Finance

We’ve all had moments where we have firmly stated our resolve to do something different with our money. Usually the outburst follows a negative financial outcome. Perhaps we’ve overspent on our vacation. Maybe we have the starting realization that there is no money in the college fund for our high school senior. It could be that we’ve dipped into the overdraft account again. Whatever the case may be, it causes us to commit to better financial management.

Here are some common statements people make in these moments:

• “I’m going to start preparing a written budget each month.”
• “I’m increasing my contributions to the retirement plan.”
• “Let’s open a 529 college savings plan and begin making monthly contributions.”
• “I’m cutting up the credit cards.”

There is just one problem with each of these statements: saying it doesn’t make it true.

For every statement and moment where we commit to better financial decisions, one must actually do the work to follow through. And, my friends, we all know that it is truly hard work. Life is so busy. We’re exhausted. Plus, many of these decisions require information and knowledge we may not currently possess. This is a recipe for failure to follow through on really good financial decisions.

And we’ve all been there, haven’t we?

Let’s flip the script, and put in place some “best practices” that can really help us sustain these good financial decisions so that we can reap the benefits they can provide us: fully funded lives, dreams accomplished, and freedom to live generously.

Sustain Good Financial Decisions – Practice #1:  AUTOMATE

Many good financial decisions can be followed through with automation! This is perhaps the easiest and best tip possible because it is literally a “set it and forget it” solution that ensures your financial decision is put into practice. If there is any possible way to automate your decision, do it.

Here are some great examples of using automation:

• Committed to save money every month for the annual family vacation? Set up automatic drafts from your bill paying account to your savings account.
• Want to help your child with college expenses? Open a 529 college savings account and establish automatic drafts.
• Ready to up your retirement investments? Log in to your 401k (or similar RSP) account and adjust the automatic contribution.
• Want to ensure your retirement money is put to work right away instead of sitting in a savings or money market account? Establish automatic investment selections.
• Want to ensure all of your bills are paid on time? Automate every single bill payment. As an added bonus, you will spend far less time paying bills!
• Want to ensure your retirement investments become more secure as you approach retirement? Choose a targeted retirement date investment fund that will automatically become less risky as you near retirement.

What good financial decisions have you been making that could leverage the power of automation to ensure they are sustained into the future?

As a teacher who is passionate about helping people win with money, I am nearly always in “student mode.” One area I focus upon is the individual way people choose to approach their finances.

It is very apparent that a person’s “mentality” (synonyms: attitude, mindset, outlook) really affects their financial decision-making. I’m going to discuss this mentality in just a bit, but for now let’s compare the mentality of wealthy people versus broke people.

Again, these are my general observations. There are certainly individual cases where this is not true – for both the wealthy and the broke.

1. Wealthy people focus on long-term results. Broke people focus on the short-term.
2. Wealthy people are far more likely to prepare and follow a budget than those who are broke.
3. Wealthy people value financial margin (savings/on-hand cash) more than those who are broke.
4. Wealthy people tend to focus on the big picture (strategic approach) while broke people tend to focus on details (tactical approach).
5. Wealthy people are more likely to say “I don’t know” or “That topic confused me, can you explain it another way?” when faced with challenging financial topics while broke people are more likely to make a financial decision without seeking to fully understand it.

If one wants to be wealthy, it should be helpful to ponder these observations and see what adjustments we could personally make in our own lives.

Why are wealthy people more focused on the long-term (#1) and the big picture (#4)? One reason is because they value margin (#3)! When you have saved a substantial amount of money (3 to 12 months of expenses), it is much easier to focus on the future. Conversely, when you have saved nothing, it is virtually impossible to think about the future. All energy must be spent on making it through this week and month!

Look at the five observations again. Which mentality do you tend to lean toward?

Do you have a “wealthy” mentality? Great – choose to live generously. Teach others so they can win with their money too.

Do you have a “broke” mentality? Most of us have been there before. Learn from the ones who have broken out. CHOOSE to think longer-term. CHOOSE to value financial margin. CHOOSE to prepare a budget each and every month. CHOOSE to seek wisdom when a financial topic confuses you.

I broke out a decade ago. My life has never been the same.

I’ve learned some painful lessons in my financial journey. Some of them were very painful! I’m going to be sharing about some of those painful lessons in my upcoming live event one week from today (more about this event below), but here are four of the most painful lessons I’ve learned.

