Freedom From Financial Fear

01/14/2024

💡 Savings tip: Internet Provider. Most people overpay for their internet. Buy your own router and negotiate contract for 12 months if possible. Set a reminder to redo a contract every 11 months. It might save you over $500 a year.

01/13/2024

💡 Coaching tip: Unsubscribe from Retail Emails. Companies increase sales between 50-75% by spamming your email with deals. Reduce temptation by unsubscribing from marketing emails that encourage spending.

01/12/2024

✅ Purchasing Tip: Wait 24 hours before making a large purchase ($100+) to ensure it's truly necessary.

01/11/2024

🔎 Subscriptions fact: 50% of people pay for streaming services they don't use, according to Forbes Survey. Cancel any subscriptions you no longer use or need.

01/10/2024

💡 Underrated savings tip: Avoid overspending by sticking to a grocery list when shopping.

08/27/2023

Credit card - financial drug and remedy

1. My credit card addiction.
2. How it affects your brain.
3. Credit card myths
4. Escaping credit card dependence.

Title: 1. My credit card addiction.

About 10 years ago, I got my first credit card. The only thing I was told was that I must have it to start building my credit score. I didn’t really understand what it meant and as a new immigrant, I didn’t really care at that point. Everyone had one, and of course, I got one.

Fast forward a few years later - I started using it on a regular basis and paid it off every single month. The one thing that I got hooked on were the Chase cashback rewards. Every time Chase asked me to “activate” them, I felt some excitement and was happy to see my “Ultimate Reward Points” rise up every few months when I checked my balance. “It is technically free money,” I thought and never cared to understand WHY they give me free money. In my brain, the reason didn’t matter because I was always careful with spending (as I thought) and never missed a payment. This was my addiction, called - “cashback addiction.” The logical questions I hear all the time are the following:

❓ Why would someone refuse to get FREE money from the bank?
❓ You still have to buy groceries, so why not just use a credit card for it?

It all makes sense, and to be honest, mathematically speaking it can be more rewarding, but only if we include numbers, and not behavior.

Title: 2. How it affects your brain.

Multiple studies have illustrated that people tend to spend more when using credit cards compared to cash. For instance:

🔎 In 2004, an article by Motley Fool showed that people in Wendy’s spent 35% more using a plastic card than purchasing with cash.

🔎 In 2016, a DCPC Study from Massachusetts found that the average value of a cash transaction was $22, compared to $112 for the average non-cash transaction.

🔎 In 2021, the MIT Neuroeconomics Laboratory did research that studied the effect on our brain comparing using credit cards or cash for purchases. They found that while using plastic, our bodies don’t feel “pain” while spending money, and people don’t analyze the price of the purchase. On the contrary, our brain’s “reward center” gets excited when we see a credit card logo, which makes us more excited to buy more stuff. This “reward center” is targeted by things like co***ne and amphetamines.

In reality, people who pay off credit cards every month unconsciously might spend more money in a month than they could spend just using cash.

Co***ne can devastate our physical health, just as credit cards can eliminate our financial security.

Title: 3. Credit card “myths”.

There are many myths about why people believe that credit cards are better than debit cards; here are just a few of them:

✅ “Reward Points”. Cash back, free air travel points etc.
✅ Building a credit score. If you use it properly, your score will go up.
✅ Fraud protection. If your card gets stolen and someone uses it without your authorization - you can dispute this charge.
✅ Emergency fund. People tend to think that it’s a great tool for emergencies that can provide a temporary “buffer” if something happens in their life.

What about debit cards? Let’s compare:

✅ “Reward Points” - you don’t normally get any rewards while using a debit card. Banks are not stupid, and if you read the studies above, there is a reason why - people overspend more while using credit cards. So instead, if you use a debit card, you might be surprised that you will save more money than get cash back.
✅ Building a credit score. Debit cards are not a tool to build a credit score. Only credit cards can.
✅ Fraud protection. This is probably the biggest myth that people believe in. However, debit cards offer a similar type of fraud protection to credit cards, but you have to watch your bank account (which you should do anyways) and report any suspicious transaction on your debit card.
✅ Emergency fund. It’s a delusional statement because credit cards are not emergency funds - you have to pay them back. If you have a cash emergency fund and you spend it, it’s your money; you don’t owe anything to anyone.

