Save Money BEFORE Attacking Debt

When we launched our “How To Have The Best Financial Year Of Your Life In 2014″ live on-line event this year, I asked the question: “What is your top financial goal for 2014?”

The top response BY FAR was “I want to reduce/eliminate debt.”

It is a noble goal that will help create financial margin and reduce stress. However, many people make the mistake of skipping straight to debt reduction without first saving some money in an emergency fund.

This is a big mistake.

You see, we want to kill debt. We’re frustrated and angry and want to say goodbye to our long-time friend, Sallie Mae Student Loans, the banks, credit card companies, and stores. We want the debt to be G-O-N-E!

And we run right past a more important step – saving money.

Think about it. If you do not save money and begin to attack your debt with any and all extra money such as tax refunds, bonuses, and money freed up by better budgeting, you will begin to see your debt go down.

Then your car will break down.

How will you pay for it? Since you skipped the “saving money” step, you will have to use credit to pay for it.

This is demoralizing, and it causes many people to give up on their debt freedom march saying, “I just can’t seem to get ahead.”

Choose to save money first. I recommend $2,500 as a good start. Once all of the non-house, non-business debt is gone, build the savings to 3 months of expenses.

I’ll finish by sharing this: I’ve yet to meet anyone who told me, “We’ve just saved too much money. I regret it.”

Never. Met. That. Person.

The #1 Lie About Why A Budget Won’t Work

Most people believe a lie about why their budget doesn’t work. It’s a sinister deceitful lie. Ready for it? Here it is:

“I just need to make more money to make my budget work.”

Of course, having more money sounds phenomenal. Given the opportunity, all of us would sign up for more income. However, more income is rarely the issue with a person’s budget. On the contrary, it’s the way they manage their outgo.

But we still like to believe that the problem is our income. It’s sinister and deceitful because it allows us to take a “victim status.” If our problem is income, the solution becomes someone else’s responsibility. It’s our bad boss’s fault. It’s our spouse’s shortcoming. It’s the mean company’s greediness. It’s the rich people’s insensitivity. It’s the government’s failure to protect the “little guy.”

However, if we were to take full responsibility for the the outgo by preparing a budget and (gasp!) follow it, denying ourselves some immediate gratification, and working more diligently to maximize every single dollar, we might just discover our income has been sufficient all along.

And by saving and investing every time we are paid, we will see our income increase over time through the power of compound interest.

Don’t believe the lie.

Get started with one of our FREE BUDGET TOOLS and put together a plan that allows you to prosper with your current income.

Monday Money Tip: Two Key Ways To Produce Income

In this Monday Money Tip, I share two key ways to produce income – one of which is less utilized, but has the greatest potential to help you build wealth! This is worth the few minutes necessary to watch it. There may not be any cute kitty cats or puppy dogs, but it sure will help you with your money!

 

Can’t see the YouTube video? Copy and paste the following link in your favorite browser: https://www.youtube.com/watch?v=MAlJnc4hGwI

You can receive the weekly Monday Money Tip in your email by subscribing HERE.

15 Negative Words And Phrases People Use To Describe Budgeting

One of our core financial foundational principles is the importance of budgeting. Many people, however, really despise budgeting. They use many negative words and phrases to describe budgets and the budgeting process.

15 Negative Words And Phrases People Use To Describe Budgeting

  1. Joy-robbing experience
  2. Frustrating
  3. Impossible
  4. Horrible
  5. Terrible
  6. No-good-very-bad
  7. Awful
  8. Depressing
  9. Worthless process
  10. A reminder of the fact that there’s never enough
  11. Clueless
  12. Challenging
  13. Painful
  14. I’d rather go to the dentist for a root canal
  15. Get ready for a money fight with my spouse

It doesn’t have to be this way! I used to think all of these things (and a few more that I didn’t list) about budgeting, but I discovered how to make budgeting work for me and my family.

I’ve prepared a YouTube Video to share some of the key things that helped me have a budget that actually works! WATCH THE VIDEO and then download one of our FREE BUDGET TOOLS.

15 Alternative Words And Phrases To Use When Describing Budgeting

Many people despise the idea of budgeting. They feel it is very challenging and restricting. As a natural born spender, I used to feel the same way. In fact, I came up with poetry to describe my view of budgeting and financial planning.

My name is JOE.
Budgets make me say “NO.”
That interrupts my FLOW,
So the budget’s got to GO!

