Well, we did it! We bought a property with a primary residence(door #1) and a rental(door #2) in the very inflated market of Ashland, Oregon. Ashland is an area that has become like many desirable towns in the west, extremely expensive and competitive. The average home price here is $500,000. It was always my dream to own a home here. The schools are good and it is a great place to raise kids. It has a great walk-able downtown, with lot of character. The town is home to all kinds of artistic & healing pursuits: from the Oregon Shakespeare Festival to the Conscious Living Fair. But when I came to Ashland as a single mom, that dream was out of reach. And it is out of reach for many regular working people, who choose instead to live in Medford, where the average home price is closer to $300,000. I believe that as we prosper, we have a responsibility to lift others up. So this blog is for all the self-employed friends who want to buy homes in inflated areas. You can do it, it just takes time. So how did we get here? #1. We tracked our money. Tracking our spending and self-employed income was a prime factor in our success. We use household budgeting software(www.everydollar.com) and business budgeting software(Quickbooks & Freshbooks). Tracking our household ins and outs helped us to "make margin", which is the process of creating cash flow I talk about in my book. And tracking our business ins and outs helped us make our businesses profitable, as well as set us up well for tax time. Having good records of self-employed income for at least 2 years is required to get a home loan. Before 2008, "stated income" loans were allowed, but no longer. Since that market crash, lenders are much more strict, and they want to see good net income(after business expenses) to be able to lend. #2. We worked our butts off! Both my husband and I have "multiple income streams", another process I talk about in my book. This works well for us, especially in the semi-rural area of Southern Oregon. We find money in many places: our various businesses and investments. We both have worked very hard over 9 years to grow these businesses, and make them profitable. When the economy tanked with COVID, and our regular businesses were challenged, we turned to new income streams and beefed them up. Shifting to respond to market changes has always worked for us! At the end of the day, we had about 8 different income streams in 2020, all of which contributed to help us qualify for the loan! 3. We saved money. We made saving a priority. Every month for years and years we set aside money in our budget: for the debt elimination, emergency funds and investing I recommend in my book. Then after that, our down payment grew: we built equity in the manufactured home we had purchased for cash by renovating it, and invested in other projects that brought a great return. We made sure to up our home insurance to reflect our home's higher value. We increased our net worth by hundreds of thousands in 5 years. On top of that, we received a little extra money from our home insurance payout after the wildfire(see the next section on giving & windfalls). In addition, our other investments did well, and we added that cash to our nest egg. We wanted to be sure to have enough for a 20% down payment AND plenty leftover to continue to invest. 4. We gave money away. This may seem counter-intuitive. When you are saving to buy a home, why give money away? Well, again this is something I teach about in Give, Save, Spend. To give 10% of your net income away is a very high practice. It helps you in your personal growth to give to where you are inspired, and also grows your abundance mindset, and your ability to receive. We found that giving away 10% of our income, time, and energy to the inspirational places & charitable causes we believe in brought us blessings. We felt abundant and relaxed, rather than tight and fearful. And giving brings miracles! In addition to our regular income, we also sometimes receive windfalls and unexpected income. And investment opportunities seem to always fall in our lap. 5. We had professionals help. We relied on the help of an accountant, bookkeeper, realtor, home insurance agent, and loan officer in this process. It helps to have a team! Our bookkeeper and accountant helped us in the years of preparation, to have good business records and complete taxes. And our accountant helped draw on that background to help us with last-minute requests from the lenders! It was very valuable to have her in our court! As we built equity in our manufactured home investments, I made sure always to insure them for full market value, and our insurance agent helped us do that! Our realtor was aware of our situation, of wanting to live in Ashland, but keep our mortgage low. So for many months he showed us primary dwellings & rental properties. While I was the one to find this particular property, our realtor helped us gain an accepted offer, and managed the details of closing. Our loan officer got us a pre-approval many months before, so that we could confidently shop for homes. He then helped us with the huge amounts of self-employed income paperwork required for closing. So now you know a little bit more about "how the sausage was made". It was steady work over the course of many years, not an instant miracle. No trust funds here. We are just regular working people with a heart for our clients and for doing good in the world. But we were able to create continual results over time. This is possible for anyone! I hope hearing our story can inspire you. It is my passion to help heart-centered entrepreneurs get ahead, so you have plenty of resources to fulfill your mission. Build Wealth, and Change the World. Blessings, Kathy Kali 
