Should I Save or Pay My Debt Off First?

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 not just to know better but do better with your money, you’ve come to the right place.

Lately, we’ve been talking about the four letter word “debt”. How to stop using debt. Today I’m going to talk about how to, both, stop using debt and how to pay off your debt. I get asked this all the time. Now should I pay all my debt down first and then start saving? And in fact, if you watch Dave Ramsey, he says to save $1000 and then do nothing but pay down debt whether you have $5000, $20,000, $60,000.

I disagree. I think that it’s really important that you pay your debt down at a rate somewhere equal to what you’re saving. Because if you don’t have savings set aside, it’s like Groundhog’s Day all over again. Emergencies are going to happen. They are always going to happen, and you’re going to need a way to pay for the emergency. If you made a commitment to stop using debt, but you have an emergency, and you have to keep going back to the credit card, energetically, it just doesn’t work. We all think a lot harder about what our options are when we have to take money out of our emergency savings account than if we just pull our credit card out.

It’s something like needing a root canal and you don’t have savings. Well, I’m certainly not going to tell you that this is the moment to absolutely stop using your credit cards. But if your TV breaks, stop watching TV for a while. If your tires go bad, well, you know what? Maybe it’s time just for a couple of months to put used tires on or take public transportation or borrow somebody’s car. There are always options out there and we look at the situation differently when we're using our savings account rather than our credit card or getting the help from some other place.

So my recommendation when it comes to paying down debt and saving is: if you’re paying $500 to bills, put $500 into savings. Make sure you’re building your savings at a rate somewhere equal to the amount that you’re paying your debt down.

As always, these things aren’t easy to do on your own. If they were, you would have done it by now. I would love it if you would join us. We have a support group on Facebook called Team Do Better. It’s private. The only people that are in there are people just like you who are ready to do something different with their money life.

You can also sign up for our newsletter at TheFinanceGym.com or subscribe to our YouTube video series right here and be sure to watch next week when I give my one last final great tip about how to get out of debt.

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.

Buying a College Education - Weighing the Costs

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.

Lately, we’ve been doing videos about buying stuff, and a lot of people will say that a home is the most valuable thing that you can ever buy. But there’s one thing that I think is far more valuable than even a home, and that is your education. Whether it’s college or a trade school or grad school after your college, even your junior college education, it all comes with a price.

I think what happens with a lot of people is they just try to figure out, “Well, OK, what scholarships or student loans? How can I make this work? How much do I need to work every week, to kind of make it through? How much can my parents help or other people in my family?” And they kind of squeeze it into how they can make it happen instead of really looking at how much it’s all going to cost.

Now, part of me doesn’t really want to tell you to sit down and budget it all out and look at the total cost. It’s kind of like having a kid. You don’t necessarily always want to pencil that out because a logical person maybe would never really have a kid if you look at the total cost and the cost-benefit ratio. But with education, there are absolute statistics about the value of getting an education for the rest of your working life.

There is absolutely return on investment for every hour you put into your education, for every dollar you put into your education. But I will tell you to sit down and pencil it all out. In one of the last videos, I talked about sitting down and comparing prices. Compare prices of the three. Do your research. Do your homework especially if you’re looking at going to some trade school or online school. There are a lot of programs in the news right now, art institutes and chef institutes that promise you’re going to get this great $60,000 job right out of school. Well, a lot of times that’s not true. Maybe there are a few people that get out of those types of programs and make that kind of money.

But make sure that you read, Google, do your homework, look at the total cost and think about, “Well, am I the person who’s always at the top of my class and then going to be the one that gets that best job, that best money or am I maybe oftentimes a middle of the road person or am I somebody that struggles"? And I know those are harsh questions, but the thing is, is that I just want you to think hard before you sign up for $20,000 worth of student loans, $40,000 or if you’re an attorney, $100,000 of student loans. Do you really want that? If you do, absolutely go do it. Go get it. But think hard about what you’re buying before you make those decisions.

Go look in your field at what average salaries are. There’s a great website at Bureau of Labor Statistics, BLS.gov. Go look up what your options are. It might be really enlightening for you. And 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 TheFinanceGym.com. And subscribe below for our YouTube video series. Now go out there and practice some mindful buying.

How Much House Do You Really Need?

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, then you’ve come to the right place.

Today we’re going to be talking about buying a home. I could go on for hours about buying a home but I’m going to just talk about one concept today and that is how much of a home do you really need. I think we’ve all seen what happened in the big mortgage meltdown and hopefully you’ve gone to see The Big Short. Great movie to really help you understand some of what happened. A lot of people bought houses but they didn’t really know how much of a house they were buying.

If you don’t have a good mortgage banker or good realtor really helping you walk through this, it can get really complicated. Most professionals will say you should take out a mortgage that’s somewhere between maybe 26 percent and 37 percent of your total monthly income and that that’s doable. Yeah, 26 to 37 percent is doable. But one of the things they don’t talk about is the price tag that comes along with that because if you’re taking out a mortgage that’s 26 percent and that’s including property taxes, insurance, mortgage insurance if you need it, one of the things you’re not kind of thinking about is all those seaming costs for the new roof or landscaping or putting new window coverings on. Any of us that have bought a new house know exactly what that goes like.

So all of a sudden, when you take this dollar and you thought that you were just shaving off 26 percent of it to buy a house, well, it’s actually kind of more like this. That’s all of your dollar bill every single month, of every dollar that you have left to spend. If you make that decision to buy a house where 37 percent of your monthly income goes towards your mortgage and your property taxes and your insurance, and then you have all of the other stuff you have to spend on your house, you’ve only got half of every dollar left to spend to live the rest of the way you want to live, to go on vacations, to buy healthy food, to send your kids to summer camp. All the other things to fund your retirement, to have emergency reserves.

So in the book I go into much greater detail and I encourage you this is a page – if you’re getting ready to buy a home, go invest in buying my book and read the couple of pages around this because it’s really important if you want wiggle room to live your life. You don’t want every single dollar to be cut in half. It’s really an unsustainable way to live and I encourage you to think a lot harder about how much home you can afford.

