Category Archives: Motivation

Don’t Focus on The Middle Class

When it comes to where people rank on an economic level, the vast majority of people think that they are middle class, but they are not.  The single mother with two children and an income of $25,000 thinks that she is middle class.  The CEO of a small business who earns over $400,000 thinks that he is middle class.  While most people are working hard, everybody cannot be middle class.

I think that everybody thinks they are middle-class because they want to fit in.  They do not want to accept that they are less than or feel superior to their peers.  They also do not know the exact income parameters.  According to The Pew Research Center, to be considered middle class, you have to have to have an annual household income between $35,000 and $106,000.  According to the 2010 census, that is about half of the population in the United States.  The Census Bureau also reported that the median household income was $59,000.

After looking at those numbers, the two examples that I gave are not members of the middle-class.  The single mother does not meet this threshold.  The CEO is actually closer to being a one-percenter than a member of the middle-class.


Location is also a key factor.  Where you live also makes a difference.  In South Carolina, the median income is $47,000.  In New Jersey, the median income is $70,000.  Even though the median salary in New Jersey is higher than in South Carolina, so is the cost of living.  Taxes, real-estate, and insurance are much more expensive in the Northeast compared to the South.

Home Ownership

Many people associate being a member of the middle class with home ownership.  Homeownership has long been associated with being middle-class.  The location has to be considered when evaluating homeownership being a strong characteristic of the middle-class.  In South Carolina, it is easy to find a new three-bedroom house under the $200,000 price tag that Zillow classifies as the median price.  Prices are much higher in San Francisco, New York City, and Boston.  In those markets, a two-bedroom flat can easily cost more than $1,000,000.  Based on the difference in cost, homeownership is even a challenge for high-earners in those major markets.


What about a college degree?  Having a bachelor’s degree once allowed for easy entry into a middle-class existence.  Today, it depends more on what the degree is in and how much debt you had to take on to earn the degree.  While people with a bachelor’s degree still earn much more than those who do not have one, there are more variables to consider.


Some people judge their class status by how they act.  They do not focus on income, homeownership, or education.  They judge it on their lifestyle.  While this might be the worst possible way to measure what class you are a member of, some simply think they fit into a particular class if the just act the part.  Pretending to be in an economic class that you do not belong to will just lead to economic woes in the form of debt.  It is better if you are honest with your lot in life.  If you want to improve your situation, it will take sacrifice and hard work.

Making personal progress

I do enjoy reading about the different classes.  Sociology is an interesting subject.  It is fascinating to study how people act and try to fit in with different groups.

When it comes to financial independence, knowing about what class you fit into does not make much difference.  It is not something that you should stress over.

What matters is that you are earning a living and always trying to improve your skills to earn more money.  Instead of focusing on how the middle-class spends their money, focus on how you can save more of your own money.  Once you get your savings in order, invest your money wisely.

I have never put too much thought into if I belonged to the middle-class or not.  I break it down to a much simpler classification.  I do not focus on earnings, but rather assets.

Financial Independence

There are those who are working class and those who are financially independent.  If you have to work for a living, you are working class.  If you have more than enough money to cover twenty-five years of expenses or beyond without having to earn a paycheck, you are financially independent.

When you have enough money to pay your bills for twenty-five years, it is up to you if you want to work or not.  If you do not have that kind of financial cushion, you have to work for a living.  After your savings have reached that level, you can keep your current job or find something that might be more meaningful.  It is up to you to decide.  That is the type of freedom that being financially independent provides.

If you are new to this blog or to the financial independence community, you might think that saving that much is an impossibility.  It is not impossible.  It is hard though.  It takes many years of living below your means, saving a large part of your salary, and investing it wisely.

Do not compare

Instead of trying to figure out if you can move to a nicer neighborhood or if you are in the same class with your neighbors, change how you think about the classes.  Boil it down to being financially independent or working class.  Focus on your own financial situation and do not try to compare where you fit in with anyone else.

By focusing on where you stack up to the middle, your measuring stick will never exceed mediocracy.  The middle is being squeezed from so many different directions.  Rise above that situation and mindset.

Play by your own rules and set your own financial goals.  Why do you have to be placed into some outdated economic pigeonhole?  The Industrial Revolution is dead.  Break free from the way society has taught you to think about how your earnings define you.  Don’t compare yourself to your peers unless you want to give away your joy.


