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Recently I was planning my training schedule for a big race that is coming up in six months, and it occurred to me that personal finance is similar to a marathon race. We at Lending Club believe that there are many money lessons that can be learned from a marathon. I have put together some ideas that I have on this subject, and in the following days you can read the following posts:

1. Defining and Goal Setting – Many times we hear so much about money, stock market and personal finance that most of it doesn’t get through to us. Defining what personal finance success means to you and setting goals is the first step.

2. Where Am I At Now? – Before determining how much there is to do, you have to determine where you are starting from, and what shape you are in now. Sometimes an assessment of your current financial state turns out to be better than you thought.

3. Where Do I Want To Be? – Once you have figured out where you are now and what you have to work with, the next step is to find out where you want to be. In a race this is usually done for you, but with money, you’ll have to set the goal yourself.

4. Short-Term Focus – In order to win with long-term goals you have to focus on what you can do to achieve those goals on a daily basis. Reverse planning should be used – start with the goal and a date and work backwards.

5. Zero-based thinking – “Knowing what I now know, would I get into this investment, business, partnership or deal again?” If the answer is no, your next steps should be to figure out how to get out of it and how fast.

6. Have a Fun Fund – When the going gets really tough and the motivation drops, you should just drop and do nothing. Finances should not just be all about sacrifices and hard work. Set aside a fund that is dedicated to nothing but fun things to do.

7. Make It Automatic – Training for a marathon should be put on autopilot. You don’t want to be thinking about your workout clothes or where your shoes are. You want the least friction possible. Same principle applies to your finances; make it automatic whenever you can. You can contribute 10% of each paycheck to your P2P loan portfolio on Lending Club, for example.

8. Compete Against Yourself Only – Competing against others will only get you frustrated and demotivated in record time. There will always be somebody that comes along that is better or can do better. The best thing is to make sure that you are only competing with your previous numbers.

9. Support Will Carry You Through – Training for hours can be tough and it’s often easy to talk yourself out of doing it. If you train with a friend, he can carry you through your rough times, and you can carry your friend through his rough times.

10. Win – Set up small wins and big wins for yourself after small intervals, before you achieve your ultimate goal. This will help you to keep focused and will reinforce your behavior and help it become a habit that you automatically default to.

In a very recent article, I talked about the difference between being cheap vs. being frugal. I defined the difference between the two as follows.

• Being cheap - You are unwilling to spend money on anything. Even stuff you need. You go out of your way to save money, even when it might not be a great idea.

• Being frugal - You don't waste money. You spend it on things you need, and save it on things you don't.

Well, Trent over at The Simple Dollar wrote a great article about the major differences. He takes the same standpoint that I did--being cheap is inherently bad, while being frugal is not. He writes:

"In a nutshell, a frugal person seeks to find the best deal on an item that meets the desired level of quality... On the other hand, a cheap person will always take the route of least financial cost in the here and now."

But, as I said before, being cheap is often more expensive that being frugal. Trent agrees. If you are cheap, you buy lower quality items much of the time. When they break, the cheapskate has to spend extra money fixing or replacing them. Fortunately if this happens to you, you can get a good P2P loan on Lending Club for all of your household needs.

Are you cheap or frugal? At Lending Club, we want to make sure you aren't wasting the money you worked hard to earn.

In my last article, I wrote about the difference between being cheap and being frugal. Here is how I defined the two.

• Being cheap - You are unwilling to spend money on anything. Even stuff you need. You go out of your way to save money, even when it might not be a great idea.

• Being frugal - You don't waste money. You spend it on things you need, and save it on things you don't.

The difference is mainly that being cheap actually hurts you, while being frugal is typically beneficial and will save you money in the long run.

So how can you determine if an action is cheap or frugal? Ask yourself these questions:

1. How much money are you really saving by not spending some money?

For example, my mom loves to fill empty shampoo bottles with water to make them last longer, rather than just buying a new bottle. How much money is she saving? Maybe a few pennies, because it only saves us the cost of one or two showers.

