In Episode 4 of the Man Vs. Debt Podcast, we cover how you can “Rally Your Friends and Loved Ones.”

We’ve talked about this here on the blog before, as it’s one of the single biggest issues that holds people back.

Note: We also cover this content on the final day of Week 1 in You Vs. Debt. Registration for our new Kickoff 2012 class closes soon, so don’t delay! The class starts together on Monday!

What We Can Learn From The News:

At the beginning of each podcast, I cover three news stories from the past week. We attempt to have a little fun and pull out a positive nugget from each story featured.

• Story #1: Wikipedia Blackout a Grand Gesture or Grandstanding?
• Story #2: What Would You Do With A Billion Dollar Bank Error?
• Story #3: Heroes of the Concordia Crash

Why having your friends and family on board is important:

1. It’s been the #1 factor of any positive change in my life.
2. Realizing that “the meaning of any communication is the response it elicits.”

1. Realize you can’t change them.
2. Let them change organically.
3. Start with WHY it’s important to you.
4. Seek their input. Listen.
5. Leverage outside influences.
6. Lead by example.
7. Make it a routine.

How you can help the podcast explode:

Our first three episode have been downloaded or streamed over 25,000 times!  Whoo-hoo!

If you’ve listen and enjoyed any of the podcasts so far, would you consider leaving a quick, passionate review in iTunes?

Click here to view and/or subscribe inside of  iTunes!

(The newest episode may take a few hours to show in iTunes, but it WILL download if you subscribe.)

Thanks again for everything!

Xoxoxo,

-Baker

“What the hell are you doing, son?”

The words sounded muffled in my head. I sat frozen – gripping the steering wheel on the side of the dark, empty interstate.

“Shut your engine off, get your license, and put your hands back where I can see them.”

I did as I was told, silently.

Upon glancing at my license, the office immediately glanced up and locked eyes with me.

Starting at the beginning, I told him everything…

Story #1: The $10,000 Wake Up Call…

I was addicted to gambling.

Now, this was before getting back together with Courtney (before we were married) and far before Milligan was even a thought. We have to go back to the period between me failing out of college – and getting my life back on track.

At this time in my life, you’d be hard-pressed to find me awake and not sitting around a card table or in a poker room.

We lived and breathed it. We played most of the day – and when we weren’t playing, we were organizing tournaments and cash games (or dealing them for addicts).

During one six-month period, I worked one day each week (a 20-hour shift) dealing one of the largest cash games in Indianapolis. I made around $60/hour in tips and would take home anywhere from $1,000 to $1,500 in one sitting.

I did this every Monday night – and spent the other 6 days playing video games and online poker with my two roommates (neither of whom had their own job).

This was the most “stable” I had been in years.

*****

A few months later, I found myself pulled over on the side of the interstate – convinced I was about to be violently arrested.

I had just passed a police car going 130 m.p.h. at 3 a.m.

You see, I had just worked the entire day, taken my overpaid cash wages, and sat down at the poker table. A couple hundred dollars quickly became a thousand, then $3,000, then $10,000.

At 21 years old, I wasn’t content with $10,000 for two hours of work. It wasn’t real money to me. I wasn’t content unless I had every chip at the table. I wasn’t content until I sent every degenerate at the table home to their mortgages they could no longer pay.

Over the next 90 minutes, I lost the $10,000 as quickly as I had amassed it.

I don’t remember leaving the poker room or getting in my car.

*****

“What the hell are you doing, son?” The officer’s words echoed in my head.

Upon glancing at my license, the officer immediately glanced back up and locked eyes with me.

“Adam *Baker*… you wouldn’t happen to be ______’s son, would you?”

I swallowed. “Yes sir, ______ is my father.”

“Adam, what the hell are you thinking?”

He listened to all of it, before giving me a breathalyzer (I hadn’t been drinking).

The next thing surprised me the most… He let me go.

No arrest, no ticket, not even an official warning (although he had plenty of words for me).

At one of my darkest and most irresponsible times, I was pulled over by the only state police officer in Indiana that had grown up with my father.

Coincidence? I’ll let you decide what to call it.

On the rest of the drive home – moving a good 15 m.p.h. under the speed limit – I fought back tears as I vowed to finally change the direction of my life.

Story #2: Trapped in the Most Beautiful Place on Earth…

Flash forward five years.

“Get Milli and crawl slowly out of the car…”

I should’ve been scared, but for some reason I wasn’t. Even so, I wasn’t about to move.

Through the passenger door, I saw the waterfalls that were streaming down the mountain side and I took in the bluest sky I had ever seen.

As I turned to my left, gravity pulled my head toward a mangled mess of tree branches.

I squinted to make out what was beyond the branches.

… nothing …

Only a few trees stood between me and two hundred feet down the side of the mountain.

As I snapped back to reality, Courtney was twisting her body to unstrap a dazed Milligan from her car seat. She was fighting gravity to try and lift the rear passenger door and climb out.

I didn’t dare move.

*****

We had come to New Zealand 8 months earlier on a last-second decision from Brisbane, Australia. We had spent the last few months living in Auckland as Courtney taught a few semesters at a local elementary school.

It was one of the most freeing times of our life.

We had spent the last two years transforming our financial life. We had paid off $18,000 in consumer debt, sold all of our possessions, and set off to backpack Australia.

Somehow our journey had now brought us to the side of this mountain outside of Milford Sound on the South Island of New Zealand.

I didn’t dare move…

*****

After what seemed like the longest minutes of my life, I let out a sigh of relief as I saw Courtney and Milli climb out of sight to where we had slid off the road.

“I guess it’s my turn,” I thought.

I moved as slow as I could given the awkward angle. The car was nearly on its side.

