2009 was my financial wake-up call. I was laid off from my job because our economy went to shit in a hand basket. Like many Americans, there was a shift in consciousness concerning ideology concerning the American dream and living. Once you begin to lose “things” “Thought” of as important and find how important they are not.
I like many other fellow citizens were living way beyond our income level. Funny thing, I kept asking myself before the 2008 crash, how long could real estate prices continue to rise, and banks keep making refinance loans greater than 100 of collateral. Still, my logic did not deter me from spending five hundred to a thousand dollars more than I was making at my day job.
Here are the bills I was paying frequently costing me $5k a month.
Discover card (several thousand dollar balance)
Very high balance revolving open credit line.
Master card #1
Car payment number 1
Car payment number 2
Separate internet bill
Daughter’s Harp rental(yes full size)
Mbna credit card
Car insurance for three cars (two drivers in household)
Misc bills I can’t remember.
All told I was drowning in debt. Then I was laid off. All hope was not lost as I had a small business that generated the money outside of my day job to keep us afloat. In addition, my wife worked and had her own bills, WTF was I/we thinking.
The layoff and the temporary reduction of income cause me to pause and rethink my situation. Since 2008 I have managed to turn my life and credit rating g around. I forgot to mention, during my financial reprogramming, just when I was seeing serious financial daylight, my wife and I separated. I was not deterred.
I will not have more debt than I can pay off at any given moment of my choosing.
There is one exception I had to make, which is housing. For several years I was an apartment dweller until I remarried. The apartment allowed me to control my living expenses for about 5 years. The good news is, because I worked on living for need versus want, I was able to repair my credit, savings, and peace of mind. When I did purchase a new home i received the best interest rate. My interest rate made me gasp, as it was the lowest I’ve ever experienced.
What I learned.
Even though everyone and common wisdom may inform us to save your money, the financial temptation is EVERYWHERE!
Don’t be good rich! rich is looking like you have everything under control materially but owning nothing of value.
Being Rich is looking like you have everything under control materially but owning nothing of value.
Don’t be surprised, doctor, lawyers people who you think have the resources are suffering too. It’s all about outside perceptions. Just because someone earns $250,000 annually does not provide financial security, if someone is financially overextended.
Money is the new crack!
Companies make it easy to take your money in order for us to look wealthy but be functionality poor. Banks make us functional addicts by issuing credit, and the lessons learned by many in 2008 are starting g to be forgotten. Not me!
Live for need and make “wants” rewards for good behavior.
I know now, a second reprogramming was required. After paying off my debts and living below my means, what’s next. The answer, more of the same. Don’t spend it just because you have it to spend.
Here is how it’s done.
Your phone works find you don’t need a new one.
Your TV still has sound and picture you don’t need a 70 inch OLED because it’s new.
Yep, your car is old but it cheaper to fix it than to buy a new one.
Make your much it’s healthier than buying processed fast food.
Use your library, you would be amazed at how much it saves you.
Chose to purchase experiences versus things.
Get a bank account not easily accessible and direct deposit minimal 10% of your income.
Learn something new to generate an income. (Try to make(profit) $100) a month and save that money.
We are programmed in industrialized nations to be financially obese. This is psychological warfare to keep you low. Every day you are told you are not good enough if you don’t have the latest item being sold. It’s not true.
Think of it this way.
Do you have a safe home?
Do you have enough food?
Are you healthy?
Are you loved?
Do you have clothes to wear?
If you can answer yes to these questions, then 99.9 of your needs are set, the rest is extra.
The other demon we deal with is boredom. I have had a tendency to spend unnecessarily when I get bored. I live in the middle of nowhere, so I am bored often. This is where I learned to use my mind and begin creating to stave off boredom.
So it’s time to cut the financial fat and create a financial reserve for the lean times.
It’s that time again, Tax season. The first quarter of every year is when new resolutions are made, and many people get their tax refund. Tax refund time is the perfect setting to start your financial makeover.
