Take a Step Back From the Edge

What would you do if your transmission went out tomorrow?  If your identity were stolen and your credit frozen, would you be taking the bus to work?  If your uncle offered to sell you his mint condition Ford Mustang for only $5,000, would you be able to come up with the cash?

We’re apt to take many of the great things in our life for granted, up to and including out income.  In our culture, it’s acceptable and a common practice to live right the edge of our income, spending 90, 100, or even 110 percent of our annual income each year.

100_0297 - Copy (isujazzdog@gmail.com)

A Valuable Heritage

But for centuries (maybe longer), wise people have practiced the discipline of saving money for a rainy day.  Because we don’t know the future, it is necessary to save an emergency fund to have the options and choices we want.

In today’s article we’ll outline what the emergency fund is, why it’s important, and what it’s to be used for.  If you’ll make the decision to adopt this important discipline, you’ll reap the great rewards that wise men and women have been enjoying throughout history.

What’s It For?

The purpose of the emergency fund is to cover expenses that may come that you can’t predict.  Anything you can predict should be included in your monthly budget.  When I first began budgeting, I was tapping my emergency fund every other month, but as we get better at predicting what’s coming, there are fewer times when we need to use the emergency fund at all.  The goal is to have a full emergency fund that is never ever used, but just sits there “just in case!”

Can you estimate how much you spent on car repairs last year?  Take that estimate divided by 12 and this is how much you should allocate each month toward car repairs.  So maybe you’ll allocate $100 to car repairs in your February budget, even if you don’t take the car in.  But if your check engine light goes on in February, you have $200 sitting there, all ready to pay the bill.

If It Can Be Predicted, Figure It Out

Similarly, let’s say you know you want to upgrade your car by $4000, six months from now.  Just divide it out and you’ll find that you need to save $667 per month.  Again, it’s predictable so include it in your budget, not the emergency fund.

Overcome the Little Kid Inside

The tough part is saying no to all the things we’d like to do until the emergency fund is complete, totaling three to six months of your household expenses.  But it’s worth it to have the security; when you really need it and you have the money sitting there, it takes a lot of stress out of the equation.

Spend It All

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What can this tool do for you?

Good Advice

Here’s a statement you might not expect from a financial expert:   you should spend all your money!  In fact, you should spend the entire month’s income, even before the month begins.  You should spend it on purpose, by creating your cashflow plan before the first of the month.

Now, some of your money should be spent into your savings account.  Some should be spent paying down debts.  Some should be spent by investing into your retirement.  But it should all be spent.  Your income needs to exactly zero with all expenses, including savings and investments.  Why?  Because it isn’t until you lay out all income for January with all expenses in January that you  can make educated decisions about how much to allocate to the various competing uses your money can have.

You’re in Control

The beauty of using a cashflow planning tool like ThriveWealthy is that it puts you more in control of how your money is spent!  Since you are now making educated decisisons and prioritizing the things you value as most important, you are actually able to achieve more, and enjoy some of the better things in life.  Why not give this great free tool a try today?

ThriveWealthy Cashflow Software

Insisting on Balance

Guess what’s coming soon?  Christmas!!  Even though it’s the same date every year, it sure can sneak up on us!  Christmas is a wonderful time, full of joy and celebration.  We give gifts to each other in honor of God’s gift to mankind:  the baby Jesus, born in Bethlehem, that we might be reconciled to God.  It’s good to get carried away in the spirit of the season, but one area we must work hard not to get carried away in is our FINANCES.


Say Yes to Great Gifts

Before you call me Scrooge, let me say that I do want you to have a wonderful Christmas, to make a special time for those you love, and to elevate the day through special activities and make great memories.  I just don’t want you to experience the January hangover that so many of our friends will have once the presents are all opened.

When You Are Blessed, Bless

If you are experiencing financial success this year, don’t be afraid to spend a little more money on people this year.  In particular, do you know anyone who may be struggling to make ends meet this Christmas?  Why not bless them with a big gift or a big check?  You could even give it to them anonymously for an extra bit of fun!

Borrowing Is Not For the Wise

If, on the other hand, you didn’t experience an overflow of income this year, you may be like many across our country—facing the temptation to go big on Christmas with money you’ve borrowed on a credit card.  Like many short-sighted solutions, this decision would be easy on the front end, and hard on you in the months to come.

Think of it this way:  if you can’t afford to pay cash for presents now, how will you afford the full amount, plus the interest?  Or, put another way, what choice will lead you to have the best gifts for your family for Christmas 2014?  Racking up debt now?  Debt that will deplete your resources from January through July?