As I stretched to try and force the passenger door open, I thought for sure the trees would snap under my shifting weight.

Luckily, they didn’t budge. Not a single inch.

As weak as they looked, the trees grouped together to form a safety net that had kept us from sliding down the mountainside.

Up on the road, we pulled out our cell phones and confirmed our suspicions – absolutely zero bars. We were 90 minutes from the nearest town on a road that is sparingly traveled that early in the morning.

We had no choice but to sit on the side of the road and wait.

Irony hit us hard as we soaked in the visualization of being trapped in the most beautiful place on earth.

*****

48 hours later, I found myself talking to an old man that owned the closest tow-truck company.

An Israeli family had found us stranded on the road – and had taken us to the only lodge within two hours of the sound. I rode in the back with their groceries. Milli rode on Courtney’s lap.

The lodge was booked solid for months, so after 18 hours of discussion (to make a long story short) we finally shared a single bunk bed with the employees of the lodge for a few hours of sleep.

I had spent hours on the phone over the last two days, trying to coordinate police, rental companies, and tow-truck drivers from a city 90 minutes away from the accident site.

*****

“Well, this isn’t going to be pretty…”

The seasoned tow-truck driver almost felt sorry for me through the dollar signs in his eyes.

He poetically laid out all the expenses he had incurred in retrieving the car.

Earlier it had been carefully explained to me that since I took responsibility for the accident that we’d have to cover the tow-truck charges ourselves (though the rental company would cover the damage to the vehicle).

“Yeah, I was there”…  I mumbled back to the tow truck driver.

I remembered waiting several hours for the driver to wind his way through the mountains.

I remembered the driver and I blocking the road for 45 minutes as we tried to figure out a way to rip the car out of the trees it had nestled in.

I remembered the gas, the after-hours calls, the size of the truck that was needed to do the job.

I knew all along the price tag of this operation would sting.

We ended up negotiating it to around $800 New Zealand, which was around $600 in U.S. dollars.

Keep in mind we were camping in a broken tent to save money at this point in our road tour. An $800 tow charge at this time was extremely demoralizing after all our frugal hard work.

But here’s the difference between the two stories…

We paid the tow-truck driver in cash.

There was no negative thought, no added stress, and not an ounce of worry.

As shitty as that 48-hour moment in time was… I was proud.

It was the first time in our life we had a fully-funded $5,000 emergency fund, and the first time we had to use it.

In the first story, money controlled me. It controlled my actions, my emotions and my relationships.

In the second story, we controlled our money. It didn’t dictate our actions in this emergency. It didn’t change much of our emotions at all.

As I handed the old man $800 in cash… I was proud.

How much worse would this situation had been without an emergency fund?

How much extra stress, arguing, and worry would have come with it?

I lived my life for years like that, and I don’t even want to think about it.

So we did the only thing there was left to do.

We buckled back into our mangled rental car (with deep gashes running down the left side and no front bumper) and finished our driving tour of the South Island of New Zealand.

We weren’t going to let sliding down the mountain keep us from finishing what we started.

*****

Taking back control of your financial life doesn’t prevent this kind of stuff from happening.

It doesn’t keep you from getting into situations where you are trapped.

But when shit does hit the fan, having a flexible financial life makes all the difference in the world.

Trust us, we know.

The goal isn’t to make it through life without any scars…

The goal is to empower yourself to break free, heal, and bounce back quickly.

The goal is flexibility.

The goal is freedom.

*****

Note: Up until now, I’ve only shared these two stories with our You Vs. Debt students. Several of those students pushed me to share them publicly… thanks to them for the nudge. The next You Vs. Debt class starts next week (January 23rd). More info soon!

*****

In Episode 3 of the new podcast, we cover the “6 Phases of Debt Reduction.”

Having talked to thousands of people (on all different parts of their debt journey) over the last few years, I’ve noticed a couple patterns that have emerged.

It seems that almost everyone, regardless of income level, country, or age, goes through 6 clear phases when taking back control of their financial life.

What We Can Learn From The News:

At the beginning of each podcast, I cover three news stories from the past week. We attempt to have a little fun and pull out a positive nugget from each story featured.

• Story #1: The Most Unusual Job Interview Questions of 2011
• Story #2: NBC’s Super Bowl Ads Sell Out at Record Prices
• Story #3: If you think Suze Orman’s new Pre-Paid Debit Card is a bad idea, you’re an “idiot”.

I also pointed out what was the best Super Bowl ad last year (by far): Young Darth Vader.

The 6 Phases of Debt:

1. Free Your Mind… (I show off my singing voice – can’t miss it)
2. Wake Up!
3. Suck it up and Budget.
4. Stop Buying Crap.
5. Earn More Money.
6. Bringing it all together (for the long-term).

We cover an overview of each of the 6 phases, along with tips on what to focus on if you are in that phase of the game.

Help the podcast reach even more people!

We’re still Top 10 in our “investing” category of iTunes. And still being featured as “New and Noteworthy in iTunes”.

Help us keep up the amazing momentum!

Word of mouth is still the most amazing method to spread the news. Is there a friend, coworker, and family member that would enjoy the podcast? Send it to them!

You can also click here to view and/or subscribe via iTunes!

(The newest episode may take a few hours to show in iTunes, but it WILL download if you subscribe.)

If you are extra impressed, don’t forget to leave a review inside of iTunes. This really helps!

Which phase are you in?

Xoxoxo,

-Baker

Our instincts as animals constantly push us to embrace a scarcity mindset.

Do you know what I mean when I say “scarcity mindset”?

It’s the belief that “there’s not enough to go around.” That you need to protect, maintain, guard, defend, or hoard.

It’s basic survival-of-the-fittest.

