What a crazy time in our history!  Our economy is in turmoil.  We have soldiers at war.  For the first time since 1776 a non-white man has been elected as president.  Gas is affordable.  Tiger Woods and GM end their endorsement partnership to pinch pennies.

Many corporations are scrambling to find ways to keep the doors open.  One of the first reactions is to cut personnel.  Save on costs.  What is your gut reaction to weather this storm?

Mine is to cut costs and not get involved in new ventures.  I scrubbed my household budget to examine where I can save some extra change.  Just four years ago, I did the exact same thing as my wife and I were saving for our first home.  At that time we found over $700 a month.  There I said this wouldn’t happen again…

Never say never.  My latest scrubbing uncovered $200 each month.  Sure this was not as bad, but the point is that I was making a conscious effort and still got up to this point again.  Even those of you who think you have no room to grow…look again with an open mind and B.E. H.O.N.E.S.T.

Bills; Essentials-Housing, Outfits, Num-Nums; and Extras-Savings, Throwaway.  Quick translation.  Break down budget into needs and wants.  Needs are bills, housing, clothing and food.  Wants are savings accounts and luxuries like travel and entertainment.  I cover making a budget a little more in another post.

My goal here is to get you into penny-pinching mode.  Really dig to see where you can save a couple of bucks each day/week/month/year.  One blogger commented, “Buy the paper towels that come in smaller sheets (the 1-2-3 sheet).  Most often you only need a small one but take a whole sheet.”  What a simple cost-cutting idea!

Over the past five years I found a collective $900 each month by pinching pennies.  How much can you find?  Instead of getting into debt over your head, get free from it.  I used my extra money to buy a home and save for my future wants and needs.

Give me some money saving ideas.  What will you do with the extra $$$$?

This economic slow down is very scary for everyone.  Daily we are hearing about companies going under and watching our portfolios dwindle.  Those with the spare cash have an extremely unique opportunity, though.

Why do people go to Wal-Mart or dollar stores?  To buy things more cheaply than in other places.  This is a very smart shopping policy.  If you went in to your favorite clothing store and saw jeans for $0.50 when they are normally $75.00, would you panic and sell all the clothes in your closet?  Heck, no!  You would clear the racks.

Why do we all panic now when our stocks prices are falling?  This is like the ultimate holiday sale.  Sure, if you are close to retirement age or were planning on using that money for another purpose in the short term it is a real bummer.  One thing to keep in mind for the future is when you are within a few years of needing the money you have invested, put it into something solid like savings bonds or CDs.

There are actually people dumping the stock they have and placing even less into the automatic investing plans they have.  I understand it is really scary and there is no perceivable bottom to this drop in the market, but history has proven the market will rebound.  In fact, on average it has risen 13% a year over the last century.  Remember the Great Depression, Savings and Loan issues in the 80’s, etc.?  Still the average has been this high.

My advice is to find a solid company like General Electric (GE) or Coca-Cola (KO) and invest in them.  Both pay dividends and have not been hit extremely hard with the recession.  It is likely their numbers will once again drop a little lower but in a three to five years I bet they go up again.

My personal stock pick for the month is GE.  Their yields are sitting at 6.36.  This means whatever I invest today, and allow the dividends to re-invest, will double every eleven years.  Imagine investing even more over the next decade.

Have you ever had a stranger go out of his way to do something nice for you?  Maybe he ran ahead of you to hold the door for you because your hands were full.  Even better, have you ever gone out of your way to help another?  How did you feel?

If you are the owner of a business or simply a human being, this posting is for you.  When we give freely of our resources we receive ten-fold as a return.  Here is a background story.  I used to teach martial arts to five to eighteen year olds when I was in high school.  My best friend and I ran the school for four years.  As Black Belts, we were never to be questioned but we both had the same mentality in a strict rank structure.

Our policy was to treat every student with the same respect that we demanded.  We would go out of our way to make sure that this happened.  Neither of us were trying to get attention, it is how we were raised.  In fact, we never got a single penny because of this attitude.  However, we got so much more.

Ten years later Chris and I occasionally come into contact with one of our students or a family member.  The reception is always similar.  We often hear about the impact we had on the student.  It is an unbelievably good feeling to hear this.  Such a small investment has paid dividends in our lives.

When we give our time, skills or finances to others, we always get rewarded.  Those rewards are rarely a fringe benefit or financial gain.  Sometimes you will not even get a thank you.  The other person may never even notice, such as putting your neighbor’s mail in their mailbox instead of routing it back to the post office.

Our gifts and rewards come in the form of personal achievement.  When you know in your heart you are giving freely of yourself, you will feel great about yourself.  Take a moment to give.  By investing in others you are really investing in yourself.

What if everything we thought had value was really worthless?  This is a question that my pastor asked this week in church.  Don’t worry, I am not going to get religious on you.  I am going to explore this question and give you some practical applications to better your finances, though.

