump in the road. This is not the end of the road.

Fourth, it’s usually a learning opportunity. You can step back and ask yourself why you made that mistake, because that mistake is usually a symptom of a flaw in your plan. This is the perfect food for reflection, as it will almost always help you build a better path forward.

Look at a misstep not as a disaster, but as an opportunity to build a better plan and become a stronger person who is better equipped to drive this goal forward to the big success that it’s destined to become.

Final Thoughts

When you’re thinking about your big goals or your resolutions for the coming year, take these strategies to heart. Break those goals down into something you can do today that moves you clearly forward with that goal. Get yourself in the right mindset each morning, and look at your mistakes and successes each evening. Make that your routine and you’ll find far more success than you ever imagined!

Good luck!

The post How to Create and Succeed at Personal and Financial Goals in the Coming Year appeared first on The Simple Dollar.

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Friday, December 23, 2016

11 Frugal Ways to Make Frigid Temperatures More Tolerable

A few days ago, a true cold spell rolled through our area, taking temperatures down to nearly -20 degrees Fahrenheit. Given that it was also a day where every member of our family had some business out and about, it meant that we were all exposed to the frigid elements.

I don’t mind cold weather, but there comes a point where frigid temperatures become nearly painful to experience, and when you have to go outside for a particular errand, such temperatures are particularly nasty, even when the wind is blowing.

Many people around here respond to this with all kinds of expensive gear and disposable items. Things like remote car starters are wonderful, but some of the best tools I have for combating frigid temperatures and keeping myself warm are very inexpensive. Here are some of the things that my family does to keep the worst of frigid temperatures at bay.

We use reusable hand warmers.

These are just small cloth bags with dried rice inside of them. You can actually make one easily out of a sock by putting some dried rice down in the toe, putting clothespins in place above the rice, then cutting the sock about two inches above that, rolling it down, then sewing that little roll of cloth together.

Then, just microwave the hand warmer on high for about 60 seconds or so and you have yourself a toasty hand warmer that stays nice and warm for a surprisingly long time in your pocket. I often take one of these to bed with me, too, warming one up just before I go to bed and tossing it under the covers with me.

We keep a bottle of homemade de-icer just inside the front door.

Our de-icer is just a container of 70% isopropyl alcohol (bought for a buck at the dollar store) mixed with just a few drops of dish soap and poured into a spray bottle. This mixture does a fantastic job of eliminating ice, even on really cold days. I often start my vehicle and let it heat up to get it warm and let some of the external ice melt, and if there’s any ice left, this spray mixture makes short work of it. Far better than buying a bottle of similar stuff at the store.

We dress in lots of layers of clothing.

As I write this, I’m wearing a t-shirt, covered by a long sleeved t-shirt, covered by a sweatshirt, and a pair of sweatpants covered by jeans. If I were to go outside for very long, I’d probably add another layer to my bottoms. All of the innerwear – the stuff you wouldn’t see in public – is stuff that’s well worn but still keeps me warm, so I don’t have any need to buy a lot of clothes for this. There’s really no need for a special “warm” winter wardrobe.

We open the curtains/blinds on any windows facing direct sunlight, but keep them closed on other windows.

Direct sunlight tends to warm up a room, so we open the curtains on windows with direct sunlight shining upon them to let warmth into those rooms and leave the curtains and blinds closed on other windows. In the northern hemisphere in the winter, where we live, that means opening the curtains on the east and south side of the house in the morning, and on the west and south side of the house in the afternoon and evening, with all curtains drawn in the middle of the day (as the sun is close enough to overhead to provide no major benefits).

We add caulk to any windows that leak cold air, and we add weatherstrips and door stops to any doors that leak cold air.

Cold air leaking through the edges of windows and doors is a great way to lose heat throughout the cold winter months. While no method is perfect, our strategy usually is to identify spots around windows where air is leaking and add caulk in those spots (a very easy task with a caulking gun), and to add a weather strip to any doors to the outside where cold air leaks through the edges. In some cases, we add a bit of clay to the inside of the door frame if a weatherstrip won’t work well, as clay can block a small amount of cold air flow very well. We also use draft blockers (effectively, a small pillow) along the bottoms of some doors as a temporary fix.

We bake a lot of food.

Baking a loaf of bread in the winter is even more cost effective than doing it in the summer, because during the winter months, one can just leave the oven door open afterward and allow the heat to flow out into the house. Thus, during the winter months, we tend to bake a lot more than we do in the summer because the heat actually helps with our energy bill rather than working against it.

We park our cars so that the morning sun hits as much of our windows as possible.

Part of the reality of living in a cold climate is that many mornings find us with ice on the windshields and doors of our cars. One great tip to avoid that problem is to find places to park that start to receive direct sunlight as soon as the sun is over the horizon. This often serves to begin the melting process of ice on the windows, making scraping much easier – if it’s even needed at all.

We keep water in the tea kettle at all times.

Tea and hot chocolate tend to be consumed quite a bit during the winter months in our home. Not only does a hot beverage make you feel much warmer (meaning that you’re not as predisposed to raise the temperature of the home), but the actual act of boiling the water adds additional heat to the home. We make this convenient by keeping water in the tea kettle, as we often use an entire kettle’s worth of water once or twice a day.

We get some indoor exercise.

It’s often easy to think of a northern winter as a “hibernating” time, where people are curled up under blankets to stay warm and not moving around much, but I’ve found that one of the most effective ways to feel warm indoors in the winter is to exercise. Do an exercise routine or some body weight exercises and you’ll feel incredibly toasty. I really like the free daily body weight exercises over at Darebee.

We keep emergency kits with warming items in the car and the house.

Sometimes things don’t go as planned and you find yourself stranded by the roadside or without power, and those situations can cause you to be seriously cold very quickly. Our solution is to have emergency kits in the car and even at home. Those kits have some instant hand warmers in them, some backup warm clothes for everyone, some blankets, a flashlight, some road flares, and so on. We keep these items in a box and load them in our vehicles in the winter months.

We keep blankets out in every room.

Whenever anyone is doing anything that’s sedentary during the winter at our house, they’re wrapped up in a big thick blanket. We have stacks of blankets that we keep in every room, so if you’re going into a room to watch a television show or read a book or play a game, you just grab a blanket and swaddle yourself in it. That way, you’re always nice and toasty.

The big idea here is simple: You don’t have to keep your home thermostat running at 72 degrees Fahrenheit for everyone to feel warm all of the time. Doing so is incredibly expensive, especially when there are so many other simple tactics to use to stay warm during the winter months. Keep that thermostat lower and use some of these tactics instead when the snow is flying and the wind chill is frigid outside.

Good luck!

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How to Spot Student Loan Forgiveness Scams

After completing college, you may feel overburdened by your student loan costs, but don’t fall victim to student loan forgiveness scams that offer false promises of easy debt relief.

