5 Strategies to Stop Creating New Debt

Hi. Welcome to The Finance Gym Action Plan for a Better Life with Money. My name is Stacey Powell and if you’re ready to not just know better but do better, with your money, you’ve come to the right place.

In last week’s video, we talked about the four letter word “debt” and I promised over the next few weeks I was going to be showing everybody videos with my favorite tips about how to stop using debt. If you’re really ready to stop, I’m going to share with you my favorite few tips about how to do that.

The first one is very important. Cut up all your credit cards. Cut up your credit cards. Let people know that you borrowed money from in the past that you’re not going to do it anymore. Every single avenue you have, to take that easy path of borrowing money, stop. Make sure you just don’t even have access anymore because it’s too hard otherwise and I know maybe you don’t want to do it. I understand that. But if you’re really ready to make a lifetime change, you’ve got to do it.

If you absolutely refuse, then secondarily take them all and put them somewhere where it’s really hard to find, in a bank safety deposit account, with a friend that you know isn’t going to just hand them over to you because some important emergency happened, someone who’s going to talk through things with you, which is my next tip.

Find an accountability partner. Not your best friend who you commiserate with when you run out of money and blah, blah, blah and they make you feel better and they’re going to talk about their money problems and you talk – no, no, no. An accountability partner is somebody who you respect about how they handle their money. You know they aren’t going to judge you. You’re not going to feel judged. Somebody to mentor you and tell them what you’re trying to do. They will be thrilled for you. They will want to help. You have someone in your life like that. Think about who that person is and tell them, “I want to stop using debt. Will you be my accountability partner? Can I check in with you about how this is going?” It’s so much easier to do it with somebody by your side, cheering you on and rooting for you.

Then the last thing is when you think you absolutely have to use credit for some important emergency, I want you to stop and I want you to journal about the thing that you want to buy and I want you to list six reasons that maybe you wouldn’t have to do it, six ideas of things you could do other than using that credit card.

This is on page 109 if you’re following along the book and if the only way you can buy this book is with a credit card, don’t do that. Just go to the store at TheFinanceGym.com. It’s on there under the free downloads. Download that page. Every time you think you need to use a credit card, fill that out and if you make that commitment alone, I promise you you’re like not going to be using your credit card at least half the time because you’re not going to want to take the time to fill that sheet out.

That little thing right there will make a difference and an impact on your life and then my fourth tip is sleep on it. Sometimes our subconscious can come up with solutions that we can’t come up with.

So, if you’re ready, I’m here to support you. We have a group called Team Do Better over on Facebook. Come join us. We will be your accountability partner if you think you can’t find one. You can also sign up for our newsletter at TheFinanceGym.com. Subscribe to our videos right here on YouTube and if you’re ready to do this, do it with us. I would be thrilled to support you.

3 Ways You Can Stop the Debt Cycle

Hi. Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready to not just know better but do better with your money, you’ve come to the right place and today we’re going to talk about the four-letter word “debt”. Not a word that most people like.

There are a lot of you that are watching today that are really clear that you got a problem with debt. You’re living paycheck to paycheck. You struggle to pay your credit cards off. You’re using them most months. You get sick to your stomach when you see your interest charges.

Maybe you’re even using credit available from one card to pay off another. It can be really crazy making – and shameful and all that comes along with it. If that’s you, you know who you are but I know there are others of you out there that probably aren’t using credit to that level, but you still have that feeling in your stomach that you want to do something different.

You’re using it more than it feels in integrity for you and you would just rather not. I’m going to be talking to you today as well, and then there’s a few of you out there who you don’t have any credit card debt right now because you’ve paid it all off with your home refinance that you did last year, or you had a bankruptcy.

Your debt is gone, and it’s never coming back, right? Well, in my experience, the people that I’ve financially coached, when they’ve wiped the slate clean like that, it comes back slowly, but then not so slowly. So what I’m going to be doing over the next few videos is I’m going to be teaching you how to stop using credit cards, payday loans, loans from your friends and family, the equity that you work so hard to build up in your house. I’m going to teach you how to just stop. You know, and the thing is, is that when we use debt to pay for things, we make different decisions and if we’re using credit, then there’s some other problem in your life.

If you need to use credit, there’s something else you’re not doing, and it’s such an easy fix. We don’t notice it as much, right? Like oh, just you need a new alternator without that credit card. You think harder when you have to whip the money out of your savings account.

