First Time Budgeting Tips

I remember our first-ever budget. It was in July 2003. My fine bride, Jenn, came into the living room with a budget scribbled on a piece of lined paper. She had been trying to get me to budget for the past 6 months or so, but I was not playing along (because I’m a spender!).

I believed budgets were controlling, restricting, live-in-a-Maytag-refrigerator-box pieces of trash. They made me say the word “no”, and it interrupted my flow. I wanted no part of it.

But let’s consider a snapshot of my family’s financial situation when Jenn walked in:

• I was managing the money

• We had $4.13 in our checking account

• Our credit cards had a huge balance on them again – for the third time!

• We had a 105% financed car and a 100% financed truck

• There was nothing in our short-term savings account

• We were B-R-O-K-E

• I was in COMPLETE DENIAL!

I can not write this strong enough: I was B-R-O-K-E and telling my wife, “NO!” to doing something different with our finances! But, for some reason at that very moment, something happened that changed my life and marriage forever. I turned off the TV and looked at the budget she had prepared. It actually showed we could live for a month without incurring any additional debt!

LIFE-CHANGING does not describe the next few minutes. I moved into the computer room and started entering the expenses into Microsoft Excel. As I was putting together the formula to subtract expenses from the income, I realized that all of this time I could have been managing my money with the math skills possessed by the average first-grader. INCOME – OUTGO = EXACTLY ZERO! After a few minutes, we had a budget that was EXACTLY ZERO.

My life and marriage have been changed forever because we discovered that a budget is NOT restricting. It is freedom!  It is merely telling your money where to go instead of wondering where it all went. It allows you to pay off debt, save up for known, upcoming expenses, save money for emergencies, and fund your dreams.

The first budget was tough because not everything went according to the plan. Every month we had been spending an enormous amount at Wal-Mart and did not clearly know what we had spent it on. As a result, our first month was a little rough. Month two was a bit easier.  Month three was even easier.

Listen to your feelings as I write this next line: We don’t worry about money ANY MORE. We did something different. We applied God’s word and Grandma’s advice to our money and our lives have never been the same.

You CAN do this! You CAN get through the 1st month’s budget! Click on “TOOLS” at the top of the page or at the button below:

Why You Should Have A Budget

"You should have a budget."

It's a phrase that's likely crossed your path more than a few times.

If you lean towards being a saver, your heart probably gave a little leap of joy (because budgets are your jam). But if you're more of a spender (like myself), you might have felt a slight tinge of apprehension, but it’s true you should have a budget and here’s why…

Increased Savings:

• You budget should include a line item for savings. This should start as enough money put away to build an emergency fund. Think of how much easier it would be to deal with what life throws at you - by having an emergency fund ready to help!

Decreases in Inefficient Spending:

• With a budget, you track your spending month over month. If there’s a problem area for you, your budget is going to show it. Your budget will keep you from spending money on unnecessary or impulse purchases because you’re tracking every dollar! 

Accomplish Financial Goals:

• It’s difficult to accomplish goals without a plan… a budget is your plan! Create line items in your budget for your financial goals, whether that be a vacation, paying off debt, saving for a home purchase, starting a business, etc. 

Decreased Financial Stress:

• When you don’t budget, this can lead to uncertainty about where your money is going and how bills will be paid. A budget will ELIMINATE that uncertainty. Track every dollar of income that you bring in each month, and write out where each dollar will be going. 

Good Financial Decision-Making:

When you have a budget, it’s easier to make informed financial decisions, because you have a full grasp on your financial standings. Reviewing your budget month over month will help you know when to cut back on discretionary spending or adjust expenses in response to changes in income.

Furthering Your Financial Education

Have you ever found yourself feeling stuck when it comes to your finances? Could it be because you haven't had the chance to dive into the right knowledge or education about personal finance?

Like any subject, we don’t know every answer to our financial questions. We can’t. That’s why it’s so important to continually strengthen yourself in the areas of personal finance. Just think for a moment: you might have a strong budgeting habit, but are you confident in your savings plan?

Here's the good news – you're not alone! Many of us have asked similar questions or faced challenges due to a lack of knowledge.

So, how can you find ways to consistently educate yourself?

• Educational Blogs

• Financial Community

• Helpful Tools

Another way to take the next step in leveling up your financial knowledge? Complete a personal finance study!

With foundational truth from scripture, learn how to budget, save, invest, plan ahead, and maintain momentum on your financial journey. The I Was Broke. Now I’m Not study blends scripture and money in a relevant, engaging, and life-changing way for you!

How Do I Create Good Financial Habits

Our financial habits are the guiding point for our financial journey. Just like a ship needs a sturdy compass to navigate through rough waters, good financial habits provide you with direction, control, and a sense of purpose. Good habits allow you to make informed decisions, adapt to changing circumstances, and achieve your dreams. 

Start with these steps and begin creating good financial habits:

Learn & Educate: 

Knowledge is a powerful tool for financial growth. Invest time in reading financial literature and resources that enhance your understanding of budgeting, saving, investing, and other areas of personal finance.

Define Your Goals:

Set specific, and timely financial goals. These give your financial habits a purpose and a roadmap to follow. Identify short-term and long-term aspirations, such as creating an emergency fund, paying off credit card debt, or saving for a dream vacation. Linking your habits to these goals will keep you motivated and on track!

