Are You Balanced In Your Work,
Finances and Personal Life?
By Gary Tilkin, CEO and Founder of Gary Tilkin Consultants, Inc.
This is a departure from my normal emphasis for “Sales, Management, Strategic Planning or Facilitation Skills” topics. I hope you like it and it in some way supports as well as improves your life style, professionally, financially and personally. This is a three part series with the topics of: Finances, Work and Personal Life. The month of February and March 2010 will have the rest of the trilogy.
Please realize, if you asked us the question if our family and I were balanced, the answer would be “NO”. Consider this article and our thoughts as some best practices to consider gain from folks far smarter than us.
Balancing Our Financial Life
Moto/Lesson #1:
“Too Much Month at the End of the Money”
Before we begin, I want anyone and everyone who takes the time to read this article to know that my family and I are very private people, especially about our financial dealings. Our willingness to write this article is based on our closest friends asking us to share our financial life experiences for the last 32 years. We do this reluctantly with the request that everyone understand it is not our intent to impress; it is my intent to assist with improvement for all whom choose to read this article. Remember, “Rome was not built in a day; however it did have a plan for successfully completion”.
Moto/Lesson #2:
“Safe for a Rainy Day”
The year of 2009 was the rainiest year I have ever seen both personally, economically and professionally. 365 days of rain is a monsoon of sorts. Our only fall back and saving grace, was the memory of my Mom’s discipline never to buy anything if she could not pay for with unencumbered cash. The only exception was a home mortgage or in today’s day a vehicle. To emphasize her personal commitment to herself and family; we did not have a dining room set until I was 14 years old, all we had was an empty room. She saved for fourteen years and eventually purchased that dining room set that was excellent quality and paid true cash for it. My Mom always saved for that rainy day and when she had enough left over, she would apply it to a material thing she wanted, like a Dining Room Set. It must be noted, she never bought a bad quality item, and she bought things to have it for a life time. If we could not afford it, she simply would not purchase it. Simply rule that I am quite sure was hard to follow.
Moto/Lesson #3:
“Follow the Rules You Set for Yourself”
My wife and I lived in Salem, Virginia when we first got married over thirty years ago; we rented a two bed-room apartment. Our furniture consisted of: a Lazy Boy chair purchased while in college; king sized bed purchased used for $200.00; kitchen set purchased used for $50.00; TV and a drum set. We went out to eat once a week for Sunday breakfast to the Brown Derby restaurant. The meal was two cups of coffee and we shared a biscuits and gravy plate. We lived like that for 16 months, until we saved enough to pay cash for an L-shaped sectional sofa. We researched the brand, store, quality and best price for months before purchasing. This was a net result of my mother’s influence and vision. To this day, I really enjoy the research prior to buying an any item as much as the purchase itself. God bless the Google™ search, E-bay, CigarBid.com and Craigslist.
Moto/Lesson #4:
“Live Like You Make Double What You Earn”
If you don’t know what you have, you don’t know what you can spend. Spending more then you have is not living like you make double, it is complete insanity. Let me make an important point, if you can’t feed your family or provide them with shelter as well as medical attention when needed; that is a completely different situation. My reference is to those in our world that have to have 20 pairs of shoes; 5 purses; the newest trends in clothes; designer brands and don’t have the resources to afford most or any of them. A recent caller to the Dave Ramsey™ national radio show, Dave is the “Personal Finance Guru” for our times, asked Dave if he could afford a new $75,000.00 Mercedes Benz he wanted to buy. Dave Ramsey asked the some simple questions of the caller, “Are you a millionaire?; Do you have a million dollar of unencumbered cash available?; Are you completely out of debt?” The callers answer was no to all questions. Dave’s advise; “Buy a used vehicle for under $25,000.00”. The callers response was: “But Dave, it is a hell of a deal!”. That caller’s response says it all. The caller was more in to justifying the purchase of a luxury item, rather then what makes logical business sense.
The solution is simply to keep track of all expenses and income carefully and completely. Our family approach was based on a college accounting professor, Dr. Harry Finklemen of Concord College that taught us to balance our budget every month. The method has evolved over the years to be much more refined and efficient; however here was the transition in stages over that 32 year span of time. Before we begin, know that I love to do this stuff and it took years to get it where it is today. Don’t expect to be this refined or efficient overnight. Also, I began doing this in 1978 before graduating from Concord College, in Athens, West Virginia.
