Thursday, April 4, 2013

The American Savings Account An Endangered Species

"Remember to put 20% in your piggy bank!"


The Saving Habit

Did your parents ever tell you to take $.20 of a dollar that you got and put it in a special place separate from the money that you usually spent on toys, treats and special occasions? Whether you got $20 for
your birthday, or $.25 from the tooth fairy, do you remember ever being told that you needed to save some of it as a good practice for managing your finances when you were a grown up? Did your parent, grandparent, relative or guardian make sure that you were only spending 80% of what you had and ensure that you kept the other amount? Maybe yours did, maybe like mine, they didn't. You see, the habits of the way that people spend their money are instilled at a young age and that is why it so hard to change spending habits when a person is older and has to start from scratch. 

Believe me, I speak from experience. I still have regret over not saving any portion of my income when I worked at a great paying job for a year...I was such an idiot. I did not realize that there is no such thing as
<---- "disposable income".

I had a personal tragedy afflict me and couldn't work, so when my roommates moved on and out, I was left holding the lease and without a penny to my name at the age of 22. Some lessons in life are harder than others.

It is incredibly important to cultivate the habit of saving a portion of what you earn, or are given because often enough, your savings is all that you have should tragedy strike, or an unexpected expense arise. And it is never too late to change your financial future. Remember when Oprah showcased financial expert and author Jean Chatzky's Debt Diet? I recommend that book for everyone!!! That and Dave Ramsey's The Total Money Makeover and Financial Peace University!!! Dave Ramsey is on air and you can listen to his radio show, check it out at

The Painful Truth

In October of 2012 The Huffington Post published an article stating that "nearly half of Americans have less than $500 in savings". Ouch. Prior to this posting a popular website, posted these statistics based on an average.

American Family Financial StatisticsData
Average American family savings account balance$3,800
Percent of working Americans who are not saving for retirement40 %
Percent of American families who have no savings at all25 %
Average amount saved for retirement$35,000
Average American household debt$117,951
Average American family home value$160,000
Average amount owed on home mortgage$95,000
Average American household annual income$43,000
Average credit card debt$2,200
Percent of American workers who postponed their retirement age this year24 %
Percent surveyed who are very confident about having enough money for retirement18 %
Percent of American adults who do not have a bank account7.7 %
Percent of American adults who have an emergency fund to fall back on38 %

Those numbers are nowhere near what a financially responsible person ought to be at. What we see here that a lot of people are living beyond their means. Do you see the errors of the financial choices of many people? Let me highlight some financial choices that could be altered, starting from the first debts that we accrue.

Student Loans

If the average household debt is as stated above, let us reason that without a vehicle included, a person's total debt just from student loans is $60,000 for both adults in the household. (This information based on and for 2012.) Many people either graduate college to move on to work in their chosen professions, only to amortize their monthly student loan payments into a household budget and then live around them as "just another bill", or they do not finish college and have the debt and the challenge of procuring enough income to pay the bills and keep the debtors satisfied.
Let us have a paradigm shift...what if before accruing a mortgage, people paid off their student loans? Economizing and living within one's financial means. Having the will power to say, "No, I will wait until my financial situation is such that I can still comfortably put 20% of my income into savings, only pay 25% of my income to my housing budget and still live in a financially sound way!" Now, that would be profound! But how often do you meet people who can wait to have the nice house in the great neighborhood until they have their student loans paid off and are actually in a secure place financially with a healthy savings account? Most people are 1 to 3 paychecks away from broke.


No, I am not going to tell you to take the bus, unless it is convenient and doesn't take 2 hours to get you to work and 2 hours home-that is reason enough to buy a vehicle. What I propose is to make a choice based on keeping your savings account healthy. Instead of buying an expensive brand new car (that loses $10,000 off the sticker price once the rear wheels hit the street pavement) to instead chose to get the test-drive model, or a slightly used vehicle and saved that $10,000 plus 36 to 50 months of interest
payments. There is a significant savings to be had if you buy with your financial future and retirement in mind. Another clever idea to keep in mind is that if you have a healthy savings account that has been building for sometime, you can not only afford a great down payment that will lower your monthly financed amount, but you can also afford to double up on payments. This double paying towards your auto loan will still build your credit score up every month as you make payments on time and it will help you save money on the interest that you would have paid on the latter half of your loan.


