Archive for March 2006

Inspiration

I am inspired by people who aim to make a difference with their lives. I am inspired when a family is financially broken, and they decide it is time to change the situation in a major way. They become seriously focused. They will not take “No!” for an answer. They will not be denied. They have decided that it is time to make a change. It takes them time, but guess what? They become debt-free. They have a healthy savings account. They make purchases with cash. In the end, they completely change their financial future.

Do you know what this family is now able to do? Help others! Give more than they have ever given! Build wealth which can be used to forever change their family tree! True inspiration!

I am inspired by the single mother who manages to raise three children all by herself and put them through college without debt! This is someone I admire greatly! Why? She would not give in. She would not be denied. She would not throw a pity party. She devised a plan and made it happen!

I am convinced that those individuals who achieve financial plan through much focused intensity and effort are better able to help others and are happier for it! They developed a plan, purposed in their heart to accomplish it, and then they went and made it happen!

If you are the type of person I have described above, I am motivated by you! I am inspired by you! It makes me so pumped up to know people who are unwilling to take lightly the unbelievable benefits that are available to Americans.

Listen to your wife!

I am the type of person who just wants to make decisions. I want to do deals. I want to make it happen! I do not want to stand around and just think or talk about doing something.

A few years ago, when I was still loaded with debt, I was interested in purchasing a tract of land. I thought that being a landowner sounded really cool. I liked the ring of it. The fact was that I would not be the landowner, the bank would. I would really own a small portion of it – something like a small rug’s worth of the land would actually be owned by me. Even understanding that fact, I was ready to deal. I could taste it. I really wanted to do this deal.

There was just one problem. My wife, Jenn, did not feel right about the deal. Something was stirring in her that said this might not be a good idea. I was frustrated to even hear her speak anything but good about the deal, but she was persistent. I tried to convince her that this would be a good thing, but she still had “this feeling” that was not good.

I stalled. I delayed. I tried to convince her. Bottom Line: Deal was not what it first looked like. We did not do the deal. We learned a lot without having to spend any money.

Moral of the story: LISTEN TO YOUR WIFE! Even though it is not a popular thing for TV to promote, it really is a GREAT thing. Husbands, you will do well to listen to your bride!

Lack of motivation

A key reason that people do not develop a plan for their personal finances is a lack of motivation. There really are at least 541,326 other things that are more fun than planning your finances. The football game on TV, fishing, hunting, sleeping, eating, shopping, traveling, crocheting, gardening … The list really could go on and on. Besides, we can always deal with our finances tomorrow. No big hurry. It’s not like we are going to need a bunch of extra money right away.

Yawn. I’m so tired. I think that I am going to go to bed. I know that all of my money disappears each month without any of it staying in my accounts, but I am just so tired and unmotivated to deal with my finances. I can deal with that tomorrow.

NEWSFLASH: TOMORROW HAS ARRIVED AND THE UNMOTIVATED ARE BROKE!

Budgeting Tips

I have some budgeting tips that have worked for me. If you have any additional ones, I would love to learn them!

Tips
1. Use a computer spreadsheet if at all possible (Excel, Quattro Pro, etc.). This takes the math out of the calculations. If you remember something that needs included in the budget, you don’t have to erase everything you have written and redo all the math. This allows you to focus on the budget items instead of items like, “You punched that into the calculator wrong …”
2. Do the budget monthly! Every month presents its own budgeting issues. In the summer, you may be more focused on budgeting outdoor activities. In the winter, you may be more focused on paying for Christmas gifts and preparing for tax season. Irregular expenses also crop up – clothes for the children, quarterly insurance payments, quarterly tax payments for the self-employed, life insurance, school pictures
3. Work like crazy to fully-fund your emergency fund with 3 – 6 months worth of expenses. If you have this fully-funded emergency fund in place, then you can cease budgeting week-to-week. For those of you who are balancing paychecks and which bill is paid with whose paycheck in which week, you KNOW what I am talking about. Once you have the fully funded emergency fund, you can just sit down and write out all the checks at once! Talk about eliminating stress!
4. If you have upcoming expenses that you know are coming, start budgeting for them now. It is so much easier to plan for a $500 expense over the course of 6 months than in 1 or 2 months.
5. Every 6 months or so, hold a little longer budget session (
6. Keep copies of all of your old budgets. Once you have been budgeting for 13 months, you can always reference the budgets from that month in the previous year(s). That will really help you remember some of the irregular expenses you may need to be planning for.
7. Ensure that BOTH of you are messing with the budget. This is not a one-person show. It will not work nearly as well if only one person puts the budget together.
8. If the budget is not balancing this month, put it away for a day or two. Then, agree to get back together to review what the issues were. It may be that a simple solution is available and the wait may help you figure that out.
9. Use envelopes. It eliminates debit card transactions. My debit card transactions went down over 75% when we converted to cash envelopes. It also holds you accountable to the budget and absolutely prevents overspending. If you were to try one envelope, I would recommend “groceries”.
10. If the budget does not balance to zero, do not allow yourself to turn to debt to fix the issue. There has to be a point in time that you say “enough is enough – we have gotten poor results the old way, we are not going back there”. You will be tested on this one. How strong is your willpower to ensure you achieve freedom from debt?
11. If you have an irregular income, you should still do a budget. The lame excuse of “I can’t predict my income” does not work here. You can plan for the known part of your income and prioritize the rest of the expenses in order from 1 to 350 (if you have 350 expenses!). When you get income in, you pay down the list in order of your priorities. Once you are out of money, the end. Maybe next month.
12. While you are saving cash for a major purchase, the rigor of saving every single month for that purchase makes you focus on that item more. I have found that I can find AWESOME bargains when I have to spend 7 or 8 months saving for a purchase. Many times the bargain is 1/2 or 1/4 of the cost I had saved for the purchase. Talk about celebrating! This is budgeting working at its finest!

Those are a few of the things I have learned while budgeting. I welcome your tips!

BOO to the non-savers. Down with you!

From USA Today last week: $575 – On average, U.S. households overspent their incomes by that much in January!!! Below the main headline is a line that states The negative savings rate worries some. WOW! It worries some?????? My goodness, what is it going to take to wake up???? What we are doing is NOT WORKING!

Americans are stupid about money. We will spend money to buy Snow White and her 7 dwarfs figurines for our yard (I know someone who did this!), but not even save a single dollar!

If you can’t save any money, something is dreadfully wrong! Your priorities are out of order. What are you doing with your money that is more important than saving it? Don’t start that with that old line of crap like “I am paying for food and utilities.” For most people, this is a minor part of your income. Let’s see what is NOT a minor part … a brand new car(s), a new computer, a fine meal, a trip to Hawaii, a ski trip, new furniture, an addition to your house, a new big screen TV, a new Harley, fine clothes from the mall, a new digital camera, a new tractor, a new four-wheeler, a new barn, a new whatever …

These expenses that you pay on every month – were they needs? Really? You are really going to need to do some serious convincing to get me to believe that these are needs. Is it worth being broke? Is it?

Get real! Get angry! Do something about it! Become debt-free and save money! You can then buy what you want with CASH, give more money away than you ever dreamed, and save even more for the future.

Go make something happen. Take your finances by the proverbial ears and yell “THIS IS NOT WORKING!!!”

Need help? E-mail me with your questions.