Monday, July 9, 2018

Money Lessons from 2 Countries - Chapter 1

This month is dedicated to talking about the ways the financial system is different in the 2 countries where I have lived my life. I grew up in Romania, first during a communist regime that believed that all are equal in rights and possessions (except that some were more equal than others, as we found out afterwards), and then in a democratic country that was designed in bits and pieces to mirror centuries old democracies in Western Europe - and not always for the good of the people. In my early 20's, I moved to the US and had to learn all about the financial system in a country that was totally different from the one I was raised in.

I decided to write some of my thoughts and the lessons I learn through my experience, so that both the Americans and Romanians reading these posts can find out what other people have to work with and through when trying to achieve their financial goals. It is my hope that readers from both sides of the Atlantic will take some of the info I share and use it so they can build better relationships with their money, and at the same time appreciate more what they have access to.

This week, I would like to address the school and university expenses in both countries. The similarity is that both countries have both state (public) universities and private ones. The differences are many on all the levels of schooling. I would like to also cover the differences in the Romanian system now compared to how things were set up when I went through my school years. I consider myself fortunate to have been in middle-school at the time of the revolution, when Romania overthrew the communist regime. I have always felt I was born at the right time, because it gave me a chance to experience life during the communism regime while being old enough to still remember it; at the same time, I was young enough when the revolution happened to benefit from the changes and the new opportunities that became available. 

The school system set up by the communists was designed to ensure all students graduated from high school, so all the students were supposed to pass, regardless of their actual level of knowledge or ability to pass tests. Also part of the propaganda was that university studies were not encouraged, because graduating from higher education was a threat to the regime - people became individuals instead of just one of the many average workers. Graduates of higher education were known as "intellectuals" and the way the pay system was set up (all under the control of the government) encouraged factory workers to have no aspirations for university degrees.  

The good thing about the universities during the communist regime was the fact that all education was free, with the only expenses related to the dorms or any other living conditions for the students who went to school in different towns. The hard part was not the cost but the entrance exam, because of the number of candidates for the student places available. When I went to college, there were over 9 of us for each of the 25 seats open in the Tourism Department. It used to be even worse back in the 1980's for Medical School and for Law School - sometimes even over 20 candidates were fighting for each spot. 

In the recent years the criteria have changed and now the entrance exam has been eliminated for many universities, while the grades from different subjects counted for the average considered for admittance. Along with the state universities that have been around for many years (a lot of them for decades and even hundreds), many private universities were founded after the revolution - these last ones not as picky in students admitted, and asking for tuition. The tuition there is a lot lower than what the American universities charge, but it can still be high for the average income in Romania. 

The private American universities, by contrast, are more prestigious and mostly more expensive than the public ones. The main drawback to going to college (for the majority of students) is the amount of student loans one gets saddled with, for many years after graduation. I think that the biggest concern for the families sending their children to college and knowing they will be taking on a lot of debt, is the statistic showing the small percentage of them that will actually work in the field that they are qualified for. Well, this is very similar to Romanian graduates, who also go for the diploma without a real plan to work in that field. This is more obvious for such graduates of business universities (named Economic Studies) and a lot of private law schools - Romania doesn't need that many attorneys. 

Now that I realize how much I can write on the topic, I decided to continue this subject next week, when we will explore some more details of the school system - similarities and differences. 

Monday, July 2, 2018

Half-Year GOAL Checkup Point

For the month of June, my goal for the blog was to help you reconnect with the goals you set for yourself in January, and to get you to refocus on them, to check on your progress and to recommit or modify them accordingly. As we are starting the second half of the year, I would like to talk about some strategies on achieving your financial goals for 2018. And since we are getting a bonus Monday in the month for July, what better time to focus on your goals and to highlight some of the finer points from June than right here, right now?!

