Tuesday, October 2, 2012

Catch this Show While you Can

Showing at the Collum Gallery in Seattle's International District (Chinatown) right now is an inspired show of Annie Bissett’s woodcuts: LOADED: the magic, the promise, the curse, and the language of money. Through October 27, 2012.

Clearly this show is the artist’s deep meditation on money. Her full-sized blocks, and smaller-sized notes, captures the extremes of feelings we harbor about money. Text and images spring surprises. With her attention to text and language she plays in the same league as Oscar Wilde, Barbara Kruger, and Jenny Holzer. Consider just 2 of these pairings:

  1. The print: "Filthy Rich" in the font used for money, paired with the hand-written “dirt poor.”
  2. The print: “Swimming in Cash”; paired with the handwritten “drowning in debt.”
Her currency in 4 denominations (earth, air, fire, and water, plus a single jubilee note) celebrates life in those classic domains and reminds us of All that money cannot never buy. Subversively, this also reminds us that “money” and “trade” are social creations. This means we share in the “ownership” of this invention, and thus what we do and say and think changes what money means. 

Loaded imaged indeed. Catch it while you can. 

Sunday, August 26, 2012

Think 3x before Accepting a Payday Loan 3/3

This is the 3rd installment of a 3 part series on Payday Loans

(3) Think it over for 24 hours. You have until the next day the payday lender is open to cancel your loan (return the money and get your check back). 

This may not be true in every state, so check your home state's regulations. In Washington, though, you have 24 hours to change your mind. The Department of Financial Institutions maintains a web page on payday loans that details duties of lenders and borrowers under Washington law. Washington's law reads: 

RCW 31.45.086

Small loans — Right of rescission.

A borrower may rescind a loan, on or before the close of business on the next day of business at the location where the loan was originated, by returning the principal in cash or the original check disbursed by the licensee to fund the small loan. The licensee may not charge the borrower for rescinding the loan and shall return to the borrower any postdated check taken as security for the loan or any electronic equivalent. The licensee shall conspicuously disclose to the borrower this right of rescission in writing in the small loan agreement or small loan note.

Because of the extreme ease of getting a payday loan, lawmakers decided to give up time to catch our breath and think. Turns out, the ancient wisdom that "sleeping on a problem" helps you find better solutions is getting modern scientific support. It makes sense: the longer we give ourselves before we are fully committed the more time important issues or potential solutions have to percolate up from less-than-conscious regions of our minds. 

Payday lenders would prefer their potential customers not think. Their goal is to get us started on a loan and they profit when we have a hard time paying it off on time or have to return for more loans later. 

Our goal is to manage our financial affairs well enough that we don't ever need quick loans. Payday lenders have motives at cross-purposes to our own. They want us to forget our motives and succumb to following theirs. Use all the time you have to see how you can hold firm to your goals.


Thinking will save you money in several ways: 
  • Reasonable rates for a loan saves money on interest costs
  • Making timely payments avoid penalties 
  • Changing your mind should you decide you don't need the loan sidesteps the problem of how to repay it.
I'll end this series on payday loans with something else to think about:

 Paying interest is like buying nothing.
~ Sheri O. Zampelli 

Sunday, August 12, 2012

Think before Accepting a Payday Loan 2/3

This is the second installment of a 3 part series of posts on thinking before taking out a payday loan.

(2) Think about how and when you will pay it back. You can change your payday loan to an installment  loan at any time if you haven’t missed a payment. The lender cannot charge a fee to make this change.

Let's review the type of loans and where payday loans land. People talk about secured and unsecured loans. A secured loan is a mortgage or a loan to buy a car. It is considered secure from the lenders point of view because the house or car can be repossessed and re-sold. Credit cards are unsecured as there is nothing for the bank to come get. For some borrowers, an unsecured loan feels like 'free money' and they actually experience an emotional high when using their credit cards. 

This part of lending-borrowing describes the relationship between some object of value, the lender and the borrower. The next factor is what does it take to pay off the loan. There are 3 main types: installment, revolving, and balloon.

With an installment loan, the borrower receives a specific amount of money to be repaid over a stated period of time. Each payment will be composed of 2 parts: principal and interest. The principal is the return of the money on loan; the interest is a cost, fee, or charge by the lender from letting you use their money. The early payments will be mostly interest, later payments will be mostly principal. Loans in this category include mortgages and car loans. 