Create A Budget: 

Build your realistic budget. Track your income and expenses diligently to understand where your money is going. Keep track of every dollar! Allocate funds for essentials, savings, and discretionary spending. Stay disciplined by sticking to your budget and making adjustments when necessary.

If you need help building out your budget, use these resources: 

Automate Where You Can: 

Take advantage of automation - it can be a built-in habit! Struggling to save each month? Set up automatic transfers to your savings accounts, ensuring that a portion of your income goes directly towards your financial goals. 

Creating good financial habits requires dedication and patience. You have to decide to decide - and start today! By practicing these habits consistently, you can shape your financial future and work towards achieving your goals. Your future self will thank you for the positive changes you make today.

Debt Snowball: What Is It?

We can all agree that debt is a drag. It hangs on like a bad relationship or a fixer-upper money pit house. Anyone, when given the choice, would choose to be debt free over paying debt payments every month.

The average family possesses credit card debt, student loan debt, furniture debt, vehicle debt, and a personal loan or two. Then a house payment enters into the picture.

Every single month, 40% or more of the family’s income is “dead on arrival” because it must immediately be sent out to lenders. Let’s work on changing that today!

THE DEBT SNOWBALL TECHNIQue:

• List ALL debts from the smallest balanced owed to the largest: The first step towards financial liberation is to get a clear picture of your debts. From credit cards to student loans, list all your debts from the smallest balance to the largest. Include everything – credit card debt, student loans, vehicle loans, personal loans, and that lingering house payment. This comprehensive list is the foundation for your debt-free journey.

• Pay the minimum payment on all debts except the smallest one.

• Pay as much as you can on the smallest debt: When the smallest debt is eliminated, take the monthly payment you were paying for that debt and add it to the monthly payment you’re making on the second smallest debt.

• Continue this process with a vengeance until you are debt free!! It might not be easy, but with every debt payment disappearing from your monthly budget, you'll gain momentum, inching closer to financial freedom with each payment!

Need help getting started?

Let's Talk: Compound Interest

Few concepts are as magical as compound interest. It has the ability to turn small, regular contributions into substantial wealth over time.

INVEST and capture the power of COMPOUND INTEREST.

When it comes to compound interest, three things matter a lot:

1. Amount of money invested (start with whatever you can and work to increase it from there)

2. Time (start early!)

3. Interest rate (growth rate of your investment)

Here’s how YOU can achieve $1,000,000 at a constant Interest Rate of 12%:

1. Invest $85.00 per month for 40 years at 12% annual interest.

2. Invest $286.13 per month for 30 years at 12% annual interest.

3. Invest $1,010.86 per month for 20 years at 12% annual interest.

4. Invest $4,347.09 per month for 10 years at 12% annual interest.

Here are some ways YOU can achieve $1,000,000 in just 20 years:

1. Invest $1,697.73 per month for 20 years at 8% annual interest.

2. Invest $1,316.88 per month for 20 years at 10% annual interest.

3. Invest $1,010.86 per month for 20 years at 12% annual interest.

4. Invest $768.54 per month for 20 years at 14% annual interest.

Here is how YOU can achieve $1,000,000 with just $300 per month:

1. Invest $300.00 per month for 473 months at 8% annual interest.

2. Invest $300.00 per month for 404 months at 10% annual interest.

3. Invest $300.00 per month for 355 months at 12% annual interest

4. Invest $300.00 per month for 318 months at 14% annual interest.

For those familiar with investing, I already know one of the biggest questions you want to ask:

“Where on earth do I get 12% annual interest?”

It’s a great question! The number one way to get 50% or even 100% interest is to contribute to an employer-sponsored retirement plan where matching contributions are made. For example, if your employer matches your contributions “dollar-for-dollar” up to 3% of your pay, that is a 100% interest rate that AUTOMATICALLY HAPPENS with NO RISK! It’s called FREE MONEY! Beyond that, I like investing in mutual funds that are older than me. Also, in other great investments like residential or commercial real estate and small businesses.

How Do I Start Saving?

Are you tired of the never-ending struggle to save money? Do you find yourself caught in a cycle of starting to save, losing track, and then starting over again?

It's time to take a step back and evaluate your foundation. Is it the RIGHT foundation to help you achieve your financial plans, hopes, and dreams?

• Have you set your financial goals? (What are you working towards…)

• Do you have an emergency fund built for when life happens? (Are you protecting yourself with the right insurance: health, home, car, disability, etc)

• Prepare for known, upcoming expenses. (Like birthdays, insurance premiums, property taxes, etc. These should not bust your budget!)

After reviewing your foundation, start prioritizing your savings. Treat saving money with the same level of importance as paying bills. Consider it a debt owed to yourself. Recognize that saving money is a choice and prioritize it over non-essential expenses.

A few tips:

• Separate Your Savings: To prevent accidental spending, move your savings to a separate bank account. This separation creates a mental barrier and makes it less tempting to dip into your savings for impulsive purchases.

• Use Cash Envelopes for Specific Expenses: For impulsive cash areas like groceries, dining out, entertainment, and clothing, use cash envelopes. Allocate a fixed amount for each category and stick to it!

• Reevaluate Subscriptions and Daily Habits: Identify and cut out unnecessary membership subscriptions or daily habits that drain your finances. Do you need every single streaming platform? Probably not.

• Seek Better Insurance Deals: Consider changing insurance providers for home and auto to potentially find better deals.

Remember, it's never too late to start saving – the key is to take that first step and stay consistent on your financial journey!

