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Monday Money Tip: A Must Have Helpful Money App – Mint.com

In this week’s Monday Money Tip, I’m sharing about a great money app that I personally use. I’ve found this app very helpful with managing my personal and business finances. Check out the below video for all the details:

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4 Benefits of Having Financial Margin – Part 4

Margin is an alternative way to communicate “space.” Remember when the English teacher ruined your life by announcing that you must hand write a two page composition? She would say, “Be sure to avoid writing in the “margins.” In other words, it was important to maintain appropriate spacing. The same is true for your finances. Financial margin creates space in your life. During this series, I’ll be focusing on the real and emotional effects of living WITH and WITHOUT financial margin. Ready?

PART ONE – LESS STRESS

PART TWO – FREEDOM

PART THREE – IMPROVED RELATIONSHIPS

PART FOUR – FILL UP THE TANK
There are so many benefits to having financial margin, but one of the greatest is the ability to just “fill up the tank.” Let me explain.

When there is no financial margin, it may not be possible to drive to the gas pump and fill up the gas tank. Lack of margin means that one has to put $16 in one time and $37 the next. Whatever money is available goes into the gas tank. This can be very costly – especially in time costs!

When you are not filling up the tank every time, you lose time because:

  • You have to fill up more often
  • You have to waste time figuring out how much can be spent this time

For many people, it also costs more money because more visits to the gas station equal more trips into the convenience store to buy super-overpriced soda and snacks!

When you have margin, you can just “fill up the tank.”

Here are other ways this applies to having financial margin:

  • You can buy the proven name-brand appliance instead of the el-cheapo model
  • You are in the position of power so you are not subject to obtaining financing and buying the junk they are trying to sell you
  • Pawning, short-term financing, and other highly expensive ways to obtain money become completely unnecessary

To me, the sacrifices to obtain financial margin are worth it just to “fill up the tank” every time!

Looking for more information on creating financial margin? Check out this resource (HERE).

4 Benefits of Having Financial Margin – Part 3

Margin is an alternative way to communicate “space.” Remember when the English teacher ruined your life by announcing that you must hand write a two page composition? She would say, “Be sure to avoid writing in the “margins.” In other words, it was important to maintain appropriate spacing. The same is true for your finances. Financial margin creates space in your life. During this series, I’ll be focusing on the real and emotional effects of living WITH and WITHOUT financial margin. Ready?

PART ONE – LESS STRESS

PART TWO – FREEDOM

PART THREE – IMPROVED RELATIONSHIPS
Individuals who are against the wall financially for extended periods of time can many times hurt people in ways that they never would do if they had financial margin. I’ve seen business owners (with no margin) who completely lose their minds on a customer who owed them $1,000 even though they are late on $10,000 of bills to their own suppliers. They are agitated, angry, and threatening. But a third party could easily say that the business owner is completely out of line. What is causing this issue? No financial margin!

I’ve seen countless relationships injured or destroyed because of no financial margin – families, friendships, business relationships, working relationships. My bet is that you’ve seen it too or maybe you’ve experienced it! It is incredibly hurtful and can cause enormous stress and heartache.

Here’s a question to ask yourself:

What would these situations look like if each person had financial margin?

Wouldn’t there be a lot less borrowing? Wouldn’t there be less heartache, pain, and agony?

Make the greatest investment into your peace and state of mind – establish financial margin!

4 Benefits of Having Financial Margin – Part 2

Margin is an alternative way to communicate “space.” Remember when the English teacher ruined your life by announcing that you must hand write a two page composition? She would say, “Be sure to avoid writing in the “margins.” In other words, it was important to maintain appropriate spacing. The same is true for your finances. Financial margin creates space in your life. During this series, I’ll be focusing on the real and emotional effects of living WITH and WITHOUT financial margin. Ready?

PART ONE – LESS STRESS

PART TWO – FREEDOM 
When financial margin is established, it provides a sense of freedom! I know that when we finally established some beginner margin in 2003, it was like scales fell from our eyes. We saw life in an entirely new light! Instead of wasting tons of energy determining how each bill was going to be paid (anyone who has lived paycheck-to-paycheck KNOWS the energy this takes!), we began looking forward. It allowed us to start asking new questions like:

  • How much should we save each month for our children’s college?
  • Any question that starts with “I wonder what would happen if … ?”
  • Who can we bless this month?
  • How can we use our gifts and talents in the most impactful way?