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 After 15 years of coaching, I have stopped giving away my most valuable wealth-building support for free. My clients increase their net worth by between $5000 to $100,000 while in class with me! And they go on to use the tools I taught them to build million dollar nest eggs and do generous giving. Pretty valuable stuff, huh? Generally in my business people do value me and pay me well. Unfortunately last year I made a mistake, and in some areas, I gave too much away. I gave away information for too many months, and discounted classes in order to "help" my community. Sadly, this made my business lose momentum. Everyone expected my help for free or cheap. They were building wealth like crazy, but not compensating me in fair measure. I had to set some boundaries, and get back to charging good rates. Don't get me wrong~there is a benefit in giving.......UP TO A POINT. But after that point, giving does not create value for your business, it devalues your business. In this blog I will explain what kind of giving is good, and will help you grow. And I outline the types of giving that are bad, and will undermine your business. GOOD GIVING: Giving 10% of time, talents & treasures(money!) away to places that inspire you and do charitable good in the world. Tithing, or giving 10% away, is a powerful practice...for YOU. Generosity makes us wealthy instantly because it affirms that we have something to give. When we give away something we formerly thought of as scarce, we reframe our experience of it to be something of which we have plenty. When we give, we open up space to receive more of what has been given. I have given 10% of my money, time & talents away for 15 years. It is a great practice! Giving a little helps dissolve blocks in our business. If you are stuck in your business, and need a breakthrough, giving can help you move to the next level. It moves energy. A woman was experiencing business blocks, and I advised she give away 10 free sessions(she had not been giving anything away for free previously). It shifted things for her, and paid clients started showing up! If you do not do ANY free giving, I recommend the following: 1. give to inspiration~Share 10% of your time(and money!) with places that feed you spiritually and help you in your own personal growth. This kind of giving is always fruitful. You are giving back in gratitude for what you have received. And you will receive blessings from the universe in return. 2. give to charity~share some of your 10% with places that are doing good work in the world, or to uplift the disadvantaged. I have given free coaching in the past to single mothers, and most recently gave a lot of my time away to help low-income people find new homes after the Alameda Fire. This feels good, and made me happy! 3. keep it to 10%~just give 10% of your time and money. More than that will eat into your income potential. But giving a little in this way keeps our hearts open, helps our communities, and keeps things circulating in our business. 3 Types of BAD GIVING: 1. Giving away your expertise constantly for free to friends and family You know this one, right? Friends and family will often ask the health coach "What should I eat this week? How can I lose weight?" and you feel you owe them your ear. But that's not the case. You don't owe them anything! Often free advice to friends & family can turn into hours and hours of unpaid labor, which does not help you build your business. As a money coach I get this all the time. My friends are always asking me money questions. I gave ongoing free advice to a friend that was already prosperous; ie, they were not a charity case. I helped them up their net worth by $75,000 dollars! Normally as a coach I would get paid a small percentage to get them the kind of huge results they did, but they did not offer to pay me a dime! And I realized it was all my fault. I had "trained" them to expect advice for free. Remember, you are in business to make money based on how you help people get results, and if the people around you respect you, they will understand that. Now when friends & family ask me questions, I refer them to my blog, my e-book, or my Wealthypreneur facebook group! I have created plenty of free material that does not require me to give away my time. And people that want my time now, are willing to pay for it, knowing I help them get results. If you find yourself constantly helping friends and family for free, I recommend the following: *get a testimonial~"Normally this is my paid offering, but I will give you a free session in exchange for a testimonial!" A lot of times friends & family are not aware you need testimonials, and will happily agree to help you. This is good when your biz is new. *set a time limit~"I usually get paid $200 for this, but I will give you 30 minutes of my time." And set a limit on the number of times you will do this. Like 1 or 2. *just say no~"I don't have time for free sessions right now, I am focusing on my paid clients." Move on, and move forward. If this person really wants your help, they will be willing to pay for it. 2. Giving away the majority of your content for free on the internet Many of us have done this in the "age of COVID". Social media has been flooded with all the free offerings generated during the pandemic. But it often can bite us in the butt. Giving away everything for free, and then trying to promote a small paid offering doesn't work. When the pandemic hit, I spent a lot of time giving away free content on social media to help others. In the beginning this was my "tithing 10%", such as the material I shared on Financial First Aid to help struggling business owners. That was a freely given gift of charity. But then I went on to share information, articles, interviews & blogs in my facebook groups for free for the rest of the year, and did not enroll any new clients! My giving went overboard, and hurt my business. I had to get back in action enrolling people at good rates. While some during COVID lost income and had to scramble, many Americans actually did well financially during lockdown. The "I can't afford it" excuse was not always valid. If you find yourself constantly posting free content on social media and NOT enrolling any clients, I recommend the following: *post a simple tip~you can still give, but keep it simple: "Here is 1 way to lose weight you can try right now" or "Here is a money tip for Spring!". Don't give away your whole transformational system. Save that for the paying clients. *free, then paid~share a free offering, such as a free talk or blog post or article, and THEN sign people up for your paid offering. Don't wait too long after your freebie to sell your paid offering, or offer too many free things. Then people forget you are actually in business, and think you are just a source of freebies! *monetize your "freebies"~If you have shared a lot of free content already, you can gather it and use it as value-added bonuses for your current clients, or even assemble it into a group program. Monetize that shit! Be sure and gather it in an attractive way, perhaps in a private page on your website or a private social media group, and delete it from public social media. 