“Firing” myself was the very best thing I ever did – and it might be the best thing that you could do for yourself too.

Before you conclude that I’m completely out of my mind, let me ask you a question:

Do you continue to disappoint yourself in some aspect of your (financial) life?  Spending, budgeting, saving, investing, earning?

If so, you may want to “fire” yourself like I did and “hire” a more qualified manager. The good news is, life will improve tremendously.  Even better, it may not cost you a cent to do it.

Let me explain.

I have a small business and (at times) I’ve suffered from the “Superman Syndrome”.

I used to think that I could do everything better, faster and smarter than everyone else.  I’m not proud of this but it’s true and it’s cost me plenty

Of course, as time went on, the facts and results got in the way of my ego.  There were certain things that I did very poorly and even though I knew it, I continued this self-destructive behavior.

Let me give you an example.

I love to tinker with the computer and many years ago, I designed a system to automate a part of my business.  It worked….to a point.  But it had some flaws that continued to pop up – and each time a flaw did come up, it cost me time and money to fix.

Rather than realize what was going on, I threw myself into the problem.  I spent more and more time trying to improve the program I wrote.

Finally, after months and months of wasted time and money, I “fired” myself and hired a programmer to do the job for me.

As a result of his work, I’ve saved countless time and money.  In fact, the money I invested in him was paid back in the first month just in reduced errors.  “Firing” myself turned out great.

Of course, the idea of “firing” yourself goes much further.

I’d like to give you another example:

When I first started my business, I was full of fear.  My wife was working in our home.  Since I was the only one bringing in money, I was deathly afraid of what might happen to our family if the business didn’t make it.

I experienced real financial terror growing up (since I was homeless for a short time) and I was fully committed to making sure that wouldn’t happen to my wife or kids.

Nothing wrong with motivation….but I became obsessed.

I refused to spend money on anything other than the bare necessities.  Keep in mind that we weren’t in debt at the time and the business was generating a decent income.

Even after the business established itself, my tight-wad ways continued.

I stayed in the fear-mode much longer than even I could justify.

I wouldn’t go out to restaurants or movies.  I wouldn’t buy anything and I would “encourage” my family to live the same empty life I imposed on myself.

I was miserable and I’m sure my wife was too.  It was no way to live.

Fortunately, I “fired” myself before my wife did.

“Firing” myself saved my family and made my life enjoyable again.

I’m pretty passionate about this because I think it’s terrible for anyone to struggle when they don’t have to.  If you face similar issues, here’s how you can “fire” yourself:

1. Write down what part of your (financial) life is out of control.

What problem do you find yourself confronting all the time?  What comes up? Are you constantly taking the wrong jobs?  Do you have the wrong spending habits?  Do you promise to track your spending….but never follow through?  What is it?

How do you hold yourself back? How do you sabotage yourself?

We all have character defects. What are yours? Are you lazy? Is that why you stopped tracking your expenses? Is that why you’re sitting on the couch rather than looking for work?

Do you fight with your partner about money because you are selfish? Have you stopped investing because of your fear? Does your arrogance alienate others who might otherwise provide good counsel?

2. How does it make your life unmanageable?

What is the result of your “best efforts”?  For example, as hard as I tried, I couldn’t stop worrying about money.  I couldn’t stop clamping down on my family – even thought I knew it was wrong.

Do you or your family go without? Do you constantly fight?  Are you making your partner’s life miserable?  Are you stressed constantly – no matter what you do? Do you spend recklessly and then wonder why you have a huge credit card bill (and then repeat this process over and over again)?

If you really want to get to the next level financially, be honest. It’s this lack of honesty that keeps people buying financial books and systems. They keep looking for the magic bullet that’s going to fix their problems. Instead, look for your own character defects and become willing to do the work.

3.   What have you done to try to get this under control and what was the result?

Have you made promises to others (or yourself)…..only to break those promises sooner or later?  Have you signed up for classes that might help you get a better job – only to not show up?  Have you installed budget tracking software, and then failed to use it?

This reminds me of the smoker who explains how easy it is to quit smoking; it’s so easy he quits once every day.

If the result is always the same – failure – you need a different solution.  And here it is:

Fire yourself

This advice may sound strange but think about yourself as a business.

If you had an employee who continued to mess up time and time again, you’d fire him, wouldn’t you? If someone demonstrates a complete lack of ability to perform a given task, she’s gone. Right?

