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.

5 Essentials To Paying Off Debt

1. Understand the WHY before the HOW

I believe this is the most important step in becoming debt free! In the hundreds of financial coaching sessions that our team has led, it’s amazing how many people do not have a plan for their lives. We ask them the “why” and they stare at us like we’re speaking a different language.

Unfortunately, this 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!

I cannot overstate this fact – YOUR LEVEL OF EXPECTATION DETERMINES YOUR LEVEL OF PREPARATION!

2. Calculate your Debt Freedom Date

• Who do you owe?

• How much do you owe?

• What are the payments that you are ACTUALLY making?

You can list these on the Debt Freedom Date Calculator. Now we can calculate your debt freedom date! This date is simply the date that you will be debt free (including and excluding the house).

3. Accelerate your debt elimination

1. Reduce Interest – Many people with substantial consumer debt do not realize that 50% – 75% of their payments are merely going to the lender as interest. This greatly reduces your ability to lower your debt. So, here are a few ways to lower your interest:

• Transfer to a 0% Interest Credit Card (Learn more HERE)

• Call & ask for a lower rate

• Pay on-time

• Establish automatic payments

2. Increase Income – Since we’re all friends here if we’re being completely honest, we all vote for this option, right? But a lot of people don’t realize that there are numerous ways to increase income that are within your hands. Here are a few:

• Pay Raise (see salary.com)

• Tax Refund

• Bonus

• Work Overtime

• Extra Job

• Sell Some Possessions

3. Decrease Outgo – This is an option that is always available to us, but it’s probably not fun. If you can decrease the outgo to other things, you can increase the outgo to liberate your life from debt!

• Create and follow a budget!

• Sell some possessions

4. Use the Debt Snowball Technique 

1. List ALL debts from the smallest balanced owed to the largest.

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

3. Pay as much as you can on the smallest debt.

4. 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.

5. Continue this process with a vengeance until you are debt free!!

5. Establish Accountability

• 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!

5 Questions To Ask Before Spending Money

Do you ever get caught in the cycle of  “see it, want it, and buy it?” Before you spend you haven’t stopped to think through what you’re buying.  Now you not only have a new purchase that’s all yours, but you also have a high monthly payment to go with it.

Let’s overcome that spending habit with these 5 practical questions to ask yourself before spending a substantial amount of money.   Practical questions that will help you truly understand the enormity of the decision, and help you make the decision that is best for you and your family.

Question 1: “Do I Need This?”

Pausing to ask, “Do I need this?”, can prevent a lot of poor spending decisions.   I’m not saying that I never purchase things that are pure “wants” – I am saying that when I ask the key question, I make much smarter overall decisions.

This question becomes a “gatekeeper” of sorts.  Something to help prevent impulsive spending.

BONUS: Wait overnight before answering the question!   It is amazing the clarity that a good night of sleep will bring to a spending decision!

Question 2: “Will This Item INCREASE Or DECREASE In Value?”

Chewing gum goes down in value.   So do cars, 4-wheelers, refrigerators, swimming pools, and clothes.

Businesses can go up in value.   So can houses, land, antiques, mutual funds, company stocks, bonds, and intellectual property (patents, licenses, etc).

Here is what I KNOW: Not all of your purchases can be for items that increase in value, but if ALL of your purchases go down in value – something ain’t right!

BONUS: Find someone you know who is prospering with their investments.   Invite them to lunch (pay for his/her lunch) and ask them to mentor you!   They will probably LOVE IT!

Question 3: “Do I Have The Money To Pay CASH For This Item?”

I know that the day I started asking this question was THE DAY that my family started winning with money.

If I do not have the cash to pay for it, I’m not buying it UNLESS it is a house or an asset that will increase in value (like a business, rental house, etc).   Even then, the answer is still usually “NO!” unless I have all of the money available to pay cash.

Question 4: “Will This Purchase Generate Income For Me Or Take Income Away?”

What an incredible question to ask – and what a difference it will make in the way you think about money!   I used to earn money and then immediately begin pondering which fun item I was going to buy.  I rarely (if ever) thought about the fact that I could use the money to buy in to a small business, purchase stocks and mutual funds, start a small business, or purchase a rental home.

Even more, I did not truly realize the ACTUAL cost of many of the items I had purchased.   I had purchased a new car (my smokin’ hot Chevy Cavalier) and I only thought of the bank loan as my “cost” to purchase.   In actuality, I also added the costs of insurance, property taxes, license tags, maintenance, repairs, and additional gasoline consumption. Not to mention the lost potential to make money with what I was currently sinking into all the bills associated with that car.

Before you spend, just stop and ponder the options available to you to use those resources to generate more income for you in the future.

BONUS: Review your budget to see how much your current possessions are costing you on an ongoing basis.  There are many purchases that are “gifts that keep on giving.”  By looking at things you’ve already purchased, or subscriptions you already have, you can find ways to lower your expenses.