It starts with a spark in our brains and then manifests itself in our attitudes and actions.

In its most dangerous form, the scarcity mindset can be the default way most of us deal with any situation that enters our life. Good or bad, we immediately turn to how it affects the limited supply of what we have.

Obviously, this isn’t a new discussion. People have been talking about Abundance vs. Scarcity for far longer than I’ve been on this planet. But I’ve been spending a lot of time thinking about it recently, as it’s starting to reveal itself as an issue in my own life.

3 years ago, we had an incredibly powerful scarcity mindset in our financial lives.

And, to be honest, I believe our scarcity mindset was an asset at this point in our lives. We needed it. We had been living unsustainably for a couple years and needed to ruthlessly focus on what we had, what was left, and where EXACTLY to put that extra money.

By leveraging this survival-of-the-fittest mindset we made some incredible strides in taking back control of our money.

But too much of the scarcity mindset can be poisonous.

Focusing through this “lens” for too long or too hard will cause you to become reaction-based, scared, stressed, and selfish.

Luckily for us, our travels throughout the world and my induction into this amazing blogging world helped radically jolt my perspective in this area. Slowly, but surely I began to realize that this isn’t a “zero-sum game.”

My eyes were opened to the possibilities that existed if I could (as my friend Chris Guillebeau says) increase the size of the pie for everyone.

No longer was there a limited supply of resources. No longer was there a fixed amount of income I could generate. No longer was there a fixed potential for what we could accomplish financially in our lifetime.

This was an extremely freeing time for us.

But I’ve realized that an abundance mindset is only really possible (and beneficial) when you actually have the breathing room t0 let it grow.

Let me use an example now. As our business has grown, I’ve picked up a couple team members. With these team members a vital part of this community and my business now – a positive thing – my overheard, expectations, and pressure to perform have all gone up exponentially as well.

This added pressure has generated stress, tightened our breathing room, and made things in general less flexible from a purely financial standpoint. As soon as we began to feel this restriction, our scarcity mindset began to creep back in.

Now, let me point out that intellectually I know this is part of growing any mission in the world. To grow, this is a necessary step along the way.

So the question is… how do you keep a mindset of abundance when times are financially tighter than others?

A scarcity mindset, within reason, can help us ensure we keep our focus. It can help us budget, plan, and forecast so we don’t implode by stepping on a financial landmine in the future. It can help us allocate our resources in the best way possible.

All of that is fantastic.

But in business, just like in life, we  can’t completely lose sight of the abundance mindset that has made this incredible journey possible.

Can we?

I can’t confidently tell you I’ve found the balance, but at least we are aware of the issue. We’re still exploring.

When a scarcity mindset can help (based on my own life):

1. When you first wake up (in life), leveraging a scarcity mindset to rapidly get yourself breathing room is extremely powerful. This is the basis of the passionate “war on debt” and  battle against clutter we always talk about.
2. Once you have sustainable breathing room, it’s important you don’t let the scarcity mindset poison your attitude and outlook. Focus on finding work you love or a mission you care about. This is the best way I know to show you just how abundant the possibilities really are.
3. When you come across a growing pain or downswing, don’t immediately revert back to the scarcity mindset. Be conscious. Evaluate. Slow down.

Most importantly, just be conscious of this dynamic. Be able to enter into and out of these mindsets as you need them.

The scarcity mindset gets an incredibly bad rap from many people. But I know firsthand how powerful it can be in giving you that breathing room to make other dramatic life changes possible.

Are you stuck in a scarcity mindset right?

I’m interested on your own thoughts and experiences in this arena.

• Do you feel at times you’re stuck in a “there’s not enough to go around” mindset?

• Do you feel like it’s ever been beneficial in your life?

• How do you keep from snapping back into it whenever adversity pops back into your life?

Whether you share your answers or not, you need to answer these questions in your own life.

I thought I had this figured out, but maybe not. I’ll keep you updated!

Xoxoxo,

-Baker

“Daddy, we need to plug my Leeeeap Frog into the puuuuuter.”

“Why is that, Milli?”

“I want some more of this…”

“Some more of what?”

“Some more of this stuff. I’m out of it.”

“I have no idea what you are talking about, Milli.”

“My Leeeeap Frog is sayin’ I need to plug it into the puuuuuter to get more.”

[At this point I realize what's going on. You see, if you don't have small children - "LeapFrog" is an educational handheld video game system. Or at least that's the goal. Milligan had used up all her "food" in her game - and in order to get more - you have to plug it into you computer and BUY more.]

“Oh Milli, that costs money to buy that stuff. I don’t think we’ll do that this time.”

“But I really want to plug this into the puuuuter and get more!”

“I’m sorry Milli, but we aren’t going to spend money on that.”

“I have monies!”

“Well, you have a few coins. But I think that costs a couple dollars. I’m not sure you have the much money.”

“I could get more money.”

“Ugh… I SAID… well… I guess… I guess you could do that. Where are you going to get more money?”

“The bank.”

“The bank doesn’t just give you money. You have to put money in there and they keep it safe for you.”

“YOU could give me more money for my Leeeeap Frog.”

“No, we already talked about that. How could YOU get more money?”

“I don’t know.”

“How do Mommy and Daddy get more money?”

“I don’t know.”

“Yes, you do. We try to help people. And we have to work really hard to do that. What do you do really well?”

“I paint pictures.”

“That’s a great idea, Milli. You are great at painting. You could paint pictures and sell them!”

“Sell my paintings?”

“If you paint really pretty pictures, I bet [insert multiple family member names] would buy one of them over Thanksgiving from you. If you saved all your money from that, you could get more food in your LeapFrog.”