While I’m not making plans to become a full-time poet any time in the near future, I’m confident many people will agree with the sentiment of my literary work of art!

I’ve discovered that budgeting actually is the most FREEING thing I’ve ever done with money. It’s freed me of stress, given me a longer-term perspective, and helped me avoid tons of horrible financial mistakes.

Here are 15 Alternative Words And Phrases To Use When Describing Budgeting:

  1. Financial Planning
  2. Cash Flow Planning
  3. Financial Stress Reducer
  4. Impulsive Decision Preventer
  5. Motivator
  6. Marriage Uniter
  7. Dream Funding
  8. Money Maximizer
  9. Earmarking
  10. Provisioning
  11. Opportunity Maker
  12. Obstacle Destroyer
  13. Freedom Giver
  14. Fun Finder
  15. Money Management

If you want your budget to WORK for you, then you must WORK your budget! Start with one of our FREE BUDGET TOOLS.

8 Ways To Save Money On Groceries

Food consumes 10 – 20% of the average American’s household gross income. With such a large spending category, it is helpful to understand some key ways to manage these costs while still eating healthy and very well.

  1. Go the store with a list. One of the largest places “impulsive spending decisions” occur is at the grocery store or in a restaurant. A list will ensure you minimize the impact of impulsiveness on your budget.
  2. Don’t shop while hungry. If you show up to the grocery store when you are hungry, you will end with all kinds of interesting things in your cart. You will look at pickled pig’s feet and say, “That looks amazing!” Instead of choosing one box of cereal, you’ll chose four. It’s how sardines and SPAM are purchased. I would venture to say that more than half of the items in your pantry right now were purchased as a result of going to the store hungry.
  3. Use coupons. This is very basic shopping knowledge, but it is amazing how few people take the few minutes required to clip a coupon or two. You don’t have to be an extreme coupon freak. It might take 30 minutes to get the coupons that could reduce your grocery bill by 10-percent.
  4. Use coupons on sale items. This is an ideal way to maximize your coupon. A great coupon site is Coupons.com. There are many great coupon websites that can help you such as CouponMom.com and SouthernSavers.com
  5. Stack coupons. This is where you match up Manufacturer’s Coupons with In-Store Coupons. It allows you to apply the discounts to each item.
  6. Go to discount stores. Chances are pretty good that an Aldi grocery store is near you – find out if one is near your home by clicking HERE. You probably have 1 or 2 additional local discount grocery stores as well that can help you save a ton on your grocery essentials.
  7. Look high and look low. Companies pay BIG MONEY to have their products positioned right at eye level and on end caps. If you look up and down, you will probably find a generic product (maybe even made by the same manufacturer) at half the price!
  8. Use a budget with cash envelopes. Prepare a written budget that clearly outlines the amount you plan to spend on groceries. When paid, pull that money out in cash. Once the cash is gone, grocery spending is over. The rule here is that once the money is spent, you can’t go back to the bank and get more (or use a debit/credit card). When you are spending cash with the rule that you can’t get any more until next payday, you will spend it differently!

Which of these items have worked well for you? What additional tips would you add?

If The Mountain Was Smooth, You Couldn’t Climb It

“If the mountain was smooth, you couldn’t climb it.”

I heard this statement the other day, and it really connected with me. It apparently connected with a lot of others as well because it became one of my most “re-tweeted” and “fav’d” tweets ever.

Let me unpack this statement while looking at it through a financial lens.

Have you ever experienced a financial cliff – a monumental financial challenge that was seemingly insurmountable? It could be paying for college, putting braces on your children’s crooked teeth, or fixing/replacing a vehicle. It might be the major task of obtaining a better job or starting a business. The financial cliff certainly presents a challenge, but overcoming it provides you an incredible sense of achievement and provides confidence like few other financial events can.

Perhaps you’ve reached a point where there are plentiful footholds and handholds and maybe even a path or two allowing you to move up the mountain at a great pace. This is when you can see the debt on the credit cards melting away and the vehicle is paid off.

Hopefully you’ve experienced a time or two where you’ve reached the pinnacle. A moment where you’ve stood on top of your financial challenges, having overcome them all. That’s the entire reason I started I Was Broke. Now I’m Not. – to help people achieve far more than they ever thought possible with their personal finances.

Of course, a look around while on the mountain top will reveal many other peaks requiring difficult climbs, but past successes will provide the fuel to get back to the top of those too.

Where are you at on your climb up your current financial mountain?

My Next 40 Years

Today is my birthday.

