Archive for June 2018

Durable Power of Attorney for Health Care

June is coming to an end and we are wrapping up our topic of Estate Planning for the month.  If you have been following our posts, then you know we have talked about some very important topics this month including a Written Will, a Living Will and a Power of Attorney for Finances.  The last topic I want to cover is a Power of Attorney for Health Care.

A Durable Power of Attorney for Health Care allows you to designate someone to act on your behalf in regards to your healthcare when you are unable to.  The word durable in there simply means that you intend for the document to still be effective even if you become disabled or incapacitated. Without that word, if you became disabled or incapacitated, you would have to go through the expense of having a court-appointed guardian.  

This person will be your advocate and communicate with healthcare professionals on your behalf so they should be chosen with great care.  They will have the ability to decide:

  • Which hospital treats you
  • What doctor or doctors are your attending physicians
  • Whether or not you will have a particular surgery
  • What particular drugs you will or will not take

When deciding who you will trust in making these decision, it is important for you to answer a few questions.

  • Does this person really know what I want?
  • Will this person respect my wishes?
  • Does this person benefit financially at my death?
  • Is this person emotionally capable of making life-and-death decisions?

At this point, you probably have someone in mind that you would trust to speak for you if you were unable to do so for yourself.  Make it official and get a Durable Power of Attorney for Health Care.

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Need more information on end of life planning?  Check out ForeTalk – a complete and simplified guide to prepare for one of every family’s most difficult times written and taught by Stan Craig HERE.

In Episode 13 of the Monday Money Tip Podcast, Stan goes into more detail on the different documents needed for Estate Planning.  Check it out HERE.  While you’re here, make sure to subscribe and leave us a rating to let us know what you think!

Get Your July Budget Ready!

June is coming to an end and that means it is time to get your budget prepared for July!  If you are new to budgeting or just need a little refresh, hopefully this post will be useful for you.  To start, click HERE to download a copy of our Monthly Budget Tool.  

Once you have the tool downloaded, you can begin entering your income and each of your expenses.  Remember, you are doing this BEFORE the month has started and before you have any of this money. This will allow you to have control of each and every dollar that will leave your pocket.  

First, enter any income you expect to receive in the income section of the budget.  This could be money from a paycheck, a bonus, side job income, child support or alimony.  

After you have completed this step, you can begin entering your expenses for the month.  It is very, very important to enter in all of your expenses for the month. This includes money that you are going to save, invest and give.  You are “spending” every dollar of your paycheck on paper first.

The budget form has some excellent features built into it.

  • If OUTGO exceeds INCOME, the TOTAL will turn RED and tell you how much you have overspent!
  • If INCOME exceeds OUTGO, the TOTAL will turn YELLOW and will tell you how much more money needs to be named!
  • When INCOME = OUTGO, the TOTAL will turn GREEN … This is the ultimate goal!

Even if the budget TOTAL turns RED, keep typing in the expenses that you know are going to happen in the upcoming month.  The goal is to get all of the known expenses for the next month on paper.

YES, you will later have to remove some expenses or boost your income to get to GREEN, but the goal right now is to get all of the expenses into the budget form!  By having all of the expenses in the budget, you can make a much more informed choice on what will be removed from the budget.

Enter ALL of the real, actual expenses that will need to be paid NEXT month into your budget form.

If your OUTGO exceeds your INCOME, you can either increase the income or decrease the outgo.  Increasing your income might mean picking up a second job, or working extra hours. Decreasing your outgo might mean deciding to spend less on entertainment and dining out in order to make sure that your dreams are still fully funded.  Remember, a little sacrifice right now can make all the difference in changing your life forever. If you are sick of living paycheck-to-paycheck, I highly encourage you to starting using a written budget today.

Once you have spent all your money on paper, print out your budget and hang it somewhere that you can see it.  The last thing to do is actually follow the budget. You have taken the time and energy to prepare a budget that works.  YOU told your money where to go so now just follow through.

Take some time to sit down with your spouse in the next few days to prepare a written spending plan for July and start winning with your money today!  

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Want more tips like this one?  Subscribe to the Monday Money Tip Podcast HERE.