Some years ago, I got fed up with my financial status. I had a good income but I could not keep any of the money I made for any length of time. There had to be a reason I was making a good living but living paycheck to paycheck. Many of us may find ourselves in the same situation.
When you think about your finances and where your money is going, on the surface things may seem ok. A closer look at your finances may be in order. I know you may have heard this all before, but it really is true. Money and resources must be managed. The time is ripe to knuckle down and become your own auditor.
Where do I start: Budget – Money – Inventory
Grab a piece of paper ( Not your computer or tablet)
Think – about every and I mean every dollar you spend.
write down three columns on the piece of paper. Label them Bills – Necessary – Unnecessary.
Write every dime you have spent in the last three months in bills and spending.
Separate the items into the three columns.
List how much money you make per month on the paper.
Add the total of the columns and play with the unnecessary from the money you make to see how much you can save.
Recording where your money has gone is a start and only a start. The reason for writing down these numbers is to find out how many bills and spending items are on the table. The next action putting items in categories gives you and indication where your money is going while placing priority on those funds.
I did it you can too!
Listing out where my money was going was a sobering act. I started to find my bank account had a trickle in the form of $20 to $100 expenses that were a pure luxury and very unnecessary. Little money vacuums such as subscriptions, dues for things I really did not use and other money ripping items. those were the bills listed in the unnecessary.
Once I had a visual on expenditure, it was easy to see I could get my money in control. It became a game to see how much I could save. When I had a bill that I could not pay off immediately, I developed a time plan by attacking the smallest, then rolling the payments of the paid off debt to the next item on the list. My family thought I was nuts, as they had not had a money mindset change as I had. Actually, my divorce came some time later(go figure). It was imminent anyway. I went nuts, I called credit card companies, closed accounts, got rid of cable channels, started taking car of my own lawn and snow. I was a mad man.
I want to touch on something I may have breezed over. The reason for the 3 moths of bills was to get a good average of items that many not occur every month. Those surprise non-monthly bills can hit you in the face. If you don’t take an average over time of your spending habits, that sudden expense could derail your efforts.
24 Months – The Outcome Over Time
Failure to reach a goal is typically due to unrealistic expectations. 24 months is a good timeframe to make great changes in your life. As you rid yourself of the unnecessary cost in your life, freedom will show up. The goal is to run for the duration and not sprint to the finish line. This is a lifestyle to make living better and more manageable. Freedom of choice will become more dominant as you free up money to be used or invested. The task I have placed before you is really easy. Start with one item per month then use the snowball moeny management method to get your finances in order.
Next time I will show you some free tools to help you budget.
Why The Billionaire Lifestyle wanted you to experience Avery Breyer.
Avery Breyer grabbed my attention via Amazon.com with a series of book to educate the masses on Personal Finance.
Here are some of the reasons I had to interview Avery Breyer for The Billionaire Lifestyle Podcast.
From Avery’s website and own words:
I have a knack for managing my money and thinking outside the box to make the most of it., And I can help you to do the same.
My first home was paid off in less than five years.
Avery owns over a million dollars worth of investment real estate.
She has a credit score just under 800 (last I checked).
I earn about $60 per hour as a freelance ghostwriter, a new career I started despite having no experience, no contacts, and no credentials.
I’ve used credit card reward points to get round-trip business class seats for our family of four on flights from N. America to Asia twice so far, and it all cost me less than the cost of flying in economy.
Her powerful books hit home directly with The Billionaire lifestyle to help guide readers into the mindset for crafting a personal lifestyle of your choice. Positive personal finance is one of the most important contributors for being able to live a life of freedom from unnecessary worry and preparation for life’s unexpected surprises.
Best-selling author Avery Breyer provides personal finance strategies and lifestyle design. If you are looking for information to gain personal financial freedom but don’t know where to start, Avery Breyer has provided inspiration and a pathway for many to follow. Avery Breyer has documented her journey and methods of personal finance, passing on vital information for novices to the most experienced in person financial for lifestyle design to help individuals navigate the new economy of 2017. Publishing various book from personal financial management to income generation for everyone.