When we established margin, I discovered the freedom of knowing that I could pursue a dream! It did not matter as much if I really did pursue the dream – what mattered most was the fact that I could pursue the dream! I’m not sure this really makes much sense, but knowing that fact was incredible. Let me share a few examples to better explain this. I am entrepreneurial by nature. This means I love starting things. When I was broke and living paycheck-to-paycheck, the option to start a business or new venture was out of the question. Financial margin gave me the freedom to consider the options without being overcome by the fear of living in a cardboard box.

Here’s another example. When I took the leap of faith to go on staff at NewSpring Church, a church Jenn and I were a part of starting and LOVE being a part of, I took a massive pay cut. Jenn was able to make the decision to work or continue to be a stay-at-home mother without really having to worry about the financial aspects. This was only possible because we had financial margin.   How many people can take a 50% pay cut and still have this option available to them? Not many, but I will tell you with 100-percent confidence that those who have established financial margin CAN – and that FREEDOM to choose is incredible!

If you have no financial margin, make a decision to start building it today! If you do have financial margin, celebrate the fact that you have made the necessary choices to establish it and then use that freedom to pursue a dream!

4 Benefits to Having Financial Margin – Part 1

Margin is an alternative way to communicate “space.” Remember when the English teacher ruined your life by announcing that you must hand write a two page composition? She would say, “Be sure to avoid writing in the “margins.” In other words, it was important to maintain appropriate spacing. The same is true for your finances. Financial margin creates space in your life. During this series, I’ll be focusing on the real and emotional effects of living WITH and WITHOUT financial margin. Ready?

PART ONE – LESS STRESS 
I still remember the day that my family first established financial margin. It was in February 2003 and we had just received our tax refund. Instead of immediately using this money, we put it into our savings account. This meant that we were not able to attack debt with this money, but our eyes had been opened to the need of establishing financial margin. Depositing the check into our savings account was incredible, but it was the emotional feeling that surprised me! We were able to breathe in a way we had never breathed before. I’m talking about literally being able to breathe differently. With that one key decision, we eliminated a load of stress that we did not even realize was there.

Gone were the days of fearing the question, “What will happen next?” Over were the days of stating, “How in the world will we pay for THAT?” Instead of dreading the clunking sound coming out of the dryer, we could simply say, “Appliances break. Let’s purchase a new one – with our financial margin money.”

STRESS! It is the #1 reason why most people want to meet with a financial coach. The stress of living with no financial margin can lead to a lot of effects:

  • Fear
  • Depression
  • Feelings of dread
  • Marital discord (or even divorce)
  • Anger
  • Combativeness
  • Snappy responses
  • Impatience
  • Frustration
  • Feelings of scarcity/lack
  • Craving
  • Unfulfilled

Having money is certainly not the answer to all of life’s issues, but the establishment of some financial margin certainly goes a long way toward easing many of the struggles of daily life! I definitely know that is true in my own life.

With all of the negative consequences related to living life with no margin, is it not worth the effort it will take to establish some financial margin? I recommend starting with at least one month’s of expenses. Saving one month of expenses allows you to manage your finances with a monthly budget, even if you are paid at some other frequency. It won’t happen overnight, but it can happen faster than you ever thought!

4 Ways to Quickly Get Rid of the Mortgage – Part 4

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate

PART TWO – Pay 10% Extra Each Month 

PART THREE – Pay One Extra Payment Each Year

PART FOUR – Eliminate one non-essential monthly expense and put it towards the mortgage 
How much do you spend on non-essential monthly expenses? One example is cable/satellite. Let’s say that it’s $70/month ($840/year). If you’re really interested in getting rid of your mortgage quicker, cancel the cable and use that money towards the mortgage payment. Yes, this does require some sacrifice BUT just think about the end goal –> no mortgage payment! That should get you fired up!