What Is Your Why

Do you have a vision for your money? Have you identified your WHY?

When you receive those precious Washingtons, Lincolns, Hamiltons, Jacksons, and Franklins, do you have a clear idea for the utilization of each one of them? Or is that money dead on arrival – doomed to be sent on its way without advancing you toward your life’s plans, hopes, and dreams – your Fully Funded Life?

Without a clear vision, it is highly likely that the money will disappear with little to no progress. After all, there are so many things competing for your dollars:

• Housing

• Utilities

• Kids

• Food

• Student Loans

• Automobiles

• Insurance

• Gasoline

And everything in between! When we experience financial setbacks, which will occur often, it can be easy to just give in and give up saying soothing statements like:

• “We just can’t ever seem to get ahead financially.”

• “We’ll never win with money.”

• “I need to win the lottery.”

I encourage you to write down your vision for the money you’ll be receiving between now and the rest of the year. You’ve still got five months to experience a massive shift toward your preferred financial future! Get started today!

Working Together To Win With Money

When my wife, Jenn, and I began our budgeting journey, we discovered a magical ingredient for achieving financial success: working together. I want to share the benefits we’ve enjoyed since we started “working together to win with money.”

Benefit #1 – We BOTH Know Our Financial Situation.

Before Jenn and I started working together on our finances, there were a lot of episodes of unplanned spending. As a result, we would run short of cash at the end of the month and cover those shortages with credit cards. Because neither of us truly understood where all of our money was going, it led to additional financial mistakes. These would lead to unnecessary stress and frustration. It also resulted in an average bank account balance of $4.13. Since I am an eternal optimist, I would say, “Hey! At least the balance is positive and not negative!”

We later realized our financial behavior was robbing us of our future hopes, plans, and dreams. In December 2002, we had our IHHE Moment (I Have Had Enough Moment) and said, “ENOUGH,” and stopped spending money in a wild manner. By July 2003, we had formalized our spending into a monthly spending plan (A.K.A. a budget). Ever since then, we have planned each month’s spending.

The result?  We have been debt-free (except for the house) since February 2004. We have achieved many of our life dreams, and we both know our financial situation.

Keys To Obtaining Benefit #1

1. Prepare a written spending plan every single month – visit HERE for a free budget template

   • This monthly rhythm will create a natural space for you to have conversations about your finances. Since nearly everything in life costs money, it will allow you to have a conversation about the more important things in life too. This is perhaps the most powerful result of preparing and following a monthly budget.

2. If you have a financial mess, it is time to have an IHHE Moment

   • This is the moment where you say, “Enough is enough.” It is a definitive moment where the pain of keeping things the same exceeds the pain of changing. This is a vital component of every financial turnaround as it provides energy and passion to help you power through the challenges of changing old financial habits and behavior.

3. Take the time to talk with your spouse about your hopes, plans, and dreams – and write them down!

   • At least once a year, you should have a focused conversation about your plans hopes, and dreams. The dreams you share with your spouse, as well as, your individual ones. This can be a wonderful time of hope and challenge that helps you remain committed to positive financial decisions.

Benefit #2 – Improved Communication.

When Jenn and I were B-R-O-K-E and constantly spending money we did not have, we really had no idea where our money was going. All we knew was this: it was leaving at a very rapid pace!

By working together to win with money, our communication changed dramatically. I now know when each of my nephews and nieces have a birthday because we send them money. We can’t just magically produce the money we send them every birthday. It must be planned. Through this rhythm of monthly meetings, these gifts are carefully included in our monthly spending plan.

We also discuss our future plans, hopes, and dreams. We talk about which dreams will be funded now and which ones will need to be funded later. Together we made a decision to fund college education for our three children. We fund that education every single month. In January 2003, we agreed together that this goal was extremely important to us, and we made it a priority.

We both have a desire to travel around the world. As such, we made a decision that most of these travels will be funded in the future, not now. However, we have focused on funding a few trips right away. We typically take a family vacation each summer where we tour several states and visit family. Living in South Carolina, we also love visiting the beach. Because of this, we have made beach trips a priority. These trips are funded monthly because they are included as an expense in our monthly budget. This allows us to pay cash for each trip without any debt following us home. This all happens because of one key reason: we have agreed together to sacrifice other items in order to fund each of these higher priority goals.

Because of our improved communication, we have been able to give more money to causes and people we believe in.

To put it very plainly: there is no possible way we are ever going back to our old way of money (mis)management.  Our marriage has been vastly improved by the fact that we are working together to win with our money.

Keys To Obtaining Benefit #2

1. Understand each other’s plans, hopes, and dreams.

   • Few things are as satisfying as setting a goal and achieving it with the one you love. Have you written down your plans, hopes, and dreams? What about your spouse? How long has it been since you allowed yourself to dream?

2. Take time to develop a written spending plan TOGETHER – free budget tools are located HERE

   • Let’s face it. Budgeting is not the most exciting task you will undertake on any given day. However, when you realize that your budget, and the process of preparing it together with your spouse, is the critical and vital tool that will maximize every dollar and enable you to achieve the huge plans, hopes, and dreams of your life, you might discover that you suddenly enjoy this process in a way you did not think was possible. You will be spending your time working together to win with money.

3. Plan your spending EVERY SINGLE MONTH – ensure that you are funding at least one of your dreams at all times

   • Have you noticed how fast time goes by? My firstborn was just entering kindergarten and now high school is already in her rear-view mirror! If you do not commit to preparing and following a budget each month, you will seemingly blink and a year (or more) will pass. Mark my words, any month you allow to pass without preparing a plan is a month you did not maximize the impact of your money.