With a revolving loan, the lender calculates a minimum payment each period (usually a month) based on the amount of payments and new charges to the account. The payment set by lenders will cover the interest payment (this is "free money" to the lender because it doesn't pay down the costs of the goods or services bought). Oh, and it will include a tiny payment on the principal. Common revolving loans are store cards, gas station cards, and credit cards.

With a balloon loan, the lender wants their loan returned in full at a later date. Any payments short of the full amount are considered fees, charges, or penalties and do not reduce the principal at all or change its due date. Don't be deceived, when the borrower (us) give money to a lender (them) that is interest on the loan because it's money the lender collects as a fee for lending their money. 

Types of balloon loans are adjustable rate mortgages, and payday loans.

Once upon the time when lenders took a careful look to see whether a borrower had the 5 Cs:
  1. Character- An evaluation of your financial performance and management; your credit score.
  2. Capital- This is your financial position; assets, liabilities, net worth and equity.
  3. Capacity- Your ability to repay the loan, your debt ratio.
  4. Collateral- This is what the lender takes for security should you default or cannot repay the loan.
  5. Conditions- These are things a lender may want of you to encourage repayment of the loan.
Don't let recent headlines & regulations since the 2008 financial crisis fool you, the shift by lenders away from fully vetting a borrower still rolls on. Who has to pick up the slack? You and I, the borrowers. Turn the 5 Cs around and apply them to yourself:

1. Character: Do you have the discipline to make loan payments every time they are due? You may be a person who now realizes  and accept your responsibility to make payments. If so, talk with a qualified coach or advisor about how go about rebuilding your credit score. 

2. Capital: Can you manage the amount of loan and repayment given what you own and owe now?

3. Capacity: Is this loan a quick fix, and how it will be repaid will have to wait for another day? That's not smart, and if your situation feels that desperate, take time to plan how you work your way out of your problems before taking on more debt. 

4. Collateral: If the lender isn't insisting on collateral (as in a credit card revolving account) do you feel you will still make payments? In other words, are you borrowing money you will repay or taking "easy" money with little thought now about how you will repay it?

5. What conditions will you put on yourself to help you repay the loan? Will you cut down on optional shopping items like clothes, alcohol, cigarettes, etc.? 

This is the second part of a 3 part series. The next part will look at a special feature of payday loans: you get 24 hours to think it over. 

Think 3x Before Taking Out a Payday Loan 1/3

Monday, July 16, 2012

Seattle, July 16—I have been busy. In April I attended the Jump$tart Week luncheon sponsored by the Federal Reserve of San Francisco. I had the good fortune of winning the door prize: a Moonjar™ Classroom Kit. Instructions and materials here for a class of about 30 students to get them started on mastering the Saving, Sharing, & Spending choices for how to handle their money. Thanks to all involved and I am hoping to put these to use when the opportunity arises.

Last week I went to the summer meeting of the Washington Asset-Building Coalition. This was the overall state coalition composed of about 17 county-based coalitions! Just the check-in took most of the time because of the amazing creative work going on to raise the financial literacy of the state. Of course, financial literacy is much more encompassing than the humble focus I have, namely, what are the basic skills that are analogous to learning the alphabet or how to compose a sentence. This is from using literacy as the metaphoric bridge connecting finance to language.

Which brings me to today's blog. I have re-organized my tips, given each a letter label (A - M), and expanded each to a bill-sized tip sheet. Interestingly, I managed to skip I in my labeling. This could be fun. There is no I in ... save; no I in ... solvent; no I in ... debt-free; no I in ... money. An certainly no I in Debtors Anonymous.

For research purposes, I attended 3 DA meetings in the area. 2 were Business DA sessions and one was a general session. If you are active with DA and reading this, and getting a little nervous, please understand I absolutely respect the confidentiality expectations common to all the anonymous groups. I will never reveal any identifiable information about specific person.
As is common with all of the Anonymous group meetings I've attended, everyone is inviting and welcoming. First timers are tipped to the rituals of the meetings, where to find the literature table, the bathroom, and so on. I personally tend to arrive early so I make myself available for helping with set-up (moving tables or chairs, laying out the literature). I also stay afterwards to help put things away if it appears I can be of help. This is my small service to support the meetings.

