Please don’t lie to yourself

“Morale is when your hands and feet keep on working when your head says it can’t be done.”
- Benjamin Morrell

Hello!

Yes, it looks like there are some good signs on the horizon for the overall economy, and that’s good news for everybody.

But, I’m going to put on my “personal coach” hat this week, and get a bit blunt about some personal financial habits which could be killing you. Even if you’re making in the high six figures, this advice bears listening to. If we’ve all learned anything about the world in the past year, it’s that previously “certain” realities may not be so certain.

I’m taking a bit of a risk, as a lawyer, but I hope this is helpful. Would love to hear your thoughts…

“Straight Talk” Personal Strategy
How Not To Lie To Yourself About Finances

Working with my clients’ finances over the years has given me a bit of a crash course in human behavior. Often, I’m floored by the generosity I see displayed by many clients–even those without significant means.

Other times…well, I think that we all could use the reminder that our human flaws show up very clearly in our family’s finances. The fact is that we ALL lie to ourselves, from time to time, about what’s really happening in our wallets.

This habit of lying to ourselves threatens our financial stability. Instead of spending $5, we spend $20. Instead of recognizing that we *want* that new shirt, car, or fine dinner at a restaurant, we lie to ourselves until we are convinced that, for one reason or another, we *need* that new shirt, car, or fine dinner. The current credit crunch can partly be blamed on a nation full of people who convinced themselves that a $800,000 home was necessary–even though a $350,000 home was sufficient. We must learn to live within our income … and this means, we must stop lying!

So, I’ve compiled a short list of ideas on how to stop lying to ourselves and face the truth when making purchase decisions.

1. Have (and stick to) a budget. Is this purchase in my budget? For example, your family budgets a certain amount each month to spend on clothing. You’ve agreed that this amount is sufficient to meet your needs. So you set this amount before facing a purchase decision. If during the month you want to exceed the budget because Kohl’s is having a fantastic sale, then you are now lying to yourselves. You aren’t saving money by exceeding your budget during a sale. In fact, now you have to dip into savings to pay for your overspending.

2. Set a per-purchase spending limit. A wise man said, “The four most caring words for those we love are ‘We can’t afford it.’” Take some time with your spouse to set what I call “What I can spend without having to ask my wife if it’s ok” spending limit. Some spouses have decided that neither one of them is allowed to spend more than $100 at any given time without calling and asking the other one if it’s okay (this does not apply to groceries). Let me tell you right now, these limits have stopped many from making a lot of unnecessary purchases.

3. Replace bad habits with enjoyable, inexpensive activities. Shopping or overspending is a habit that we have likely formed over years. Since our brains are programmed to react in a certain way in specific situations, any change is met by resistance. The existing habit is simply more comfortable and natural. To help change your behavior, replace the bad habit with another activity.

For example, instead of going to the mall to pass time, go to a local park with a soccer ball and spend some time with family or friends. Start or re-start a hobby. Your new hobby might even be a low cost home business where you make money!

4. Make sure that the reason you tell yourself you are making the purchase and the *actual* reason you are making the purchase are the same. Ask yourself, “Why am I really making this purchase?” Am I buying this dress for my wife because I love her and want to show my appreciation, or am I trying to prove to her and the world that I am a good provider? We lie to ourselves to cover our true motives. If the real reason you are making a purchase isn’t in-line with your principles and budget, then don’t buy it.

5. Take stock of and enjoy everything that you already have! Develop gratitude for what you already have in your life. Purchasing new things is often a sign of ingratitude for what life has already afforded us … or a sign that we feel deficient in some area.

Overcoming bad habits and addictions is a process that requires concerted effort. Face each day one at a time and stop lying to yourself! Don’t believe the story you’ve created in your mind that justifies unnecessary and financially harmful purchases.

To your family’s financial health!

Are you or your friends making these mistakes?

The secret to productive goal setting is in establishing clearly defined goals, writing them down and then focusing on them several times a day with words, pictures and emotions as if we’ve already achieved them.
- Denis Waitley

Last week, I sent you some “light notes”, and it’s really interesting how people responded…it’s clear that people recognize that we’re not your normal law firm! Truly, we’ve got YOU on our mind, and what matters most to you. And, I’ll reiterate what I communicated during my Personal Strategy Note: THANK YOU for your friendship, your business, and your time. We wouldn’t exist around here–without YOU.