That’s not to say there’s no such thing as student loan forgiveness — federal loans really can be forgiven under certain conditions. But debt relief companies know that millions more people are struggling to repay student loans and, in response, they’ve set up programs that offer to help reduce your debt — for a fee.

Often they offer services that you could perform yourself at no cost. According to the U.S. Department of Education, such companies solicit business through mail, mobile phone ads, social media, and direct phone calls.

Not all debt relief offers are illegal. There’s no law against charging a fee for a service that borrowers could have obtained on their own, notes Mark Kantrowitz, publisher and vice president of strategy for Cappex.com, a website that helps students compare colleges and search for scholarships.

“These scams, which take advantage of the borrower’s lack of awareness of their options, only become illegal when they charge a fee before providing the service or make false claims when promoting their services,” he says.

Robert Farrington, founder of TheCollegeInvestor.com, says there are a variety of ways that companies make money from people who are struggling to repay student loans.

In addition to charging fees for loan modification services, some companies charge money for services that aren’t performed, or are performed incorrectly, he says. There also are companies that falsely claim that they have a special relationship with the Department of Education that enables them to help their clients reduce debt.

One scam is to ask borrowers to make payments directly to the debt relief company instead of to the lender. In some cases the money is never forwarded to the lender, and the missed loan payments go on the borrower’s credit report.

You should have realistic expectations about debt relief. Whenever companies make sensational claims about their ability to reduce debt, “they usually just take your money and disappear,” says Justin Chidester, a financial planner in Logan, Utah.

Watching for Warning Signs

There are a variety of warning signs that a company offering to help you with your student loan debt may be scamming you. These include:

  • Asking for upfront fees, before services are performed.
  • Claiming the ability to provide debt forgiveness or negotiate a special deal on your behalf.
  • Asking you to sign a “third-party authorization” or “power of attorney” in order to gain permission to negotiate with loan servicers and make decisions on your behalf.
  • Asking for your Federal Student Aid PIN, an identification issued by the Department of Education to allow access to information about your federal student loans. This allows a third party to make decisions on your behalf.

Where to Get Real Help

While student loan forgiveness scams may be all smoke and mirrors, student debt is a very real problem for millions of Americans. In less than a decade, the volume of outstanding federal student loan debt more than doubled, according to a 2015 report from the CFPB, increasing from $516 billion in 2007 to more than $1.2 trillion in the third quarter of 2015.

What’s more, in some cases, companies that service student loans may fail to do their jobs. In 2015, the Washington Post reported thatthousands of students have complained to the Consumer Financial Protection Bureau (CFPB) about loan servicers who give them inconsistent loan information, lose their paperwork, or surprise them with unexpected fees. This can cause frustrated borrowers to turn to debt reduction companies for help.

However, if you’re unable to make your student loan payments, there are better options. Federal student loans — which are made or guaranteed by the Department of Education and comprise the bulk of student debt — offer many different repayment plans that can lower your monthly payment based on your income, as well as forbearance and deferment options, and even legitimate paths to student loan forgiveness in some circumstances. The DOE has an online guide for repaying student debt.

While private student loans don’t have as many protections in place, you should still contact your lender to see if they’re able to refinance the loan or make adjustments to your payment schedule. The CFPB has an online repayment guide that walks borrowers through the process and helps them explore their options.

Hindsight is 20/20, but the best way to avoid running into student loan debt problems is to understand the terms of repayment before you borrow money. Read your loan contract carefully and ask questions about anything you don’t understand.

Related Articles:

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Thursday, December 22, 2016

31 Days to Financial Independence (Day 19): Getting Promoted at Your Current Job

“31 Days to Financial Independence” is an ongoing series that appears every Thursday on The Simple Dollar. You might want to start this series from the beginning!

Last time, we began to look at improving your income at your current job through a number of techniques that focused on improving job performance and making a clear case that you deserve better wages for your work.

Today, we’re going to look at the next step in that wage earnings journey: getting a promotion at work. This can be something as simple as moving up to the next grade on a very standardized employment scale, like the one managed by the federal government, or moving into a whole new role in the workplace, perhaps even into managing others.

A promotion is often the most straightforward step for most people when it comes to career advancement. You still go to work at the same place. Often, you keep interacting with many of the same people. What will change is your job responsibilities, the items that can go on your resume, your income potential, and quite possibly your current income as well.

The goal with any promotion is to either directly increase your true hourly wage or put you in a position where it is much easier to increase your true hourly wage. As a quick reminder, we discussed your true hourly wage earlier in this series; it refers to the amount of money you make per hour when you subtract out all of the extra costs of work and also include extra hours devoted to work items that you’re not directly paid for. If a promotion is not providing you an improvement to your true hourly wage or making it much easier to improve your true hourly wage, then a promotion isn’t worth it.

Exercise #19 – Putting Yourself in Line for a Promotion

Many strategies for getting yourself prepared for a promotion overlap with the ones that will help you get a raise, but these strategies are more geared with pleasing those who might promote you rather than your immediate supervisor.

The key thing to remember is that it is rarely your immediate supervisor who will promote you. Often, the promotion comes from your supervisor’s supervisor or from someone else in the organization entirely.

The question you should always be asking is what you can do to maximize your value to those people, the ones that would hire you. While the things you do to maximize your value to your supervisor often overlap with those things, there are many different things you can do to improve your value for promotion that won’t necessarily improve your value to your immediate supervisor.

This list focuses on things that maximize your value for promotion, mostly in terms of building relationships and skills that will make promotion possible and also finding opportunities for promotion. Use them where they make sense.

Understand the job requirements of the promotion that you desire, and use those requirements as a personal checklist. Go online and find an exact job listing of the position that you would like to have and learn what the exact requirements for that job is. What skills are required? What education is required? What experience is required?

Then, take those requirements and compare them to where you are right now. How do you match up? Do you already meet those requirements? If not, which ones do you not match up with?

The real question you need to be asking is what exactly can you do to fulfill each and every one of those requirements from where you’re at now. What do you need to do so that you can say “yes” to everything required for the job?

That list should become your checklist. Your goal should be to check everything off of that list so that you’re prepared for that job and there are no obstacles standing in your path. Often, taking care of those requirements will also help to ensure that you actually do a good job if and when you get that promotion as well.

Pay attention. Watch. Listen. Be aware of when an opportunity to be promoted to your desired job comes available. Promotions sometimes happen very quietly, particularly when a company is interviewing for a job from outside the company, and people within the company don’t even hear about it.

Keep an eye on any hiring listings that your company or organization might be doing. Look for situations where a particular department might be growing or when someone is leaving a position, as those are often great opportunities for promotion.