So if you’re using credit, it’s very likely that you’re not earning enough, you’re not saving enough, you’re spending money on things that really isn’t in a balanced spending plan for you and the minute you stop using credit is the minute when where your real problem lies becomes more clear. I want to help you find that. Make sure you tune into the next few videos where I’m going to be giving some of my very best tips about how to get out of debt.

As always, I would love to help you through this. Come on over to Facebook to our Team Do Better group or sign up for our newsletter at TheFinanceGym.com or sign up right here on YouTube to subscribe to our videos. Now take a big breath and get ready to stop using your credit cards.

The Golden Rule of Buying Stuff

Hi. Welcome to The Finance Gym Action Plan for a Better Life with Money video series. My name is Stacey Powell, and if you’re ready to not just know better about your money but do better, then you’ve come to the right place.

Today we’re going to be talking about the golden rule of buying, and it comes out of the chapter of the book called Buying Stuff. In that chapter of course at some point, I get around to talking about buying a home, buying a car, buying a college education.

But at the beginning of the chapter, I take us all the way back to what we should have learned when we were kids, what hopefully some of our parents taught us. But we know most of our parents, they didn’t teach us this stuff. So now it’s time to start learning, and I start by teaching you about how to buy a bike.

Maybe it’s a $500 bike, $100 bike. You could spend $1000, $3000 on a bike and so what I ask you to do in the chapter is practice some mindfulness techniques when you’re buying. My golden rule of buying is ask how much and get 3 quotes. That’s not just when you’re buying a car, but that’s also when you’re buying a $200 piece of electronics or when you’re getting a root canal from your dentist.

When you are buying anything, just practice asking how much and that way, when you’re buying a house or a car or a really big ticket item, you’ve practiced what you should have practiced when you were kids so that it became easier.

Can you imagine asking how much? Something that the doctor’s office is going to cost. I found for many people it’s uncomfortable and becomes more comfortable when we just practice. So here’s what I would like you to do. The next thing you’re going to buy that is in that kind of mid-range couple of hundred dollars, several hundred dollars, I want you to do these 4 things.

I want you to get paper and pencil out, and I want you to do a little journaling about how important is it that you have the best of this thing you’re buying.

1. What would make a difference if you bought a new one or a used one? 
2. How many years do you plan on having this thing you’re going to buy? 
3. Then the last and most important question. If you bought the less expensive one if you’re going to buy a bike and you’re going to buy an inexpensive used bike or a really expensive brand new one, what are you going to do? 
4. If you choose the less expensive one and you’re going to save all that money, what would you do with that extra money if you chose the less expensive one? 

So I encourage you just to practice the mindfulness around your buying and practice on smaller stuff where the stakes aren’t quite so high as they are when you’re buying a house or a car. Let me know how it goes.

If you want to know where to let me know how it goes, come into our Facebook group Team Do Better and you can chat with me in our private group. You can also sign up for our newsletter at www.TheFinanceGym.com and subscribe for our YouTube video series. Now go out there and practice some mindful buying.

3 Tricks for Not Touching Your Savings

Hi! Welcome to the Finance Gym Action Plan for a Better Life with Money Video Series. My name's Stacey Powell, and I'm here to help you and your money get stronger.

Today I'm going to be teaching you how to leave your savings alone.

In the last video, I talked about how many months it would take you to build up to 3 to 6 months of reserves. 3 to 6 months of reserves is kind of the amount that financial professionals recommend that we have set aside for real emergencies, things like job losses.

Well, you build 3 months to 6 months of reserves. In the last video, I was showing how I like to think about it as climbing up a mountain. But the thing happens is that emergencies happen and you kind of slide back down that mountain when you have to dip into them.

And so what I want to teach you is how to dip into your reserves less frequently. For me, oh my gosh, what would be this constant cycle was getting money set aside and then having an emergency. My emergencies were things like a $200 vet bill or a $400 car expense.

I'm actually filming these videos with my daughter in the room who's 21, and she says "Those always seem like emergencies to me." You know what's an emergency is relative, right? Like for me, a $1,000 car repair, that shouldn't be an emergency. I have a car it's going to need repairs. I should have that money set aside and ready to roll. But if I had a $5,000 car repair, well that is an emergency.  That's a lot of money and not standard.