Let's get to what it costs to attend and get that out of the way. All Anonymous groups are self supporting. This has been the case from the beginning. I'll give myself 5 minutes to find an interesting story about John D Rockefeller and the founders of Alcoholics Anonymous (AA, the Granddaddy of them all) ... found it!
In 1938, Bill Wilson's brother-in-law Leonard Strong contacted Willard Richardson, who arranged for a meeting with A. Leroy Chapman, an assistant for John D. Rockefeller Jr. Wilson envisioned receiving millions of dollars to fund AA missionaries and treatment centers, but Rockefeller refused, saying money would spoil things. Instead, he agreed to contribute $5,000 in $30 weekly increments for Wilson and Smith to use for personal expenses.
This would have been 3 years after the founding of AA in 1935.

Back to what it costs. A newcomer may attend the first couple of meetings and not pay or contribute anything. This allows people who are uncertain a chance to check it out for no charge. After than, a treasurer announces the status of the group's finances, any upcoming special events the group is collecting for, etc. Since there was a regional DA conference being planned when I attended, 2 envelopes were circulated—one for the general fund and one to support some aspect of the conference.

What happens? First, there is a long preamble portion. The volunteer facilitator for the meeting uses a printed list of steps and instructions. All Anonymous traditions have their variant of the 12 Steps, and other sacred texts based on the number 12. DA has added 12 Tools for example. These are read by the group, one person reading a section and passing the book or sheet to the another member to continue reading.

If there is a speaker (could be a regular member ready to talk about one of the Steps or Tools), then that person talks about their personal journey with money and finances. This could be very touching an insightful. Then other members have a chance to share in a random order, usually chosen by names pulled from a bowl.
Then when the last person has shared who choses to, there is a closing ritual, usually standing in a circle and reciting the Serenity Prayer.

What sets DA apart from many of the other Anonymous traditions is their use of Pressure Relief Groups (PRGs). Creditors want their money, and will make one's life miserable until they get it. This generates pressure on the debtor. As the name implies, PRGs help DA members consider their options and how to approach creditors to bargain for time, agree to a payment plan or anything else that may relieve the pressure. After several meetings the debtor has a spending and action plan as well. I personally have not experienced one of these groups, but stories about their value pepper the accounts DA members share in their newsletters and blogs. PRGs and the follow-up action steps are Tools 4, 5, & 6.
4. Pressure Relief Groups and Pressure Relief MeetingsAfter we have gained some familiarity with the D.A. program, we organize Pressure Relief Groups consisting of ourselves and two other recovering debtors who have not incurred unsecured debt for at least 90 days and who usually have more experience in the program. The group meets in a series of Pressure Relief Meetings to review our financial situation. These meetings typically result in the formulation of a spending plan and an action plan. 
5. Spending PlanThe spending plan puts our needs first and gives us clarity and balance in our spending. It includes categories for income, spending, debt payment and savings (to help us build cash reserves, however humble). The income plan helps us focus on increasing our income. The debt payment category guides us in making realistic payment arrangements without depriving ourselves. Savings can include prudent reserve, retirement and special purchases. 
6. Action Plan
With the help of our Pressure Relief Group, we develop a list of specific actions for resolving our debts, improving our financial situation, and achieving our goals without incurring unsecured  debt.

I moved Debtors Anonymous to the top of the list because it is anonymous, social, available at low costs, and non-judgmental. It does have a quasi-religious or spiritual aspect, but this can be ignored while one reaps its benefits—peace of mind, solvency, social support, service, & self-confidence. 

Tuesday, April 17, 2012

Changing Habits

I begin with the view that spending money is a habit; its dancing partner—saving money—is also a habit. By habit I mean behavior that runs on automatic. There are lots of other terms that mean about the same thing: personal routine, a pattern, a tradition, etc. Mostly a habit suggests that what a person or group did the last time is likely to be what they will do the next time, unless the thought process intervenes.
    Over the years I have taught groups of people a set of steps for changing a habit. I will use a personal example and walk through the steps. I invite you to find your own example, either something you've succeeded in changing or a habit you would like to change, and come along.

Step 1: Draft Your Goal or Change Statement
Since I can remember doing my taxes I used the Shoebox Filing Method: dump all my tax deductible receipts in a shoebox and deal with them once a year when preparing my taxes. The great benefit of this is for 10 months of the year I didn't think much about my receipts. The great burden were the 2 months spent dealing with them: about a month dreading getting around to the receipts, then a month dealing with each category in turn: credit card receipts, checks, cash, and Paypal purchases. Over the years, the late winter/early spring period of my life grew more crowded with other activities. So much so, that time spent entering receipts in my spreadsheet crowded out other activities or resting.

Thus my general goal statement: Enter my receipts as they arrive throughout the year. 

