I’m Stuck! Help! Part 1

Have you ever been stuck financially? I mean STUCK. Do you feel so stuck that you can’t gain traction to get control of your finances?

Perhaps you have no income because you have lost your job. Maybe you’re in college and accumulating debt to pay for it. Perhaps your spouse spends money faster than you can make it. Or maybe you’re just lost when it comes to managing money. It might even be the fact that you have so much unsecured debt that you feel completely helpless. Maybe you’re disabled, and can’t figure out what to do to earn more money.

This series is written for those who are struggling with their finances. You might even be making tough decisions about what will and will not be paid this month. It is my hope to provide practical steps you can take to walk out of this situation and into a fully funded life.

Let’s get started on the journey and get unstuck!

PART ONE  Evaluate
It is extremely important to understand why you are stuck. You must ask yourself challenging questions. There are some situations that have definite ends to them (college) and other situations that may continue on indefinitely (job loss, disability, and overwhelming debt).

When I’m coaching a person who says, “Help! I can not pay my bills!” my immediate response is to evaluate the root cause of their situation. I ask questions to grasp the real issues. Here are some of the questions I ask to help move you along in your financial journey. These are not in any particular order.

“What was the cause of this situation?” Is your financial situation the result of a long series of poor financial decisions or the result of a catastrophic event like a job loss, medical issue without insurance, death of income provider, etc.? Can you point to a particular poor financial decision that has led to your financial challenges?
“Is this an INCOME or an OUTGO issue?” Prepare a budget to help you more clearly determine the answer to this question. Identify where your money is going using your credit card and bank statements. As you identify you monthly income and total expenses from the previous month, it is important to challenge each expense with the question, “Was this expense absolutely necessary?” While most people in financial challenges believe their issue is an income problem, I’ve learned from experience that in most cases, it is an OUTGO issue.
“What are the required debt payments?” As you identify all of your debt payments, determine if each one is unsecured revolving debt (credit cards) or installment debt on an asset (car, boat, motorcycle, etc)?

As you identify why you are stuck, write the reasons down on paper.

Do you have other questions that you would add to this list?

4 Budgeting Steps for Irregular Income – Step 4

This series of post has been focused on how to manage your budget when it is powered by irregular income. It is my goal to help you eliminate the feast/famine lifestyle (especially the famine part!!). Before we focus on today’s step, let’s review the previous steps.

STEP ONE  Recognize it!
To avoid living the feast/famine lifestyle, you need to recognize that you are earning irregular income.

STEP TWO  Determine monthly  expenses
It is important to understand how much income is necessary each month to ensure that the household operates smoothly and free from the feast/famine lifestyle.

STEP THREE  Save up at least three months worth of expenses
This is your buffer that absorbs the wild patterns of your customers! It allows you to live life smoothly without the feast/famine episodes!

STEP FOUR  Become personally debt-free and operate your business debt-free
What are the advantages of operating a business debt-free?

  1. Monthly expense load drops! there are no interest payments to make!
  2. Your business can absorb dips in revenue much more effectively. Again, there are no interest payments to absorb!
  3. Breathing room. It is amazing how much stress a pile of debt brings on.
  4. When you spend your own real money, you will manage it better. I don’t know why it is, but if I am spending someone else’s money (i.e. the banks) I am much more susceptible to make a riskier decision! When I am spending my money, I am much more likely to do thorough due diligence before doing a deal!

Interested in learning more about irregular, seasonal and cyclical income? Check out my newly revised book, I Was Broke. Now I’m Not. Just click HERE!

4 Budgeting Steps for Irregular Income – Step 3

In this series of posts, we are learning how to manage your income when it is irregular or seasonal. Over the last few posts, we have learned the first two steps to prosper with irregular income and put away the feast/famine lifestyle forever!

STEP ONE  Recognize it!
You must recognize that you are living with irregular income!

STEP TWO  Determine monthly expenses
It is important to understand how much income is necessary each month to ensure that your household operates smoothly.