If your main goal for 2018 is not tied to money, don't worry! You can apply some of these strategies as well. I will also state that all goals you set can help you improve your finances in some way. For example, if your goal is related to health and fitness, once you achieve the level of health and fitness you want, you will feel better about yourself and be able to monetize your business at a higher level. Even if you don't have a business and bring home a regular paycheck, you will be able to stand tall when you ask for a raise when you feel better about your self-image.

With all that said, let's move into some quick ideas on how you can raise your balance in your bank account by the end of the year. If you are already doing some of these things, congratulations! Please share this post with a friend and help her build her savings, investments and financial serenity.

1. If you are already saving 10% of your revenue for retirement, or for a big goal, make sure you are also setting aside 10% of any bonuses you receive, or from any other unexpected income - such as: tax refunds, refunds from stuff you may return to stores, little side jobs you may do while you grow your business, etc. 

2. If you handle cash, make it a practice to set aside in an envelope a certain denomination banknote (like $10, $20 or $50) anytime one comes to you, and then periodically put that cash into your savings account - and don't touch it until the event happens that you are saving for. This can be for your retirement or for a big purchase goal. 

3. If you want to teach your children how to save, consider starting them with setting aside the change they get anytime they spend a part of their allowance. That money can be then added into a savings account for them. Or if you are more determined and can shoot higher than that, veer a percentage of the allowance straight into a savings account.

If you have plans to take time off this week and spend it with your family, I hope you enjoy that time. I also hope you find a few minutes in the mornings to look over your 2018 goals, refocus and plan the second half of the year, so you can achieve those goals. Make 2018 the last year when you set these particular goals, so that 2019 can build on them and you (and your business) can get to the next level. 

Happy 4th of July! See you here next week for more ideas on how to build your financial serenity.

Monday, June 25, 2018

Goal Achievement Month - Chapter 4

STEP 4Follow your plan and adjust or pivot when necessary

I realized that the path to achieving my goal was through building a business. I always believed this to be true: you can either be a star in your own movie or an extra in someone else’s. I always knew I was a superstar. The first action I took was to study about money and business from the greats in the field. I learned about the American financial system, most importantly how to keep more of the money I made, because I realized that making a lot of money was not sufficient when it fell through my fingers. I learned how to make the right financial decisions, how to send out a dollar that would bring back friends, not one that would follow its friends away from my pocketbook.

I also had to learn a whole new business language and to understand what business ownership actually meant. I started like many others with a home-based business in direct sales with a well-known network marketing company. It didn't get me too far on my way to financial independence, but it gave me the first basic knowledge about business, and I'm grateful to this day to my mentor who showed me the first steps. Especially because I had a huge disadvantage over Richmond natives - I didn't have any friends or relatives in the city who had known me my whole life. So I had to learn very quick to become good at talking to strangers.

When I was offered a position as an independent contractor with a life insurance company, I jumped at the chance of making my own hours and writing my own paycheck, based on the effort I was willing to put in. I doubled my income and within less than a year, achieved my first major goal I had set since arriving to the US: home ownership. 

I understood that knowing what to do from reading books was not enough, unless I acted on that acquired knowledge. Therefore, I built a few solopreneurship businesses, some more successful than others. I learned from each experience and I adapted. I felt stronger with each lesson and new doors opened with each pivoting moment. The field that attracted me was always the financial one because I learned that by sharing my knowledge in this field with others looking to build businesses in other fields, can lead to their success and set them on a path to their own financial serenity.

The hardest lesson to digest, when talking to other women about their finances, was the fact that most women are uncomfortable even thinking about their money, let alone talking about it. I made it my mission to help women (and a few good men) build better relationships with their money.  

STEP 5Teach others how to achieve their goals, and partner up for accountability

Monday, June 18, 2018

Goal Achievement Month - Chapter 3

STEP 3: Make a flexible plan on how you will get it done

Armed with the knowledge on what we needed to get us to live together in the US, my husband and I got married and applied for my spousal visa, all in one day. And less than 3 months later, I was landing in Richmond, VA - my new home across the Atlantic. 