3. Giving away free classes & sessions or lowballing them I made the mistake of doing this at the beginning of COVID. I sold a class that I normally sell for $150, for just $47. Yes, I sold a lot of the class, but guess what? A lot of the students didn't show up, do the work, or report their results! I had way more success helping people show up & get results in the last 5 years of teaching the class, when I charged more money for it. People value what they pay for. Charging a decent rate is important, not only to honor your time, but to help your clients get the most out of the work. And those that pay the most tend to also be the most grateful! Isn't that interesting? I've received the best testimonials from those clients who have paid the most. If you have been giving away your most valuable work for free I recommend the following: *identify your low/high offerings~Pin down what you do as your initial consult, your inexpensive offering, and your higher-end offering. Getting clear on this "sliding scale" helps you meet people where they are at, AND honor your own time. *private time is valuable~Charge more for private work, always. Getting your one-on-one attention & expertise should be the most expensive aspect of your business. You can charge less to run a group program because you have more people contributing smaller amounts, and of course they each get less attention. *find your "sweet spot"~The sweet spot is that intersection between what you love to do, what you can get paid for, and what other people want. Take a moment to brainstorm ideas for these three areas, and then see how they intersect. That is your offering, and you can charge market value for it. Hope this article helps you value yourself and your time. Yes you can do a little giving...in balance. And yes, you deserve to get paid for your very valuable work. Blessings and good luck!  September 8th, 2020. I was literally weeks away from publishing my book when we had an unusually warm windstorm in Southern Oregon. Out my front window I noticed a plume of smoke on the horizon that appeared to be about a mile away, beyond the dry grass fields. We thought, oh how odd. We've never seen a fire in Ashland. And within 20 minutes our neighborhood was burning. I asked my husband to have our teens pack “go” bags. I hurriedly ran from door to door letting elderly residents in our neighborhood know, until the fire was 3 houses away from ours. At home my husband and I each put a cat under one arm and a computer under the other, got the kids in the car, and got out. The road out was blocked due to smoke & fire, so we followed a crowd of 15 other residents who were on foot and waited in a burned out field until the road opened up. Because we gave a ride to an elderly neighbor and her dog, we were able to save our car! We are so thankful everyone in our neighborhood made it out safely. However, only 3 out of 70 homes in our neighborhood were still standing after the wildfire raged through. In the greater valley 2500 homes were lost in the historic Almeda/Obenchain Fires that ripped through the neighborhoods of North Ashland, and the cities of Talent & Phoenix. As you can imagine this has been emotionally and spiritually devastating! The last 2 months have been a wild ride of lots of unknowns. We stayed with a friend for 3 weeks, and now are in temporary housing. We still don't know where we will live longterm. But thankfully, due to the give, save, spend method, it has not been financially devastating. Our future looks bright. *Because we are GIVERS, we have a wide and deep network. Our friends and family raised money for our most immediate needs the first month. We were so thankful! Supplies, furniture, food, have poured into our lives so our every need has been met! *Because we are SAVERS, we had an emergency fund to be able to cover not being able to work for several months, and initial costs of temporary housing, food, clothing, etc. It has been wonderful not to stress about any expenses during this transition time. *Because we were smart SPENDERS, we had bought good insurance. We received good value for our home, and are able to purchase something new. I had just upgraded our insurance a few months ago to cover the true market value of our home. Life can be stressful enough without adding financial stress! My hope for you is that you can use the GIVE, SAVE, SPEND method to not only give, get out of debt and build some wealth, but be prepared for anything! When life’s disasters happen, and they do happen, at least financial stress does not need to be one of your worries. You can focus on what is most important: the people in your life and their well-being. And YES the Give, Save, Spend Book is coming out January of 2021. Stay tuned. Have fun giving, saving & spending, and taking good care of your loved ones! Life is precious. Much love, Kathy  I loved my work singing for seniors for over 20 years. I grew up in a singing family, and leading singalong was a joy! I started with 5 music clients, and grew them to 15….then eventually 50. In this business, I made 80% profit. My operating costs were only 20% of my gross income. And in my coaching business, too, the margins were good. But I had to work to get my profit to that point. For many years, I operated my