Managing Money As A Single Parent – Part 06

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

Part Six  Gain financial wisdom.

You must gain financial wisdom. Without it, winning with your money will be virtually impossible. In Proverbs 4:7, Solomon shared, “The beginning of wisdom is this: get wisdom. Though it cost all you have, get understanding.” If Solomon, one of the wisest people who has ever lived, realized it was worth “all you have” to get wisdom, we should all take note! You could have more degrees than a thermometer and still be broke!

You must gain financial wisdom.

Recognizing that time is a valuable and precious commodity for you, here are some ways to gain financial wisdom without feeling like you need to complete days and weeks of college course. Read books about personal finances. Attend one or two day personal finance conferences taught by me or other financial teachers (like Dave Ramsey and Robert Kiyosaki). Take online on-demand personal finance courses (like the one I provide called the I Was Broke. Now I’m Not. Core Coaching Program).

PRACTICAL STEPS TO TAKE:

  1. Read two financial books each year
  2. Take one financial class each year
  3. Meet with a financial coach once each year (see final section)

Managing Money As A Single Parent – Part 05

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

Part Five  Establish automatic long-term investments – then monitor

In the midst of the busyness and chaos of being a single parent, retirement and college expenses are approaching – one day at a time. It is vitally important to prepare for them.

While investing can seem very intimidating and potentially overwhelming, it certainly doesn’t have to be! If you have a Retirement Savings Plan (RSP) available via your employer, begin with contributions to that account, particularly if a company matching contribution is available. The ultimate goal is to contribute at least 15% of your gross income (before tax pay) to your retirement account. If you can’t start there, begin with an amount that enables you to receive the entire employer matching contribution.

Retirement and college expenses are approaching – one day at a time.

As you receive pay raises, use half of the raise to increase your retirement contribution until you achieve the 15% level. For example, suppose you are contributing 3% of your pay to the company 401(k) in order to receive their matching contribution of 3%. You receive a pay raise of 3%. Immediately adjust your investment contribution from 3% to 4.5% (half of your raise). This way, you will still receive some of your raise in your paycheck while also securing your future retirement. It is important to fund your retirement account prior to your children’s college fund. Usually money only flows from parent to child – not child to parent!

As your financial situation improves, you can begin contributing to a 529 College Savings Plan for each of your children. One great approach is to establish a 529 College Savings Plan account for each child and ask their grandparents to reduce their Christmas/Birthday/Special Day spending on “stuff” by half and send the other half to each child’s college account! Grandparents love it, and we all know that children like the boxes their toys come in better than the toys themselves!

PRACTICAL STEPS TO TAKE:

  1. Ensure you are contributing enough to your employer’s retirement savings plan to receive the full matching employer contribution
  2. As you receive raises, use half to increase your retirement investments until they reach 15%
  3. Establish a 529 College Savings Plan for each of your children
  4. Invite your children’s grandparents to contribute to the accounts as part of their gifts to the children on their special days – Christmas, Birthday, other Special Days

Managing Money As A Single Parent – Part 04

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

Part Four  Establish financial margin

Nothing will create financial pain and agony like having no savings. Without financial margin, you will always be on the brink of financial disaster. If you are a single parent with no money in savings, you clearly understand that even simple expenses like replacing a car tire can wreak havoc not only on your finances, but also on your emotional well-being.

You can not PROSPER if you do not SAVE.

It doesn’t have to be this way! As outlined in I Was Broke. Now I’m Not. [Click HERE to get your copy], the first step to establishing financial margin is Rung #2 of the I Was Broke. Now I’m Not. Ladder – Saving an amount equal to one month of your expenses. For most single parents, this is between $2,000 and $4,000. Your number will vary based upon your geographic location and cost of living. If you have this amount in savings already, you know how very important it is to your financial and emotional stability! If you do not have this amount saved, take clear note of this fact: You can not prosper if you do not save. It is simply impossible.