 

MMT PODCAST: The Must Have Legal Documents

In Episode 13, we’re wrapping up the topic of Estate Planning with special guest Stan Craig. Stan is a pastor, Bible teacher, financial professional, and the Executive Director of a non-profit foundation. During this episode, Stan talks about why this topic is so important to him and break down each of the legal documents needed to express your desires, for both when you’re alive and also when you pass. While death isn’t a fun topic, it is an important one as it is something we will all face at some point. Stan is here to help you prepare for it in a way that blesses your family and those you love most instead of leaving behind a burden.  

It’s our goal at the end of each episode that you gain hope and encouragement in your financial journey, you’re equipped to take the next step, and that you’ve had FUN with us!

Find the Monday Money Tip Podcast HERE. Please let us know what you think by leaving us a rating!

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Email info@iwbnin.com to submit podcast questions or share success stories.

Show Notes

About the episode:

  • Stan explains the four legal documents we need to express our desires.
  • Get tips on how to initiate a conversation with your loved ones to make sure they have plans in place.
  • Hear Stan’s thoughts on the importance of leaving behind letters to the special people in your life in addition to any legal documents.  

Resources:
Foretalk – 7 Critical Conversations for Living in the Season of Now [Book]
Estate Planning Course [Online Course + Book]

Quote of the Day: “Teach us to number our days, that we may gain a heart of wisdom.” – Psalm 90:12

 

10 Lessons Learned from Budgeting for 180 Consecutive Months

This month, my bride and I prepared a budget. Just like we had done since July 2003, Jenn and I chose to tell our money where to go by planning every single dollar. For those who like math, that is 180 consecutive months of budgeting! 180 months is equal to 15 years.

Anyone who has prepared and followed a budget for just a month or two knows how helpful and powerful it can be in moving toward your financial goals and funding your dreams. Now, I can say what it feels like after 15 years! I’ve taken some time to reflect on all of those months and share “10 Lessons Learned from Budgeting for 180 Consecutive Months” with you.

10 Lessons Learned from Budgeting for 180 Consecutive Months

  1. More money won’t make budgeting easier. Less money won’t either. Like most people believe at some point in their lives, I used to believe that more money would make budgeting more fun or easy. I did not find this to be true. With more money came different financial decisions that were more complex. When I had little money, the biggest budgeting challenge was figuring out a way to make our income cover all of our obligations. As we moved beyond paycheck-to-paycheck living, we were faced with investing decisions.
  2. The financial rewards of budgeting become much greater the longer you stick to it. When we first started our budgeting journey, we were excited to pay cash for a small weekend getaway. All of our previous vacations had been put on a credit card! As I write this, we just got back from a trip of a lifetime throughout Europe – and paid cash for all of it.
  3. It has required both of us to be committed to the process.  I used to be the out-of-control spender who did not want to be confined by a budget. My bride had to be so frustrated! It is a great enough challenge to manage your money when you are both committed to the process. I can’t imagine where we would be if we had not both committed to prepare and follow the budget every single month.
  4. Financial emergencies tend to disappear as you prioritize savings (margin) in your budget.  We’ve had lots of “surprise” financial expenses, but none of them derailed us. I credit it to the fact that the process of monthly budgeting tends to make you a better planner – and gives you a better vision of the future. This, in turn, causes you to prepare in advance.
  5. The lessons learned in personal budgeting transfer to business financial management very well. I transferred the budgeting process into this fledgling business called “I Was Broke. Now I’m Not.” when we launched in 2008. It has been so successful that it helped us purchase two additional businesses and launch another. Every business operates with a monthly budget. It is an invaluable part of our management system.
  6. Budgeting has allowed us to be intentionally generous.  Like any other human being, we desire to live generously. Our monthly budget allowed us to always prioritize generosity. It is the very first item in our budget. If you have ever used one of our free budget templates, you will notice that “giving” is the first category. That is not an accident.
  7. Cash envelopes have been wildly helpful in preventing impulsive spending.  I’ll never forget the our first monthly budget back in July 2003. We decided to use cash envelopes because Dave Ramsey recommended them. It felt like we had robbed the bank when we withdrew the cash for our “impulsive” spending categories: Groceries, Dining Out, Clothing, Entertainment, and Spending Money. It completely changed the way we shopped for groceries (no more Barbie movies bought with grocery shopping money), went out to eat at restaurants (started sharing a lot of meals and ordering water), and purchased clothes (hello, consignment and clearance racks). We have continued to use cash envelopes each and every month.
  8. Budgeting several months in advance help us anticipate and accommodate major expenses.  As we began to become expert budgeters, we began to prepare monthly budgets about twelve months in advance. This allowed us to foresee upcoming major events (summer vacation, runner’s camp for our daughter, car repairs, Christmas, etc.) and “smooth” those expenses by allocated a portion of each month’s budget toward those expenses. This allowed us to pay cash for each one without crushing that particular month’s budget. If you’re an expert budget (or a planner by nature), I encourage you to check out our free “annual budget – month by month” budget template.
  9. Planned money goes so much farther than unplanned money.  I am absolutely convinced that we would never have been able to successfully chased our dreams without this focused effort on planning our money. I was so floored at how much we were able to accomplish with our first budget that it made me a believer for life. That feeling has never left. Each and every month, we’ve been able to make progress even in spite of the challenges that life has presented.
  10. I’ve found no better way to maximize the potential of every dollar.  Seriously. When I find a better way to maximize money, I’ll convert to that method. Until then, I will continue to prepare and follow a monthly budget.

