According to researchers in psychology, when a person does something that is not pleasant but receives some positive reinforcement afterwards, he will keep doing the task and go through the negative to experience the positive. This phenomenon can be seen in many areas of life. In running, it’s usually the natural high feeling from endorphins that keeps the runners coming back to running.
Many times this result occurs naturally, but often times the reinforcement has to be manufactured. For instance, you can give yourself a reward after doing something you do not enjoy. It doesn’t have to be anything fancy; it can be as simple as having a cup of coffee or tea after starting on a difficult report. This would be considered a small win and it’ll keep on reinforcing your behavior until you have accomplished your goal.
Apply this method to your Money Marathon also. An easy way to do this is to reward yourself every time you save, invest or cut costs. You can do this by contributing to your Fun Fund. When you contribute to your Fun Fund, you can imagine and plan what you will do with the funds in the future. This “day dreaming” or future planning is a small reward for taking an action that you might have otherwise put off.
The reinforcement of your small victories will serve to build up the habits and behavior that will be required to complete your bigger goals and finish the Money Marathon.
When working on your bigger goals, such as saving 10% of your income, investing a big amount of money or lending out thousands of dollars through social lending, you can set your sights on even bigger rewards, such as a weekend getaway or a big purchase you’ve been looking forward to making.
Your task is to associate the feeling of winning of with any activity that will bring you closer to winning your Money Marathon.
We at Lending Club wish you the best of luck with your Money Marathon!
Just as your friends and family can have a significant influence on your financial life, so too can you influence the financial habits of those around you. If someone in your life is heading towards a financial crisis, then the time may have come for a financial intervention.
Interventions are necessary in many cases where addictions are involved. While most interventions are geared towards addictions that are detrimental to one’s physical health, they may also be appropriate in dealing with addictions that are detrimental to one’s financial health. The most common of these are addictions to spending and to debt.
When you do confront the person, expect resistance. Denial of the severity of the problem is to be expected. If the person realizes that there is a problem, he or she will be more likely to take corrective action. Rather, the person is probably convinced that things are under control.
Involve as many close friends as possible in the intervention. The point is not to highlight the person’s faults but rather to demonstrate that the concern for his or her well-being is widespread and that this support network will be strong during the recovery process.
Stressing the importance of breaking bad habits is only the beginning. Having a concrete plan to back things up is a much stronger position to go to someone with. If your friend’s problem is an addiction to debt, then you could go with a plan of refinancing the debt through a P2P loan from Lending Club. This approach does more than highlight the problem; it also offers a viable solution.
Knowing when a person’s finances have gotten out of hand can be difficult to judge. With the topic of money being rather private, you may need to rely on other habits to judge if a person is in trouble. If you believe that things have gone too far, then staging a financial intervention, with the support of friends and family, and providing a corrective action plan, may be the way to save your friend’s financial life.
An interesting idea that I’ve been hearing about lately is that of the money-free day. Incorporating one into your year, month, week, or even more often may help you achieve your savings goals.
The idea behind a money-free day is to go a whole day without spending any money. The concept is simple, but the implementation is a little more complicated. You’re not trying to pre-pay or defer payments from that day to the day before or after but rather to eliminate spending from the day.
Obviously there are some basic expenses like food that we are all faced with on a recurring basis. For your money-free day, be sure to bring your lunch with you and prepare other meals at home. Doing so will still cost you money in the sense that you bought the food at the grocery store, but will prevent you from incurring a new expense. Also, try to forgo normal daily expenses such as your newspaper or latté for the day. Try riding your bike instead of using your car, when practical, etc.
You can start out having one money-free day. Then repeat the practice more and more frequently as you get more comfortable with the idea. If you can build up to once or twice a week, you could end up saving yourself a considerable amount of money. The more often you do it, the more creative you’ll become for your money-free day. You may get confident enough to take all of the money out of your wallet or purse before you start your day.
What to do with the money that you’re not spending on those days? You could pay down your debt or invest in a P2P loan portfolio from Lending Club. You’ll either be reducing the amount that is subject to high interest charges against you or increasing the amount subject to above average interest returns for you. That’s a real win-win!
There are support programs for everything in life. They are there for a reason, and the reason is that it is much easier to accomplish something when somebody is there with you who has gone through it, understands what you are going through and wants to you to pull through it and win.
In sports, support is readily available – from other people that are doing the same thing, from coaches and from trainers. In training for a half-marathon, the best support that I found effective was having a friend who was constantly there when I didn’t feel like showing up for training.
When training for your Money Marathon, it is important to use as much help as there is available, and there’s a lot of it available if you know where to look and what to look for. Here are several types of support that might be available to you:
1. Unbiased Professionals – These are the lawyers, accountants, advisors, SCORE counselors, and other veteran professionals from your field. For example, sometimes when you’re in a financial bind, you can call your accountant and ask for advice. Because of his or her unique position you may be able to get some general advice to keep you moving further.
2. Biased Professionals – There are many professionals out there, from bankers to brokers to insurance agents, who are willing to explain everything about their products. However, you should keep in mind that they are looking for your business and might not tell you the whole story. It’s best to approach them when you already know what you are looking for and only need them to fill in some details and start the ball rolling on what they are offering.
3. Fellow Marathoners – There are always people that are in a similar race to you who are local. It might help to ask around and research other people who are on the Money Marathon and would be interested in talking about saving, investing and related topics.
4. Online help – Since you are reading this on the web, it is safe for me to assume that you have access to the Internet on a regular basis. There are thousands of sites and groups dedicated to providing support and sharing information on savings tips, investing in stocks, real estate, p2p lending, cost cutting and pretty much anything else you can imagine. Start with a search on Google Groups and Google for forums such as “investing forum” or whichever topics interest you.
We here at Lending Club remind you: don’t go racing off on your Money Marathon alone. It is much easier to be running with somebody or even as a group and having fun along the way, while at the same time supporting each other and sharing information.
In this season of giving, many people make charitable gifts. To ensure that your charitable contribution is as meaningful as possible, it’s important to know where your contribution actually goes.
In most cases, only a portion of your gift will go to the actual intended recipients or charitable purposes. All organizations have overhead and operating expenses, so it should come as no surprise that a portion of your donation goes towards these costs. What you may find alarming is the percentage of donations that go to these costs.
Gerri Willis of CNN urges donors to ensure that they only contribute to charities that use at least 75% of their budgets for their stated mission. The Better Business Bureau uses 65% as its standard when reviewing charities.
Some charities that claim to support Veterans were in the news recently when it was discovered that they give less than a third of their donations to charity.
In other cases, retailers may urge you to purchase items for which a portion of the sale goes to charity. This common practice has also faced increased scrutiny. The problem here is that it’s rarely disclosed what percentage of the sale will go to the charity. In some instances, the supported charities aren’t even aware they are part of these marketing campaigns.
Wherever you make contributions, you should have basic visibility into how the funds are being used. While you won’t necessarily get a detailed accounting of how your individual charitable contributions are used, we at Lending Club remind you that you should at least know the percentage of your donation that will actually be applied to the charitable cause. If you can’t easily determine this number from the provided literature, then your donation would likely be put to better use at an alternate charity.