Our financial life is a reflection of the choices we make, says Larry Winget, author, television personality and motivational speaker. Unfortunately, many of us haven’t been making the right ones.

At a glance
Name: Larry Winget

Hometown: Muskogee, Okla.

Education: B.A., Northeastern State University in Tahlequah, Okla.

Career highlights:
  • Host of PBS special “Success Is Your Own Fault.”
  • Star of reality cable television show, “Big Spender” on A&E Television.
  • Panelist on CNBC’s “The Millionaire Inside: Debt-Free and Get Inspired.”
  • Frequent guest on FOX Business, FOX News, CNBC, MSNBC and the “Today” show as a business, personal development and financial expert.
  • Author of “Shut Up, Stop Whining, & Get A Life: A Kick-Butt Approach to a Better Life,” “It’s Called WORK For A Reason,” “You’re Broke Because You Want To Be: How to Stop Getting By and Start Getting Ahead,” and the forthcoming “People Are Idiots and I Can Prove It! The Ten Ways You Are Sabotaging Your Life and How To Overcome Them” (release date: December 2008).
  • Member of the International Speaker Hall of Fame.

Even before the stock market began its latest gut-wrenching roller-coaster ride, many Americans were already experiencing financial stress — spending more money than they’d earned, living paycheck to paycheck, grappling with ever-increasing debt and facing an uncertain future in retirement.

“The biggest money problem people have isn’t in their wallet or their bank accounts. The biggest problem is between their ears,” Winget says, adding that money problems can be fixed only when attitudinal and behavioral issues are first addressed.

To that end, Winget shares his insights with Bankrate readers about the country’s collective financial problems and provides advice to help individuals improve their bottom lines.

We’ve recently witnessed historic events on Wall Street with respect to changes in the structure of some of the biggest investment banks — and, of course, there’s this $700 billion rescue package. What do these failures on such a massive scale mean to the average American?

If you’re asking what the positive effects are going to be for the average American, well, there probably aren’t going to be that many. Sadly, we have many regular folks out there who believe, wrongly, that this whole bailout is gonna make some positive impact upon their lives. It’s not gonna make any difference. If you’re in trouble today, you’ll still be in trouble tomorrow.

What this is going to do for everybody, though, is saddle us with a huge tax burden that, in my opinion, may be way more scary than what the “fall” would’ve been. The problem is that the markets, both the stock market and real estate market, are in a correction, and I’m not sure that we should do anything to save a correction. We should let it correct on its own because it will correct itself. It’s just going to take some time.

Many argue that the recent spikes in food and energy prices, the downturn in global stock and real estate markets, as well as other factors beyond most people’s control are most responsible for the financial hardships Americans are currently experiencing. It’s obviously much tougher to get ahead now with everything costing more, so what can consumers do to shield themselves from this trouble and to somehow get ahead?

Well, you have to look at what you can control versus what you cannot control.

I ask this of people all the time when they’re griping about the cost of gasoline. I ask them, “OK, name one thing that you can do about that?” The same goes for rising prices at the grocery store: “Can you do anything about that?” And the answer is no. There’s nothing you, as an individual, can really do about that. That’s all beyond your control.

So, control what you can control. Control what you consume. When you don’t use as much, you don’t need to spend as much. So, look at what you’re spending your money on, and if you’re spending money on things that are not absolute necessities, there’s where you can cut back. It always comes back to cutting back on your lifestyle, to limiting yourself to spending money only on what’s really important to you. That requires being able to differentiate between what is a true necessity and what is a desire.

Your philosophy is that Americans’ attitudes with respect to money and its management is really everything. If that’s so, where is the deficiency? What is wrong with the American way of thinking?

From an overall attitude standpoint, we have to get our priorities right. That’s where we always mess up.

Your energy, your money and your time always go toward what’s most important to you. So, if what’s most important to you is looking good, you’ll spend most of your time, energy and money at the mall. If looking cool is most important to you, you’ll get yourself a fancy new car you really can’t afford. If your financial future or kids’ education is important to you, then that’s where your money’s gonna go. Your money always goes toward what’s most important to you.

I could spend five minutes with you and, just by walking through your house, looking at your checkbook, looking at your bank account, going through your credit card statements, I will know what’s really important to you in your life, for you’ve left behind a clear money trail. If people would only sit down and follow their money, they’d immediately see for themselves what their true money priorities really are.

The money trail tells you the whole story and it gives you an honest picture of what you’d been doing and what your choices had been. And for many, that picture isn’t pretty. It basically shows that they’re broke because they want to be, that things other than saving became priorities.

The focus in this part of Bankrate’s financial literacy series is “growing your bottom-line” and, obviously, you cannot do that easily if too much debt is a major problem. So what is your recommended regimen for dealing with debt?

Credit card debt is the worst kind of debt you can have and it’s my opinion that you should pay it off as soon as possible — and you should pay off any other kind of debt that you can pay off and still be able to save some money for a rainy day. But, at a minimum, you really have to go out and knock out as many of those outstanding high-interest credit card accounts that you can.