Pastor Greg Surratt gave the example of a flat-panel plasma TV costing only a few dollars while a pack of underwear was $1,000.  We would buy the television that we did not need and ignore what we really needed.  This made me question if I ever have done this in my finances…I did.

I recall in the not-so-distant past, putting a trip on my credit card because I knew about future cash in my pocket.  I chased my wife out to Los Angeles while she was on business and made it a vacation for us also.  The whole trip went onto our credit card because I counted my chickens before they hatched.  Thankfully, they hatched, and the trip was paid off as planned.

Have you ever done this?  Acted on a hope?  We like to charge things or take financial leaps of faith all the time and often on things that don’t matter.  We must first, not spend money we don’t have.  Then evaluate what the best use for our money will be.  To do this we must think about where we place our value.  Do we focus on being entertained?  Do we focus on our family’s financial futures?

What is the most important thing in the world to you?  Your family or seeing Hollywood?  As much as I hate to admit it, the trip was not needed.  We could have waited for the money to come in and use it responsibly.  I could have put that cash towards paying off my car.  Once paid off, I could reward myself with a vacation I could afford.

More often than not, we are going to use our money for things that are not needed and ignore the things that are.  The only way around this is by evaluating our values.  What is most valuable to you?

Every time I check the news, I get bombarded with analysts that are terrified about the economy.  There are one thousand Chicken Littles running around sparking fear.  Let’s get them back into the hen house.

For starters, no one is certain about what will happen to the economy, and that is scary. Change and the unknown are very scary, and that is why suspense movies make you jump out of your seat. Currently, we are in one of these movies without a script.

Why should we not be afraid? The economy moves in natural cycles. The “Roaring Twenties” was capitalizing on the stock market. People were making fortunes off of their portfolios. Then the market crashed, and all those that were over-leveraged were left with nothing. The ripple effect carried throughout the masses, and the panic further hurt those doing well and businesses collapsed. This in turn resulted in lost jobs and ultimately the Great Depression.

Then the US auto and steel industry was insanely powerful. Millions of jobs and vast economic booms were experienced. Foreign competitors kicked our complacent butts and that industry collapsed again crushing the populace. Now there is something similar happening with oil prices and the housing industry which were booming in the recent past.

Again we got over-leveraged. Greedy companies were passing out credit as if it were in the “take-a-penny” tray. We were greedy and took the credit and bought useless things that we could not afford. Mortgage companies gave us loans that forced us way out of our means. The companies experienced a boom in sales. The GDP was up and everyone was officially winning.

Until…the rise in oil prices. Now, our paycheck to paycheck strategy was collapsing. The banks started suffering and wanted their money to pay for their expenses. Interest rates were raised on the adjustable rate loans, and people began losing their homes.  They got over-leveraged.

Why shouldn’t we be afraid? Every single financial crisis in our history has been overcome, and each time we have come back even stronger.

What are you doing to protect your fiancial futures? What advice can you give our readers?

A few years ago I was talking to my friend Matt Carman. Matt is a financial brain and has educated me and given me great tips since I have known him. As I was talking to him, a guy that can be best described as a cro-magnon commented on how dumb budgets were. This Masters degree-toting, knuckle-dragger went on to say, “Don’t spend more than you make.” His advice is actually the foundation of this posting. I figured if he could grasp the concept, any of us can.

These are chaotic times of banks closing the doors and the government being looked upon to save the economy because we have fostered a mindset of buying things we cannot afford. Our economy is failing because we are relying on credit cards to buy things older generations would have saved for OR not even bought at all. Then there are banks and companies handing out credit like candy bars on Halloween. I was buying a soda at a department store one day and was asked if I wanted to save 10% by getting a store card…on a soda?

To stop our personal financial turmoil, we need to break the cycle of spending first. I did a small-scale experiment to accomplish this by tracking everything I spent. I saved every single receipt for an entire month. At the end of the month I separated the receipts into wants and needs. A need is something I can’t function without, i.e. food, soap, etc. The wants were luxury items like music downloads, clothing, and anything of the sort.

I also included all of my bills into the needs column. The total of the needs was my baseline. I then took on the cro-magnon’s advice and compared the amount coming in to the amount of needs being paid. Everything leftover went into the want pile. Once I got the money separated, I racked and stacked my wants. What did I want most? Do I have enough to buy it? If I did, I bought it. If not, I saved up to buy it.

Don’t you love it when you get that order of French fries and find an onion ring in the container? What about getting an extra soda from the vending machine? Free things tend to make your day or at least make the moment. Why not keep the spirit alive in your investment strategy?

My friend Chris Hubinsky and I recently formed an investing company called H&L Ventures, Ltd. Our goal for the first few years is to build a strong portfolio with a solid base. We want a structure that will last for years and solidify our financial futures. We are employing a dividend grabbing strategy that I will call the Check, Please! Strategy or CPS.

The CPS focuses on buying stocks from secure companies that pay dividends numerous times each year. Many of the big corporations pay dividends quarterly. These dividends are free bonuses to the shareholders (you) that can be rolled right back into your investment. More often than not, the dividends are between 10-50 cents per share. “This Joe Lawrence guy is a moron!” you must be saying to yourself.