STEP THREE  Save up at least three months worth of expenses
WHAT?!!!!  I am sure that is what many of you are saying right now!  Yes, I did say that you need to save up at least three months of expenses.  Remember in Step Two that you calculated your monthly expenses?  Multiply that number by three, and you have your savings target.  I call this savings the “Known Slumps Fund”!  You know that slumps are coming, so be prepared!!!  This is HUGE in eliminating that horrible feast/famine lifestyle!

WHY?!!!  You might be asking this question.  Why on earth should I save up at least three months worth of expenses? I am glad you asked that question!

Irregular Income Image 2

Let’s say that you have monthly expenses of $3,000. This means that you need to have at least $9,000 in your Known Slumps Fund.

KUE Income-Outgo Only

Let’s look at a year’s worth of expenses. Now, it is easily seen that this person has earned enough to make it this year. They have taken $36,500 for the year. BUT look at how irregular the income is! Have you seen something like that before in your business? This causes life to be CRAZY. In January, you are eating ramen noodles like they are going out of style. February through April are decent, but then it dies down again May through July. Famine of the worst degree! All of the sudden, August through October are awesome! Feasts abound! Then November and December come in with back to back terrible incomes. Back to the ramen noodles!

What should you do? Get a Known Slumps Fund that equals three times your monthly expenses!

Let’s see what difference that makes!

KUE Balance

When you look at this chart you realize the POWER of having three months expenses in the bank! Whether you have a $500 month or a $6,500 month, you live on $3,000 that month. That means that you get to EAT!! That means that you can save money (remember the monthly expenses includes savings!). That means that you can have some fun each month!

The Known Slumps Fund absorbs the irregularities of your income! Fill out your Known Slumps Fund – it will take so much stress out of your life!!

Get a copy of any of our FREE tools located HERE

4 Budgeting Steps for Irregular Income – Step 2

Are you currently living with irregular or seasonal income? Interested in learning how to prosper while earning irregular income? It is my goal in this series to help you stop living the feast/famine lifestyle that is so often associated with irregular income. As we focus on today’s step, lets review the previous step.

STEP ONE  Recognize it!
To avoid living the feast/famine lifestyle, you need to recognize that you are earning irregular income.

STEP TWO  Determine monthly expenses
One of the key steps to budgeting is knowing how much income is necessary each month to keep your household running smoothly. That is why it is so important to determine your monthly expenses.

To determine your monthly expenses, you should pull up a monthly budgeting form and enter the following:

  1. Fixed Expenses – Enter all of your fixed expenses – house payment, utilities, car payments, credit card payments, cell phone, childcare, etc.  This also includes SAVINGS!
  2. Variable Expenses – Enter the average of all of your variable expenses – gasoline, groceries, clothing, spending money, entertainment, dining out, etc.
  3. Known, Upcoming Non-monthly Expenses– This is a KEY STEP!!!  If you do not add in all of those known, upcoming non-monthly expenses, you will continue to live the feast/famine lifestyle (more likely the famine lifestyle!!).  These type of expenses are BUDGET-BUSTERS.  Here is what I do.  I list all of the known, upcoming non-monthly expenses and place their annual cost next to them.  Then I divide that number by twelve to determine how much I need to save per month. Lastly and most importantly, I set up that amount to be auto-drafted into my Online Savings Account, Capital One 360. (If you’re looking for an Online Savings Account, just click HERE).

==Known, Upcoming, Non-Monthly Expenses Example==

KUE Example

So in this example, I would include a line item of $483 in my monthly budget for Known, Upcoming Non-monthly Expenses.  This would allow me to bring a stop to the feast, famine lifestyle!! You now have a monthly budget that will change very little throughout the year and Step Two is complete!

Stay tune for Step Three where we’ll tackle the toughest part of irregular income – having enough cash on hand when you need it.