4. Become debt free – calculate your Debt Freedom Date HERE

   • Have you ever known anyone who said their credit card debt was the reason for their financial success? Probably not. The same can surely be said for furniture debt, student loan debt, and owing a friend or family member. We all understand that debt is not all created equal. Credit card debt is wildly different from a home mortgage. But consider this thought: What would your life look like if you owed zero debt except for your home? What if you were completely debt-free – including your home?

Benefit #3 – Dreams Get Funded!

By working together to win with money, many of our dreams have been funded.

We have had tons of dreams …  A new kitchen with granite countertops, a new master bathroom, paying for our kids’ college education, paying cash for our kids’ first house, giving away $1,000,000, starting a university, living for a year in downtown Chicago, traveling to Australia, Europe, and Asia, owning a 100-acre farm …

Quite frankly, the list of dreams goes on and on. However, because we have talked about them and prioritized them, many of them have been fully funded. In fact, it is my belief that one hundred percent of the above goals will be funded during our lifetime. Why do I believe that?  Because we have funded so many of our dreams already! Many of them were dreams we did not think were really possible when we first discussed them. It is amazing what happens when you have a financial plan and work together to win with money.

If we fail to achieve all of our dreams, so be it. It will be a blast knowing we gave our best effort together!

Keys To Obtaining Benefit #3

1. Remove all distractions and take the time to have a great conversation about your plans, hopes, and dreams.

   • Children are wonderful and beautiful, but there are some conversations that are better without their constant input (or interruption). One of these includes the conversation about your plans, hopes, and dreams. Schedule your conversation so you can ensure a distraction-free environment for this most important of discussions.

2. Ask these questions of each other:

   • Will these dreams cost money?  How much?

   • If we continue to manage money the way we are right now, will we be able to achieve these dreams?

   • What is your most important dream?  How can we start funding it right now?

How Working Together Has Helped Us

Ever since our IHHE Moment back in December 2002, Jenn and I have taken our financial decisions much more seriously. The addition of a budget greatly accelerated our financial success. By February 2004 (just 14 months later), we were debt-free except for our home. We have been able to launch and purchase eight companies, acquire the farm, and invest in rental real estate.

We are so grateful for the journey and the blessings we have experienced. It is our mission and goal for you to enjoy the same success. We truly believe it is possible for you to live your own Fully Funded Life! You can do this! We believe in you.

After more than 25 years of managing money, I finally took time to write about the profound impact that one’s plans, hopes, and dreams can have on your financial behavior. I have entitled the book, 20/20 Money: Gaining Clarity for Your Financial Future. Included within this book are 22 Vital Questions you should ask to help discern and fully understand your own plans, hopes, and dreams and just exactly a Fully Funded Life looks like for you. You can learn more and pick up your copy HERE.

5 Proven Strategies To Save Money

I am a HUGE fan of savings accounts.   I am an even HUGER (I made up that word) fan of savings accounts with money in them!

Here are some proven strategies for piling up HUGE CHUNKS of money in your savings account:

• Save the “magic month” paycheck

  • If you are paid weekly, you normally receive four paychecks a month, but there are four months each year where you receive FIVE paychecks.   Budget and live your life on four paychecks per month and you will be able to save the extra paycheck every three months!    

  • Paid bi-weekly?   Budget and live your life on two paychecks per month, and you will be able to save the extra paycheck during those two magic months each year when you get three paychecks.

• Save the TAX REFUND

  • As a spender, I know that the word “fun” is right in the middle of the word refund. However, maybe the right thing for you to do this year is to SAVE your tax refund.

• Automatically send 10% of paycheck to savings

  • If the money makes it home in the paycheck, it is at risk of special magic disappearing acts – even for the most conservative of people.   Set it and forget it.   You won’t regret it.

• Save the BONUS

  • Don’t spend it – just this once.   Put it into savings.   It is amazing how great it feels to be able to say, “NO!”, to yourself and put your BONUS into the savings account. It gives you the feeling that you truly are in control of your money!

• Sell something

  • The old RC airplane in the garage just needs to go.   So do the bikes that you don’t ride.   So does the boat you use once per year – it’s cheaper to rent one when you need it.   Put the money into savings.   You will end up with a cleaner and neater garage and attic and a plump savings account!

Remember, we each have a unique financial journey, so it's important to adapt these strategies to suit your specific circumstances and goals. The road to financial stability and security is paved with consistent saving habits. Start implementing these strategies today and you'll be well on your way to achieving your fully funded life.

You Can Be Debt Free

#1: Understand WHY You Want To Be Debt-Free!

I believe this is the most important step in becoming debt-free!  In the hundreds of financial counseling sessions I have held, it is amazing how many people do not have a plan for their lives. I ask them, “Why do you want to win with your money?”  and they stare at me like I am from outer-space.

“Why?” they stammer back at me.

Seriously, I believe that it is the first time that many of these people have ever seriously thought about what they want to accomplish with their lives.  As a result, they are bumbling through life just “trying to make it through the day”.

What a miserable way to live!

Write Out Your Hopes And Dreams.

When Jenn and I wrote down our hopes and dreams on paper it opened our eyes to the fact that our money management (or lack of) was literally ROBBING us of our future!  We wanted to move back to Anderson, SC to take a job that paid way less than what we were making, but every single dinner at Outback was robbing us of that opportunity.  Every single debt payment went off to make the bank wealthy while at the same time robbing us of our God-given dreams!