This is yet another reason why it is so important to prepare a monthly budget. You will not stumble your way to saving money. It happens on purpose through the use of a good budget. It allows you to be intentional about saving money and establishing financial margin. Ultimately, you want to grow your savings to an amount equal to three months of expenses (Rung #5 of the I Was Broke. Now I’m Not. Ladder).

PRACTICAL STEPS TO TAKE:

  1. Determine your savings goal (One month of expenses for you is: $______ )
  2. Save your entire tax refund
  3. Eliminate a regular expense or bill that is a “want” (like Cable, Starbucks coffee (gasp!), or gym membership) and save that money until you’ve achieved Rung #2 of the IWBNIN Ladder.

Managing Money As A Single Parent – Part 03

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

Part Three  Move to equal payments where possible.

As a single parent, surprises are unwelcome, especially financial ones! Seek to eliminate these sorts of issues by moving to “equal payment plans.” Many utility companies offer these options that basically even out your annual costs into equal monthly payments. This means your electricity costs will be the same all twelve months of the year. The same is true for natural gas, fuel oil, water, and other utilities.

You can do the same with many of your known, upcoming non-monthly expenses like annual insurance premiums, homeowner’s association fees, and membership dues. Convert to a monthly payment system to prevent the dreaded “budget crushing” expense. Essentially you want to convert your KNOWN but non-monthly expenses (like Christmas, car repairs, etc.) into “every paycheck” expenses. Instead of attempting to pay for $500 of Christmas presents out of your December paychecks, you save money from each and every paycheck throughout the year for Christmas. It is much easier to save $20.83 per paycheck (when paid twice a month) than it is to save $500 in one or two paychecks, right?

PRACTICAL STEPS TO TAKE:

  1. Call each utility and known, upcoming, non-monthly expense and establish an equal monthly payment plan.
  2. Use the Known Upcoming Non-Monthly Expenses Calculator to establish savings for these expenses every paycheck.

 

Managing Money As A Single Parent – Part 02

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

Part Two  Eliminate as much work as possible!

Your time is extremely valuable. As a single parent who must run kids to practice, go grocery shopping, ferry kids back and forth from school, and, oh yeah, work, you realize more than most people that there are only 1,440 minutes in a given day. To ensure you have enough time for the most important things in life, seek to eliminate as much work as possible when it comes to managing your money.

To ensure you have enough time for the most important things in life, seek to eliminate as much work as possible when it comes to managing your money.

One key way to do this is to automate every bill you possibly can. For individuals or businesses who can’t accept automatic online bill payments, establish automatic checks. This is a free option from nearly every major bank.

For impulsive spending categories like food (grocery and restaurants), clothing, entertainment and spending money, use cash envelopes. Once you are paid, withdraw cash for the budgeted amount you’ve allocated to each of these categories. Put the money into an envelope and only use the money for these impulsive expenses. Once the money is gone, don’t spend money in that category until you are paid again. Employing these principles not only reduces the time you have to focus on money, but it also makes budgeting much simpler.

PRACTICAL STEPS TO TAKE:

  1. Establish automatic bill payments for your monthly bills as much as possible
  2. Implement the Cash Envelope System (see my short YouTube video explaining this in more detail)

Managing Money As A Single Parent – Part 01

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

Part One  Prepare and live by a monthly budget

A monthly budget allows you to tell your money where to go instead of wondering where it all went. Without this basic financial tool in place, you will not be able to maximize the money you have worked so diligently to earn. One of the greatest benefits of budgeting is being able to stop the morning routine of checking your bank account balance! You should prepare a budget every month, and it should be completed before the month actually begins. This systematic approach will allow you to review your financial performance over the previous month and make any adjustments necessary for the upcoming one.

“You can eliminate a lot of insanity from your life simply by preparing and living by a budget.”