Solutions Are Out There

Something funny happens when you insist your budget must balance.  Your brain goes to work.  Once you’ve made the decision that you won’t go negative in December, your eyes suddenly see opportunities all around you.  You notice that stack of DVDs that you haven’t watched lately and you decide to put them up for sale.  You see the snow fall outside and take a few hours to shovel driveways in the neighborhood.  You eat peanut butter and jelly instead of fast food on your lunch break.  All these things may seem small, but when you add them together, you’ll be amazed:  you really can make things balance.

Supernatural Gifts

Another funny thing happens when you make a commitment to keep your budget in balance, particularly when you commit to prayer for the Lord’s help.  God loves to reward those who trust in Him, who rely on Him, and who live His way.  Call on the Lord, and keep your eyes open—you will find Him when you earnestly seek Him, and He is more loving and gracious than you can possibly imagine.

Worth the Hassle

Today’s topic most certainly falls under the category of “things I know I should do, but I never feel like getting around to.”  Although this simple practice will help protect you from excessive damage from identity theft and is a habit of the financially responsible, all too often we’re apt to neglect checking our credit report.  But, with the information you’ll get below, you’ll find that this financial discipline is actually very easy, free, and will give you confidence in your financial health.

Despondent Lisa

Big Brother’s Watching

If you’ve never seen your credit report before, get ready to be surprised at all the information about you that’s floating out there in cyberspace! It addition to every credit account you’ve ever opened (many you’ve probably forgotten about), your credit report will show you previous addresses, phone numbers, and lots of other data that other parties collect about you.

Free is Good

There are three credit reporting agencies:  Equifax, Experian, and TransUnion.  You can access your credit report once per year from each agency for free by visiting www.annualcreditreport.com.  I checked mine earlier today, and from the moment I arrived at the site to the moment I printed my report was less than five minutes.

Watch for Posers

When looking over your report, note any activity that looks unfamiliar or suspicious.  If someone took out a loan or opened a credit card fraudulently in your name, it should show up on your report.  Take action to resolve these issues right away if they exist, as they’ll only get worse with time.  You may also want to close any inactive accounts that show a zero balance, as these can be easy openings for future identity theft.

Take a moment to download your report from one of the three bureaus today, and then set a calendar reminder four months from now to remind yourself to check another bureau then.  With this rotation you’ll get a copy of your report three times per year for free—and at a time cost of less than five minutes, we are all without excuse for knowing our financial health!

Get More of What You Want

What if there were a way that you could have more of the things you want in life? A better car, more time with family, better and more frequent vacations, or anything else you can think of. Would you be willing to make a few changes in your life in order to get these things?


Have You Lost Your Dreams?

Most people are good dreamers when they’re young. We imagine what life could be: the things we’ll do, the places we’ll go, the people we’ll influence. But, as we get older and become part of “the real world,” the temptation surfaces to deny or suppress our dreaming. There are a few big reasons this happens. One, that’s what people around us do. As you know from being a reader of this blog, that’s never a good reason to do anything! But a second reason is that often the practical cost of all the things we’d like to do adds up to a great deal more than we earn in income. This is a real limitation, but I have some good news: it can be overcome in two ways.

Owning Your Priorities

The first way to overcome the gap between what your dream life costs and the money you have available is to eliminate things which are not essential. For example, I may dream of owning a top-of-the line road bike, but don’t currently have the $1,500 in the bank to purchase one. However, owning the bike of my dreams is actually within my reach. I can get the $1,500 I need if I will simply commit to cutting $1,500 from other areas in my life. Maybe I collect $200 by abstaining from buying coffee from Starbucks for a year. I can collect another $300 by canceling cable TV for three months, and get $150 more by selling an old stereo that I never use. What I’m doing here is sacrificing the things that aren’t important to me in order to obtain that which is important to me.

We often let statements like, “I wish I could afford that,” or, “someday I hope to be able to…” come out of our mouths. As in our example above, the fact of the matter is that we can afford the things we’re dreaming about, but we refuse to give up the other things in our life that we need to sacrifice in order to get it.

Instead of Shrinking Your Dreams, Expand Your Income

The long-term way to overcome the gap between the life we imagine and the life we can afford is to develop an asset. One of the best definitions of an asset, especially in the context of what we’re discussing here, is Robert Kiosagi. In his book Rich Dad, Poor Dad, Robert defines an asset as something you own that produces a stream of income for you. By this definition, a house you own and live in isn’t really an asset, because it moreso takes your money, through taxes, interest, and upkeep expenses, than it produces in capital appreciation for you. An asset by Robert’s definition would be ownership in a growing company, a stock or bond, or creating a franchise. What assets do you have currently? What opportunities do you have to develop an asset?

We’ll Show You How

If you don’t know where or how you could begin to create an asset for yourself, you are in the right place! Part of what we do as part of our ThriveMart business is something called, “personal franchising.” We help people to do what we’ve done—start a business that they own without the risks and financial investment typically required to launch a business. Visit our ThriveMart facebook page and send us a message to learn more, and remember what Zig Ziglar says, “you can have anything you want in life if you’ll just help enough other people get what they want!”