If you would like to chat with me about any of this, I would like you to come on over to our Facebook group Team Do Better group and join us. We can have conversations that only people in that group get to see. You can also sign up for our newsletter over at sign up for the newsletter and subscribe to our videos down below.

Money Management Tips - Are You Frugal or a Spendthrift?

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, you’ve come to the right place.

Today we’re going to be talking about how we all spend money. Are you frugal or are you a spendthrift? I am always fascinated by the spending decisions that we all make. I have lots of clients over the years that it doesn’t matter what they buy. They’re going to buy the most expensive thing they can possibly afford.

I also have a lot of clients that it doesn’t matter what they buy. They’re going to buy the cheapest or the best deal and just be frugal about all of their spending decisions. Then there are some people right in the middle. It just depends on what they’re buying. Some things are really important to them. So they buy the best. Other things aren’t really so important. So that’s where they go and find the best deal.

I illustrate this on page 81 in the book, if you’re following me along. It’s two shopping carts full of the same six things – a couch, a watch, a TV, a necklace, a vacation and a car. These people over here, they have to have the best of, $311,000 price tag. These people over here, $16,000 price tag. It’s the same six things. When you sit on a couch, maybe it makes a little bit of a difference what kind of couch you’re sitting on. But in the end, you just need a place to sit.

So if you’re buying a $4000 couch or a $300 couch, why are you making that decision? I’m not placing the judgment on either decision. If you can afford a $4000 couch and you’re fully funding your reserves and your retirement and taking care of everything else, then by all means go buy that $4000 couch. But I also know there are a lot of people that buy that $4000 couch on credit and pay for it over many years and then they pay more for it. Why are you making those decisions? So in this video, I’m really just asking you to spend some time thinking about which side you’re on. I’m going to ask you to spend some time writing about some of your spending decisions.

In the book, page 78 and 79, I ask you to talk through your spending habits. There’s a worksheet that has a bunch of questions for you to fill in. You can go to TheFinanceGym.com and in the store, there’s a whole area of free pages of the book and we’re going to put these up there for you to go and download and fill them out even if you don’t have the book. I’m going to help you, so head on over there.

While you’re there, be sure to sign up for the newsletter. You can also go to Facebook and join our Team Do Better group, a great place to talk about your spending habits on there, you can chat with me. And also you can sign up for our video series down below so that you can catch every single one of these as they come out. Now go do some thinking about what kind of spender you are.

Talk to Kids About Money: How to Teach Your Kid to Buy Stuff

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 with your money but do better, you’ve come to the right place. Today I’m going to teach you about how to teach your kids about buying stuff.

If you watched the last video, we were talking about how we would probably make better spending decisions as adults if our parents had spent more time on how to better plan for teaching us how to buy stuff when we were kids. I don’t want to make that same mistake. So I didn’t always do it right, but I was very mindful about teaching my daughter when she was growing up, and I want to teach you three of the things that you can do to help teach your kids about buying stuff.

Number one, have a plan for when they ask for something when you’re out shopping. Don’t just buy something right then when they want it. Take them back home. Talk to them about where the money is going to come from. Can they earn it? Do they have an allowance? Do they have a plan for their spending allowance? How much does it cost? Look at some of those kinds of questions that I’ve taught you to ask yourself and have them think about it.

If they weren’t going to buy that one thing with their money, what else would they buy? Go over some of those decisions and even if it’s a $5 toy and I’m completely serious. Talk to them about this $5 toy because what you’re doing is laying the groundwork for when they want to buy a $60 computer game or a $400 smartphone or their first starter car or when they want to buy their college education which they’re probably going to buy partly with you. You want them to have that groundwork of practicing with small things.

The second thing you want to teach your kid is how to put together a spending plan. If you’ve got a vacation coming up, sit down on a family night over ice cream and talk about that vacation and what you’re going to do, where you’re going to go and where you’re going to have to spend money.

If they’re teenagers, they’re old enough to do a bunch of the internet research probably better than you and put that spending plan together. Have them do it. If they’re younger than teenagers, then sit with them and go through parts of it, the simple stuff. How much are tickets to Disneyland? Make it fun. Include your kids in this. Don’t make it dull.

The third thing is there are parts of your spending plan that have everything to do with your kids. I want you to incorporate them in those decisions. If they have a clothing budget every month, let them know how much it is. What I did with my daughter when she was young was around summer camps. We had a set amount of money and summer camps is the kind of thing that you can send thousands of dollars on, and so she had a budget, and she looked at the thing she wanted to do and made some balanced decisions about whether it was going to be horse camp year or tennis year or swimming year. She would choose. We made her an active participant in that, and hopefully she learned something from it.

So those are a few ways that you can teach your kids how to buy stuff. If you want to come chat with me about ideas you have with teaching your kids, come join our Facebook group Team Do Better. It’s a private group where only people that are working on doing better with their money are at. You can also join our weekly newsletter list at www.TheFinanceGym.com and don’t forget to subscribe below to our video series, so you will know when they come out. Now go have a conversation with your kid.

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.

How to Convince Ourselves to Save for Retirement

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

Today we're going to be talking about, you. Not you right now, but you when you're 75-year-old. We're going to do a little thing that makes you stop, sit and think about what it would be like if you were able to time travel. Forward yourself ahead, for me it would be 25 years from now, what would it be like if I could sit and have a conversation with my 75-year-old self. What would your 75-year-old self have to say to you about what you're doing with your retirement savings right now, for her or him? What would you say to your 75-year-old self when they ask, were you putting money aside when you were in your 20's? In your 30's? In your 40's?

I thought a lot about today's video because I wanted to make it just right. I think a lot about what would somebody have said to me when I was in my 20's that would have actually made me start saving for retirement. Because I didn't. And I wonder what somebody could've said to me when I was in my 30's that would have actually gotten me to start saving for my retirement. But I didn't. And when I hit 40 I still wasn't saving for retirement, and I know so many people in their 30's, 40's, 50's, I even talk to people in their 60's who still haven't started saving for retirement.