Build positive relationships with people who would be your peers in your promoted position. Let’s say you get that promotion that you’re eyeing. Who exactly will be your peers at that point? Who will you be meeting with regularly? Who will be your colleagues?

Start establishing positive relationships with those people now. Talk to them whenever you can. Ask about the realities of their job and listen. Ask what makes someone good in their position and what doesn’t. Give them respect for the position they’ve earned.

Basically, you want to be a positive known quantity to those fellows because there’s some chance that they will be involved in the hiring process in some fashion, and if they know you have the kinds of traits needed to succeed and those people like you, it’s going to be a net benefit for you.

Not only that, these relationships will tell you pretty quickly whether you want that particular promotion or not. Will you get along well with those colleagues? Do you have the traits that are really needed for that position? That’s what those positive relationships will tell you now rather than later.

Find a mentor that is several steps above you on the ladder. Try to identify someone in your workplace that’s above not only your current level but the level you wish to be promoted to and ask them for mentoring help. Make sure that the person is one of the “good guys,” meaning that they don’t play workplace political games and are well respected by others.

Tell that person that you have a great deal of respect for what they’ve been able to achieve, that you hope to be able to achieve many of those things, and that you hope that they will give you advice and suggestions on how to get there.

Listen to those suggestions. Take them seriously. Take notes. Use what they say to the best of your ability to prepare yourself for what’s next.

Most people are thrilled to have someone come to them showing respect and asking them for help. It’s an ego boost, especially for people who have achieved a lot but are unrecognized for it. They’ll almost always help you, both through direct advice and occasional assistance, but sometimes behind the scenes, too, in ways that you’ll never see.

Dress for the position that you want to get promoted to. Different positions often have different dress codes, whether formally stated or not. Look around your workplace and see how people at your level dress and then observe how people who are in the position that you want to achieve dress. Dress like your target.

Yes, that means you might somewhat overdress for your current job. That’s okay. The only time you need to worry about it is if you find that dressing differently is somehow incompatible with your current job, such as if you’re trying to shift from a shop job to an office job. In that case, dress appropriately for your current job but make an extra effort to apper presentable.

The goal is to give a visual appearance of caring about your job, something that appears at the briefest glance. Clothes can provide that idea at just a quick glance.

Willingly accept responsibility – and live up to that responsibility. Many people who are at a job just to collect a paycheck avoid as much responsibility as possible. They want their hours at work to pass as easily and effortlessly as they can. The problem with that approach is that positions that offer more pay almost always come with more responsibility, and if you’re showing everyone that you shirk responsibility, no one is going to promote you.

Accept responsibility. Make sure key tasks are done and be willing to accept the ramifications if they’re not. If a responsibility is offered, take it and execute it to the best of your ability. If you get in over your head, ask for help – asking for help is far more responsible than trying to go it alone and failing.

Build a reputation for reliability. If you regularly accept extra responsibility and handle it and if you are extremely consistent at showing up on time and doing what needs to get done, you’re going to gain a reputation of reliability, and reliability is one of the most important factors you can have if you’re wanting a promotion.

Many businesses run on the back of their key personnel being reliable, and if you can show that you have a strong tendency to be reliable, you’re much more likely to be moved into a key position.

Ask lots of questions about how the organization works levels above where you’re at. A promotion almost always means an expansion in the scope of your job. You’re now worrying about aspects of the business that you never had to worry about before. Someone who flips burgers worries about the burgers and the grill; someone who manages worries about how that burger-flipping task fits into the bigger picture.

Try to step back and understand the bigger picture. What role does everyone play in it? How does everything flow together to produce a product that people want? Why do people do the things they do at work? The better you understand how the business works as a whole and how things interconnect, the better off you’ll be in terms of getting promoted.

How do you figure this out? Ask questions. Figure out what everyone’s job is and how they all flow together. Ask questions of your supervisor about how everything connects. If you don’t understand something, ask.

Engage in an organized program of additional education of some kind that’s relevant to where you want to be promoted to. Many jobs that you might be promoted into come with some form of educational requirement that you may not have. Perhaps they require a degree in a particular area, or they require a masters degree in your field when you have only a bachelors degree.

While those educational requirements might not completely prevent you from getting a promotion, they can provide a real hindrance and create an obstacle that would make it easy not to promote you. The best solution? Use your spare time – and any workplace programs that help – to actually get that education.

In fact, any extra time you spend outside of work on personal education that’s suitable for the promotion you wish to get will help. Not only is it a demonstration of your ability and willingness to acquire the knowledge and skills necessary to succeed at the job that you want, it’s also a demonstration of personal initiative, a willingness on your part to simply take care of what’s needed to bring about success. That’s attractive to any employer.

Avoid self-promotion. Many people fall into the trap of tooting their own horn about the things they’ve achieved and the great attributes that they bring to the table. This is very rarely a good idea in the workplace.

For starters, most people know of your achievements and of what you bring to the table without your self promotion, so the self promotion is redundant. It’s also often seen as vain and egotistical and actually seen as a pushback against team efforts, which is particularly important because most modern workplaces thrive on teamwork.

Don’t waste your breath talking about your own achievements unless you are specifically asked to do so. Interjecting your own achievements almost always puts you in a bad light. Save that listing of achievements for your resume and for your interview, when you’re prompted to share them.

Deliver lots of praise and give lots of praise to your colleagues for good work, to your supervisor and to everyone else. This is almost always the best approach in terms of building a positive reputation in the workplace. Not only do your coworkers appreciate the nod, it shows to people in management that you are genuinely a team player that’s focused on using the best of everyone’s efforts to achieve great results.

This should be your reflexive response to any situation when there’s a chance to talk about workplace accomplishments and about other workers. Look for the good things that others produce and how it’s resulted in good outcomes overall. If there’s ever a focus on something that you’re primarily responsible for, dole out lots of credit to everyone who helped you.

The person that does this is the person everyone is going to want on their team because it’s clear that success will reflect on them as well. This, of course, puts you in demand because of it.

Practice self-direction. While asking for help when you’re genuinely unsure of the next step is completely appropriate and even seen as a positive, it’s also seen as a positive if you can take a situation where the next step isn’t immediately clear and you can simply find the right thing to do on your own – and then you do it.

For example, let’s say you’re restocking shelves. Rather than having to ask about each step in the process, understand what the big end goal is and then formulate your own steps in the process, then execute those steps on your own without having your supervisor intervene.

Self-direction is an absolutely essential skill for almost every promotion out there. It is very hard to climb a career ladder and earn new levels of employment if you do not have the ability to self-direct much of your work. Employ as much self-direction as you possibly can and only check with others and with your boss if you’re not entirely clear on how to judge a particular situation.

