Work Less and Earn More by Joan Sotkin Mary B. is a talented graphic artist. For years, she worked for a large corporation where her work was appreciated. Yet she yearned to be in business for herself. In September, 1995, she took the plunge and opened an independent graphic arts studio. Unlike many new entrepreneurs, Mary had a large enough bank account to survive for six months with a minimum amount of income. She also had many contacts from the corporate world that she could use to establish her customer base. Mary was in great shape to start her own business. Mary knew she was in a good position for success. She was also very conscientious and wanted to make sure that she did everything possible to make her business work. She put in long hours on the phone, going to networking meetings and planning her marketing. She wrote articles for local publications, volunteered her time when she had something to offer, and even appeared as a guest on a local talk show that had a business focus. When she did work for a client, Mary often worked to exhaustion to get the job done as quickly as possible. Mary began to realize that something was out of balance. Her whole life was wrapped around her business, and, although she had created a positive cash flow, she was no where near her earning potential. After a year in business, she was exhausted and constantly worried about where her next client was coming from. What Mary needed was to learn to let go and allow her life to happen -- rather than pushing to make it happen. She also needed to see her work as something she did during the day and not what defined her as a person. Although it was scary at first, Mary learned to set boundaries. She established specific hours that she would work. During the week, she limited herself to eight or nine work-related hours per day. Weekends were for her, not for the business, unless she chose to take a day off during the week. She set aside days that were specifically for her spiritual growth. During these days, business of any sort was entirely off limits.During the hours designated for work, Mary often took people breaks: having lunch with a friend, meeting with another graphic artist, talking to a far-away friend. She learned to have short breaks within her workday when she would focus on something other than her work. Mary also learned to spend 10 to 15 minutes each morning and 20 to 30 minutes every night, sitting quietly and letting her mind slow down. After a few months, she began doing specific meditation techniques. Because Mary had more time for herself, she started exercising regularly and found her energy levels increased rapidly. The big change for Mary was learning to let go in order for her business to take shape by itself. If she really wanted to go to networking meetings to be with other people she did. But she didn't push as hard to get new clients. Whenever she felt the fear of not earning enough coming up, she learned to take deep breaths and not take any overt action. Mary was amazed at the results of her new approach to life. It didn't take long for enjoyable projects to come her way. New clients started coming as a result of referrals rather than her marketing efforts. Within a few months, she was able to vendor out some of the work that came her way so that she could earn more without putting in extra hours. Mary also noticed that her business was moving in a new direction -- one she could not have foreseen if she kept plugging away and doing everything she thought she had to do before. Mary learned to take care of herself and her life became a reflection of that care. The less she pushed to make her business happen, the easier it was for it to support her. Mary's new-found trust in herself and how life works paid off for her. Mary never stopped paying attention to her business. She also had clear income goals and a picture in her mind of what she wanted her life to look like. What she stopped doing was pushing to create what she wanted in the way she thought she had to do it. She let herself believe that she could have what she wanted and let her life take shape. When we aim for a goal, if we don't take pauses in order for the energy of our life to reshape itself, everything we do comes from a previously known point of view. In order for something new to take form, we have to give it time for the energies to gather -- and shape themselves. What we have to do is not do anything and give our creation room to breathe. It may look like goofing off, but there is a lot going on deep within our creative being. Try taking longer pauses in your life. If you find the concept frightening, ask yourself what you are afraid of. Don't let the actions you take come from fear. Let them come from knowing that the action is the right one to take. That knowing can only come from a silent space that you create by not doing. Joan Sotkin is the creator of ProsperityPlace.com , author of "Build Your Money Muscles:9 Simple Exercises for Creating Wealth Prosperity" and "Prosperity Is an Inside Job" and publisher of Prosperity Tips, a free monthly ezine. Visit ProsperityPlace.com .Copyright copy;2003 by Joan Sotkin. Permission granted for use on DrLaura.com More >>