Let’s say you’ve tried and failed several times to track your expenses. You’ve made promises to yourself that you break time and time again. You’ve failed yourself once too many times— so fire yourself.

Hire a better manager.

One way to do this is to “hire” an accountability partner and “report” to her.  It can be a friend or your spouse.  Anyone who has the qualities that you want.  Someone you trust and respect.  Someone you are willing to take direction from.

Keep in mind, that when you “fire” yourself and “hire” another person, your mind will play tricks on you.  There will be a little voice inside that will keep lying to you. It will tell you that you don’t need to follow direction.  “You are a grown up and you can decide things for yourself” the voice will say.

This is a lie.  You’ve already proven that.  That’s why I asked you to write down all the steps you’ve taken to try to correct the problem and what the results were.  There is no shame in asking for help – but that little voice inside your head will tell you that there is.

Don’t listen.

You “fired” yourself.  That’s all you have to remember.

Don’t be embarrassed to ask for help.

Look around. There are plenty of people in your life who would be happy to be on your team. Tell them what it is you want to do and do it. Tell them you want them to be your accountability “boss”. Tell them the problem you are trying to solve, be honest about it, and commit to take action and report daily or weekly, as the case may be. Tell them that they can “fire” you if you fail to live up to your promises.

This one idea has helped millions of people overcome serious problems such as substance abuse, and it can be invaluable to you as well.

Stop thinking and take action right now.

If you’ve gotten this far, you know what to do. Get a piece of paper and go through the action steps I outlined above.  Go “hire” your new accountability partner. Make the call now.

Don’t think about it anymore. Do it.

Fortunately, these techniques work for me. I have to keep doing the work by checking in with my accountability partner but it does work if I do my work.

Do you need to “fire” yourself?  Have you already done so?  What has been the result so far?

As debt freedom moves closer to reality in the Frugal household, my dreams have again turned to the idea of venturing out on my own. I’ve been fortunate to enjoy some growth around here these last couple years, and my combined earnings from all freelancing ventures are enough to support us comfortably once we are debt free.

Most of you know that I’m a pretty conservative guy. Let me say it another way – I hate risk! The idea of becoming an entrepreneur is exhilarating and terrifying at the same time. But it is something I have wanted to try since the very earliest moments of my career. Until now it has been a pipe dream.

To overcome my fear of crashing and burning, and taking my family down with me, I’ve decided to implement a couple actionable steps that should provide an adequate safety net, both for my household, and my business.

Building an Entrepreneur Fund

1. Take an inventory of all household expenses. Make a master list of all household expenses using last month’s records. Apply no filtering here; just list.

2. Develop a projected household budget after leaving the workplace. When I turn in my notice, a few things will change around our household, financially. Some “employment” expenses will go away or be lessened (gasoline, clothes, meals out, etc.). Other expenses will increase (self employed health insurance, etc.). Get quotes on things like health insurance and office space rentals now, and factor those new expenses into your projected budget.

3. Save one year of projected expenses in an “Entrepreneur Fund.” Think of it as an emergency fund for your business. Worst case scenario – my idea completely flops after six months and I have to hit the pavement looking for work. In that case, a year of expenses in the bank would make me much less desperate!

Since I included a few self employment expenses in the mix, I recognize those go away if I give up the entrepreneurial endeavor. For instance, the expense of leasing office space eventually dies off with the end of a lease or rental agreement. Self employed health insurance stays around until I’m working again.

*From this point forward, the steps are highly individualized for my situation. Maybe it could work for you, too, or maybe not. Do what works best for your circumstances.

4. Move Entrepreneur Fund to an online savings account and schedule a biweekly draw to your personal checking account equivalent to half of monthly household budget. My income as a freelancer is somewhat erratic. There are a few forms of ad income that hold steady each month, but nothing is a sure thing.

To offset the peaks and valleys, I plan to “pay” myself the same amount from the Entrepreneur Fund every two weeks, just as if I was receiving a paycheck from my employer.

5. Transfer monthly profits from my business account to Entrepreneur Fund. At the end of the month, I will make two transfers to online savings – one to my self employment tax sinking fund from where quarterly estimated tax payments are made, and the second to transfer profits to my Entrepreneur Fund.

During months where earnings are high, I’ll be replenishing more than I’m spending. At the end of the year I’ll plan to do a re-balancing of my account taking the balance back down to 12 months of household and business expenses. The excess profits will be invested as profit sharing via a self employed retirement account.