No, I am not trying to become the Gore Vidal of the financial independence movement.  All I am stating is to use your money to build a life of freedom.  Don’t pay attention to class warfare.  That is a losing battle.  Make the most of what you have and always try to improve your situation.  Focus on what you truly want and go get it.

Be grateful for what you have instead of envious or others.  Help someone every day who is less fortunate than you instead of feeling self-pity.  Work smarter not harder, spend less, save until it hurts, and invest wisely.  Follow those principles and you will not have to worry about what class you are part of because you will be too busy working for your freedom.

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A Vision Board for Personal Finances

I recently came across an interesting tool to empower individuals to better reach their goals.  That tool is a vision board.  A vision board is a poster where you post your goals or dreams.  You can post words or images.  By seeing your goals every day, they are always going to be on your mind.  This allows your mind to keep processing ways to make these goals a reality in your life.  The daily reminder of your dreams is a powerful tool to keep you motivated.

When I read about a vision board, I thought this is an ideal tool to use to reach goals tied to personal finance.  It can be used at any stage of where you might be on the journey toward financial independence.  It can be used as a motivator to get you started, to overcome a hurdle, or to make the last push to reach FIRE.

Getting Started:

Start by brainstorming.  This is an exercise of writing all your words down on paper.  If you are new to getting your personal finance in order, you might want to start with some of these words or phrases: debt, budget, savings, spending, investing, credit cards, down payment for a house, student loans, emergency fund, mutual funds, and others.  If you have been actively involved in managing your personal finances for some time, you might consider words or phrases like: maxing out 401K, Roth IRA, HSA, writing a will, asset allocation, paying off mortgage, 529 plan, term life insurance, early retirement, as well as other words that meet your individual goals.


The next step is to find images that best represent your goals.  Take the list of words that you have written down and type them one at a time into Google. Search under images.  When you find the best images that capture the essence of your dreams, print them out.  Google will provide you with many images, so be sure to select the ones that you feel will best inspire you.  Do this for all the words on your list.


After you have your images, you are going to need some materials.  You will need a poster board, tape, glue, markers, and scissors.  You might have some of these supplies.  If you need them, go to your local hobby store or online at Amazon to buy the supplies you need.


The next step is to make a collage out of your images.  Since your vision board is based on financial goals, you can design it in a progressive manner. By adding structure, you can better monitor progress.  For example: pay off credit card debt, create an emergency fund, open a Roth IRA, and whatever follows based on your dreams.


After you glue or paste your images to the vision board, take some time to identify the words that best represent the image.  Print these words under the image that is attached to the vision board.  If possible, use verbs.  By using an action word or phrase, the vision board is reinforcing what you need to do to reach your dreams.  For example, don’t just use the word “debt”.  Instead, try the phrase “pay off credit card debt”.  By being more specific, you can have an exact objective.


Actively use your vision board.  Whenever you walk past your vision board, stop for a few seconds and ponder it.  Think about what you have achieved and use that as a reminder of what is possible.  Be mindful of what you are working on and focus on being present.  Identify what you want to achieve and what your next actions will be.


Where should a vision board be located?  It should be visible.  It should be in a location that you will be sure to see it at least twice per day.  A good place for it might be next to your bed.  By having it in your bedroom you can review it upon waking in the morning and before you retire in the evening.


I will admit to you that I am not one for new age gimmicks.  I am, however, a very visual person.  For example, on my vision board, I have very specific actions that I visually see myself doing.  My vision board has both short, mid-term, and long-term goals.  My short-term goal is to create a new budget and evaluate it twice per year when I evaluate our asset allocation.  My mid-term goal is to increase our savings rate by 1% per year until we reach retirement.  My long-term goal is to buy a house on a lake for our retirement house.

Have you ever created a vision or dream board? Did it help to motivate you or to empower you to strive for your dreams?  Please share your experience in the comment section.

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Debt: Reaching Step Zero

The first step in correcting a problem is to admit that there is a problem.  Prior to admitting that there is a problem, there is another step.  That is when a person reaches their breaking point and cannot go on living the way that they are living.  That is often referred to as step zero.  Step zero is when a person says to themselves “this crap has to stop”.  It is the breaking point.  It is the point where a person becomes willing to take corrective action.  They become willing to try a different approach of living because of a psychic change.