Top 10 Things You Can Do to Insure Your Prosperity by Joan Sotkin Be Positive. It's a known fact that optimists live longer and do better than pessimists. Practice seeing the positive side of everything. Become aware of any fears you may have about trusting in a positive outcome. Examine Your Values. Find out what really matters to you so you can use your personal values as a guide for planning your life. Support yourself by honoring your values. Use Your Values As a Guide for Your Actions. There's a saying that I like -- If one of us has to be uncomfortable, it doesn't have to be me. If you are ever asked to act against your own values, don't do it. This takes courage, and you will probably have to work through some fears, but do it! Strive to Increase Your Levels of Awareness. Awareness is the first step in the process of change. If you are going to change your life position, then it is important to take an inventory of where you are now. This means looking at the condition of your home, possessions and relationships as well as being very conscious of where you are now financially. Vagueness is a serious impediment to prosperity. Be Willing to Step Outside of YOUR Box. If you keep on doing what you've been doing, you will keep on getting what you've been getting. If you are uncomfortable in any area of your life, then you will need to do something different in order to change. Take Care of Yourself. If you don't support and take care of yourself, others won't do it for you. The more you nourish yourself with what you actually need, the easier it will be to create a comfortable lifestyle. A comfortable body/mind/spirit reflects itself in prosperity. Take Care of Your Money. Balance your checkbook, post your sales, keep track of what you spend and earn. Money, like people, goes to those who nourish and care for it. If you don't learn to take care of your money, when you start earning more, it will overwhelm you. Every dollar is a decision and it's easier to learn to make financial decisions when there is less to deal with. Keep Learning about Money Management. Money is a powerful force that requires skill to handle it. A lot of people are intimidated by the whole money arena because they've never learned about it before. It is never too late to start and there are many good resources and books for beginners that will introduce you to the principles of investing and money management. Take Responsibility for Your Personal Power. It really bugs me when I hear people say things like, "I guess God (or any variation thereof) dosn't want me to have money now." I firmly believe that we create our own reality with our thoughts, beliefs and emotions (TBEs). Prosperity requires a willingness to no longer be dependent on others or to be a victim of circumstances. The principles we teach require a willingness to take responsibility for creating your own life -- and your prosperity. Take Action. Sitting still won't get you anywhere but where you are already. Small actions that move you closer to your goal of increased prosperity will move you along the path. Take small steps, but take them. For example, save a few dollars, read a book like Learn to Earn by Peter Lynch, balance your checkbook (if you don't normally do that), set realistic short-term financial goals, evaluate your life, add healthier foods to your diet. It's a good idea to get a buddy and make changes together. Talking about what you plan and the actions you are taking reinforces your resolve. Joan Sotkin is the creator of ProsperityPlace.com , author of "Build Your Money Muscles: 9 Simple Exercises for Creating Wealth Prosperity" and "Prosperity Is an Inside Job" and publisher of Prosperity Tips, a free monthly e-zine. Visit ProsperityPlace.com . Copyright copy; 2003 by Joan Sotkin. Permission granted for use on DrLaura.com More >>

Abandonment Issues And Your Money by Joan Sotkin ProsperityPlace.com People often use money to express hidden emotions, and abandonment is acted out through money more often than any other emotion. Many life-dramas have abandonment as one of the elements. From feeling emotionally abandoned by parents who didn't have emotional tools to the pain of being abandoned at the end of a love relationship, just about everyone in our culture understands abandonment. How does this sense of abandonment affect your relationship with money? Let's do a little review: Money is always attached to people -- it doesn't have any power by itself. You can't really run out of money, you can only run out of people --they are the source of money. So fear of running out of money, is the fear of running out of people, or being abandoned and alone. Difficult financial situations are often characterized by feeling alone and abandoned. When you address your deep-seated feelings of abandonment and aloneness, your financial difficulties will begin to fade. A seemingly simple solution for a complex problem. Think about how you behave and what actions you contemplate taking when you are financially uncomfortable. Do you use too much credit or think about getting a loan? If you owe someone money, they aren't going to forget about you. People often borrow money to feel connected to someone. (People lend money for the same reason.) If you have a history of needing to be rescued by friends or family members, that's a sure sign that you are feeling alone and abandoned. Once someone rescues you, you feel less alone -- at least temporarily. People often feel abandoned by God, life, authority figures, etc. It is very common for people who are going through divorce, or are grieving for whatever reason, to have financial problems. It is the expression of abandonment and aloneness. How you can tell if you are acting out abandonment through your money? See if any of these apply to you: You often borrow or lend money People to whom you lend money rarely pay it back (elements of betrayal may be at work here too.) You worry constantly about running out of money You work hard, but never get paid what you know you are worth You lose money on investments You have a hard time finding customers for your products or services You started making more money, but