[Milli thinking for a long moment]

“Milli, how much would you charge for your paintings?”

“5.”

“5, what?”

“5 quarters.”

“I think that’s a fair price. You know what, we have that painting you did on the wall. Remember? I could buy that from you to start. How much would that be?”

[Milli thinks for another 5 seconds or so]

“6 quarters.”

“What? You told me 5 just a few seconds ago?”

“No… it’s SIX quarters, Daddy.”

“Alright, you drive a hard bargain, but I’ll give you 6 quarters when we get home. You’ll need to save your money in a safe place.”

*****

And so, over the next few days, Milligan painted another 5 or 6 small paintings in preparation for Thanksgiving holiday. Sure enough, she had no problem selling out very quickly.

She now has plenty of quarters saved up – but hasn’t yet brought up the LeapFrog again. If she does, we’ll upload the in-game items for her like promised.

We haven’t yet covered that we need to save money and give some of the money. We’ll have a bit left over to consider that.

We haven’t yet covered how buying digital items may lead to a very short-term high, before buyer’s remorse sets in quickly.

We haven’t yet talked about how selling to family isn’t a good long-term growth strategy.

But at three and a half years old, I figure we have some time.

For now, I think this is a good start.

*****

What are your thoughts on raising entrepreneurial kids?

Is this kind of thing a good or bad influence?

Is it ever “too young” to start encouraging this?

*****

I’m a bit exhausted, but far more excited to announce that the newly-redesigned You Vs. Debt class is open for registration starting today!

We’ve designed the structure of the course to focus around daily, bite-size chunks that anyone can knock out quickly.

It only takes an average of 15 minutes per day, but when applied consistently over the 6-week framework, this amount of time can yield fantastic results.

Here’s some of the new structure we’ve created:

• Daily lessons delivered via video, MP3, and text transcripts.
• Each video contains a lesson, a specific challenge, and a worksheet that you’ll be expected to fill out.
• We’ll send out weekly accountability surveys to track your progress and check your momentum.
• You’ll have the opportunity to unlock badges and publicly display progress on your profile and in the forums.

But more important than fancy, new features is the why…

There are millions of people in financial situations that keep them pinned down. And the truth is, a big percentage of these people know better.

They even know exactly what needs to be done. But they still can’t manage to bring it all together and change their habits.

Over the last two weeks, we’ve talked about how habit change is not about simply knowing more. It’s about understanding how our emotional mind and logical mind work together to create lasting change.

I’m so passionate about this non-conventional approach, that I’ve designed You Vs Debt around it completely.

The entire focus is to get people to stick with the program and finish.

I’m CRAVING results for the people who jump in on this. We’ve broken it down into small pieces. We’ve installed game mechanics to help make it fun. We’ve brought together a community of other like-minded people.

I can’t make you (or anyone else) show up and focus for 15-20 minutes a day.

But I’m sure as heck going to try!

If you think this may be a good fit, go check out the guarantee we are offering on the class right now!

Seriously, we are THAT intent on getting results for people who show up and stick to the plan.

Your one-time enrollment also covers lifetime membership! 

Meaning even if you miss a week or two, you’ll be able to pick up where you left off in any future classes down the road.

*****

Lastly, I’ll be doing a no-holds-barred Q&A session this coming Wednesday at 9 p.m. EST.

It’s the first time I’ve done something like this and I’ll shoot out more information about it tomorrow. If you’ve ever wanted to ask about finance, debt, travel, business, life, or anything else you can think of… this is the chance. It should be a blast!

*****

Thanks again for all your support. If you know someone who can use motivation and accountability to passionately attack their debt – I appreciate if you forward them over to You Vs. Debt this week.

We’re going to blow the roof off this class!

Note: Let me know what you think of the video above! It’s a sample daily video (Day 5) from the new 6-week You Vs Debt class that opens early next week!

There are hundreds of factors that weigh into the success of a change.

But time and time again, I’m convinced that one single factor outweighs all the others:

The support and excitement of a respected loved one!

I know for sure that the financial changes I’ve made, the growth of this community, or any of the strides I’ve made in person freedom and creativity wouldn’t have been possible without the support and excitement of Courtney.

It’s really that simple.

Courtney’s support has been the #1 factor in every positive change I’ve made in the last 5 years.

Now, don’t let me paint you a rose-colored picture here. Most times we don’t start on the same page. Many times getting to the same page isn’t the prettiest in the world. We are far, far away from being the perfect family or couple.

But we have found a way to prioritize being on each others’ bandwagon.

If Courtney believes deeply in something (and I’m aware enough to know that), I try to do my best to be her #1 supporter and fan. It may not happen overnight, but we are well aware of how important this support is in our lives!

But I know from experience that things don’t always go smoothly…

In addition to learning from our own mistakes, I’ve heard from hundreds and hundreds of readers of the last few years with similar hiccups.

Sometimes our own excitement and values can be so far apart from our loved ones that we can feel completely alone.

But that’s rarely the actual case. And in these vulnerable moments many times we can find ourselves scapegoating our loved ones:

“I’m ready for change, but my husband just won’t help me out…”

“We’d turn around our finances, but with three young kids in school we just have too much responsibility to do ____________.”

“My friends don’t get it…”

Some or all of these statements may be true in your life.

But it’s my experience that it’s easy to blame others than realize just how much control we DO have in our own lives.

I read a quote – or truth of sorts – a couple years ago and it stuck with me.

“The meaning of any communication is the response it elicits.”

I love this way of thinking, because it returns the responsibility for results back onto me. If Courtney doesn’t give me the response or support I’m looking for, it’s very likely a result of poor communication on my part.

This may not be true ALL of the time, but it’s definitely been true MOST of the time for me.

