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Free Spending Plan eBook

I have complied those blog posts into an eBook that I am giving away. In the free eBook learn: 

•          How to create a spending plan that you can stick to.

•          Tips on creating an emergency fund and more.

Good day everyone.  Today on the GoldenRule blog, I want to give you a free eBook.  Click here to register for your free eBook on creating winning spending plans. 

For October, in what I called The Spending Plan Challenge, I gave readers of the GoldenRule$ blog practical tips to help them create winning spending plans that they can stick to.  I have complied those blog posts into an eBook that I am giving away. In the free eBook learn:

•          How to create a spending plan that you can stick to.

•          How to get into a habit of tracking your spending and working your. money

•          How to determine your values around money.

•          What to do when you have more month than money.

•          Tips on creating an emergency fund and more.

This eBook will be available for a limited time, so get your free eBook today.  Thank you for reading.

Healthy Financial Behaviors

As you can see, it makes a big difference to pay more than just the minimum due, in both the time it takes to pay off debt as well as how much you end up paying.  Of course, the optimum plan would be to pay the balance in full each month and avoid paying interest altogether, but the most important thing is to make sure your payments fit with your spending plan.  

Last month I posted an article titled “How Healthy is Your Financial Behavior?”.  In it, I discussed healthy financial behaviors and even gave you an assignment.  This month we want to talk more about healthy financial behaviors and what you can do or what healthy financial behavior you can employ to improve your financial health. 

Several financial behaviors may be draining your spending plan without you even realizing it, and leaks here and there can add up to spending money on things you did not intend.  Below are some financial behaviors you should consider.  Changing these behaviors may help you tighten up your spending plan.

When making payments on credit cards and loans, try to pay more than the minimum.  Paying more than the minimum can save you from incurring a significant amount of debt in the form of interest.  Here is an example:  If you have a credit card with a $1,000 balance, an 18% interest rate, and you pay only the minimum payments each month it would take almost three years to pay off the balance.  The total of payments would be about $1,304, meaning $304 is interest.    

On the other hand, using the same balance, interest rate, and minimum amount due, let’s say you pay more than the minimum due each month.  If you were to pay an additional $60 each month, or a total of $100, it would take just 1 year to pay off the balance, and the interest paid is reduced to $103, a significant saving. 

As you can see, it makes a big difference to pay more than just the minimum due, in both the time it takes to pay off debt as well as how much you end up paying.  Of course, the optimum plan would be to pay the balance in full each month and avoid paying interest altogether, but the most important thing is to make sure your payments fit with your spending plan.  

Pay your bills on time.  First, late fees can add up, so consider setting up automatic payments for your monthly bills, either through the company billing you or through your bank.  Some companies even offer a small discount for enrolling in automatic payments and paperless billing, so be sure to check. 

Another benefit of paying bills on time is that accounts, such as loans and credit cards, are reported to the credit bureaus and are reflected in your credit score.   Thirty-five percent of your credit score is based on how you pay your bills.  Therefore, on-time payments will help increase or maintain your score, while late payments will lower your score.

Read the fine print and look for fees or charges for certain actions or criteria.  Banks, credit cards, and loan companies will charge fees for certain transactions or services, so be sure to read your statements carefully and know the terms and conditions.  Banks may charge a fee for that “free” checking account and 0% credit cards aren’t always what they seem.  For example, while the idea of transferring a credit card balance from one that charges interest to an interest-free card be sure to look for balance-transfer fees or other charges that must be paid up-front, as they may outweigh the savings, you’d receive from a 0% interest offer.

Plan your shopping trips before you head to the store.  Take note of what you already have and make a list of what you need.  Do not shop for things you do not need.   How many times have you walked into a store for one item and you end up walking out with a full cart of merchandise totaling $100, or $200?  You did not go shopping for these items but once you saw them you had to have them.  Did you think about how this would affect your spending plan? 

Making a list beforehand, and sticking to it, will do two things.  First, it will help you from going over your spending plan category.  And second, it will help you from making unnecessary purchases.

These are just a few behaviors that can help you financially.  Can you add any?  Comment below and let me know what you think.     

Consistency in Managing Finances

Consistency and money management, like all things, begins in the mind with thought.  All of our beliefs, feelings, and behaviors begin in thought.  You can create neurological pathways that reinforce the notion that you are capable of managing money well.  And practicing these thoughts consistently builds the pathways.  Each thought has the capacity to help us follow through with the appropriate behavioral response automatically.