coaching & healing arts businesses like they were a hobby. What I made, I spent. I bought the most expensive supplies, the most expensive advertising, rented the most expensive brick-and-mortar locations for my workshops. Even though I was able to “write off” a lot of my lifestyle, my profit margin was zero. Plus, as you know, I had debt. “I owe, I owe, so off to work I go.” This was my motto until I became a single mom. As you know, this was my “come to Jesus” moment where I saw the old way was no longer working. I had to shift my mindset. I had to become a “Wealthypreneur”. What is a Wealthypreneur? A Wealthypreneur is a business owner whose business is able to give, save and spend wisely. The business is continually generating cash flow(more income than expenses), which allows for giving, and growing wealth through debt elimination, savings(retained earnings) and assets. It’s aligned with your purpose, and supports you in serving your clients in a heart-centered way, knowing your money is taken care of. Why does it matter? THE BIG PROBLEM I’M SEEING IS A DESIRE TO CONTINUE TO SERVE THE CUSTOMERS WE LOVE SO MUCH BUT… In a normal economy conscious entrepreneurs often invest in training, coaching, equipment and supplies with a dream in their heart to serve and to give~spending up to $15K, $20K even $100K to support their entrepreneurial dream, which sometimes puts them deeply in debt. What you are not getting is a simple process for how to deal with money to avoid debt in the first place, and build wealth. So you end up spending that money to grow our business only to find yourself struggling to have savings, buy a home or invest for retirement, and have enough cash flow to put your kids through college. Some of you struggle to keep your business doors open due to how much debt payments eat up your cash flow. And then, in economic downturns, those debt payments become a crushing burden for your biz. You must take responsibility for your business numbers! Even if you have a bookkeeper or accountant, it is up to you to look at your numbers and make crucial decisions. Many small business owners abdicate this responsibility. Instead of abdicating, I recommend you embrace this role! Become your own CFO! As a heart-centered small business owner, you probably don’t even know what a CFO is, right? CFO means Chief Financial Officer. The CFO does more than just a bookkeeper or accountant who tracks numbers and prepares reports. The CFO keeps financial integrity for the business. The CFO makes sure profit margins are maintained and the business is not going into debt. A CFO is not judgmental, but objective & kind. Understand Profit How do you become your own CFO? First of all, you need to understand profit. Most small business owners don’t even know what that is. What is profit? Profit is the money in your business that is not used immediately for business spending of one kind or another. In its basic form it is your salary, your takehome pay. In its advanced version it is not owner pay/salary, taxes, or operating expenses. Profit is EXTRA money that does not need to be used for living, giving, or running your business that month. In that more advanced sense profit is used for business/personal savings & investments, and for investing in longterm business growth. So for example, a business that grosses $5000 a month and has $2000 operating costs has a basic profit of $3000. $3000 is your take-home pay, and you pay taxes out of that. However, if we separate out take-home pay, taxes, and operating expenses, we might get an actual profit of 5%, or $250, the amount the owner is able to literally save and put into their household savings & business retained earnings that month. A basic way to track profit is with the 70/30 Rule. The 70/30 rule means that 70% of your income goes to take-home pay, 30% goes to operating costs. Then savings and investments come out of the 70%. Profit helps you grow your business, and your personal wealth. An advanced way to track profit is with the Profit First system, invented by author & teacher Mike Micalowicz. Mike encourages business owners to breakdown their income like this: 5% True Profit(amount you can save & invest), 50% Take-home pay/salary(for lifestyle), 15% Taxes(put in a separate savings account), and 30% Operating Expenses. Basic Profit and Advanced Profit I recommend bookkeeping software to track all these numbers every month. Quickbooks is the industry standard, and many bookkeepers use this system. However, it can be overly complicated for many service-based businesses with just 1 employee, the owner. If you do not have inventory, or employees, I recommend Freshbooks, a very simple & user-friendly system that does invoicing, and profit/loss reports. And if you are just getting a business started and have very low overhead, you can even use Everydollar, the personal finance software, to keep track of business expenses under $500. Another common way businesses track profit is through a “profit & loss” form. This form is easy enough to create yourself in Excel, and is readily available in Quickbooks & Freshbooks. A Profit & Loss form is helpful if you are using the Basic Profit system, or 70/30 rule. The final net profit number at the bottom should be ideally 70%. Once you understand profit, you can assess whether your business is a hobby, or profitable. Wealthypreneur Russ Schweikert says “Don’t pretend it’s a job when it’s a hobby, because chance is, you’ll go months and years doing it and you’ll wonder what happened and you let it overtake you. And then you’ll somehow feel guilty because you have to let people go and close the business. And what you’re trying to do is help people and make money.” I agree with Russ. Find out your true profit margin so you can answer the question, “do I have a business or a hobby?” Once you know, then you can make an empowered decision.  For years I resisted savings because I felt guilty. Who am I to have abundance when there is so much poverty in the world? How can I develop assets when others have none? My heart for others made me averse to savings.