The next step is to re-write the goal statement according to the SMART goal attributes ...   

Step 2. Make sure the goal is SMART
[Pick attribute for each initial letter for SMART that resonates with you.]
S – stated in positives, significant, stretching, specific
Stated in positives means the goal statement says what I will do, not something I won't do. This statement as written is in positive words.

Significant means this is important somehow. And it was. Therefore, I would extend the goal statement to acknowledge it is a significant re-arrangement of what I used to do: To recapture valuable time during tax filing season, I will enter my tax deductible receipts as they arrive. 

Stretching invites you to rewrite the goal as something to reach for. The type of goal I am working with was not much of a stretch for me.

Specific means the goal has borders around it and more than some vague intention.

M - measurable, meaningful, motivational

When I think of every single receipt and out-of-pocket expense being entered every single day, week, or month, I feel drowsy and ready to fall into a deep sleep. This is clearly not motivating me. So, I think about all the types of receipts and when I have the chance to enter receipts.

I use the old-fashion system of writing checks to pay my bills. I make many payments on the go with a credit card, and writing out a check helps me carefully review the statement to make sure all my returns and charges are properly listed. With a bit more effort, I could add any tax-deductible expenses around the time I write my check. That could be enough for the first year, and I'll see about adding the others (other checks, Paypal, and cash) later.

Thus I rewrite the full statement of my goal: For the first year, I will enter my tax deductible expenses that I charged with a credit card before I write my check to the credit card company. Shorter version to remind myself: Enter expenses before writing the check.
I'm actually feel a bit more alert with this shorter goal statement. Motivation comes down to 4 words about accepting the goal: "I can do that."

A - attainable, achievable, acceptable, action-oriented

A good goal statement has a built-in stop sign: When you have accomplished the goal, you can stop going for this goal and rest or do something else. It also tilts towards movement, action, doing something. I'm satisfied that "enter expenses before writing check" works for me as a attainable, action-oriented goal statement.
R - realistic, relevant, reasonable, rewarding, results-oriented
The "R" word that I will pick from this list is "results-oriented." The results mean a lot to me, and that's good enough. Sometimes, for some tasks, working to satisfy yourself is not sufficient. At those times you either need to nestle yourself in a supportive group of people (this is largely how the various Anonymous groups support change) or vividly imagine who the result is for.

I once had a client who wanted to exercise to lose weight to help her attract the type of men she wanted to meet. Two weeks after our session she called: "John, I just can't find the motivation to get on the exercycle." I asked her who was she exercising for? She answered, "Myself, of course." I asked: "And, what about that man you're going to attract with a slimmer body?" She said, "Thanks, John, I needed the reminder. I'm off to go exercise."

T - time-based, timely, tangible, trackable
For a goal like entering credit card receipts, the "T" watchword becomes trackable: am I entering my credit card tax deductible purchases every month or not? 
If you have not done so yet, play with edits to a goal statement using the SMART goals prompting words. When you have completed this, continue reading.
Having A SMART goal statement sets the stage for you to get to work on making a permanent habit change. (Comments in quotes come from William James's 1890 "Habit" essay.) You can print a copy of this blog to check-off the steps or mentally check them off as you work through the steps. 
Step 3. Oversupply support for yourself. Find people to witness or share your progress.  People have organized support groups for everything from investing to de-cluttering. Why? They work. Millions seek it—and find it—on the World Wide Web through the means of user groups, listservs, chat rooms, meet-up.com, craigslist, and online discussions. Voluntary mutual support returns more back to us than we give to others. It strengthens our determination. And when things don't go as planned, support helps up keep perspective and strengthen our resolve to keep making the effort.
           [  ] I can do this step.

