Category Archives: saving

Protective & Effective

carpMuch too often we have an “all or none” perspective about things.  Money is one of those places.  We spend it or save it.   We hoard or bet it all.  We miss the all-important middle.  Working with a client the other day we hit upon another one of those extremes:  Protective vs effective actions.  In this money knot we either feel frozen in trying to protect what we have or create ineffective actions that leave us spinning wildly.

A good definition of protective is: “having or showing a strong wish to keep safe from harm.” When we are being protective we are being cautious.  There is, of course, value in being thoughtful and deliberate.  There is value in considering how to use your money in ways that align with what’s important to you.  This cautiousness gets to be a challenge when it goes too far.  Most of us remember some of the typical oddities about the way our “depression era survivor” grandparents behaved around money.  There are funny stories about basements with giant balls of saved scraps of tin foil (aluminum foil of the 30’s) and plastic margarine tubs by the dozen.   The idea was “Waste not, want not.”  Be careful.  Who knows what may happen, what disaster may befall us.  This behavior often went from being careful to the extreme of never actually recognizing that things got better and that they really didn’t need to “scrimp and save” for ever more.  Unfortunately, this protective nature gets really hard to even partially let go of.

Let’s look at the other word, effective.  It’s all about producing a desired result; solving a problem.  It actually requires action, lots of action.  The words thoughtful and deliberate come up here too, don’t they?  But in a different way than with protection.  We want an investment to be effective and make money for us, don’t we?   We try new ways of making money.  We hopefully lean on our talents to earn a living in a way that is more easy than arduous. Being effective is all about trying different ways of doing things.  Somehow it relates to trial and error and experimentation.  Figure out what works and what doesn’t.  Finding the way that gets the best results and perhaps even “more bang, for our buck”.  This works best when we are clear and intentional about our actions.

These two words can be and often are on opposing sides.  The protective side doesn’t want to risk something by acting.   Or the effective side may be so “gung ho” as to risk too much.

Here’s the deal: this is not an either/or situation.  It, like most things around money, will benefit from an application of both.   You do better by being protective and effective at the same time.  Find the middle. Combine the best of both money strategies.

Whichever one you tend to lean towards more, challenge yourself to “swing” out a bit and try the other one.  See what happens when you purposely pull yourself more toward the middle.  Money is really about the middle.  It swims toward us and away from us.  We earn it and spend it.   We give it and get it.  For it to work, and for you to do well with money, you need to find your personal balance between the extremes: between being protective and being effective.

I’m here to help you untangle all your money knots.  Just give me a call at 503-258-1630 or check out my website at


Shell Tain, The Untangler

Student Loan Blues

Have you got ‘em?  The student loan blues, that is?  They are becoming more and more common these days.  I’m getting calls about them all the time.  So let’s take a little time here and untangle some of the knots that come with those challenging loans.

First some interesting facts. According to U.S. News and World Report, the average studentloansstudent loan is $30,000.  Of course that means that many are higher than that.  The 20 high-debt public colleges had average debt levels ranging from $33,950 to $48,850, while the 20 high-debt nonprofit colleges ranged from $41,750 to $71,350.  A Huffington Post article has some even more intriguing stats to share.  The amount of student loan debt is second only to mortgage debt, which means that it is higher than credit card debt.  Student loan debt has grown by almost 300 percent in the last 8 years according to the New York Federal Reserve.

That’s some of the big picture of the student loan knot.  But if you have a student loan, the big picture doesn’t really have much of an effect on you.  It’s your own student loan that you worry about.

What do you make up about the loan?  How do you feel about it?  For most people that I talk to about student loans, they feel bad about them.  They feel guilty.  Sometimes they have been told, or at least interpreted, that they shouldn’t do ‘anything’ else financial until they pay off that ‘nasty’ student loan.

Funny thing about debt.  We use it, we have it, we take advantage of it, and yet we have a lingering inner message that says we shouldn’t have ANY of it.  Most of that thinking comes from early 20th century American thinking.  Having a loan of any kind was a bad thing.  They could take away your home!  And back then you didn’t get a mortgage on the home when you bought it.  You saved and saved and finally bought a house.  The whole family saved, it sometimes took generations to save enough to buy a house.  And often, generations would then live in the same home.  In those days, if you got a loan against the house it was because you needed money to solve some serious problem.

That all changed with the G.I. Bill after World War II, when people started getting mortgages to buy houses.

The reason I’m telling you all that house stuff is that we are in a similar place around student loans.  Used to be you had to save up for a house and buy it outright.  Used to be you had to pay your college tuition as you went.  The money folks got clever and figured out that people would pay more over time (interest) in order to get the house sooner. We are all used to that. So then they figured out that people would also pay more over time (there’s that interest again) in order to get through college sooner.

It doesn’t really freak you out, or keep you from saving or investing in other things that you have a 30 year house loan, now does it?  But somehow, having a really large, long term student loan does.

What does that student loan represent?  To me it says you leveraged your ability to get a student loan so you could go to school sooner, and finish school sooner.  That way, with your education, you could make more money sooner, follow your dreams sooner, and live a better life, all sooner.  How many years might it have taken for you to save more than $30,000 for an education at a job you could get without an education?  Would doing that really have made sense?