The only difference from this example is that credit cards can be used as a tool to start building your credit score or keep it active.

Title: 4. Escaping credit card dependence.

I remember the time when I decided to stop using credit cards. It was a scary and uncertain feeling because emotionally I could see on a daily basis that my checking account was slowly shrinking. It took me about 3 months to stop thinking about it, and until today, I don’t carry plastic cards in my wallet.

Was it extreme? Yes. It was a choice that I made, and I know the benefits that it brings me in the long run.

Does everyone have to do it? Of course not. It has to be a choice based on knowledge, goals, and the current situation.

Here are only a few signs that you might have an “addiction”:

❗️ You have over 5 credit cards and are opening new ones.
❗️ You max out some or all of the cards on a regular basis.
❗️ You don’t “pay in full” each month.
❗️ You use them to buy things that you want and never consider the price of it.
❗️ You live in denial and have secrets from your loved ones because of a growing balance every month.
❗️ You are confident that you can outsmart banks and use rewards as a way to get free money.

If you see these signs, the good news is - there is a way out. But the first step is to BELIEVE in it and start taking action.

Here are the steps you should take if you're ready to make a change:

1️⃣ Acknowledge that you have a problem. This is the hardest, most emotional step. It is not easy, but you can do it. The sooner you start, the sooner you'll feel free.
2️⃣ Find support. Talk to your family or closest friends who will support you or not judge you. If you are afraid or feel ashamed, you can seek a coach who is certified and trained to help you. A professional coach must keep it confidential.
3️⃣ Budget. Start budgeting and build a plan on how to manage your money going forward.
4️⃣ Cut up credit cards. Don’t just throw them away or hide them.
Use cash or debit cards. Use these methods to purchase things that you've budgeted for.
5️⃣ Create a debt repayment plan. Start a plan using proven techniques that will help you pay off your debt as quickly as possible.
6️⃣ Educate yourself. Start reading books or subscribe to blogs that you trust related to personal finance.

In summary, it’s important to understand the risks and rewards, truth and lies regarding credit cards. You should not take it as financial advice, but just as a recommendation based on my experience, training, and knowledge.

If you feel hopeless and think that it's just too hard or impossible - feel free to reach out, and I will be happy to help you! As a coach, I was trained to help people get rid of any type of debt and show them how their life would change without it.

If you have a person or a friend that you love that needs help, share this post with them, and it might be a starting point in their life to experience freedom from financial fear.

08/17/2023

Don’t wait: Shield Yourself from Economic Instability.

1. Inflation and recession - what it is and how it affects you.
2. Things you can or can’t control during a crisis.
3. Importance of budgeting.
4. Necessary actions to take during financial uncertainty.

Title: 1. Inflation and recession - what it is and how it affects you.
If you read this “piece of artwork” during summer 2023 and you have to pay your bills - you have experienced what we call “inflation”, in simple terms, “food prices skyrocketed”, “rent and insurance cost went up”, “gas prices over $4/gallon” etc. It was caused by different factors, but that’s not what I will talk about this time.

The worse and more confusing word than “inflation” is “recession”. That’s when people spend less money because of the fear of inflation, which leads to businesses making less money, which leads to companies firing people, closing their doors or going bankrupt.

It's a very simplified version of complex concepts - but you get a point. People spend a lot more money for simple living necessities and are scared to lose a job. In today’s reality, 7 out 10 people already live paycheck to paycheck, and recently the Federal Reserve advised that Americans totaled more than $1 trillion dollars of credit card debt in the United States.

Based on my knowledge, these things like “inflation” and “recession” can impact your life through different lenses: financial, spiritual, relational and emotional impacts.
• Financial Impact - you might be running into more debt, notice decreases in your savings, defaulting on your monthly payments due to lack of funds.
• Spiritual Impact - you don’t feel peace in your heart, because you are not sure when things get better.
• Relational Impact - if you have a family, financial problems can directly affect your relationship with a spouse and can have a big effect on your children once they grow up.
• Emotional Impact - you might feel insecure, anxious and fearful of losing your job that can lead to health problems and depression.

