SERIES: How To Win With Money – Part 2
Welcome to another series here on the wildly popular I Was Broke. Now I’m Not. website. We’re passionate about helping YOU win with your money. In this series, we are going to be talking about a practical, step-by-step plan that you can use to take your finances to the stratosphere!
How To Win With Money
2. Save money (Build a wall of protection) – Start with a goal of $2,500
I’ve seen nothing provide greater confidence to a leader than having financial margin. Money in the bank provides a person with the ability to take risks, pursue opportunities, fund dreams, and encounter obstacles. Without savings, a person will always be at risk of financial catastrophe. Any occurrence of a multitude of potential financial challenges could cause financial collapse – vehicle breakdown, air conditioning unit failure, replacing an appliance, and medical bills all seem to be attracted to people who have failed to save money.
If you want to truly win with money, you must prioritize saving money.
Saved money allows you to prevent future debt. This allows you to confidently turn your focus to eliminating any existing debt you may have.
A beginning goal of $2,500 will allow you to pay cash for most financial challenges you could potentially face such as an emergency trip out of town, replacing an appliance, or repairing the car.
Here are some ways to quickly achieve this goal:
- Sell something
- Use your tax refund
- Take a 2nd job and commit to depositing all of the extra money into savings
- Eliminate an “extra” or several “extras” from your monthly budget
- Use our “next steps – money saving ideas” page to find ways to save money
Read the entire series (available after 4/20/2013)
SERIES: How To Win With Money – Part 1
Welcome to another series here on the wildly popular I Was Broke. Now I’m Not. website. We’re passionate about helping YOU win with your money. In this series, we are going to be talking about a practical, step-by-step plan that you can use to take your finances to the stratosphere!
How To Win With Money
1. Set Goals
Suppose I told you to run a race, but I did not tell you where to run. You could do a lot of running and still not end up at the ultimate goal – the finish line! Now suppose I challenged you to run a race, and at the same time I provided you a detailed map of the race course, a GPS, and a personal guide. The chances that you will end up at the finish line will have increased exponentially!
There is nothing like the power of a clear goal to spur one to take action. While a person might be able to make progress with their life without having clear goals, the process of establishing and tracking goals makes their achievement more likely. This is especially true when it comes to money and money management. One rarely stumbles upon wealth. Facts support this. Most wealthy people achieve their success through a series of focused decisions that are inspired by their goals.
Your money decisions should be driven by your goals for life! Many people make the mistake of allowing their current financial situation to dictate their goals. They make “broke thinking” statements such as, “I can’t afford that” or “I’ll never be able to do that.” This is a money lie that can create paralysis in all areas of life.
Establish life goals that mirror your plans, hopes, and dreams. Refuse to let the high costs frighten you away from establishing each goal because each one can be fully funded by following this plan.
Take some time in the near future (why not right now?) to write down some of your goals. Here are some good questions to ask yourself to fire up your dreams again:
- What opportunities do I want to provide to my children?
- What trips do I want to take?
- Who do I want to bless? What do I want to bless them with?
- What type of house do I want to live in?
- Where do I want to live?
- When do I want to retire?
- What career(s) do I want to pursue?
Here’s a “MY LIFE GOALS” form you can use to write your goals.
Read the entire series (available after 4/20/2013)
How To Prepare A Budget That Works
There are a lot of people who struggle with budgeting. They know theyshould have a budget, but there never seems to be enough time, energy, or money to prepare one.
I know the feeling. However, I also know the feeling of not having control of my money and always running into financial disasters toward the middle to end of each month. It was in December of 2002 that I experienced my IHHE Moment (I Have Had Enough Moment) and resolved to figure out a way to gain full control of my money. By July of 2003, I figured out a way to make budgeting work for my family. Below are the steps I put into place. If you put them into place, I’m confident this budgeting process will work for your household too!
- At least 3 days before the month begins, make a list of all your expected income and expenses for the upcoming month.
- Pull up the FREE BUDGET TOOL. Enter the income and expenses into the worksheet.
- Modify your income/expenses to ensure that the following formula is true: INCOME – OUTGO = EXACTLY ZERO
It really is that simple.
However, before you dive into preparing your best budget ever, I urge you to consider a few tips I’ve learned along the way:
- Prepare the budget BEFORE the month begins (before you get paid and start spending money). It is very difficult to prepare an effective plan in the midst of already spending it!
- Be realistic. I found that my previous attempts to budget failed because I was lying to myself and not being realistic.
- Put some fun in the plan. It really is okay to spend some money on FUN – as long as you aren’t mortgaging future plans, hopes, and dreams in the process.
- Use cash envelopes or a pre-paid gift card for categories where you have a tendency to overspend. This has worked wonders for my budget! The categories I use cash envelopes for are groceries, restaurants, clothing, spending money, and entertainment.
- Recognize that you will forget some expenses – especially in your first few budgets! I’ve seen many people address this by putting a “I forgot!” line item in their budget to cover these forgotten expenses.
Now go put that budget together, and start winning like never before!
Biblical Financial Lessons- Proverbs 13:22
I believe that the Bible is the best money book ever written, and I really want to take some time this week to share a money lesson I have learned from the Word.
Proverbs 13:22 A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous.
There are two distinct parts to this verse. Let’s focus on each part separately.
“A good man leaves an inheritance for his children’s children”
This is a very challenging statement. It forces us to understand that we are not just supposed to look at the “here & now”, but also to the future. Here are some key things I take from this:
- It’s not all about me
- I’m supposed to bless my children and my grandchildren
- The way I live my life will affect my descendents
- Blessings are generational
“but a sinner’s wealth is stored up for the righteous”
What an interesting statement to follow the first portion of the verse with! This part is making an observation that God will bless the righteous and that those who ignore Him and His commands will have their wealth transferred to those who will pursue Him.
Question: If you keep managing money the way you are currently managing it, will you leave an inheritance for your children’s children?
SERIES: I’ve Declared Bankruptcy – Now What? – Part Three
“I’ve declared bankruptcy. Now what?”
This is a combination “statement – question” that millions of people have made over the past few years. According to the United States Courts website (HERE), 1,221,091 individuals and companies declared bankruptcy in the U.S. in 2012 alone. We’re launching this series to help people who have went through bankruptcy so they never go back and so they can prosper!
Part Three Fix the root cause.
Identifying the root cause is very important, but fixing it is even more important. Statistics indicate that nearly half of all individuals who declare bankruptcy will declare it again at some point in their life. You can ensure that this statistic is lowered by ensuring that you address the root cause and prevent it from leading to bankruptcy again.
Did a pile of medical bills incurred while you were without medical insurance send you into the financial ditch? Address the root cause (not having medical insurance) by ensuring that you never again allow medical insurance to lapse.
Did you get laid off from the job you held for years and a lack of savings sent you into a downward financial spiral? Address the root cause (not making savings a top priority) by ensuring that you save money every time you are paid money in the future. It is a bill you owe to yourself!
Maybe you entered into a business partnership based solely on trust and your partner left you holding all of the bills. Address the root cause (failing to seal a handshake agreement with a contract that clearly identifies ownership, roles, responsibilities, privileges, and liabilities) by never again entering into an agreement without a rock solid contract.
Perhaps poor spending behavior and impulsiveness finally caught up with you and left you with an overwhelming pile of debt. Address the root cause (failing to have a monthly budget that prioritized giving, saving, and investing) by submitting yourself to a financial coach who will hold you accountable to living and operating by a budget every month.
Changing behavior is rarely fun, but it is so worth it!
Read the entire series (available after 3/25/2013)