Step 4. Animate your destination. Let's imagine that by a miracle the changes you want appear in your life one morning when you awaken. The changes you want happened while you were sleeping. What would you see, hear, and feel that will let you know that the resolution has been achieved? What comments do people make on the changed you?
            [  ] I can do this step.
Step 5. Write a theme song for your resolution. Writing a theme song gives your something to hum. Sometimes a popular song has words and tune which exactly fit you needs. For example, one man in a workshop wanted to build his deck as his first ever construction project. He used "If I Had a Hammer" as his theme song without changing a word.
            [  ] I can do this step.
Step 6. "Make as strong a start as possible." Use every aid you can that supports the new habit: pin up reminder notes and signs, take a public pledge, commit yourself to a reward for keeping at it. For a strong start on my goal, I had to collect the credit card statements for the first 3 months and enter them to "catch up" because I only resolved to try my new goal as I was finishing last years' returns in April.             
            [  ] I will make a great start.
Step 7. "Seize the very first possible opportunity to act on every resolution you make, and on every emotional prompting you may experience in the direction of the habits you aspire to gain." Keep motivation high by achieving multiple small interim goals. Combine discipline with readiness.  Discipline—such as setting aside regular times to apply yourself to making your change—is how your conscious self communicates seriousness to the out-of-conscious self; the spontaneous "emotional promptings"  is your unconscious's answer. Fro me, for this goal, the year turned out well. I managed to keep track of my receipts from credit card purchases, and when completing my 1040 return decided that since I had not spent much this year I would skip itemizing deductions this year. This meant I was done with entering deductions! How rewarding is that!
            [  ] I'm ready to respond.
Step 8. "Never suffer an exception to occur until the new habit is firmly rooted in your life." When is a new habit rooted? And rooted firmly? Go find out!
            [  ]  Okay, no excuses, no exceptions. I'm ready!

∞ Practice. James felt that "every good that is worth possessing must be paid for in strokes of daily effort." He further added this challenge: "Do every day or two something for no other reason than its difficulty." How's that for a goal?

Sunday, April 1, 2012

Financial Fitness Day 3.31.12

Monday, April 2, 2012. Seattle—Attended the second (my first) Financial Fitness Day Saturday sponsored by the Seattle-King County Asset-Building Collaborative held at the Rainier Community Center in the south part of Seattle. Good location with parking and easy access to public transportation. As a humble participant, all appeared to go well and people seemed to get what they came to learn. Things like: getting their credit score, finding out about small business loans, and learning how to cope with debt collectors.

As one walked in a friendly staff person handed one a bright yellow form to fill-in. It asked about what you were there to find out and whether you had mobility or language concerns. While I stood in line a couple of people nearly knocked me over in their eagerness to find the help they needed. Everyone appeared in a good mood despite the damp, rainy weather outside.

When you turned in the registration form another volunteer handed you a packet and you were good to go. Two breakout rooms hosted 3 rounds of presentations.

The vendors occupied the rim in the gym, and a second circle of general service providers made a circle in the middle. I walked the whole room, slowly, taking it all in. Stopping to chat here and there. Picking up material. From the brochure these were the categories and number of organizations present:

Banking, investment, and financial planning: 8
Credit & Debt Counseling: 3
Starting & Growing your Business: 4
Housing Counseling: 6
Consumer Rights & Protection: 5
Public Benefits and Community Resources: 16

Each section had a color code to assist with getting around. 

Participants could attend these workshops during the day:

Understanding Credit and Credit Scores (repeated)
Paying for College
The First Time Home Buyer
How to Deal with Debt Collectors
Managing your Money - A 21st Century Strategy

After collecting nearly 3 pounds of material, I sat in on the dealing with debt collectors and managing your money workshops. Both had knowledgeable presenters who kept great tips and information flowing at a decent pace. 

One conversation reinforced an interesting pivot point: identity as a factor in overspending or saving. We noted that some people have a sense of identity originating in how others see and think of them, sort of an outside-in identity. And there's the opposite, a person's identity flows from within to the outside, an inside-out identity. Which do you guess is more aligned with overspending and which goes with saving?

This is my zone, the behavioral-financial-social arena. I would immediately begin a research project, if I had enough funding, to find out:

For people finding themselves in debt with an outside-in identity (OII), who do they hope sees their projected identity? Is this something that constantly changes (say needing to have a recent model car or dress in the latest fashion)? How much choice do they feel around constantly spending to present this identity? If they could just ignore all of that, what would be the sources of their identity? Do they have something inside they want to present to the world, perhaps the "latest model" of themselves?

For those with an inside-out identity (IOI), what role does money and spending play in their identities? When is fashion and "keeping up" important? Who do they find are natural communities for how they identify themselves?

There were only 1 or 2 vendors that had displayed a game for helping financial literacy, and these were for youth in schools. Though games were not in abundance, little instruction guides in various formats dotted the vendor tables. Dramatic pictures with text that narrate a story, cartoons, seemed under-used. Of course, many had figures and graphics, but they were all directly related to "instruction" of "education" directly, missing the chance to enter via the side door of story as a means of getting a message across. Is this an opportunity?

