Mentored Money

Budgets

Mugger: It’s you money or your life!
Jack Benny: (Pause) I’m thinking it over!!

The secret to getting out of debt… A Budget

The easiest thing there is and it’s the hardest thing to do. All that a budget can do for you and everyone is scared to death of them. Let’s see if I can dispel some of the mystique of these.

A budget is a financial plan for a defined period, often a month or even up to one year. It shows the user where their money is coming in and where it is going out. That last part is usually the scary part.

To start putting together a budget you will need your paychecks and bank statements which will also help in figuring what you have spent. Also all the credit card statements and cash receipts for everything you bought or payed for the month. It is tough to get into the habit of asking for and keeping all your receipts, it usually takes a few months to really get it going.

Once you get everything written down and organized you can start to see where you are struggling and what you can do to change things to move in the direction of your goals.

There are many ways to do a budget. You can find several online to give you an idea of how to do your own on paper or fill in and save online. I use the free version at EveryDollar.com and I find it easy and customizable to my needs. They also have a pay version that securely integrates with your bank accounts but I’m more of a hands on person.

Here is a general guide you can start with
Income– Any monies that come into the household
Gifts– Money given to charities or church, etc.
Savings– This should include your Emergency account and any accounts for your goals or vacations that you are saving for.
Housing– Include Mortgage, Utilities, Phone, Heat and Repairs
Transportation– Vehicle Gas, Oil and Repairs
Food– Groceries and Restaurants
Lifestyle– Pet Care, Clothing, Sports and Entertainment
Insurance and Taxes– Health, Life, Auto and Property Insurances and Taxes
Debt– This would be any other Loans, Credit Cards, etc…

I know it can look like a daunting job but It’s really not so bad once you get one going. Plus it’s a good bet that you will find money that you can more than likely put to a better use.

Remember, and this is VERY important, you should be doing this with your spouse. And absolutely no arguing or fighting over this. You are starting from today and the past is already done. From here on is where your money starts working for you instead of doing whatever it wants.

If you have any questions about putting a budget together, I can help. Hit the Book Now button above.

Stay Loose

Where Are You?

A couple comes in to see me. We are about a half hour in and I get the distinct feeling that this couple doesn’t really want to be here and is not real worried about their financial state. Small things, like slouching back in the chair, not focused, yawning kinda really gives it away. So I wrap things up by giving back their papers and giving a generic plan that they could follow if they ever think it’s for them and walk them to the door. I doubt if I’ll ever see them again. What a waste of their money and my time.

3 weeks later they schedule another meeting with me. I wonder why?

We sit down and start to talk and this meeting is exactly opposite of the last one. They are one the edges of their seats, asking intelligent questions and very intently listening to my answers and taking notes. We are really making progress this time. They are about to leave with a plan in their hands and a focused intensity in their eyes.

Before they leave I ask them what changed for them since our last meeting?

Husband looks at his wife and back to me. He asked if I remembered the snow storm we had a week or so ago. I did. He continues

Later that afternoon after the snow stopped he went to his favorite Aunt’s house to shovel the paths and driveway since the usual person was too swamped to get to her that day. He said he was there quite awhile and was getting hungry so he went inside to grab a sandwich.

After looking in the fridge and seeing only condiments he looked in the cupboards and didn’t find anything in them except several cans of dog food.

He paused to choke back the tears.

I’m not understanding what he’s telling me until he says with tears pouring down his cheeks, “she doesn’t have a dog”…

Just let that soak in for a few moments.

Now hopefully you are not in that situation but that does show how bad things can get for people and how pride can keep from getting help.

So where are you along financial street? Need help with Budgets? From finding extra money from your paycheck, paying off debt, saving for kids college or investing for your retirement. Maybe being able to give to favorite charities or saving time and money to be able to have an incredible lifestyle is what you’re looking to do. I can help you find a plan. Because if you haven’t noticed yet, If you don’t tell your money what to do you will be wondering where it went.