Those are kind of the ranges for somebody at my income level. For somebody at her income level, it's the difference between a $100 car repair and a $500 one. I would absolutely let her dip into her $500, into her reserves for a $500 repair. Cause I'm her accountability partner.

And that's the next thing that I'm going to talk about is some tools that I was taught that I teach other people to use to not get into your reserves except for true emergencies.

Tool #1 - Write out 6 other options that you have to deal with your "emergency" other than getting into your reserves.

Tool #2 - Wait a week. Let yourself sleep on it. Let yourself and your mind kind of work through deciding whether it's really an emergency or not.

Tool #3 - Call your accountability partner. Here's the way this went with me when I was going through this. I had friends I had called and whined and complained and commiserated with; it really wasn't very helpful. I did it to myself. When I started finding friends who I could call and all they would help me talk about was what the solution to the problem was, in a positive way and keep me out of that victim mode, that really changed for me, how many times I would go touch my reserves. And how hard I would try to think of other ways to solve my "emergencies".

So what I challenge you to do is create a rule of 3 for yourself. Find yourself an accountability partner who's going to support you and let them know what your rules around touching your emergency reserves are.

If you'd like support from our community, come join us over at the Facebook group, Team Do Better. And don't forget you can subscribe to these YouTube videos so you'll be sure to catch them when they come out. And you can also join our mailing list over at thefinancegym.com.

Now go out there and SAVE!

Climbing Your Emergency Reserves Mountain

Hi! Welcome to the Finance Gym Action Plan for a Better Life with Money Video Series. My name's Stacey Powell, and I'm here to help you and your money get stronger.

And today we're going to be talking about climbing the emergency reserves mountain. The emergency reserves mountain is one of my favorite; it's not one of my favorites, my favorite picture in the entire book. I love this thing, and I'm going to tell you why I love this picture.

First, reason is because it shows that no matter who you are, whether you are able to climb a rope to the top of a mountain, or slowly walk up a winding path, even if you can't walk, you can make it up bit by bit by bit, to the top of 6 months reserves. And that's why I really like this picture, that if you just go step by step, you can get there.

The other reason that I like this illustration is that it also shows the reality of how long it takes. You can be the most in shape, financially fit person climbing at a 20% grade, putting 20% of your income away every month. And to get to the 6 months reserve that is recommended you have, it's going to take you 2 1/2 years. That's a long time and a big chunk of your income. But you'll get there.

If you're walking, oh my gosh, it's going to take a lot longer. This is a 5% grade here; this person is putting away 5% of their income every month. That's still really a decent chunk. You'll feel it if you're putting 5% away. It's going to take you 10 years to get to 6 months.

I think that's why a lot of people just go "pfft, what's the point? It's going to take me forever." I think maybe that's what I felt like when I kept trying. Like why would I even bother putting $25 away? What good is that going to do?

But I started doing it and bit by bit by bit, I was no 5% grade I think I was kinda crawling up this mountain. But I crawled up the mountain. I'm not at the top, by any means. I'm not. But I'm somewhere that has brought me peace. Which is what I want for you.

And that's the final thing that I just love about this whole illustration.  That if I can get you to just start on this path of walking just a little, I really believe that what happened for me, and a whole lot of clients that I've worked with, will happen with you.

It could change the entire rest of your life. Just stop and think what it would feel like to move through the rest of your life with 6 months of reserves, set aside for whatever emergency hits you.

That is a feeling of peace and wellbeing that you might not have ever experienced. So go out there and start climbing.

And you really don't want to do this one alone. So what I'd like you to do is come over to our Facebook group, Team Do Better where you can get support from others just like you and by me. You can join our mailing list at thefinancegym.com, or you can subscribe to our YouTube channel so you can be sure and catch every single one of these. Please come join us.

Zero-Based Budgeting - Building a Budget from the Ground Up

Welcome to the Finance Gym Action Plan for a Better Life with money. My name's Stacey Powell, and if you're ready to not just know better, but to do better with your money, then you've come to the right place.

The latest series of videos we've been doing is focusing on budgeting and today we're going to talk about zero based budget ideas.

I'm assuming a whole bunch of you that are watching these videos are probably having a little bit of a hard time shoving it all in to make it make sense.

I know that's where I was when I started out. Actually, it kinda still is where I am, it's just that the things I'm trying to shove in now are so much better than what I was trying to shove in years ago.