The good news is - you can overcome these issues. I believe in you and you can believe in yourself too. You might have the following question pop up in your mind - “Wait, how can I control these things? I don’t think it’s my fault - I can’t control prices and my job stability”.

Title: 2. Things you can or can’t control during a crisis.
In order to understand how we can impact our financial lives during uncertain economic turbulence, we need to understand what we actually can or cannot control.
Things we can’t control:
• Prices for living - such as food, rent, gas etc. They can go up or down, depending on many factors.
• Your job - there is no such thing as “job security”. You might be laid off any day or find out that your company is getting closed.
• Natural Disasters, Wars, Government Handouts - things such Destructive Hurricanes, Covid-19, International Wars or crooked politics giving handouts all affect our current economic stability. We can just watch it, but we can’t change the fact that they occur.
Things you can control:
• Your budget - you can adjust your budget every month based on prices.
• Your job options - always be on a lookout for different employment options. If you know that things might be rough, start having a plan in case tomorrow you will be out of the doors.
• Your knowledge and skills - investing in proper financial knowledge over time and job skills can assure you becoming better prepared for future instability and getting employed faster.
• Your lifestyle - if you are spending more than you are making - you are or will be broke. Learn to say “no” to your friends and family. Learn to say “no” to a car or vacation that you can’t afford. Don’t buy or do things that you can’t afford.
• Your behavior - you can decide to follow a plan or just do what feels good. It feels good to use a credit card to buy things you can’t afford, it feels good to get drunk or get high when you are dealing with stress. If you follow a plan, however, you set your behavior based on the plan and will not let lifestyle, your broke family and friends or your emotions to get control over you and your life.

You can control way more than things you can’t and it can be a decisive point for you and your family’s future. Just ask yourself - “Do I need to take control of my life or just blame someone else for my problems?”

Realistically speaking from personal experience - change is so hard, and it takes a lot of hard work and support to go through. The great news once again is - you can do it - and you should start simple - buy following a simple, common sense plan. In the financial world we call it “budget”.

Title: 3. Importance of budgeting.
I will focus my attention only on the importance of budgeting during a crisis. If you have never personally made a budget, here’s a fun analogy of what it is:

People that budget:
“I want to cook a pizza and my fridge is empty. I plan to buy crust, tomatoes, cheese, onions and deli meat. I bought them, baked pizza following instructions and it’s so yummy !”

People that don’t budget:
“I want to cook a pizza and my fridge is empty. I went to the store, however I have no idea what ingredients I need and I have never made a pizza before. I just bought crust, ketchup, greens, apples, blue cheese and pineapple. I microwaved it and it didn’t taste great. It’s okay, maybe the ingredients were not that fresh”.

During a crisis, budgeting provides clarity on how much you can afford to spend or save based on the income next month. It helps avoid unnecessary purchases that you didn’t plan and results in having an inner peace. As an example, if you budget to spend $800 for food next month, you must have a plan on how to make it happen, instead of blowing $1500 and complaining that it’s all the government's fault.

Not budgeting leads to impulsive decisions, waste of money resources, racking insane amounts of credit card debt and loss of peace in daily life.

Budgeting is not a remedy to all the problems - but it’s a starting point. Other actions will be appropriate as well, however, they are all interconnected to having a plan.

Title: 4. Necessary actions to take during financial uncertainty.
These are not advices, but practical ideas that actually work.

1. Re-evaluate Spending: be realistic, transparent with yourself and your family. Make a budget that you can follow;
2. Reduce debt: stay away from consumer debt that is not necessary and focus on paying high-interest debts, especially credit cards.
3. Stay away from borrowing: don’t go deeper into debt. It’s very hard to pay it off down the road, especially while interest rates from banks are very high these days.
4. Build Emergency Fund: try to build a fund that will have at least 3-6 months worth of expenses.
5. Avoid Large Purchases: try to postpone buying large or luxury purchases if it might affect your savings.
6. Get a part-time gig: taking a part time job, or even two can be a great source for extra income. Don’t be ashamed of it and don’t let other people’s opinion stop you from taking care of your needs or your family.
7. Control your lifestyle and behavior: don’t let other people's opinion or your emotions affect your actions.

During times when money is tight or the economy is bad, it's important to be flexible, focus on what's really necessary, and think about the long run. Making smart choices, instead of quick ones, can help you get through tough financial times.