now you are right back where you started You had to close a business or went bankrupt You have a hard time supporting yourself You think that the only way out of your difficult situation is for someone to rescue you financially You work all of the time because you are afraid that if you don't, you won't make enough money. Self Abandonment When you start looking at your abandonment issues you are bound to go back to abandonment dramas in your family of origin. Virtually everyone can find them -- especially if you look at your life from a child's point of view, which is when patterns are formed. For example, you probably felt abandoned on your first day of school. Or when you realized that one or both of your parents left you every day (to go to work). Or when you were really upset about something and no one seemed to care. But the core of your current abandonment issues may lie in the way you abandon yourself on a regular basis. Signs of self-abandonment include: People-pleasing behavior. You do what you think others expect of you or you adjust your actions to please others. You never follow your inner urges to do what you really want to do because of fear of failure, rejection or just general fear. You don't speak up for yourself or defend yourself when criticized by others You remain in an abusive relationship (either business or personal) You do something that goes against your personal values. What You Can Do to Process the Feeling It is important that you become aware of your feelings of abandonment and identify where you are working them out. This is a process that can take some time because you have probably been automatically acting out this feeling for much of your life. Most people do. I have yet to meet someone who doesn't have some abandonment issues. Yet we rarely discuss these issues with others. Instead, we might talk with close friends about our money problems, try to borrow money, or use a lot of credit. You might want to do an abandonment inventory. Write down all of the times that you can remember being abandoned -- or when you abandoned yourself. This may take some time and may bring up a lot of uncomfortable feelings. That's ok. You need to get things out, not keep them buried. If possible, find someone you can talk to about this issue. If you don't have a close friend who can share this process with you, try a Codependents Anonymous meeting. That's a good place to share feelings that doesn't cost anything. Make a concerted effort to connect to people on a deeper level.Push yourself to become a participating member of a group with whom you share a common interest. If most of your contacts are related to your job or business, reach out to people outside of work. Start speaking up for yourself. You may have to work through some serious fears. It is important to learn how to stop abandoning yourself. Joan Sotkin is the creator of ProsperityPlace.com , author of "Build Your Money Muscles:9 Simple Exercises for Creating Wealth Prosperity" and "Prosperity Is an Inside Job" and publisher of Prosperity Tips, a free monthly ezine. Visit ProsperityPlace.com . copy; 2003 by Joan Sotkin. Permission granted for use on DrLaura.com. More >>

The $60 Lightbulb The Dollar Stretcher by Gary Foreman gary@stretcher.com Hi Gary, Should we turn off the compact fluorescent bulbs each time we leave the room at least 15 minutes? Do these bulbs use a lot of electricity when turned on and off? Thank you for your advice. Mai Mai asks a very good question. And, as more people shift to compact fluorescent (CF) bulbs, others will be interested in the answer as well. The reason that people are gradually beginning to use CF bulbs is simple. In many applications they can save money because they use less electricity. Generally a compact fluorescent will only consume one third as much juice as a regular bulb. The CF will cost more to buy. But, the bulb will last up to ten times as long as a regular bulb. So any cost comparison needs to include the cost of many regular bulbs. According to the U.S. Department of Energy, a 100 watt incandescent bulb can be replaced by a 27 watt compact fluorescent. After four and one half years the CF will have saved $62.95 compared to the incandescent including the cost of the bulbs used. Compact fluorescents also operate at a cooler temperature. Less than 100 degree F. in most applications. So the bulb doesn't create heat that needs to be removed by an air conditioner. Not surprisingly, CF's are good for the environment. According to the Energy Star program if everyone is the U.S. joined her and just replaced one regular light bulb with a compact fluorescent it would have the same effect as taking one million cars off the road. Now that we know why people are shifting to compact fluorescents, let's try to answer Mai's question about whether to turn it off when you leave the room for a few minutes. Fluorescent lights work a little different than the incandescent bulb that Thomas Edison invented. Tom's bulb glowed because electricity heated up a filament. Once heated the filament glowed and produced light. A fluorescent light consists of a ballast and a gas filled tube. The glass tube is also coated with phosphor. The ballast sends electricity through the tube. When the gas in the tube is 'excited' it causes the phosphor coating to emit light. All fluorescent lights take about a half a second to start and up to two minutes to reach their full brightness. It is commonly believed that they use more electricity in 'starting up' than they do while the lamp is burning. That is not true. Energy Smart, a Western Australian government initiative, says that you should turn off a fluorescent anytime that you'll be out of the room for ten minutes or more. Turning a CF on and off frequently will reduce it's energy effectiveness. But, even if you do cycle it often, it will still be more energy efficient than a regular incandescent bulb. Mai will also reduce the lifespan of her CF if she turns it on and off frequently. The Energy Star website recommends that you use CF bulbs in places where they can operate for several hours at a time. For instance, Mai wouldn't want to use a CF in places where lights are on for a short periods like a closet or bathroom. A family room is often ideal for CF usage. And Mai can even buy 3-way CF's and ones that are specifically made for use with a dimmer. Congratulations to Mai. Not only is she saving money and the environment, she's also learning how to get the most out of a new technology. Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website and ezine . Permission granted for use on DrLaura.com More >>

Too Frugal? The Dollar Stretcher by Gary Foreman gary@stretcher.com Dear Dollar Stretcher, I am a long time reader and I really appreciate what you have to say. I just wanted to get something off my chest. Sometimes in the quest to be frugal one can lose sight of other important qualities. It is also important to be generous, kind and unselfish. It seems like in the rush to save a few bucks or get something for free, people can take advantage of others and cause hurt feelings. For instance, a group of people will agree to go in on a present and one person will buy the gift. But then when that person goes to collect someone in the group brushes the collector off and keeps saying they'll bring in money later, but then never does.Or, for an example from my own family, this holiday we all got together for a potluck style dinner. My sister-in-law, who is very proud of her "tightwad" lifestyle, insisted that we order a ham even though no one else wanted it. When it came time to order it, she put no money towards it and the rest of us did. At the meal, most of it did not get eaten, and then without asking anyone else, she wrapped it up and took it home! She was so excited about saving a few cents and feeding her family for cheap that she forgot her manners.I see examples of this all the time, and I am not talking about poor people, it is usually people that have a very comfortable lifestyle. Thanks, Amy Amy makes a valid point. It's fine to be frugal. But, like most good things, thriftiness can be taken too far and become a fault. The trick is in determining what is 'going too far'. Where is that point? One way to answer is by deciding what really is frugal living? The American Heritage Dictionary defines frugal as "avoiding unnecessary expenditure or money; thrifty; costing little; inexpensive". I'd add to that definition. Maybe it's wishful thinking, but frugality should help us lead a balanced, fulfilled life without harming others. Some examples of a prudent lifestyle? Finding a second use for an item Making something to last longer Using less with the same results Finding a less costly alternative True frugality has a way of creating wealth that wasn't there before. Most frugal living ideas fall under one of two categories. Either they're a way of needing less of something. Or they're a way of providing more of a resource at a reduced cost. Either way you've provided more value for the money or resource that you consume. Frugality should never be used as an excuse for theft or a lack of honesty. I think that most of us would agree with Amy that agreeing to help pay for something and then not doing so isn't right. And probably not even really thrifty. Isn't the relationship with your relatives worth more than the leftover ham? Some thrifty tactics aren't so black or white. For instance, suppose you walk into an antique shop and realize that they have seriously underpriced an item. Are you taking advantage of the shop owner if you buy the item at that price without telling them of their mistake? Whatever your answer was, would you apply the same rules if you found the same item underpriced at a church thrift store? Or at a garage sale? At a garage sale in a poor part of town? Yes, we all like to find a 'bargain'. But for most people there is a point where we feel we're taking advantage of the other person. Amy is also right about getting too wrapped up in what we're doing and losing sight of the world around us. One summer I was so successful in reducing our electric bill that it became an obsession. A hot Florida summer and a nut controlling the thermostat isn't a comfortable combination! The original goal was fine. But common sense got lost along the way. Once you've been living more frugally for awhile, it's probably a good idea to step back and analyze what you're doing. Maybe you've gone overboard. Or, maybe it's time to give yourself and your family a small reward for what you've already achieved. What can Amy do? If their relationship is good, she might gently remind her sister-in-law that frugal living is a balance. Or, if that's not possible, she can remember that we're all subject to making mistakes. Hopefully the ones we make aren't too public and don't do too much damage! Gary Foreman is a former purchasing manager and financial planner who currently edits The Dollar Stretcher website: www.stretcher.com and ezines: subscribe@stretcher.com . Permission granted for use on DrLaura.com More >>