By writing out our hopes/dreams on paper, Jenn and I were motivated to manage our money differently.  It caused us to view debt differently.

#2: List Your Debts

I KNOW that it can be scary to total up debt.  The mere fact that it is so scary tells me two things:

• People do not like debt.

• People have not been paying attention to their finances and do not have a well-defined plan for their life.  Otherwise, they would not have incurred most of the debt.  It is literally ROBBING them of their financial future!

Get started by preparing a well-organized list of your debt.

#3: Calculate Your Debt-Freedom DatE

It is really very simple to calculate your Debt Freedom Date.  You need two numbers to calculate your Debt Freedom Date –

• Total Debt Owed

• Total Monthly Payments.  

Calculate by clicking the button below:

#4: Establish Accountability To Become Debt-Free

The strongest among us can still fall to temptation!  You could be making fantastic progress toward debt-freedom and then a new truck pulling a new boat passes you on the road.  If you are not careful, you will also be pulling a new truck and boat down the road!

There are two key ways to ensure you are held accountable to your goal of debt freedom!

• If Married, Work Together With Your Spouse. 

• If Unmarried, Have Someone You Trust (Someone Who Has Won With Their Money) Hold You Accountable!

Plan Your Spending Every Single Month!

Planned money goes further than unplanned money!  Every single month Jenn and I sit down TOGETHER and spend every single dollar on paper before we are paid.  Don’t miss that – that was good! 

Every.  Dollar.  On.  Paper.  BEFORE.  We.  Are. Paid.

From the day that Jenn and I started budgeting, we have not incurred any new debt.  In fact, we became debt-free (minus the house) in just 14 months!

Your budget will hold you accountable. 

#5: Secure Your Debt-FreedoM

Save at least $1,000 before attacking your debt!

I have seen so many people calculate their Debt Freedom Date and get all fired up about attacking their debt.  They sell everything and everyone in sight.  They can’t shut up about getting out of debt.  It is all they talk about with their spouse. Everything goes great for two months.  They smile every time I see them.  “This is awesome”, they tell me enthusiastically.

Five months later, they avoid me.  When I ask them what is up, they say something like, “Well, Johnny broke his arm and the emergency room bill and doctor bills cost me $1,500.  I had no savings so now I am right back where I was – falling back into more debt.”

How demoralizing is it to attack debt so fervently and then have to go right back into debt?  It is AWFUL!  Don’t do that!  Instead, save up at least $1,000 into an emergency fund before attacking your debt, and THEN you can attack your debt all you want!

What happens if you have an emergency pop-up while you are attacking your debt?  You can use the emergency fund to cover the expense.  To replenish the emergency fund, slow down on the debt pay-off plan until you have the $1,000 back in the emergency fund!

By the way, if you have a house, kids, or more than one car I highly recommend $2,500 for your emergency fund.

Secure your debt freedom plan with your emergency fund!

Practicing Generosity

We all strive to be generous people. Donating to causes that are important to us, tithing at church, supporting a non-profit. Is your generosity a financial habit or do you need to learn how to practice generosity?

ONE: Be intentional

Add ‘giving’ as a line item in your two most important budgets: your financial budget and your time budget. Generosity falls into two categories giving time and giving dollars. Take the first step and identify that 'giving’ is important to you. Those who plan their time and dollars tend to accomplish far more than those who choose to ‘wing it.’

TWO: Put time on the calendar

If you are planning to "get around to doing it" or "would like to find time to be a part of that" - you will always face challenges in actually doing it. I have a team of people who help me manage my calendar - as you can imagine, it is loaded with writing, zoom and phone conversations, planning meetings with the team, and leadership tasks. But what gets on the calendar is ultimately up to me! If I am not happy with the calendar, that is my fault!

Are you being intentional with the time on your calendar?

THREE: Put dollars in the budget

Giving dollars can be broken down into the budget, just like other expenses. Budget for giving monthly, annually, and for significant events. Here are some examples:

Monthly Giving

• $50 at Christmas at Walmart

• Homeless person on street corner

• Friends or family who had a special opportunity or need

  HACK: Having the dollars pulled out in cash allows you to be "intentionally spontaneously generous"

Annual Giving

• Birthdays, Anniversaries, and other annual special days

• Organizations to support

One-time Gifts

• Weddings, special events

Why Do I Need A Budget?

Budget. The word alone sends chills to many people. You might even be asking yourself, “Why do I need a budget?”

STEP ONE – Understand That Budgeting Is Nothing More Than “Telling Your Money Where To Go.”

This is the largest hurdle of any part of budgeting. The rest of budgeting is a breeze once you understand what a true budget is. Once you have internalized Step One, it is time for Step Two.

STEP TWO – Determine The Income (Take-Home Pay) You Will Receive During The NEXT Month.

There is a very key word in Step Two – the word “NEXT”. I have learned that preparing a budget for money that has already been spent is not very fruitful. It is like being a Monday-morning quarterback for your finances. You want to get that money back. You wish you could have that money back. But it is GONE!

The budget must be completed BEFORE the month begins and BEFORE the money ever arrives. You are developing a spending plan for your money BEFORE you ever get it. The only way I have found 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 was paid to me for the month.

So, think about it. What income will you receive during the next month?

