"Why would anyone listen to you?" Wendell asked, pointing out the obvious question and the one I least wanted to hear.
After writing a post about my under used talents and getting some wonderful support and suggestions from my bloggers friends, I was telling Wendell that I was interested in teaching a community education class on simplified budgeting.
"What experience or expertise do you have that would make people want to listen to your financial advice?"
"I paid off $25,000 of consumer debt in three years," I offered.
"Nah!" Wendell insisted. "You cheated and used the equity in our house."
"True, but I kept the payments the same, lowered the interest rate on the house, and paid more than half of what I owe to my mom and dad on the down payment loan."
"And that makes you a financial expert?"
"I read voraciously on the subject," I asserted, "I've read numerous books and I read three to five financial articles a week."
"I'm just not sure that that is enough. What would it take to become a Certified Financial Planner?" Wendell wondered.
I sighed. "One to two years of school, passing the test and working full time for 5 years. That's really my problem. I'd love to work part time, in a few years, but not full time."
"Keep thinking," Wendell said, "you're eventually going to come up with an idea that will make us a gazillion dollars, but I don't think this is it."
When Wendell got a promotion to finance manager (which came with a healthy pay raise) at the Honda store a year and a half ago, I consumed every financial book and article I could get my hands on to see what we should be doing with our money. Should I pay off debts? Increase the amount we're contributing to our 401K? Buy more insurance? If so, which kinds? We even met with our financial planner.
I got a lot of really good information and set about formulating a financial plan.
Around the same time, our ward sponsored a special financial seminar. My neighbor was the instructor, but because of scheduling difficulties, I wasn't able to attend. My bishop was afraid that too many ward members who needed this advice had missed, so he scheduled another at a better time and made a special invitation to the young married couples. (Since Wendell and I are in our early 30's, we count.)
I was pleased that I was able to go, although Wendell (who trusts me implicitly with the family finances) had to stay home with the kids.
This seminar was among the worst financial advice I had ever heard. And the most appalling thing was that my neighbor did this for a living.
First he nitpicked a budget to death with sub categories of the sub categories. Just the kind of thing that makes people hate budgeting. He never touched on insurance not health, life, disability...nothing. Finally, as he was recommending getting ready to buy a house he suggested getting a $200,000 house rather than $150,000, because the $200K would hold it's value better. What? Where was the discussion on getting what you could afford? If your house is too much of your budget you won't be able to feed your family, let alone keep the house up.
He also suggested that you get a 15 year mortgage rather than a 30 year because in the long run you pay less interest. He forgot to mention that 1) you could do this yourself with a 30 year loan by doubling your principle payments and 2) a loan on a house is some of the cheapest money you can get. It's a great thing not to owe on your home, but if you don't have an emergency savings fund, proper insurance, funding for your retirement AND your children's college education saved for, not to mention money set aside for short term goals like vacations, home remodels or car purchase, then you SHOULDN'T be paying down your house.
I could go on in lambasting this poor man's financial advice, but suffice it to say that he was way out of touch with his audience and I can't actually think of anyone for whom his advice is appropriate.
It was just one of those, "I could do this better than he did," moments. I'm more fun to listen to. I'm more dynamic and for heaven sake I'm more well read on basic financial plans. (I don't doubt, however, that he could tell you more about the stock market and stuff about investing which I admittedly know next to nothing about.)
So, here I sit wondering if I could offer someone a step by step guide to a basic financial plan and simplified budgeting.
Who knows? Maybe I'll start another blog on the subject.