When a promotion opportunity opens up, talk directly to the person who would be hiring you, not your immediate supervisor. Many of the steps that will make you a good potential candidate for promotion are the same ones that make you indispensable at your current job. While good supervisors will see this and help you rise in the organization, some will not as they will find it more useful in the short term for them to keep you right where you are.

The most effective way around that is to discuss promotion with people who might actually be hiring you. Generally, your immediate supervisor will not be involved in hiring you for a promotion, so when you’re seriously looking at an opportunity to step up, bypass your supervisor and talk to the people who can actually get you promoted.

Find out what their expectations are. Make sure they know who you are in the most positive way that you can. Don’t give into the temptation to self-promote; instead, let your reputation precede you.

Next time, we’ll talk about strategies for switching to a new job with a new employer that can give you a much higher ceiling on your income.

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Six Predictions for the Housing Market in 2017

It’s nearly impossible to discuss the 2017 real estate market forecast without factoring in the Trump Effect. President-elect Donald Trump and his rhetoric, which may evolve into actual policy soon, will impact many aspects of the market in the year (or years) to come.

The Trump administration is likely to usher in several major policies that could significantly change the long-term trajectory of the U.S. real estate market, including changes to immigration policy, tax cuts, and infrastructure spending.

“The housing market in 2017 will be more impacted by politics then we have seen in quite a while,” says Nela Richardson, chief economist for Redfin, a national real estate brokerage. “For the past five or six years, the market has been almost in neutral. But what Trump is promising to do in his administration will affect the homeowner and the home buyer.”

Trump’s tightening of immigration policy, for instance, could harm the housing market in a couple of different ways. Here’s why:

Single-family new construction increased just 9% in 2016, says Richardson. That figure is low, as it has been since the housing bust almost a decade ago. One of the big reasons housing construction hasn’t returned to normal levels, despite increased demand, is labor shortages — a lot of workers left the industry when construction jobs dried up in 2007-2009.

About one in four construction workers are foreign born. Stricter immigration policies from the Trump administration are likely to make the problem worse, according to Redfin, which recently issued its 2017 market analysis. The company predicts single-family home construction growth will slow to 6% in 2017 if immigration policy changes go into effect next year.

The takeaway here is that having less new home construction activity impacts the overall number of houses for sale and the availability of affordable starter homes, which ultimately translates into higher prices for first-time home buyers.

But that’s not all, says Richardson. “It’s not only that it cuts off potential home buyers, but a lot of home buyers are immigrants,” notes Richardson. In other words, a tightening in immigration policy could also reduce the number of people seeking to purchase a home.

Trump’s promised tax cuts, meanwhile, are aimed at the wealthy, and thus could potentially result in more housing demand at the higher end of the market, says Richardson.

And as for infrastructure, Trump has talked of increased spending in this sector, but has not offered much detail. Still, the comments he’s already made have led to an uptick in interest rates, says Richardson.

“We don’t know a lot about what that spending will look like. It looks a lot like it will be subsidies for contractors. But right now there’s so much optimism that the stock market is rallying and yields and mortgage rates are going up.”

Higher interest rates essentially make a financed home purchase more expensive overall, so they aren’t great for sellers or buyers. They’re also not good news for blue-collar or middle-income home buyers.

And there’s one last ramification of Trump’s election to consider with regard to the 2017 housing market. Lawrence Yun, chief economist for the National Association of Realtors, expressed concern over comments made by Trump’s pick for Treasury Secretary, Steven Mnuchin, who has discussed potentially changing the mortgage interest deduction.

“That would be a terrible hit to the confidence of home buyers,” says Yun. “It spooks potential buyers when they hear that. A change in the mortgage interest deduction could have a big negative impact… The mortgage interest deduction has been widely popular for most homeowners, and housing wealth has historically been a significant source of middle-class wealth, so that would be a hit to the middle class.”

The Trump Effect is just one part of the overall picture emerging for next year’s housing market. Here are five additional predictions for the coming year.

Continued but Slower Market Growth Due to Affordability Pressures

In America’s largest cities, the available inventory of homes that are considered affordable on a median income has declined for the past four years. And 2017 won’t be much different, according to Redfin.

The real estate brokerage predicts inventory will recover slightly, up 1.7% year over year, after falling about 3.4% in 2016.

Redfin also predicts median home sale prices will increase 5.3% year over year. And finally, existing home sales are forecast to increase 2.8% in 2017, after rising 3.4% in 2016.

2017 Will Be the Fastest Real Estate Market on Record

What makes a real estate market a fast market? The average number of days a home spends on the market before going under contract.

Redfin predicts 2017 will break last year’s record on that front. In 2016, the typical home stayed on the market just 52 days, the shortest time recorded since 2009.

“We’ve had a persistent inventory crisis for two or three years, especially in starter homes, there’s not a lot of those on the market right now,” explains Richardson. “In some markets, such as Seattle or Denver, homes have offers within six days of being listed.” That’s six days on average.

The development of new technologies is also contributing to homes disappearing from the market quickly, by making the entire real estate transaction more quick and efficient.

Mortgage Rates Will Increase, But Not by Much

Experts predict that rates on the 30-year-fixed mortgage will climb to about 4.3% next year.

Already, the 30-year fixed mortgage rate has increased from 3.5% at the end of October to just above 4% following the election, according to Redfin. That rise is being attributed to Wall Street’s optimism toward Trump’s economic proposals, as well as the Federal Reserve’s long-expected interest rate hike earlier this month.

More People Will Have Access to Home Loans – For the Time Being

For those with particularly good credit, here’s a bit of positive news. Some financial institutions have introduced mortgages that require down payments of as little as 1% to 3% of the home’s purchase price, if you have a stellar credit history.

In addition, starting in 2017, the government-sponsored mortgage giants Fannie Mae and Freddie Mac will back bigger mortgages for the first time since 2006. The loan limits insured by these companies will increase from $417,000 to $424,100 in most regions of the U.S.

The potential bad news is that the Trump administration is talking about doing away with, or privatizing, Fannie and Freddie, a move that will negatively affect countless home buyers, says Yun.

“Most consumers are unaware of the role of Fannie and Freddie,” he says. “Without them, it will be much more difficult to obtain mortgages.”

An Ongoing Housing Shortage

Perhaps one of the biggest takeaways from the 2017 housing market forecast is the unabated shortage of affordable housing in this country. It’s an issue impacted by nearly all of the other predictions already discussed – construction slow-downs, mortgage rate increases, and more.

Yun, of the National Association of Realtors, says there’s nothing on the horizon in the coming year that will likely bring any relief or improvement to this issue.

“We just don’t have enough homes being built in relation to population growth,” he concludes. “This could lead to some social discontent, because overall we will continue to face this housing shortage while new home building remains sluggish.”