By preparing your budget before the month begins, it will provide you an opportunity to recognize upcoming financial challenges and implement steps to address each one. For example, suppose your budget revealed a gap of $220 in the approaching month. Because you prepared a budget before the month began, it provides you the opportunity to either (a) eliminate $220 of expenses in the budget or (b) determine a way to produce an extra $220 in income (like working overtime, selling something, etc.) You could even potentially do a combination of options (a) and (b).

However, if you encountered this scenario without a budget, when would you would discover the $220 gap? That’s right. When your money ran out! This would leave you with little option beyond putting the overages on a credit card or using overdraft. You can eliminate a lot of insanity from your life simply by preparing and living by a budget.

As you approach the end of each month, follow these two simple steps:

  1. Review your budget for the month you are completing.
    • What went well?
    • What surprises did you encounter?
    • What do you need to adjust for upcoming months?
  2. Update your budget for the approaching month.
    • What items need to be included in this budget?
    • Do you need to make any changes to existing budget expenses?

Remember it is important to prepare your budget BEFORE the month begins! This process should take less than 15 minutes each month.

PRACTICAL STEP TO TAKE: Use the free budget tools from IWBNIN: www.iwbnin.com/tools and prepare your budget!

Managing Money As A Single Parent – Part 00

Welcome to the latest series here at the wildly popular JosephSangl.com – “Managing Money As A Single Parent”!

So many people are faced with this very situation, and it is a key issue many people face today. Life as a single parent is very challenging. Balancing your children’s needs with the demands of your job creates a near-constant tension. Toss money into this equation, and life can become overwhelming! The good news is it is still possible to thrive financially even when faced with what, at times, can feel like insurmountable odds. This series has been prepared to provide key steps you can take to win with money in spite of your circumstances.

Over the next several days, I will be sharing seven key steps single parents can take to win with money. If you apply these principles and take the practical steps outlined in each section, you will eliminate a ton of stress and frustration. You can do this!

As part of this series, I would love to hear from some single parents about the financial challenges you have faced. Will you take two minutes to share your thoughts with me? If you can’t see the survey, please click here to access the survey.

 

SERIES: The Reluctant Spouse – Part 5

Welcome to the latest series at JosephSangl.com – “The Reluctant Spouse”

Perhaps the most challenging issue I face as a financial author, teacher, and coach is “the reluctant spouse.” One spouse wants to prepare and live by a budget, invest, save, give, and live frugally. Meanwhile, their spouse is very reluctant to participate in the budgeting process and routinely makes contradictory financial decisions. In this series, I will share some tips and ideas to help bring the reluctant spouse on board as an active and willing participant in financial decisions.

Part Five  Be Realistic

It is important to recognize that your spouse may never share your excitement about money management. While an Excel spreadsheet and budgeting may light your fire, it might always drive your spouse crazy. Don’t ask them to become involved with the tasks as much as you ask them to become involved in the decisions and execution.

Think about this for a moment. If you have a reluctant spouse right now who refuses to participate with any money decisions, which of the following is a better outcome?

  1. For your spouse to prepare the budget each month
  2. For you to prepare the budget each month and gain your spouse’s final input and support to follow it?

Of course, the answer is #2. Because it is their involvement you are seeking.

Change is difficult and will take some time. Depending upon the reasons for their reluctance outlined in Part One, it can be vital to seek marriage coaching/counseling.

There is hope, and I should know because I used to be a reluctant spouse. And now I’ve written multiple books on the subject and started a business teaching about it!

SERIES: The Reluctant Spouse – Part 4

Welcome to the latest series at JosephSangl.com – “The Reluctant Spouse”

Perhaps the most challenging issue I face as a financial author, teacher, and coach is “the reluctant spouse.” One spouse wants to prepare and live by a budget, invest, save, give, and live frugally. Meanwhile, their spouse is very reluctant to participate in the budgeting process and routinely makes contradictory financial decisions. In this series, I will share some tips and ideas to help bring the reluctant spouse on board as an active and willing participant in financial decisions.