With this paradigm in mind, here’s a recap of the 7 tips from the video:

1. Realize you can’t change another person…

You can force, manipulate, coerce and brainwash… but not forever.

In the long-term, you can’t force lasting change onto anyone else.

Lasting change comes from within.

Trying to quickly force a change in another person will always blow up in your face. It elicits a defensive reaction and turns conversations into arguments in the blink of an eye.

But that doesn’t mean you are hopeless.

You can encourage change. You can model healthy change. You can communicate, listen, and evolve with those you love.

But the first step in the process is to realize you can’t change them.

2. Allow change to happen at its own pace…

Once you’ve realized that you can’t force or rush change, you learn that you have to allow it to occur at its own natural pace.

You’ve experienced circumstances and influences that have ignited an excitement or an urgency for change.

How selfish is it to expect that any other person immediately experience that same level passion? You are different people with different ways of processing influences in your environments!

You’ve got to respect your loved one’s internal timeframe for an organic build up of excitement.

That’s a fancy way of saying be patient.

I’m not telling you to wait forever. I’m not telling you to accept a lack of action or effort.

I’m simply suggesting that real excitement and passion only grows when there is room for it to happen naturally for each person involved.

Patience, young grasshopper. Patience.

3. Start with why this is important to you…

Whenever you approach your spouse or loved one, frame the entire discussion with why this change is important to you.

Not why this change is the right path.

Not why this change must be done.

Not what has been done wrong.

Not what some other person has done better.

Start with why this is important to you.

Reach deep down. Find the vulnerable, open, honest reasons why why you are excited and passionate about this change.

Most importantly, be optimistic. Be happy.

There is a time and place for recognizing and learning from errors. Moving away from a painful moment can be a big motivator in your journey.

But not now. This is not the time for that.

Start with optimism.

Start with why it’s important to you.

4. Seek their input…

After you state why it’s important to you, seek their input.

Ask them what’s important to them about the topic or part of your life you’ve just talked about.

Don’t ask them what they think about what you said. This is a formula for them to take the opposite side and defend.

Instead, ask them what’s important to them about ___________.

Then stop talking.

Don’t interrupt. Don’t risk breaking the flow.

Listen.

When they are done, this is often times a great place to end the initial conversation. There’s nothing wrong with a short discussion of what’s important and then some time away to think.

5. Leverage outside experiences and influences…

If I know one thing for sure, it’s that I’m terrible at having a Teacher/Student relationship with Courtney.

It’s probably a combination of my ego and my tendency to get offended when I recognize naivety in my own actions – but I simply don’t handle it well.

I can be taught by others. I do it all the time.

I love learning from a wide variety of sources…  just as long as that source is NOT Courtney!

All joking aside, it’s extremely difficult for most of us to swallow instruction or correction from someone we are that close with. We want those people to respect us so deeply that we completely block the potential to learn and grow from their experiences.

A great way to avoid this conflict is to leverage outside influences to help:

• Take a class together. Courtney and I did this at the beginning of our financial turnaround.
• Watch a documentary or movie about that topic. This is our method of choice for many healthy eating and food-related issues.
• Send them an article, post, or recording. “Honey, check out this article I loved on ___________.”

Allowing them to leverage external influences will often make it far easier for people to accept responsibility for the new change!

6. Lead by example…

Even with the tips and suggestion on this list, one conversation isn’t going to magically cure all your woes.

Remember, this takes time. Open, honest conversations will help go a long way to building that foundation, but you may still have some patience to practice as your loved ones build that excitement.

While they come around, you don’t have to be sitting by idling.

Lead by example.

Take action. Model the behavior and the baby steps toward change that you are so passionate about.

If it’s financial change you are after, start tracking your own spending. Get your hands on a couple great books on the topic. Enroll in a course or class and start your journey.

Don’t force feed your loved ones, but show them with ACTION that you are serious and committed.

Hearing your words is nice, but seeing you walk the walk can inspire in a way words can’t.

7. Make it a family routine…

Last, but certainty not least, get the whole family involved in this process.

Make it a game. Make it fun, quirky, and interesting.

One of the best ways to get a spouse on board is to encourage yourself to include the kids.

The best example from my own life is when Courtney and I work out. Often times we’ll follow videos like P90X or Insanity and we almost always have Milligan do them with us.

Obviously, she just jumps around and rolls on the floor (and sometimes gets in the way at the WORST possible times), but her effect on motivation is significant.

If Courtney casually says “Milli and I are going to do today’s P90X video…” I’m about 500 times more likely to jump in and do it with them. If Courtney just goes to do it herself, I’ll sometimes her myself justifying “Oh go ahead, I’ll do it later on at a more convenient time for me…”

Yeah, right. That ends up happening about 10% of the time.

The simple fact is I’m much more likely to participate when I know it’s a family activity we are doing together.

This works to help get older kids involved, as well.

If kids see that both parents are on board with a goal or mission, they are FAR more likely to have excitement for the activity or change.

Even Milligan is willing to give half of her toys to the garage sale if she sees that Mommy and Daddy are all putting their stuff in the sale, too.

YOUR CHALLENGE (DON’T SKIP THIS)…

You know I’ve been on a big action kick lately, and this post is no different.

These tips are useless, unless you take action to apply at least one of them in your life today.

At the end of the video, I challenged You Vs Debt members to…

Schedule a 20-minute block of time to have a conversation with a loved one in your life.

You Vs Debt member or not, I want YOU to do this exercise.