Question 5: “Will This Help Me Achieve My Future Plans, Hopes, And Dreams?”

Without a longer-term perspective, it becomes extremely easy to fall into the trap of living for the minute, and immediately spending every single dime we earn.   As one develops a longer-term perspective, it really helps us recognize that spending all of our money right away will rip our future dreams away from us!

When my family first got started on improving our financial future (Dec 2002), I noticed that we started looking a few months ahead.   Now, eighteen years later, my entire perspective has shifted.   You see, I want to leave a legacy for my children and community.   I want to leave a huge inheritance to my family, church, and others.   My wife and I want to give our children a paid-for college education.   We want to give them a paid-for house when they graduate.   We desire to teach them to manage their finances recognizing that it is not just FOR THEM, it is FOR THEM TO HELP OTHERS!

So Before You Spend…

THINK!  Think about what this big purchase means.  Not just the temporary gratification, but how it will impact you in the long run.

My hope is that by slowing down and asking yourself these questions you will be able to gauge how important a large purchase is to you, and how it will benefit you.

5 Basic Steps To Investing

Investing! This is consistently given as one of the most confusing topics individuals face. Before we begin, you need to assess what investments you currently have. You might be saying, “Joe, I don’t have any investments.” My question to you would be: do you contribute to some type of retirement plan at work, own a home, or own a business? Investing is much more than owning stocks. To start, let’s make a list of all your investments. 

Step 1: Evaluate & Diversify 

Now that you have all your investments listed, let's evaluate to make sure they are diversified. I’m sure you’ve heard the saying, don’t put all your eggs in one basket. This directly relates to investing! A key step when investing is to diversify your investments. For example, you should not put all your money into one company’s stock, instead spread your investments out. By spreading out your investments you greatly lower the risk of your investment.

An easy way for you to diversify is to invest in mutual funds. A mutual fund allows you to purchase a portion of many stocks and bonds with a single share purchase. This purchase automatically diversifies your investments, even though you’ve only bought one share! Also, don’t just think stocks. Invest in a new business or a home that can be rented out. Investing is much more then the stock market. You have a world of things to invest in – real estate, land, new businesses, or even your own business!

Step 2: Automate Your Investments

Make your investments automatic! Your bank account can be set up to auto-draft money into different investment plans (401k or a child’s 529 college savings plan).

When your investments are automated, it prevents you from forgetting to transfer money each month. It also eliminates the possibility of using that money for splurge purchases. This is awesome for those of us who are highly susceptible to spend any and all extra money! You’ll also see your net worth increase every single month!

Step 3: Get the Free Money 

Yes, I said FREE money. Many employers will match a portion of your contributions into a self-directed retirement plan! I encourage you to go to your human resource department and sign up for the retirement plan. Start investing money into it immediately! Contribute enough money to obtain the entire employer match. Remember, this is really just FREE money!

Step 4: Unleash the Power of Compound Interest

Have you ever heard the saying, “My money is working for me”? This is exactly what compound interest does for you! When you utilize the power of compound interest, you’re allowing the interest you’re making to also earn interest.

For example, let’s say we have $100 in an investment account that grew to $105 in one year. This is the equivalent of 5% interest. Now suppose the $105 is left alone for another year and continues to grow at a rate of 5%. Will it be paid another $5 interest when the second year is up? No! It will be paid $5.25 because interest was received on $105 – not just $100. Interest earning interest!

Remember,  you are only investing $100 each month! After 40 years, you’ve only invested $48,000 BUT your account balance is $1,176,477! This means that $1,128,477 is the interest you have gained!

Now do you see the POWER of compound interest?

Step 5: Continue to Learn about Practical Investing Opportunities

There are so many different types of investment opportunities, so I’ve broken down a few of them.

Stocks – When you own stock in a company, you technically become a part owner of that company. You have some claim to the assets and earnings of the company. Stocks are foundational to most investment portfolios. They are known to be very volatile in the short term but have historically outperformed other investments in the long run. 

Bonds – A bond is a large debt owed by a company, government, or even a school, where the borrowing institution has agreed to repay an established amount of interest payments for a set period of time. When this time expires, the borrower then returns all of the principal back to the lender(s). Bonds can vary in maturity times anywhere from 1 year to 30 years. I like to think of my personal residence as a bond investment. A bond is generally less risky.

Mutual Funds & Exchange Traded Funds (ETFs) – Mutual funds and ETFs let you accumulate a wide variety of investments that couldn’t normally obtain without consuming large amounts of time and money. Mutual funds and ETFs are funded “mutually” by you, me and millions of our closest friends. Our money is pooled together and then used by the “mutual fund managers” to invest in hundreds of other company stocks, bonds, and other sorts of investments. Usually, mutual funds and ETFs have specific charters that direct their investments. Our mutual fund might only focus on established companies in the USA while another could focus on investing in up-and-coming companies in third world countries.