I think the material for youth and young adults may hold promise for development for older groups. Take the "Getting Credit" comic book from the Federal Trade Commission as one example. The drawings mimicked street/graffiti graphics and lettering.The text is presented in second person—"Most creditors uses scoring to evaluate your credit record."

I would test whether using the left side of the page—which is devoted to graphics now anyway—as a running comic focused on the credit adventures of a young adult applying for credit and the benefits and risks involved.

Also, let's bring the emotional-psychological aspects of spending into the storyline. Why do you want a credit card? Where would you place yourself on a scale of 1 to 10, with 1 meaning "a credit card is free money" & 10 meaning "a credit card is a loan of cash I need to pay back quickly"?

Naturally, along with all the information, I gathered a stack of business cards and book suggestions. I'll be busy for quite a while just following up. Thanks to all the organizers for an enjoyable Financial Fitness Day.


Saturday, March 3, 2012

Save Your Excuses

"If you don't want to do something, one excuse is as good as another." - Yiddish Proverb

When it comes to spending, saving, working, and rest, we find ourselves in a thicket of intents, inclinations, motivations, and opportunities. This post considers the role of excuses in our justifications to ourselves and other people for what we do—or don't do.

Defining Excuses
According to the American Heritage Dictionary excuse can mean ...

tr.v., -cused, -cus·ing, -cus·es.
    1. To explain (a fault or an offense) in the hope of being forgiven or understood: He arrived late and excused his tardiness in a flimsy manner.
    2. To apologize for (oneself) for an act that could cause offense: She excused herself for being late.
n. (ĭk-skyūs')
  1. An explanation offered to justify or obtain forgiveness.
  2. A reason or grounds for excusing: Ignorance is no excuse for breaking the law.
[Middle English excusen, from Old French excuser, from Latin excūsāre : ex-, ex- + causa, accusation; see cause.]

source: http://www.answers.com/topic/excuse

Chronic excuse making limits our ability to save and maintain solvency. Excuses only come into play when there is a promise or expectation either from oneself to oneself or from one person to another. It is a explanation for why the promise or expectation was not met. Thus, the explanation from the excuse maker (Ex) may have credence with the receiver (Re), or it may not. It pleads that Ex is a better person than their recent actions may imply.

Excuses form a type of punctuation for some people. They become their verbal transition between their promises, actions, and the present moment. Chronic excuse makers have attached excuses to their greeting, "Hi, sorry I'm late, I was stuck in traffic." What's especially dangerous for the person, and annoying and off-putting to their work associates, friends, family, spouses, and even parts of themselves, is when they don't wait for a reply. They become self-excuse makers, living their chaotic lives and randomly affecting people around them without much visible concern.

There are some questions that can help determine whether you can accept an excuse.

1. How severe was the harm? Typically, most excuses occur for what may seem to the Ex as a minor infraction. This may or may not jibe with the Re's views. Consider this dialog:

Re: Hi, Hon, where's the $100 we need to make this month's rent? It's due in 3 days.
Ex: Oh, Rent! I totally forgot and thought it was all taken care of.
Re: You mean you spent it.
Ex: Well, it was Pat's birthday, and we were all in a good mood. Look, it's no big deal, I'll pawn something. We'll be OK.
Re: Yeah, right, No Big Deal. I guess there's no money left for food, either. ...

Clearly, Ex and Re are on different scales as far as the significance of the spending. Now compare ...

Re: Hi, Hon, where's the $100 we need to make this month's rent? It's due in 3 days.
Ex: Oh, Rent! I totally forgot and thought it was all taken care of.
Re: You mean you spent it.
Ex: Yeah, I guess I spent it. It's a slip. I think I thought you said rent was taken care of.
Re: Well, I didn't, and neither is there money for food till we get our next checks.
Ex: Alright, I slipped. I blew the money at Pat's party trying to act like a Big Shot. Here's what I'll do, I have $40 in my pocket. Here, take it. I overheard someone say they had a couple of days of work. I'll see if I can do that. Maybe I'll stop hanging out as this has happened before.
Re: Well, this helps. Next time just leave your cash and credit cards with me before you go out.

2. Does the Ex admit harm? You see this in the second example where the Ex says "I slipped. ..."

3. Does the Ex do something immediately to patch the relationship? In this example, Ex offer $40 left in his or her pocket.

4. Does the Ex at least make noises that they will amend their ways? In this example, Ex says they will stop going out with friends. This is too extreme as Re recognizes but jokes about holding Ex's credit cards and cash. Beware Excuse makers: Re is taking note of what Ex does going forward. Ex may not have much time in Re's gut to change their ways. 