Emergencies will happen, too, so you really have to save some money for a rainy day. Disasters will happen and you don’t want to reach for a credit card every time you have to pay for them. And there are now dark skies out there for everybody, so we all need some cash to put away. Cash is king — always has been, always will be.

What other steps would you advise people to take to firm up their bottom lines? What should folks be doing — and doing without — in today’s challenged economy?

The first step is to determine what’s really important to you. If you are already in “crisis mode,” you have to spend your money accordingly — no money for anything but what’s essential.

Second, you have to get in control of your debt and you have to do that immediately. You have to take a look around and see what debt you can get rid of right away. Personally, I like to take a look at how many places you are in debt and then start reducing that number. I think that that builds confidence. If you owe money to five people and, suddenly, you just owe money to four people, it’s almost like you’d knocked out 20 percent a year debt just because you are dealing with fewer people. Sometimes it’s not as gratifying to be paying off, say, your high-interest debt. Sometimes it’s just as nice to be able to knock out one loan so that it’s no longer nagging at you.

Third, you absolutely have to adjust your lifestyle. That’s an area that people have trouble with, because they’ve established habits and they’re not willing to change them. So, you have to circle the wagons as a family, you have to pull together. You have to bring everyone in your life together and inform them of the situation so that you can’t hide it anymore at this point in your life. All of those dirty little secrets about secret spending can’t be secret anymore.

Fourth, you gotta get everyone on-board and thinking, “How can I bring in more money?” There are only two ways to get ahead: spend less; earn more. So, you gotta ask yourself, what can I do to earn more? Can I work more overtime? Can I find time to work a second job or do something extra part-time? And then take a look around and ask yourself, “What can I sell?” And then go through your house and start getting rid of some stuff. We all have tons of stuff that we can get rid of.

Do everything to get more cash coming in, to have more money that you can direct at your debt. And once that’s addressed, start putting money into savings.

OK, let’s say that someone has followed your advice with respect to debt-repayment, and they’re now well on the way to getting their finances in order. What must that person then do with the money that’s accumulating? How should it be divided up to ensure preparation for short-term needs and long-term goals such as retirement?

If you are personally going to handle your own money, then I would put it into something that you personally will understand.

One of the problems that I have with people is that they tell me, “Well, I watch so and so on television and he says that I should do this with my money, and he’s training me to do …”  Listen, if you take an amateur and you give them just a few skills, you’re still dealing with an amateur.

I myself am an amateur, which means that I don’t want to be investing money myself because, when it comes to the more complicated investments, I am an amateur. I know that about myself. When it comes to the things that I don’t understand, I turn to a professional. And if you don’t understand a great deal about investing, you need to get yourself in touch with a qualified financial adviser.

Bearing in mind what has happened to the real estate market in America, would today be a good time to consider becoming a landlord to help grow one’s bottom line?

Not only yes, but, and you can quote me, heck yes. I think that if you have the money to invest in real estate, this is a great time to buy. If you find a good piece of property that you can afford, and you can get a good a rate on it, it’s an excellent time to buy a home or an investment property.

People across this country are losing their homes, yet they still need a place to live. They don’t have enough money to be homeowners, but they have enough money and income to be renters. And this is a situation that you can definitely take advantage of.

How should an investor go about this? Does it make sense to look mostly at distressed real estate such as foreclosures, for example?

First, find a piece of property that’s valued right, work with a true real estate professional, and don’t get into that old “flip-this-house” mentality that got a lot of people in trouble. You gotta keep looking at this as an investment and something you are going to own and rent over the long haul.

The problem with a lot of this stuff that’s now in foreclosure, well, it’s just getting hard to get. They make it seem that you can just go out there and pick up all of this stuff on short sales, etc., but this stuff is just getting harder and harder to pick up.

In my opinion, it’s a lot easier to go out and look for places with the old “for sale by owner” signs. You know, the stuff that’s being put on the market by some couple who are getting older or who have some money and are going to upgrade. And if you can get that, it’s just a smoother, quicker deal all around.

How can one keep on the straight-and-narrow path, financially speaking? What’s the best motivator to keep on track?

People have a tendency to fall back into old habits, so that’s why it’s so difficult to stay on the straight and narrow. If it’s really important to you, that’s where your money will go. So, make sure that you are really and truly motivated to keep making the right choices for yourself and for your money. Money is like anything else: It’s not a question of how you’re gonna do it, it’s a question of why you’re gonna do it.

I worked with a woman, and her life was a true disaster. She was facing bankruptcy and was in debt everywhere and she could see the impact this was all having on her 11-year-old daughter. And she told me, “Larry, I have to fix this because it’s upsetting my daughter. I’ve been a bad role model and I’ve got to fix this for her.” That was her motivator, it was the “why” that kept her on track.

So, pick a motivator, pick a reason as to why you want to change your life for the better.

Any final thoughts or words of advice you’d like to impart to Bankrate’s readers?

It’s OK to enjoy your money after your bills are paid, your investments are made, a portion of savings is set aside for emergencies, and you’re left with some cash that you can then just play with. That should be the goal for people. Once you get there, you can feel free to set aside some money to enjoy. Because money, in the end, is merely a tool that gives you the freedom to go out and enjoy your life.

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