My 40th.

I’ve been blessed greatly during these 40 years. Here are a few of the greatest blessings:

  • Awesome parents
  • 5 incredible brothers (including an identical twin – yes, there are TWO of us!)
  • Growing up on a farm in the country
  • Learning the value of work and serving others at a very young age
  • Literally seeing the principle of “sowing & reaping” at work all around me
  • Attending Purdue University and graduating with a degree in Mechanical Engineering
  • Meeting my bride, Jennifer, and getting married
  • Having a daughter when doctors were skeptical it could happen – and then having a son 10 years later, and then another beautiful daughter 4 years after our son. I still can’t believe we have three children. What a blessing!
  • Attending Clemson University and graduating with a Masters of Business Administration
  • Helping start NewSpring Church back in 1999 with my crazy lunatic friend, Perry Noble, and watching it grow to more than 33,000 people per weekend
  • Starting I Was Broke. Now I’m Not.
  • Multiple fishing trips – including many to Canada where I caught a 46.5″ 28# muskie
  • Purchasing INJOY Stewardship Solutions.
  • Purchased land where I can take my children to run free and wild like I did when I was a kid
  • Living in 1, 2, 3, 4, 5, 6, 7, 8 different dwellings (apartments & houses) in 4 cities (2 in Indiana, 2 in South Carolina)

If I’m blessed to live 40 more years, here are some of my dreams for those years:

  • Help my children graduate college without student loan debt
  • Fund my wife’s dreams (she’s be VERY patient while I pursued many of my dreams)
  • Maximize time with family through intentional blocking out chunks of quality time with them
  • Visit the world beyond North America – including Israel, Australia, England, France, Germany, Italy, Greece, Austria, Denmark, Sweden, Hong Kong, Japan, South Africa, Egypt, Brazil, and Argentina.
  • Serve 10,000,000 people through I Was Broke. Now I’m Not.’s personal finance and small business programs – enough to make a measurable difference in their individual situations and in the world economy.
  • Help NewSpring Church reach its goal of 100,000 people per weekend (and beyond)
  • Write 20 more books/resources/equipping classes
  • Become a trusted resource to and help influence the decisions of the United States Federal Government in such a way that we achieve a balanced budget and substantially reduce the National Debt
  • Start a university that is thriving after 40 years

Ultimately, I would love to achieve my life goal of being on the Great Wall of China when I’m 90 years old. Time will tell if I reach that goal. Check with me in 50 years.

4 monthsBy the way: Happy Birthday to my identical twin brother, Dr. John Sangl! We were 4 months old in the above picture!

How I Changed My Child’s Life In 15 Minutes

I changed my new daughter’s life in just 15 minutes time a couple of weeks ago.

That’s quite a dramatic statement, isn’t it?

But it’s true.

How did I change her life?

  • Did I move?
  • Did I decide to change careers?
  • Did I do something super drastic?

Nope. In fact, I did something you could also do to change your child’s life.

Here’s what I did:  I opened my daughter’s 529 college savings account and established automatic monthly contributions. It took a total of 15 minutes. And with that one decision and accompanying action, I changed her life.

Think about it. Because her mother and father took action when she was ZERO years old, when she is EIGHTEEN years old she won’t have to worry about:

  • Paying for college
  • Graduating with a boatload of student loans
  • Whether or not she can even afford to go to college

The magnitude of her parent’s simple decision will still be felt decades from now.

Perhaps you could take 15 minutes of your time right now to open your child’s 529 college savings account and help change their life.

10 Reasons I Love Budgeting

I love budgeting.
Let me count the ways.
My budget set me financially free.
For the rest of my days.

10 Reasons I Love Budgeting

  1. Reduced stress.
  2. Clear plan for the future.
  3. Intentional generosity.
  4. Focused savings.
  5. Anticipate future expenses.
  6. Same page as my bride.
  7. Allows me to maximize every dollar.
  8. Funded my dreams.
  9. Blessing my children.
  10. I can use a Microsoft Excel spreadsheet.

Do you love budgeting? Why?

One Change Can Be The Catalyst For Life Change

I believe most people are one or two major financial decisions away from completely changing the trajectory of their financial future.