Stay Loose

Goal Setting

What’s your story? What are your dreams and goals? How about the dreams and goals of your family? It’s not uncommon for everyone in the house to have different goals. Mom wants a week on a beach this winter. Dad has been dreaming of a motorcycle that he saw on his way home from work the other day. The kids want the latest and greatest gaming gear.

What about the common goals of your family? OK, lets not fool ourselves, the kids only care about the game system. Mom and Dad have common goals though, probably something to do with paying bills, investing for retirement, getting the kids to put down their phones and eat supper.

What about beyond that? Maybe a bigger house, a newer car, a vacation, college for the kids. That’s what you get to figure out, the fun part.

You might be thinking that you don’t have the money or time to be dreaming about maybes in the future, you’re stuck here living in the now trying to hang on financially. But actually sitting down knee to knee with your partner (or a mentor or mirror if you’re single) is a very good exercise to create incentive to change your bad money habits. So break out the magazines, poster board, glue and markers. Paste the pictures and draw or write down what you can’t find a picture of. And get the kids to help, they need to feel like they have skin in the game to do their part. Don’t let the excuses or guilt get in the way, let the creativity flow no matter how crazy or silly it may seem, remember you need the incentive.

When creating your dream boards try to organize them into a loose timeline. what you think you can achieve in say 6 months, 1 year, 5 years, 10+.

When you are done with the fun don’t you dare put it in a closet, post it somewhere that it will be seen on a daily basis (in front of the TV maybe) and remind everyone what you are working towards. Looking at and thinking about it everyday cements those ideas in your non conscious mind and will help you find ways to make them come true. I agree it sounds hokey but neuroscience has actually studied and shown greats success with this technique.

Besides all the science it’s a great excuse to hang with the family for the day doing something fun all together.

‘Til next time, stay loose

Definition of Money

noun

mon·ey \ ˈmə-nē

plural moneys or monies\ ˈmə-nēz

1 : something generally accepted as a medium of exchange, a measure of value, or a means of payment

2 : a form or denomination of coin or paper money

A simplified version of what Merriam-Webster has to say about it.

Money, as we know it, is a piece of metal or paper that someone says has value. Money is not valuable in and of itself, it’s just a piece of paper. Alright so it’s a highly technologically advanced piece of paper, but is it worth the number printed on it? Probably not since 1971 when Nixon finished what FDR started in 1933 by taking the U.S. off the gold standard.

Then who says it has value? Some old dead dude from waaaayyy back? 1100 B.C. the Chinese started using metal coins. 600 B.C. Lydia (western Turkey) started minting coins. But we keep it going because it’s an easy way, in it’s most basic form, to make something or do a service for someone and trade these little slips of paper or coins for something else that we want that someone else has or will do for us.

Simple right?

But what if I gave you $20 to get me a coffee and it takes you 3 minutes to do that. You’re thinking “Cool!! I just made something like $400 an hour”. Value of that $20 dollars just went up in your head. But then when you got back I tell you that I made a Million dollars in the time you were gone, you’d feel like you got ripped off and that $20 just dropped in value. That’s perspective.

Here’s another perspective, if you think of 1 dollar being equal to 1 second, $60 equals 1 minute. 1000 dollars would be 5 hours and 45 minutes.

Now jump to 1 Million dollars is 12 days.
A billion dollars is 31 years.
And a trillion dollars is 31,688 years.

The U.S. National Debt as of today is a little over $23 Trillion or 728,824 years.

How about your personal debt? Well you can do the numbers but the total US consumer debt currently sits at over $4.165 trillion and has increased nearly 22% over the last four years. Total revolving debt is $1.088 trillion of that and has increased 20% over the last four years. An estimated average of $275,000 per adult. And that’s just the average!

Well, those numbers went crazy in a hurry. I hope I didn’t get you too dizzy. Next time I’ll start to explore what we can do to turn that number around to the positive side of your personal balance sheet.

Stay Loose