How to Stop Making Excuses
Step 1: Know when you are making a promise. This means what you say matters. What you sign matters. For the great majority of promises don't expect trumpets and fanfare. Many promises that are broken and thus trigger the need to offer an excuse are very brief and seemingly off-hand. For example:

Okay, we're on for lunch Friday at 12:30 at Comfort Foods. That's your promise to be at the restaurant @ 12:30 on Friday. It's not a promise to call or text with a message that you are "running late."

Then there are those substantial, long-term promises common in our culture:
Yes, I'll sign this [rent, credit card, loan, mortgage, etc.] agreement. This is your promise to provide regular payments as defined in the contract. This is not a ritual after which they allow you access to credit or a place to live and you pay when you please, or only pay "when you have the money." As people learn when they miss these payments, the people and companies on the receiving end take these promises extremely seriously.

The takeaway: your word binds you, your signature binds you. You may feel relieved if you think you have an excuse, don't believe for a moment that your tardiness or missed payment is not factoring into how the Re will interact with you going forward.

Step 2: Do all within your power to keep your promises. To meet a promise requires attention to both your time and your actions.
From the example if it take you 15 minutes to walk from your office to the restaurant, you alone have to protect that transition time. Thus, on you calendar show the appointment as filling the time from 12:10 to 2:00 to pad your time so you don't have to rush.

When it comes promises to make periodic payments (credit cards, loans, rent) the larger the payment, the more you have to accumulate a bit a time. For most people, the largest expense is housing so you may have to set aside half the rent from your first pay check and half from the second one.

As you spend money using credit cards or cash, keep a log of your spending with columns for the date, the item or service, and the amount, plus what category it was (food, clothing, fun, etc.) Just writing the amount down raises it to awareness, creates a moment for reflection, and makes each purchase just a bit more "costly" as you will need to take a moment to record what it was.

Step 3: Recognize that keeping promises is the balancing habit to chronic excuse making. All the tools for building habits apply, and this will be discussed in one of my next posts. That's a promise.

Friday, January 20, 2012

Buck$ta$h.¢r™ Baby Step Workshop Description

Here is my description of the project I began developing in Dec. 2011.
Project Name: Buckstasher™ Baby Step Workshops
Description: Buckstashers are single-sheet cash saving reminders that people carry with them in their wallets. Each Buckstasher is a folded 6.125 x 5.25 inches sheet of paper printed with information about the costs of borrowing on one half of the fold and suggestions for saving money on the other half. They provide a portable, concrete means of separating paper currency a person wants to set aside for savings. People learn what this system is, what is printed on Buckstashers and how to use them to increase their savings in "Baby Step workshops" that last less than five (5) minutes.
Project Lead: John Perkins, PH.D. Perkins relied on his 35 years of experience as a trainer and facilitator to develop Buckstasher Baby Step workshops. He also has a background in economics, market research, advertising, consumer engagement, and policy advocacy. Researchers seem puzzled on how to help people translate what they learn in a peer group, class, counseling or coaching session into permanent behavior change—something I have long experience with. Many materials and presentations could benefit from a healthy infusion of excitement and variety, which I also know something about.
Background: Poor people have suffered the effects of their limited financial literacy forever; it is only within the past 15 years that it has drawn significant attention from foundations, legislatures, and regulators. Recent reports document the egregious effects of the predatory lending industry.[1],[2] About 10,000 un-banked or under-banked adults live in King County. This highlights the success of the Seattle-King County Assets Building Coalition that has helped 47,000 people open accounts in recent years.[3] Having an account is a big step, the next step for many low-income people is putting money in their accounts:  
Generally, focus group participants were interested in financial education that would help them change their savings behavior, that is, that would help them learn ways to save given their income constraints …[4]
Buckstashers contributes to the development and practice of a single yet foundational skill (remembering to save at the point-of-sale) that people can use to gain control of their saving and inoculate themselves to the temptations posed by predatory loans and the enticements of retail marketing. Buckstashers uses emotional appeals similar to the ones that make predatory loans and overspending so seductive for some people. A few of these appeals are presented as "If … Then …" statement pairs:
If … the typical new payday loan account can be opened in less than 30 minutes and customers walks away with cash,           
Then ... workshop participants' experience has to be fast and concrete.
If … predatory lenders cares less about customers' ability to pay,
Then ... we help the customer care more for themselves.
If … the customer responds to immediate gratification,
Then ... we help customers pause to decide before they act.
If … the customers struggles to save money,
Then ... we will provide a tool to assist with that process.
Audience: This project will benefit adults focusing on improving their financial health and literacy or who want to avoid or untangle themselves from debt traps. In Seattle, there are many projects whose clients might be interested in this tool, such as, FareStart students and alums, new credit union members, Real Change vendors, transitional housing tenants, participants in financial literacy classes, etc. My goal is to present Buckstasher to 1000 people or conduct 100 presentations in one year, whichever is reached first.
The "Baby Step Workshop" format: This Baby Step workshop takes 4.5 minutes. To help hold attention and give everyone an immediate success, participants will be paid $1.25 for their 4.5 minutes, as shown in the script. The complete presentation could last 30 minutes to an hour as people linger informally after the Baby Step workshop to discuss the tool and ask questions. Here is the script for the workshop.
__________________________Begin Script _________________________
Opening: Hi, My name is John Perkins and I'm here to present a Baby Step workshop. Good news! I'm going to pay you what a livable wage for a single parent with one child would pay in 4.5 minutes. That's $1.25. And at the end I have an offer for tonight only.
By a show of hands, how many of you know someone who has ever used a payday loan, tax refund anticipation loan, or deliberately overdrew their checking account with no money in the bank?
 [Count hands] That's most of us. There are four legal ways you can get money: from your savings, by working, by selling something you own, and by borrowing it. When we borrow money, or get a loan—the same thing—we are buying money, so there's a cost. Some call it interest, some a fee, other companies call it a charge.
[hold up red side facing group] 