Here Are Some Common Ways That People Receive Money During The Month:

• Paycheck

• Bonus

• Side Job Income

• Child Support

• Alimony

Whatever your source of income is, write it down. In fact, write it down and put the dates that you will be paid this money during the next month. If your income is unpredictable, write down the amount of money that you can count on.

If you have at least one month’s worth of expenses in the bank, download the [Monthly Budget].

Because you have at least one month’s worth of expenses in the bank, you can sum up your total income and enter the total income in the Income section at the top of the budget form.

If you are living paycheck-to-paycheck, download the [Weekly Budget].

Because you cannot pay all your bills at the start of the month, you will need to develop a budget for each individual paycheck. Make the dates at the top of the budget form match up to your income dates and enter the income in the Income section at the top of the budget form.

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 you spend your money on paper! In Step Two, you determined your total income for the next month, and it is now time to spend it on paper BEFORE the month arrives!

These expenses are the real, actual expenses that will happen. Not averages! Enter the real expense because this budget needs to be highly relevant to the next month. 

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. If you don’t know the ACTUAL cost (utilities, gasoline, etc.), enter an educated guess based on recent spending.

The 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!

• If INCOME exceeds OUTGO, the TOTAL will turn YELLOW and tell you how much more money needs named!

• When INCOME = OUTGO, the TOTAL will turn GREEN … This is the ultimate goal!

Even if the budget TOTAL turns RED, keep typing in the expenses you know will happen in the upcoming month. The goal is to get all of the known expenses for the next month on paper.

YES, you will later have to remove some expenses or boost your income to get to GREEN, but the goal right now is to get all of the expenses into the budget form! By having all of the expenses in the budget, you can make a much more informed choice on what will be removed from the budget.

STEP FOUR – INCOME – OUTGO = EXACTLY ZERO

Your income is limited. If you bring home $3,000 during the next month and spend $3,320, your spending plan will not work! Where will the $320 come from? It will have to come from savings OR from debt – usually in the form of a credit card.

YOUR INCOME IS LIMITED! Let me take it one step further. Let’s say you are really blessed and bring home $70,000 during the next month (don’t laugh – many people do!). If you spend $71,320, your spending plan will not work! The $1,320 will have to come from somewhere – and many times it is made up with debt.

In STEPS TWO and THREE, we entered all of the income and expenses into the budget and, no surprise, the OUTGO exceeded the INCOME.

There Are Two Options When The OUTGO Exceeds INCOME:

1. Increase the INCOME – 2nd job, Overtime, side job

2. Decrease the OUTGO – Decrease the expenses

STEP FIVE – Follow The Budget!

You have followed all of the steps. You now have a spending plan for the next month. It is time to live by it! After all, it was YOU who told your money where to go! Why wouldn’t you follow YOUR plan?

As I have helped others develop their own spending plans, I have seen people completely break free of debt. I have seen people pay off their mortgages, marriages restored, and the hopeless become hopeful!

That is what your budget will allow you to do! Develop a spending plan every single month BEFORE the month and the money arrives and then FOLLOW it! You will never regret this decision.

3 Ways To Save Money

One of the largest issues I see during our one-on-one financial coaching meetings is the inability to save money.

Here are some facts about saved money:

• Saving money is essential to long-term sustainability

• Saved money relieves stress

• Saved money allows you to take a chance

• Saved money allows life to happen (job loss, disability, pay cut, injury, etc.) without going broke!

But you already knew that part.  We all know that we are supposed to “save money for a rainy day.” Yet, even though we KNOW how important it is to save money, most people fail to do so. However, if you do not save, you can not prosper.

I challenge YOU to take the next step. 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 savings, the goal is to get to at least $2,500 in a beginner emergency fund.  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.

Automatic Draft From Paycheck

Establish a savings account and have the money drafted from every single paycheck.  Whether it is $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.

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 you robbing it!

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.  Only after I had a plan developed together with my bride, Jenn, did my savings account begin growing in a healthy manner.

Create An Escrow Account For Known, Upcoming Expenses

For those unfamiliar with an escrow account, it is a savings account that is 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 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!

Establish Accountability

Find someone who is:

• winning with money,

• not trying to sell you something

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

Types Of Debt

Do you feel like you are drowning in debt? Like the payments are consuming your entire paycheck and you can never get ahead? Or worse, there really is not enough money to pay for basic living expenses and cover the debt payments you owe? If you are in a situation where you do not have enough money to pay for everything, I would suggest prioritizing in this order:

1. Housing

2. Food/Prescription Medicine

3. Transportation

4. Back Taxes

5. Secured Debts

6. Family & Friends Debts

7. Unsecured Debts

As you can see, your debts would actually be addressed last. So many people are so terrified of creditors that they make sure these payments are made first. I would suggest the opposite. Once you have your basic living expenses covered, it is then time to decide which debts are going to get paid.  At this point, it is very beneficial to have an understanding of the different types of debt and how they operate.

The first type of debt you should focus on paying back is secured debt. This is debt where the lender can come take something – like a car, boat, motorcycle, tractor, etc. If the lender repossesses the item, they will sell it at a wholesale auction and then come after you for the difference.

The next type of debt I would suggest paying off would be debt to family and friends. I feel this is important because unpaid debts to family and friends have been the cause of relationship issues. It is essential to pay back these debts to avoid these problems!

