JW's Financial Coaching Podcast Lesson #84-Money is a good servant, but a bad master
Today’s show is in memory of Dr. Thomas Stanley, who was tragically killed in an automobile accident last weekend. Dr. Stanley authored many books but his most famous was the classic Millionaire Next Door. That book is on my short list whenever someone asks me about must read personal finance books. It also was one of the big influences that got me interested in learning about personal finance and ultimately into coaching and blogging.
Rather than focus today’s lesson on one major topic I am doing something different today and going to be talking briefly about on a few different topics. I would love to hear whether or not you enjoy this format better.
The first topic we discuss is how we view and treat money differently depending on the source it came from. What I mean by this is it just or me or do we view money differently when it is from our regular income compared to a bonus check? Or do we treat money from a garage sale differently than an inheritance or tax refund? I know I do and most of my peers do as well. I noticed this recently on Facebook when a lot of people were sharing what they had bought with their tax refund. But why is this? The way I look at it your normal income is what you pay your bills with, investing in your 401(K), and give. Tax refund is money to be spent, while bonus money is money to save for a larger purchase like a vacation or car. However I never think about investing or giving any of that money.
Ultimately though if we have a certain goal such as getting out of debt, building an emergency fund, or saving for a down payment on a home, shouldn't all of our money, no matter what the source, go towards that goal? I believe so but am intrigued as to why we don’t do that.
Identity theft and data breach seems to be more and more common. Recently Anthem announced that over 80 million people had had their personal data compromised including their name, address, date of birth, income, and social security number. While that is scary, it is also a good reminder that you really can’t protect your identity. So how do we guard against it? Well really the best thing we can do is to monitor our credit report.
I’ve done whole shows on the credit report before, but this is just a reminder to check your credit reports at least once a year. You can do so for free at annualcreditreport.com. If you go through that site you can get a free annual credit report from all three of the credit reporting agencies. Checking your credit report can’t stop identity theft, but it can stop it from growing quickly.
Finally I am proud to share with you a couple of guest post appearances I’ve made recently. The first was a guest interview on Mint.com. They asked me several questions pertaining to how I started getting into financial coaching, what financial coaching looks like, and how money is more than just the numbers.
The second guest appearance was on the website Scratch Wireless and had thoughts from me and 24 other personal finance experts on how to save money each month. I discuss my answer and why I think that it is true as well as discuss other people’s advice. We also dive into the thinking that the best way to save money is to spend.
This lesson’s quote is brought to you by Audible.com and comes to us from a French Proverb:
"Money is a good servant, but a bad master”
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