Remodeling an Attic The Dollar Stretcher by Gary Foreman gary@stretcher.com Was wondering if you could do an article on converting an attic for the do-it-yourself frugalite? There is just so much space there going to waste. I know the electric will have to be hired out but what can I do to make this a livable space? Nothing too fancy required. By the way this is an 1880 Victorian house. Thank you, Tanya The first thing that Tanya will want to do is to contact her local zoning and building inspector. In many cases, they'll have booklets available for the homeowner considering remodeling or addition. She'll want to find out what permits will be needed. They'll also tell her what type of drawings will be required to get the permits. Usually the homeowner is allowed to be the 'general contractor'. That means Tanya will pull the permits and take responsibility for the job. Don't skip the permits. If it's a big enough job to require permits, having a professional inspector check the quality of your work is a good idea. I've already had them request changes that were safety related. Tanya will benefit from spending time daydreaming about the project. Think about the space and how you might use it. Plan ahead. For instance, it's easier to hide wire for extra phones, computers and stereo equipment before you enclose the walls with drywall. Tanya will need a budget before she begins the project. That budget will have a major effect on how the project progresses. She'll start by assembling a list of all the materials that will be used on the D-I-Y portions of the project. A visit to her local home center will price those items. Next, she'll talk with the contractors to get an estimate of any work that they'll do. Added together she will have a good idea of how realistic her budget is. She might find that the budget estimate is more than she can afford. That's time to scale down the project. Remember, remodeling is not an all or nothing proposition. She may be able to occupy the room and gradually do improvements over a number of years. Tanya will need to consider how she'll pay for the remodeling. If she doesn't have the money saved she'll need to borrow. Often a home equity loan is the best choice. Make sure that there is enough money available to complete the project before beginning. In Tanya's D-I-Y project she'll be the general contractor. That means she's responsible for the whole job. Think of the remodeling as a series of smaller tasks. On her attic conversion, Tanya will need to build interior walls; add any required electrical, insulation plumbing and drywall. Heating and air conditioning may be needed. She'll also deal with finish carpentry, electric and plumbing. And finally flooring and painting. The order of inspections will help Tanya determine the sequence of jobs. Don't hesitate to ask the building department for advice. My experience is that they're glad to help you do the job correctly. It's easy to get overwhelmed if you consider the whole project at once. The smaller individual tasks aren't that difficult. For instance, a major part of Tanya's project will be building walls. With a little study most do-it-yourselfers can learn to do an acceptable job of framing a stud wall and then hanging drywall. And, once that's completed, they can learn how to finish the joints to prepare the walls for painting. There are some jobs that Tanya will want to have a professional do. She mentioned electricity. That will require getting the appropriate bids and recommendations. Some subcontractors, especially smaller ones, will let you help them do the work. You won't save a lot of money by helping. In fact, sometimes you might actually have to pay more! But you will learn something and have your finger prints on the project. Don't kid yourself. Most qualified professionals will do a slightly better job than you would. And, they'll do it faster. But, if Tanya is willing to tolerate minor imperfections or take the time to seek perfection, she can do an acceptable job of many parts of the project. After each step is completed she'll arrange for any necessary inspections. Then on to the next step. Gradually the new room will begin to take shape. And that's a great feeling! We hope that Tanya enjoys the doing the work and also that new room when it's completed. Gary Foreman edits The Dollar Stretcher website and ezines subscribe@stretcher.com . Permission granted for use on DrLaura.com. More >>

Controlling Bank Fees The Dollar Stretcher by Gary Foreman www.stretcher.com gary@stretcher.com My bank has charged me almost $150 in fees and over $100 of that is in fees from a negative balance (4 times!!) They can't charge me like that...can they? Matt The simple answer to Matt's question is, yes, they can charge him that much. And he's not the only one complaining about increased bank fees. Many consumers have noticed the hit to their wallets. Competition for loans has forced bankers to offer lower interest rates to borrowers. That's great for homebuyers. But it also means that banks aren't making as much on those loans. So they're using fees to boost their bottom line. For instance, ATM fees raise over $2 billion a year. Public interest groups claim that because of the fees that banks impose there are over 10 million families that can't afford bank accounts. So what can Matt do? Basically he has two options. He can avoid negative balances or find an account that's more lenient when he does have a negative balance. According to Bankrate.com the average service fee for interest accounts that fall below the minimum balance is $10.85 per month. Bounced check fees generally run about $25. Frustrating as the fees are, Matt can control the situation by not writing checks for money that's not in the account. Many bounced checks can be avoided simply by entering each check in the check register, subtracting it from the previous balance and balancing the checkbook each month. Overdraft protection might be appropriate