So…back to our regularly-scheduled programming around here–I’m beginning a short series on clearing the air regarding some all-too-common mistakes which we see on a weekly basis. Why do we see these? Well, after cleaning up a bunch of “messes” for clients, these are the reasons these folks got into the mess in the first place…

[Again, I'll re-iterate that for our clients who've already worked with us in these issues, we have already taken care of the solutions...which is why this article may be very useful for sending to your friends]

“Straight Talk” Personal Strategy
Two All-Too-Common Mistakes

Why do so many families end up with a big fat mess on their hands in dealing with their estate when there is a change in circumstances? Well, here’s two reasons to start…

Going it alone with “cheap” online options

Did you know that many lawyers like to joke to one another about how good those online legal programs (LegalZoom®, Pre-Paid Legal®, etc.) are for our business? Why would that be? First, because they are NOT as “easy to use” as claimed, and secondly…they actually cost you an arm and a leg in the long run!

You might think they seem like an inexpensive and safe option. But I’m not referring to the money for the service itself.

Using those programs can end up leaving thousands (or much more) of YOUR assets in the coffers of Uncle Sam…even if you follow all of their instructions to a tee. I see it ALL THE TIME-frustrated clients bringing in online-generated plans, astonished at all the “hidden savings” my staff and I are able to find for them.

The security you get is actually false security.

Even worse…

Choosing the WRONG asset allocation method can end up leaving your estate owing more to the IRS than if you had done nothing at all.

Now, it’s not my intention to scare you, but again–I’ve seen it more than I’d like. Frustrated families coming to see me during a period of great stress, and my staff and I having to attempt to “undo” poorly-crafted plans created by well-intentioned families (or even other lawyers) which ends up costing everybody far more than they’d like.

So, I hope you are with me: YOU AGREE …. choosing a well-trained and caring professional, who will put YOUR interests first–rather than just making another “sale” online.

With all that, now we come to the issues you’ll deal with in choosing the right planning lawyer for your needs.

Choosing a lawyer who will charge you overly-high hourly rates for simple services.

Many lawyers will lure you in with (again) “cheap” basic services…and proceed to rack up the fees as they execute planning services which really should have been covered by the flat fee.

When you’re investigating flat fee services from a lawyer, here are some simple questions to ask:

• “Are all of your fees flat fees?”
• “What about ongoing work after the initial completion of my estate plan documents?”
• “What happens when I call with legal questions 2 years after my planning documents were completed?”
• “What if the questions are about something other than my estate plan?”

You need to be satisfied by the answers you receive to these questions, as they often sneak up on families after-the-fact, and can be a major drain on your family’s cashflow.

I hope this clears up the confusion…

We’re here to help!

Thanks for your time (and some light notes)…

“Look, I’m not the one with the problem, okay? It’s the world that seems to have a problem with *me*! People take one look at me and go ‘Aargh! Help! Run! A big stupid ugly ogre!’ They judge me before they even know me.”
- Shrek

How was your Labor Day weekend? Mine was interesting…you see, the old email inbox has been “heating up” of late–we’ve been talking estate plans, health care, current events–and how to make sure your assets are passed on right.

As you know, I love talking about this stuff…and there’s plenty to discuss these days.

But I thought that THIS week, I’d take a break from your regularly-scheduled family advice, and offer up a few tidbits to keep things a little light around here. After all, things get intense as we head towards the fall!

So…here we go:

*You thought the IRS was after YOU? Check out THESE famous tax cheats :
http://www.thedailybeast.com/blogs-and-stories/2009-08-03/a-list-tax-cheats/?cid=hp:beastoriginalsR3#

* You thought this only happened in fables? Think again…
http://www.timesonline.co.uk/tol/news/uk/science/article6753086.ece

* Everyone makes a difference: (this is NOT a misprint)
Xvxryonx makxs a diffxrxncx
Somxtimxs I gxt to thinking that what I do doxsn’t mattxr.
But whxn I start thinking that way, I rxmxm¬bxr my old
typxwritxr. Most of thx kxys workxd finx most of thx timx.
But onx day, onx of thx kxys stop¬pxd working altogxthxr.
And that rxally mxssxd xvxrything up. So whxn I’m txmptxd
to say, I’m only onx pxrson, it won’t makx much diffxrncx if
I don’t do this quitx right, I rxmxmbxr my old typxwritxr. And
I say to mysxlf: “I am a kxy pxrson and nxxdxd vxry much.”
Adapted from the book Inside the Magic Kingdom, used with the permission of the publisher.