How did credit start? Well, in the beginning it was how early businesses were able to operate until their wares sold. Take the farmer who needs seed to be able to harvest, or the rancher who needs to be able to get tools and feed before he can take and sell his full grown livestock, or the seamstress who needs thread and fabric to be able to make garments to sell. Credit was a short term solution to help people through short term situations. We can look back and see how credit has grown and taken over our economic structure. We now focus on our credit scores and not necessarily our savings amounts. Our dependency on credit has replaced our understanding for a need for savings. The school of thought propitiated in the 1950's was"Why wait to save to pay for it in a year when you can get credit to buy it today for low monthly payments?!" The now mentality. ,
Credit cards ought to be used to build your credit score and paid off monthly to every other month. Yes, that requires self-discipline and sticking to a payment system...that's ok, there is an app for that. 
The reality that we have is that many people have more than one credit card that they are just paying the minimum payment of interest, or amount due and not making any headway on paying down the actual principle balance. Or they are just transferring their balances to new 0% interest cards and still not making a dent in their debt.
What the personal finance experts teach is to pay off your credit cards and stop wasting money on unnecessary interest payments and miniscule minimum payments and get the proverbial monkey off your back.

Stagger; to arrange otherwise than at the same time, especially in a series of alternating or continually overlapping intervals.

 Do you know someone who got a house, then a vehicle, then furniture, then a new TV, new computer, new appliances...? That is a lot to get at one time! How do they do it? Financing. Not only does it negatively impact your FICO score to take that many pulls to get financed, but the stress of paying everything on time on doesn't afford one peace of mind. Again, it's OK if you are in that situation because there is an app for that! 
 It is important to make a big purchase that may need to be financed and then wait 6 months to make another big purchase, so long as your budgeting margins are still in adherence; your savings still gets fed 20% regardless, and your housing stays at 25% of your net income.
Again, make economic choices with big items like furniture. I know someone who got a couch off of craigslist and found $400 in it. Being thrifty pays...maybe not like that, but it feels good to brag about how much you saved!


I discussed in my first blog the amount of opportunities that my parents let pass them by because they weren't able to afford to invest. If the principle of saving 20% had been a house rule, we would all be sitting pretty right now. Why? Because my parents would have invested in the cellular industry, they
would have invested in insurance and they would have a 402B retirement plan each. My sisters and I would have trust funds and we would have our own respective businesses and for those of us who enjoy learning, our college degrees. It all goes back to having the self-discipline to have a boundary within yourself to say, "No!" to your internal instant gratification gremlin that gets green with envy at the nice things of others. Think about it; do those other people that you see with the nice things that you want have investments that give them returns? Do they have the peace of mind knowing that they have a healthy retirement plan? Do their children's college funds are robust? Do they have the peace of mind of knowing that they are not in uncomfortable debt?

What Now?

Now is the time to make a decision about how you are going to manage your financial future. I am a solution oriented person. That is why I like the apps that come with my Wake Up Now! membership. I can plug in all of my expenses and track them. I get to have a financial manager in the palm of my hand! There is this app called Taxbot that I got, it is great! And, just like the wealthy, I get rewards to help me save even more money...unfair? Not at all! I may not be able to go back in time to when I was 21, or 19 and tell my younger self what choices to make, but I can take control and move on from here and make better choices! And so can you!

Isn't it time to take control of where your future is heading? 
Isn't it time to make cultivate your legacy that you will leave behind now?

YES it is!

Get your Wake Up Now membership and apps and get going! Then tell your friends and family and help them get in control of their finances and save money while they do it!
And if you like what you use enough to share it, then talk to me about joining my team and get something back for giving to others the gift of financial freedom!

Click WakeUpNow!

For more information and to start working with me at home the smart, productive and affordable way, please see my blog, 
*This Blog is the intellectual property of Amy J. Smith, all rights reserved 2013

Friday, March 29, 2013

Be Your Own Accountant & Get Paid To Do It!