So zero-based budgeting ... have you ever heard of it before? We don't really talk about it with personal budgets, but in business zero-based budget, the concept is every year departments that roll up into a company-wide budget start fresh and look at what areas do they need to spend money on, how much do they need to have in office supplies, human resource expenses, what kind of marketing budget do they need. And it's really useful to just start fresh like that instead of just pull from last year and the year before and the year before that, (which is kind of how governments do it.)

Because what happens then is that you're spending money on things you think you have to spend money on. But if you start with a zero based concept, like what would your budget look like if none of the other things in your life, that were there last year had to roll into the next year?

And it's kind of a refreshing way of looking at it. Because it helps you think about, well, what if I lived in a different kind of house? What if I didn't have a car? What if I had a different kind of car? What if I decided I didn't need cable? There's a million what ifs.

So, if you turn to page 40 in the book, there's this the zero-based budget idea here that you can start to write down some things you might do to make your budget balance to 0 when you're done with it.

And I might have mentioned some crazy things like, what if you just stopped driving a car ... how much money would that save? When I encourage people to do "what ifs", it's not about jumping immediately and saying "oh my God, I could never do that, I could never sell my house, I could never not have a car, I could never, I could never, I could never. We all have a bunch of those. It's really about just throwing out a bunch of brainstorming ideas.

Look at the possibilities and see what you're  willing to have stick. If you're the person that absolutely has to have a car, well that's fine. But if your budget isn't balancing, somewhere you're going to have to make some kind of choices.

I always like to give an example of Waren Buffet. He can live anywhere he wanted. He can live in any house he wanted. Waren Buffet and his wife and family have lived in the same suburban ranch house for decades.

He values living in that house. He doesn't need to spend a ton of money on a really big home. We get so tied into the things we had to do. I had a client once who, she had such high credit card payments. She could not fathom when I asked, "What would happen if you just stopped paying those?". She just couldn't fathom it.

You know the truth is, she needed to stop paying them for awhile. And she went through a bunch of machinations of getting beyond that with her budget. To the point that she's flourishing now. She is back in integrity. But the truth was that her credit card payments were more than her mortgage. She couldn't do it. She had to let go of a whole lot of things to get to where she is now. Which is a pretty happy, healthy budget.

And she got there by taking a hard look at zero based budgeting. So I'd like you to look at this. I'd like you to just throw caution to the wind, write down a bunch of crazy ideas and pick a few that you think will really stick, that you're really willing to live with for awhile.

And as always I don't want you to have to do this alone. Over on Facebook, we have a private group called Team Do Better. There's a bunch of other people that are working on doing better with their money. Come join us. We also have a newsletter that comes out at least once a week at thefinancegym.com is where you can sign up. And over on YouTube. Head over there and subscribe to our channel. Have a great day and thanks for watching.

Stop the Money Stress!

We all have stress about money. If you have loads of money, you worry about losing it. If you have a little money, you worry about not having enough. If you’re somewhere in between, you want more. Money, money, money.

It doesn’t matter if you believe that "money is the root of all evil" or that "money = happiness." Money is necessary in our society. We all want different things when it comes to our money. The one thing we all have in common, is that we don’t want to stress about it.

So, how do you deal with your money stress? Do you stick your head in the sand and hope it goes away? But every month, it’s still there...eating away at you...But you manage, because you’ve gotten used to it. We’re adaptable creatures. If we live a certain way, for a certain period of time, it becomes normal. That doesn’t mean that it’s ok.

We all have stress about money. And the more we ignore it, the worse it gets.

I used to have an ad on my fridge of two people having coffee that said something along the lines of “you don’t need a chill out album or yoga…sometimes you just need a conversation.” This hit me like a brick wall. At the time, I was all about dealing with my stress by relaxing, but it wasn’t doing it. So, I tried a conversation. And that was just the beginning. Dealing with the cause of stress is the best way to get rid of it.

Do you want to get rid of your money stress?

•       Talk about it.
•       Track your numbers.
•       Know your goals.
•       Make a plan.
•       Take action.
•       And make sure someone is holding you accountable.

This list is easy for some, but not for others. We’re here to help. But you have to want it. It may be uncomfortable at first. It will get easier. You will feel better. You will make progress.

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

We teach. We inspire. We support. We help people change their lives by improving their finances.