A lot of people ask why it is important to have a budget and track their spending. They think they do alright and have a general idea of where their money is going each month. To be truly effective financially though, a budget is a necessity. Let’s say we sit down together and have you write out a list of your monthly expenses. You write down $200 for groceries each month. We total that up with everything else, and it looks like you have enough money to cover your budget, but somehow you are ending up behind each month.
Suppose you follow my advice and track every penny you spend over the next few months. As soon as you spend any money, you write it down so you know exactly where it goes. You come back the next month, and we look over your budget together and see that you actually spend closer to $400 on groceries. This isn’t necessarily a bad thing. Maybe you need to look for ways to save on your grocery bill, but maybe you don’t. Perhaps there is another area that you can cut back so you have enough to cover the grocery line item in your budget. The idea is that the process helps you figure out where the spending leaks are, where there is money flowing out that you did not realize. The more solid idea you have about where every penny is going, the better you will be able to control the flow. It is like having leaks in a dam. You can’t stop them and save the whole dam from breaking if you don’t know where they are. With a budget and tracking system, you are able to prioritize and visualize your finances.
Budget does not equal poor. And it doesn’t mean you are stingy with your money. There is a lot of stigma about budgeting. But did you realize that even large, successful corporations have very detailed budgets? They keep track of every penny. And they are profiting. So don’t worry about what other people will think when they discover that you keep a budget. Know that you are doing what is best for you and your family, getting your finances to a great place.
Is it enough to learn how to track your spending and have a budget? If it were, all those fast and easy budget books out there would be helping people. They would not have to jump from one to another trying to find something that actually works. We take finances from a different angle. Besides budgeting, we feel that it is important to view the whole picture, to see how the rest of your life affects and is affected by finances so that you can be successful in making changes.
Tags: budget, spending leaks, tracking
With all that has been going on in our economy lately, people are starting to question the banking system. Did you know that the Federal Reserve is not a part of our government? In fact, when they meet with Congress, the Federal Reserve is pretty much telling Congress what to do – not the other way around. It may be shocking to find out that the Federal Reserve is just like any other big business, driven by profits and out to make as much money as possible. Their primary goal is not to keep your money safe or to help you get to a place of financial freedom. No, their primary concern is making money.
But you do have options. Did you know that credit unions are non-profit organizations that are owned by their members? Credit unions are made up of members that share some common bond like belonging to the same school, employer, or organization. And because you are a co-ownder, the credit union tries to make you happy and ensure that you have an enjoyable experience. Your deposits are insured by the National Credit Union Association up to $100,000 in the same way that your deposits are insured for the same amount by the FDIC at the bank. Since credit unions are non-profit, they do not have high-salaried executives or many of the state and federal taxes to pay. And the savings are passed down to you in the form of lower interest rates on loans, higher interest rates on savings accounts, free checking accounts, and lower fees on overdraft or late payments.
Here is a video that was posted on YouTube that does a good job explaining some of the differences between banks and credit unions and why the free iPod you get for opening an account just might not be worth it.
Tags: bank, credit union
If you were to sit back and take a look at your life, could you honestly say, “I love my life”? I’m not talking just a shoulder-shrug and a “my life is OK” or “I’m kinda happy with my life.” But do you love it? Are you enthusiastic about it?
One day as I was going to the conference room to meet with a client, I found her collapsed in a chair in the waiting room, crying. She was inconsolable, and I offered to get her something or call someone. I asked if she had bad news or was ill. All I could finally do was sit silently and hold out a box of tissues for her until the sobbing subsided. I received a huge shock when she looked up after drying her eyes and was smiling a huge, beaming smile. She explained to me that she had been sitting there waiting for her appointment and thinking about how far she had come since she started our coaching program. She said that for the first time ever she loved her life. She’d never been able to say that before, and now she felt in control and hopeful.