And so even though I had made a half million dollars in my working lifetime, I was still “bleeding” my money away: with out-of-control spending, the debt game, and no plan. It took developing a giving practice and also being close to poverty as a single mom to help me feel deserving of savings. Being close to poverty was a big wake-up call for me. Saving meant the difference between paying for food out of pocket and foods stamps. Saving meant choices about what kind of work I did. Saving meant security. Out of this experience I began to realize that I can give AND save. Giving helps me feel I am making a difference, and contributing to my community and my world. And Saving helps me feel secure. Once you are motivated to save, there are some basic things to focus on that involve creating security, and then building a legacy. First focus on your 4 Walls, or the basics of your household. Next, focus on Debt Elimination, so debt is not eating up your wealth. Then save an Emergency Fund of 3-6 Months of Expenses in Savings for both Business and Household, so you are secure for any storm(we saw the importance of this with the COVID-19 slowdown!) After that focus on purchasing a Home because owning a home statistically boosts your wealth. And finally focus on Retirement Savings, so you have choices for your future and can build a legacy for your family. So what are you waiting for? Start piling up cash! It is possible, even in an economic slowdown. Yes downturns happen. We’ve seen this with the Coronovirus. But you will get through this. Just as I got through being a single mom. No season lasts forever. And hopefully this will be the time you say "never again" to being in debt with no savings. For now, keep your attitude positive and keep looking for the silver lining. Stay in touch with those who cheer you on and want you to succeed. And just start saving. THE SAVINGS STEPS: 1. STABILIZE YOUR HOUSEHOLD If you are low-income, or in crisis, I recommend you start with the 4 Walls. Start with taking care of your castle first. Then you can start giving and saving. The 4 Walls are: food, shelter, transportation and utilities. Place all debt payments on hold if you need to as well. Talk to your landlord/mortgage company if you need to defer payments. Most reasonable people will work with you. Go to the food bank if needed. See if you can carpool or reduce your transportation costs. Talk to your utility company so you can keep the lights & water on. Once your household is secure, the first saving step is to accumulate $1000. We talked about this in the “Making Margin” chapter. This beginning emergency fund will help you deal with small emergencies and keep them from destroying you. Sell stuff online, take on a side hustle, cut out all unnecessary bills, etc. Review “Making Margin” if you are not sure how to save $1000. 2. FULLY-FUNDED EMERGENCY FUND The next step is to accumulate 3-6 months of expenses in savings. This bigger cushion will be the biggest gift you can give yourself. Believe me! Once I had this fund, as a single mom, I relaxed in a place I didn’t even know I was tense! I finally felt peace of mind. My clients report that they have fewer “emergencies” once they have built the emergency fund. Rather than being a negative attractor of danger, the fund seems to repel problems. And when problems arise, they can be handled with a lot less drama. When we save, we create security. Statistically, most people will have a negative financial event(divorce, death in the family, economic downturn, loss of work, illness, etc.) at least once every 10 years. In the past, I thought if I only “thought positive” enough, I would not have any emergencies. I actually thought an emergency fund would create problems for me! While I do believe positive thought in general is very important, this reliance only on positive thinking was a little naïve. Have 3-6 months of expenses in the bank~average household has $10,000 *Ask yourself, “What would it take for me to live for three to six months if I lost my income?” Your answer to that question is how much you should save. Use this money for emergencies only: incidents that would have a major impact on you and your family: unexpected household repairs, car dying & needing to be replaced, medical bills, etc. Keep these savings in a money market account. Remember, this stash of money is not an investment; it is insurance you’re paying to yourself, a buffer between you and life. *This savings is essential before you start investing in assets such as real estate, or investing in the stock market, because it is liquid cash. Investments are often not quickly liquidated. *$10,000 in the bank is an average household emergency fund. Some people want a little more, a little less. If you have a very secure job and your spouse is working, you can lean toward 3 months of expenses. If you are single or do not have a secure job, lean toward the 6 months rule. How much do you need each month to cover your expenses? Multiply that by 3 or 6 to get your “Fully-Funded Emergency Fund” number: Suze Orman recommends people have 18 months of expenses in savings. If you want to save that much for your security, go for it! I personally found that saving 6 months worth, and then going on to save for a home and start investing gave me more momentum. Since then we have gone back and “beefed up” the emergency fund to be a little larger than it was before.  "Failure means a stripping away of the inessential." ~J.K. Rowling
My whole life, I was set up for success. I was the "good kid" while my brother was the wild one, always doing what would make my parents happy. An oldest child of a family who valued education, I went right to college after high school. I rebelled a bit in my 20s by pursuing the arts, music & dance, without much financial success. But I returned to the people pleasing of my childhood by marrying a wealthy man and having children by the end of the decade. I built a successful small business in the healing arts & coaching in my 30s, and maintained a 5 bedroom house on 8 acres. It seemed we had it all. Then failure came along and changed my life. The underpinnings of my marriage began to unravel....my business was mired in debt....our remote rural neighborhood couldn't support my business....and then I began the arduous, slow process of losing everything I had. With the help of my prosperity coach Toni Stone, I got the courage to let go of what was not working. I lost the marriage, and became a single mom. I lost many friends & clients when I moved from a rural neighborhood to a progressive town. Although I had always made good money, due to my debt load, and out of control spending, I could not afford to