Consistent thoughts are, naturally followed by consistent behaviors that are conducive to managing anything, including money and finances.  For example, just because you have created a spending plan or budget does not mean that you are set, and your finances magically improve. 

Now comes the part where you have to stick to that spending plan. 

Being consistent in doing the things you need to do to manage your money well will get you to the financial freedom you desire.  It is already difficult enough managing money and all the competing demands that money commands, but to consistently do the things to manage that money well, takes more effort, which makes it more challenging.  Let’s face it, money is time. 

However, spending time managing money well is time well spent.   

Think of it this way, it is quite difficult for businesspeople and financial statement users to make projections and plan when the data, is not organized and therefore measured in the same way over time.   A lack of consistency over time can distort the financial trend and create extreme uncertainty in evaluating a company and its performance. 

How about this, let’s say we have an accounting entity that is not using the same accounting procedures from period to period.  Would you make financial projections and financial decisions about the business with unequal financial data?  Not me. 

Apples are not oranges – consistency.

And Your finances are the same way.  The lack of consistency in managing your finances can distort where you are financially and be unproductive.  Constituency in your financial management practices and behaviors will allow you to plan, compare, and make good financial decisions. 

What is Consistency? 

According to Dictionary.com, consistency is steadfast adherence to the same principles, course, or form as consistency in a particular pattern of behavior.  So, consistency or staying the course is a critical aspect of success, no matter what the endeavor.  Managing finances well is not a one-time thing; it is like a job and commands consistency.  It’s not a project that has a beginning, middle, and end. It is an ongoing way of being.

Consistent Thought

Developing the right mindset for any endeavor requires consistent thought.  Managing money well is a way of being that stems from developed thought.  Each time you have a thought, neurological pathways are reinforced.  New thoughts lead to new pathways.  Which leads to strengthening pathways and a habit is formed. 

Consistency and money management, like all things, begins in the mind with thought.  All of our beliefs, feelings, and behaviors begin in thought.  You can create neurological pathways that reinforce the notion that you are capable of managing money well.  And practicing these thoughts consistently builds the pathways.  Each thought has the capacity to help us follow through with the appropriate behavioral response automatically.

Though this process may appear to be quite easy, it is important to note that some of the thoughts may not be supported by your underlying belief system.  Therefore it will take some time, and practice to build the neurological pathways for the things you want to achieve.

You are no different from any person that manages money well.  Managing money well can be a matter of perception.  Take a few moments each day and:

  • Learn, embrace, and practice good money management
  • Believe that you can succeed
  • Be grateful
  • Look at your goals often- keep them in front of you

With the use of other tools such as a spending plan, gradually, the process of managing money well becomes second nature, allowing you to achieve the goals that you visualize every day.  Your thought processes naturally lead to behavioral follow-through that is consistent with your ideas.  Focus on what you can accomplish, and you will begin to improve, fundamentally and consistently, your finances. 

Achieving Financial Success

To some, financial success is spending less than they make.  This is a key to any financial plan.  The alternative is spending more than you make is a recipe for disaster.  Spending less than you make will allow for savings so that you can purchase assets.  

Financial success is attainable for everyone because it means different things to different people.  Your thought or views on financial success are probably different than mine and vice versa. 

Financial success for one may be to provide an inheritance to his children, and another person may see the vacation house on the lake as financial success.  However, you determine financial success, below are some tips or foundational tools to help you achieve your view of financial success.

Have a Plan

Get organized and develop a plan to get you to where you want to go.  In doing that, determine what your financial situation is.  Often, you can know where you are going until you know where you are.  So where are you?  What is your income?  Who do you owe, how much do you owe, and when is the payment due?  These questions are the types of information you will need to know.   

Once you know where you are, you can develop a plan to develop short-term and long-term goals and ways to meet them. 

Spend Less

To some, financial success is spending less than they make.  This is a key to any financial plan.  The alternative is spending more than you make is a recipe for disaster.  Spending less than you make will allow for savings so that you can purchase assets.  

And it is assets that will help you build your wealth and financial success.

Prepare for Expected and Unexpected Events

Expected events would include things like retirement, holidays, and kid’s college.  How will you plan for these events?  How much will you need for college or retirement?  Prepare for these events to be successful for you and your family.          

