1. Be proactive, not a victim. Money flows from those who manage it to those who do.
2. Do a written cash flow plan (budget). You will become blessed when you a re a blessing. Tell your money where to go instead of wondering where it went.
3. Keep your checkbook balanced and never write a check until the money is in the bank.
4. Take off the mask and address where you are on paper.
*Address everything. Don’t leave anything out! (Even car repairs!)
5. Plan your impulses. Watch those ATM/Debit cards and only use them when they are part of your basic plan.
6. Do it on purpose and quit spending more than you make!
- (5) Reasons people don’t do a budget:
- They don’t want to be limited on what they spend.
- Budgets have been used to abuse or control. (Budgeting is not a method by which you can make other people behave. It is a method by which you make money behave.)
- Never had one that really worked. (You have to include all categories in your life and deal with where you are. You have to write it down. See number 4 above.)
- Fear of what you will find or admitting how bad you’ve been. (Deal with where you are so you don’t have to live where you are for the rest of your life.)
- Denial
- Budgets will not work when you:
- Leave things out.
- Overcomplicate them. (Keep it simple.)
- Don’t actually do them. Either follow it, or change it.
- Do them in theory only. (You have to live on it.)
**Note: Your budget will not begin to work until the 3rd mo. First you will have a budget agreement meeting. Then, an emergency adjustment meeting until things begin to balance out. ($40, 816 avg. household income)
- A written plan:
- Removes the manage by crisis situation (see manage what you have below).
- Gives farther (stretches).
- Removes money fights when unity is established.
- Removes guilt, shame, fear, and stress in relation to buying necessities.
- Removes NSF’s. (Never write checks for things not included in your categories. You may change them, but if you raise one, you must lower another.)
- Stops overspending. (Put things in perspective.)
Manage what you have.
- The (4) Walls:
- Food
- Shelter
- Clothing
- Transportation
- Zero based plan: Give every dollar of your income a name before the mo. begins. Every month has it own characteristics. (Income – outgo = zero)
- Envelope system: Don’t spend more than the cash in the env. for its designation (food/clothing). Overfund it in the beginning, you can always adjust it later.
- Healthy financial plan:
- Build a budget.
- Write a will.
- Debt reduction plan – Debt snowball
- Tax reduction plan – VOTE!
- Emergency Fund
- Retirement Fund
- College Fund
- Charity
- Insurance
*** Take action! You wont prosper until you have diligence!
- Consumer equity (net worth): own – owe = equity
- Ex: $90,000 (own home) – 70,000 (owe) =$20,000 equity
- $7,000 -10, 000 =-$3,000 equity
- $1000 Savings = $1000 equity
Rewrite often as debts go down and savings go up to show progress. (2-3mos. in the beg. Then once a year thereafter.)
- Income (take home pay):
- Ex: $1700/mo.
Joe – $850 (1st & 15th)
Susie – $650 (every 2weeks) *Twice a year (3) checks.
Budget according to how your pay period falls before the mo. begins. Especially those who get paid by-weekly and have that extra week in a given mo.
- Non-monthly expenses (such as ins. or real estate taxes):
- Total annual exp./12
- Ex: Furniture – $600/12 = $50.00/mo.
- Vacation – $1800/12 = $150.00/mo.
- Christmas – $1200/12 = $100/mo.
- Monthly cash flow plan (budget)