Does Money Drive Your Decisions?

Have you ever heard someone quote from the Bible that, “money is the root of all evil?” Does God really oppose riches and want His children to avoid nice homes, cars, and other physical possessions?  Is it wrong to seek financial freedom and success?

a formal affair

To start off, let’s check the accuracy of that biblical quote.

1 Timothy 6

7For we have brought nothing into the world, so we cannot take anything out of it either. 8If we have food and covering, with these we shall be content. 9But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction. 10For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.

Money is Paper

Does this passage teach that money is bad?  Is money the root of all evil?  No. Rather, it is the love of money that is a root of all sorts of evil.  Loving anything more than we love God is idolatry, and to do so violates what Christ said was the greatest commandment:  to love the Lord our God with all our heart, soul, mind, and strength.  As the passage above teaches, many foolish men have wandered away from God in the pursuit of their greatest love:  money.

So, if loving money is a danger we must be careful to avoid, should we seek to keep our income low and not bother to learn sound financial principles and habits?  Some have misquoted and misunderstood Scripture in asserting such ideas, only to find that this foolishness has the opposite effect than what was intended.

Money on Your Mind

Which man spends more time thinking about money, the one who earns plenty and has a large savings account or the one who earns little and lives paycheck to paycheck?  All else equal, who places more value on a $100 bill, a man who’s in debt up to his ears or a man who has a $1 million net worth?  A rich man may be miserly or generous, and a poor man may love God or love money, but in general the following applies:  those with plenty of money make fewer decisions based on money than do those who have little.

How Then Shall We Live?

So, what does this mean for us—the majority between poverty and affluence?  How should we live in light of these truths?  I see two major lessons:  First, always check your heart that you’re loving God more than money (or anything else for that matter).  Whether you count yourself rich or not, your heart can be led astray after money, so guard yourself and always see money as a means to serving God, not the other way around.  Lesson number two is this: act wisely now in order that your decisions need not revolve around money later.  Dave Ramsey says in this way:  Live now like no one else so that later, you can live like no one else.

Don’t Be the Joneses

It’s a hard thing to do, saying no to fun trips, activities, and purchases just because “we don’t have the money.”  What makes it even harder is that it’s so easy to borrow money on a credit card or finance a big purchase, and this is exactly what our neighbors do.  But, if you will make the hard decisions and say no today, the money you save and invest will grow and compound, and one day you’ll reach the position of financial strength and freedom where money no longer drives your decisions.  We’ll look forward to seeing you there!

Driving Blindfolded, Looking in the Rear-view Mirror, or Looking Ahead

What would you think of a person who drove his 2013 Corvette convertible around while wearing a blindfold.  How about someone who kept his eyes glued to the rearview mirror as he blazed down the highway?  Would you think that person is nuts?  Would you consider that person dangerous?  Would you be surprised if I told you this is exactly the way most people operate a major aspect of their life?

nice car!

The illustration above is the way many people operate their finances.  Ask 10 of your friends and neighbors if they keep a budget and you’re likely find few who do so.  Of those who keep a budget, many do not truly have a budget (forward looking) so much as they have a spending tracker (backward looking).  You would never drive a vehicle this way, so why would you operate your finances this way?

Not that fun?

Ok, few people are delighted to sit down with a spreadsheet and map out their spending for the month.  Even fewer people like to say no to themselves and restrict their spending on superfluous items.  But, if you will give advance cashflow planning (budgeting) a chance, I promise that the rewards will be worth the small investment of time, and you may just save yourself from careening off the road!

Having Financial Agility

When you’re sitting down with all the information in front of you, you’re more apt to see roadblocks and curves in the road ahead.  You can look at your home improvement fund or your vacation fund and get a gauge foe whether it’s on track for the upcoming expenses.  This lead time allows you to respond to financial challenges earlier: for example, skipping meals out for a few weeks early in the month so you can afford to buy new tires for your car when they’re needed later in the month.

Taking Control

Rather than creating unpleasant restrictions, a budget like that recommended in our ThriveFit page actually makes your life easier and more hassle-free.  While your friends are busy worrying and hand-wringing about how they’ll pay for the medical bill they didn’t plan for, you’ll be peacefully executing your spending plan for the month.  Although planning ahead doesn’t create more money for you from thin air, when you get your spending under your control, it often feels like you’ve gotten a raise.  Anyway, what do you have to lose?  If you hate the feeling of being in control and looking in front of you instead of behind, you can always go back to the chaos method….  😉

Get Money, Don’t Let Money Get You

Most of us spend the majority of our waking hours in pursuit of one thing:  money.  Even though money isn’t the only reason we go to work each day, for most people it’s the main reason.  Though money can get a bad rap sometimes (in particular from those who misquote the Bible as saying that money is the root of all evil), spending the day working to acquire it is not a bad thing.  In fact, if you’re like me and you enjoy eating and having a warm bed to sleep in at night, it’s quite a wonderful thing.  But, money makes for a cruel Master, and we must be sure to take certain steps to keep the money we seek from getting us.