Since that day, the goal of our coaching program has been to get all of our clients to that same place, where they can look back and see how far they have come, all the way to the place where they can say “I love my life.” We want them to walk away with new relationships, new attitudes, new possibilities, and new dreams. When they come to us, they may be in a tough spot financially, and we might work through some very challenging life struggles, but by the end of the program there is a confidence and hope that is undeniable. Honestly, it is rewarding to see people this happy and able to live successful, significant lives and be happy. At iMoneyCoach we spend every day now working toward this goal of helping all of our clients reach that place.
Tags: love life
Take a second to stop and think about how you view money and why. Where did you first learn about money? What was it you learned? When you were young, did you learn that there was never enough money for your family so now you work and work to hoard because you are still afraid there will never be enough? Do you feel like you have to be in control of your family’s budget so that you can make sure there is enough money in the bank? Or did you come from a family where there was always plenty, so you don’t have a problem with laying down money whenever you feel the urge to spend, even if your spouse is horrified by this?
We all learn different things about money. And very often the way we react to money or the way we behave in regards to our finances is tied to our emotions dealing with money, often emotions we learned very early on. Does this mean that because Jane had a certain childhood that she can never change her spending habits and will end up sinking further and further into debt her whole life? No, not at all. Knowing what emotions we have and why we have them is the first step in being able to make necessary changes so that we can be successful with money. You’ve heard the saying that “knowing is half the battle.” How true this is! When we know why we act a certain way or why we respond to money with certain emotions, then we can figure out how to make adjustments in our lives. And we can try to start reacting to money with our minds, not our feelings. When we are able to step out and think logically about our finances, including our purchases and plans for the future, we will be much more successful than if we continue to rely on our feelings to get us through.
It can be difficult to sit down with someone and talk through your life to figure out why you handle finances the way you do today. It can be scary or embarrassing, or confusing. But once you go through the process, your life can change dramatically. You can start to free yourself from old conceptions and debts as you begin working on getting to a place of financial freedom. What a wonderful journey that can be! So don’t be scared to call on iMoneyCoach to help you tackle these issues. Saying it is worth it is an understatement. This is something you can do for yourself that will last a lifetime.
Tags: money, response to money
Do you ever wish you knew why your grandparents or parents made some of the choices they did? Do you wonder about their lives and wish you had a record to look to or even share with your kids? Do you ever think about what the lives of your family members and friends will be like when you are gone and if you have left a mark there?
When you move through your life from a level of basic Survival, getting by, to the next level of Stability, that is a great accomplishment. Then when you take your life from a place of Stability on up to Success, you are doing an incredible job. The best thing that can come out of your Success is Significance, which is generally an outpouring of the overflow of your Success. Significance is the permanent reflection of your Success in someone else. What does that mean? It means you are taking your skills and knowledge to teach, train, and give to others to make their lives better. With your children, it can mean showing them how to budget well and save money or having a “family bank” to help them through life’s potential disasters. You can leave a wonderful legacy of teaching and sharing with others.
The important thing to remember is that your life has to be built up first. You have to pay attention to your own life and make sure it is stable so you can be successful first and then add significance. If you are giving and giving but lack stability, things in your life will end up toppling down around you, and then you are stuck with a big mess and unable to give at all. I was on a cruise ship a few years back, and one night the entertainment for the evening was a massive champagne tower that consisted of several layers of glasses that would be filled as the one from the top overflowed. The waiter climbed a ladder clutching the first bottle of champagne as the boat rocked gently back and forth. When he reached the top, he carefully held out the bottle and leaned forward and then quickly jumped back, losing his balance and looking like he was going to knock the whole thing over. The whole audience gasped and then just as suddenly realized from the huge grin on his face that he was just kidding around. Now, thinking of that tower of glasses, picture Stability being at the top. Then Success is in the middle, and finally Significance is the big layer at the bottom. As you pour into the Stability, the overflow runs up and over into Success. As you continue pouring, it finally runs over into Significance, and you have a beautiful flowing tower (i.e. life) to show for it. But you can never pour into the bottom glasses and expect it to flow upwards into the Success or Stability levels. There are certain things that will just never work that way. So as you go through your day, try to remember to focus on the things in your life that you can balance and make stable first so that in the end you can have a wonderful positive impact on those around you.
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