4 Painful Financial Lessons I’ve Learned

1. Don’t “Go it alone” without seeking financial counsel. Have you ever faced a major financial decision but chose not to seek wisdom from people who’ve “been there – done that” before? I know I have. And I’ve paid stiff penalties that would have been completely avoided if I had only gotten over myself and asked for help. I’ve found that PRIDE is the greatest reason I’ve attempted to “go it alone” without seeking wisdom from others on financial decisions. And we all know where pride leads us …
2. Listen to my bride when making a major financial decision. Perhaps the only thing worse than losing money on an investment is facing the “I told you so” greeting from one’s beautiful spouse. When my bride has a negative “feeling” about an investment, it is like 5-alarm fire bells going off saying “RUN AWAY FROM THIS DECISION!”
3. Pray for God’s guidance. If a major financial decision is so hurried that my family and business teams can’t pray about it, then we’ll let the opportunity pass on by. I’ve made some hurried decisions before without praying about them. Some worked out okay. Others were complete and utter flops. I’m completely convinced that prayer is an essential part of financial decision making.
4. Always have a plan. And a back-up plan. And probably another one. Rarely do plans come together exactly as we mapped them out. New information becomes available, laws and regulations change, other parties in the deal change their minds, etc. I’ve learned that it is best to approach any and all financial decisions like Muhammad Ali approached boxing when he famously said, “Float like a butterfly, sting like a bee. The hands can’t hit what the eyes can’t see.”

Those are four of the most painful financial lessons I’ve learned. I wouldn’t trade any of the experiences, however, because they’ve allowed me to become a much more savvy financial manager and leader.

It is my passion to help you win in your money journey too! That’s why I’m offering a free online event just one week from today. The details are below. If you want to make 2016 the best year yet, I encourage you to register now. REGISTRATION IS REQUIRED.

• EVENT: How To Make This Year The BEST YEAR YET
• DATE: Thursday, January 14th
• TIME:  8:00 PM Eastern Time
• DURATION:  60 minutes (45 minutes teaching + 15 minutes Q&A)
• COST:  Free
• REGISTER:  Click HERE to reserve your spot. Space is limited to the first 500 people who sign in on the night of the event.

Every single day, I wake up thinking about how to help people prosper with their finances. It’s for this reason that I’m hosting a free online event called “How To Make This Year The BEST YEAR YET” on Thursday, January 14th, at 8:00 PM Eastern Time. I’ll share more details below, but first I want to share a few tips to help take your money to another level in 2016 (I really like #3 the most!).

1. Prepare a budget each month – and follow it! We all know that a budget is helpful, yet so few people actually take the time to prepare one each month. If you truly want to maximize each and every dollar in 2016, commit to prepare a budget each month before the month begins. Give every dollar a name. Give some. Save some. Invest some. Spend some. It really works!
2. Focus on paying off your smallest debt. If you’re caught up in a wave of debt, it can seem overwhelming to tackle all of them at once. Instead of putting “a little extra” toward each of your debts, pay the minimum payment for each debt except the smallest one. Use all of your extra money to focus on eliminating that one debt. You will be surprised at how quickly that debt will disappear, and you will gain huge momentum toward liberating your life from unhealthy debt.
3. Use your tax refund to launch something! Too many people spend their entire tax refund on the most urgent item in front of them – a debt, or maybe even a trip. But what if you decided to use the money to launch something new – a product you’ve created, a new business, or investment opportunity? You could utilize the money to catapult yourself to financial freedom!
4. Sign up for a financial conference or class.  Financial education is vital to your financial success. Sign up for a real estate investment course, a stock investment conference, or an online financial education course (like our IWBNIN Core Coaching Program)
5. Set a saving/investing goal and ask someone to hold you accountable.  It is one thing to have a goal. It is quite another to tell someone that goal and invite them to hold you accountable to reach it! For instance, I’ve set a goal to run 400 miles in 2016. I want you to hold me accountable to it. You can do so by being my friend on the Runkeeper app (it’s one of my favorite apps!).

• EVENT: How To Make This Year The BEST YEAR YET
• DATE: Thursday, January 14th
• TIME:  8:00 PM Eastern Time
• DURATION:  60 minutes (45 minutes teaching + 15 minutes Q&A)
• COST:  Free
• REGISTER:  Click HERE to reserve your spot. Space is limited to the first 500 people who sign in on the night of the event.