  1. Increase investment by $200 per month. If a 25 year old were to change their monthly investment by $200, it would change their net worth by $2,352,955 by age 65. (12% growth for 40 years).
  2. Eliminate all non-house debt. This usually reduces a person’s cost of living by $500 to $1,250 per month. Suppose an individual were making $750/month in payments. $750/month would equal $9,000 per year! If this were invested and received 6% interest for 20 years, it would be worth $346,531.
  3. Keep the paid-for car for an extra four years.  Suppose the monthly car payment were $359.96 (like my first car payment). If the $359.96 were saved each of the next 48 months, it would be worth $19,475 (at 6% annual growth). No more car payments for the rest of your life!
  4. Eliminate cable TV.  At $75 per month, this can add up to quite an investment. Suppose this $75 were placed into an investment for 30 years at 12% annual growth. This would be worth $262,122.
  5. Prepare a budget. When my bride and I prepared a written budget for the first time in July 2003, we discovered more than $500 was disappearing every month for “miscellaneous cash withdrawal.” This money was utilized to intentionally eliminate debt. In 14 months, all of our debt (except the mortgage) was eliminated. In 10 years 1 month, our home was paid off. Preparing a written monthly budget every single month has been a huge part of our financial progress.

What is the one change you could make this week that could completely change the course of your financial future?

It takes tremendous courage to make a change. It will require sacrifice. It is WORTH IT.

Sad Realities About How People Manage Money

Here are some sad realities about how most people manage money:

  1. We know more about our favorite team or TV show than we know about our own financial situation.
  2. We spend more money on video games for our children than we save for their college education.
  3. We say we have plans, hopes, and dreams, but most of us never take the time to even write them down – let alone prepare a plan to accomplish them.
  4. We will spend hours planning for a Super Bowl Party but no time preparing a financial plan.
  5. We spend all of our money every month and then claim the lack of savings is someone else’s fault.
  6. We raise kids for 18 years and somehow never take the time to teach them about money management – giving, saving, investing, budgeting, compound interest, etc.

I’m committed to helping people change this reality. It’s good to have a favorite team (especially if it’s the Indianapolis Colts, Indiana Pacers, and the Chicago Cubs), but not if it takes the place of ensuring my finances are in order and funding plans, hopes, and dreams. It’s awesome to have an incredible Super Bowl Party (especially if my Colts are in it), but not if I am overspending money because I didn’t have a budget.

Are you ready to help millions of people change their lives? One step is to be a part of our Core Coaching Program – CLICK HERE to learn more.

Monday Money Tip: Life Insurance

In today’s tip, I talk about a vital component of most people’s financial plan – Term Life Insurance. This is one of the most misunderstood components of personal finance, but it doesn’t have to be that way! This will be worth the small investment of time required to watch.

Can’t see the YouTube video? Copy and paste the following link in your favorite browser: http://www.youtube.com/watch?v=UoG-I6GkNuY

You can receive the weekly Monday Money Tip in your email by subscribing HERE.

Crazy Statements People Make About Money

Here are some crazy statements people make about money:

  • “My children are my retirement plan.”
  • “I’ll always have a car payment.”
  • “I don’t need to save any money for retirement because Social Security will cover me.”
  • “I can’t pay my house off in 10 years because it is a 30 year mortgage.”
  • “I want to buy a 401(k).”
  • “I’m still paying off the original Nintendo.”
  • “Money is evil.”
  • “I can’t budget.”

What crazy statements have you heard people make about money?

How To Pay Off Your House In Less Than 10 Years

Many people believe that because they have a 30 year mortgage, it will take 30 years to pay it off. Some have been enticed by gimmicks (that cost thousands of dollars) purported to help speed up their home pay-off using some “little known” and “magical” formula. The truth is there is one way to pay your mortgage off earlier – by paying extra money toward the principal balance and less money toward interest.

Here’s an example:

  • $150,000 mortgage balance
  • 4.5% interest rate
  • 30 year mortgage
  • $760 principal & interest payment

If one were to pay $200 extra per month toward principal ($960/month), the mortgage would be paid off in 19 years 8 months (a full 10 years sooner)!

If an extra $790 per month were applied toward principal (1,550/month), the mortgage would be paid off in 10 years flat.

Use our “Early Pay-Off Calculator” to calculate the difference extra principal payments or interest rate reductions would make!

5 Ways To Pay Off House Earlier

  1. Refinance to a interest rate
  2. Rent out a room and use the rent to pay toward principal
  3. Use tax refund to reduce principal
  4. Use a bonus to reduce principal
  5. Eliminate PMI and use the money to apply toward principal

I applied this technique and paid off my house in 6 years flat, and you can read every month of my journey by clicking THIS LINK.

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