Four Recipes to Financial Success

Below are four recipes to financial success. By that, I mean that if you focus and do just one of these things well, the chances of having success with your finances will increase. You can be successful and find a level of success that will propel you to even more success. Everything starts somewhere, and the beginning to making better financial decisions can start with the recipes or tips below.

A Recipe to Financial Success is Having a Plan for Your Money

Having a plan makes a big difference in whether or not we win with money. By plan I mean having a spending plan. I like to call it a spending plan for two reasons. One, it is a plan to spend your money. Two, when you hear the word budget, you think of restriction or something you cannot do.

Calling it a spending plan gives you permission to spend on purpose because it’s your money anyway.

Spend Less Than You Earn

Live within your means. Just because you have created a spending plan does not mean that you are home free. Now you must stick to your spending plan, which is a whole other thing. You cannot be successful and spend more than you allocated for a particular spending category in your spending plan. So, for example, if you plan to spend $300 at the grocery store, you cannot go out and spend $400. This kind of overspending is a destroyer of spending plans.

Financial Success is Preparing for Unexpected Financial Events

Another issue for spending plans is the unexpected event. Let’s say you created your spending plan and are moving well through the month. You are following your spending plan, and then an unexpected event happens. Your mom or dad gets sick, and you must travel to see them.

Emergencies or contingencies are going to happen, and although we know that they are going to happen, you cannot plan for them specifically, but you can plan for them in a general way by saving up an emergency or contingency fund.

With this fund, you can take care of emergencies and contingencies when they come, and it does not affect your spending plan. A good rule of thumb is for three to six months of expenses into an emergency or contingency fund.

Preparing for Expected Events is a Recipe for Financial Success

Preparing for expected events is another key to financial success. You have spent most of your adult life doing things the “right” way. You planned to spend your money, you saved, and lived within your means. Then you get to the point in your life where your children are ready to go to college, and you have not saved enough.

How about retirement, are you ready? Have you saved enough? If you have not, what do you do?

The other side of this is to plan for these expenses and begin to save for them. The key is to determine the number or amount you are trying to reach. How much will you need to save for your children’s education? How much will you need to retire the way that you want to? Once you find these numbers, you can begin to save and reach them. Preparation is the key.

These are just some of the keys to financial success…can you think of others?

Managing Money Well Creates Choices

Managing money well gives you more choices and options. You see, money is just a tool to help you reach your goals and dreams. It’s an asset and a help. It’s not a master, and it’s a terrible god.

William Jennings Bryan, three-time Presidential candidate, put it this way in a speech in 1900, “There is a proper relation which should exist between man and money. Man, the handiwork of God, comes first: money, the handiwork of man, is of inferior importance.”

Our purpose is not to serve money, but for money to serve us and help us reach aspirations.

When money is managed well, good financial decisions are made and financial goals and dreams are moving forward. Some questions for you to consider are:

What are your goals for your money? When you make financial decisions, do you know the choices that you have? When you make financial decisions, do you make them based on your goals and dreams and do they support the financial life you want to create? Do you make financial decisions based on how they grow your assets?

These questions can guide you as you make financial decision and improve choices.

Assets Are Money Managed Well

The foundation of choices with money are assets and specifically, liquid assets. Asset that can easily be converted into cash in a short amount of time are called. Liquid assets include things like cash, money market instruments, and marketable securities.

Liquid assets are often viewed as cash, and likewise may be called cash equivalents because the owner is confident the assets can easily be exchanged for cash at any time.

Overall, liquid assets are very important for individuals because they are the first source of cash used in meeting payment obligations, financial shocks, emergencies, and the other things that we all do with money. Managing money well creates assets and provides the choice to go back to school or to quit your current job to look for a better one or start your own business.

David Kolb, An educator, says this about choices, “The way we process the possibilities of each new emerging event determines the range of choices and decisions we see. The choices and decisions we make to some extent determine the events we live through, and these events influence our future choices. Thus, we create ourselves through the choice of actual occasions we live through, and these events influence our future choices.” (Kolb 1984:63-64).

You can create better choices for you and your family!

Can A Financial Coach Help you Manage Money Well?

