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?

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.

####

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. 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.

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.

My innovative Service Project Idea

I sent this to my network of contacts on Dec. 30.

Hi Friend, 

Hope your holidays were delightful and solvent.

My request. I have several innovative financial education/dialogue ideas that I'd like to refine. I am reaching out to my network to share my ideas and help me connect to people who help fund or host a pilot test of the innovation. There is a lot that can be done, so if you have the inclination you can also partner with me to launch the project.

Background. Thanks to Gary Rivlin's Broke, USA I am getting the specifics on legit "industries" that prey on our poorest citizens. It has reminded me of what anyone with attentive eyes can see: many poor neighborhoods though lacking in legit banks have an abundance of check cashers, pay-day loan storefronts, pawn shops and rent-to-own stores. Wasn't always the case, but is the current situation. Dig a bit, and many of these stores or predatory mortgage lending companies are owned outright or financed by the largest banks in the nation—Wells Fargo, Citibank, Fleet, Bank of America, and, before it's demise, Washington Mutual. For shame.

Many people use a payday loan company once and feel so uncomfortable that they got themselves in such a bind or felt a need for fast money that they don't do it again. That's not who the payday loan companies make their money on. As with any business, these companies make their money off repeat customers. Multiple times a year repeat customers. Customers who don't pay the loan when it falls due pay a fee to keep the loan in play, but that fee isn't applied to the principal, it just stretches the due day another spell, usually 2 weeks, sometimes a month. One man began with $800 loan and paid rollover fees regularly on Tuesday for 10 years! His account rep showed him his total fees, over $9,000!

The companies like that their regulars pay and pay, upwards of 545% annual rate or more. But customers are shielded from this harsh fact most of the time, though you can find signs with this rate posted in the lobby or on the wall of many of these companies' storefront locations. Payday joints encourage customers to think they are paying fees, not interest. But many don't really seem to care, they just feel an urgent need for cash. One said a payday loan was better than crack!

Right now, in King County, there are 50,000 no-account adults. These adults do not have an account at either a bank or credit union. Banks, and also credit unions, experience a conflict of profits. Though they could promote programs to help their customers decrease overdrafts and encourage the proper use of regular accounts, their overdraft fees or competitive payday loan products bring in more money!

Service action. Of course, there are many ways one could address this: direct action such as protests at the stores may actually backfire because many customers say they like the stores. Political activism?? Pshaw! The legislature is made up of people from the comfortable classes. They know little about payday loans, have the state's own debts to sort, and are the targets of intense lobbying whenever these laws come forward. The predatory lending companies were able to defeat an effort a few years ago to cap interest rates in Washington.

So, what's left? A person always has authority for themselves. That autonomy can be awakened and supported to take responsible actions. It can always be asserted at any time. 

I want to nudge customers of these predatory lending practices to start thinking about their personal authority/autonomy over their spending and saving. And begin taking small, personal action steps to get out of their debt traps.

 

Email me to see more details and schedule a time to talk more about it.

I'll blog on this idea as I learn more and matters progress at ktc-sfc.blogspot.com

Happy holidays and much luck & prosperity in 2012.

John

Payday Loans

12/12/2011

Thanks to Gary Rivlin's Broke, USA I am getting the specifics on "industries" that prey on our poorest citizens. It has reminded me of what anyone with attentive eyes can see: poor neighborhoods are lacking in legit banks but have an abundance of check cashers, pay-day loan storefronts, pawn shops and rent-to-own stores. Wasn't always the case, but is the current situation.

Of course, there are many ways to begin to address this.

Direct action against the companies in terms of protests, etc. might backfire because the research I've found says their customers actually like the stores. Customers like the convenient hours, open early before work, open late after work. Friday night, driving in Lynnwood, Washington I counted two open at 8:45 PM.

Customers say they like that in less than half and hour you can walk out with cash.

Customers say they like knowing what they have to pay and when it's due.

This isn't a time to rile the customers up to defend the "financial services" industry!