And what I tell everybody I can when they're a teenager or in their early 20's is, start now it's so much easier, it feels hard. And I wish I knew what it was that I could say to you that would inspire you to do it. And quite honestly, I don't know.  I've never come up with the answer.

But I do know something ... I turned 50 this year, and I feel so much closer to that conversation with my 75-year-old self. And I know that I want to be able to look her in the eyes and say, I cared about her future. I cared about her ability to keep a roof over her head and take trips when she wants and putter around in the garden. I might still be working when I'm 75; I love what I do.  But you know what ... I might just want to spend every day in the garden. That's what my Mom's doing right now at 82 years old, and she took pretty darn good care of her retirement.

So quite honestly I don't know what to say to you to get you to do this, but what I do know is that when you're talking to your 75-year-old self, he or she is really going to want you to have saved for retirement.

This indeed is something you can't do alone. So come join us over at Team Do Better, our Facebook group. Sign up for this video series over on YouTube or sign up for the mailing list at www.TheFinanceGym.com. And join us in taking care of you and your 75-year-old self.

It’s the one-twelfth of the way through the year check-in

Do you remember back to the beginning of this year, a little less than a month ago? It was a fresh new year, and you made some goals, resolutions, or commitments. Or at the very least, you took a big breath and thought to yourself, “ok, this year is the year I’m going to XXXXX.”

Well, you know what? We’re in the last week of January already! We are 1/12 of the way through this fresh new year! Have you started on XXXXX? Are you 1/12 of the way toward that thing you said you’d accomplish this year?

If you’ve already slipped on that commitment that you whispered to yourself, then it’s time to anchor yourself again. We’ve been sending videos out one by one, and maybe you’ve noticed, they’re walking you through The Finance Gym Action Plan for a Better Life with Money. If you want to get yourself back on track, set aside some time today and rewatch some of the videos. Or if you’re really off track, get a cup of coffee, find a quiet place, and listen to them all. It just might be the best investment you could make for your money today.

Read all the blog posts >>

See all the videos >>

And if you ARE tracking on your goals on this 1/12th of the way through the year point, congratulations! You must be proud of yourself. You might want to re-watch a few of the videos too. If you’ve really been working on your money, your context for watching the videos will already be different, so different points will jump out at you. You'll get a deeper, richer understanding of the concepts and practices in the videos. You'll see something completely different this time through because you're different.

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.

Why You Should Have 6 Savings Accounts (Not Just 1)

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 here to talk about savings. But not just the singular savings, we're here to talk about the 6 different kinds of savings. One of the things that I certainly had a hard time with and I think many people also do is that we think of savings as a singular thing.

We keep it in 1 place and often that's in the "savings" account at our bank. Which is, of course, tied to our overdraft protection. Well, that's not really very useful when you're trying to keep savings as savings and not spend it on a monthly basis.

One of the other things is, we don't really have a structure around our savings. If it's all in one big pot, we don't have things that it is assigned to be for.

And so, one of the things that really shifted for me and I've seen shift incredibly for others is thinking about savings, not as one thing but as 6 different kinds.

The first kind, of course, most important emergency reserves. The second one is short term things that are not consistent, but predictable. Things like when your car breaks down or your cat has to go to the vet. Then there's long term things like putting a new roof on your house or saving for a car.

And then 4, 5 and 6 are separate long term savings that I've identified as 4, 5 and 6 because I think they're so important. And that is saving for a home, saving for your kids college education and then the third one is the big one, saving for retirement.

If you flip to page 47 in the book, and if you go to my website if you haven't bought the book I'm going to have up there for you page 47 so you can just take a look at it. You'll see all 6 of these areas with a list of what are these things and what's the purpose behind each one of them. How do you decide how much you should put in each one of these 6 accounts? And some suggestions about where you might keep it.

I want to give this roof as an example to show you how I work with people and how I think through where to put my savings. If I know I have to put a roof on my house sometime in the next 3 to 5 years and that roof is going to cost $15,000. Well, I need to be putting away between $300 to $500 a month, every single month to make that goal. And it better not be in an account tied to my checking.

I like to keep my reserves at Capital One 360. And this is not a sales pitch, this is really where I keep them. And here's why, Capital One lets you name every single savings account its own name. So for my roof account, I can name it something like "roof, dry roof, don't touch". Something funny to remind me when I get tempted to use all that roof money when it starts to grow, that what I really want is a dry roof. Separating out all of your savings like this, I know sounds a little bit overwhelming especially for those of you that are still struggling to put $25 aside.

And I assure you that if you go listen to my last video you'll know that I was once there. That I just couldn't put $25 a month aside. You can do it when you start practicing bit by bit. I promise. And the biggest thing you will get out of it is peace of mind for yourself and your money.

As always I don't want you to do this alone. You can join us over on our Facebook group Team Do Better. Come on in the water is warm. You can also go follow us at thefinancegym.com and join our mailing list or go like us over on Facebook and, of course, subscribe to these YouTube videos. Have a great day!

Free download of page 47 - Making Your Savings Rules

What's the first thing you saved for?

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

And today I'm going to get a little real and tell a couple of stories about myself. Today we're gonna be talking about savings. It's the third chapter in the book, and it's not called savings, it's called, "Building Peace of Mind". Because I've come to believe that that is what savings does for people, and it's certainly what savings has done for me.

In the first part of the book, I ask you to think about the first thing that you ever saved for. I love hearing those stories from people. A lot of times it's saving in a piggy bank and some little thing that you bought when you were 5 years old. Or maybe as a teenager, your first car.

I'm quite sure that my parents at some point "taught" me how to save or told me that I should, I honestly don 't remember. And when I think about the first thing I ever saved for I can't think of a single thing as a kid, a child, a teenager that I saved for.

In telling the story of the first thing that I saved for, it's a little bit embarrassing actually because I was pretty old. I'd already graduated from college. I already had a really good professional career. And I had never really saved for something that I wanted to buy.