for Matt. He'll pay for the service. But probably less than what the bounced checks are costing. The problem could also be with Matt's paycheck not being available quickly enough. His bank is required to tell him how long they 'hold' incoming funds before they're available for payment. The length of holds is regulated by law. If Matt needs to have the money available sooner, direct deposit might solve the problem for him. Matt has already recognized that bank fees can eat up his savings. So if he's going to continue to flirt with a negative balance, he'll need to find an account that's more forgiving. The American Bankers Association commissioned a survey on bank fees. They found that 58% of the consumers surveyed said that they paid $3 or less per month in fees. However, 64% also said that they avoid fees by maintaining the minimum balance required by their account. In effect, they've found an account that matches their needs. Recently more banks have been offering free checking. "Free" sounds good, but most have hefty fees for bounced checks, negative balances and ATM use. Matt might have one of those accounts. He might be better off with a 'no frills' account. Or even an account that costs him a few dollars each month if that account has a low negative balance fee. It's a matter of finding an account that works for him. Might be as simple as asking his current bank what they have available. Matt should also check out smaller local banks or credit unions. They won't have as many branches or ATMs. But they do generally have lower fees. Finally, it's possible that Matt could benefit from combining accounts. Many people have more than one account. If he's struggling to meet the minimums he'll earn more interest and/or pay lower fees by combining accounts. Matt has recognized a problem. I'm sure that he could have found a better use for the $150 that was consumed in fees. Hopefully he'll find an account that matches his banking habits better. Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website and ezines . Permission granted for use on DrLaura.com More >>

Enough Life Insurance The Dollar Stretcher by Gary Foreman gary@stretcher.com Hi Gary, How much life insurance should a couple with two small children have? Anita H. While none of us like to think about it, Anita is wise to be concerned with life insurance. Should either or both parents die insurance could be vital to her children's well-being. There are two basic methods Anita can use to decide how much insurance she needs. One way would be to replace the income of the deceased. A second method is to buy enough insurance to cover your expenses. Your choice will depend on your present financial situation. If you struggle to pay your bills look at the expense method. Otherwise replacing the lost income should be sufficient. There are calculators that will do the numbers crunching for you. But unless you understand the process, it's hard to know whether they're giving you a good answer. Anita doesn't need a perfect answer. To get that would require seeing into the future. She'd need to know her longevity, investment return and future inflation rates. She can only estimate those things. So just try to get reasonably close. First we'll look at using life insurance to replace income. We'll assume a family where only one parent works. That way we can do one illustration when you lose a spouse who draws a paycheck and another one for the person who works inside the home. In most cases you'll want to replace all of the income that's lost when an employed spouse dies. To be more precise you'll only want to include the after tax pay and make adjustments for expenses (like a second car) that are incurred earning that income. Don't forget to add the value of health insurance or other employee benefits to the income number. Now Anita has an amount of income that she needs to replace each year. But life insurance is often paid off in a lump sum. We're going to assume that she'd invest the life insurance proceeds and spend the income that it generates. How can Anita calculate how big a lump sum she'll need to create a specific annual income? The calculation is simple division. Take the amount of annual income you want and divide it by the investment return you'd expect to earn on the lump sum (i.e. life insurance proceeds). For instance, if Anita needed $50,000 a year and thought that she could earn 5% on the money, she'd need a lump sum of $1,000,000 ($50,000 divided by .05 = $1,000,000). That $1,000,000 would provide $50,000 to spend each year without touching her principle. The investment return that you use will make a big difference in the calculation. For instance, if she assumed a 7% return she'd only need $714,000. What rate should Anita pick? Probably something between CD's on the low end and the long-term stock returns (8 to 10%) on the high end. It is best to overestimate your needs a little. Yes, you'll be buying and paying for a little more insurance than you need. But, if you underestimate you won't realize your mistake until too late. If a stay-at-home spouse dies the target is a little harder to figure. Unless there's someone like a grandparent who could move in and take over, the survivor will need to pay to have things done. And that can get expensive. Add up laundry, cleaning, cooking, day care and a hundred other chores and you have an idea of what the at-home spouse's "salary" is that needs to be replaced. Then calculate like you did for employed spouse. Another way to look at the problem is to have enough insurance to cover your expenses. The calculation is the same. Just use expenses instead of income in your calculation. Insurance companies