My budget story actually begins with wealth! For as long as I can remember, all I wanted to do was work. I loved the sense of accomplishment it gave me and the joy involved with building up my bank account and savings. By the time I turned 18, I was a supervisor of a successful framing crew, working on average 55 hours a week. I bought a brand-new truck and had it paid off in a year. I fell under the category of what you would term, “sitting pretty.”
I have learned that if you begin a budget and allow it to build, within six to nine months it will be possible to have enough “excess” money for an entire month’s worth of bills. This is when the budget begins to be fun! At that point, it becomes possible to budget an entire month and use the money you are making for next month’s bills – allowing you to never fall behind again. This is the ultimate goal of a working budget. I have used many different budget apps in order to fully embrace this kind of lifestyle. I am always researching ways to make a budget easier in order to improve my money habits. The three budget websites I have used and will talk about are: You Need a Budget (YNAB.com), Calendar Budget (calendarbudget.com), and a brand new one called Proactive (proactivebudget.com).
It is a well known fact that finances are one of the most common sources of conflict in marriages today. My wife and I no longer fight about money because we are now on the same page and participating in the same plan. We know that we will have a great retirement and that we will no longer have to live paycheck to paycheck. It relieved stress and made life together much easier for us. If I can help other couples achieve this as well, I am confident that life can be breathed into their families again. Until they do it themselves, people will never understand how living within their paycheck and understanding money brings freedom. This is the reason I became a financial advisor: to pass this peace and independence onto as many people as I possibly can.
The big question in everyone’s mind after they create a budget is what to do once everything is set and planned. The short answer is: live by it. The more detailed answer includes dealing with many unexpected circumstances that may arise. In the next few blog entries, I am going to tackle some of the most common issues that may be encountered when first implementing your budget.
Many times in the beginning stages of budget, people will overspend. This can mess with the budget and cause them to panic. The first and foremost thing to remember in this circumstance is that you are doing better on a budget than off of it, even with the overspending. Remember: you had been overspending for years prior to taking control of your money and just never recognized it. So, when this happens after budgeting, relax and take a step back to look at the situation as a whole
One of the most familiar budgeting approaches is Dave Ramsey’s “7 Baby Steps to Financial Peace.” These steps have been immeasurably helpful to many individuals and families starting their financial journey. Because so many have heard of the steps, it is important to address them in any budgeting discussion. In this blog, I will review and comment on Ramsey’s steps. In future blogs, I will offer my own 7 Step Plan for comparison and assessment purposes.
I’m married to a financial advisor, so when I hear the word, “budget,” the best way that I can think to describe it would be as a “General Partnership” (GP). Investopedia defines a GP as “a venture in which all parties share the legal and financial liability of the partnership equally.” Now, why would I portray a budget this way? Well, the answer is simple: unless you are single, you cannot fully commit to a budget or any financial plan unless BOTH parties are on board and willing to change.
Christmas is the time for celebration and family.It is the holiday of gift-giving and the joy that comes from it.But when it comes to buying and giving gifts, the financial repercussions can leave a decidedly NON joyful aftertaste.It is best to create and hold to a budget for Christmas in order to be able to celebrate guilt free and without months of agony and monetary difficulties to follow.
After completing a review of Dave Ramsey’s Seven Steps to Financial Freedom, I was asked whether I myself have my own plan for eliminating debt. Financial advisors all have their own approach, and I am no different. Some of my steps may be similar to Ramsey’s, but others I have adapted based on my own experiences, successes, and observations.
Let’s choose to begin the new year with a plan! If you were the CEO of a large company, you would have a plan for your money and your company in the coming year by the time the conclusion of the present one comes around. Over the course of your lifetime, you will make a million dollars yourself, so follow the CEO’s example?
“Compound Interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it. Compound interest is the most powerful force in the universe.” – Albert Einstein
I believe the most important lessons for kids can be about money and financial responsibility. The old adage, “Money does not grow on trees,” is a significant first lesson in raising a fiscally responsible child.
One particular topic that I find is confusing to many people is the one regarding Whole Life versus Term Insurance. I believe it is important to understand exactly what each is before deciding on the benefits of making a choice between them.