Have you reached the point where you realized that your way of managing money is not working?  Are you spending more than you earn?  Does all of your earnings go towards paying bills?  Do you have creditors calling you who want to be paid?  Do you have to borrow money when an emergency occurs?  Do you find yourself spending money that you do not have in order to keep up with your friends, neighbors, or relatives?  Do you feel broke even though you work hard and earn a good income?  Do you contribute any money to your retirement savings accounts?

Have you reached step zero? Do you want to change how you manage your finances?  Do you want to take control of your life?  Do you want to break away from the bondage of debt?  Are you at a point where you are totally dissatisfied with how you are living because of debt?

The good news is that there is hope.  It can get better.  It is all up to you.  It is based on your willingness to change.

Now that you have admitted that your way of managing your finances does not work, how should you start the mending process?

Measuring the Damage

Start by measuring the damage that you created.  Before you can move forward, do an analysis of what you owe.  My favorite tool to assess debt is the debt-to-income ratio.

To calculate your Debt-to-Income Ratio, see the formula below:

Debt-to-Income Ratio = Monthly Debt Payments/Monthly Income x 100

Example: $1000 in Monthly Debt Payments/$3000 in Monthly Income x 100 = DTI of 33%

What is considered a bad DTI Ratio?

If your DTI Ratio is higher than 36%, you are in the danger zone.  The higher your DTI Ratio is, the less money you have to cover your living expenses.  A healthy DTI Ratio is less than 16%.

Where to Start

After you know your DTI Ratio, it is time to start paying down that debt.  Start with paying off all of your bad debt.  Pay off all of your payday loans, credit cards, and auto loans.  Next, start to pay down your student loans, mortgage, and business loans if they exist.

Stop the Bleeding

Stop buying stuff you do not need on credit.  Identify what you need and only pay cash for those needs.  A few examples of needs are food, clothing, medical supplies, transportation costs, and housing expenses. Wants are fancy cell phones, cable TV, designer clothes, eating at restaurants, or any other expense that is not required to live.


If you are part of a dual-income household, learn to live off of one salary.  Use the higher of the two salaries to pay for all of the household living expenses.  Use the lower of the two salaries to pay down debt.  After your debt is paid off, you can start to focus on saving money.

Get a second job.  Find a side gig to earn money to pay down debt.  If you spend your free time working, you will be less likely to spend money on stuff you do not need.

Create a budget.  A budget is a plan that allows you to break down where your earnings will be allocated based on a percentage.  For example, 25% for housing, 11% for transportation, 20% to pay off bad debts.  Once you have a budget established, all you need to do is follow it.


Even though you have debt, you still have to live your life and have fun.  Find ways to enjoy what your local community has to offer.  Instead of going to high priced movies or amusement parks, go to local parks or free museums.  Instead of going to a high priced gym, exercise outside by walking.  Instead of going on a luxurious vacation, take a staycation.

Guilt & Shame

There is no use in feeling bad about having debt.  You have identified the problem.  Now is the time to move ahead and to make positive changes.  Having ill feelings is not a solution.

Focus on the positive and on everything that is possible once your debt is under control.  Try to take small steps and to monitor your progress.  Don’t strive for perfection.  If you have a slip, don’t beat yourself up.  Pick yourself back up and keep striving for progress.


Debt is similar to hiking.  Once you walk 5 miles into the woods, you have to walk 5 miles to get out.  Now that you have decided that a change is needed, it is up to you.  At this point, there is no use in looking for someone or something to blame for your debt.  You cannot change the past.  You can just pick up what is left and apply a solution.  If you learn from the situation, it was not a waste.  As you move forward, you can also use it to help other people who are struggling with their own financial issues.

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Be Intentional

I recently attended a leadership training seminar at a local college.  This seminar was about managing the multi-generational workforce.  The facilitator covered many topics and I am not going to get into any of those details in this post.  He said many interesting things, but the one statement that made me think was that he said that we should always be intentional.

Everything we do should be with intent.  Our actions should have an intended outcome.  Our words should have an intended message.  Even our thoughts should be focused and have a purpose.

The purpose of this training was meant for workforce development.  The message can easily be applied into everyday life.  It is ideal for managing money.

Too many people just coast in life.  They walk around making noise and bumping into things.  By not having a plan, they will just land at a random destination.  What could possibly go wrong with that approach?