You would be right on many occasions, but not here. Let me show you some numbers. If you bought $300 worth of General Electric (GE) back on January 6, 2006, you would own 8.45 shares (I went to 2006 to use real numbers). GE paid $.25 per share dividends throughout 2006. After the first quarter you would have made $2.11. Again, not much but work with me here.

Allow the dividends to be reinvested (most brokers do this automatically, like Sharebuilder.com) and you will have .06 of a share. Your new total shares are 8.51. Keep this up until today, and you now made $24.74 in dividends and own 9.18 shares. That is $25 for free in two and a half years. Sure, it is not a retirement check, but give it a few more years and that number will continue to grow.

H&L Ventures uses Sharebuilder.com because it allows for fractional stock purchases and only $4 fees per trade. To learn more check out Quality Over Quantity.

Remember getting that first credit card? It would be used strictly for emergencies. None of those ever really popped up, and you got a letter in the mail last month saying that you credit limit just doubled. All of a sudden temptations start to resemble emergencies.

Getting a pair of shoes, going out to dinner, going to a concert or buying a CD all of a sudden become easier and easier. This is free money! I can buy anything I want, without waiting and only have a small monthly payment. Perfect.

It is perfect until you run some numbers. That dinner you ate last year and charged has been paid for many times over. A balance of $1,000 at 18% would take 153 months to pay off, if you made the minimum payments, and you would have paid $1,115.41 in interest alone. That is enough money to buy everything that you charged twice. (Money for Tomorrow)

Credit cards sound pretty dumb now, don’t they? The solution is a savings account. If you open a savings account and start saving, you will no longer need a credit card. Simply put $20-$50 a pay period into your savings account the day you get paid. You probably will not even notice it gone. This will give you anywhere between $480 and $1,200 after a year.

An amount this small is not going to rocket you to early retirement, but it will replace your credit cards (aka the devil). Each year this amount is going to rise, just like your credit limit. You can put in more money if you choose to increase your balance at a faster pace.

How does a savings account replace my credit cards? Good question. Many people have what they call an “emergency” savings account. An account to be used for emergencies, just like that credit card you got in the mail. The difference is the interest actually works in your favor as opposed to being against you. Many of these accounts even have debit cards for convenience.

Create your own emergency account and cut up your credit cards!

Are you swimming in debt? Is it harder now to pay your debt because of rising prices across the board? Are you looking for a way to make a little extra cash and start treading again? If so, read on.

We all could use a little extra money these days. Even if we are debt free (Yeah, right!) we may want to strengthen our security blanket. You’re probably saying, ‘OK, Captain Obvious, I already know that. How can I make more money when I am already working long hours to build my career and trying to balance a personal/family life?’

There are two roads to take: the easy or the rough road. The rough one involves taking a skill that you have and marketing it to others for cash. For example, web design, mowing lawns, painting, etc. The rough part of this road is that agreeing to paint a house or design a web page requires a huge time commitment. In addition to the burden of time, there is a large financial responsibility to buy the supplies and equipment. This solution doesn’t stay within the parameters of balance between work and family.

Now, what about the easy road? There are companies out there that allow you to generate income without high start-up costs or demanding time constraints. Multi-level (aka network) marketing companies are the solution. Don’t confuse them with the “pyramid schemes” of the past. Most of these companies actually provide great products, training and mentorship.

My favorite is Advocare, a health supplement company. I began using these products for lifting and loved them but never cared about the business aspect, that was until a friend asked me how she could make some extra cash without giving up everything. Coincidentally, I was ordering some more products immediately after reading her email and. . . Eureka! I told her about the company and that I never did the business but have read great things. She gave it a try and is now making a few hundred dollars extra each month. The best part is there are products for every health need.

Choose the easy road.

We are obsessed with having ‘things.’ Everyone wants to be rich. We want lots of money today. What we fail to realize is it is not easy and therefore settle for just appearing to have money.

We see the celebrities on TV or in magazines wearing certain clothes and driving exotic cars. Naturally, we associate having those things with having money. Having money means we are somebody important, at least in our minds. Then we set out to make lots of cash.

Once we realize that acquiring wealth does not happen overnight, we become impatient. Thank God for credit cards! “Who needs to work when we have this free money?” At least it is free until the bills roll in each month. Now we accept the fact that in order to ‘live’ we always will be in debt.

To summarize this: we want to be rich. We try and see that it is difficult. We buy the same things rich people do but on credit. We bury ourselves in debt trying to look rich.

The ‘fake it till you make it,’ strategy does not work well when it comes to building bank accounts. In fact, just the opposite occurs, you ‘fake it till you bankrupt it.’ This explains why more people under the age of twenty-five are filing bankruptcy each year.

There is a solution. In my book, Money for Tomorrow, I talk about building a budget and planning for the future. The truth is that we cannot live our lives for today. We have to grow our finances into a cash machine. Once we do, we actually can look like we have money AND really have it.