Avery has crafted a lifestyle independent of geographical location. At the time of our interview, she was residing in Mexico with her family. Because of careful financial planning and deciding to live each moment to the fullest Avery and her family lives in locations of personal choice for indefinite lengths.
Looking at a few of Avery Breyer’s titles gives you very simple lessons to be financially stable and financially free.
The first word that stuck me hard when speaking with National Speaker association member and financial adviser Martin Hurlburt was:
“Emmitt, Emotions Are Hazardous To Your Wealth!
The very statement was the one thing that drew me directly to Mr. Martin Hurlburt’s message. Listening to his lecture was an affirmation we all know in the back of our minds but tend not to adopt. It’s understood, many of us ignore the fact we spend our money to make us feel better, and there are a host of other emotional reasons money leaves our pockets. There is an addiction much of our society tends to sweep under the rug or just blindly look the other way and never address as a personal issue. That addiction is emotional spending be it large or small. There is a common bond each of us has in the fact we use money spending as a cure for so many things, in order to feel temporarily better.
Martin Hurlburt has identified key motivators when helping clients to with them on their financial journey. Before being able to formulate a financial road map there must be an understanding of the mindset of clients. Martin has identified key factors our population may be harboring preventing the arrival at financial freedom or security.
In his new talk: Financial Misbehavior: Why Smart People Do Dumb Things With Their Money. Martin spells out key points to help you navigate the journey.
A few of the key points:
Why emotions can be hazardous to our wealth!
Why money does not solve financial problems.
How our brains are wired against us making good choices with our money.
3 simple things anyone can do to make better financial choices.
How emotions impact our investment returns.
A few (7) Reasons why we buy to satisfy emotions.
Protecting our image.
Many times we spend money to protect the perceptions concerning how and what our family friends and everyone have concerning our persons. There is a stigma in much of the world of being poor, lower class or without means. The perception of financial insecurity by people outside of yourself is as old as the hills, but has little merit to a person who understands financial literacy and long-term planning. With a financial pan, and following a financial map will remove those temptations.
Spending Up To Our Income Level.
Many of us obtain raises throughout our working career’s. The majority increase our level of spending to match whatever upgrade to our check stubs gain periodically. Up spending is the norm versus the exception. The best practice is always to live below your income level and use compound interest with any new revenue we find in our lives. The American standard particularly before 2008 was to spend more money than we made in the form of credit cards. So spending your raise is not a good idea.
The Need To Feel Powerful.
Sometimes spending money make you feel like a Greek deity. It’s a fact when you have some cash or a new credit card, a certain perception of power come comes along. Spending money can make you feel like those people in the NBA player who just scored the winning three pointer as the clock hits zero to win the game. There is the other side of power spending its being broke. Being broke is not a power feeling.
The Need For Immediate Gratification/Boredom.
Sometime we just need to get our of a rut and spending money will fill that empty whole, briefly. We have all had those moments where it seems, there is something missing and an urge needs to be satisfied. A new TV, that new iPhone 50 just came out and you must have it. After time has passed we recognize the purchase was totally unnecessary and there could have been a better use for the dollars and time spent.
The desire to protect our standard of living.
I have made purchases in the past just because I had the old model of something, and that was just not right. Cars were the most notorious. Sometimes we make purchase “Just Because”, it’s what we do.
The Need To Overcome Past Problem.
People who come from meager situations and who have not gained a certain level of financial literacy. These individuals may have a tendency to spend money far less responsibly than other who were more stable earlier in life. Think about all the Football players, boxers who make huge sums of money only to end up broke. Often in this category one can hit several items in this list because of the lack of exposure to finances.
Convince oneself of worth.
Some people emotional spend money because they attribute their value is dependent of how much money they can spend.