This red side of a Buckstasher shows some of the costs for borrowing $100 for one month. The best, of course, is not spending it. [Point to bottom row] You keep your $100. From savings, if you replace it in a month add a penny for missed interest. The worst is overdraft protection [point to top row]—that will cost you $30 plus the $100 you still owe.
After you've mastered baby step savings, initial one of these boxes on the lower left side when you pass this on to someone else.
When the red side facing up, this is money flowing out because it costs you to get that money [pull a few play bills out of opening]
But, turned the other way, [show green side] …

It reminds you to save! This has over a dozen tips or ideas for how to build your saving muscle. I'll leave you with 2 baby steps ...
You're out, you want something to eat. Don't get a soda, drink tap water instead. Then put $1 of what you saved by not buying the soda in here, and turn it greenside up. [demo this] That's yours. You just saved it.
Another example, and it's also our offer. We have the money to give you your $1.25. You've earned it. And tonight, a Buckstasher™, which costs 70¢, can be yours for a quarter. You can start your savings tonight with your dollar, put in it your Buckstasher™ … turn it green side up and put it in your wallet [demo these actions as you talk] and you are on your way!
Pay everyone. Continue ...  You're welcome to stick around and talk, but this on your own time …
__________________________End Script _________________________
January 2012 Project Status: Since conceiving of small, baby step sized workshops aimed at increasing financial literacy I have refined Buckstashers and reached out to my network of contacts. I have continued my research into the current state of adult financial literacy in the US.
Next Steps: The immediate next step is to conduct one or two focus groups and use the feedback to modify the presentation and tool.
I am looking for sponsorship to pay the salary, overhead and expenses involved in reaching 1000 people or conducting 100 presentations in the first year.
Please contact me to discuss ways you might support this project.

John Perkins, Ph.D.
Keep the Change Consulting (not affiliated with Bank of America)
206 524.4496

[1] Gary Rivlin, 2010, Broke, USA: From Pawnshops to Poverty Inc.—How the Working Poor Became Big Business, New York: HarperCollins.
[2] Federal Deposit Insurance Corporation, 2009, "FDIC National Survey of Unbanked and Underbanked Households," available on 1/16/12 at http://www.fdic.gov/ householdsurvey/
[3] Kelly Gilblom, 2011, "Program Helps 'Unbanked' in King County Live Happily with Accounts," Puget Sound Business Journal, April 8, 2011, available 1/16/12 at http://www.bizjournals.com/seattle/print-edition/2011/04/08/program-helps-unbanked-in-king.html
[4] Jennifer Turnham, 2010, Attitudes to Savings and Financial Education Among Low-Income Populations: Findings from the Financial Literacy Focus Groups," Center for Financial Security University of Wisconsin-Madison, available 1/16/12 at http://www.randschool.com…/attitudes-savings-financial-education.pdf, p. 76.