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Homemade Broth: A Healthy and Frugal Winter Treat for Body and Soul

Winter’s here, and if you’re anything like me, cold weather brings with it a strong desire to eat warm, hearty soups. And what is at the heart of every delicious soup? A tasty broth, of course.

I misunderstood broth for most of my life. I thought the only way to make it was to buy a box of salty powder off the supermarket shelf and then mix it with hot water. Add in some cheap noodles and boom, you’ve joined an esteemed culinary line of soup-creating chefs.

It turns out that’s not the case. The traditional way of making broth involves slow cooking high-quality tendons and bones to extract the plethora of nutrients and flavors they have to offer. These traditional methods are starting to come back into vogue, as people far and wide tout their health benefits (which we’ll get into below).

As with many rediscoveries of ancient techniques, the health food marketplace juggernaut has caught on. There are now stores popping up that will sell you broth made in the traditional fashion. I pass one shop in New York City, called Brodo, on my walk to work every morning. Their offerings look tasty, but they’re also pricey: It costs a minimum of $9 for a 16-ounce cup of basic bone broth.

Meanwhile, if you buy four pounds of bones from the supermarket at an average of $3 per pound, you can easily make a gallon of broth for only $12. The equivalent amount at Brodo would cost you $76!

I commend the people at Brodo for their entrepreneurial spirit and for charging what the market can afford. After all, making homemade broth takes precious time. But as with buying coffee, your wallet will thank you if you find a way to make your own traditional broth at home. Not only is it cheaper and more flavorful, it’s also healthier than store-bought powders and bullion cubes.

Health Benefits of Traditional Broth

A few years ago, as I was looking for ways to revamp my diet and get rid of the debilitating stomach pains that were bothering me, I discovered the traditional way of making broth – and I’m very glad that I did.

When humans first started consuming meat, they used to consume the whole animal. This meant eating all the stuff many of us scoff at today, including organ meats, tendons, and bones.

Those tendons and bones have formed the basis of real, nourishing soup broths for thousands of years. The collagen in these tissues provides a whole array of amino acids and nutrients that you miss out on if you only ever eat muscle meats. If your stock includes bones with marrow in them, even better.

As with many things in nutrition science, the best way to find what works for you is to experiment on yourself and see what works. There are no large-scale studies on the health benefits of eating traditionally prepared bone broth, but the anecdotal evidence is piling up.

I know that it personally helped me heal many of the issues going on in my gut after I developed a tumor in my colon during college. After introducing broth to my diet, my stomach cramps became much less frequent, and my overall health improved. Others claim that bone broth helps protect your joints, boost your immune system, and improve your sleep.

The potential benefits of consuming traditional broth reached the mainstream after it came out that the Los Angeles Lakers training staff was pushing the team to consume as much of the stuff as they could handle. The players who bought in raved about having more resilient joints and increased energy.

Your mileage may vary, of course. But for me and many others, adding broth to our diet was a revelation.

How to Make Your Own Delicious Broth

If you have a large pot or a slow cooker and access to a butcher, you can make gallons of yummy, healthy, homemade broth that will put the boxed, chalky supermarket broths to shame.

To start, buy a mix of bones. The more tendons, the better. Chicken feet are great, as are knuckle bones, necks, and all other animal parts you might normally be too grossed out by to even look at.

Here’s the simplest preparation method:

  • Pull out your biggest pot, or your slow cooker, and dump in the animal parts. Aim for at least two pounds of bones, but I’ve done up to 10 pounds at a time for really big batches.
  • Fill the pot to the top with water, and add in some salt, fish sauce, lemon juice or apple cider vinegar, and a couple of vegetables (onions, carrots, and celery are pretty common choices) for flavoring.
  • If you’re using a pot, bring the water to a boil, then cover it and let it simmer for 6-8 hours. If you have a slow cooker, just set it on the lowest heat setting for 7 hours and walk away.
  • Once the bones have simmered long enough, strain out the liquid into a bowl. You can use the broth right away (though it will contain some extra fat), or store it in your refrigerator. If you take a look after a few hours and it’s no longer liquidy, but rather bouncy and gelatinous, then you know you’ve made a batch of healthy, protein-rich goodness.

When you’re ready to use the broth, just skim off the layer of fat from the top, warm it up, and you’re good to go. You can use the broth in any recipe that calls for chicken, beef, or vegetable stock, from soups and gravies to risotto or stir-fry dishes.

A great thing about making your own broth is that it’s pretty forgiving: As long as you’re boiling bones, it’s hard to go wrong. There are many different takes on how to prepare a good batch of broth, and a simple Google search will reveal many different recipes. For instance, a recipe from the New York Times calls for no fewer than 15 ingredients. I can only imagine it’s even tastier than the one listed above — so if you want to get fancy, there are options.

Also, if you make more than you can eat in a week, don’t fret. The broth freezes really well, and can be defrosted easily in a microwave.

Summing Up

If you’re looking for a cost-effective way to get more quality proteins into your diet, making your own bone broth is a no brainer.

Julia Child once said, “How can a nation be called great if it’s bread tastes like Kleenex?” I feel like she would have felt similarly about American soup broth tasting like overly salted slop. We’ve gone away from the traditional preparations, and we sacrifice for it in nutrition and flavor.

Making your own broth means you can always have a delicious soup when you want it, and you’ll have peace of mind in knowing that you are consuming food in a manner that is consistent with how humans have eaten for a very long time.

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Wednesday, December 21, 2016

The Road Not Taken

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

We are faced almost constantly with choices.

Walk into a supermarket and you’ll find literally tens of thousands of goods for sale, of which you’ll choose a few dozen to buy.

If you find yourself without urgent tasks at work, what will you do? Idle? Find a project to take on?

Someone comes up to you with a request that will take time and energy. Do you say yes? Do you politely say no? Do you bluntly refuse and discourage them from ever asking again?

You’re tempted to buy some item for your hobby. Can you afford it? Will you actually use it? Can you justify it to your spouse?

You have some extra cash in your checking account. Do you go out and splurge on something? Or do you make an extra payment on a debt or bolster your emergency fund?

Your boss is asking for volunteers for a tough task at work. Do you stay silent so that your job remains easy? Or do you take on that extra challenge, bolstering your resume and opening the path to promotions and raises, even though it might mean more work for a while?

When we face those choices, we almost always have an instinctive response, our natural way of doing things. We can run through the grocery aisles on instinct, grabbing items and dropping them in the cart. We blow through our urgent tasks at work and then look at social media. We say yes to requests from anyone who might have power over us, and no to everyone else. We give into temptation and buy that item if it’s small. We splurge when we have a little bit of extra cash. We stay silent when the boss is asking for volunteers. Those types of reactions are almost instinctive; we don’t even think about them.

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,

The problem is that many of those instincts are borne out of a set of values that we had at one specific point in our lives, and we keep repeating and firming up those instincts even as our values change. Those ways of doing things have become so natural to us over the years that we don’t even really think about them. We just do them.