To be successful in all your affairs, practice being more intentional.  A great place to start is with how you manage your personal finances.  You should know the why behind everything that you do.


Do you know what your savings rate is?  You should be able to answer this question without giving it any thought.  Is it 10%, 20%, or more than 30%?  Your savings rate is the most important factor that will determine if you will reach financial independence or not.  It is also one of the rare aspects that you have control over.  Nobody can control what the S&P 500 will return this year, what direction interest rates are headed, or if there will be a spike inflation.  Everyone, however, can control what their saving rate is.


Your savings rate is directly impacted by your spending.  Do you just spend money without thinking?  Do you go to the mall, outlets, or online and buy things that you do not need?  If you want to change this trend, become intentional with your spending.  Before you buy something, ask yourself if you need it or truly want it?  If you must spend the money, did you shop around for the best price?  Is there a low-cost alternative to making the purchase?  Even if there isn’t a better alternative, at least you did your due diligence and gave thought to the purchase.


Does your credit card bill arrive, and you cringe when you look at your balance due?  Do you make late payments or just pay the minimum balance on your credit cards?  Do you know what your credit score is?  Do you know what your debt-to-income ratio is and what a healthy ratio should be?  Do you know how to calculate your debt-to-income ratio?  If you want to improve how you manage debt, take a more intentional approach.  Learn what your credit score is, identify if you have too much debt for what your income is, and ultimately establish a plan to get out of debt.


I bet you know what your annual salary or hourly wage is?  You get a paycheck every week or bi-weekly, so you are reminded frequently about that rate.  Do you feel that you are underpaid?  Doesn’t everyone?  Maybe you are underpaid or maybe you are overpaid.  Before you ask for a meeting with your supervisor demanding a raise, you should do your homework.  Be intentional and research what the market rate for your position is based on your location and level of experience.  If you are under market rate, you might have a case.  If you are over market rate, but not satisfied, you might need to develop more skills or ask for a more challenging assignment.


If someone asked you what type of investor you are, could you answer them?  Are you a market timer?  Do you buy and hold equities?  Are you a passive investor who invests in a few different mutual funds?  Do you simply try to capture what the market returns with a total stock market fund?  Do you use value tilts?  Do you buy dividend stocks?  Are you trying to get rich by investing in Bitcoin?  You are free to decide how you invest your money, but you should know the why behind your plan.  Your approach to investing should be intentional.  Nobody knows what the future market returns will be, but you should at least know what you are intending to accomplish with your asset allocation.

Financial Independence

Do you know how much money you need to have in savings to reach financial independence?  To declare financial independence, the general rule is to have 25 years worth of living expenses in savings.  That is based on a 4% withdrawal rate that most financial professionals consider to be acceptable.  Do you know if you have obtained this milestone or how close you are?  Most people who reach financial independence do not get there by accident.  They live intentionally for many years.

Early Retirement

Do you have a target-date as to when you want to retire?  It might be next week, or it might be in 10 years.  If you have an established early retirement date, what are you doing to make that goal a reality?  Are you doing everything you can to maximize your salary and taking on side gigs?  Are you saving until it hurts?  Do you have the right mix of investments to both reach your goal and sleep comfortably at night?  If you do, you are acting in an intentional way.


The nice thing about being intentional is that you can start this process now.  Start by reviewing your current financial situation.  Can you answer why for all your financial decisions?

If you have a financial plan, use it as a guide.  If you do not have a written plan, write one.  That is a good starting point if you want to become intentional.  Review your plan for areas of your financial situation that might need to be amended.

Some fixes are quick, and others require time to implement change.  Moving forward, wherever money is concerned, ask yourself why before you make a final decision.  If you cannot answer why you are doing something, give it some thought and find out what your true intentions are.

This is just another example of how to improve your financial situation.  It provides a pause before you act.  Sometimes giving a decision an additional few seconds of thought can turn a bad decision into a good decision or a good decision into a better decision.

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Financial Unmanageability Transcends Money

I believe that financial unmanageability transcends money.  When it comes to finding ways to better manage your finances, there are unlimited resources.  There are many great books, blogs, forums, websites, and apps.  There is not a shortage of information, tools, or even professional services.  If a person wants to make improvements when it comes to spending less, paying down debt, saving more of their earnings, or learning to invest, they could find out how to do it in a matter of minutes by doing a few simple online searches.