If you or someone that you love struggles or needs help with finances - feel free to reach out to me or send them this article and I will be glad to provide a free coaching consultation.

Providing financial coaching and tutoring services to help you achieve your financial dreams.

08/10/2023

Retirement is not an age – it’s a number
1. Misconception about retirement.
2. Problems with Social Security Payments.
3. Ways to save for retirement.
4. Importance to act TODAY.

Title: 1. Misconceptions about Retirement

Being in my early twenties and thinking about retirement seemed like a crazy idea. I believed that by the time I retired, I should have enough money saved, open a successful business (and of course, just do nothing and pick money from trees), or rely on social security benefits to cover my day-to-day expenses. However, once I started learning more about personal finance, my understanding changed. In my coaching experience, I've noticed common misconceptions people have about retirement. These are:

• Misconception - People who retire just relax and have no responsibilities.
• Reality – This might be true for some, but a study conducted by Pachex.com in 2023 shows that 55% of retirees returned to work because they needed more money. Those who don’t need to work anymore still have to manage healthcare-related costs and finances, potentially on a reduced income.

• Misconception – The Medicare program will cover all healthcare expenses.
• Reality – Medicare coverage starts after you turn 65. It’s a health insurance plan that covers most, but not all, health-related expenses. Patients still have to pay for deductibles, copayments, or coinsurance.

• Misconception - Social Security will be enough to live on.
• Reality - The average earner will receive only about 40% of their income after retiring.

• Misconception - Retirement planning starts after the age of 50.
• Reality - The later people start saving for retirement, the more they will need to save in their later years to catch up. Starting retirement planning early, in your 20s and 30s, gives people the opportunity to save more due to the power of compound interest.

Title: 2. Problems with Social Security Payments

2.1 Problem # 1 – The Misbelief that the Government will "Take Care of You".
If you've ever paid taxes and wondered where your money goes, you might have noticed Social Security and Medicare taxes. If you're unsure what these mean, here's a simple explanation: you pay Social Security tax today to support people who are currently disabled or retired. Similarly, you pay Medicare taxes today to finance a government insurance program that covers people over the age of 65 and younger individuals with disabilities.
Normally, you can retire at 62 (which means early retirement with less money) or wait until 67 (full retirement age) to collect Social Security payments. So if you retire today, people who work today are paying for your retirement benefits.

Every time you get paid, the government taxes 6.2% for Social Security and 1.45% for Medicare (totaling 7.65%) if you work for an employer. This amount doubles to 15.3% if you're self-employed.

Let's pretend you're 30 years old today, and you're curious about how much you will get paid at age 67 upon retirement. We'll run a few scenarios using different examples (I encourage you to try the Social Security Benefits Calculator online).

• First scenario: You started working at 18 and retired at 67 (49 working years). On average, you earned $60,000/year ($5,000 a month). Your Social Security monthly benefit will be $2,376 a month. Over 49 years, you will have paid approximately $182,280 in Social Security taxes.

• Second scenario: You worked from 18 until 67, but made $100,000/year ($8,333 a month). Your benefit will be $3,149 a month. Over 49 years, you will have paid approximately $303,800 in Social Security taxes.

• Third and final scenario: You worked the same number of years, but made a whopping $150,000/year on average ($12,500 a month). You probably think that because you're a hard-working rockstar, the government will take care of you, right? Your benefit amount will be only $3,692 a month. Over 49 years, you will have paid approximately $455,700 in Social Security taxes.

The more money you make, the less money you will get for retirement – it's just that simple. This is the first problem with Social Security, or what I call, "punishment" for high earners. Just look at these amounts and imagine these are real numbers you would receive today if you retired and hoped to live only on Social Security benefits. Would this be enough for you to live comfortably? Would it be enough for you to achieve your dreams?

2.2 Problem #2: Predictions Indicate that Government Funds will Deplete After 2035.

The Social Security system, also known as "pension", is quite complicated and difficult to understand for most people. But let's break it down into simpler terms.

"Imagine you have a giant piggy bank that everyone in the country puts money into when they work. This piggy bank is called Social Security. When people get old and stop working, they start taking money out of this piggy bank to pay for things they need.