Unexpected events include car repairs, a job loss, or maybe unexpected medical expenses.  How will you handle these events?  An emergency fund of six to twelve months of expenses is a good place to start and could be seen by some as a financial success. 

Preparing for expected and unexpected events will save a lot of headaches later. 

A Healthy Credit Report

Many people see a healthy credit report as financial success.  To keep your credit report healthy, you need to do two things.  First, pay your bills on time. 

Thirty-five percent of your credit score is based on how well you pay your bills on time. 

The second thing you need to do is get a free copy of your credit report at annualcreditreport.com.  Getting a copy of your free credit report, and looking over it, may alert you to possible identity fraud.    

Understanding Taxes

Many people do not take advantage of tax breaks that are available to them.  For example, the Internal Revenue Service conducts a program called VITA.  VITA stands for Volunteer Income Tax Assistance.  Volunteers are trained to do taxes for free for low and limited-income individuals and families. 

Additionally, credits such as the earned income tax credit, education credits, and retirement saving contributions, can increase your income and help you reach your financial goals.         

Give Back

Money is used to do three things.  That is, spend or buy things, saving and investing, and giving.  

So, to complete your success, give back. 

Once you achieve financial success, give back to the local elementary school, food bank, or United Way.  Give back to the community in some way.  For me, giving in a much greater way than I am currently able, would be the ultimate success. 

What constitutes success for you.  Comment below, I would love to hear from you. 

Avoiding Bad Financial Habits

weekly, and monthly basis. Weekly, add up all of those receipts for gas, snacks, soft drinks, and lunch at your favorite restaurant, and coffee.  And see how quickly it all adds up when you do not know how much you are spending every day.  Eliminate this bad habit and put yourself on a daily spending limit and stick to it.

We all have habits. Some are good and some are not so good.  Whether it’s cursing, biting fingernails, or something else, we all have things we do consistently that we should not, bad habits.  There are also bad or negative financial habits.  Things that we should not do that hinder us financially. 

Instead of simply accepting your financial negative habit, think about how that habit may affect your financial future.  Living the life that you want to, and then do something about it. 

When it comes to making the most of managing your money well, the following are some tips to help you recognize some of those negative financial habits and control them so they do not take a toll on your wallet. 

Not Living Within Your Means

Living within your means or spending what you do not have, is a negative habit and is critical to managing your finances. 

With so many temptations from new fashion every season to sales every other day at your favorite store, it is easy to fall into the habit of constantly buying new things.  Become a financially disciplined person and learn how to resist the urge, the consistent desire, to spend what you don’t have on what do not need.  

Start by creating a spending plan.  

Not having an Emergency Fund in Place

Not having an emergency fund for unexpected expenses is a serious negative habit.   Whether your car needs unexpected repair, your air conditioner breaks, or you get laid off, the unexpected financial event can be a real inconvenience.  

Saving regularly for an emergency or rainy day fund of 6 to 12 months of expenses is a must so that you will be covered when the unexpected does happen.

Be Aware of Your Money Attitude

What you say to yourself and others about your finances is a bad habit and can have a big impact on how you interact with money. 

Watch out for statements like, “I don’t have any money to budget,” “I will never make any money,” “Shopping is my therapy,” and “But, I’ve always let my spouse take care of the money.”  

These excuses, negative thinking, and talk will keep you from feeling confident about managing your finances.

Blind Spending

It’s important to not be oblivious to how much money you spend on a daily, weekly, and monthly basis. Weekly, add up all of those receipts for gas, snacks, soft drinks, and lunch at your favorite restaurant, and coffee.  And see how quickly it all adds up when you do not know how much you are spending every day.  Eliminate this bad habit and put yourself on a daily spending limit and stick to it.

Maxed Credit Cards

When used correctly, credit cards are an effective and useful tool in helping you to make purchases and build a good credit history.  However, when they are not, they are a bad habit waiting to happen.

The key is paying off your balance every month.  Be wary of spending up to your credit limit and just paying off the minimum amount each month.

We all have good and bad habits.  Do not just accept your negative bad financial habits but think about how that habit is affecting you and your finances.  Deal with that bad habit and live the financial life that you want to.  What other bad or negative financial habits can you think of?  Comment below, I would love to hear from you.