The last type of debt to pay is unsecured debt. These are the debts that are screaming at you the loudest to pay: credit cards, student loans, signature loans, etc. Why are these creditors the loudest? Because there is nothing they can come take from you! The debt is not attached to anything that they can come and repossess. This is why creditors will play on your emotions to get you to pay them before anything else. I have met so many people who are up to date on their credit card payments but behind on their house payment. I do not want this to be you! Pay your secured debts first!

So go back to your spending plan and make sure that you have all of your priorities in order. If you cannot make all of your payments this month, make sure you are prioritizing and paying the most important first.

5 Reasons Why Budgeting Is Important

“You need a budget.”

Chances are pretty high that you’ve heard that statement before.
If you are a saver, your heart started beating wildly (because you LOVE budgets). If you are a spender (like me), you probably felt the hair raise on the back of your neck and immediately felt flashes of frustration. For those of you who are spenders…

Here are 5 Reasons Why BUDGETING Is Important:

1. It maximizes every dollar you earn.  As a spender, I can “accidentally” spend money. Preparing a monthly budget (and an annual budget once each year to cast vision for the future) allows me to know that money is limited and ensures that I maximize every dollar I do receive.

2. It makes you aware of your impulsiveness.  This is not the most pleasant feeling, but it is very helpful to be reminded that it is much easier to remain broke than it is to win with money. My budget ensures that I am continually aware of my impulsiveness and the danger that presents to my long-term goals.

3. You can buy stuff without feeling guilty.  This is probably my favorite reason for budgeting! I used to play a round of golf and feel guilty because I knew it wasn’t in the budget (because we didn’t have a budget). I’ll never forget the day that I was able to just go enjoy a round of golf and KNOW it was in the budget and I had planned for it! It didn’t help my golf score, but it did help me and my marriage!

4. You have probably married a saver (or if you aren’t married, and hope to be someday, you will most likely marry a saver)  I married a saver. Jenn is a beautiful and amazing bride, but she just does not have any desire to go spend all of our money. So when we didn’t have a budget, I nearly drove her crazy with my random ATM cash withdrawals and surprise expenses. I am certain she was the one celebrating the most when I finally “got it” and began participating in the monthly ritual of planning our spending and following that plan!

5. Budgeting will fund your dreams faster.  I know that I said #3 is probably my favorite, but I’m taking it back. This one is my favorite! I love funding my dreams. Because of budgeting, my family has been able to give more money away than we ever thought possible. We have been able to take wonderful cash-paid-for-in-advance vacations, pursue our dream of launching this organization, and pay off our house! All in 10 years and 1 month! I can’t WAIT to see what happens in the next 10 years!!!!

Got Oxen?

Where there are no oxen, the manger is empty, but from the strength of an ox comes an abundant harvest.

Proverbs 14:4 (NIV:1984)

I will never forget the day I first read Proverbs 14:4 in my Bible. My family had embarked on a journey to become financially free, and I was reading the entire book of Proverbs to find verses providing wisdom about money and money management. Many verses in Proverbs were already well-known to me and had made a profound impact on my life. But, Proverbs 14:4 never registered on my radar until that day. Its wisdom gripped me and stopped me in my tracks. “Where there are no oxen, the manger is empty, but from the strength of an ox comes an abundant harvest.”

I grew up on a small farm. We raised or grew just about anything and everything. We had pigs, cows, ducks, and chickens. Our crops included corn, soybeans, wheat, and hay. I loved growing up on a farm. It is where I learned the value of hard work, about sowing and reaping, the cycle of life, and how everything in God’s creation is interconnected and dependent upon each other.

Maybe Proverbs 14:4 connected with me so strongly because it was talking about a life I knew that included farm animals, farm equipment, and a harvest, but I think the real reason it connected with me is because it described my financial situation – my manger was empty.

I don’t know if you have ever watched cattle eat from their mangers, but they will stand eating at a manger until all of the food is gone, and then they will lick the manger clean just to ensure all remaining scraps are consumed. This described my financial situation. I could scrape together enough money to pay the bills, but beyond that, there was absolutely nothing left over. Every single spare dime we gained inevitably departed our presence – never to be seen again. Our version of “licking the manger” was running out of money and then physically turning our piggy bank over to find enough coins to buy food off the dollar menu.

The same scenario played out every single month. We made money, and then we consumed every last dollar. Just like the oxen, we would be faced with an empty manger and were forced to stand around waiting for the next paycheck to refill it. It seemed like there was never enough for the moment, let alone storing up for the future.

On the day I encountered Proverbs 14:4, I realized that the writer shares two potential outcomes: an “empty manger” and an “abundant harvest”.

Two Potential Outcomes – Proverbs 14:4

1. An empty manger

2. An abundant harvest

An empty manger is barren. It represents hunger and potential famine. The manger once held food, but now it is cleaned out. It has nothing left over. To more fully comprehend this, imagine that your entire house is void of food – the pantry, cupboards, and refrigerator are completely empty.

An abundant harvest is presented as an alternative outcome. I liked the sound of this much better than an empty manger. An abundant harvest suggests that we have a full manger – all of the time. Dictionary.com defines “abundant” as “present in great quantity; more than adequate; over-sufficient.”

As I pondered these two potential outcomes. I sensed a life-changing moment approaching. I knew if I could truly grasp the wisdom contained within this verse, my life would be radically changed. As I read Proverbs 14:4 again, I saw what made the difference between an empty manger and an abundant harvest: oxen.

A farmer knows it is impossible to reap an abundant harvest without oxen. The same is true for all of us even if we aren’t farmers.