In the past, there were a lot more people putting money into the piggy bank than taking money out. But over time, things have changed. People are living longer, which means they're taking money out of the piggy bank for a longer time. And, there are fewer people working and putting money into the piggy bank because families are having fewer kids than they used to.

So, we're reaching a point where the piggy bank is getting emptied faster than it's being filled. Those managing the piggy bank have calculated that by the year 2035, there might only be enough in the piggy bank to pay out 75% of what each person should receive.

This doesn't mean the piggy bank will be completely empty, it just won't be able to give everyone the full amount they were expecting. To fix this, we could find ways to put more money into the piggy bank or change how much we give out."

As you can see, our government recognizes the problem but hasn't presented a clear solution yet. Here are a few realistic solutions they might implement:

• Increase payroll taxes, which means you will pay more taxes now than before you retire.
Raise the retirement age, meaning you will need to retire after 67 to get the same amount you would get today.
• Change the benefit calculation to pay even less to people who earn more money.
• Implement other methods, which are more complex and will be explored in future articles.

This is the second problem we face: our government's complex and confusing Social Security system is running out of cash, and you might end up paying more in taxes to receive less in retirement.

2.3 Problem #3: You Cannot Opt Out of Paying Your Taxes.
Yes, it's an issue we're all familiar with. You MUST pay taxes. I've included this point to highlight what could happen if you had the CHOICE not to pay the 6.2% Social Security tax but, instead, invest it long-term using a professional advisor.

Let's look at what you could earn if you had this choice:

• Age 18-67, salary of $5,000/month on average. You could earn $2,266,830 (8% annual return), $4,857,967 (10% annual return), or $10,741,820 (12% annual return). You would have paid only $182,280 in taxes over 49 years.
• Age 18-67, salary of $8,333/month on average. You could earn $3,773,176 (8% annual return), $8,086,174 (10% annual return), or $17,879,932 (12% annual return). You would have paid only $303,800 in taxes over 49 years.
• Age 18-67, salary of $12,500/month on average. You could earn $5,667,074 (8% annual return), $12,144,933 (10% annual return), or $26,854,544 (12% annual return). You would have paid only $455,700 in taxes over 49 years.
Pause for a moment and read these numbers again. Now, compare these figures with the ones provided by the government. Can you feel the difference?

Title: 3. Ways to save for retirement

Having realized that it will be tough to live comfortably without retirement savings, or to put it more realistically, to "survive" only on Social Security, it's important to consider other options. I personally believe it's healthy to work at any adult age, but if health reasons prevent you from doing so, you should plan to have something to live on.

Let's look at some funny, albeit impractical, ways people think they can save for retirement:
• Stashing money under the mattress. You'd be surprised, but some people in this era still believe that saving money in a bank or investing is high risk, so they prefer keeping good old cash closer to their "hearts". This idea is terrible because inflation will devalue cash every single year. For example, if you had $100,000 saved in cash in 2020, it would only be worth $85,730 by 2023 - that's a 14.27% inflation rate over three years.

• Find a money tree - some people say it exists, so just keep looking!

• Marry a millionaire - just make sure they don’t make you sign a “prenup” before you tie the knot.

Now, let's get serious:
• 401K, 403B, or IRA plans. These are employer-sponsored, self-employed (SEP IRA), or traditional retirement accounts. We can't choose NOT to pay Social Security taxes, but we can steadily invest in these accounts and retire peacefully.
Pension plans. These aren't related to Social Security and are quite rare, but some employers still offer them.
• Savings Accounts. You can keep part of your retirement savings in cash and have it ready when you get closer to your retirement age.
• Investment Portfolios. These are non-"retirement accounts", but they offer options for those looking for more ways to save for the future using stocks, bonds, ETFs, etc.
• Real Estate Investment. You can opt to have rental properties that can generate extra income for your retirement.
• And many more. There are more ways to do it, but they are much more complicated, and I've decided not to list them here.

Title: 4. Importance of Acting TODAY
Do you remember those millions you could have if you invested by yourself, as mentioned in the previous chapter? That's still a possibility. While you can't avoid paying your Social Security taxes, you CAN and SHOULD invest in retirement accounts.

The most important part? You should start tomorrow, if not TODAY already. Time plays a crucial role in investing - because of the power of compound interest.