will often encourage you to buy enough insurance to pay off your mortgage or other debts. That's nice, but it's not really necessary. When you consider how much money you'll need be sure to take inflation into account. Even a modest 3% inflation rate will cut the amount your income will buy in half every 24 years. So if you lose a spouse in your 30's your dollar will lose half it's value before you retire. Anita should also consider what would happen if both parents die while the children are small. Hopefully they have someone who's agreed to raise their children. If so, the question becomes how much is needed to allow the children's guardians to house the children (bedroom addition? a bigger home?) plus the extra expense of feeding, clothing and schooling the children. One final thought. Anita will also want to make sure that the insurance policy is set up properly. Choosing the correct owner and beneficiary can have important consequences. Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website and free ezine . Permission granted for use on DrLaura.com. More >>

Protecting Your Financial Privacy The Dollar Stretcher by Gary Foreman gary@stretcher.com I am considering going to a mostly cash basis with the passage of the Homeland Security bill. I have nothing to hide, but I just feel uncomfortable with the potential for abuse. Have you any thoughts about privacy? Anna Anna has lots of company. Many people are concerned with the amount of their personal information that's available. Computers can store and correlate an awful lot of stuff about us. Current federal government plans call for law enforcement to assemble databases of all credit card transactions and other personal data. Their goal is to look for patterns that could help them identify terrorists. Anna makes a valid point. Any time that you have that much information available there is a potential for abuse. Formal government misuse would cause a huge outcry and is probably unlikely. But that doesn't mean that a rogue bureaucrat couldn't make unauthorized used of the database. We're not going to get into whether it's a good idea to trade privacy for terrorism defense. That's a political discussion. But we will try to give Anna more information so that she can decide how to react with her personal data. Before Anna decides, it's important to note that government use of your personal records is only the tip of the iceberg. Direct mailers, credit card issuers and other corporations have been collecting the same type of data for years. So the government is only accumulating what already exits. A third group poses the biggest threat. Criminals have learned to take your personal information and use it to commit identity theft. In 1998 that was made a federal crime. Over 1 million people will be victimized this year. The Federal Trade Commission says that identity theft is the fastest growing crime today. Estimates say the costs are over $10 billion a year. The next thing is to consider what 'abuse' Anna is concerned about. Would the government use the information it collects about her? If not, is she harmed just because they have it? In some ways we're returning to a level of privacy that we had 50 or 75 years ago. At that time the local grocer knew what breakfast cereal you ate and how much you spent on groceries. Even in large cities you had neighbors who observed a lot of your habits. So what should Anna do? She may decide that she just doesn't want other people to know what she buys and does. The best way to limit the amount of info available on her is to avoid credit cards. That will be inconvenient. She'll probably need open a bank account to turn her paycheck into cash. The bank will require information to open the account. So she still will have some files outstanding. She'll also find that cash isn't accepted everywhere. It will be difficult to buy airline or other tickets. She'll need to pay utility bills in person or with a cashiers check. That takes time. There is a reason people use checks and credit cards. They're convenient. Anna will have to decide whether the additional privacy justifies the extra effort. She may choose to continue to use credit. If so, there are steps that she can take to keep privacy problems to a minimum. First, find out how information will be used before providing it. Do not give out personal information by phone, mail or in email unless you initiated contact with the organization. Be wary of anyone trying to get your Social Security number, bank account info or other personal information. Especially if they contacted you first. Many places will try to use your Social Security number as an identification. Even though that is a common practice today the law that started Social Security made it illegal. Your doctor's office won't be happy if you refuse to provide a Social Security number but you're not required to do so. Their record keeping software will work fine with a made-up number. Minimize the number of cards and IDs that you carry. Do not carry your Social Security card or number in your purse or wallet. Watch for your credit card bills. If they're more than a few days late contact the credit card company. Your trashcan can be a fertile ground for your personal info. Get a shredder and use it. Order a credit report from all three credit reporting agencies at least once a year. Make sure that you know about all the accounts listed in your name. You can order a report for a nominal fee at Equifax: 800-685-1111; Experian: 888-397-3742; and Trans Union: 800-916-8800. Only Anna can decide how much energy she wants to devote to protecting her privacy. There's no doubt that it gets harder every year. Hopefully Anna will find a balance that's acceptable to her. Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website and ezines subscribe-dollar-stretcher@ds.xc.org . Permission granted for use on DrLaura.com More >>