So I did, like I've mentioned before, something that I was told to do, that I kinda thought maybe was a little bit ridiculous.  I started setting small amounts of money aside for things. And one of the things that I started setting aside for was something that I'd always wanted and that was a really, really nice Native American flute.

Now we're not talking about anything worth a couple thousand dollars here, but we're it wasn't a cheap $50 flute either. It was in the low hundreds and at the time to me setting aside that money just felt irresponsible. I had a lot of other important obligations that I was trying to meet. So I took an amount of money. First it was $5 then it was $20. And I put it in this little envelope every single month, the cash, I got the cash, and I put it in this envelope until I had saved enough to buy it.

I could have bought it at any other point in time by just doing the machinations that I had been doing, really, my entire adult life. But it was, it was the action of saving for that and the gratitude of going out and searching for just the right flute that I wanted. It was that whole experience; I just hadn't done it before. You know, and I should have done it when I was 5. I should have done it when I was a teenager. I should have at least done it in my 20's. But that just wasn't my reality. I had never done it before. So when I was practicing, it felt kinda silly.

But we all have to learn to ride a bike somehow. If we don't learn to do it as a child, then we've got to learn to do it as an adult. So when you get to that question in the book or that question in the video, "What's the first thing you remember saving for?", if you can't remember saving for something, then I want you to do what I did. Because I learned something really important. It wasn't about the flute, because jump ahead years later, I have so many savings accounts. For prudent reserves, for vacations, for taxes, for all kinds of stuff, fun stuff.

I am now a savings master. And I think it's fun. And it all started with what felt like a silly little tiny itty bitty exercise. But in the end, it's what I needed to do. In some areas, I needed to just dial back and start again. And so for those of you that need to do that too, go do that.

Because the rest of the chapter we're going to talk about all kinds of savings. And it's kinda masters level savings that I'm going to be talking about, and I want you to be ready.

And as always I don't want you to do it alone. This stuff isn't necessarily meant to be done alone, head on over to Facebook and join our Team Do Better Group or sign up for our newsletter at thefinancegym.com or subscribe to our subscribe to our YouTube channel. And join us in learning how to build peace in our lives through savings. Thanks for watching.

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.

The Cold Hard Facts of Budgeting Your Money

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

And today we're going to be talking about the cold hard facts of budgeting.

If you've been following along in the series, hopefully, you first listened to a little bit more of the fun videos around budgeting; ways to kinda get around it a little easier, ways to be more inspired about it.

And today we're talking about rolling up your sleeves and just doing it. And if you've really never embraced budgeting before, I'm not going to lie to you, it's a little bit of work. But I promise you I've made as simple as possible, and I also promise you, you can do it.

So here's the thing, if you go to page 36 in the book, that's where you're going to find the action plan. And there some very obvious things in there like electricity, car insurance, all the obvious stuff. But what you're going to find around all that is almost 100 spending areas. And I worked really hard to make it as few as possible, but the reality is when you look at all of the things most of us spend money on in a given month, in a given year or over a given 5 year period, easily it's around 80 to 100. And so you really need to take a look at all of them.

There's a multitude of areas that we spend money in. And we all know the obvious ones right, like duh, we all have electricity and all that. But then there's the ones that we don't. Kinda the quiet areas that are a surprise, like root canals and car repairs and summer camps. You know, but the truth is if you have teeth you're eventually probably going to have a root canal or some kind of expensive dental expense. If you have a car, you're going to have a car repair. Sometimes it's $200; you can squeeze that in a month no problem. But sometimes it's $2000, that's a lot harder to squeeze. And if you have kids ... Well don't even get me started on the summer camps and everything else that comes along with having kids that we don't need to spend in a given month, but oh my gosh, stuff comes up. Am I right?

So here's the importance of budgeting ... If you don't set your financial flow up to be able to handle that $1000 root canal or that $2000 car expense then you're going to be stealing from your future. You can pull a credit card out when it happens, sure, but you're going to be spending money on interest. You're stealing from your future every time you do that.

You can also just kinda shove it into the month you know; that's what I did a lot. Well, I just won't go out to eat this month. I won't have any fun this month. I'll spend less money at the grocery store.

That's no big deal to do that in a given month. But if you do that to yourself over and over and over. It's a different kind of stealing from yourself. It's kinda stealing from your happiness. It's stealing from where it is that the flow of energy of money that really keeps us happy.

The other thing that I think we often do is, we don't put money in our savings, and that is really stealing from our future.

When we are trying to shove "emergency expenses" that we probably should have had set aside ready to roll. We are not doing the things that create for us a peaceful financial life ... having enough in reserves, having enough in retirement.

The end result, in my experience, in my own personal experience and in lots of people I've worked with is; disappointment, fatigue and just even the loss of faith in ourselves that we can have a peaceful financial life.

So I'd like you to attack this budgeting with a bit of fervor. I want you to set aside a couple of hours. Sit down with a glass of wine or a nice cup of coffee and really embrace doing this. I think in the end you're going to find out that this work is really worth it.

And as always I don't want you to do this alone. Join us over on our Facebook Group, Team Do Better. It's closed and private. I'd really like to see you there.  You can also sign up to our newsletter at TheFinanceGym.com. Or subscribe to our YouTube video series. Good luck out there and thank's for watching.

Budgeting Should Start With Dreams and Goals

Welcome to the Finance Gym Action Plan for a Better Life with Money Video Series. My name's 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.

Today we're going to talk about budgeting, but probably not the kind of budgeting you've ever heard about before. We're going to talk about starting your budgeting with dreams and goals.

I love budgeting. As an accountant, I've done budgeting forever. With other people's money, with other business owners money, lots and lots with my own. It's kinda second nature for me. And it's fun and something I'm really good at.

But back when I was really, really, really struggling with my money and asking other people for help. I was told to do something with my budgeting that seemed absolutely ridiculous to me. I was told to put together an ideal budget. Which I thought was the most ridiculous idea in the whole world. I was just struggling to pay my electricity bill every month, haveing enough money for the absolute necessities. And they wanted me to put together an ideal budget? Like what good was that gonna do?