4 Budgeting Steps for Irregular Income – Step 1

Irregular Income Image 1

I know that there’s a large group of people whose family economy is powered by irregular, seasonal or cyclical income. As I’ve continued to travel and meet people this recurring question comes up – “How do I budget when my income is irregular, unpredictable or seasonal?” In this blog post I want to address this exact question.

Real estate agents, hair stylists, commissioned salesmen, and business owners all experience cyclical income.

Several times, I’ve heard from people it is impossible to budget when you have this type of income. They say budgeting is impossible because they have no idea how much they will make each month. I say it is not only possible, but people with irregular income need a budget more than anyone!!!

For this very reason, I’ve broken budgeting with irregular income down into 4 steps. And here’s a hint – It’s EZ!!!

STEP ONE  Recognize it!
You must recognize that you have irregular income!  If you have ever starved to death during the “off” season, you KNOW what I am talking about!  In order to stop having your life severely impacted by “off” seasons, you must prepare!

If your family economy is powered by irregular income, what do you currently do to prepare for the “off” seasons?

In Step Two, we’ll go over actually PREPARING a budget with cyclical income!

 

5 Easy Steps to Budgeting – Step 5

In this series of post, I’ve been sharing the process that Jenn and I followed to develop a budget that actually worked! We have developed a monthly spending plan or budget every single month since that first one way back in July of 2003!

Here are the steps that we’ve already discussed.

STEP ONE  Decide to decide 
Until you decide that budgeting is crucial to taking your finances to the next level, you’ll be stuck! Decide to live differently and decide to start winning with your money NOW. 

STEP TWO  Determine the income (take-home pay) you will receive during the NEXT month
Planning ahead allows you to determine if there are any gaps. By being ahead of the game, it provides you an opportunity to avoid “budget-busting” events.

STEP THREE  Enter all of your expenses for NEXT month 
Tell your money where to go!

STEP FOUR  INCOME – OUTGO = EXACTLY ZERO 
Whether you make $1,500 per month or $50,000 per month, it is limited. If you spend more than you make, you will erode savings or turn to debt!

STEP FIVE  Follow the budget!
Now you know all the steps. You have a spending plan for next month. Now is the time to live it. YOU told your money where to go now YOU make sure it goes there!

I’ve been able to see people completely break free of debt. I have seen people pay off their mortgages! I have seen marriages restored! I have seen the hopeless become hopeful!

Following a budget is about more than money. It’s about becoming FREE! Not being held by the chains of debt and despair. You will become financially free if you stick to a budget. This is a decision you will not regret.

Maybe you have read this series in a guarded, protected way while wondering, “Will this work for me? I don’t want to get my hopes up. I’ve tried this before.” I say that YOU CAN DO THIS!!! I believe in you! Why? Because I was there! I had an average bank balance of $4.13 and the STRESS was awful! The shame was real. I did not know how to break free.

Planning my spending one month in advance was what broke Jenn and me free! It will work for you too!

Why not pull up a free budgeting tool and get started winning with your money today?

If you get paid monthly or have at least one month of expenses in the bank, use our Monthly Budget Form. If you are living paycheck-to-paycheck, use the Weekly Budget Form.

If you would like to learn more about how to budget, check out my newly revised book, I Was Broke. Now I’m Not. Click HERE to order!   

5 Easy Steps to Budgeting – Step 4

In this series of post, I am sharing the process that Jenn and I followed to develop a budget that actually worked!

Here are the steps that have already been shared.

STEP ONE  Decide to decide
You can not start winning with your money until you decide that budgeting is crucial to taking your finances to the next level.

STEP TWO  Determine the income (take-home pay) you will receive during the NEXT month
The key word in Step Two is NEXT. A budget must be completed BEFORE the month begins and BEFORE the money ever arrives.

STEP THREE  Enter all of your expenses for the NEXT month
This is where you get to actually spend your money on paper before the month arrives!

