Tuesday, October 18, 2011

Set your first financial goal

Some of my favorite writing has actually been posted on other blogs.  This article was written for Billeater.com and published in August 2011.  Although the content may not apply to all In The Trenches readers you may know someone that it does and want to pass it on.
Life is like a treadmill…if we don’t make a conscious effort to keep moving forward, we will automatically begin to slide backward.
This is true of every area in our lives, whether it be relationships, health, finances, or even house cleaning. The momentum of our decline can even speed up when unexpected tragedies and events occur. I wrote In The Trenches to help others keep moving forward rather than sinking backwards.

In The Trenches, what does that sound like to you? The term it is one commonly associated with the military and conjures associations of a battlefront. Indeed, In The Trenches is a defensive posture with an offensive goal. "How does it apply to finances?" you may wonder?
People are now facing a financial battle brought on by unexpected or unplanned circumstances. Many more feel that they have worked so long, with so little to show for it. For all these people, it’s time to get In The Trenches. The battle strategy from In The Trenches that I would like to share today is the simple act of setting a goal, even if it is the simple desire to be self-sufficient.

Whether it is food stamps, unemployment, or even subsidized housing, the first step toward financial independence and freedom is to set a goal. It may take six months or more to achieve your goal, but if you keep walking forward in the direction you plan, you will reach your destination. Remember the first line? If you are not moving forward you will slide backward.

If you are currently receiving any type of welfare assistance, I'd like to share a story with you that I hope will illustrate why your first goal should be to overcome your dependence on financial assistance.

A Common Story
At my work, we hired a young woman fresh out of high school. For the purposes of this story, we'll call her Jane. The job we hired Jane for wasn't great, but it was a good place for her to gain experience and a pay check. Unfortunately, Jane had no goals and no direction. She became pregnant, but decided not to marry the father, with whom she had a rocky relationship. Jane reasoned that she could qualify for many types of government assistance if she stayed single and the money could supplement the income she made at her job.

It was not long before the baby arrived and Jane set out as a single mother, making every attempt to raise the child on her own. She continued to maintain an open relationship with the child's father because she wanted her baby to have a two-parent family. The unstable relationship caused Jane to move several times in the next couple of years. When together, the pair could afford a nicer home. When separate, Jane had to downsize again. While apart, they each dated others, creating more obstacles to their happiness.

After a separation, they got back together and talked about getting married. And what happened almost immediately? You guessed it. Jane was pregnant again. Watching the downward spiral of Jane's life was hard for her co-workers. But none of us expected what happened next. Jane told us she was quitting her job. As the whole department listened, trying to keep their jaws from dropping, she told us that she and her fiancé would now be a happy family and that she wanted to stay home with her children. Between the man who paid not one dime in child support and government assistance, Jane actually thought everything would work out fine.

After watching the drama unfold for two years, we were all very sad for Jane. Just a month later, we found out she was looking for a job again. Jane was wandering through life on a roller coaster to nowhere. Jane did have a vague goal. She wanted a happy stable family. But she was clearly going about it the wrong way. Anyone could see that. But there is an old saying, “They can’t see the forest through the trees,” and that's exactly what had happened to our friend Jane. Even sadder, Jane's situation is not so unusual.

Jane is not Alone
In Washington State in 1960, the rate of babies born to unmarried mothers was 3 percent. By 2007 it had climbed to 33 percent*. In 2000, the number of married couples with children at poverty level was 6 percent. Compare that to the number of single female heads of household children in poverty, 31 percent!* The worst part of the debacle is that it took place long before the financial crisis of 2007 set in.

So ladies, what is our goal here? To get off assistance. Benefits won't last forever, and without strong support from a partner or your family, expecting to raise a family on financial assistance alone is unrealistic.

Achieve Your Goal in Three Steps
How does one go about this goal? As a single mother myself, I’m going to recommend three steps:

1. Get your personal life in order. If not for your own sake, then for your children. There are many good books to help, but two in particular were the most helpful to me. I only wish I had known about them when I was 16 years old:
  • Too Close Too Soon, by Bobby Reed and Dr. Jim A Talley
  • The Rules, by Ellen Fein and Sherrie Schneider

2. Get a job and give it your all. Start someplace...anyplace. It does not have to be your dream career or even something you want to do for more than a year, but any job looks better on a resume than no job. If you can' find one, begin doing volunteer work or odd jobs. Find one that lets you bring your children if you can't find a family member to help care for the kids.

3. One friend of mine who loved to clean found a job in the hospital's Housekeeping Department and made more money than I did. She earned benefits like a retirement fund, bonuses, and recognition for her excellent work. Many companies offer medical, dental, education, and profit sharing. If nothing else, you gain experience. Keep working on your budgeting and money management plans.

Follow the advice you find on blogs like Billeater and keep moving forward, not backward. Use your desire to learn all you can about managing your resources effectively and profitably.

Many Janes, One Lesson
You might think Jane's story doesn't really apply to you, that such situations have no effect on your life. But if you are a taxpayer, if you have kids in school, if you are a single mom struggling to get by, then the lessons Jane learned most certainly apply to you.

Managing finances is not just about money. The way you manage finances reflects on your choices, goals, and values in life. All these facets of life are subject to change and we can all change them today by taking steps to keep moving forward.

Because finding a job is the first step to financial independence, you can use the Job Profitability Worksheet in her book to help you make the best and most profitable job choice, calculating not just wages, but the costs and benefits involved in any employment.


Barb Friedberg said...

Carol, Very wise. I like how you tied in your entire life management to money management.

Carol Schultz said...

Thanks for stopping in. Hope the readers will check out Barb's blog.