But if there's one thing I am, it's compliant, and when I'm being coached in an area, I will do what I'm told even if I think I'm smarter than the person coaching me.

So that's what I did. Sat down and put together an ideal budget. Which meant I was budgeting for stuff that I had never budgeted before ... vacations, reserves. I specifically remember getting into an argument about concerts. It's not that I don't like music, I do. But it seemed to me at the time really irresponsible for me to be setting aside money to go to concerts when I wasn't keeping up with my obligations that I already had.

But their point to me was, just do it. Put your ideal life down. Put down what it is you want to be living with. And so I did, you know, and they were right. I like going to concerts.

And there was a lot of other things that I wanted in there. Disneyland went in there. I hadn't taken my daughter to Disneyland for years. And you know, not that you can raise a kid, and it's going to be the end of the world if they don't get to go to Disneyland. But I live in California, it's kind of important, right? And why wouldn't I be, why wouldn't that be a part of my spending plan.

You know what I learned about that ideal plan. The epiphany that I had was that when we create these budgets around our actual expenses, our actual obligations, it's all about constriction and fitting in what we have to do and nothing about our future, our dreams, our goals. When I had this ideal budget sitting there, that was way out of what I was able to do at the time, a couple of different things happened to me...

1. It made me realize I was not living the life I wanted to live. And there was no amount of tightening my budget anymore. My problem was income. And so it really helped me focus on the fact that I didn't need to be looking at those expenses. What I needed to be looking at was growing my income, and so I started working on that.

The other thing it made me realize is that you're going to spend a lot more time focusing on your money if the things you're focusing on are things you're excited about. I was excited about vacations. I was excited about Disneyland. I was even excited about reserves. Not that so much, you get excited about reserves but, I was excited about the idea that next time something serious happened with my car, I was going to have money to pay for it without using a credit card or making a call to the bank of Mom and Dad or where ever I would call.

So that's the thing that happened for me, that was my big epiphany, and I promise you if you sit down and roll your sleeves up and do this ideal budget you're going to have an epiphany about your financial life as well. It'll be different than mine, I don't know what it will be, but I promise you if you do it before you do your actual budget you're going to learn something, and I think it will be something of value.

Now at the end of all of these videos I remind you to please not do it alone. This is kind of a big chunk of work. And so if you have somebody who is all about your future and your dreams, ask that person to sit down with you and do this ideal budget.

If you'd like to join the community where there's other people working on this right along side you there's a few places you can go.

1. Is over at Facebook. We've got Team Do Better Group. It's completely private the only people in there are people who are also working on their money.

You can also sign up for our newsletter at thefinancegym.com.

Or you can subscribe to the YouTube channel.

Thanks for watching.

How to Get Away with NOT Budgeting Your Money

Welcome to the Action Plan for a Better Life with Money video series. My name is Stacey Powell, and I'm here to help you have a healthier, happier life with your money.

Today's video is kinda a fun one. It's called you don't have to budget, and it's the second one in a 2 part series. The last video I posted talks about who can get away without budgeting. And in today's video I'm going to teach you the things you can put in place so that you don't have to budget.

Because, here's the thing, if you pay yourself first, all the time, all of your important goals, then you don't need to budget. But you've got to get the structure in place to make sure that you're one of those people that don't need to do it. And what I'm going to teach you today is about impound accounts.

I'm sure a lot of you have heard about impound accounts and those of you that are homeowners you more than likely already have one. Every time you make your mortgage payment you probably paying a specific amount that is set aside for your property taxes and homeowners insurance. It's great! It becomes part of your monthly budget you don't ever have to think about it; you don't ever have to worry about it. It's just done and taken care of every single month.

Wouldn't it be great if all of your important goals were set up that way? I'm posting a blog this week with some specifics around it, but let me give you a couple of other examples.

Santa saver accounts? I know hardly anyone does those anymore, but I have clients that do them, and they love it because in November all of a sudden a bunch of money gets plopped into their checking account. They have extra money to go spend on whatever holiday related thing they want to spend the money on.

A couple of other examples, if you're a business owner, hopefully, you've got an impound account set up for your estimated quarterly taxes so once a quarter you just write a check right from the funds you've been setting aside.

Impound accounts around emergency reserves are great, Whatever it is. A lot of you probably have an “impound account”, even though it's not called that, with your 401k. You never notice that money. It gets taken right off the top and set aside into an impound account called retirement. You're not going to touch it for a very long time, but you don't ever have to think about it.

So when you look at all of your important goals, big vacations, college tuition upcoming, whatever it is important. If you set up an “impound accounts” for every single one of those things, then whatever you have leftover at the end of moving all that money around, that's your budget right there.

And if you want to go out to expensive dinners or buy really fancy shoes or purses or whatever, who cares? Because your more important goals are already happening, and that's all that matters.

So if you can do all that work and put that structure in place that in essence is creating yourself a “budget” without doing the mathematical work of it and tracking.

But if you do all that and then it becomes painfully obvious that you don't have any money to go out to eat, you maybe don't have any money to go to the grocery store. Well, that's some hard news for those of you, you do have to budget.

Because when it comes down to it, if something is that out of balance in your financial life that you're having to worry about those basic kinds of needs then you've got to roll up your sleeves and put numbers on paper. Add them up and speak your truth, every week, every month, every year for a little while. I swear you won't have to do it for the rest of your life. You probably won't have to do it for 10 years, but a year or 2 or 3. If you're looking for financial peace and things aren't balancing then this is the way to get it done.

And as always I don't want you to get it done alone. Come on over to our private Facebook group, Team Do Better. There's people there working on the same stuff you're working on. And I'm there to answer questions for you. You can also check out our finance boot camps at thefinancegym.com or subscribe to the videos. Now go get it done.

You Don't HAVE to Budget Your Money!

Welcome to the Finance Gym Action Plan for a Better Life with Money. I'm Stacey Powell, and I'm here to help you have a healthier life with your money.