buy a home for myself and my children. And then my income itself began to disappear, and I faced real poverty as a working single mom. But becoming poor was one of the best things that could have happened to me. I began to look in the mirror and see what was really going on. I discovered my people pleasing was actually a fault. When I took a Debtors Anonymous course, the common theme in myself that I discovered was "lying". I was "lying" in order to be loved. I took on debt, and spent more than I had, to please others, and appear wealthier than I actually was. A lot of my lifestyle was based on trying to make up for a deep insecurity. I began to really grieve for the loss of the marriage, and to grieve for many pains that I had experienced in my life. Instead of masking my feelings, I began to speak them, and let people know when they hurt me. I woke up to how I was medicating my grief with purchases, and I stopped the out-of-control spending. When I did the math, I saw I had wasted about $75,000 in "people-pleasing"! What I found so personal and shameful is actually a cultural problem. Most Americans try to “keep up with the Joneses”. And since 75% of Americans have consumer debt, that means the Joneses are in debt! And we are all comparing ourselves to each other! We look at each other's social media feeds to see how great other people are doing, and how poor we are doing. And it's an empty shell game! Who was I really impressing with my large lifestyle? I realized that for years buying the newer car, the bigger house, the prettier clothes, etc. never brought me happiness. The folks I was trying to impress never stuck around. And my true friends are with me no matter how much money I have. That was a real shocker. J.K. Rowling, who wrote the Harry Potter books, said of becoming a poor unemployed single mother: "Failure gave me an inner security that I had never attained by passing examinations. Failure taught me things about myself that I could have learned no other way...I also found out that I had friends whose value was truly above the price of rubies." And so rock bottom became the solid foundation on which I rebuilt my life." And so did I. I began to rebuild my life. I no longer cared what other people thought. My own financial well-being was more important to me than what I looked like. I cut my budget drastically, rented out a room, and hustled in my business. I stopped going out. I stopped buying extravagant gifts for others. I paid off $20,000 in debt in one year, and saved an extra $20,000 the next year. I joined forces with my boyfriend who lived next door, and eventually became my husband. Together we upped our net worth by $200,000 in 5 years. So if you are facing debt, low income, unpaid bills, low-to-no savings, or financial failure of any kind, congratulations! It may be painful, but failure is nothing to be afraid of. Trying to pretend everything is fine, and continuing to drive yourself into debt, now that is a real danger. Failure can be a blessing. It just might lead you to a new beginning. A PLAN TO ELIMINATE DEBT Dumping debt is an important step for building wealth. Once you are out of debt, you have real money, and that money can grow into a sizeable nest egg. My favorite get-out-of-debt system is the Dave Ramsey method:
Dave Ramsey is one of my mentors, and I hold his coaching certification. He admits he did not invent the “baby steps” above, they are classic personal finance wisdom from the last 50 years. However, he is famous for packaging and sharing them in such a way that has helped millions of people build wealth. What I love about this method is its step-by-step nature. For years I tried to do everything all at once: pay off debt, save for retirement, fund my small business, put money in savings, etc. And I was getting NOWHERE. Saving $1000, paying off my debt and then saving the emergency fund was an easier path for me. In addition, the debt snowball method was more effective for me than paying off higher interest rate credit cards. It helped me feel excited and motivated! Why eliminate debt? *Debt reduces cash flow. When you have debt payments, they eat up your take home pay, which affects your ability to save & build wealth, and also have a good lifestyle. If you have a small business, debt payments eat up your ability to pay your employees, cover operating expenses, and save for wealth-building. During economic downturns(Coronovirus, anyone?) debt marches along, becoming a crushing burden. *Debt reduces wealth. When you have debt, it subtracts that amount from your net worth. For example, you can have $50,000 in your Roth IRA, but if you have $50,000 in debt, you actually have a ZERO net worth. Wealth is important for your retirement, and it also protects you from risk. Real assets bring stability during downturns. Debt doesn’t. *Debt increases risk. When you are in debt, you are at greater risk of losing your home, and other assets, in the case of an emergency, such as a health challenge where you can’t work, or an economic downturn in which you lose your clientele. We saw many people who had too much debt on their homes lose them in 2008. 10 million of them! And we know large emergencies happen for most of us every 10 years. It’s not a question of if, it’s a question of when. *Debt masks profit. When you have a small business, debt makes it hard to tell what your actual profit margin is. Say you put a piece of equipment on the credit card at $2000, and pay $100 a month on the bill. You might bring in $100 more a month based on that equipment. But when you deduct the debt payment from the income, your profit is actually zero. The Debt Snowball METHOD: Pay off all non-mortgage debt using the Debt Snowball method. The “highest interest rate first” method IS mathematically correct, but it often doesn’t work because people lose momentum. The debt snowball method gets you fired up!! And it works to get the job done! Plus, most people pay off their debt within 2 years of doing the snowball intensively, so the amount of interest paid is not crucial. List your debts, excluding the house, in order. The smallest balance should be your number one priority. Pay the minimums on every debt but the smallest~pay as much extra on that as you can to pay it off quickly! Then attack the next one on the list. When you start knocking off the easier debts, you will see results, have more money to throw on the next largest debt, and you will stay motivated to dump your debt.  As a single mom I started budgeting for the first time in my life. I started seeing my longtime habits of overspending everywhere in my life. In my business. In my household. And that overspending meant I was always in debt.