If you are going to buy a cheaper item, how much is the price difference between the more expensive and the less expensive items? Is the difference very small?

2. What is the difference, qualitatively, by spending less money?

If you were planning on buying a book, and decided to save money by buying a cheaper book, what is the difference in the quality? If you are buying a piece of clothing, is the more expensive one significantly better in quality or aesthetics? For example, I had to buy a wallet, and I paid $10 extra to get one that was inlaid with a sweet red cloth. Although it was $10 extra, I smile every single time I pull out the wallet---I consider it $10 well spent.

3. What are the long-term negatives of saving that money?

Buying books is a great example of this---if you save $20 on a book that could have potentially given you a great idea, did you actually save money? Sometimes, spending money is an investment. A book can give you an idea, an investment can get you a monetary return, and money spent can become money earned.

We at Lending Club want you to save money as part of your overall financial plan. Put some money into different types of saving and investment vehicles including P2P loans on Lending Club. If you want to spend a few extra dollars to get a nice pair of shoes, that's okay. Just make sure you aren't spending enough to ruin your finances.

Are you cheap or frugal? Although everyone has different definitions for these words, here is how I use them:

• Being cheap - You are unwilling to spend money on anything. Even stuff you need. You go out of your way to save money, even when it might not be a great idea.

• Being frugal - You don't waste money. You spend it on things you need, and save it on things you don't.

Clearly, being frugal sounds better than being cheap--that's how I defined it. ☺ The problem with being cheap is that not spending money is actually hurting you or your finances, not helping you.

How can saving money hurt you? Well, take a look at this article from WiseBread. The writer's mom saves up ketchup packets, and when her ketchup bottle at home is empty, she cuts up each of the packets and refills the bottle.

That is being cheap, not frugal.

Now, maybe she enjoys cutting up the packets and she considers it fun and relaxing. That's a different story. But if she does it from a money-saving standpoint, well, that isn't very smart at all.

The money she saves by cutting up packets (what, maybe $2?) is not even close to being worth the time it takes to do it (1-2 hours, probably). In that time she could do a multitude of things that might make or save her money, like planning her finances, or working. However, even if she didn't do any of those things, she only saved $2 dollars. That amount of money isn't worth 1.5 hours of cutting and squeezing plastic packets.

The point of having money is to use it wisely. (On a side note, when the shampoo at my house gets to the bottom, my mom fills it with water and shakes it around and uses that. When I got to college, I was surprised that everybody didn't do that.)

Don't be cheap. Be frugal. Then take all the money you’ve saved and invest in P2P loans on Lending Club.

Here are six more tips to insure that your Holiday spending doesn’t break the bank. The first six tips can be found here.

1. Watch the small expenses – When setting a budget for Holiday spending, make sure to include small expenses, such as postage, shipping, wrapping paper, greetings cards, etc.

2. Avoid spending future money – Don’t plan on paying off your holiday debt by hoping for a tax return or a wage increase. This is money that might never appear and you might be stuck with paying for debt for longer periods of time. If you know you have some big-ticket items you’re buying, get a P2P loan through Lending Club to cover these expenses.

3. Give your time – Would your kids appreciate two fishing trip “coupons” more than just buying them a $75 video game? Or would giving your friend a “3 lunches on me” coupon make a better gift? There are many different ways that you can give of your time and it would be a more meaningful and cost effective gift.

4. Get the kids involved – If you have kids, have them design the cards that you will send out to close family and friends. This will get them excited in a time that is often stressful for the parents, and it will make the cards stand out from regular store-bought cards. It’s a fun family activity that will also save you money.

5. Don’t open up a new card in every store to save an extra 10% – Open up a new card in every store and you will end up spending more than you ever budgeted for. On top of that, you might end up carrying the balance for a long time and paying high interest rates on balances.

6. Don’t give gift cards – While gift cards may seem helpful by saving you time and ensuring the recipients get what they want, you may want to think twice about giving them. The cards might go unused or get lost. Merchants might also tack on hidden costs and fees.

Do you have any good tips to share?