And I'm kinda happy about today's video because I'm going to explain to you today, why you don't have to budget. You know of course a bunch of you will have to budget, but here's the thing... When I wrote this book, I thought long and hard about where to put the budgeting chapter. Part of me didn't want to put it right up front because it scares people off. And if your one of those people that it scares off then I want you to listen really carefully to today's video.

The other reason I didn't necessarily want to put it right up front is that budgeting isn't necessarily the most important thing in the whole book. Saving and earning in many ways is far more important.

The truth is, though; budgeting is really key for a lot of people. But if you're one of those people that absolutely hate it, and you're never going to make it to chapter 3 because you're going to stall out in the budgeting work in chapter 2 then I've got really great news for you … skip it. I want you to skip it.

I want you to turn the book to chapter 3. Leave the budgeting behind. And I want you to attack, with fervor, all of the other chapters in the book. And if I let you out of doing chapter 2 you have to promise that you do all those other chapters with fervor.

Because here's the thing, if you work on savings, getting out of debt, increasing your earnings, all the work in the other chapters, you might get to the end to the end of the book and discover that you don't really need a budget because your money is now good.

You also might discover that, alright, maybe you do really need to do the budgeting work. But the thing is by the time you get to it, by the time you circle back to it from doing all the other work you will have built some money muscles that you didn't have before. And so budgeting isn't going to be as hard as you thought it might be.

So if you're one of those people that aren't going to finish my book because you hate the idea of budgeting, then I want you to jump ahead to Chapter 3, Building Peace of Mind, which is arguably the most important chapter in the book.

And I also want you to watch the next video in the series because I teach an important component about how to get away without budgeting, how to build your finances so that budgeting becomes much more simple.

And as always I don't want you to do this alone, come on over to Facebook and join our private Facebook group, Team Do Better, or join one of our Finance Boot Camps at TheFinanceGym.com and sign up for the YouTube series, subscribe so that you know when the next video goes up.

How to Manage Your Money Action Plan Part 5 - Intention

Welcome to the Finance Gym Action Plan for a better life with money video series. My name is Stacey Powell, and I am here to help you have a healthier life and a happier life with your money.

If you're watching the video series while you're doing the book I want to give you a big, huge congratulations. Because today's video is the very end of chapter 1. and so if you made it to the end of chapter 1 huge kudos to you for starting out on this journey and making it there.

And as a little treat, at the end of every chapter I do something, that when I was a kid I thought was incredibly fun. I loved Mad Libs when I was a kid, before I decided I could actually be a writer, it made it so simple to just fill the story in. So I included something like that at the end of every chapter, and that's what we're going to do today.

You're going to tell a little story about your path with money. Why are you reading this book? What'd you learn in the first chapter? And what are you hopes and your commitments as you move forward in the book?
So the first question is, It's my intention to have a better life with money. My hopes and dreams for that better life are …. You fill in the blank.

Alright, I'm going to sit here for a second. I want you to grab a pencil, and I want you to actually write that down.

Did you do it? No really like if you didn't do it go get a pencil and write it down. Hit the little pause button, I want you to write that down. I want you to be really clear with yourself about why you're taking a few minutes to watch this video. Why your taking time to read this book.

What are your hopes and dreams? Because if you're just doing this so you can learn something about your money, that's not motivation enough. Money is the thing that fuels our hopes and dreams. So if you're not clear about that, this is a great time to get clear.

So a couple of other things - you can turn to chapter 1 at the end and fill this out. But if you don't have the book, I'm going to let you know what a few of the other “fill in the blank” sentences are.

So when you were sketching out the big picture that was in the last few videos, I realized that the areas I most need to focus on are … fill in the blank.

And the other thing I realized was, Thank goodness I'm already a rock star at x. What are you a rock star at? We're all good in some area of money, some little area for some of us. But we're all really good at something with our money.

So what did you see? As you worked through parts of looking at the big picture.

And last, but not least, to get healthier I'm going to commit to working on my money. How many times a month? How many times a week? For the next, how long?

I want you to write that down too, and then I want you to tell someone. You can put it in the comments below on YouTube, that's fine. You can join our Team Do Better group and let us know. And I'll check in on you from time to time.

If you tell me how much you want to commit to working on. I promise I'll check in with you. God knows, I could not do this alone when I started doing this. And I want to help you get better with your money.

As always, no way you're alone, so come over to Facebook and join our Team Do Better Group. Or join one of our Finance boot camps. You can find those at www.thefinancegym.com or subscribe to our YouTube channel and keep watching these videos.  See you next time.

How to Choose a Recordkeeping System - Part 4

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. If you’re ready to not just know better but to do better with your money, you’ve come to the right place.

Today’s topic, one of my favorites, recordkeeping. It’s actually not really one of my favorites. I like recordkeeping. But given a choice on a Saturday, do I want to go hang out on a river, go for a bike ride or do recordkeeping? I think the choice is pretty obvious.

But what it came down to for me is, “Do I want a peaceful, healthy, successful financial life?” Well, that’s what I wanted and the conclusion I came to is I had to do more recordkeeping than I was doing.

For many of you, you’re probably going to have to too. Not for forever but definitely for a while. So I’m going to talk a little bit about recordkeeping today and I’m going to show you the super fun way of recordkeeping to just give you an example of what might work for you.

I get asked the question all the time. What’s the best recordkeeping system? What should I be using? Well, there’s no one answer. It’s just not that way.

So my answer is, “What recordkeeping system do you think is the most fun?” If your answer is none, “Well then, what recordkeeping system do you hate the least?” because the truth is you just have to pick something you’re going to use and whether that’s Quicken or Mint or Excel or a butcher paper or just writing it down the old-fashioned way in a ledger, I’ve seen so many people be successful in all of those modalities.

You really just have to pick which one is going to be – maybe not fun. But you know, why not try to make it fun? So this is the thing that Cassie did to make hers fun. She was a client of – in our finance boot camps and very creative and there was no way she was going to put everything of hers in Quicken.

So she said, “I don’t know. I’m going to put this butcher paper up on the wall,” where her kids could see it in the dining room and start keeping track of when money came in and when money went out so that she could get a feel for it.