Often, those instincts are also shaped by what we perceive as “normal” behavior in others, built up over the years by pop culture and news coverage and advertising. Name brand goods are seen as “normal” by many, whereas store brands are not. Doing the minimum amount of work to keep your job secure is seen as “normal” by many, whereas working hard to earn promotions and raises and build a resume is not. Spending everything that you earn and living paycheck to paycheck is seen as “normal” by most, whereas spending significantly less than you earn and building up money in the bank and living without debt and potentially retiring early is not.

Our instincts usually guide us right down the road that’s more travelled. It’s the path of least resistance. It’s the path we’re more familiar with. It’s the path that we often repeat just because we’ve seen it.

It’s a path that leads us to paycheck-to-paycheck living. It’s a path that leads us to a career that doesn’t grow like we want. It’s a path that leads us to a lot of short bursts of pleasure but perhaps lacking in long term joy.

And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

The road less traveled is a bit different.

It’s a path that leads to having plenty of money in the bank, giving you the freedom to move to a different career or retire early or make any number of surprising lifestyle choices. It’s a path that sometimes forsakes pleasure in the short term in order to gain some amazing long term benefits.

The thing is, for the vast majority of Americans, it is very much a road less traveled. It doesn’t feel like the choices are natural ones. Almost all of the cues of society around us are pointing down the other path, the one where we spend everything we earn, the one where we enjoy a nearly endless flood of short term pleasures, the one where we don’t do as much as we could to improve our career path.

That path leads us to a future where, even if everything goes perfectly, we’re spending our golden years scraping to get by and working until we’re quite old. It’s a future where if something goes wrong, we find ourselves almost destitute. It’s a future where half of Americans die with essentially no assets at all, meaning that their final years were almost entirely hand-to-mouth.

It’s a path that may look beautiful from here, but it bends around a corner to a place we don’t really want to go.

But what about that road less traveled? It looks a bit harder from here. It means making grocery lists and buying store brands. It means making hard career choices and not burning time at work. It means buying fewer frivolous things and selling off some of your unused stuff. It might mean things like living in a smaller home or a smaller apartment.

Further along that path, though, it flattens out and becomes very smooth. You have money in the bank. You can walk away from your job if you hate it. You can afford to retire early or become a stay-at-home parent. You can launch a side business and when it becomes successful, make the leap to doing it full time. You have more options and more freedom and more protection of those options and freedoms than you could ever have on the other path.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less travelled by,
And that has made all the difference.

The road not taken looks a lot more difficult than the path that most Americans follow. It doesn’t involve things that are advertised on televison. It doesn’t involve a shiny new car that “sets you apart.” It doesn’t involve a huge house in the suburbs. It doesn’t involve spending half of your day at work surfing the web or playing with your phone and the other half making it appear as though you’re working.

It involves buying just what you need and being very selective at buying the things that you want. It involves working hard and working smart. It involves rethinking many of the choices that you normally make in a given day, a given week, a given month, a given year.

But where does it lead? It leads to much less stress. It leads to incredible freedom of choice. It leads to early retirement if you want it. It leads to a ton of security against the unknown. It leads to having tons of time to do the things you want to do in life.

Two roads diverge in front of you. Will you choose the road not taken?

The poem “The Road Not Taken” by Robert Frost was interspersed with this article. You can find this poem and many other works by Robert Frost in the excellent volume The Poetry of Robert Frost: The Collected Poems.

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Tuesday, December 20, 2016

Building a Lifetime of Positive Financial Influences

The United States has a paycheck-to-paycheck financial culture. The truth is that 76% of Americans live paycheck to paycheck, with virtually no emergency savings to their names, and roughly half of all Americans will die with virtually no assets, not even a house.

This is considered the norm in America, and that norm pervades a lot of the elements of day to day life. People spend until they can’t find any more money to spend and they follow people in the media who spend even more than they do. Most people have a social circle full of those who spend in the same way. It’s an endless cavalcade of spending on whatever the flavor of the moment is – restaurant expenses, drinks, gadgets, shiny cars, nice clothes, a huge house, and on and on and on.

When someone decides that this routine isn’t for them – a decision I made several years back – it can be hard to pull yourself away from this routine for cultural and social reasons. Most of your friends likely have no interest in changing their spending habits. The vast majority of news and culture focuses on continually spending more and more money, too.

The truth is that the road to financial independence can look like a very lonely one. Many of the things that are obviously things that you can give up when you look to cut your expenses are social expenses – going out to eat, going out for drinks, and so on. This can cut into your social life, and it’s a tradeoff that many people struggle with. Even worse, there are often few positive role models out there for people making good choices with their money. Watch the news and you’ll see an intense focus on people with exorbitant wealth and the incredibly flashy ways in which they use that wealth, with almost no attention to the ordinary person making ends meet with smart moves.

Our thoughts are greatly shaped by the people around us. As Jim Rohn famously said, we are the average of the five people closest to us. We are also greatly shaped by the media sources we absorb, from the content itself to the perspective behind it and the advertising shipped with it. If we can shape those influences to push us toward having thoughts that are as conducive as possible toward financial independence and personal growth, it’s going to do nothing but help us on our road to financial success.

There are three main strategies I’ve found in fighting that sense of social isolation and building a positive network of people and information around you on the road to financial independence. The first is meeting people with positive financial mindsets through community involvement. The second is to change how I socialize so that I’m more likely to find people with whom I share financial perspectives. The third is to intentionally look for media that shows me thoughtful perspectives. Let’s look at each strategy in turn and see how they all fit together.

Meeting Positive Financial People

The first prong of this strategy is to simply meet people with positive financial habits and viewpoints and put yourself in position to build positive relationships with them.

The biggest question people often have is how do you find other people that have positive financial views? What do frugal people do with their time that’s social? In general, they’re not going to bars and they’re not going to clubs – those places are expensive. Where do people who are planning for financial independence go to socialize?

I’ve found a few answers to that very question over the years. Here’s how you find those people. Note, of course, that you’ll also find some people who aren’t geared toward good financial choices at these things; you’ll just find a pretty high proportion of people with a good financial mindset at these events.

Volunteer Whenever I volunteer for anything, particularly things that are not directly connected to sporting events, I often find a lot of people who are at the very least frugal in their lifestyle choices and I find a surprisingly large number of people gearing up for financial independence.

If you don’t know where to start, look for the food pantry or clothing pantry in your area, or check out your local Habitat for Humanity group. You can often find pointers to these groups on your community website.

Library programs Many local libraries sponsor a number of programs that are free and of interest to the community. There are probably a dozen book clubs sponsored by libraries within fifteen miles of my house, along with lecture series and discussion forums and other events. Plus, there are always library volunteer programs.

