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Free Your Finances...

Updated: Nov 30, 2020

Hey Family,


Last month we talked about the importance of establishing a budget. I gave you a few apps to use but here's an example of a personal budget spreadsheet from Microsoft Excel.

I love this spreadsheet because you can edit it to the categories you need, it automatically tracks your expenses as you enter them in, and you can see first hand what an expense will do to your end-of-month total. This will help you make better decisions on what you can and can't spend your money on. Microsoft Excel has many more templates you can use to establish different types of budgets for event planning, home construction projects, family budgets, budgets with charts and graphs, etc. Microsoft Excel makes it easy for you. All you have to do is input your information and that's a habit you'll have to develop over time if you're not used to keeping track of every penny you spend. Like we said last month, once you know exactly where your money is going, you'll be better able to shift how you spend and how you invest.

 

As we head into the final month of 2020, lets talk about how we can be more financially disciplined by building good financial habits and setting goals for the following year.


I recorded this video in 2019 about establishing and maintaining good financial habits. So lets start with that. Watch these videos as you read the information below.


Financial Discipline: How well we conform our spending and saving to the plans that we have set to achieve our monetary goals.

4 Financial Discipline Principles:

  1. Goals. You need to set short term and long term financial goals. Write them down and place them all around the house so you see them everyday. Let your friends and family know what your goals are so they can hold you accountable. Short term goals allow you to develop habits to continue to reach the long term goals. Lastly, celebrate your success of achieving short term goals because every achievement deserves to be celebrated!

  2. Plans. Make a plan to get to your financial goals. Know what your end goal is and make a monthly or weekly plan to get to that end goal.

For instance, maybe your goal is to save $10,000 by the end of next year. In order to reach that goal you establish a monthly plan of $833.33, which can appear somewhat overwhelming. So you establish a weekly plan of $192.31 that seems a bit more manageable. Now every purchase you make will be weighed against whether or not it will interfere with your weekly plan to get to your end-of-year goal. "Hmmm...🤔...will this $10 Starbucks coffee ☕ dig into my weekly goal?" This gives you something to track on a weekly basis and causes you to hold yourself accountable....which brings me to the next point.


3. Spending. Be accountable for your spending. 1. Learn to start asking yourself questions before you spend money. a. Do I really need this and do I need it at this moment in my life? b. Is this what I came in the store to get? c. Can I do without it?

d. Am I buying this out of emotion just to feel good? 2. Challenge yourself.

  • Challenge 1: Challenge yourself to cook for 30 days and only eat what's in your house. This will help you to not spend money in restaurants. It can also be a way for you and your family to get creative with the food you have. It will also help you to take lunch to work and school.

  • Challenge 2: Challenge yourself to not purchase clothes for 30 to 60 days.

  • Challenge 3: Challenge yourself to avoid shopping as entertainment.

  • Challenge 4: Challenge yourself to unsubscribe from retailers' newsletters and email ads that offer you deals.

  • Challenge 5: Challenge yourself to set a monetary limit to not spend over a certain amount. Set a limit of $50 so any purchase that is over $50 you have to wait 24 hours before purchasing.

4. Saving. Create a savings by paying yourself first. Decide on a percentage or dollar amount to be auto-drafted from your paycheck or bank account. No amount is too small! The goal is to create some consistency to develop a habit. Once you see your account being built up, you'll find more ways to save more because you'll see your account getting to your end-of-year goal. There are many apps that will help you save automatically. I use the following apps: Digit (auto-draft savings), Dosh (purchase roundups toward your savings), and ChangeEd (purchase roundups toward your student loans).


BONUS:

5. Investing. Find ways to make your money make money. If you don't know much about investing, you'll want to get into some sort of invest class. There are several for free online but also most banks have financial advisors that will give you free advice on investments. Your bank may have money markets accounts you can invest in for as little as $50 per month. You can set your account to conservative, moderate, or aggressive depending on the level of risk you're willing to take. Once you learn more and are more comfortable with investing, you may want to open a brokerage account to be able to buy and sell stocks. I use TD Ameritrade because I like the interface of the website and app and it also offer $0 trades.


For those of you who want to invest in an easier way, you can do so with apps such as Acorns and Stash. These apps allow you to invest in companies and industries of your choosing for very little. You can see how a company has done over a particular timeframe and you can see what other stocks a particular company is also investing in. Both of those apps allow you to start and stop at any given time.

 

So Family as we head into the last month of 2020, let us assess how well...or not well...we did in Freeing our Finances this year. Did you meet your financial goals? Did you establish a budget and stick to it? In what ways can you do better in 2021? Can you increase your savings and investments? Can you give more? Giving is something we haven't talked about but giving is just as important as saving and investing. I'm a HUGE believer in releasing to receive. Everything you put out, good and bad, will come back to you 10 fold! That will be the focus of one of the Free Your Finances blogs in December. Let's continue to establish financial goals for ourselves and our families. Let's continue to work on maintaining financial habits that will lead to us being more financially disciplined, ultimately leading us and our families to generational wealth. NEXT FREE YOUR FINANCES TOPICS: Giving, Estate Planning, Starting a Business, and Investing through Real Estate. Thanks for reading! See you all next month!

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