Part Four  Invite your spouse to participate

As you tell your reluctant spouse about your plans, hopes, and dreams, you will be sharing your passion. After all, you can’t separate your heart from money. This means your passion will flow out of you as you share your dreams. Bill Hybels has shared this about vision, “Vision is painting a picture with passion and then putting people into it.”

As you passionately tell your spouse of the vision you have for your marriage and future, it is important to “paint them into the picture.” Ask them to share some of their dreams with you. Ask the, “If we won the lottery …” question. Write their ideas down.

Then ask for their help in making those dreams come true.

Let’s be very clear. Ask them to take one step. Perhaps you will ask them to help prepare the monthly budget. Maybe you would like them to accompany you to a meeting with an investment officer. Even bolder, ask them to turn in their debit card and convert to the cash envelope system to control impulsive spending decisions.

Remember: one step. Not twenty. Not even five. One.

I’ll finish the series with an important reminder in Part Five.

Read the entire series (available after 10/21/2014)

SERIES: The Reluctant Spouse – Part 3

Welcome to the latest series at JosephSangl.com – “The Reluctant Spouse”

Perhaps the most challenging issue I face as a financial author, teacher, and coach is “the reluctant spouse.” One spouse wants to prepare and live by a budget, invest, save, give, and live frugally. Meanwhile, their spouse is very reluctant to participate in the budgeting process and routinely makes contradictory financial decisions. In this series, I will share some tips and ideas to help bring the reluctant spouse on board as an active and willing participant in financial decisions.

Part Three  Share the WHY

As you live out the principles in your life, it is important to begin addressing the reasons you’ve identified as the cause of your spouse’s reluctance to participate in financial decisions. This can include marriage counseling/coaching as well as ongoing one-on-one conversation.

Ultimately, you must convey to them why you want them to participate in financial decisions. This should be done with a few key things in mind.

  • You are both rested  Trying to have a financial conversation when your spouse is exhausted is a recipe for a terrific argument.
  • Without the kids present  Children tend to be very distracting to serious conversation. Hire a babysitter and go out to a nice dinner at a place where you can have a real conversation free of interruptions.
  • Focused on the issue – and the emotions  Attempting to separate emotions from finances is an impossible task. Acknowledge this fact and remain focused on the issues – which is the “why” you want their participation in financial decisions. Don’t make any personal attacks.
  • Not too long  Your spouse probably isn’t naturally drawn to financial conversation like you are. Don’t drag out the conversation.

With these items in place, it is the moment to share WHY you want their help with financial decisions. Have your reasons written down on paper. Your preparedness will quietly convey the importance of this conversation. Remember, “Your level of EXPECTATION will determine your level of PREPARATION.” Because of your high expectations, you must be prepared!

Your reasons should not be focused on financial principles and tools like “I want to have a budget that works.” This is uninspiring to your reluctant spouse. Instead, focus on the outcomes that will occur as a result of excellent budgeting. Outcomes like “I want to be able to retire by age 55.” Even better, “I want us both to be able to retire by age 55.” Here are a few statements to help you get started with your own list:

  • “I want us to be able to build our dream house.”
  • “I would like to own a cottage at the beach.”
  • “I want to pay cash for our children’s college education so they don’t have student loan debt like us.”
  • “I want to see you start that business you’ve always talked about.”

Do you see it? Share the WHY and then apply the fourth step which I’ll share in the next part of this series.

Read the entire series (available after 10/21/2014)

SERIES: The Reluctant Spouse – Part 2

Welcome to the latest series at JosephSangl.com – “The Reluctant Spouse”

Perhaps the most challenging issue I face as a financial author, teacher, and coach is “the reluctant spouse.” One spouse wants to prepare and live by a budget, invest, save, give, and live frugally. Meanwhile, their spouse is very reluctant to participate in the budgeting process and routinely makes contradictory financial decisions. In this series, I will share some tips and ideas to help bring the reluctant spouse on board as an active and willing participant in financial decisions.