Visit your library’s website and see what kinds of programs they have and join one of two that seem interesting. Almost all library sponsored book clubs are very welcoming, and you can probably find a club that matches your interests. If not, look for any other meetings hosted by the library and see if any of them click with you. Many libraries have investment clubs of some kind as well – those are almost always loaded with people with financial independence goals paired with a reasonably frugal lifestyle.

Civic organizations, such as Toastmasters People who participate in civic organizations tend to be doing it for two reasons: personal growth (mixed with giving back to the community) or career networking. It’s pretty easy to figure out who’s who in those groups, and the people who are in the personal growth/giving back to the community side of the coin often tend to be oriented toward financial independence.

Toastmasters is a great example of that dichotomy. Some people are there to simply become more well-rounded people; others are there to use it for a career boost. You’ll usually find more financial independence mindsets in the group focused more on personal growth. (That’s not to say that people interested mostly in personal growth aren’t career oriented; it’s just that they realize if they become better and more rounded people, better outcomes will naturally come their way.) You’ll likely also find personal growth and financial independence minded people at other civic groups such as the Lion’s Club.

Churches and other religious organizations are also often a haven for frugal and financially sensible people. There are some, of course, who preach things like the prosperity gospel that are far out of alignment with frugal and financially independent values. A good way to start is to talk to the religious leader of that organization and find out what they believe and what values they espouse.

Meetup.com This is absolutely the best tool around for finding hobby-specific interest groups in your area. All kinds of groups in your community, many of which you’d never hear about otherwise, are listed on Meetup. Whatever hobby you might have, you can probably find something on Meetup if you live in a metro area.

While Meetup is a great way to find groups devoted to your interest, it’s not necessarily a direct ticket to people making good financial choices. Groups like these tend to attract people with their financial life in balance, but it’s far from a universal thing. It’s just that Meetup groups tend to have their focus on doing things rather than acquiring things and on personal growth and community spirit rather than attaining pure pleasure, and those types of environments tend to attract people who are committed to building a better long-term life.

Improving Socializing

You’ve now found some sources for meeting financially responsible people with a personal growth mindset in your daily life… so what’s next? For many people, particularly introverted people, knowing how to move from simply being in a room of people with similar interests and values to building strong social relationships with them can be a challenge. (I know… I’m definitely an introvert.)

I’ll start off by suggesting two books that have helped me enormously with moving from feeling really uncomfortable in group situations where I didn’t know many people to being able to enter a room and build at least a few good relationships.

First, How to Win Friends and Influence People by Dale Carnegie (check the link for my detailed summary of the book) is useful in terms of the mechanics of how exactly to, well, win friends. I honestly believe this book was written for introverts like myself who find it difficult to strike up conversations with unknown people and the book breaks it down mechanically, something that’s really, really useful for introverts and can seem a bit… mechanical for extroverts. If you feel nervous starting a conversation with someone you don’t know but you really want to unlock how to do it so that you can build some new friendships, this is the best book I’ve ever found on that subject.

Second, Never Eat Alone by Keith Ferrazzi and Tahl Raz (again, check the link for my detailed summary of the book) is useful for discussing how to maintain friendships and connections once you’ve built them. Again, it feels like a guide written for introverts, because it really spoke to me in terms of maintaining social relationships but for others it can seem a bit mechanical. I feel like it pairs very well with the Carnegie book above.

Here are a few of the key strategies I’ve found that really work well for building relationships with unknown people and following up on them.

Be positive I try very hard to be at least 90% positive with the comments I make in mixed company. If I can’t find something positive to say, I usually don’t say it. I especially avoid being critical of people who aren’t present, though I may lightly self-deprecate and occasionally make a joke with someone who is present.

Negativity almost always pushes people away, especially when it’s a repeated habit. The guy or gal who criticizes everything might get a few listeners at first, but those are rarely going to build into real connections (it can happen, but it’s rare).

You don’t need to be “fake positive,” either. Just look for genuinely positive things to say.

Ask questions and listen to answers If you’re struggling with something to do to extend a conversation with someone you find potentially interesting, ask a question. Ask them a question about themselves that isn’t deeply intrusive, and take advantage of the fact that you’re both at this event to find a useful question to ask.

For instance, if you show up at a meeting of a book club and you’re mingling afterwards, don’t be afraid to go up to someone who made a good point and tell them so, and then ask them what other books in the genre they’ve liked. Following positivity with a question almost always puts the other person in a positive mindset, and if you’re both positive, then you’ve done a lot to open the door to a potential friendship. (Remember, not everything will blossom into friendship, so don’t feel bad if it doesn’t.)

Avoid sticky subjects One of the worst ways to throw a potential friendship away is to delve into a sticky subject and find that you have differing viewpoints on it. Just avoid subjects of potential controversy where you may have different opinions unless you’re at an event where it’s almost required for you to have similar viewpoints.

The thing to remember with sticky subjects is that they’re often greatly informed by the circumstances within which that person grew up. People from different backgrounds are simply going to value different things differently than others, and that’s okay. The problem comes when you haven’t established a strong relationship with someone and you find out that you disagree on a single key value, which will probably put that relationship in a rough place when it doesn’t need to be there. Give it time and build to real conversations on sticky issues when you know each other well and understand each other’s values.

I can talk frankly with my closest friends about my political and religious viewpoints, even if they disagree with me, because even if we do disagree on some things, we know each other well enough over a long period of time that we understand that we do share more values than we disagree on. We may not have found that if we dug right into sticky areas upon our first or second meeting.

Pave the way for meaningful follow-up If you find that you’ve had a great conversation with someone, find an avenue to follow up. Suggest becoming friends or followers of each other on social media and, if you have a smartphone, do it immediately.

Another strategy I follow is to make a note of a reason or two to follow up with that person. I’ll use Evernote to write down a thing or two that we were talking about that I can follow up on and then, in the next day or two, I’ll use that as a starting point for a subsequent conversation on social media or via text or whatever method of communication we’ve exchanged. It provides a great way to follow up with a subsequent conversation.

Making Better Media Choices

The third strategy that I use is to be very careful about what media I absorb. Television, radio, books, film, magazines, newspapers, websites, social media – all of it is a powerful influence over the way we think, but we have the power to control that influence by choosing what media sources we actually bother to give our valuable attention to. Here are some tactics that have greatly helped in terms of selecting media options that encourage financially smart moves and personal growth.

Less “quick” media, opinions, or headline news I almost never watch or read the “news” any more, for several reasons. One, the current events of the day have basically no impact on my daily life. The ramifications of those events might have an impact, but those ramifications are rarely very clear in the first few hours after an event, and that’s what the news reports before they move on to something else. There’s very little value in that. Two, what passes for news is often deeply intermingled with opinion. Sometimes, pure opinion is presented as fact; at other times, the person writing the article presents only carefully selected facts to push you toward a particular conclusion. This, again, is most prevalent in opinion columns and “quick” news sites.

