Frugal, not cheap, but frugal is an important trait in those who are working toward becoming debt free and living in financial freedom to build wealth. I promote frugality to my clients. It is important to price shop, use coupons, by generic, etc.

There is a time however, when being frugal turns into being cheap and it starts to cost you money. Like the old saying goes, “the bitterness of poor quality remains long after the sweetness of low price is forgotten.” With that said, it is important to know where that line in the sand is between frugal and cheap.

For example, I have a friend who will drive 25 miles out of her way to save three cents per gallon of gas, now when you think about it, that extra 50 mile round trip to save .51 cents on a 17 gallon tank of gas. The trip most likely used up and extra 3 to 3.5 gallons of gas assuming she gets 12 to 15 miles to the gallon. So that savings of .51 cents for the cheaper gas cost an extra $9.80 if gas is $2.80 per gallon. That is an example of frugal turning cheap and costing you money.

Another thing to take into consideration when being frugal is the value of your time. Many times referred to as soft dollars. Sadly, many people do not actually put a value on their time. But your time is valuable and must be used wisely just as money must be spent wisely.

How do you put a value on your time? One way is to take your gross (before taxes) annual income and divide that by 2080 (number of working hours in a year based on a 40 hour work week) this will give you your hourly rate of pay from your job, so that hourly rate is a good starting point for a value on an hour of your time. What if you are a stay at home mom? Well, it is near impossible to put a value on stay at home moms because your service to the home and family is really invaluable, but non-the-less, your time is of value and must be used wisely to not take away from the kids, and other duties around the home, so you must determine what it would cost if you had a sitter watch the kids for an hour as well as the hourly rate of someone cleaning the house, add those two amounts up and that is a good starting place of your personal hourly value (of course you are worth much more because you do so much more.)

Using this thought process will help you to insure you are actually being frugal and wise with both money and time, verses being cheap and just looking at the dollars involved in spending rather than the whole savings picture.

Becoming wealthy is not about the amount of money you make.

Stop laughing, it is true, as soon as you stop thinking you are going to gain wealth by making more then the quicker you will gain wealth.

You get rich from educating yourself. You must learn how to manage your money, discipline yourself with money, learn how to invest your money.

Education is the key in becoming wealthy. Now I can guarantee if you have a loser type thought process you just tuned out and probably left this page. That is why 90% of America is poor and/or living paycheck to paycheck….most people are lazy and don’t want to learn.

Face it, we all want that pie in the sky idea of the “get rich quick” solution. One tenth of one percent of people stumble onto that quick solution. Of those that do “get rich quick” say the lottery winner, historically loose all there winnings within 5 to 10 years if not sooner because they were not educated in how to handle the money.

If you can’t manage $20,000 a year, how can you expect to know how to manage a win-fall of $500,000 a year? You just can’t. Also, if you “think” you know everything there is to know about money, you are lying to yourself. Nobody knows everything about any one topic. Sure, some of us are smarter about certain topics than others, but we all have room to learn regardless of the topic. As soon as you get arrogant about your knowledge on any one topic, that is a good sign that you are really ignorant and getting lazy.

So, if you are still reading then I owe it to you to give you some of my recommendations of ways to gain education about how to handle money and become wealthy. Now this is just a select few, and as I blog through the days and weeks ahead I will continually add more, it is a never ending list.

Of course, being a Dave Ramsey Certified Financial Counselor I am going to recommend Dave’s book The Total Money Makeover – great book for the beginner who is in debt and needs an idea of where to start to learn how to get out of debt

Another great read is Larry Winget’s Shut Up, Stop Whining, and Get a Life I love this book, it is an in your face reality check. If the book makes you mad, great, that means you are reading it, and it is touching a nerve. It is all about some good old tough love, and I believe in tough love. You have to focuses on handling yourself, after all, you have to be able to handle yourself before you can begin to handle money.

Learn about money with the whole family by playing Cash Flow 101 by Robert Kiyosaki, he is the author of Rich Dad Poor Dad another great book on how to educate yourself on what money is. You have to learn how to think, if you say to yourself “I can’t afford it” you have just turned off your brain..it is a defeatist thought. Instead, focus on “how can I afford it” this get your mind’s creative juices flowing and opens your eyes to money making possibilities.
Education is worthless if you don’t put what you learn into practice. It is easy to become a lifetime student, reading and learning for years, but it won’t help you unless you get past the fear, get off the couch and put what you learn into practice. Make mistakes, learn from your mistakes and move forward

Do I really need to engage with a money management coach in order to get out of debt?

Is a money management coach required to get out of debt, no it is not required for your to engage in the services of a money management coach to get out of debt.

With that said, most individuals and couples who are in financial distress are so close to the actually problem that if they could resolved it on their own, they would. When you are so overwhelmed with the situation at hand it many times is much easier to continue on with status quo instead of working together to resolve the problem. Most of my clients don’t even know where to begin.

Most of the information that a coach will teach you can be found in well written books such as Dave Ramsey’s The Total Money Makeover. Personally, I believe that Dave’s philosophy is the best as it totally focuses on never using credit again and always paying cash. When that is done, then there is no way to get into debt.

What a coach offers, is additional accountability that you don’t already have when going it alone. It is someone who will provide a third party objective view of your financial situation. It should be someone who has experienced debt first hand and has conquered the problem. Do you want to work with a coach in regard to getting out of debt if they are carrying debt of their own? I don’t think so.

A coach will provide you with recommendations as to where to begin to cut back from your preliminary budget and teach you how to work a budget each month. What a coach shouldn’t do is the work for you. How will you learn if someone else is paying your bills, or working with your creditors. That takes the responsibility off you as well as the accountability. If you don’t do the work yourself, learning and making mistakes along the way, you can’t expect to know how to never get into debt again. Sure, it will hurt, there will be sacrifice, but it will be well worth it in the long run as you will be learning new habits, change behavior and your mind set as it relates to money management along the way.

Now with all that is said, you will not always agree with what a coach recommends to you. Think about it, this is a life changing experience and change is many times a difficult pill to swallow, but if you are serious about getting out of debt, staying out of debt, building wealth and changing your family tree, working with a coach is a great first step forward.

Well, Kim, how on earth can I afford a money management coach if I can’t afford to pay my bills? This is one of my most popular questions. Simple answer is, how can you not afford it. What you are doing right now is obviously not working or you wouldn’t be in a debt situation. I have found that people in debt are more than willing to find money for a new TV, a dinner room table, or something fun and don’t begin to “claim poverty” until it comes to investing in a change for their future. Many times the reason for this is they really don’t want to change and use “I don’t have the money” as an excuse to continue on the path of living paycheck to paycheck. But if you really want to change and are tired of living in the cycle you are in now, you will find the money, just like you found it to get all the things you wanted in the past, it just depends on what your priorities are.

Please feel free to look around our site and invest in a 30-minute call if you are ready to change your financial life.