Well ok, that's out, what about political activism? The legislature is made up of people from the comfortable classes. They know little about payday loans or the type of binds less well-off people find themselves. They get donations and intense lobbying from the financial services sector. Besides, they have a huge state debt to work their way out of.

So, what's left? A person always has authority for themselves. It's not always active before they take out that first loan, but it can always be asserted at any time. Many people use a payday loan company once and feel so uncomfortable that they got themselves in such a bind or felt a need for fast money that they don't do it again.

That's not who the payday loan companies make their money on. As with any business, these companies make their money off repeat customers. Multiple times a year repeat customers.

The companies like that their regulars pay and pay, upwards of 545% annual rate. But customers are shielded from this harsh fact most of the time, though you can find signs with this rate posted in the lobby or on the wall of many of them. Customers think they are paying fees, not interest. Customers pay a fee to keep the loan in play, but that fee isn't applied to the principal, just stretches the due day another spell, usually 2 weeks, sometimes a month. One can keep doing this while trying to scrap together the full loan to repay. And keep doing it. The fees keep rolling in. One man began with $800 loan and paid fees regularly on Tuesday for 10 years! His account rep showed him his total fees, over $10,000! And he had a mortgage-free home. What's up with this?

I want to nudge regular users to begin thinking about their personal authority over their spending and saving.

More in later posts. 

Just Gotta Find Friends

Friends! Where did all mine go? Did I let some lapse, did some drift away? Did I miss that one key chance go cement a friendship due to being too honest about my interests, energy level, time, cash flow?

I'm starting this blogging series to chronicle my steps to find hang-out buddies in Seattle. Building friendships is one of my 2011 goals. How am I going about it? First, I constructed a Kaipa pyramid for myself on this theme. You'll see in the article that Kaipa poses four questions. I will use a shorthand here and invite you to look over the article for the full question form.

1. What is my north star/my genius? I have skills for friendship—I enjoy most live events like music, theater, readings. I listen well and have spent much of my life creating and sustaining discussion and support groups of various types.

2. What is my core incompetence? Related to friendship, paradoxically, I am independent! I tell myself "not to wait for the herd." I'll go alone, I'll be the first of my group. I am the positive version of introversion: I am content enough alone. I can conjure a friend in my imagination and that is nearly as good as hearing his or her voice.

Another part to this, I feel if I lack a 'purpose' for the call I may be interrupting the person and wasting their time. But hanging out is just that, it's primarily sharing time & space without agenda.

3. What adds energy when I feel zapped? Getting together in realtime is fun, improvisational, and open to possibilities.

4. What saps my energy and provides brakes or alarms? Arranging is tedious. I am not interested in Faceb**k, and Twi**er. People forget to return my calls. In this region, there's a provisional nature to commitments that I find leaves me uncertain whether a planned meeting will actually happen. I'd rather not bother and just buy my tickets and go.

Of course, I'm not new to these insights, or most of them, and it's my personality.

Following the process Kaipa presents, I completed my pyramid ... (click link for easier to read version)
So, here I am with my pyramid and what I discovered about my inner DNA for this, but, what am I TO DO because of it?

This is where the pyramid meets my life. My activities need to tack against being solo (the solo mojo triangle) towards the comrade triangle. To get there I quickly touch on longing for friends and use that feeling as a springboard. This leaves inviting as the active side. Becoming comrades signals I've finished the cycle.

Goal: some hang-out and activity buddies. Specifically, I would like to share the Ballard Jazz Walk next Friday with someone.

When folded into a four-side pyramid, holding the inviting side away from me and "looking" through the point aimed at my body I "see" inviting from the perspective of independence. For me, this reminds to take initiative. Send out invites far and wide and still be prepared to go it alone a few times. It also has to traverse the other three sides: longing, comrade, and solo mojo.

I can also see if others have any invitations out that I can respond. I checked craigslist personals and meetup for jazz and nothing is listed. So now, I've broadcast invitations to several groups to which I belong and I've reached out to specific friends who live in the neighborhood.

And today, I'll go buy my single ticket and get ready for who may join me. Or not.

Interested in learning more about how to make these pyramids or even join me for the BJW, email me at johnp at ktchange dot com

John