I didn’t have any margin. I was always chasing my tail. “I owe, I owe, so off to work I go”. I kept out-earning my debt, but it was a constant struggle to keep up with the bills. Hustle, hustle, but nothing to show for it. With my new habits I began to make margin, and then my extra cash started to pile up. I started to get somewhere. It was like my financial engine had been going uphill, working so hard, and now I could coast downhill…things became so much easier. What is making margin? “Do what you can, with what you have, where you are now.” ~Theodore Roosevelt Making margin is the process of increasing the amount of money between what you bring in and what you spend. Basically, it’s creating extra cash to put on your goals. I think of margin as a comforting “cushion”. To always have extra cash is very stabilizing, and increases a sense of security. We use most of our margin to save for retirement. But you might use your margin for travel, saving to buy a home, or paying off debt. Remember your Big Why? That’s where your margin can go. You can use your margin to: *pay off debt *save your emergency fund *pay for a vacation *fund some fun lifestyle *save for retirement *pay for household improvements *pay for out of pocket medical costs *pay for anything you consider “extra” So how do you make margin when your income is down? For those who are in economic hardship, the thought of trying to save money is hard, but not impossible. REMEMBER I raised my net worth by $40,000 as a single mom!! Making margin does take focus, and dedication. You are building your “margin muscle”. And the following steps can help you. Act Your Wage This was the most important step for me as a working single mother AND as someone knee-deep in debt. Since I have been a professional I had consistently made good money, but always outspent my salary. I had to let go of “keeping up with the Joneses” or trying to please others. I cut my lifestyle drastically so that I could live within my means. Acting your wage means not pretending to be wealthy, when you are actually in debt or have minimal savings. It means you need to stop spending above your income. Stop the bleeding! As a single mom I was willing to not look good for a while, in order to get my financial house in order. I rented out a room, stopped ordering takeout, looked for sales, and started using coupons. I said, “no” to my kids a lot, and made them earn their own spending money. Anyone can do this. I got food stamps and state sponsored healthcare. What can you cut out of your budget to free up cash for your goals? Remember this is a temporary sacrifice, for a lifetime of financial security. Be selectively frugal. You don’t have to cut out everything. Cut the items that are not important to you, and spend on what you love! My husband and I chose to buy a home in a lower-end neighborhood in a very inflated real estate market. We have no mortgage. This “cheapness” enables us to keep our children in a good school district without overspending on housing. It also allows us to invest 30-50% of our income for retirement! It is a trade-off that we love. My parents built a significant nest egg over 50 years. One of their secrets is they were selectively frugal in their lifestyle. They chose to be cheap in their choices of cars(always used and 10 years old), clothing(often shopping at Goodwill and other discount stores), and vacations(often taking us camping or to low-cost locations). This meant they had margin to be able to splurge on the things that were important to them: education(they funded both high school and college for myself and my brother), organic food(my mom has always been health-conscious!), and an upscale home.
Of course, I still get a latte at a business meeting or when I’m out with friends! Selective frugality is my jam. Make More Money The second thing I recommend is to be willing to do whatever it takes to generate the cash flow needed to meet your goals. Unfortunately for single parents, many have a victim or entitlement mentality which makes hard work, well, hard. I recommend dropping the “poor me” attitude, and just getting down to work. Can you take on a delivery job? Work at a grocery store? There are jobs available if you are willing to hustle. As a single mom I took on a side job at a housewares store, made calls to get extra music gigs, and networked to keep my coaching business strong. I sold stuff around the house. I applied for grants for my business. If I could do it, you can do it. Also there is no shame in looking for free money, discounts, and grants. There are many free resources out there, from free food at the food bank to business grants. Many during COVID-19 have accessed government aid. Stop the whining! Your work ethic and willingness to do whatever it takes are an essential part of your success. Even if you deliver pizzas, you can make an extra $1500 a month! Having more cash to dump debt or build savings helps keep the ball rolling!  Excerpted from Chapter 5 of my new book~"Budgeting & Getting Clear"
"The budget is your friend. The budget is your friend. The budget is your friend. This is what I say to clients who are getting control of their money. So many people seem to think the budget is a horrible thing. They huff and sigh whenever we do budgets in class, and moan and groan when I bring up the subject in coaching sessions. Dave Ramsey, one of my money mentors, describes 2 financial personality types: The Free Spirit, and The Nerd. For the nerd, a budget is automatically fun. For the free spirit, it is often torture. I have been a free spirit for most of my life. Until recently for me a budget meant: strictness, living on bread and water, denying all pleasure. Just. No. Fun. Growing up, my parents were strict budgeters, and while they did spend money on themselves for fun, that was done quietly, without a lot of fanfare. Because I didn't see them doing a lot of giving or fun with their money, I interpreted that as suffering. I vowed that I would have fun with money as an adult. I would always say "yes"! And I did! I said "yes" a lot! I have always used my money to bring pleasure to myself and others, and as a result have been able to do incredibly generous giving and build a business doing work I love. Unfortunately, I often didn't know where to stop, and often had my lifestyle expand beyond my wage! I didn't know how to say "no", either to my wants, or to the wants of others. And so my budget often showed expenses higher than income. I was continually playing catch up with myself, which was incredibly stressful. Now I'm all about balance. The balance between "yes" and "no". The balance between wants and needs. Through regular budgeting, I am now debt free, with an extra cushion in savings. I have the balance that my budget brings me. I feel an incredible peace of mind, as I know my needs are amply provided for, and my savings for my wants are growing steadily. My hope is that your budget can be an empowering "balancing" tool for you too! Money loves to be paid attention to. It tends to grow in the presence of attention. When we do not pay attention to money, it disappears. How can you pay more attention to your money? With a budget. Contrary to popular belief, a budget is not a set of handcuffs. The budget is your friend! It helps you choose where your dollars go~to giving, saving, lifestyle & fun. Are you consciously choosing where your dollars go or are you frittering them away unconsciously? It’s your choice."  