STEP FOUR  INCOME – OUTGO = EXACTLY ZERO
YOUR INCOME IS LIMITED! If you bring home $3,000 during the next month and spend $3,208, your spending plan will not work! Where will the extra $208 come from? It will have to come from savings OR from debt – usually in the form of a credit card. If you spend more than you make, no matter how much you make, you WILL have to make that up somehow!

In Steps Two and Three, we entered all of the income and expenses into the budget and, no surprise, the OUTGO exceeded the INCOME. You can see the entire budget HERE.

budget image

So OUTGO exceeds INCOME…now what? We have two options.

  1. Increase the INCOME – you could get a 2nd job, work overtime, turn a hobby into a business
  2. Decrease the OUTGO – get rid of some expenses

NOTE: This is not a “perhaps, perhaps, perhaps” type of budget! This is how the family will ACTUALLY spend their money next month! Remember – if your budget is not 100% relevant for you and your family, you will ignore the budget and use it to start a fire in your fireplace!

What expenses can be eliminated from the example budget? Again, you can pull a copy of the budget HERE.

After working together on their budget, the family decides on the following changes.

5 Easy Steps Image - Changes

SUCCESS!! INCOME – OUTGO = EXACTLY ZERO!

If you want to see the entire EXACTLY ZERO budget, you can view it HERE. You might be saying, “These people are CRAZY! They cut out 1/2 of their dining out, entertainment, blow money, and all of their babysitting money!” I would say – “NOPE! They have had enough. They are so sick of living paycheck-to-paycheck that they are willing to live differently and change their lives forever. All because of a little sacrifice now!”

We only have ONE step left!!

Monday Money Tip: I – O = EZ

I’m FIRED UP because it’s Monday and that means another Monday Money Tip! These tips were created as a weekly service to provide people, just like you, with a practical and simple money tip – right at the start of the week so that you can take action with it!

Register HERE (it’s free) to receive this weekly tip in your email bright and early on Monday mornings!

5 Easy Steps to Budgeting – Step 3

First, let’s review Steps One and Two.

STEP ONE  Decide to decide
You have to decide that you’ve had enough! The very day that Jenn and I started budgeting was the very day that we started winning with money!

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month
This income is what you will be spending on paper BEFORE the month, the money, and the bills ever arrive!

STEP THREE  Enter all of your expenses for the NEXT month
This is where we get to actually spend our money on paper! So we have already determined our income for next month, now it is time to actually spend the money BEFORE the month arrives! The absolute best way I have found to input my expenses is to use real, actual expenses that will happen. NOT averages for the year. If you don’t know the actual cost, enter an educated guess based on recent spending.

If the expenses are not relevant to the next month, it is highly possible that you will consider the budget irrelevant for the next month!!

Enter all of the expenses into your budget. You can obtain a FREE COPY of our budgets by clicking HERE. To find out which budget is right for you, check out Step Two of this series.

Each 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! Do not stop if the total goes red! Can you live with a total in the RED? Absolutely, with the help of credit cards! Living in the red is how people get into debt and stay in debt.
  • If INCOME exceeds OUTGO, the TOTAL will turn YELLOW and tell you how much more money needs to be named!
  • When INCOME = OUTGO, the TOTAL will turn GREENThis is the ultimate goal!
  • There is an ACTUAL column that can be used throughout the month to track your progress.

Our goal for this step is to get all the expenses into the budget. We’ll work on getting it green next.

How are you doing so far entering all your income and expenses into the budget?

 

 

5 Easy Steps to Budgeting – Step 2

I’m answering one of the most common questions that people ask me – “how do I budget?” In Step One, I wrote about the negative feelings that people have when they hear the word “budget”. 

Just remember that a budget is nothing more than telling your money where to go

So let’s review before we move on to Step Two!

STEP ONE  Decide to decide
This is where it begins! You must decide to live differently and not paycheck-to-paycheck. 

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month
The key work in Step Two is “NEXT”. Preparing a budget for money you’ve already spent is not very fruitful. A budget must be completed BEFORE the month begins and BEFORE the money ever even ARRIVES!