Finally, for my “Straight Talk” Personal Strategy Note, I’d like to pass along something an old friend sent to me…

“Straight Talk” Personal Strategy
Thanks For Your Time

It had been some time since Jack had seen the old man. College, girls, career, and life itself got in the way. In fact, Jack moved clear across the country in pursuit of his dreams. There, in the rush of his busy life, Jack had little time to think about the past and often no time to spend with his wife and son. He was working on his future, and nothing could stop him.

Over the phone, his mother told him, “Mr. Belser died last night. The funeral is Wednesday.” Memories flashed through his mind like an old newsreel as he sat quietly remembering his childhood days.

“Jack, did you hear me?”

“Oh, sorry, Mom. Yes, I heard you. It’s been so long since I thought of him. I’m sorry, but I honestly thought he died years ago,” Jack said

“Well, he didn’t forget you. Every time I saw him he’d ask how you were doing. He’d reminisce about the many days you spent over ‘his side of the fence’ as he put it,” Mom told him.

“I loved that old house he lived in,” Jack said.

“You know, Jack, after your father died, Mr. Belser stepped in to make sure you had a man’s influence in your life,” she said

“He’s the one who taught me carpentry,” he said. “I wouldn’t be in this business if it weren’t for him. He spent a lot of time teaching me things he thought were important…Mom, I’ll be there for the funeral,” Jack said.

As busy as he was, he kept his word. Jack caught the next flight to his hometown. Mr. Belser’s funeral was small and uneventful. He had no children of his own, and most of his relatives had passed away.

The night before he had to return home, Jack and his Mom stopped by to see the old house next door one more time.

Standing in the doorway, Jack paused for a moment. It was like crossing over into another dimension, a leap through space and time The house was exactly as he remembered. Every step held memories. Every picture, every piece of furniture….Jack stopped suddenly.

“What’s wrong, Jack?” his Mom asked.

“The box is gone,” he said

“What box?” Mom asked.

“There was a small gold box that he kept locked on top of his desk. I must have asked him a thousand times what was inside. All he’d ever tell me was ‘the thing I value most,’” Jack said.

It was gone. Everything about the house was exactly how Jack remembered it, except for the box. He figured someone from the Belser family had taken it.

“Now I’ll never know what was so valuable to him,” Jack said. “I better get some sleep. I have an early flight home, Mom..”

It had been about two weeks since Mr. Belser died. Returning home from work one day Jack discovered a note in his mailbox. “Signature required on a package. No one at home. Please stop by the main post office within the next three days,” the note read.

Early the next day Jack retrieved the package. The small box was old and looked like it had been mailed a hundred years ago. The handwriting was difficult to read, but the return address caught his attention. “Mr. Harold Belser” it read. Jack took the box out to his car and ripped open the package. There inside was the gold box and an envelope. Jack’s hands shook as he read the note inside.

“Upon my death, please forward this box and its contents to Jack Bennett. It’s the thing I valued most in my life.” A small key was taped to the letter. His heart racing, as tears filling his eyes, Jack carefully unlocked the box. There inside he found a beautiful gold pocket watch.

Running his fingers slowly over the finely etched casing, he unlatched the cover. Inside he found these words engraved:

“Jack, Thanks for your time! -Harold Belser.”

“The thing he valued most was…my time”

Jack held the watch for a few minutes, then called his office and cleared his appointments for the next two days. “Why?” Janet, his assistant asked.

“I need some time to spend with my son,” he said.

“Oh, by the way, Janet, thanks for your time!”

“Life is not measured by the number of breaths we take but by the moments that take our breath away,”

If you have a great friend, take the time to let them know that they are great.

Send this letter to all the people you care about, if you do so, you will certainly brighten someone’s day and might change their perspective on life…for the better.

To everyone I send this: “Thanks for your time.”