Other items that could be reduced/eliminated include:

  • Dining Out
  • Clothing
  • Spending money
  • Grocery bill (use coupons!)
  • Insurance premiums

Less payments toward these items mean more money for payments toward mortgage elimination!!

 

4 Ways to Quickly Get Rid of the Mortgage – Part 3

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate

PART TWO – Pay 10% Extra Each Month 

PART THREE – Pay One Extra Payment Each Year
One of the most common ways that people get rid of their mortgage is by sending in one extra payment each year. This will eliminate 5 to 7 years from a 30-year fixed rate mortgage.

You can send one extra payment each year using a variety of methods:

  • Send in one extra payment when you receive a tax refund or profitability bonus
    • Since this money is extra and not part of the normal budget, it’s easier to put this money immediately towards the mortgage.
  • Set up 1/2 payments to be made every two weeks
    • Since there are 26 two-week periods in a year, this means that 13 full payments will be made each year. Presto! An extra payment!
  • Send in 1/12 (8.3%) extra on each monthly payment.
    • 1/12th payment/month X 12 months = 1 full payment per year

You can run the numbers for your specific mortgage by using the Early Pay-Off Calculator. This is a great tool to discover how much sooner you could be debt-free by making extra payments each month.

4 Ways to Quickly Get Rid of the Mortgage – Part 2

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate

PART TWO – Pay 10% Extra Each Month 
Interested in eliminating 7 years or MORE from your 30-year fixed rate mortgage? Just add an extra 10% to your monthly payment! For instance, if your mortgage payment (including escrowed taxes and insurance) is $1,000, you would send in an extra $100 per month – $1,100/month.

Example – Let’s say you have a $150,000 – 5.5% fixed-rate mortgage with a monthly payment (include escrow) of $1,000 with $852 being applied to principal and interest each month (the other $148 being applied to taxes and insurance). If you send in $1,100 each month (extra 10%), there is now $952/month being applied to principal and interest. This will reduce a 30-year note to a 23 year 4 month note!

You can run the numbers for your specific mortgage by using the Early Pay-Off Calculator. This is a great tool to discover how much sooner you could be debt-free by making extra payments each month.

 

4 Ways to Quickly Get Rid of the Mortgage – Part 1

I’ll never forget the day that I signed my first home mortgage. I financed such a large amount of money that I couldn’t really comprehend the amount. That day I only knew two things: I wanted to purchase a house and the bank was willing to lend me the money. It wasn’t until after I made my first mortgage payment that I realized just how much this debt was going to cost me. As I begin to discover the enormity of this debt, I set out to find ways to eliminate my mortgage quickly so that more of my money would be applied to the principle balance instead of the interest.

It’s my hope that this series can help you eliminate what is usually the single largest expense in the household budget and free that money up to much greater things!

PART ONE – Lower The Interest Rate
One key way to quickly getting rid of the mortgage is to have an excellent mortgage interest rate. Current mortgage rates are still near an all time low. CNNMoney’s has an excellent online calculator that can be used to evaluate different refinancing alternatives to see which one is best for your situation. It can be obtained HERE.

Just lowering the interest rate by 1% on a $100,000 mortgage will save nearly $1,000/year! That, my friends, will spend just like money and I would much rather apply that money toward principal reduction or funding a dream than sending it as a gift to my mortgage lender!

Another great tool is the Early Pay-Off Calculator located on our website under the Tools tab. This tool will show you how much more quickly you can pay off your loan if you obtain a lower interest rate.

This can seem very basic, but it is easy to get caught up in the day-t0-day bustle of life and miss one of the key ways to eliminate the mortgage more swiftly!

Monday Money Tip: How to Pay Off Your House in 10 Years or Less

Welcome to another Monday Money Tip! In today’s tip, I’m sharing how you can pay off your house in 10 years or LESS! I was able to pay off my house in just 6 years using this technique. I’m confident you can apply it and see dramatic results too!

Want to automatically receive a helpful and practical money tip every Monday? Just sign up HERE (It’s FREE)!

3 Ways to Save Money – Part Three

During this series, I’m sharing PROVEN and PRACTICAL techniques that have helped people save money.