I am a financial coach/counselor and what I do is help people navigate financial choices to help them manage money better. I would love to help you manage your finances better. Imagine, a year from now and you have a different outlook on life and different perspective about your future. Working with you as your financial coach, we can make this happen.

The question is not can a financial coach help you, because they can, the question is, are you ready to be coached? Are you open to receive coaching so that you can make better financial decisions? Contact me if I can help you. Take care.

Spending Plan Tips for Graduates

Congratulations! You finally made it and graduated, and now it’s time to face a different world. And that includes planning to spend your money. Keep the following spending plan tips for graduates in mind as you get out in the world and start working your first real job.

Use a Spending Plan and Plan your Spending

You are possibly going to have more money than you ever have. It’s going to be a smart move, on your part to plan to spend it. Money is good for three things, and spending is one of the three things, so it’s okay to spend just spend with a plan.

Sit down with a piece of paper and a pencil and just write out where you are going to spend your money; how much, where, and what for.

By doing this, you are creating a spending plan. Later you may want to move to a spreadsheet or app, but to start, use paper and pencil, keep it simple.

Tracking Your Expenses helps You to Be More Aware

Track your spending if you want to manage your money better. There are lots, and lots of ways to track your spending…you pick one. You can track by app, spreadsheet, or on your phone, and it does not matter which as long as you track.

Record every expense every time.

Some expenses are just easy to forget. Here I am mainly talking about things automatically drafted, like the streaming subscription or maybe a credit payment. Car insurance payments every six months or once a year is another. Keep these expenses written down in your log so you do not forget them. And get a receipt from every place you shop or eat; this will help when it comes time to remember and record.

Also, contingencies and emergencies are going to happen. Do not forget to save for these. A good emergency fund will cover expenses for a couple of months and give you peace of mind.

Again, congratulations! You have worked hard, sacrificed, and now it’s time to celebrate. After your celebration is over, start planning your spending and use these spending plan tips for graduates to creating a spending plan that works for you. It will benefit you as you grow in your career and life. Take care.

You Need a Fund for Emergencies

An emergency fund or what some call a contingency fund allows you to stick to a spending plan without having to change and interrupt your budget to meet unexpected costs and expenses. You can plan better and manage your finances knowing you can cover emergency expenses as they arise.

Having emergency savings is extremely important in today’s economic environment. It may be the most significant difference between those who manage to stay afloat and those who are sinking into financial debt. Emergency savings of 3 to 6 months of expenses allows you to meet unexpected financial challenges such as:

• Car repairs

• Medical expenses

• Home repairs

• Other emergency expenses

Having an emergency fund also allows you to plan to spend all your money without worrying about taking care of emergencies that arise. Below are more emergency fund tips.

Emergency Funds give you Peace of Mind

The emergency fund not only allows you to cover these expenses, but it gives you the peace of mind that you are prepared for financial emergencies.

Not having an emergency savings fund is a reason many individuals borrow money at high interest-rates through alternative and predatory lenders.

Keep Emergency Funds Where you can get to Them

You will want to keep your emergency savings in an account that you will have ease in the ability to access as needed. This is called liquidity or the funds being liquid.

How easy is it for you to get access to the money when you need them?

It is best to keep emergency savings in a bank or credit union savings account so I can get to it when I need it. These types of accounts offer easier access to your money than certificates of deposit, U.S. Savings Bonds, or mutual funds. Keeping your emergency fund separate from checking accounts makes it much less likely that you will use these savings to pay for everyday, non-emergency expenses.

Get the Family Involved in Saving for the Emergency Fund

You may think that it is not so easy to save $500 to $1000 for emergencies. One way to make it easier is to get the entire family involved in building the emergency fund. It may be easier if you involve your whole family in meeting the challenge. Explain the importance of emergency savings to your family and get them to help by cutting expenses on the power, food, entertainment, and more.

Make your emergency savings fund your family financial goal and plan how the family will meet the goal. Keep the family updated and when you meet the goal be sure to celebrate maybe with a family fun night.

Having emergency savings is essential in today’s current economic climate. Having emergency savings will give you peace of mind about your finances. Set goals and celebrate when you meet the emergency savings goal. You need an emergency fund, and with some work and a plan, you can have an emergency fund for emergency expenses and peace of mind over your finances.

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.