Wake Up Now! Transforming Our Financial Management  

Set Up For Failure Without Financial Planning

I came into my adult life without any real template for success with personal finance. I grew up in a household where I knew the meaning of bankruptcy and the median poverty level in 1989(then $20,000) at the age of 7. I knew what it was to get hand-me-down clothes, donated clothes and to shop at a thrift store. Holiday celebrations were scarce and usually provided by whichever caring family that took an interest is helping us that my parents hadn't alienated, or relatives that were near and kept in contact. I can count the Christmases that we had where we all received good gifts, mostly from relatives. I knew what it was to be grateful for my blessings. I always wondered why we never sent gifts out to our relatives, didn't get new things, or go on vacations and visit places like Disney Land. Looking back I think the saddest day in my youth was when I came to accept the fact that we would never be "like everyone else" because we were poor. Words like "personal finance", "expense management" and "financial planning" were rarely heard in my home and when they were, it was it was in relation to a short term project.
It wasn't that my parents didn't work hard, or that they blatantly chose not to pay our bills, it was that they were overwhelmed and uneducated. Also, my mother was very ill in more than one way and I don't believe that foodstamps were an option for them, either by ignorance, pride, or not qualifying for them at their income bracket. Medical bills were the reason for their bankruptcy. 

 Common Mistakes In Personal Finance

My mother had no head for financial planning. When we got our tax refund at the peak of my step-father's business, rather than invest it in a sure-fire option for return, she convinced my step-father to buy us all day-beds. This is where being thrifty would have benefited us long term. We had wooden bunk beds that were just fine for my middle sister and I, and my younger sister could have slept in a toddler bed. This is a mistake that a lot of people make, going for what is shiny rather than what is practical just because they can afford it at the time.
"I'm sorry, we can't afford that."

Budgeting and expense management were not as productive as they needed to be. I got to sit and see our monthly budgets as my mother wrote them out. They never had an option for savings as a use for any remainder. The profit from my step-dad's business was used as "mad" money. There was no future goal in mind, my mother always convinced my step-father to live in the moment. So, we grew up without any sort of financial safety net or monetary cushion in preparation for the financial storms that came along.

                                                         Stuck Thinking Inside The Box

We worked as volunteers at a thrift store in central Portland and as payment for our services we were able to take home whatever we needed or wanted. This would have been a fantastic opportunity for my parents to have sold those shiny day-beds and had us use free beds. Also, there could have been so many opportunities to capitalize on free goods to be sold elsewhere; swapmeet, community yard sale, etc; And when we had a large move, rather than make the choice to sell what we did not need, my parents put the items in a storage unit and we ended up losing all of our belongings from our past that we did not already have with us. Holding on too tightly to something does not always work out. It is important to see the bigger picture.

 Opportunistic Tragedy

I remember the first Tupperware party that my mother went to, it was 1985 was a bit over 3, but not yet 4. It was a blast and I loved the event. We had just moved to Daniel's Creek, Oregon from the Tri-Cities in Washington. We had gone from a single-wide mobile home to a very nice home and my little sister had been born. My parents were planning on moving again for a better job for my step-father. Rather than stay and grow a business that my mother would have done well at then, my parents relocated and upset the delicate balance that is the permanence of establishing one's self in a community.
When opportunity knocks you had better answer. My step-father told me when I got my first cell-phone
at the age of 19 that he'd had the option to buy in to the cellular market back in the 1990's before it had boomed, but he "didn't have the money" then...

There was this newer MLM company that got started in the 1960's and got really big in the 1980's called AMWAY...yeah, my parents had an opportunity there.

Insurance, HUMAX, Mary Kay, and the list goes on for all the opportunities that my parents had and passed up.

The Hamster Wheel Business

My step-father worked harder than anyone else I had ever met. He drove long-haul truck which was a pretty decent paying gig. The isolation took it's toll on my mother and he was soon home, making less

It might look like you're going somewhere, but you're not.
money, but around to make my mother perk up and our quality of life was better. Then my step-father discovered that a niche market in Portland, Oregon. He found what he called "parkers", cars that no one wanted and that he could buy for cheap, that might need some work done and cleaned up that he would resell at a higher value. He had vision, a great attitude, tools and dedication, but I am sad to say that he did not make as much of a success out of his business as he could have. He had such potential and I really think that he would have gone farther had he some guidance in the business arena, more connections and a spouse who could see the big picture.