And imagine if you teach your kids to invest as early as 18... how much could they retire with? 5, 10, or maybe 12 million dollars? The amount doesn't really matter. Money won't buy happiness, but it will buy peace and stability.

No matter what society tells us or what our hopes are - retirement is a number - the number of money we need to save to retire, regardless of whether we are 40, 50, or 67 years old. Just remember - whether you save and invest $50 or $500 a month, JUST DO IT.

If you need help or don't know where to start - reach out TODAY and let's get to work together !

05/14/2023

American Dream - The Harsh Facts of today's Financial Well Being and How they Affect our future.
Written with love by Oleg Peleshok

1. What's your idea of the American Dream?

Everyone has their own version. Maybe it's about having a good job that pays well and offers chances to move up. Or it could be about getting married, having kids, buying your dream house and car. Maybe you dream of a relaxed retirement with a summer house in Florida, sharing stories of success with your grandkids, or earning enough money without much work so you can travel the world. Thinking about this can make you feel happy. This article will talk about the money part of these dreams.

2. Key Statistics of US Households.

To understand the problem and its solution, we need to look at the current data, which can be quite shocking:
• The median household income in the US is $70,784 (according to the most recent data from the US Census Bureau in 2021).
• 6 out of 10 people need a credit card to cover a $1,000 emergency (according to a study by Bankrate in 2023).
• 7 out of 10 people wouldn't be able to cover a month's worth of expenses if they lost their job today (also from a study by Bankrate in 2023).
• 5 out of 10 families earning over $100,000 a year would struggle to cover a month's expenses if they lost their job (another Bankrate study in 2023).
There's a lot more data to consider, but the point is clear: many people live paycheck to paycheck, and even high earners are not immune. Does this mean some of our friends, family members, coworkers might be broke?
Let's consider some more data (from a study by Experian in 2022):
• Total consumer debt in the US increased to $16.38 trillion in 2022 (a 7% increase from 2021).
• Average mortgage debt is $236,443 (money borrowed to buy a house).
• Average student loan debt is $39,032 (money borrowed to get an education).
• Average auto loan debt is $20,987 (money borrowed to buy a car).
• Average credit card debt is $5,910 (money borrowed to cover various expenses).
• Total average debt balance is $101,915.

From these figures, we can conclude that at least half of Americans don't have $1,000 in hand and live paycheck to paycheck. An average person carries around $100,000 of debt. However, observing the people around us, it's not immediately obvious that so many are financially insecure. They live in nice houses, drive fancy cars, share their vacation photos, and dine out on weekends. People tend to spend everything they earn, and when emergencies arise, they borrow more.

3. Who is to Blame?

Every morning, I have a routine of reading the news. I usually check the news channels for updates about the situation in Ukraine. Sometimes, I also catch up on financial news from around the world. Most of these articles make it feel like the world is ending. They talk about "recession," "US banks failing," and "high inflation." After reading them, I feel like things are falling apart - thousands of people are losing their jobs, banks are shutting down, food is becoming pricier, and no one knows when it'll get better.
These articles don't just give information. They also make us scared and worried. We start to think that we don't have control over our money problems, but the government and banks do. We often blame "them" or "someone else" for our money struggles. Does this sound familiar? Have you ever thought like this, or heard someone you know talk like this?

Everyone has their own views, but after learning more about personal finance, I realized that we need to take responsibility for what we do. We are the ones to blame if we're struggling with money. This doesn't apply to people who can't work because of a disability, or those who have had unexpected bad things happen to them. We make bad choices with how we spend our money, and we need to admit this and move on. I've also made bad choices, and I'll tell you about the biggest one.