Lest you think this past 15 years was easy. Here are just a few of the challenges we’ve been able to successfully navigate:

  • Downstairs heat pump failure
  • Upstairs heat pump failure (six months after the downstairs unit)
  • Hot water heater failure
  • The truck’s transmission went out
  • Complete remodel of downstairs of a “fixer-upper” house
  • Left corporate America to go on staff at a church
  • Launched a new business (I Was Broke. Now I’m Not.)
  • Embarked on the IVF journey
  • Left church staff to lead IWBNIN full-time
  • Canceled maternity insurance after IVF didn’t work only to find out we were pregnant 16 days after canceling the insurance!
  • Had to pay cash for the delivery of our baby boy (he’s 8 years old now!)
  • Purchased another business (INJOY Stewardship Solutions)
  • Found out we had another miracle baby on the way (we had maternity insurance this time!) (she’s 4 years old now!)
  • Too many car issues to list including all the standard maintenance stuff like tires and brakes
  • Four major surgeries in the family
  • Multiple ER trips (I can count at least four …)

My hope with this post is to encourage you that YOU CAN DO THIS!

With this said, I must stop writing because it’s time to prepare next month’s budget.

Durable Power of Attorney

Do you have someone appointed to handle your finances in the event that you are unable to do so for yourself?  Most people consider who they want to leave their assets to after they die but what about while you are still alive?  Illnesses, accidents and the effects of aging are around us every day and they can be incapacitating.

You should consider a Durable Power of Attorney for Finances.  This document provides for someone to act on your behalf in money matters in case you are incapacitated.  You can give this person as much or as little power as you would like. In most cases, he or she is granted power to manage your expenses and pay your bills.  Some other powers that you can grant to your agent include:

  • Hire or fire attorneys, nurses, caretakers
  • Make legal claims on your behalf
  • Invest your money
  • Run your business
  • Buy, rent and sell real estate

Regardless of how much power you want this person to have, they should be someone you trust with absolute confidence.  If you become incapacitated, they will have control over your assets and work without a lot of oversight. When choosing a Durable Power of Attorney for Finances, ask yourself a couple of questions.

  • Can I trust this person with a blank check?
  • Am I comfortable talking about my financial affairs with this person?
  • Does this person have personal financial stability?

With all of that being said, it is important to note that you can revoke the Durable Power of Attorney if you ever become dissatisfied.  It is important to review all of your estate documents every three years or so because as time goes on, your preferences may change. Keeping these documents up to date and accurate is very important.  

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Need more information on end of life planning?  Check out ForeTalk – a complete and simplified guide to prepare for one of every family’s most difficult times written and taught by Stan Craig HERE.

Check out our interview with Stan Craig where he goes into more detail about end of life planning HERE.  You can listen to the Monday Money Tip Podcast HERE.  While you’re here, make sure to subscribe and leave us a rating to let us know what you think!