My mother tutored under a master pruner and gardener in Portland, Oregon and she started her own pruning & gardening business. She even had success with getting the bid for the Hermiston, Oregon townhall and her landscaping was great. I can't tell you how much profit that she made overall because she never discussed her expense management. But she stopped there. She got distracted with dog-breeding. 
And the next thing you know my parents were moving again. Any rapport, or relationships that they had established in that smaller town that would have helped my mother become more successful, were tossed aside.

An Unfinished Expense Management Puzzle

A big key piece of the business puzzle that my parents were missing was effective marketing. They blew money on things that had no return without any thought to the concept of expense management.
So you can buy toys; a bigger TV, weapons, more expensive clothing, jewelery, a vacation...but are those going to give you a return in your investment? No. They are a non-recuperative expense.
My step-father used the cheap classified ads to draw business, but how much greater traffic would he had been able to attract if he had invested some of his profit into a bigger color add? If he had gotten business cards printed? If he had established relationships through a small business co-op or networking group? The formula for investing in your business should be to take a portion of your profit and invest it in advertising

Being Asleep Financially

A lack of financial planning causes one to sleep through the opportunities that life may bring for good fortune. I can tell you right now that for all the expenditures that my parents made towards furthering there respective businesses, that they never claimed anything as a tax write off or business expense. Do youknow how much money they lost just at tax time over the years?! Just as an individual that is the head of a household and relocating for a job there is a deduction that I am sure that they never credited from.
There problem was that they were uneducated in matters of money management for business. They were caught in the Poverty Mentality. There are some great public figures that have arisen in the arena of money management in the past few years whose sole goal is to help families to break the generational chain of poverty through changing the mentality of first parents and then the result being their children are successful financially.
But what are the tools that those who are wanting to change their lives financially permanently now? For many the solution seems to make more money, but does that actually help if you don't know how to manage it? To invest properly? To have healthy personal boundaries within your self so that you can tell the part of your self that wants instant gratification, "No!"? To look at the bigger picture and plan for the future?

Realistic Consequences Of Expense Management

I don't mean to be a downer in mentioning a harsh reality. The truth is that at the end of the fiscal year tax
documentation is due and few small business owners are prepared because they lack the education about the necessity of financial planning. The fiscal year determined by our
I'm no CPA!
government is October 1st to September 30. All documentation is due by April 15th. Taxation for business which generally comes out to 20% of your profit...and who actually remembers to save 20% of their earnings monthly? Why do you think that we see so many businesses fail within the first year that they open? Lack of prior financial planning, guidance and management.

  How Do I Enact A Change?

The first step to overcoming a problem is to admit that you have one. You don't have the adequate knowledge, time or experience to effectively manage your personal, and personal business finances and that is alright.
Necessity is the mother of invention. And aren't we glad for necessity driven inventions! We like
convenience, ease and affordability. There is now a tool that will essentially think for you and help you to manage your finances. I find it's value to be priceless, but as I stated earlier, I grew up in a family that did not have a track record of financial success. So, I latch on to any tool that I find that will elevate my mentality beyond what I currently operate at and I share it with others that are struggling as well, especially parents.

                                                    The Solution is Wake Up Now



  • Track all of your financial accounts in one place
  • Apps for your aspects of personal finance
  • Categorize your spending
  • Create budgets
  • View financial reports

   Rewarding Your Responsibility In Personal Finance

Wake Up Now is the first program that actually rewards you for using the tools that it provides, and they make a big difference. You receive insider savings programs that gives you free items, 22% discounts with large cellular carriers, discounts in shopping at your favorite places, a member's only exclusive marketplace and rewards you with vacations, paid. Really!
Act Now!
Do your self and your family a favor and go watch the whole video at the link attached. I want you to think about how this tool can help you give you financial freedom that before you thought was only available to the wealthy. Wrong thinking. This tool is how the average become wealthy!

Click HERE to take a hold of your future and Wake Up Now!

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For more information and to start working with me at home the smart, productive and affordable way, please see my blog, or call my toll free number 888-291-4034
*This Blog is the intellectual property of Amy J. Smith, all rights reserved 2013