If the solution to finding ways to improve your financial situation is so readily available, why are so many people struggling?  Yes, we can blame the marketers for always trying to sell the newest gadget.  That excuse, however, only carries so much weight.  Consumers are more educated than ever and many tune ads out.

What if the problem is more pervasive?  What if the problem is beyond simple behavior modification? What if the problem is based on unmanageability?  Yes, the inability to have mastery over your life.

If the problem is based in unmanageability, there is not a blog or app to solve the problem.  If your life is truly unmanageable, trying to get a better handle on your financial shortcomings is just treating a symptom.  To gain control of your life, it will take a little more than spending less and saving more.


Nobody truly wants to admit their life is unmanageable.  Just like nobody wants to admit they drink, spend, eat, or gamble too much.  It is natural for many people to think, I don’t have an issue with my finances and then go spend more money.  It is common behavior for people who have addiction problems or a spiritual malady to deny what the problem is.  The thought process is like a broken record that skips the same verse over and over.  I do not have a problem with my finances – go spend more money.


To resent is to keep going back to a negative feeling.  Instead of feeling and processing those bad or negative feelings, you spend money.  Resentment is not always based on harboring ill feeling towards someone who you believe wronged you in some way.  Resentment can also be rooted in harboring ill feelings towards someone who did exactly what you expected them to do.  The problem was that you were still not satisfied.  They were unable to fill that void that exists within you.  To find temporary relief, you continue to spend and try to fill that void with an external fix.  Unfortunately, it does not last.  After you exhale out and feel relief, you almost immediately inhale the resentment back in.

It is All About You

When you live an unmanageable life, there will always be a conflict with self.  It is all about you.  You cannot be of real use to others.  Sure, you might be physically present in their life, but are you truly living in the moment?  Or are you just physically there, but mentally bound to your troubles?  When your self-centered thoughts and feelings are the focus of your existence, it is difficult to make meaningful connections with others.


You are not a bad person.  You might even do nice things for others.  You believe that you are thoughtful and caring.  You spend money on the people you care about and on those who you want to care about you. Externally that all might be true, but aren’t you just doing all those things to find more relief and to feel better about your current state of unmanageability?

Do you live in fear?  Do you spend more than you earn and panic when the bills arrive?  Do you lay awake at night and worry that you will never be able to get out from under all the debt you are in?  Do you see retirement as a possible option for others, but something that you would never be able to afford?  Do you obsess over your finances in one thought, but follow it up with more spending that pushes you further away from having healthy finances?  Do you feel hopeless?

Is this fear leading to other health concerns?  Is it leading to weight gain or panic attacks?  Have you gone to see your doctor because you feel overwhelmed?  Did your doctor put you on meds to take the edge off and to help you cope?

There is a Solution

Yes, getting your finances in order is great, but you first need to get your mind right.  I am not a therapist.  I am just a guy with a personal finance blog.  If you are honesty suffering from the symptoms that I listed above, you should seek outside help.  Find out if your health insurance covers visits to a psychologist without a referral from your primary care doctor.  If not, ask your doctor for a referral to one that they recommend.  You might have to pay a low co-pay, but it will be worth it.

There are also 12-step programs.  As I stated earlier, your spending might be just a symptom of a larger issue.  There are 12-step programs for spending, gambling, drinking, and just about any other type of obsessive disease.  It is up to you to dig deeper and decide if you think a 12-step solution would be a good fit for you.


Don’t beat yourself up.  Don’t wallow in guilt, shame, remorse, or any other negative feeling.  The past is the past.  It is time to move on.  Pick up the pieces.  You are not a bad person.  You might have made poor decisions and you might suffer from the disease of addiction.  After you put your own house back in order, you can make amends to those you feel you might have harmed including yourself.

There is hope.  There is also help available.  It is now up to you to find the right help that will be a catalyst for positive change.

Once you get your mind right, great things will start to happen in your life.  Not only will your financial situation improve, but every area of your life will get better.  How could it not, you will be moving away from the problem and in the solution.

You will be able to better accept people and situations as they are.  You will be able to let go of the past. You will better assimilate into the mainstream of life.  You will become more useful to the people around you.  You will finally find the peace that you have been searching for all along.

As a bonus, you should be able to better budget and save money.  Your whole life will become more manageable.  Having a few more bucks in the bank will just make life more enjoyable.

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