When people talk to me about what to do about their student loans I suggest they think of their student loan as a ‘never ending car payment’.  Generally they are around that monthly cost.  Sure you eventually may be able to pay it off with the earnings you have from the better career you got because of your education. But in the meantime, don’t let it slow you down for a minute.  Every time you write the student loan check, remember you got the education years before you would have without that loan.  Not such a bad deal.  And it even comes with a tax deduction.  Hot diggity!




Do you find that your money always shows up in extremes?  For example, you get a lump of it at the beginning of the month, spend it and then find there is none until the next month.

If so, you may very well be trapped in the scarcity place (feast or famine, binge or purge, black or white, all or nothing…all the same stuff).  It’s a concept of extremes, and it’s exhausting.  Your little kid part that I often speak about is still in charge of your money.  extremesWhen the money comes in, she spends it…all.  She doesn’t think past this moment.  It’s part of being a little kid.

It’s all about that tricky balance thing.  You need to wrap your head around it differently.  Think of the middle, instead of the ends.  After all, the colors are all in the middle between black and white.  Emotionally, you need to make it more valuable to take care of yourself all month than to splurge…not from a sense of boring duty, but from a sense of self love.  This is the inside work.

Consider some outside structures that might help:

          When you get the funds immediately put 30 – 40% aside

          Every time you spend money put 15% aside

          Save some amount every time you get money – this is the crucial one.

Our brain needs to know that we CAN save.  It doesn’t matter how much, even one dollar is fine.  Brainwise, it’s the action of saving that is important, not the amount.

If you are spending it all, and then find yourself lacking, you are doing what ‘poor’ people do.  Poverty creates an interesting concept of quickly exchanging money for stuff.  The belief and logic is that someone may take money from you, but it’s harder for them to take stuff away from you.  So spend it all now, so that no one can take it away.  The trick is to establish the idea and process of saving, taking action to believe that it’s not just about today, but self-care for tomorrow.

Practice this and you will change the behavior and the beliefs…at the same time.



Yep, You Need Another Bucket

Okay, well maybe not an actual bucket.  How about another savings account?  

When it comes to handling their personal money, most people have a checking account and a savings account.  That is all well and good.  BUT, you need one more savings account for your personal money.  You need to separate out the long term savings from the short term.  

Here’s the deal.  Long term savings is just that: long term.  It’s for vacations, retirement, kids’ college, buying a house, those sorts of things.  And yes, you may have more than one Long term savings account if you have an IRA, 401k and other savings.  Great! All that is good: keep it up.

Now what about short term savings?  What is that anyway?  It’s primarily two things.  It’s for the short fall.  You know, the rent is due and that check that will cover it hasn’t come in yet.  It’s for saving for property taxes and other events that don’t happen on a monthly basis.  Those puppies sneak up on us, don’t they?  It’s also for the emergency money.  The money when the well dries up, and yet you have to eat.  Most Financial Guru’s suggest 3 – 6 months of back up money for emergencies.  This is for the basics, your food, shelter, health.  And it’s a very good idea.

Can’t you just keep all that in the same savings account?  Nope, not a good idea.  It leads to a bad spot in your psyche.  If it’s all in one place, then every time you use some it gives your brain the impression that you “can’t save money”. We don’t want that.  We want you to be able to handle the day-to-day stuff AND to save for the bigger dreams and life plans.   So, open another savings account.  Call it what you will: short term savings, the “oh no, I need it now” fund, the float.  I suggest something on the quirky side.  Fund this account as you can while you continue to fund the Long term one. 

Set yourself up to succeed with money.  

For more info about being clever with money check out my next teleclass, Charge What You Are Worth.  Click here to register.

Growing Money

The Money Knot this month explores a book from 1926, The New Mathematics, by John C. Stone.  (If you would like to sign up for the Money Knot and get a copy of this month’s issue, “The Good Ole Days” click here)

 I was so intrigued by this book because, even though it’s a “Math” book, it has extensive sections on how to deal with money.  Good things like the basics of banking and budgeting.

I was tickled by this table.  Who knows, it may be the original table for the concept of “Dollar Cost Averaging” since it’s actually about saving a dollar a year!  

The idea was then, and still is now, that if you sock away even a small amount and it grows by some percentage of interest, then that small amount becomes big.  Just a little bit makes a difference over time.  Our table shows that $1 invested over 40 years becomes between $61 or $164 dollars, depending on how much annual interest you are getting (2 – 6 %).  Note: this chart and our numbers are “compounding” once a year.  Most places do it more often than that, but we are keeping it relatively simple here.

The problem these days is that scale.  Somehow we scoff at the chart.  40 years!  Who can wait 40 years!  And only $100?

To see the value of this concept for yourself, bring it closer to home.  Don’t think of how much money Barbra Streisand’s Malibu house is worth ($12 million)…okay, now you’ve thought of it.  Bring it back home.

How much do you make an hour?  If you put what you make an hour in a conservative investment at say 4% for 40 years you would have 100 hours of savings.  Stated another way saving 1 hours gives you about 2.5 weeks of pay.  Yes, I know inflation will erode some of that, and does that circumstance make it less of a smart thing to do to take an hour a YEAR and save it?  What if you took an hour of pay a week? That’s like 50 or 52 hours a year.  Now take that at 4% for 20 years.  That comes out to 1,600 hours or about 40 weeks of pay, over 9 months of pay.

So the real question is would if be worthwhile for you to work an hour a week for your long term savings?  It can add up!  Start now…!