Other Investing Opportunities – People so often hold themselves to these common types of investing and never branch out. Investing opportunities are all around you! You can invest in a small home and rent it out. You could invest in small businesses in your community. When you are investing, you can think outside the box. Some of the greatest returns can be found when investing in unorthodox ventures.

Next Steps

• Review your investments and know what you are invested in

• Start to think OUTSIDE of the stock market when you’re investing

• Start investing!

Sustain Good Financial Decisions: Automate Your Banking

We’ve all had moments where we have firmly stated our resolve to do something different with our money. Usually, the outburst follows a negative financial outcome. Perhaps we’ve overspent on our vacation. Maybe we have the starting realization that there is no money in the college fund for our high school senior. It could be that we’ve dipped into the overdraft account again. Whatever the case may be, it causes us to commit to better financial management.

Here are some common statements people make in these moments:

• “I’m going to start preparing a written budget each month.”

• “I’m increasing my contributions to the retirement plan.”

• “Let’s open a 529 college savings plan and begin making monthly contributions.”

• “I’m cutting up the credit cards.”

There is just one problem with each of these statements: saying it doesn’t make it true.

For every statement and moment where we commit to better financial decisions, one must actually do the work to follow through. And, my friends, we all know that it is truly hard work. Life is so busy. We’re exhausted. Plus, many of these decisions require information and knowledge we may not currently possess. This is a recipe for failure to follow through on really good financial decisions.

And we’ve all been there, haven’t we?

Let’s flip the script, and put in place some “best practices” that can really help us sustain these good financial decisions so that we can reap the benefits they can provide us: fully funded lives, dreams accomplished, and freedom to live generously.

Sustain Good Financial Decisions – AUTOMATE

Many good financial decisions can be followed through with automation! This is perhaps the easiest and best tip possible because it is literally a “set it and forget it” solution that ensures your financial decision is put into practice. If there is any possible way to automate your decision, do it.

Here are some great examples of using automation:

• Committed to save money every month for the annual family vacation? Set up automatic drafts from your bill paying account to your savings account.

• Want to help your child with college expenses? Open a 529 college savings account and establish automatic drafts.

• Ready to up your retirement investments? Log in to your 401k (or similar RSP) account and adjust the automatic contribution.

• Want to ensure your retirement money is put to work right away instead of sitting in a savings or money market account? Establish automatic investment selections.

• Want to ensure all of your bills are paid on time? Automate every single bill payment. As an added bonus, you will spend far less time paying bills!

• Want to ensure your retirement investments become more secure as you approach retirement? Choose a targeted retirement date investment fund that will automatically become less risky as you near retirement.

What good financial decisions have you been making that could leverage the power of automation to ensure they are sustained into the future?

5 Easy Steps to Budgeting

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: Restricting. Controlling. No Fun. Not Worth It…

In reality, a budget is nothing more than telling your money where to go. 

Here are 5 easy steps to budgeting:

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!

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!

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!!

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!

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.

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 book, I Was Broke. Now I’m Not. Click HERE to order!   

0% Balance Transfer Credit Cards

Do you carry a balance on your credit card from month to month? If so, you are likely paying hundreds, if not thousands, of dollars in interest year after year. You should consider transferring your balance to a 0% Balance Transfer Credit Card.

A 0% balance transfer credit card provides a way to eliminate credit card debt very quickly and can provide HUGE savings over keeping a balance on a high-interest card.

Many people look at 0% Balance Transfer Credit Card offers and wonder, “What’s the catch?” Is the interest rate really 0%? 

The answer is, “YES!” Many of these offers do, however, have a small transfer fee – usually around 3%. 

Example:

Suppose you transfer a balance of $5,000 from a card that has a 21.99% interest rate. You apply for a 0% balance transfer credit card. This offer comes with a 3% balance transfer fee, but it also provides 0% for 18 months.

Upon acceptance of your application, the 3% balance transfer fee ($150) will be applied to your balance on the new credit account making your total balance owed equal $5,150 ($5,000 balance that was transferred PLUS the $150 balance transfer fee).

Now comes the good part! You now owe 0% interest for the 18-month period – as long as you make all of your payments on time, of course. 

Let’s take a look at cost if you did not switch to the 0% balance transfer card. Assuming you made no additional charges and paid only the minimum payment due each month, you would have paid $1,162.70 in interest over the 18-month period!!

By taking 15 minutes to do a little research and apply for a 0% interest card, you can eliminate hundreds or thousands of dollars in interest and accelerate your debt freedom date.

20/20 MONEY

From Joe:

In all of my live events, I ask this question: “How many of you do not have your plans, hopes, and dreams written down?” Without exception, more than half of the people raise their hands.