chapter 4~"A context of giving"“It isn't a matter of giving a lot or a little, of giving anything at all. It is simply a matter of giving oneself.” Daniel Odier Giving, or "tithing", is the practice of giving 10% of your income to places that inspire you and who do charitable work. Historically this practice came from the Babylonians, who passed it to the Hebrews, who passed it the Christians, who passed it to the wider culture. In modern society giving to spiritual teachers has gotten separated from charitable giving, when they used to be one and the same. The temple would honor the priests AND feed the poor. So I recommend both. When I first learned about tithing, in 2005, I started giving right away. My income increased from $8,000 a year as a stay-at-home mom to $50,000 a year with a thriving business. 5 years later I was making $100,000. Tithing works! Tithing changes you immediately. Generosity makes us wealthy instantly because it affirms that we have something to give. When we give away something we formerly thought of as scarce, we reframe our experience of it to be something of which we have plenty. When we give, we open up space to receive more of what has been given. This works on a very practical level. If you give chocolate, you get more chocolate. If you give money, you get more money. "The act of giving restores a harmony and balance in both mind and body that results in happiness as well as prosperity. When your life gets out of harmony, you need to give in order to restore balance and abundance." ~Catherine Ponder It is a powerful practice to give where you are inspired, to give back in gratitude. Give to people and places that keep you in alignment with your highest self. These are people and places which encourage you to be more generous, responsible, powerful, and loving. These are people and places who lovingly call you on your shit and lovingly call themselves on their own shit, and keep going. I see in myself and others the urge to call charitable giving enough, to just give to a need. "I'm giving to the food bank, and my local school, isn't that enough?" as we learn to be more generous, we are called upon to give more to others, and this is good. And I see that this alone does not work to prosper me, not in the way giving to my source of inspiration does. When we give only to a need, we are not feeding our soul. When we give out of gratitude to where we are nourished, we are truly fed. Who inspires you? What work calls you on your shit? Who aligns you with your source? What work supports your life purpose? Who stays with you and your intentions? Giving is only ever your choice. If someone tells you to give to them, run away! The tithe is a freely given gift of gratitude for what has been received. It is not a payment for a service or product. Some places that people have historically given: Ministers & Rabbis Churches, Synagogues & Spiritual Centers But they have also given to: Musicians, Authors & Inspirational Speakers Counselors, Coaches, & Healers Spiritual Practitioners Artists and those who Protect Nature, etc. So, basically, anyone who is doing work that inspires you and helps you grow! The way I recommend to start or upgrade a giving practice is to give to the locations of your choice for 1 month, and then keep a journal of all the blessings that come your way for that month. See if the tithing practice is working for you to uplift you and help you prosper. If it is a “downer” with few positive benefits, at the end of the month you can decide if you would like to shift and change the locations of your giving. Some benefits people report from tithing: Income expansion Healing miracles Freebies & discounts Forgiven fines Windfalls Increased savings Prayers answered Unexpected blessings Things working out well Have fun starting or upgrading your very own giving practice!"  chapter 2~"Your big why""“When your WHY is big enough you will find your how.”
― Nelson Millard What is your “Big Why”? Your Big Why is the reason you want to build wealth. The Why has to be big, and it has to be strong. Why? Because if it is not, you will not be willing to do what it takes: work more intensively, budget and save, let go of unnecessary spending. Who wants to do that? No one! Unless….your temporary sacrifice will lead to a good result. My Big Why when I started this journey was to buy a house for myself and my children. I wanted security, and a place to gather and nest, that could not be taken away from me. This was my burning desire. It kept me going through days when I felt discouraged, months where there was no margin, and seasons of not much progress at all. I just kept going, knowing that overall, I was getting closer to my goal. It can help to ask yourself, “If I had a million dollars, what would I do with it?” Your first answer is your Big Why. Would you fund a foundation or give to charity? Would you buy that family home for yourself and your children? Would you travel the world on a sailboat? Would you quit your dayjob and become an artist/healer/stand-up comic? Would you support your aging parents? Your Big Why could be related to security. After the Coronovirus hit, many people are saying “NEVER AGAIN will I be without an emergency fund!” The Big Why can motivated you to put a buffer between yourself and life. The Big Why can clarify your purpose. Sometimes we become aware of how we are in a dead-end job, that is soul-sucking. We suddenly realize, we want to change careers, to move to something more meaningful. If you already have work of heart, meaning and purpose and know your Big Why, then this book will help you get the money to fulfill that vision. If your work is not satisfying to your purpose, then your Big Why can help clarify what your purpose is. Simon Sinek says, in his book Start with Why, that the Why preceeds the How and the What. I agree. When you have your Why, suddenly the process of how to build wealth and what to do become clearer. You become guided about how and what to do. And the day-to-day difficulties that can arise with wealth-building take second place to your driving motivation, your touchstone, your why." |
Kathy KaliCoach. Teacher. Author. Speaker. Archives
April 2021
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