So what I’m going to show you is extremely simplistic, $4000 something every single month. By the end of the year, it’s very easy to see she has brought in $48,000 and she was kind of writing down what she had spent money on but just the big swaths, nothing specific. Who cares if you spent $3 at Starbucks?

What’s really important is at the end of the month where you made $4200, did you spend $4600 or did you spend $3800? Those are really the most important questions. So she did the same thing with this blue line here as her spending and you can see like most Americans, she ends up kind of living paycheck to paycheck all month long or all year long.

Some months are different. Some months are better than others. Some months are worse. Then the same thing with tracking where your debt is. Take a look at the beginning of your year. So for her, she had $49,000 worth of debt and if you’re living paycheck to paycheck and not really putting a dent in it, which is what she was doing, she can end up with $49,000 of debt at the end of the year.

But if she can shave this blue line down and start tracking the reduction of her debt, you can draw it up here and see it. In a lot of ways, I think this is almost more valuable to do this where you can see it.

Last but not least, tracked her savings. So she didn’t have any savings at all. She was totally living paycheck to paycheck. But what she did have was retirement which is a form of savings. So $35,000 in her 401(k) and it was just inching up. By the end of the year, she’s at $38,000.

So there’s nothing rocket science about this. It doesn’t take that long. I pulled that together and drew that in less than five minutes. It will take you just a little bit longer but not all that much longer and here’s the thing. Just having that up there, isn’t that a lot better information than you had five minutes ago?

Are you going to get better information by using an Excel spreadsheet or a Quicken software? Absolutely. But is having that much greater detailed information going to impact the changes that you’re trying to make? Maybe. I think that remains to be seen as you kind of move through the work that we’re doing here together. For some of you, you’re going to have to drill into the details.

But for a lot of you, this big picture view is really all you need to do. So get your colored pens out, some butcher paper and have some fun. As always you don’t have to do this alone. In one of the chapters in the book Date Night with Your Money, I talk about the importance of grouping together with your community or an accountability partner.

Come be a part of our community. Subscribe to our YouTube videos or join us over on our Facebook private group, The Finance Gym Action Plan.

Managing Your Money with These 5 Numbers - Part 3

Welcome to The Finance Gym Action Plan for a Better Life with Money video series. If you’re ready to not just know better but to do better with your money, you’ve come to the right place.

Today we’re going to be talking about the big picture again. In our last video we talked about the big picture but we wrote about it in sentences. Today we’re going to get those pencils out and put some numbers down. But for those of you that are number-phobic, I promise today we’re just going to do five simple numbers.

If you’re following along in the book, turn to chapter 1, page 11 and for those of you that haven’t gotten the book yet, just get a piece of paper and a pencil out and write these five rows down. You just start with “earning” and then we’re going to subtract “spending” and then the third row is going to be “difference”. The fourth row will be “debt” and the fifth row is “savings”.

What I want all of you to do is to think about your last year, either your last 12 months or the last calendar year, whichever is easiest and I want you to estimate. We’re not looking for exact here. What did you earn in the last year? That’s earning everywhere, in your businesses, in your job, in your investments.

Then I want you to write down what you spent in the last year and then of course the difference. Whatever that difference is, whether it’s positive or negative, I want you to divvy that up. Did you increase your savings with anything that was left over or if you had a negative amount, did you grow your debt? Was there some mix happening with both? So some of you, you’re like writing those numbers down right now. You guys are great. You’re all good. Some others of you are like, “How in the world would I know those numbers?”

So for some of you, you might need to pause this video and when you do that, I want you to set a timer for 15 minutes and spend no more than 15 minutes going and gathering that information to write those five numbers down.

Now again, estimate it. If 15 minutes ends and you still don’t have those numbers, then just do it to like the nearest 50,000. All of us can do it to the nearest 50,000. Well, most of us. But those people aren’t watching this video. Just do as close as you can and take a look at those numbers.

So here’s the thing. How much time did it take you to pull those four numbers and do that simple little calculation down? How much energy did it take and how comfortable are you with your final answers?

There’s a trick to this exercise. When I have an introductory meeting with potential financial coaching clients, they always want to know what information they can pull together to bring to that first meeting and I always tell them I would really rather you didn’t prepare and then I asked the questions that I just asked you and how readily someone can answer those questions tells me a lot about where they need to begin on their path to making their money life better.

So if this was a challenging exercise for you and you wanted to pull your hair out, you might not like my answer. My answer is you’re going to have to watch that next video on recordkeeping and you’re going to have to make a little bit of commitment to change your recordkeeping format.

I promise you I’m going to make it as painless and easy as you can possibly do. But you’re probably going to have to do something a little different and if you’re one of those people where those numbers just roll off of your head or they were at your fingertips, whatever recordkeeping you’re doing, even if it’s simply just recordkeeping in your head, you’re good enough. You don’t need to do anymore unless you really want to because you already know what your numbers are. You have your answers.

So thanks for walking through the first time of delving in, writing numbers down. I swear we’re not going to do this every time and as always, I don’t want you to do this alone. If you would like support, please join our community by signing up on our list at www.TheFinanceGym.com or head on over to Facebook and join our Finance Gym Action Group or head on over to Facebook and join our Finance Gym Action Group, "Team Do Better". Have a great day.

4 Secrets to Financial Health - Finance Action Plan - Part 2

Welcome to The Finance Gym Action Plan for a Better Life with Money video series.

If you’re ready to not just know better but do better, you’ve come to the right place and today I’m going to share with you the secret to financial health.

The secret to financial health is earn more, spend less, save more, and don’t debt. That’s it. Simple. If you can do all four of those things consistently, you’re not going to have any money problems at all.

But you probably wouldn’t be watching this video if you do all four of those things consistently. So we’re going to delve just a little bit deeper today. If you’re following along in the book, I want you to turn to page seven, chapter one, and if you don’t have the book, that’s all right. Grab a pencil and a piece of paper and we’re going to write a few short paragraphs about a few questions.

So, one of my great beliefs is that we spend so much time looking at numbers when we try to fix our financial problems. We don’t really connect with our feelings and our thoughts and our beliefs around it. So I like to have people write down what they think about their saving, their earning, their debting or not debting.