Part Two  Quietly live the financial principles in your own life.

This is very important. Asking your reluctant spouse to take financial steps you are unwilling to take yourself is the very definition of hypocrisy.

If you are asking your spouse to prepare and live by a budget, be certain to prepare and live by a budget each month. Of course, there will be certain categories that your spouse will not follow. For the categories you can control, live out the principles.

Notice the word “quietly” in this key step. It is very unhelpful to announce, “I’m preparing a budget like Joseph Sangl says we should.” or “I’m attacking debt like Dave Ramsey instructs.” or “I called Suze Orman, and she said we can not afford to buy that item.” It only makes a reluctant spouse dislike the financial teacher!

Here are some quiet ways to employ financial principles:

  1. Prepare a budget and post it in a visible place. As you pay bills, mark them off. This demonstrates active utilization of the budget without saying a word.
  2. Utilize one of our free “Savings Spectaculars” (opens in new tab) and begin saving for a dream you both share (like a Disney cruise).
  3. Use cash envelopes to manage impulsive spending categories like groceries, restaurants, clothing, entertainment, and spending money. I’ve prepared a short video HERE (03:16) that teaches how to implement this system.
  4. Write down your plans, hopes, and dreams. Post in a visible location (like the refrigerator) and include some blank lines and a pen. Perhaps they might feel compelled to include a few of their dreams on your list! As a bonus, put the cost of each dream next to each one.
  5. Be nice. Nagging automatically moves people to become defensive.

In Part Three, I’ll be sharing a way to invite your reluctant spouse into the conversation.

Read the entire series (available after 10/21/2014)

SERIES: The Reluctant Spouse – Part 1

Welcome to the latest series at JosephSangl.com – “The Reluctant Spouse”

Perhaps the most challenging issue I face as a financial author, teacher, and coach is “the reluctant spouse.” One spouse wants to prepare and live by a budget, invest, save, give, and live frugally. Meanwhile, their spouse is very reluctant to participate in the budgeting process and routinely makes contradictory financial decisions. In this series, I will share some tips and ideas to help bring the reluctant spouse on board as an active and willing participant in financial decisions.

Part One  Identify “WHY” your spouse is reluctant to participate in financial matters

This is an important moment for you. Consider the reason(s) your spouse may not want to participate in financial decisions. This is not an attempt to discover what is “wrong” with your spouse. The ultimate goal is to gain understanding.

As a financial coach, I’ve identified several reasons a person takes on the role of “The Reluctant Spouse”:

  1. Relationship Status  Many times, financial behavior is an indicator of deeper relational issues. Are there areas of your marriage that need addressed? In a world full of blended families and past marriages, these past relationships can also play a role.
  2. Income Challenges  When income does not meet expenses, it can cause some people to shut down completely. “There just isn’t enough money to manage,” they reason.
  3. Past Money Mistakes  Has your spouse been burned by a financial decision they have made? Have you made a money mistake that has created a trust issue? Poor money decisions can cause some people to “freeze up” and choose to avoid them completely in the future.
  4. Upbringing  Perhaps their behavior has been informed by their own parents. Maybe they saw all of the money decisions handled by one parent and honestly believe the same should be true for their own marriage. They may have been raised in a family that didn’t hear the word “no” used very often when it came to spending.
  5. Power  Does your spouse feel like you are manipulating them to get something you want? Because money is attached to our hearts (read Matthew 6:21), it is powerfully and deeply connected into our plans, hopes, and dreams.
  6. Education  Most people have had little money education. The feeling of ignorance can be very powerful and cause a person to feel the “fight or flight” defense mechanism.
  7. Embarrassment  No one wants to be perceived as broke or unable to manage their money. We all want to be able to provide well for our family. When one doesn’t feel like they have done this very well, it can be embarrassing. This feeling is amplified if the “the exuberant spouse” is pushing “the reluctant spouse” to meet with a financial coach because they know they will be faced with their financial shortcomings.
  8. Financial Infidelity  Perhaps there is a hidden financial decision that will have to be revealed once “the reluctant spouse” becomes an active participant. It could be a hidden debt, poor spending decisions, an addiction, or hidden income.