Stage One–Paper Ledger: During a trip to the local office supply store, after graduating from college, I saw ledger paper. On a whim, I purchase a package of this paper. On one side we put the potential income for that given month, always estimated low. The other side was fixed and variable expenses, estimated high. The game was to discipline ourselves to have “Money Left Over for Reserving at the End of the Month”. The alternative was to have “Month at the End of the Money”. This method was time consuming and frustrating at times. The alternative was not doing anything, which was not an option. The real long-term benefit was the understanding that, before anyone can utilize a “Personal Financial” or any computer program, they really needed to be able to do task by hand. This little exercise was critically important for every aspect of my family’s lives, even though we did not realize it at the time.
Stage Two–Electronic Spread Sheet: The first improvement to the antiquated method came with personal computers and electronic spread sheet programs. Now, adjustments could be made on the fly and erasers could be eliminated. The time savings was substantial. This method lasted for years and created the emergence of a concept called “Reserve Fund”. This is a fund of money that you save today, to spend tomorrow. A short-term fund category example is a “Christmas Fund”. Our family saves from January 1st of that year to December 1st to pre-pay for all Christmas presents. The result, no debt after Christmas, NONE. This supports the concept of always being able to pay your credit card bill every month, no exception. Our family has never had to ever pay an interest charge on a credit card due to the concept of reserve funds.
The long term example was the “Kids College Fund”. When my children Alex and Alyssa were born, a reserve college fund was created for their college educations. At first, each child was given $100.00 per month. As time went on, it became $200.00 monthly. My son just graduated Auburn University with an Under Graduate degree in December 2009. His college reserve fund ran out of money the day he graduated. My daughter on the other hand, is going to the University of Alabama. She will run out of money in her third year due to her complete lack of budgeting ability and warped sense of entitlement. Most of those reading this if we went to college worked from day one just to survive which was a great life lesson.
The last statement was to let everyone know; even when you plan methodically, you don’t know what the future holds. Tami and my ability to “Lead by Example” does not always work. To add to this, it is not my daughter that is the issue or at fault, it is my wife and my inability to allow our children to have the same life lesson’s we grew up learning. My daughter is simply doing what we all would have done if given the chance. Sound familiar, parents.
Stage Three–Computerized Money Programs: Now, it was time to save even more time and incrementally improve our system. A computer “Personal Finance” program was developed called “Managing Your Money”. It was simple to use and easy to set-up. The home page had a visual desk that had drawers as icons. Each draw had a category name like Checking Account, Credit Cards, and Loans. Touch the draw with your mouse pointer, it opened and the topic would be available. This was the first program to generate reports like “Monthly Budget” allowing you to see if you were above, below or even on each of your budget categories. Another words, are we on or off budget? Side story, I was on a jet coming back from Los Angeles on Friday night. Next to me was the famous entertainer, Kenny Rogers. Kenny saw me working really hard on my “Personal Finance” program he asked me to teach him how to use one. It seems that his business manager had just stolen millions of dollars from him and he decided to control his own finances, smart decision.
Tami and I met a married couple early on in our marriage. They worked for a company called, Pat Ryan and Associates. They had a financial plan and concept; “You can have nice clothes or a nice car, but not both”. This meant; pick and choose where you spend your money carefully, because “you can’t have everything you want”. Therefore, when you went over on your “Grocery Fund” for the month, your “Dining-Out Fund” had to be reduced to keep your monthly budget balanced. Every week my wife and I would balance our monthly budget and make needed adjustment. Again, the goal was to “Make more then we Spent” supported by always staying within the budget we had set. This was not a perfect system due to life’s little challenges; however, it was worlds better than having no system at all. As a side note and major lesson, one day I was visiting my father in Rivervale, New Jersey. He had divorced my Mom when I was one. He made a great living and never saved a dime. His kids had everything they ever wanted; alternatively my full sister Shelly and I had little or no luxury items.
One isolated and memorable day, I made mention to my Dad that I hope to buy a “Game Boy™” one day. My dad looked at me as if I were a complete idiot and said abruptly; “Just go out and buy it, stop being so cheap”. As my personal and business life continued, my Dad oddly asked to speak to me years and years later. He met me in New York City where I was doing a sales and management seminar. He asked me if he could borrow some money to pay for my half sister Ronnie’s wedding. I gave it to him and he was in disbelief that I could write a check of this size without gaining a loan. For the first time in my life, my father paid me a complement. He said: “Gary, I made one major mistake in my life, I never saved”. The lesson is when your friend and family make fun of your saving and budgeting habits, remember that years from now, they will respect you for that discipline and hard decisions you made.
