Lie #1: Debt is Normal
A shocking 77% of Americans have some type of debt. People say it’s okay to have student loans and car payments. Not really, as this keeps you from building wealth and the paycheck to paycheck lifestyle that this creates only leads to unnecessary stress.
Lie #2: I have plenty of time to plan for my financial future
If you understand the importance of compounding interest, you know it’s important to start saving as soon as possible because this allows your money to grow quicker and requires less contribution vs. waiting until later to get started. Lie #3: You don’t make enough money to live debt free
I’ve seen individuals prioritize debt elimination even though they were in bankruptcy. All it takes is a made up mind and the rest will take care of itself.
Lie #4: The sacrifices aren’t worth it
I can tell you from personal experience that there is no greater feeling than eliminating debt and using that cash for wealth building, to splurge, travel or do things that you couldn’t do while in debt. Lie #5: Having a budget limits your freedom
Actually a budget gives you permission to spend your money as you know where it is going and allows you to be in control of your finances. Budgeting isn’t hard but does take some effort. Use an app like EveryDollar to keep track of your expenditures. Lie #6: You need to keep up with the Joneses
This mentality of doing or acquiring something just because your neighbor or friend does is a sure way to keep you broke. Don’t believe everything you see online as social media is flooded with fake lifestyles that do not get to the root of helping someone become happy & fulfilled. Lie#7: I want it and I want it now
Of course you deserve to have things just like the next person. But, is this thing worth you getting more into debt and falling further behind on establishing that emergency fund? Between the credit cards and buy now and pay later offerings, that’s what will happen as you pay interest to use these financial products which are designed to strip you of your money in a silent manner.
Lie #8: Not using debt is a scary lifestyle change
If you’ve always been in debt, this may appear uncomfortable at first, but you can live without debt. You can use a debit card instead of a credit card, and you can use cash also. This adjustment to having money leftover at the end of the month for savings or do whatever with, will quickly help you get over being in debt.
Lie #9: Debt isn’t a big deal
As long as I make the minimum payments each month, it’s not big deal. But actually, that credit card is costing your 18-30%+ in interest, and you also pay interest on that car balance and student loans. The hidden fees and interest in these products makes it feel like you are barely above water when making the payments and the balance doesn’t move.
Lie #10: You don’t need your spouse to be on the same page
Money is the leading cause for divorce and can quickly ruin a good relationship. So, get on the same page as soon as possible because at the end of the day it’s our money and our debts. Lie #11: You need a credit card for emergencies
That’s completely false as you only need access to cash or a debit card to pay for emergencies that come up. This is where an emergency fund comes in handy as it allows you to live worry-free in regards to addressing Murphy, when he comes around. Lie #12: Getting out of debt just isn’t possible
We all should know that this isn’t true as I have helped countless individuals reach the goal of debt freedom over the years. It isn’t easy but it is possible if you put forth the effort and stay committed to the process. Look, I know trying to pay off a mountain of debt is challenging. There’s no sugarcoating that. But if you commit to your debt elimination plan and take it step by step, you too can enjoy the freedom that millions have realized by eliminating debt. Let’s go...
When it comes to retirement, the earlier you plan and save, the better. Because of compound interest and tax deferrals, you can benefit more the earlier you start saving for retirement. The below strategies will help:
1.Think about the kind of retirement you want. Will you want to live differently when you retire? Start visualizing the type of lifestyle you want to live when you retire so you can tailor your savings goals to that lifestyle.
- How old do you want to be when you retire?
- Will you still work part time?
- Where will you live? Do you want to live domestically or internationally?
- Will you be renting a house, or will you own your house? What will your monthly costs be?
- Will you still work part time?
- Where will you live? Do you want to live domestically or internationally?
- Will you be renting a house, or will you own your house? What will your monthly costs be?
2. Set a goal. Take time to carefully consider retirement expenses while factoring in inflation. Will you have other expenses that you might not have right now (such as children’s expenses)?
- How much do you want to have when you retire? - Will you be traveling when you retire?
- Hypothetical examples suggest that even a 25-year-old who invests $75 per month would accumulate more assets by 65-years-old compared to a 35-year-old who invests $100 per month.
3. Automate your savings to a retirement plan. Take advantage of tax deferrals to a retirement account. Set up automatic payments to your Individual Retirement Account (IRA) or 401(k). This way, the money gets deposited into your retirement savings plan before you have to think about it.
- 401(k)s have a high contribution limit ($23,000 if under age 50 & $30,500 if you are age 50 or over – 2024 limits), and sometimes employers are willing to match your contributions (this is FREE money).
- If you are under 50, you can contribute up to $7,000 to an IRA. If you are 50 or older, you can contribute up to $8,000 to an IRA (2024 limits).