Which reasons apply to your reluctant spouse? Again, reviewing these reasons is not to be used as a way to identify “who is right” and “who is wrong.” The goal is to identify the key reasons causing your spouse to be very reluctant when it comes to money decisions.

The first step is to obtain complete understanding. In Part Two, I will reveal another key step you can take, and it’s about YOU – not your reluctant spouse!

Read the entire series (available after 10/21/2014)

Savings Accounts With Online Banks – Why You Should Consider Using One

To be very clear, I am talking about banks that exist almost exclusively “online” – not banks that have a website.

Some great examples of these banks include:

  1. Capital One 360 Savings Account
  2. Discover Bank Savings Account
  3. Ally Bank Savings Account

I have used these type of banks for many years, and I love them!

5 Reasons I Love My Savings Accounts with Online Banks

  1. High Interest  These banks pay interest equivalent to a 30-month CD, but none of the CD restrictions exist (early withdrawal penalty, terms, etc.) As of this writing, these accounts are paying interest between 0.75% and 0.90%. That’s WAY BETTER than the 0.01% that most local banks are paying on simple savings accounts!
  2. No Minimum Balance  While most of these banks require a small minimum amount to open an account, they do not have a minimum balance requirement going forward.
  3. Sub-Accounts  These banks allow you to create “named accounts” within the main account so you can better track your savings for various items. For instance, I have sub-accounts named: “Business Operating Reserves”, “Christmas”, “Vacation”, “Property Taxes”, “Life Insurance”, and “Emergency Fund”  When I log in to my account, I can instantly see how much I have saved for each of these items.
  4. Customer Service  I’ve experienced nothing but the best service from my online banks. They have to, really. After all, they don’t have local branches so the only way they can attract and retain customers is by serving each customer extremely well.
  5. No Fees  I’ve never been charged a fee by my online bank. Not once.
  6. BONUS  Automatic savings – you can create automatic transactions that draft money from your regular bill paying bank account on a frequency that works best for you. I have established automatic monthly drafts so I don’t have to “feel like it” to ensure I save money each month!

I encourage you to click on the links for each of the banks, choose the one that suits you best, and get your savings automated!

Disclosure

Upcoming Speaking Events – Will You Attend One?

Here is my schedule for the next several weeks. I would love to be able to see you at one of these events!

October 5, 2014 (Sunday)  Newhope Church  Durham, NC

October 15, 2014 (Wednesday)  FBC North Brentwood  North Brentwood, MD

October 19, 2014 (Sunday)  The Bridge Church  Goldsboro, NC

October 22, 2014 (Wednesday)  Calvary Baptist Church  Lubbock, TX

October 29, 2014 (Wednesday)  Bethany Baptist Church  Lindenwold, NJ

November 9, 2014 (Sunday)  Crosspoint Church  Morehead, KY

November 16, 2014 (Sunday)  Rehoboth Open Bible Church  Brooklyn, NY

November 23, 2014 (Sunday)  Christ’s Church of the Valley  Royersford, PA

I’m FIRED UP for the opportunities I have been given to teach about practical personal financial principles and tools. We are establishing a great line-up of events for 2015. If you want to provide practical financial teaching to your church or business, start the conversation by CONTACTING OUR TEAM.

Monday Money Tip: Core Principle #4 – Have Fun Managing Money

Many people believe that budgeting requires the elimination of all fun from their life. They believe that anyone who focuses on eliminating their debt will be forced to eat spam and sardines every single day. It just isn’t true, and in this Monday Money Tip, I will show you how to have fun managing your money.
 

 
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