After experiencing this same response for more than ten years, I realized that many people really struggle with having a clear vision for their lives. As a result, it is difficult for them to have clarity for their finances. I wanted to help people have 20/20 vision for their lives and their money. Thus the name of the book “20/20 MONEY".

Wouldn’t it be appropriate as we enter into the year 2020, that we would have 20/20 vision for our lives and money? What a great time to consider the plan God has for each of us!

This book has already been a huge help to me! As I was writing it, I stole away with my bride for a few days to work through Chapter 5: “22 Questions for Clarifying Your Fully Funded Life”. These challenging questions helped prompt a lot of great conversation for us – even as we are in our 23rd year of marriage!

Some lessons I’ve learned over the past 10 years

A Note from Joe -

We’re celebrating the 10-year milestone with I Was Broke. Now I’m Not. I’ve spent some time reflecting on some key lessons I’ve learned along the way, and I thought I would share them with you.

Lessons Learned:

1. Ten years is a long time: Ten years ago, Jenn and I had one child and were told we couldn’t have any more. Now we have three kiddos. Back when we went full-time, we had a daughter in third grade. Now, she’s a junior in college and we have another in fourth grade and our youngest is in Kindergarten. We had one book in print back then. Now, I have been blessed to write and publish three more. I wonder what the next ten years will bring?

2. Great team members make the work so much easier: Without Matt, Megan, David, Caroline, Craig, Chad, Brian, and Ken along with all of the people who’ve helped along the way – like Paul, Mark, Greg, Rachel, Keri, Casey, Ashley, and Jessica, we wouldn’t be able to help so many people. I’m grateful for everything each and every team member has brought to the table – those who journeyed with me all along the way as well as those who served for a season.

3. Innovation is not an option: Some things that worked ten years ago do not work anymore. Back then, social media was in its infancy. Now it is a central part of the way we communicate with people, share successes, and tackle challenges. Back then, receiving an email was still a special thing. Now, we have special email addresses for all the junk and spam email. Video lessons used to be available only via DVD. Now, they have to be on-demand and on-line, or they’re almost irrelevant! Our tools were in Excel format only. Now they are on our app and on Google Drive.

4. Passion alone isn’t enough: When you begin with a dream, passion is excellent fuel to initiative movement toward the goal. However, passion alone isn’t enough to help you continue to move forward. It will take relationships, a great team, lots of money, and a ton of exhausting work. For me, it has involved hundreds of flights, hotel stays, and car rentals. Any of you who are road warriors know just how draining this can be! I’ve written dozens of newspaper articles, hundreds of blog posts, penned several ebooks, and managed to author four books. I have found it very important to continue to meet one-on-one with people and help them with their specific financial issues because it always reminds me of the “why” behind everything we do.

5. This work becomes more and more rewarding: One of the great blessings of being able to last ten years full-time is being able to see the long term impact of our work. It takes some time for some financial principles to pay off. A person can choose to pursue debt freedom, but it can take many months or even years to achieve Rung #4 of the ladder. For a person who begins to aggressively pay off their house, it can take seven to ten years. Compound interest doesn’t seem very powerful in the first decade of investing, but then all of that seed money will begin to escalate very quickly. We’re seeing that just beginning to happen in so many people’s lives right now. There’s nothing greater than seeing a person climb the IWBNIN Ladder and begin living their fully funded life!

Learn how to make your money behave and begin to climb the ladder to financial success.

Learn how to leverage financial oxen to fund the biggest dreams of your life.

The perfect resource for young people as they embark on their own money journey

A Special Note to Say Thank You

A Note from Joe:

It was the summer of 2009. The Great Recession was underway, and it was clear that America was hurting financially. That’s when I decided to leave the safety and security of a full-time job with benefits (when lots of people had already lost theirs!) and travel across the nation speaking and teaching about money to try and help people.

Do you remember just how tough it was back then?! Millions had lost income, were struggling with high debt levels, and many people had watched helplessly as their home lost more than half of its value.

That was TEN YEARS ago, and what an amazing journey it has been! You’re receiving this note today because you’ve been a part of it. Perhaps you downloaded one of our free tools, attended one of our live events, or you’ve received one-on-one financial coaching training from our team. Whether we’ve had a small or large impact on your money journey, I want you to hear just how thankful I am that you’ve allowed me and my team to be a part of it.

Knowing most small businesses fail in the first 18 months (80% of them do!) and even fewer last five years (only 10% of them make it), we’re going to take a few days to celebrate!

Learn how to make your money behave and begin to climb the ladder to financial success.

Learn how to leverage financial oxen to fund the biggest dreams of your life.

The perfect resource for young people as they embark on their own money journey

Here’s to increased financial success, expanded generosity, and more dreams being accomplished in your life!

- Joe
Founder, I Was Broke. Now I’m Not.