PART ONE – Automatic Draft From Paycheck

PART TWO – Create an Escrow Account For Known, Upcoming Expenses

PART THREE – Establish Accountability

Find someone who is (1) winning with money, (2) not trying to sell you something, and (3) available to help you. Ask them to hold you accountable to your saving goal.  I have seen some people go to the extreme length of actually giving the money to the other individual to hold for them because they cannot trust themselves to keep their own hands off of it.

Accountability can also be created by your written spending plan that you prepare every month before the month begins (you do prepare one, right?).  This plan helps cement your goals in your mind and helps you connect the fact that if you spend money on unplanned items, you will literally be robbing yourself of your savings goals.

I am married – this means I have built-in accountability.  Jenn is a huge saver.  She keeps me (the spender) in control. Establish accountability – it works!

3 Ways to Save Money – Part Two

During this series, I’m sharing PROVEN and PRACTICAL techniques that have helped people save money.

PART ONE – Automatic Draft From Paycheck

PART TWO – Create an Escrow Account For Known, Upcoming Expenses

For those unfamiliar with an escrow account, it is a savings account that is generally established by a mortgage company.  The mortgage company totals the annual cost of property taxes and homeowner’s insurance and divides it by the number of payments being made each year.  The mortgage company then pays for the taxes and insurance from this escrow (savings) account.  For example, if the property taxes are $1,200/year (sorry Northern folks – this is how low they are in the South) and the insurance is $600, then the total amount needed each year is $1,800.  The mortgage company will collect $150 extra with each monthly payment to place into the escrow account.

An escrow account smooths out the cost over a year – instead of having to pay for it all in one month.  It tightens the monthly budget, but having a fully funded escrow account sure is AWESOME when vacation arrives and the money has already been saved to pay cash for it!  Those who have a mortgage with an escrow account will testify to the fact that they never worry about paying for the taxes and insurance – ask someone!

Take it from one who has lived it – if you do not plan for your known, upcoming expenses, your ability to save money will be tremendously hampered!

Related Tool – Known, Upcoming Expenses Calculator

 

3 Ways to Save Money – Part One

One of the largest issues I see during one-on-one financial coaching is the inability to save money. Saved money is essential to long-term sustainability.  Saved money relieves stress and allows you to take a chance.  Saved money allows life to happen (job loss, disability, pay cut, injury, etc.).

But you already knew that part.  Yet, even though we KNOW how important it is to save money, most people fail to do so.  So, I wanted this series to focus PROVEN and PRACTICAL techniques that have helped people save money.

If you have negative savings (no money plus overdrafted accounts and debt), the goal is to bring you to zero.  If you are at zero, the goal is to get to at least $2,500.  If you have been able to save a substantial amount of money, it is my hope that you will participate in the discussion and share your own tips that have worked well for you!

PART ONE  Automatic Draft From Paycheck

Establish a savings account and have the money drafted from every single paycheck.  Whether it’s $25 or $250 per pay period – just SAVE!  You KNOW that the car is going to break down.  You KNOW that the school is going to send home a surprise expense.

By establishing this draft, it allows the money to be “out-of-sight.”  When money is out-of-sight, it can be out-of-mind.  This allows the account to grow without being robbed.

Now, I personally had a problem with this when I did not have a monthly budget.  I would ROB my own savings account about 2.1 microseconds after I was paid.  My account did not start growing in a healthy manner until after Jenn and I developed a plan that we agreed on.

How about you?  Is your paycheck set up for an automatic draft into your savings account?

Monday Money Tip: Online Bank Savings Accounts

Welcome to another addition of Monday Money Tip! I’ve used online bank accounts since 2007. They have been incredible for me, and I think they can be a very helpful way for you to maximize your savings as well! You can check out the online banks I recommend HERE.

Want to automatically receive a helpful and practical money tip every Monday? Just sign up HERE (It’s FREE)!

 

Monday Money Tip: How to Pay Off Student Loan Debt Faster

Happy Monday! In today’s tip, I wanted to share how you could eliminate your student loans faster! While you may believe you will still be paying on your loans in your 50s – or even later, it doesn’t have to be the case. I was able to eliminate all of my student loan debt in my 20s by using these techniques!

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