When I was 25 years old, I decided to buy a Tesla that cost me nearly $60,000. I found many reasons to justify this purchase, thinking it would save me money in the long run, and believing I needed it. I also had a childhood dream of owning a self-driving car, like the one I saw in the old Sci-fi TV show, Knight Rider. The smart part about this purchase was that I planned to pay it off the next year, which I did. But I now see that this decision was not wise for several reasons:
• I still owed more than $60,000 on my mortgage.
• I bought a $60,000 asset that drops in value (five years later, it was worth $20-25,000).
• The money I had in the bank, my income, and my net worth (the money I would have if I sold everything I own) at that time did not justify buying such an expensive vehicle.
I let my feelings, not logic or knowledge, guide me into a purchase that could have put me into long-term debt if I lost my job.
I didn't understand how silly this was until I learned about managing money, the difference between "needs" and "wants", and the importance of "long-term planning." I also realized how hard it is to be a grown-up.
For example, if I had chosen to buy a $20,000 Toyota Corolla and invested the remaining $40,000 in an S&P 500 Index Fund (which is money put into 500 large U.S. companies), it would have grown to $482,277 in 25 years (based on a 10.15% average return, according to Investopedia). This could have paid for my children's education, their first cars, or their wedding costs.

We can choose to appear rich like everyone else or to become truly wealthy. We can decide to spend money based on our feelings and childish desires, or we can spend it based on what we can afford according to our budget and plan.

4. Why We Spend More Than We Earn and How to Change It.

Here are three simple habits that many of us follow:

1. Most of us wake up in the morning and brush our teeth. Why? It helps us avoid dentist visits and keeps our breath fresh.
2. Kids go to school and do homework. Why? To gain skills and knowledge that will help them grow into adults and find jobs.
3. Adults go to work. Why? To earn money, so they can support their families and live comfortably.
Who told us to brush our teeth? Who told us to go to school? Who said we have to work? We learned these things by observing our parents, siblings, and people around us. These activities became our norm. We plan for them daily, and we don't question them because we were taught as kids that they were necessary.

However, we don't often give money to the church or a good cause, set a budget, avoid debt, save money, buy the right insurance products, or invest in retirement. Why not? The reasons vary, but here are a few:

• Our parents didn't teach us about financial literacy, or they didn't understand it themselves.
• Our parents told us what to do, but they did the opposite in their lives. They didn't show us how to be responsible adults because they weren't responsible themselves.
• Our schools didn't offer classes on financial literacy.
• We were influenced by those who were financially irresponsible, like spoiled kids who always got what they wanted, or broke relatives who encouraged us to spend freely.
As a result, we often spend more than we earn, influenced by how we grew up and what we were taught in school.

Not understanding how to manage personal finance can lead to problems, such as:

• Higher stress levels and mental health issues due to fear of losing a job, or not having enough money to cover expenses.
• Risk of bankruptcy, especially without an emergency fund and proper insurance coverage.
• Poor decision-making (like my Tesla example. I got what I "wanted", not what I "needed", and took on more debt instead of paying off my mortgage).
• Insufficient retirement planning, possibly leading to a need to work into old age.
• Generational impact, as we can't teach our kids about financial literacy if we don't understand it ourselves.
The good news is that we can change this. How? It's simple. We have to change ourselves. We have to accept that we were wrong. We need to understand that we made poor decisions with money (I still do, just not as often). We should learn how to manage our finances instead of blaming others for our lack of knowledge.

We need to realize that whether we earn $50K, $71K (the national average), or $200K a year, our behavior with money affects our current life, our future, and most importantly, the future of our children.

5. How to Achieve the American Dream.

If we're ready to make a change, we must acknowledge a few things:
• We've made mistakes.
• We don't want to pretend to be wealthy while being broke, like many Americans do.
• We need to focus on what's important to us, not what others think or tell us to do.

We can start with a simple plan:
• Learn: Understand basic financial ideas like budgeting, saving, handling debt, and investing basics. There are many online resources, books, or financial coaches available.
• Define your dream: What does your American Dream look like? Financial freedom, a family with a paid-off home, early retirement, starting a business? Set clear financial goals.
• Budget: Plan where your money will go, instead of wondering where it went.
• Pay off debt: Clear any consumer debt you have.
• Build an emergency fund: Save up to cover 3-6 months worth of living expenses.
• Get insurance: Learn about the necessary types of insurance and the coverage you need.
• Plan for retirement: Understand the basics of investing and contribute to retirement accounts like a 401(K) or IRA.

If you're ready to make these changes, or you've already started, I'm thrilled for you and your family!
If you think this is all nonsense, that's okay too - I still care about you!

And if you need help or know someone who could use help or coaching, feel free to send them my way. I'd be happy to help.

Slava Ukraini and God Bless !