The best way to stop saying, “I can’t believe I spent my money that way” and “I wish I could have that money back” is to develop a spending plan BEFORE the money is received that month!

So, what income will you receive during the next month?

  • Paycheck
  • Bonus
  • Side Job
  • Child Support
  • Alimony

If you get paid monthly or you have at least one month of expenses in the bank, we recommend you use our Monthly Budget Form (It’s FREE). If your income is unpredictable, write down the amount of money you can count on. (If your income is irregular or unpredictable, stay tuned for specifics of how to deal with that later this month!)

Monthly Budget - Income

 

If you are living paycheck-to-paycheck, all the bills probably cannot be paid at the start of the month. You will need to develop a budget for each individual paycheck. We recommend using our Weekly Budget Form (It’s FREE). Make the dates at the top of the weekly budget form match up to your income dates and enter the income in the INCOME section.

Weekly Budget - Income

 

Stay tuned for Step Three…

 

5 Easy Steps to Budgeting – Step 1

One of the most common questions I get asked is, “how do I budget?” Many people have tried budgets…and failed! That leaves people frustrated and in turn they say they will NEVER use a budget again. Here are some things people equate with budgets:

Budget = Restricting

Budget = I’m Broke

Budget = Controlling

Budget = No Fun

Budget = Not worth it

I would ask them the following:

  • How are you paying for Christmas this year? I am paying cash.
  • How much is your car payment? I paid cash for my car.
  • How much did you invest this month? I have invested for retirement for over 220 months in a row and my daughter’s college for over 150 months in a row.
  • How much money do you owe to your credit cards right now? I owe $0.
  • When is the last time you had a great discussion on finances with your spouse? Not a fight. A great discussion. Jenn and I develop a spending plan TOGETHER every single month.

Well I want to make a deal with you. Will you give budgeting one more shot? I’m going to do my best in this series to try and teach you a method of budgeting that works. A method I used and still use today. My hope is you will try a budget for the month of March.

In reality, a budget is nothing more than telling your money where to go. I have heard Dave Ramsey take the definition a humorous step further – a budget is nothing more than telling your money where to go instead of wondering where it went! EXACTLY!

So our first step in budgeting is:

STEP ONE  Decide to decide
Until you decide that budgeting is crucial to taking your finances to the next level, you will always find a way to avoid this “unsavory” task. The very day that Jenn and I started budgeting was the very day that we started WINNING WITH MONEY! From this moment on, decide to live differently. Decide to not live paycheck-to-paycheck and in debt.

Decide to decide!

Make sure to check back for Step Two on Thursday!

Monday Money Tip: Budgeting?

It’s Monday and I’m FIRED UP! Are you ready to start your week off right with another Monday Money Tip? This video covers one of the greatest challenges people face when it comes to their personal finances – preparing a monthly budget that works. I’ve found that people either put together a budget that does not work, or they can’t even find time to even prepare one.  In this Monday Money Tip, I’ll discuss the reasons you should be budgeting every month.

Want to automatically receive a helpful and practical money tip every Monday? Register FREE at MondayMoneyTip.com

 

Contest: Guess The Number Of Exclamation Marks In Original and New “I Was Broke. Now I’m Not.”

Today marks the first full day that the completely revised and updated I Was Broke. Now I’m Not. is available!

As part of the festivities, we are offering the “Release Special” for people who purchase a copy of the book.

IWBNIN Order Today

We’re also launching a contest called “Guess The Number Of Exclamation Marks!!!!!”

As you know, I am a big fan of this form of punctuation. I tend to speak with exclamation marks and my writing reflects. As I began the process of rewriting the book, I could not believe how many of those little “!” I had used in the original copy of I Was Broke. Now I’m Not.