- Money contributed to a 401k or Traditional IRA may be deductible on your taxes that year. Then, when you withdraw money from that account in retirement, you pay taxes then.
- Money contributed to a 401k or Traditional IRA may be deductible on your taxes that year. Then, when you withdraw money from that account in retirement, you pay taxes then.
- Money contributed to Roth IRA or Roth 401k are not deductible on your taxes that year. However, withdrawals you make from that account when in retirement are not taxed.
4. Diversify your savings. Don’t put all your eggs in one basket! Your retirement account is just one piece of the puzzle. Consider investing in other assets, such as real estate, taxable investment account or a business.
5. Take advantage of employer matching. If your employer matches your retirement contributions, take advantage of that! Deposit the maximum amount that your employer matches. Then invest the remaining amount in a Roth IRA to get your total up to 15% of your gross income.
6. Continually reduce your debt. Pay off your credit cards every month, if you use them. When possible, accelerate your mortgage payments after eliminating all other debt and maximizing retirement savings.
7. Start saving today. Most (if not all) articles you read about retirement will encourage you to start saving today. The reason being is over time you can earn money from your savings via compound interest.
- Compound interest is the interest you earn on interest. It comes from reinvesting the interest you earn. It works in your favor.- Hypothetical examples suggest that even a 25-year-old who invests $75 per month would accumulate more assets by 65-years-old compared to a 35-year-old who invests $100 per month.
- Put as much as you can away now so that you can reap the reward later.
Some financial experts recommend saving 15% of your pre-tax income towards tax-advantage retirement accounts. Saving for your ideal lifestyle when you retire is a marathon, not a sprint. When you build your wealth over time, you don’t have to worry about tackling everything all at once. Remember that over time, your retirement account will build! Let’s go, you’ve got this...
26 Money Affirmations to keep you focused on Financial Freedom
| I can do all things through Christ that strengthens me. |
| I have an emergency fund that surpasses all of my needs. |
| I routinely document my spending, savings and investing. |
| I live a life of abundance and love. |
| I’m blessed to be a cheerful giver to those in need. |
| My finances do not define me, but allow me to be an olive branch to those in need. |
| My wealth is accumulating and compounding every year. |
| I give myself permission to be rich and enjoy it. |
| I attract money and can manifest it wherever I go. |
| I am rich in all areas of my life. |
| Money comes to me easily and quickly. |
| I create wealth & abundance wherever I go. |
| I am actively creating financial security, abundance, and peace. |
| I always have more money than I spend. |
I can relax and let go; I am financially free. |
| I release my resistance to money and allow cash to flow into my bank account. |
My income always exceeds my expenses. |
I have removed debt from my life and it feels so good. |
I embrace financial freedom and independence with joy and confidence. |
| My cup runneth over. |
I am worthy of being paid well for what I do. |
I bless and release my tired old money stories and welcome in new prosperity and freedom. |
Today I am wealthy. All my needs are taken care of — and exceeded. |
| I am a magnet for happiness. |
I thank the universe that wealth and abundance are mine to enjoy. |
I am intentional with how I spend and save my money. |
In order to get better with our money, at some point our focus will need to shift to saving more money for debt elimination, emergency fund, retirement or to reward ourselves for the discipline used to accomplish our goals.
Below are some tips to assist with your saving efforts:
1. Establish a budget. In order to save money, we’ve got to first know where it’s going. A budget will help us to identify what’s going where and how much we should have left for spending and savings. Complete a zero-based budget every month and regularly document expenditures against it for status.
2. Set a savings goal. One of the best ways to save money is to set a goal identify target amount to save by a certain date. This will help you focus on it. 3. Make savings automatic. Set up direct deposit to have a certain amount of money withdrawn from your paycheck to go into a savings account. This will occur in the background without you having to do anything.4. Buy generic items. Try to buy generic staple food items and nonfood basics, like medicines, cleaning supplies and paper products.
5. Cancel subscriptions & memberships. Conduct a spending inventory to see what accounts, subscriptions and memberships are not serving you financially. Then cancel some, to see how that impacts your cash flow and life.
6. Eliminate Debt as quick as possible. No one wishes they had more debt. Increase your focus to get out of debt as soon as possible.
7. Reduce Temptation to Spend. Stay out of your favorite store or off your favorite website for a couple of months to see how that helps increase your savings. This will be hard to do but focus on your end goal to activate the self- discipline needed.
8. Meal Plan Your Food. Put together a meal plan for each meal and stay committed to using it so you do not mess up your food budget. This one may take a couple of months to get right but pays huge dividends when followed.
9. Switch Your Cell Phone Plan. Shop around for a lower plan that will provide instant monthly savings.
10. Stop eating out so often. Going out occasionally is okay, but let’s plan it ahead of time, so we can control the costs being spent.