In lean times, the Entrepreneur Fund will allow us to continue to receive the same draw in the form of a paycheck. In other words, temporary downturns will not affect your household. Of course, long-term downturns could be problematic as my Entrepreneur Fund balance slowly drains. Without cutting expenses, or turning around earnings, I’d be looking for other sources of income and fast, but at least I’d have a few months as backup.

If you are like me and have always dreamed of becoming an entrepreneur, I hope you will consider building a healthy Entrepreneur Fund before taking the leap. I believe many more businesses could stay afloat if they had a stronger cash position early on to survive that first inevitable income dip. Without savings, business owners are often forced to turn to borrowing to pay expenses, make payroll, etc. The debt creates yet another expense, and without a quick turnaround, only speeds up the demise of the fledgling business.

As if it’s not enough that we’re living it, we have to listen to people talk and strategize about it – the recession has put all of us in a spin and it’s going to be some time before we can recover enough to go back to the life we were used to before. But if you think of the situation beyond the surface hardships, in a way, a recession is a great time to learn good spending and thrift habits, whether you’re an individual, a family or a business.

It’s the small and medium businesses that are hit the hardest; with not much of a cash cushion to help them ride out the storm, they have been forced to effect layoffs and salary cuts, measures that don’t win them any points with the employees that remain. One of the best ways to see off the recession is to tighten your belt and begin to live frugally, an initiative that must percolate down from the owner and manager of the business, to the most insignificant employee. You can start your cost cutting measures by:

• Reducing your electricity and water usage: Offices are infamous for leaving their lights on all throughout the day and night and for appliances and gadgets that are always on standby. This not only causes you to use more power and harm the environment, but also raises your recurring monthly expenditure significantly. Begin by asking your employees to make a conscious effort to not switch on lights during the day and to practice switching them off when they’re leaving a room for some time. Shut down computers, printers, fax machines and other appliances when they’re not being used for a long period of time or overnight. You could also save on paper by using both sides to print or by taking the email route for most of your communication needs. These are small measures indeed, but they sure go a long way in helping you save some money at the end of each month.

• Minimizing risks: It’s better to take calculated risks rather than foolhardy ones that put you in a hole of debt that is hard to climb out of. Most organizations have gone back to depending on cold, hard cash rather than leverage to do business. And even if they are borrowing money, they do so at low interest rates and pay their bills every month so that the outstanding does not keep rising.

• Keeping personal expenses separate: Just because you own the company, it does not mean that you have an unlimited expense account. You need to separate your business interests from your personal ones by spending only your salary or monthly allowance on yourself. Remember to look at the long term benefits of making your business grow rather than paying yourself more just because your expenses are too high.

• Not going overboard: And by this I mean that it’s not necessary to be penny wise and pound foolish – there are some people who try to do everything by themselves in order to cut costs. But there is a difference between being frugal and being plain stupid. When you try to do too much, especially if you’re not sure about what you’re doing, you end up making a mess of it and having to spend more than your original budget in trying to put things right.

This article was contributed by Nicole White, who writes about online web design school. She invites your questions/comments at Nicole.White222 @gmail.com.

In the days before emergency funds are fully established there will come a time when you need to generate some quick cash.  In a worst case scenario you may need the cash to pay a utility bill, a medical bill, or even your mortgage.  In a real emergency, every little bit of cash helps, and here are several ways to raise cash quickly.

1. Take a “day laborer” job. Check out the classifieds for listings looking for day laborers.  Often times contractors are looking for people to do some type of manual labor for a short duration, even as short as one day.  It could be cleaning up a job site on a new build, or tossing bricks up to guys on a scaffold.  You’ll probably earn minimum wage, or only slightly better, but for a couple days work you could clear $100.

2. Sell Your DVD Collection on Ebay.  Seriously, how many of those DVDs do you really watch repeatedly?  I can count on one hand the ones I would want to keep, but the rest could be sold and I’d never miss them.

3. Work surveys at CashCrate.  I’ve been a member of CashCrate for nearly two years now, and still work surveys for extra grocery money.  It may take a while to get to $100, but hitting the minimum payout can easily be done the first day. Talk up CashCrate to your friends and family and have them sign up under your name, as the real earning opportunity is in the referrals.