After I landed in the United States, I had a steep learning curve to adapt to a new country, new rules and new people. Many things that I had been used to for my entire life were done differently here. I adapted to most changes in a short period of time, the easiest thing to adapt to being the American version of the English language that I had studied throughout school. In my quest to build a life in my new country, I left behind everything and everyone who had been important to me. So I made a decision to make that sacrifice worth it by building a life of financial serenity. My definition for it at the time was to be able to do what I wanted when I wanted.

Coming from a country where everyone had a job working for a state-owned company, and then seeing a few "adventurous souls" be brave enough to become entrepreneurs - the foreign word was adopted into the Romanian language, since we did not have a term for it - I thought that finding a corporate ladder to climb on will take me to the ultimate goal of financial serenity. I was also naive enough at the time to believe that I was now in a country where my own achievements would be recognized and I would get rewarded for them with the jobs of my choice and the salary that I wanted. Coming form a country where it is more important who child, nephew or friend you are, that your competence in the field, I thought I was in a place where the fact that I didn't know people was not going to be an obstacle.

Wow, was I wrong?! I had to learn very quick that the corporate ladder was not the spot where I wanted to hang out, and that people promote you or not based on them liking you (or not) just as much as back home. And I also learned that I could not stand incompetence anymore than with my former employers back in Romania. So, after biting my tongue one too many times, I started looking for a better way. I had learned even before coming to the US that this is the land of opportunity, and I was convinced that mine was out there - I just hadn't found it yet. So I crossed off corporate career from my plan and moved on to the next idea. 

Monday, June 11, 2018

Goal Achievement Month - Chapter 2

  STEP 2Acquire the knowledge of what you need to accomplish the goal

I had a goal and I had a vision on why I wanted to achieve my goal. I could see myself living in another country and - most importantly to me at that time - not living in Romania. I was speaking this into being, I was acting as though it was a given. Even though initially I had no idea how I was going to accomplish my goal, I was convinced I would do it. At the time I had conversations with a friend and we both said we would leave the country, but we had different visions of what that would look like: I said I would live in another country for the rest of my life and only come back to visit; she said she would go work and return with the money to live in Romania. And we both got our wishes.

After coming home from the college experience in England, I started sharing first with my parents, then with my friends, my intention to leave the country after college, at some point. The strange thing about sharing my goal was that as I was repeating it, I kept getting more certain of the outcome – still without knowing when, where or how. And the interesting thing is that once they saw me so determined and sure of my idea, my parents started believing it would come true; and they also started acting like it was going to happen. Because of my college experience, the first logical choice was England, or somewhere else in Western Europe. After all, there were a lot of Romanians living abroad in that area, including a few of my friends. My ultimate goal became moving to the United States later in life, alter some years in another country or two.

And then my plans got changed when I met my now husband, and we wanted to be together. The goal now became moving to the US, without spending time in other countries, so we could be together. This also started as an idea and was soon developed into a plan. In a time where the information was not as easily accessible on the internet, I managed to find out details on immigration and the INS (now USCIS) rules. Following the online directions on their official website, my husband and I got married in Romania and applied for my spousal visa. Thus, 2 months later I joined him in Richmond, Virginia; and have been here ever since.

It was a stressful 3-4 month period once we decided to get married because we had to figure out the legal requirements for my transition from Romania to the US. I found lots of horror stories online about how hard it was and how long it took to be able to get there. All we knew at the time was that we wanted to be together and him living in Romania was not an option - language barrier, work challenge and lack of a personal place to live. 

I relentlessly scoured the internet and connected to people within Yahoo groups (Facebook was not even a dream at the time) and learn from their experiences what not to do. I also read anything and everything there was to know about immigrating in the US as a dependent of a US citizen. And then, armed with that information, I coached my husband on the documents he needed and on the steps we had to take. 