11. Stop using credit cards. Use cash or debit cards as much as possible because you feel every spend and it helps you focus on NEEDS only.
15. Adjust Your Tax Withholdings. If you have been receiving a large tax refund, that means you are giving too much money to the government. Adjust your withholdings so you receive more money out of your check each month.
11. Stop using credit cards. Use cash or debit cards as much as possible because you feel every spend and it helps you focus on NEEDS only.
12. DIY everything. Mow your lawn yourself and do not call that contractor until you have tried to repair or replace it after watching YouTube videos.
13. Reduce Energy Costs. Adjust your thermostat so the HVAC system isn’t running as much. Take shorter showers, fix leaky toilets, wash clothes on cold cycle, and turn off lights when not needed.
14. Try a No-Spend Month. Keeping a needs based, no-fluff budget for 30 days, will save money immediately. Commit to cutting out the nonessentials for month and see how much money you can save.13. Reduce Energy Costs. Adjust your thermostat so the HVAC system isn’t running as much. Take shorter showers, fix leaky toilets, wash clothes on cold cycle, and turn off lights when not needed.
15. Adjust Your Tax Withholdings. If you have been receiving a large tax refund, that means you are giving too much money to the government. Adjust your withholdings so you receive more money out of your check each month.
16. Shop for Lower Insurance Rates. Once a year, look for lower insurance rates. Take advantage of combining auto/homeowner’s with one company. Also look to increase the deductible, which reduces the monthly premium.
20. Join a Gas Rewards Program. Since you’ve got to get gas anyway, you might as well get some perks by refilling with the same provider.
17. Learn to Say NO or Not Now. You’ll delay some of that gratification by using the magic of NO and save more money, build better spending and savings habits and feel more contentment overall.
18. Skip the coffee shop. Make coffee at home, which will provide immediate savings for the coffee lovers out there.
19. Pack a Lunch. Don’t go out to lunch everyday. Try brown bagging it and go out only once per week or for a special occasion only.18. Skip the coffee shop. Make coffee at home, which will provide immediate savings for the coffee lovers out there.
20. Join a Gas Rewards Program. Since you’ve got to get gas anyway, you might as well get some perks by refilling with the same provider.
While some fads come and go, there are some timeless things that always ring true. Money has been around in one form or another for ages; it only makes sense that certain truths have been discovered in wise ways to make the best use of this asset.
Here are 10 rules that will never steer you wrong:
1. Grow your knowledge around getting better. We don’t do better until we know better. So, always work on improving your thoughts around money, and improving things that you know you should be doing to improve your money situation. This includes having an accountability partner to hold you accountable to what you should be doing.
2. Have an emergency fund. Without some savings to handle the inevitable hiccups that happen to everyone, your long-term plans can be in jeopardy. With an emergency fund, when a big financial challenge comes into your life, you can avoid having to dip into your retirement to pay your bills.
Recommend an emergency fund consisting of 3 – 6 months of your monthly expenses.
3. Know where your money is going. A spending plan or budget allows you to know where your money is going and identify how extra dollars can be used to improve your financial situation. You can alter spending from one area to another or increase income in order to increase savings or reduce debt.
4. Eliminate Debt as quick as possible. No one wishes they had more debt. While the debt required to buy a house is acceptable within reason, any other debt should be eliminated as soon as possible.
5. Maintain a healthy credit score. Increasing your credit score takes work and patience. But it’s worth the effort as having a good credit score can help you improve your financial health by allowing you to receive approvals at lower interest rates which translates in to lower monthly payments.
6. Be cheap. When you're buying anything, let’s make sure we are getting the most for our money. For managed investments like mutual funds, take a look at the management fee. Are you really getting your money's worth? Be sure the management team is worth the extra money.
7. Diversify your Investments & Be Patient. Putting all your eggs in one basket can be catastrophic if something happens to that basket. A significant financial loss to your portfolio can take 10 years or more to recover from which is why it’s important to diversify and let the power of compounding interest work overtime.
8. Properly Insure against unexpected losses. The best financial plans can be ruined if they are not properly protected from unplanned losses. It’s best to start with basic term life insurance to make sure your family is covered if something was to happen to you. Next, look to see if you have appropriate disability insurance which usually replace 50 – 65% of your salary.
9. Do everything (legal) you can to avoid taxes. Minimizing your taxes is work that's well worth the effort. Everyone should pay as little in taxes as possible. Don't just give away your money unless it's charitable, and the IRS doesn't count as a charity.
10. Do something, implement your plan. Wishing and thinking require as much energy as making and executing a plan.Instead of daydreaming all the time, just do something. Even a little financial planning and some minimal, but consistent, action make a big difference over time. So, let’s get going.
