Posted in Budgeting for Everyone, Building Wealth, Debt Free, Financial Freedom, Raising Your Income, Saving for Your Future, Winning with Your Money, You and Your Money

Biggest Tool in the Toolbox

We all need a financial toolbox – tools we can use to win in the area of our finances. And as much as you are going to hate to hear this, a budget is your biggest wealth building tool in your financial toolbox. Give me a moment of your time and I will explain why in hopes that by the end of this blog, you will agree and begin to take seriously the budgeting process.

First, let me clear up a huge misconception – a budget is not designed to tell you no. Actually, the opposite is true. Of course, if you are living paycheck to paycheck, you are going to have to say no to some things. At least, you should say no to some things. However, when you have a budget, you know exactly where your money is going; therefore, you are able to say yes more. Maybe not in the beginning – it depends on how big your hole is. But as you begin to dig yourself out of debt and build wealth, the budget will allow you to say yes – a lot!

A budget (or spending plan as I like to call it) is simply a way to look at your income and your expenses. When you can see it visually, it helps you to see where to cut back on expenses, when to raise your income and helps you make awesome financial decisions that will move you forward in your getting out of debt and building wealth goal.

Now, if you don’t want to build wealth and you are okay where you are currently in your finances, then budgeting probably won’t work for you. However, if you are looking to get out of debt, save money and build wealth, then you definitely need to budget.

Budgets are a snapshot of your finances. Having this snapshot every month will help you walk in your truth and begin to make better financial decisions in order to reach your financial goals. So stop avoiding a budget! Now is the time to start – it will take a few months to get the hang of it and that’s ok. And if you have no clue where to start, head over to our short, easy course and learn everything you need in just a few short minutes.

It doesn’t matter how you learn or what methods you use. The main thing is that you start! Today is your day! You’ve got this!

Posted in Budgeting for Everyone, Building Wealth, Debt Free, Financial Freedom, Raising Your Income, Saving for Your Future, Winning with Your Money, You and Your Money

New Year, Better You

Why do we continue to be enslaved in our finances?

Why do we continue to spend more than we make?

Why won’t we do what we know to do?

Deep down most of us know what we need to do to better our finances.  Maybe we need to spend less.  Maybe we need to make more.  Maybe we simply need to say no every once in a while.  So why don’t we?  Personal finance is 10% math and 90% emotions.  We get the math – it’s 1st grade math for heaven’s sake.  But the emotions of money take us to places we never thought we would go.

When you were in the 9th grade and the teacher asked you to write about where you saw yourself in 10 years, you would never even think to write “I want to be doing a job I hate, but I need because of my $50,000 worth of debt.”  But that’s exactly where you are.  How did you get here?  For me, it was years and years of misspending and trying to live a life that my income couldn’t support.  Within 8 years, I had amassed $200,000 in debt and had gone from making $30,000 a year (it was 1998) to making $10,000 a year.  This was definitely not the story I had written in the 9th grade.

I believe that if it was just a matter of education, most of us would not be in debt, especially nowadays with the internet and all of the information out there about money.  We know exactly what we should be doing.  Odds are you have been handed the key to wealth and financial freedom numerous times, yet you still choose to stay shackled.  Why is that?

Wealth takes actions – not just ideas. In order to get out of debt, stay out of debt and build wealth, you must take action each and every day – action that will take you in a positive direction.  Here are a few things you can do in 2018 to make it the best year ever:

  • Budgeting – People hate budgets; however, they are your biggest wealth building tool.  A budget is simply a monthly layout of where you need (and want) your money to go.  It will help you spend less than you make which allows you to save, invest and build wealth.
  • Spending Journal – Keeping track of every dollar you spend helps you to prepare an accurate budget and to see where all of your money is going.  How many times have you looked up at the end of month and wondered where the money went.  With a journal you never have to wonder.
  • Spending Freeze – I am doing a one year spending freeze for 2018.  There are many reasons – we are taking a huge trip this year, I want to learn contentment first hand, and I want to take a deep look at needs vs. wants.  You don’t have to do a year like me.  I have done multiple one month freezes and that is where I would start if I were you.  You can’t imagine how freeing it can be – once you get past the shock
  • Cleansing – Take an opportunity this year to look at everything you have and be real with yourself about what brings you value and what is just there.  Begin to release the “just there” and let someone else get value from it.  Have a yard sale, donate items, sell them on Ebay – move them out of your life and into someone else’s, someone who can enjoy them.  It is a very refreshing process.
  • Save a little – Make sure you save something – even 2%.  If you keep telling yourself that you have nothing to save at the end of month, you won’t.  However, if you budget 2% and pay yourself at the beginning of the month, you remove the risk of spending it instead of saving it.  Reality is you have more than you think.  You have the money for lattes, for eating out, for movies, for cable, for unlimited GBs on your cell plan – you have money.  You are just choosing luxuries over your future.  You can have both – you just need to make sure you have your priorities straight.  Pay yourself and then enjoy life.
  • Value – Look at every purchase, every bill, every decision through the eyes of what brings value to your life.  I heard this from a colleague of mine when I read his book last year and it was very eye-opening for me.  You can have anything, but you can’t have everything.  Learn what brings value and spend your money on that.  Don’t waste money – focus on making money.

2018 is going to be your year – a year of hope, a year of renewal, a year of financial freedom.  You are not going to make a new you this year – you are awesome!  But you are going to make a better you this year – better decisions and better results.  Let’s do this – together!

Look for Debbi’s newest book “50 Shades of Money” releasing on January 20, 2018. You can preorder it in paperback or for Kindle.  Don’t miss this amazing book answering the top 50 personal finance questions asked to Debbi over her 15 year career.  

Posted in Budgeting for Everyone, Building Wealth, Credit Cards, Debt Free, Raising Your Income, Winning with Your Money, You and Your Money

Budget 101

Yes, I am writing about the dreaded “B” word.  Most of us hate the word budget and even more, we hate doing a budget.  However, I have found that a budget is one of the biggest wealth building tools you can have.  In my book, the chapter on budgeting is disguised under “S” for Spending Plan.  There are two reasons for this:  one is to make sure people read this chapter and don’t skip it and two is because a plan is a positive thing.  Budgets need to be thought of as positive tools, not negative jails.  If you went to build your dream home, you would not just start building and never have a plan.  You would plan everything out and only start building when it was to your liking.  And along the way, you would make changes as situations change, always improving.  The same is true to build your dream financial situation.  You must have a budget to lay out your money and tell it where to go.  You will always be making changes as you go.  Your budget will not be the same this month as next and in 5 years, it should be completely different.

Doing a budget is easy, 3rd grade math.  The hard part and the part we don’t like is the other 90%, the emotional part.  We hate to say no to ourselves and if we do a budget, we may have to say no sometimes.  But without saying no sometimes you will never be wealthy.  What if you make $3000 per month and you spend $3200 per month?  That is spending $2400 per year more than you make.  How will you know this if you don’t do a budget and how will you control this without a plan?  When you spend more than you make, you will never be wealthy.  It is not possible because there is nothing left over to save and invest.  This is also one of the two reasons we have debt – spending more than we make and using debt to make up the difference.

If you are tired of your financial situation and stress, I want to challenge you to start a budget today.  Start with July, but start today.  You can do it on the computer, on a piece of paper, or use our budget form (Tools tab on our website – www.abcsofpersonalfinance.com).  A budget is simply writing your income at the top, listing all of your expenses, and the difference is what is left over.  You want the difference to be zero.  Therefore, if you have a negative difference, you will need to cut some of your discretionary expenses or raise your income.  If you have a positive difference, you will need to decide which financial goal is next (saving, paying off debt, home project, etc.) and put the money in that line item for the month.

I had the same dream as most of you have – to be out of debt and become financially free.  I would never have achieved this goal without a budget.  I started with a spending journal first because I wasn’t sure where all of my money was going.  I did this for about 3 months and used that information to form my budget.  Knowing where my money was going helped me to pay attention to my money more and use it in a positive way to achieve my goals.  You work hard for your money; therefore, you should control how it is spent.  A spending plan is the best way to do this.  I know millionaires who still budget.  It usually isn’t written down anymore because they have formed good spending habits using their budgets as a tool, but they don’t just spend like crazy now that they have a little money.  If they didn’t continue to have limits (budgets), their money would be gone very quickly.

Begin building your financial dream house today with a good foundation – a spending plan!