Scrooge's Christmas List The Dollar Stretcher by Gary Foreman gary@stretcher.com "Cratchit, take your Christmas grab bag and be gone. Out, I tell you, or you'll be seeking new employment!" That scene wasn't included in Charles Dickens' "A Christmas Carol" but I can easily picture crotchety old Scrooge taking Bob Cratchit to task for attempting to include him in an office holiday gift exchange. Scrooge certainly is the symbol of someone who doesn't like Christmas. But, if you think about it, many of us harbor Scrooge-like feelings today. We really don't want to participate in yet one more gift exchange. We're out of both time and money. The sad fact is that for many of us, Christmas shopping has become largely an obligation. We buy presents because it's expected. Take a look at your list. How many gifts are you buying because you really want to bless the person receiving it? And how many fall into the "I gotta" category? Part of the problem for all of us is that most of the people that we buy for already enjoy material wealth. They truly "don't need anything". In fact, your present creates a problem for them. Yes, I know that some think only a real Scrooge would take people off of their gift list. But, I'd disagree. Many of the gifts that you will give this season will actually hurt the person you give them to. Here's how. They really don't need whatever you bought. It's just one more item to take up closet, cabinet or attic space. You've put them one step closer to needing a bigger house (with a bigger mortgage payment). You'll consume their time and money without adding any enjoyment to their lives. And, you'll diminish your own life, too. Whether you consider this time of year to be an important part of your faith or just a time of goodwill, rushing from store to store will take your mind from the real meaning of the season. You will be focused on things. Not on the relationships that are important to your life. So I'd argue that it's really in the spirit of the season to reduce the number of people on your gift list. In fact, you'd be doing friends a favor by not exchanging gifts. You'd both save the time spent buying and wrapping the gift. If you truly value that person, it's much better to get together for lunch or dinner and catch up on what's happening in your lives. OK, in some cases it's not practical to drop people from your list. So how can you make the best of gift shopping? Before you go shopping, consider why you're buying each present. Decide which people on your list are really important. You have a limited amount of time and money. Spend them on the people who are truly important in your life. Everyone else should be handled without a big fuss. It's not that we don't like the people in our office gift exchange. It's just that six months from now they won't remember what you bought them. An office party is a great place for a gag gift. Thrift stores can provide an assortment of items that can be used for funny gifts. Stuffed animals, clothing, coffee mugs and toys are fertile ground for the imagination. Is the recipient a stickler for time? An old alarm clock could be good. One where the hands have been removed is even better. Many of us have far away relatives and friends. Unless you're particularly close, you might as well admit that you really don't know what they already have or what they need. So no matter what you get there's a good chance that it will need to be returned. Rather than combing the malls hoping that the perfect item will jump into your arms, why not consider a gift certificate from a national chain of stores. Or, better still, agree to a dollar amount that you will each spend on your own family. Do your buying after Christmas and send the 'giver' a photo of the gift that 'they bought'. For local friends and relatives, think about where your lives intersect. That's the place to begin looking for a present. If you find that your lives have drifted apart, it's better to spend time catching up instead of shopping. Then there's those very special people on your list. Your spouse, children and others who you truly want to make happy with a gift. Remember that it's not how much you spend. While it's nice to find a thoughtful gift for that special someone, what they really want is you. The people that are most important in your life want your time and attention. They want your happiness. Don't disappoint them by picking something that's expensive but impersonal. Finally, please understand that this isn't meant to imply that you shouldn't give to those who need help. Not everyone in our world is blessed with the abundance that so many of us have. And the less fortunate can use your gift. If you can afford to, please participate in Angel Tree, the Salvation Army kettles or other programs to help those who struggle. If you're really in the holiday spirit you'll feel much better giving that new sweater to a poor child rather than your Aunt Edna. Nor is this meant to imply that you should ignore the holidays. This is a wonderful time of year. My hope is that you'd make the most of your resources and bring happiness to the people who matter in your life. Here's to a wonderful holiday for everyone. Hopefully your holiday will be filled with joy and wonder. Gary Foreman has worked as a Certified Financial Planner and currently edits The Dollar Stretcher website You'll find hundreds of free articles to help you save time and money. Visit Today! Permission granted for use on DrLaura.com More >>