Here are your ground rules for this conversation:

1. 100% Distraction Free – No screens are are allowed in a 10 foot radius. No televisions, cell phones, computers, etc… It’s only 20 minutes, you can do it.
2. Low stress and not tired – Ensure the conversation happens at a time that is low stress (unwind from work or business), but also when you aren’t tired (not right as you lay your head down at night).
3. Lead with WHY it’s important to you – Remember tip #3. Start the conversation with why it’s important to you and then LISTEN.
4. Never say “YOU” or “YOUR” – These two words are BANNED from the entire conversation. No exceptions.

Put this post to use in your life.

Schedule a 20-minute conversation for sometime this weekend.

Share your experience and tips below…

I’ve mapped out everything I’ve learned from talking with hundreds of people over the last few years, but I want YOUR experience as well.

Have you had success getting on board with a spouse or loved one recently?

How do you rally your loved ones?

Share your frustrations, experience, and/or tips below with others!…

*****

Today is an exciting day for me. We’re one week out from the opening of my new You Vs Debt class – and to celebrate I’ve decided to share a few sample daily lessons and resources this week with you!

The first week of the six week You Vs Debt class is all about “Motivation & Mindset.”

As we talked about in my last post, this is an extremely important topic that many financial experts simply shy away from. We dig into the numbers of personal finance starting in Week 2, but not before we lay a foundation of excitement, passion, and commitment.

The key metaphor that guides us through this first week is that of The Rider, The Elephant, and The Path – a great construct laid out in the book Switch by Chip and Dan Heath.

Essentially they describe our emotional mind to be like a huge elephant – slow, deliberate, and powerful. Our logical mind is the rider on top tasked with constantly guiding the elephant through the jungle towards a desired destination.

How do most of us try to get this elephant through the jungle?

We force it. We grab the reigns and try to ram this beast straight through the shortest path possible!

We fight, we struggle… we tire, we sore, and finally… we exhaust.

“WILLPOWER!” We scream at the top of our lungs… but it’s no use. We simply can’t keep up the stamina to constantly overpower the elephant.

Is it any wonder most of us burn out when attempting to change a tough habit?

Willpower alone is not enough…

Instead of constantly exhausting ourselves trying to micromanage our journey, Chip and Dan Health suggest we:

1. Direct the rider – First, we need to give our logical minds clarity above all else. We need to know specifically what we are doing and where we are going. This helps us overcome the fear of uncertainty (a huge source of resistance in our logical brains) – and gives us the guidance to make small course corrections when needed.
2. Motivate the elephant – This is where so many of us fail. You shouldn’t be motivating the rider (what most of us try first) – you need to motivate the huge, powerful beast you’re riding! By switching your motivation to feed your emotional mind – you’ll ensure that the elephant wants to come along for the ride. You’ll no longer be caught in a constant power struggle – and won’t burn out nearly as quickly.

This subtle shift to motivate my emotional mind over my logical mind has completely changed the way I approach change in my life.

But the last part of Chip and Dan’s jungle metaphor may be the most important.

They remind us that you can also Shape The Path that the rider and the elephant take through the jungle. This means crafting a positive, supporting environment and removing any negative potholes, obstacles and predators in your way.

Shaping the path makes the journey easier on both parts of our minds. Our emotional mind can push forward without many hurdles – and our logical mind can make small adjustments if we begin to wander off the path at any point.

You Vs. Debt Sneak Peek…

And this is where we find ourselves on Day 4 of the You Vs. Debt class framework. Having just covered how to motivate our emotional minds and direct our logical minds, we’re ready to craft our environment to help support the journey.

Take a sneak peek at a sample lesson and challenge from Day 4:

[Can't see the video? Click here to watch it in your browser!]

Additional Resources:

• Download the Day 4 Worksheet (to complete your challenge at the end of the video)
• Download the MP3
• Download the full transcript

Do This Challenge Today…

This sample lesson (and post) is useless if you don’t take action.

I want you to download this supplemental worksheet and fill it out.

Start by filling out your three levels of positive influences. Next, list the negative people and environments that are dragging you down.

After you are done share the following in the comments (if you are willing):

1. Share the #1 entity in your life that is dragging you down.
2. Share your #1 most empowering influence.
   

Sharing your answers in the comments below will help inspire others to take up the challenge!

Your financial life CAN change. And crafting your environment (or “shaping the path”) is an essential step in ensuring that this change will be long-term and sustainable.

I hope you enjoyed the sample lesson!  To unlock another couple lessons just like it, be sure you are on the You Vs Debt Insider’s list by filling out the form below this post!

Xoxoxo,

-Baker

*****

Understanding the numbers of your financial life is an important principle in helping you take back control. However, just studying the math of your situation has its limits.

Many financial experts choose to focus all their time and energy on tangible formulas, benchmarks, and percentage-based rules of thumb. In doing so, they completely ignore the most essential skills!

TRUTH: There are several skills far more important than just “knowing the numbers” of your situation.

TRUTH: You do not have to be good at math to break-free from the burden of a stress-filled financial life.

All these formulas and percentages are useful, but only when properly put in their place in the pecking order. Here are 3 skills you should focus on before getting a grasp on what the numbers of your situation are…

#1 – Developing A Blessed Attitude…

It may sound cliche, but in every successful turn-around I’ve seen or studied – a positive, blessed attitude was at the very core.

What the heck is a “blessed attitude,” you ask?

A blessed attitude is a life-long learned skill. It’s the ability to break-free of everyday ruts and negative attitude by constantly reminding yourself with all the reasons you are truly blessed.

A recent statistic I read stated that a far majority of the world (close to 70%) lives on less than $2.00 per day.

If you are reading this post, chances are you are already ahead of 95% of the world’s population in terms of possibility and freedom.

Don’t get me wrong here, this isn’t about the token hippie dude screaming “Just be positive and it’ll all be okay, man.”  I don’t believe positive thinking alone manifests anything for you long-term.