So on each of the four pieces of secret of financial health, I want you to answer these questions. Thinking about the last year, how was your earning? And about the last year, how was your spending?

I also want you to write a short paragraph about your savings. Did you save? Did you use your savings or would your short paragraph be two words like mine would have been years ago. What savings?

And then of course debt. Write a short paragraph about how your debt was over the last year. Were you chopping it down? Were you growing it or you just don’t have debt? If you don’t, write a really great paragraph about that and pat yourself on the back.

Last but not least I want you to back up and look at the big picture and write the short paragraph just about your overall feelings about how you and your money are.

Hope you learned something by the power of putting pencil to paper today and remember, you don’t have to do this alone. In my Date Night with Your Money chapter, I talk about the power of tackling your next money to-dos as a part of the community.

How to Save Money & Get Out of Debt - Action Plan - Part 1

Welcome to the Finance Gym Action Plan for a Better Life with Money. If you’re ready to not just know better but do better with your money, you’ve come to the right place.

Today is the first video in the series and because it’s the first one, we’re going to talk about beginnings. My financial beginning and then I’m going to ask you about your financial beginning.

So I’m just going to start out by speaking the truth. My journey with money, my path of writing this book and doing these videos is that I was in a complete financial mess and could not pull myself out of it with all of my professional financial knowledge.

I had a dirty little secret that literally no one, not my best friend, no one in my family, no one knew. I filed bankruptcy. It was my secret. There’s a lot to the story I could go into but that’s the truth. I don’t think I need to say anymore.

My financial life was that messed up and it should have gotten better after that and it did a little bit but it didn’t get better like it should have and that almost made me more ashamed that I couldn’t pull it together after wiping away a portion of my debt. I had portions of my debt that I couldn’t wipe away with bankruptcy and every time I want to just get into the story, I remember, you know, we can’t live in our stories. My whole point of what I teach and what I did to make my money life better was to just do it, to just do better, to ask for help, find somebody. Pull up a chair with them and do it with them. If you can’t do it alone, do it with somebody else.

So my question to you is, “What’s your beginning? Why are you listening to this video? If you’ve bought the book and started reading the book, why did you buy the book? What do you want to accomplish? What are your dreams around money?”

You don’t have to do this alone. In one of the chapters in the book, Date Night with Your Money, I talk about the power of tackling your next money to-dos as part of a community. If you want to be a part of our community, subscribe to these YouTube videos or join our Facebook group. Have a great day.

- Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups.
Reach your financial goals. Get motivated. Get support. Get results. Are you ready? 

What’s Your Monthly Nut?

Monthly Nut

The Wall Street Journal ran a great article by Carolyn Greer this week, From Spender to Saver to Investor. The financial media focuses so much on investing, it was refreshing to read an article about an every day person with every day money struggles. The story illustrated the exact type of family we strive to help.

 “A reader in Minneapolis has an all-too-common problem. Despite holding down a job in luxury-car sales for the past eight years, he struggles to save money.” The story went on to describe the exact circumstances of so many that I've worked with over the years:

• living paycheck to paycheck
• not living a life of luxury, and
• watch what they spend.

Why, one wonders, would someone who has a steady job and is careful about their spending still be struggling? That’s a question that perplexes millions of people about their own finances.

The answer is often found in their "monthly nut,” the amount of set expenses they have signed up for when they bought their home, car, private school tuition or any other number of financial decisions that we make and are then locked into for 5, 10 or even 30 years. You can tighten your belt month to month all you want. If your mortgage is 45% of your income, getting to the end of any month with extra money is going to be a problem.

I suspect that that is where the solution to Mr. Minneapolis’ quandary lies. His “monthly nut” wasn't mentioned in the article. If he was being honest about his obsession with careful spending, the only answer left is that his core expenses are too high for his income level.

Our financial health equation is simple:

Earn  >  Spend  =  Savings

When we talk about cutting back on our spending, we are usually talking about eating out less, watching our grocery bills and not buying so many new pairs of shoes. But the discretionary areas our spending, according to the Bureau of Economic Analysis, are often only about one-third of our expenditures. Shelter, transportation and health care comprise nearly two-thirds and thus have the biggest impact. I suspect that Mr. Minneapolis’ monthly nut includes a home that is more than 30% of his monthly income. 

Society encourages us to buy the biggest home we can afford. Mortgage brokers and Realtors persuade us, "keeping up with the Jones'" eggs us on, and our tax code puts the cherry on the top. "Oh, but I’ll be able to deduct more." Yes, yes you will.

If you really want to make an impact on the spending side of your financial health equation, get a pencil and paper out and do the math on what your financial situation would be if you bought a home that had cost 80% of the cost of your current home. And it’s of course not just the mortgage, but the total cost of your home impacts the cost of property tax, insurance, utilities and maintenance. The average cost of maintaining a home is around 1% to 3% of it's value. Price matters.

Did you do the math? What would your equation be? What would you do with the extra money you've not spent on your shelter?

“What would you do with the money” is the trick. If you're going to take that money and buy more shoes and dinners out, then you might as well just stay in your bigger home. But if you're going to take the extra money and use it on some important goals you haven't been able to reach, then perhaps its time to start hunting for a new home.

I can hear many people saying “hey, moving, selling and buying a home itself carries a cost with it!” True. If you're going to make a decision like this, you really need to be sure the math pencils out. For many, it will. If you really want to make an impact on your long term financial health, this is a decision that should be considered carefully. Even if you decide not to do it, simply considering it will give you a fresh perspective on your monthly quandary.

And don’t forget to make an honest assessment of the rest of your monthly nut. Shelter is most people's largest expense. Once you’re done with that calculation, move on to your next largest category. Is it transportation, children's tuition, vacations or some other area that is causing the squeeze on your financial health equation? Do that math too.

How much of an impact could you have on your financial health equation if you made one hard choice?


- Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups.
Reach your financial goals. Get motivated. Get support. Get results. Are you ready?