Monday, June 4, 2018

Goal Achievement Month - Chapter 1

STEP 1Figure out what you want – beyond doubt (a.k.a. your WHY)
    When sharing my recipe for achieving goals, I want to start with the biggest goal that I set for myself and describe the way I managed to reach the goal. Of course, as they say “hindsight is 20/20”… so after reading many books on how to get things done, I realize that I had followed the steps without even being aware of them at the time.

When asked what my greatest achievement is, I always say that moving across the Atlantic and building a life for myself in a country where I only knew my husband. It may sound crazy, or scary, or too hard. Well, 15 years later, I am here to tell the story. I have achieved numerous goals since then but still feel this to be the greatest one, since it brought about the most radical change.

I was born in a small country in South-East Europe, Romania, in one of its largest cities. After finishing college and working for a couple of years, I moved to the United States to follow my husband. I was always an overachiever, I guess people would call me. Through my school years I was always at the top of the class and passed all my exams with flying colors. These seemed like reasonable things to do at the time, so I never really considered these major goals to be achieved. After a scholarship earned in college that sent me to England for 3 months, I realized there were things I wanted to achieve and a life style I wanted to live that were outside Romania.

The first step toward achieving my goal was setting it. And the very first thing to do in this case, was to get the idea – I found the one major thing I wanted to accomplish: moving to another country to build a career or a business. At the time this idea first came to mind I had no clue where, when or how I was going to do this. Looking back I understand that when you are young everything seems in a far distant future. And that was my first thought.

Once I came home from the college experience in England, I started sharing first with my parents, then with my friends, my intention to leave the country after college, at some point. The strange thing about sharing my goal was that once I started repeating it, I kept getting more certain of the outcome – still without knowing when, where or how. Because of my college experience, the first logical choice was England, or somewhere else in Western Europe. After all, there were a lot of Romanians living abroad in that area, including a few of my friends. My ultimate goal became moving to the United States later in life, alter some years in another country or two.

Monday, May 28, 2018

Prosperity Mindset Month - Chapter 4

This month was dedicated to different types of debt that we take on during our life. After we talked about student loans, wedding expenses and mortgages, we will talk about how to plan our monthly budget so we can make sure we pay off all these debts and reach financial serenity.

I know that "budget" is a tough word in Americans' vocabulary. I will endeavor to make it easier for you, my reader, by telling you that by budgeting your money you are not giving up all opportunity for fun and things you desire. You are only planning all your desired purchases and you are also making sure that all your necessities are taken care of. 

I have to agree with the financial experts who tell you to track all your expenses, to the last penny. It is the best way to understand your expenses over a 30-60 day period and to be able to control them afterwards. However, I also have to agree that most of the people (including myself) don't have the patience or the discipline to track every penny spent and to plan where each penny goes. So I have devised a simpler system that has also been sustainable. And I will go over the 3 categories of expenses that I use in my own budgeting:

1. Fixed expenses
This category includes all the payments that are due every month and that have set amounts that cannot be changed, such as: mortgage/rent, insurance payments (all policies: homeowners, car, life, etc), retirement contributions (once you determined how much you contribute), car payment (only after you negotiate the best interest rate available to you), student loan payments, credit card payments (once you negotiate the monthly payments). This is what you must cover every month from your income. You will include all those payments that are a must, and once you have listed them all, you make sure your income goes to them first, before taking care of the next two categories.

2. Flexible expenses
This category includes all the payments necessary every month, that can be negotiated with the companies you have to pay, such as: utility payments (you can control how much electricity, gas or water you use), gas for your car or common transportation (whichever way you need to get around, most of all for work or your business), groceries and any food you eat out (if you have to go out for business meetings), any dues to professional organizations, any other activities that you need to pay for (like children's music and sport activities). 

3. Discretionary expenses
This category is for all the fun spending, such as purses and shoes, or clothes, or any other items you want to collect, as well as vacation money, and money for any other fun family activities. These expenses should not happen before any of the other two categories. I'm not saying to give up all the fun, I'm only saying that these cannot be a priority over the fixed and flexible expenses that you have to take care of every month.

Hope these ideas help you, as you build a better relationship with your money.