However, I’m utterly convinced that a constant negative, entitled attitude will drag you down and keep you trapped.

It’s something that we all battle with on a daily basis (trust me, I’m in the same boat!).

If you let an attitude of entitlement win, you’ll complain, procrastinate, idle, blame, and wallow. We all do it, it’s our entitled attitude rearing its ugly head.

But if you defeat this negativity with a blessed attitude, you’ll thank, praise, hustle, capitalize, and plow forward.

Remember the last time you felt that blessed?

Like absolutely nothing could stop you?

I love that feeling, when I’m in those unstoppable moments.

My goal is to get to around 80% blessed / 20% entitled. I’m not sure I’m there yet, but I am convinced that this trait is far more important to turning long-term, lasting financial change than any formula.

[Your Challenge - 5 min]: Make a simple list of everything you’re thankful for. Don’t wait for Thanksgiving, do it right now.

Be honest with yourself. Don’t put answers just because “they should be on your list,” put the answers you really feel blessed to have in your life.

Now, stick it in a place you’ll regularly see. Maybe the bathroom mirror, next to your computer screen, or on the wall next to your bed.

Further Reading: Man’s Search for Meaning by Viktor Frankl

#2 – Honest, Humble Communication…

This isn’t just an essential financial skill, it’s a life skill.

Don’t believe it’s that important for lasting change? Think again.

Honest, humble communication will help you:

• Establish passionate, motivating goals with your loved ones
• Ask for a raise
• Get concrete answers for specific questions you have
• Get more money when selling your crap
• Add more value at your job (think promotion!)
• Go into business for yourself
• Negotiate a discount on your next major purchase
• Establish an investment plan with an advisor
• Overcome any obstacle that blocks your turn around

Anything worth doing in life is worth doing with other people. And anytime you’re around another person, honest, humble communication will reward you every time.

As you may notice, a few of these benefits include learning how to negotiate. Let me tell you a little secret about that:

Negotiation is simply the convergence of Communication and Problem-Solving.

Some of you may view negotiating as a scary word or skill – it’s not. It’s simply what we call honest, humble communication when a problem needs to be solved.

We all negotiate and communicate every single day of our lives. It’s time we recognize The #1 biggest tip: stop trying to be right.

It’s part of our culture to enter into any type of communication, even casually, with the intent to be right, correct, or justified.

Master communicators that I have studied and learned from have one skill in common. They understand that the goal of the communication is not to be seen as the “one who is right.”

Even more importantly, most of the time being “right” will be counterproductive to the real goal of your communication in the first place!

Let me say that again. More often than not, you’ll have to sacrifice part of the real goal of your communication in order for others to view you as being right in the discussion or argument.

What’s more important to you – being right or being effective?

Most of the time you’ll be choosing one or the other. Choose wisely.

[Your Challenge - 20 min]: Pick one of the following three options for practicing and crafting the art of honest, humble communication.

1. Research and enroll in an affordable or free community college speech/communication class. There are options available in almost every community.
2. Research local Toastmasters club and attend one meeting. It’s scary at first, but one of the most rewarding leaps of faith I’ve ever made. Find local clubs in most communities here: http://www.toastmasters.org/
3. Visit a local flea market or weekend farmer’s market and enter friendly negotiations on several small items. Don’t buy a bunch of crap, but flea or farmer’s markets are great places to enter into friendly negotiations in small increments.

Further Reading: The 5 Love Languages by Gary Chapman (trust me, it’s one of the best books on humble communication for anyone – even singles).

#3 – Studying Habit Change…

The longer I live, the more I realize the value of studying the basic principle of psychology and habit change.

Far too many people jump head first into a change, without even realizing what really motivates or drives them to lasting results.

“I’m never eating fast food again!”

“I’m going to workout every day!”

“I’m not spending any more money on entertainment/fun!”

We’ve all been in mindsets where we’ve shouted these proclamations from the rooftops! Unfortunately, most of us end up right back where we started after the initial honeymoon motivation burns out.

In order to stretch out this period – and fuel long-term, lasting change – we have to have a better understanding of what really motivates us. This comes in two parts:

1. What motivates us as humans.
2. What drives you personally.

I’ve come to terms with the fact that most people simply try to make habit change a logic problem. They think they can out educate, out learn, or out read their problems.

It’s not that easy, folks.

Lasting change requires much more than just additional information.

In their amazing book Switch, Chip and Dan Health map out the following key elements to change habits:

• Directing your logical mind with clear, concrete directions
• Motivating your emotional mind – the part most people leave out!
• Shaping your environment to support and make your path to change easier

In other words, most of us totally ignore the fact that our emotional minds need to be fed, motivated, and inspired. And we rarely take steps to change our environment (a topic we’ll dive into much deeper in the next video post).

It’s not just about logic, people. It’s a multi-headed beast that requires efforts on multiple fronts.

But the great news is that it’s doable. By studying some of these basic elements of habit change and psychology you can drastically increase the chance of your change sticking.

[Your Challenge - 10 min]:  Think back to the last time you successfully changed a habit (and it stuck). We’ve all made positive habit changes in our past. Make a list of the TOP 3 reasons you believe you were able to stick to that change.

Be detailed and specific. Why were you able to make this change stick? What was different about that time than other attempts to change habits in your life?

This could be a long list, but I want you to focus on picking out your top 3 core reasons why you were so successful. Do it!

Further Reading: Switch by Chip and Dan Health

My Challenge To You!…

My challenge to you is to actually apply this stuff.

We’ve talked about how this is not just a logic problem, so reading this article alone IS NOT ENOUGH.

You need to actually do something.

You may think these challenges are too simple or too hard. Maybe you think they are silly or cliche.