4. Ask neighbors if you can mow their lawn.  Even if you don’t consider yourself a “landscaper,” you could easily mow, edge and blow a couple yards for your neighbors on a Saturday morning and make $100.  You’d be surprised how many people will take you up on the offer just to take a week off from yard work!

5. Hold a yard sale. One of the faster ways to raise cash is to hold a yard sale.  You don’t have to spend a lot of money on advertising.  Simply buy a few pieces of brightly-colored poster board and a fat magic marker.  Write “YARD SALE” in bold letters, followed by the times and your street address.  Place the signs at major intersections to draw traffic.  For other ideas read more tips for a successful yard sale.

6. Sell gold jewelry.  Thanks to the recession gold prices are still running high. If you have some gold jewelry sitting around that you rarely wear, it might be worth offering it up to broker such as Cash4Gold, who will give you cash in exchange for allowing him to melt it down and resell it for a profit.

7. Be a medical guinea pig.  Medical research facilities and universities will pay participants to take part in trials, surveys, and other types of research.  Tread carefully here; some trials could have negative medical consequences, while things like surveys and sleep studies don’t seem so bad.

8. Donate plasma.  Most cities of any size have a donation center that will offer $25-$35 for a donating plasma.  And depending on your medical condition you may be able to donate up to twice a week.

9. Redeem your credit card rewards.  Even if you are like me and you haven’t used credit cards in a while, but are working to pay them off, chances are there are some rewards points accumulated from past spending.  Contact each credit card company and ask about your rewards balance.  Redeem what is available in the form of cash (check from company), or a gift card to a store you can buy some household essentials (Walmart, Home Depot, etc.).

10. Sell your books online.  Services like Cash4Books.com will provide an online quote for your books and even add a little extra for the trouble of shipping.  Books that don’t sell here may sell at sites like Amazon.com marketplace (a great place to sell textbooks) or eBay.

11. Take something valuable to a pawn shop.  Musical instruments, computer equipment, jewelry and sporting equipment in good condition all sell well at pawn shops, and owners are more likely to give you cash for these items.

12. Sell company stock.  If you currently participate in an employee stock purchase plan at work, consider cashing out if you are in need of cash. Company stock is not well-diversified, and often the cash could be put to better use, even if it is simply reinvested with a broader diversification.

13. Ask to work overtime.  With unemployment running high, and little budgeted for new hires, you may be able to work a little overtime if demand justifies it.  Talk to your boss about working some extra hours and you should have a little extra in your next paycheck.

14. Gather up loose change.  If you are like me you probably have a couple stashes of loose change – on top of your dresser, in the cup holder of your car, and the cracks between sofa cushions.  You can either roll the coins in wrappers provided by your bank, or visit a Coinstar machine in your area to convert the coins to cash.  Coinstar charges a fee for cash payouts, but you can get an Amazon.com gift certificate for your full balance, which could be used to buy just about everything under the sun.

Money Makers

• Cash4Gold wants to buy your unwanted gold and other precious metals from you today! Click here to get started!
• Take Paid Surveys At CashCrate.com
• Cash For Books – We Buy Books & We Pay The Shipping!

I received the following question about self employed health insurance, and because I know many of you are business owners, or blog full time, I hoped you could provide some real world help for a fellow reader looking for health insurance.

Robert writes in with the following question:

I was wondering if you knew any ways self employed individuals could buy health insurance?  I have been taking your advice on building a “side hustle,” and luckily enough it is now bringing in more than my full time job.  I am eager to quit my regular job and take this side hustle full time, but worry about health insurance for me, my wife and my young son.  Any ideas?

Robert, first of all, congratulations on building a second income substantial enough to replace your full-time job.  You may remember from my New Year’s goals post, that is something I hope to one day achieve as well. Also like you, I have questions about how to provide health insurance for my family, outside of the traditional group policy where I work. I have a few ideas to get you started, but will rely on readers to fill in the gaps by sharing their expertise on the subject.

1. Continue current coverage under COBRA.  According to the Department of Labor website, you, your spouse, and your son may continue health insurance coverage based on your “voluntary or involuntary termination of employment for reasons other than gross misconduct.”  COBRA is expensive because you’ll have to pay both sides of the insurance premium (your employer probably used to pay the majority of the costs), and you may only be eligible for up to 18 months, so it is not a long-term solution.

