Last month I asked readers to share their biggest money concerns and I received a ton of great responses. Today I’m summarizing a few of the common themes and sharing some of my responses. You may relate or have similar worries so my feedback will be helpful to you.
Also, I’ve decided to give you free access to the first nine chapters of my book because the book covers most of these concerns. This offer will be removed soon, so download it quickly and share it with your friends before the link comes down.
Finally, the winners to my Ultimate Free Gift contest are revealed below.
Here are the questions:
“Chuck, my greatest worry is that we will not be able to save for our kids’ future. It is difficult to pay the bills, save for retirement, and also save for the kids’ college all at the same time.”
As much as we love to set our little ones up for the future, it’s more important that you’re retirement is covered before saving for the kids’ college tuition. Without question there will come a point when you’re physically unable to work to earn income. It’s not as certain that your kids will head off to college.
If they do attend college and you did not save in advance, education can be funded with low cost loans and work, but in retirement you don’t have those options.
For college funding, I like using a formula of three‐thirds. One third is paid by the parents with savings or income. Another third is paid by the kids with their own savings or by working during school. The final third is paid with school loans in the child’s name. You can offer to pay their loans off if they graduate and you can afford it. This method gives the kids some “skin in the game” and motivates them to take it more seriously.
“Chuck, my greatest fear is that the stock market will crash or our money manager will lose it all.”
There are two issues here. The first is the money in the stock market. As you approach retirement age, you should decrease the percentage of your net worth invested in higher risk investments within your 401k or IRA and put more in less risky investments such as CDs , money markets, or cash. This will minimize your exposure to wild fluctuations in the stock market. Focus on the things you can control, and don’t pay too much attention to things beyond your control.
If retirement is far off and you still have these fears, it may still make sense to invest less in the stock market. Investing in the stock market is one tool to help protect you from inflation, but it’s not worth it if it keeps you up at night.
Your second concern is with your advisor. It’s important you share your concerns so he can explain what you’re invested in and why. If you’re still not comfortable, ask if there are ways to accomplish the same goals with less risk. In the end, you have to be comfortable with your advisor and trust that he is doing what is best for you. If you don’t feel comfortable, it may be time to seek someone else who makes you feel more at ease.
“Chuck, my greatest money worry is that my family struggles to get by week to week. I clip coupons and have tried mystery shopping and other ways to earn more money, but there never seems to be enough.”
When in this situation, like so many during this down economy, it’s important to step back and look at the situation as objectively as possible. It’s easy to feel stuck in a rut and keep repeating the same thing over and over and never make forward progress.
If you’re running out of money, there are only one or two things that have to change. You have to reduce your expenses, bring in more income, or both. It’s very helpful to make a list of everything you spend money on and look for ways to save money. Cutting unnecessary expenses is the fastest way to free up income, but there is only so far you can go before you have to increase your earnings.
After you get a handle on your expenses, start working on earning more money. I am a very long range planner, so I often forgo current income while investing in a much bigger future payoff. An example is to cut corners now so you can attend school that will provide you career advancement. This type of investment in yourself can pay huge dividends in your future lifestyle, even if you have to work extra hard now.
A lot of people make a mistake of looking for a short‐term easy fix to earning more money. This is what leads people to the many “work from home” or “get rich quick” scams. Usually, if it’s too good to be true, it probably is.
It’s important to evaluate how much time you’re investing in something, versus how much it returns. This is the weakness in a lot of the coupon clipping, sweepstakes, mystery shopping, and other part‐time income opportunities. They often require considerable time with very little payoff.
Instead of seeking short‐term small income opportunities, look for ways to improve your skills so you can add more value to the workforce. Small improvements in your skills can provide huge payoffs over the course of your lifetime and make a big difference in your lifestyle and stress level.
“Chuck, I’m consumed with debt and don’t know how to get out of it.”
I’ve written about my 5 step process to get out of debt and also have a free online course you can get here. The short version though is to first stop using debt at all costs. Contact each creditor and try to get your interest rates and minimum payments reduced. Then make minimum payments to all lines of credit except the one with the smallest balance. Pay as much as you can afford, and then some, toward that debt until it is paid off. Then rinse and repeat.
“Chuck, my greatest fear is getting wiped out by medical bills, disability, or not being able to pay for medical expenses.”
Abraham Maslow created his “hierarchy of needs” theory where he explained that you can’t focus on higher levels of happiness until after your basic survival needs are met. When dealing with money and personal finance, being properly insured is on par with basic survival needs. Health and disability insurance is relatively inexpensive when compared to the potential risk of not having it. Insurance needs to be a priority before luxuries like TV, cable, and nice cars, yet many people think of insurance last.
Everybody can get insurance, even if you don’t have a job that provides benefits, but that does not mean it will be affordable. If you already can’t afford insurance, you’re likely eligible for government aid. I’ve never seen an emergency room turn people away and when the bills come in you can often negotiate them cheaper. The medical industry is used to writing off huge losses, so be aggressive in negotiating discounts, payments or even charity write offs. You’ll be surprised what you get just for asking.
Free Access to the Book
For a very limited time, I’m giving you free access to the first nine chapters of my book, How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money. You can download it HERE.
Ultimate Free Gift Winners
Grand prize: Kevin Ford — Up to two hours of private coaching with Chuck Rylant with limited follow‐up. You can work on any of your personal finance goals or small business marketing projects. ($997 value)
2nd prize: Lisa Klimah — Amazon Kindle pre‐loaded with How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money ($154 value)
3rd prize: Brittanie Blokker‐Brandt — Print copy of How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money along with several brand new copies of some of the most popular personal finance books ** ($200 value)
4th prize: Lavonne Yates — Print copy of How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money ($16 value)
4th prize: Kristen — Print copy of How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money ($16 value)
4th prize: Shea Balentine – Print copy of How to be Rich: The Couple’s Guide to a Rich Life Without Worrying About Money ($16 value)
It was very hard to select a winner because there were ninety comments with a lot of compelling responses. I went through each and every response more than once and narrowed it to 12 finalists. I sent the finalists to an esteemed panel of judges (some of my close friends) and they selected the winners. You can see all of the entries here. Thanks to everyone that participated.