Anything that packages a complex issue into a brief sound bite isn’t worth my time. Anything that presents people yelling at each other isn’t worth my time. Anything that talks about a new development or a new product release isn’t worth my time because there hasn’t been adequate time to evaluate it. Anything that tries to encourage me to buy things or be jealous of the things that others have isn’t worth my time. Anything that presents a particular perspective on an issue without being very up front about the fact that it is a particular perspective isn’t worth my time. I just avoid all of it.

More (and better) books and long-form articles Instead, I invest my time in trying to understand the things that affect my life as deeply as I can. I constantly try to understand why I make the choices that I do, what my sense of right and wrong is, and where that comes from. I try to understand as deeply as possible the core issues affecting the world, and those core issues aren’t talked about on headline news.

Understanding those issues comes from quality reporting and deep thinking, and those things are usually slow and they usually are long. I tend to trust well-sourced books and long articles, or books and articles that carefully walk me through their logical process. I get far more value out of a book that carefully explains an investment strategy than a talking head on CNBC telling me about the hot mutual fund of the day. I get far more value out of a book on philosophy and values than from a moralistic rant on a political website telling me how half of the world is flatly wrong. I get far more value out of a well-reported long article on how someone different than me lives than I get out of a reality television program. I consciously choose to spend my time on the things that give me value in life and I try to avoid spending time on things that do not.

Selective blogs, podcasts, and social media These things tend to be a very mixed bag, with a few examples being very good (like NPR’s Planet Money podcast) and most not being worth the electrons used to transmit them. Again, the key isn’t timeliness, but thoughtfulness. The key isn’t anger, but levelheadedness. The key isn’t insisting that you’re right and they’re wrong, but in everyone trying to understand all sides better.

Mostly, I use these tools as recommendation engines of a sort, as the better items push me toward well-researched and well-considered books and long articles on things that genuinely matter to me.

It all really comes down to a single question: what media is worth my time? For me, the answer comes down to whether or not it actually impacts my life and my true understanding of the world and the issues in it. An awful lot of media doesn’t do that at all. If I spend an hour or two reading something or watching something, it better have contributed something positive to my life; if it doesn’t meet that threshold, it’s really not worth my time. I generally find those values in books, long-form articles, music, and occasional movies and television series without commercial interruption. Most of the rest of it is just filler that usually just confuses my values and doesn’t contribute to my understanding of the world.

Final Thoughts

The goal of all of this is a very simple one. It’s all about filling my life with influences that encourage me to continue on the path to financial independence while still having fun, being social, and enjoying life. By intentionally finding people who share those key values with me and throwing out media sources that don’t share those values, I can live a life where financial independence seems to be the norm, not the exception.

I find it in civic organizations and volunteering, not in going to clubs. I find it in dinner parties with the people I meet from those experiences. I find it in well-researched and well-written books and articles, not from headline news and reality television. Those are the things I consciously choose to fill my life with, and because of that, good financial decisions, frugality, personal growth, and trying to understand the world and make it a better place feel like the norm to me. And when those things feel normal, you’re far more likely to stick with them.

Your path to financial independence is guided by the people you spend your time with and the media you absorb. Make sure those things are actually helping you along that path, not hindering you. Good luck!

The post Building a Lifetime of Positive Financial Influences appeared first on The Simple Dollar.

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New Year’s Credit Resolutions That Could Change Your Life

If you think this article’s title sounds a little dramatic, that’s by design. But the truth is, the condition of your credit actually has a massive influence over your life. Having bad or even mediocre credit can easily cost you hundreds of dollars a month, thousands of dollars a year, and tens or even hundreds of thousands of dollars over the course of your life.

Your credit reports and credit scores are relied upon over and over again by companies deciding whether or not they wish to do business with you. The health of your credit is relevant when you apply for a loan, fill out a credit card application, try to lease an apartment, open a new utility account, take out a new insurance policy, and sometimes even when you apply for a job. The importance of your credit simply cannot be overstated.

Now that you realize that your credit matters, it is a great time to figure out how you can improve it. Here are four killer New Year’s credit resolutions that can help you improve your credit in 2017.

Resolution #1: Check Your Credit Reports Often

It’s your personal responsibility to make sure the information contained in your credit reports is accurate. No one else is going to be as good of a steward of your information as you will be. Thankfully, keeping an eye on your credit reports is easier than ever, and free.

First, thanks to federal law, you have the right to access all three of your credit reports for free every 12 months at AnnualCreditReport.com. Additionally, there’s no shortage of websites that will grant you free access to one or more of your credit reports every month if you agree to view advertising for credit services (loans, credit cards, and the like). Point being, there’s simply no excuse to not become more engaged with your credit reports.

Resolution #2: Don’t Let Credit Errors Slide

If you check your credit reports and discover an error, you should do something about it. The Fair Credit Reporting Act gives you the right to dispute suspected errors with all three of the credit reporting agencies – Equifax, Trans Union, and Experian.

You can dispute errors all on your own or to hire a professional to do the work for you. If you do choose to hire someone, just make sure to do your due diligence ahead of time and confirm that the company with which you work is trustworthy.

Resolution #3: Make On-Time Payments a Priority

It doesn’t take a credit expert to know that late payments are a really big deal on your credit report. One of the most important factors considered in the calculation of your credit scores is whether or not you make timely payments on your credit obligations.

Earning great credit is going to be an impossible task until you break the late payment habit. And even when you do break it, you’re going to have to wait seven years for the record of your late payments to be removed from your credit reports. So, start now!

Resolution #4: Tackle Your Credit Card Debt

Your credit card debt is another extremely important consideration when your credit scores are calculated. The fact is, credit card debt lowers your credit score, even if your payments on the accounts are always on time. That’s because credit card balances eat into your credit utilization rate, or the amount of your available credit limit that you’ve used up, and that’s the second biggest factor in your credit score.

Making a plan to pay off your credit card debt and to never again revolve balances from month to month is one of the smartest credit score moves you can make. The fact that you may save a ton of money on interest fees is an added bonus, as the average annual percentage rate (APR) for a general use credit card is a brutal 16%.

Resolution #5: Stop Applying for Credit Unnecessarily

Credit scoring models don’t like it when you apply for credit excessively. Apply too often and your credit scores could take a downward slide.

This doesn’t mean you should never apply for credit again. But what it does mean is that you should apply for credit only when you actually need it, and not simply to save 20% off your purchases during the holiday season by opening a bunch of new store credit card accounts.

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John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.

The post New Year’s Credit Resolutions That Could Change Your Life appeared first on The Simple Dollar.

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