So, in honor of my complete overuse of this punctuation, we’re going to award a free copy of the completely new I Was Broke. Now I’m Not. to two people:

  1. The person who most closely guesses the number of exclamation marks in the original book
  2. The person who most closely guesses the number of exclamation marks in the newly updated book

Enter your guess below. Only one entry per person. You must provide a valid email address so we can contact the winner. Contest ends at 11:59 PM Eastern on Thursday night, January 15, 2015. Can’t see the the entry form? Copy and paste the following link in your favorite browser: http://goo.gl/forms/zyaYx7VpSr

What Are You Doing Sunday Night At 8PM Eastern?

“What are you doing Sunday night at 8PM Eastern?”

A slightly strange question, I know! But I am FIRED UP about the free live online event I will be teaching at that very time.

We’re celebrating the complete rewrite, expansion and release of my book, I Was Broke. Now I’m Not. which officially releases Sunday!

In keeping with our team’s mission of helping people accomplish far more than they ever thought possible with their personal finances, we wanted to be able to provide a free equipping event that can help the year 2015 be your best financial year yet!

I’ve even asked my bride, Jenn, to join me so she can share her own unique perspective of our family’s money journey. I really think you will find it to be a time of great encouragement and practical teaching that will challenge you to take your next financial steps.

It’s free, but you must REGISTER.

5 Key Decisions That Helped Us Win With Money – A Special Evening with Joe & Jenn Sangl” Live Online Event Details

  • DATE: Sunday, 1/11/2015 at 8:00 PM Eastern (7:00 PM Central; 5:00 PM Pacific)
  • DURATION: 60 minutes total (45 minutes teaching – 15 minutes Q&A)
  • LOCATION: LIVE Online
  • COST: FREE! (but you MUST register to secure your spot)
  • REGISTER: Click HERE or copy and paste the following link in your favorite browser: http://iwasbrokenowimnot.com/5keydecisions

Nothing Happens Until You Decide

I once heard a friend say, “I decided to decide.”

It was amusing when he said it because it was a strange use of the English language. However, he said it with such passion that it forced me to explore what he was really saying. I realized that this was one of the 5 Key Decisions That Helped Me Win With Money.

You see, we’ve all made decisions before where we did not follow through. Here are some common examples:

  • Getting physically fit  We decide to lose weight and get in shape. We purchase the treadmill and a weight set. A gym membership is secured. We purchase all the right workout gear. And then the treadmill and weight bench become just another place to store junk. The gym membership card is never scanned.
  • Reading a book  We decide we are going to read a book that we’ve heard others talking about. We purchase the book. The book arrives in the mail. It sits on the counter, nightstand, or near the toilet. Then it becomes buried under more books we wanted to read. Five years later, we rediscover the book and realize we’ve never read it.
  • Preparing a budget  We wanted to prepare a budget. We knew that having a budget was a good idea. A good budget tool was discovered (like this one). We even took the time to put some numbers into it. We went even further and forced INCOME – OUTGO to equal EXACTLY ZERO. Then we promptly pulled out the credit card and went to Olive Garden – completely violating the budget we just prepared.

“Deciding to decide” was one of the 5 Key Decisions That Helped Me Win With Money. It meant that not only was I making a decision, I was committing to actually follow through with it!

When I finally “decided to decide” to get my finances in order back in December 2002, it completely changed the trajectory of my financial future.

This is why I’m hosting a live online event where I could share all of these decisions in more detail with you right now, at the start of 2015. I really hope you will be able to join me and my bride for this special one-of-a-kind online event (it’s FREE).

5 Key Decisions That Helped Us Win With Money – A Special Evening with Joe & Jenn Sangl” Live Online Event Details

  • DATE: Sunday, 1/11/2015 at 8:00 PM Eastern (7:00 PM Central; 5:00 PM Pacific)
  • DURATION: 60 minutes total (45 minutes teaching – 15 minutes Q&A)
  • LOCATION: LIVE Online
  • COST: FREE! (but you MUST register to secure your spot)
  • REGISTER: Click HERE or copy and paste the following link in your favorite browser: http://iwasbrokenowimnot.com/5keydecisions
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