I don’t care…do them anyway.

If you do them and they don’t help you – you’ve wasted a few minutes of your life – and you never have to read anything I write again.

But on the flip side…what if they work?

What if they spark the beginning of action-based change in your life?

*****

Your Challenges…complete these tonight:

1. Make a simple list of everything you’re thankful for
2. Enroll in an affordable community college speech class, attend one local Toastmaster’s meeting, or practice negotiating at a flea/farmer’s market
3. List the TOP 3 reasons you were successful at changing a habit in the past. Pick one time you knocked it out of the park and dissect why

*****

*****
The approach to tackling financial issues that I’ve outlined in this post is really important to me. I believe it’s so essential that I’ve created an entire course around the principle that taking back control of your financial life is about more than just knowing the numbers.

We talk numbers and formulas just like anyone else, but the difference is we choose to focus the bulk of our time and energy on mindset, environment, motivation, psychology, and community support from like-minded members.

These are the oft-ignored principles that lead to long-term, lasting change!

Over the next few weeks, I’ll be sharing a bit more of my core philosophy – as well as some sample video lessons, worksheets, and daily challenges. I know you’ll be super impressed at what we’ve put together.

If you want to see a sneak peek of these sample lessons and content before anyone else – enter your email below (don’t worry, it’s free). I’ll also send you a couple advanced pieces of the course that I won’t be sharing publicly! Whoo-hoo!

First viewed this awesome cartoon on Reddit.

The Debt Ceiling.

It’s been around for almost 100 years now, but few of us really knew much about it before the last three months or so.

Originally created so that Congress didn’t have to approve every individual expense of World War I, it’s now turned into an extremely polarizing and extremely dangerous piece in the United States’ financial puzzle.

[Read more about the debt ceiling's origins and history on Wikipedia]

Here’s the bottom line: The United States is financially screwed if we don’t make drastic changes in the next five to ten years.

I haven’t met very many people who disagree with that fact. For decades we’ve been “letting ourself go” financially. We’ve been pushing the problems onto the next Congress, onto the next President, and onto the next Generation.

One of the best resources – of any type – that I’ve seen in the past few months is this video:

Pretty scary stuff right? If you have a few minutes today, you should really watch that video (and share it with your family and friends)!

Note: Want even more food for thought? Did you see the recent CNN Tech article claiming Apple now has more cash than the U.S. Government? I don’t know whether to be depressed at the government or wildly inspired by Apple – probably both.

What if the U.S. Government were an American Family?

This comparison has been done in several places before, but it’s a great exercise for visualizing the enormous debt levels we face in this country.

The estimated numbers (according to Wikipedia) of the 2011 budget show that you U.S. will bring in around 2.17 trillion dollars, spend around 3.82 trillion dollars, and currently carries over 14 trillion in debt.

But what happens if we divide all these numbers by $50 million dollars?

Imagine a young family with the following numbers:

• They earn $43,400 per year.
• But spend $76,400 per year.

That means they spend $33,000 per year more than they earn! Ouch.

Even worse, the currently carry $280,000 in debt. They are trapped, buried, with several huge changes needing to be made to fix their situation.

So, after much arguing, they devise a plan to eliminate an average $1,834 per year for the next ten years.

$1,834 a year…  from the $33,000 a year they need just to break even! Nice plan.

They realize that just cutting the cable out of their budget (about $153 per month) may not do the trick, so they also agree to make a plan sometime soon to eliminate another $3,000 per year (over the next 10 years) – but they need time to argue about it more before they decide what to cut.

Over the next ten years, if this young family play theirs plan out perfectly (no hiccups, no increased costs, no new fights with neighbors, no disasters) then they’ll get to break even.

But over those ten years, the debt will continue to skyrocket each year – adding more and more weight to their struggles – and more and more payments to the interest on that debt. That’s assuming they can find people that’ll keep lending them money!

It’s not enough…

I’m going to blame both parties here. I’m afraid we haven’t done enough.

We’ve got to cut spending much more dramatically. Yes, that includes finding ways to cut Social Security, Medicaid, Medicare and other bloated programs that help the nation’s most poor. And, yes, that means cutting our military spending, too.

Sorry to say it, but we also have to raise taxes. While I’m all for smaller government and lower taxes – we simply can’t dig out of this hole with spending cuts alone. We bear the burden of the generations of low taxes and high spending before us.

If it were up to me (it’s clearly not), I’d favor a 2:1 ratio. We’d cut twice the spending (as I believe our spending is our core problem) than we would raise taxes – but we’d still do both.

We’d do it hard and fast. We’d do it starting in 2012.

The current solutions aren’t big enough. They aren’t fast enough.

So what can we do?…

No matter how great I think my plan may be (3 trillion in spending cuts and 1.5 trillion in increased taxes per year for the next 5 years), I know it would never fly in Washington. It’s too unpopular – and would hurt everyone (the poor, the middle class, and the wealthy).

We are going to have pain, folks. Pain now, or pain in ten years. It’ll come.

The best way to minimize the pain?

Use this debacle to FUEL your own balanced personal economy.

The primary thing you can do to fight back is to get your own house in order.

Aggressively design your financial life to be free, flexible, adaptable. I don’t know what the future holds, but I know this debt ceiling stuff is just the tip of the iceberg for the changes we will have to make.

I realize a decent portion of my audience is international, but this still applies. If the U.S. or any other major world economy or two start really hurting (some are already on their way) it’ll affect all of us.

In this day and age, we should already have  enough motivation to aggressively attack our finances, but let’s use this as even more fuel.

Mad at your government’s handling of money?

“Be the change you want to see in the world.”

Show them how it’s done.

*****