Stage Four–Microsoft™ Money: This was the very first “Personal Finance” program with some real power and guts. My favorite parts were: 1) Budgeting for a year at a time; 2) Having a Net-Worth Report; 3) Tracking Investments manually. Every day you could know if your net worth was higher or lower. The importance of this came from Mr. Tom Hopkins, author of “How to Master the Art of Selling”. Tom was and is one of the most successfully sales training consultants of all time. He made a simple statement that we should all focus on; “Increase Net Worth and Decrease Debt”. Now with Microsoft™ Money, I could do this concept and know where I stood on a daily basis. It became a game of sorts. During this time, a reality check came to me. If you paid a little extra every money on your home mortgage every month, it would pay high dividends in years to come. Initially I paid an extra $200.00 per month and it was honestly not easy. Over time, as my career and income improved, I invested as much as double payments every month. It became a challenge and game for me to see just how much extra we could pay on my budget every month. The net result was our family now have two homes: One in Birmingham, Alabama and another in Miramar Beach, Florida. Both homes have no mortgage. Even though 2009 was the worst year of my financial life, we purchased a new Florida home that was quite frankly a steal and paid cash for it. The realization was that when times are really bad economically, those that have true cash can make some very wise investments for the future. I did not know this concept when I was paying double mortgage payments, however, glad I did make them.
Stage Five–Quicken™ 2010: Last year, Microsoft™ made a decision to eliminate the Microsoft™ Money program. So after well over a decade of successfully use, we had to learn another “Personal Finance Program”. Anyone out there that has had to learn a new computer program recently will agree: it is all consuming; frustrating; and takes patients as well as commitment.
Well, every year my family and I have disciplined ourselves that on January 1st, we would establish a new yearly budget and set-up the computerized budget program. This year it took three days instead of one, because we had to learn Quicken™ 2010. The net result was impressive and simply stated unbelievable. Where in past years, I would have to log every single credit card receipt, ATM withdrawal, and check written for business and personal; now all I do is hit refresh and the computer goes on-line and down loads all the information. Whereas before every morning of my life, I would check every single credit card and bank account I had for fraud and my families usage; now I press a button and save an hour of my time daily. Now with a press of a button, if I am over or under in a budget category, it automatically pushes it forward to the next month, so I don’t have to do it manually ever again. Finally, the reports are plentiful for whatever I want to and more then I need to know. Personal and Business financial statements are no longer an issue; bill reminders are synced with my Outlook™ as well as a Quicken™ calendar; my business expenses are separated from personal as well as tagged to the correct tax category and the program lets you know the instant you go over your monthly budget. I simple don’t get any happier than this.
Moto/Lesson #5:
“Neither a Borrower or a Lender be”
In an earlier story, I told you about my father asking me for money to pay for my sister’s wedding, I lent him the money. He never paid me back prior to his death. When he did pass away, that same sister was the executor of his estate. I explained the situation to her and I was paid back first. A nephew was about to lose his vehicle to repossession, he asked me for the payment. I did not give it to him; however, I did make the payment directly to the bank making sure it got paid. The car was repossessed two months later and I was never paid back. A very profitable and successfully business owner borrowed a huge sum of money from me with the personal promise to pay it back in six month. It took over a year to get the first payment and six more months to get the full loan paid back. There were several other situations all that got paid back eventually.
I now have learned that even though I did get paid back for most of the personal loans I made, the personal as well as business relationships with those folks were negatively affected and I put myself under extreme stress. The answer now, especially in these economic times, to; friends, relatives and family, is absolutely NO to a loan of any kind. In truly unique and unfair situation I will consider a gift not to be paid back, however that would be extremely rare.
Why would I have worked so hard to financially protect my family all my adult life, to risk giving it to someone that lived their lives with no financial discipline? The word for that is “enabler”. All that being said, if anyone I know is hungry, needs shelter, or just a friend to talk with; my family will always be there for them.
Moto/Lesson #6:
“Do What You Love and Love What You Do”
Early in my career, when Tami and I had nothing, I worked two jobs. The relief manager for Shoney’s™ Restaurant and as an Automotive Sales Consultant. My wife Tami worked for a welding supply company. We paid our bills and saved money every month but had nothing. Funny thing, we were pretty happy back then. My lifelong dream was to become a professional consultant, sales and management facilitator, writer and entrepreneur. We start our business over 22 years ago and never looked back. I absolutely love what I do and hopefully my client’s expectations are mostly exceeded. Our family lives in Florida now due to no state income tax and the fact that I own a Florida Sub-S Corporation. What I hate is traveling, to and from, my client’s locations which are usually out of state. However, once I get in front of those clients, I am the happiest camper in the world. The good really out weights the bad.
The lesson here is that when you do what you love, you will always find a way to make a better than average living. Take the good with the bad and remember the small successes that life provides you when you get down. If and when you get so upset or depressed at life; call a true friend and get another perspective. If you have no close personal friends available at the time, call me.
Final Thought:
Remember, “Money is not everything, but it is a lot nicer to have it. Just do what you love to gain it.” All my best for this upcoming year. Write you plan, work your plan, live your plan and enjoy your life.