If I continued managing my money without the help of financial oxen, the opportunity for an abundant harvest would be greatly limited. After all, there was only so much I could accomplish on my own. Like most people, I was working a “Work, get paid. Don’t work, don’t get paid.” job. Even if I worked twelve hours every day, there was a limit to how much I could earn on my own. My earnings would allow me to feed my family, but without a serious change to the way we managed our money, the income would probably only be enough to maintain our household. We would continue to be stuck in the “empty manger” cycle, cleaning out the manger each month and then standing around waiting for the next paycheck to arrive. The worst realization of all was knowing that even if I worked for fifty years of my life, my income would cease the moment I chose to retire. It became imminently clear that I needed oxen in order for my family to experience abundance.

There is a choice each person must make. In pursuit of financial abundance, you can choose to rely on yourself and your own abilities, or you can acquire oxen to help you. Don’t miss my wording here. It is a choice, whether a conscious one or not, that each one of us will make as we journey through life.

I have chosen to acquire oxen, and have found Proverbs 14:4 to be absolutely true. While my family’s oxen acquisition journey has been adventurous, frightening, incredible, and exciting, I have discovered that the strength of oxen has indeed led to an abundant harvest. The same can be true for you. All you need is some good oxen.

Now I have one question for you:

Got Oxen?

Saving For KUEs

There are three things we should ALWAYS be saving for. 

1. Emergencies

2. Known Upcoming Non-Monthly Expenses

3. Dreams 

Of these three, our focus today is on KUE’s - the known upcoming non-monthly expenses. This savings bucket can tend to be difficult and can create budget issues.

Here’s why:

1. They are non-monthly  Because of this, we tend to forget about them until they show up

2. They are usually larger expenses  Property taxes, insurance premiums, Christmas, vacation, car maintenance, and repairs, and insurance deductibles usually have larger price tags than typical monthly expenses

3. We don’t save for the expenses monthly  We wait until the bill arrives and then we are forced to scramble in an attempt to pay for it

If not saved for probably these known expenses can become budget-crushing expenses!

Here’s a step-by-step way for you to eliminate “Budget Crushing Expenses” from your life:

1. Download our free “Known Upcoming Expenses Calculator” tool HERE.

2. Enter all your “Known Upcoming Expenses” into the tool – include the annual expense of each line item.

3. Enter your “# of Pay Periods Per Year” into the tool – enter “12” if paid monthly, “26” if paid every 2 weeks, “52” if paid weekly, and “24” if paid twice each month.

4. You have now calculated the amount you need to save out of each paycheck to ensure all of your Known Upcoming Non-Monthly Expenses are covered.

Financial Event Update: The Banking Crisis

Let’s talk about the banking crisis, what happened, and what it means for you. 

What Happened:

Interest rates are so low for so long, that the government sells their debt at the prevailing interest rates and they sell US treasuries.

SVB Bank was putting their depositor's money into these two-year, five-year, and ten-year treasuries. Well, that means they have to hold them for two years, five years, or ten years, or they have to sell them on a secondary market.

With the economic decline, some of SVB Bank's depositors came in and started taking more of their money out than the bank had readily available, some of what was in these treasury bonds.

These treasury bonds had declined in value. Why? Because the Federal Reserve had increased interest rates, making the bonds less valuable. So SVB Bank went to the secondary market and was auctioning several billion dollars worth of these treasuries to be able to get cash to give to their depositors.

When several billion dollars worth of US treasuries hit the secondary market, people begin to talk. And, quickly found out SVB Bank was doing this. Word ran really fast in a digital age and many people raced to the bank to get their money!

And the next thing you know, SVB Bank was on the verge of collapse and ended up going into receivership. As a result, the bank’s depositors would have lost their money if it was outside of FDIC insurance.  With FDIC insurance, the federal government stepped in and made sure all depositors’ money was backed up.

Here is the lesson:

The lesson is that everybody, including very smart bankers, got stuck on low-interest rates and didn't keep themselves with enough margin or enough liquidity to be able to think about what could happen if rates started going up and they couldn't transfer fast enough when the rates increased so greatly.

What could you do personally?

Well, make sure that your deposits, if you have the issue of a lot of cash, don't exceed the FDIC insurance amount. Maybe have your deposits at multiple banks. That's one way that you can secure your money, so that when you need it, when you demand it, you can go get it, get fired up, and have a fully funded life!

Financial Event Update: The Debt Ceiling

The Debt Ceiling….we keep hearing conversations about it, but what is happening?

Here’s a brief update:

Well, appears that the House Republicans and the president have come to an agreement and it has made it out of committee. It's going to hit the floor this Wednesday evening. That's tonight.

And when it goes there, it's going to go to a vote, end up getting reconciled with a bill from the Senate, and then it should pass. Then it will be on the president's desk, by tomorrow… maybe by Friday. But the bottom line is, it looks like they’ve come to terms.

There was a lot of saber rattling, a lot of people saying mean things about each other. That is the nature of politics. It's hard to believe that we make any positive progress. But, hey, it doesn't look like we're on default on our debt one more time and it's going to kick the can down the street for another two years.

Yay! We get to spend more money with the seemingly unlimited credit card.

What can you do:

I urge you to write your senators. Write your congressmen. Write the president. Ask them. “Hey, please, can we have a balanced budget?”

Send them the I Was Broke. Now I'm Not budget template offered by Fully Funded Life. I think it will help them greatly.