2. Apply for a health insurance policy at eHealthInsurance.com.  eHealthInsurance.com is one of the leading sites for providing quotes on personal and family health insurance coverage, coverage for small businesses, and short-term policies. I highly recommend you get a free instant quote there first.

3. One spouse continues to work and receive benefits.  Something my wife and I have discussed is the idea that she could return to work to receive family health insurance coverage if I ever branch out on my own.  This might be a tough sell, particularly if there are child care issues to consider.

4. Work part time for an employer that offers benefits.  They are few and far between, but there are a few employers out there that offer health coverage to part-time employees.  Starbucks and UPS come to mind.  It might be possible to do your “side hustle” during the day, sling a few boxes at night, let mom stay at home and still get benefits. This one may be a long shot.

5. Consider membership in trade associations, unions, etc.  When investigating this option for myself a few months ago someone recommended joining various freelance associations (such as the “Freelancers Union,” and various groups for writers), which offers group health care options for its members.  I also noticed places like Sam’s Club offer group policies to their members through providers such as Blue Cross Blue shield, etc.  You will probably pay more than you did as an employee, but less than you would for COBRA.

6. Consider a high-deductible plan along with a Health Savings Account (HSA).  If you and your family are relatively healthy, you might investigate an HSA with a high-deductible, or catastrophic, health insurance plan.  Basically, a catastrophic plan has low premiums because it only pays for things over several thousand dollars (think heart attacks, accidents, etc.).  The health savings account is established to help pay anything and everything up to that high deductible.  This option requires a good chunk of cash to fully fund the HSA up front.  It’s also a risky plan, but a lot cheaper alternative to traditional health insurance, and a lot safer than having no insurance at all.

For the last few weeks I have been selling items on eBay to finance two operations. I have been on a reading kick lately and am reading anything and everything I can get my hands on related to personal finance and personal development. I truly believe the saying, “You’ll be the same person you are today five years from now except for the people you meet and the books you read.” I find books on eBay, read them and auction them on eBay in the span of a week or two.

Ebay profits are also going towards my debt snowball plan and I am discovering even micro-payments here and there can drive down interest charges and overall balances. I’ve been buying and selling on eBay for years, but this is the first time I’ve put the proceeds to good use. Over time I have assembled some selling tips that I’ll pass along here, hopefully they will improve your selling totals, too.

Start 99% of your eBay auctions for $0.01. EBay makes money by charging sellers both a front-end and back-end transaction fee. The fees are based on the item’s beginning price and final selling price. No sense paying more in fees just to start your item off at a higher price. I’ve found that $0.01 auctions tend to generate a lot of interest at first and create a lot of “watchers.” These watchers will monitor the item throughout the selling process and come back near the end of the auction to bid. It’s tempting to set the starting price closer to what you would like to actually get paid, but I’ve found this method to be both costly and largely ineffective. One disclaimer: If you are selling a high-priced item you may want to consider a higher starting price, and/or setting a reserve price.

List your items at the end of the day. Most people peruse eBay auctions later in the day, so consider listing your items in the evening to get maximum exposure near the end of the auction. Consider the various time zones – ending your auction too early may not allow those on the west coast enough time to get home, have dinner and fire up eBay to see your listing. Listing items around 10:00p.m. EST has always worked well for me.

Time your auction to end on a weekend. Auctions ending on a weekend tend to generate more interest, and therefore higher selling prices. If you are using the most popular 3-day auction (and I recommend you do) list your item on a Wednesday or Thursday evening so that it will end over the weekend.

Personal messages and your own photos add a unique touch. Technology has made things easier over the years by giving those selling on eBay a product look-up via UPC codes, and stock photographs to insert in auctions. While these shortcuts do save time I recommend taking a couple minutes to include a personal message in your auction. Include your reasons for selling whether it be as simple as you’ve read the book and you are passing it along, or that you are are trying to get out of debt or build an emergency fund. If you have access to a digital camera consider snapping a shot of your item and replacing the stock photograph provided by eBay. Actual photos are great for showing item condition, guaranteeing a certain quantity, etc.

Stick with PayPal. I highly recommend signing up for Paypal and using it exclusively to handle your eBay transaction processing. Several years ago people were skeptical of using online payment services and sellers had to offer alternative methods of payment. However, most people today, especially those using eBay, are comfortable using PayPal to pay for winning auctions. It sure beats waiting on checks or money orders to be mailed and cleared.