What the Good Book Says

The quote I mentioned earlier that people often get wrong is from 1 Timothy 6:10:  “For the love of money is the root of all kinds of evil.”  Similarly, Jesus taught in Matthew 6:24 that, “No one can serve two masters. For you will hate one and love the other; you will be devoted to one and despise the other. You cannot serve both God and money.”

A Matter of Priorities

These scriptures, as well as many others throughout the Bible show clearly that money itself isn’t bad, but the way we spend our money tends to reveal where our allegiance lies.  If we are like Christ, our chief desire will be to love and worship God, and money will be a tool or servant under our watch, to be used to glorify God and spread His Gospel.  Conversely, if we seek our own desires first, we will tend to use God as a means toward the end of having more and being more comfortable.  As the wise teacher Hank Haanegraaf says, “instead of loving the Master (Jesus), we only want what is on the Master’s table.”

Fix Your Heart

So, given the understanding that we all tend toward selfishness and are tempted within our own hearts to pursue wealth for the wrong reasons, what can we do to keep money from getting us?  The answer is simple:  give.  All throughout history, God has taught His people to give to Him first.  Though many think that this practice is simply a pragmatic way to fund the church, in fact this has more to do with meeting a need you have than meeting a need the church has.  Here’s why:  God owns everything.  He doesn’t need your money to accomplish His purpose.

Live as You Were Meant To

But what you need is a way to keep your heart from pride, greed, and self-centeredness.  Giving accomplishes this wonderfully, and also comes with the side effects of joy and peace.  When you take the first $100 of your $1,000 paycheck and give it to God, it speaks very clearly to your heart:  “I’m not the most important thing in my life.”  By giving, you recognize that you are simply the manager of God’s money, to use it in accordance with His purposes, and really, what better investment is there?

Treat Her Like a Lady

Although you should treat your wife or girlfriend like a lady, that’s not what today’s post is about.  🙂  Instead, since winter weather is coming fast, we’ll be identifying some of the most important things you’ll want to do to prepare your vehicle for the cold days ahead.  By taking the time and effort to address these items before they become issues, you’ll save time, energy, frustration, and quite a bit of money!

The most important things to check are the:

  • Fluids (coolant, oil, windshield washer fluid, etc.)
  • Battery
  • Tires
  • Wipers

The Liquids

First, test and inspect your coolant and battery. Test your coolant with a hygrometer if you do not already know it to be good, and make sure all the other fluids are clean and full, or serviced if not.

Holding Your Electricity

A healthy battery is as important as the cooling system: one is like the skin, the other like blood. You can take and have your battery tested to be sure, but be careful, as you know there are plenty of places that would try to sell you a new one to replace your perfectly good old one. In general, you battery should be ok if all the following conditions are met:

  • It’s less than 3 years old
  • It looks good
    • not swollen (sides pushing out)
    • not leaking acid
    • not growing cauliflower on the terminals
    • it turns the engine over well after sitting overnight in the cold

If possible, it’s best to perform a load test on your battery, but if you can’t, these parameters should be a good rule of thumb.

Good Contact with the Pavement, Seeing the Road

Beyond that, a good pair of wiper blades, ensuring the tires are roadworthy (proper psi, tread depth) and a basic vehicle inspection are all any car really needs to survive the winter and its driving conditions. In my experience, there’s no such thing as too much maintenance, and your vehicle will thank you for it!

Be Prepared for the Worst

And finally, you need an emergency kit if you don’t already carry one–it’s always a good idea, and especially so if you’re traveling with kids.  Make sure your kit includes:

  • jumper cables
  • flares or warning triangles
  • blanket or sleeping bag
  • a warm hat and gloves
  • flashlight/lantern
  • first aid kit

Stay safe out there this winter, and make it a priority to get these things taken care of now, before it gets cold.  Your family and your pocketbook will thank you!

Controlling the Little Kid Inside

Any time you turn on the TV, open a magazine, or walk down the street, you’ll find a plethora of advertisements for incredible products that you can’t live without.  While many of these products may well be amazing, if you lose control of yourself and let the little kid inside take over, you can end up with a home filled with some cool stuff and retirement and savings accounts filled only with IOUs.  Perhaps worse than that, you’ll find that your resources were unintentionally spent on things you value little, and those priorities that you want to value highly go wanting.  Today we’ll dive into the topic of prudent spending and offer a few suggestions on how to enjoy some of the nicer things in life now, while preserving your future and tempering buying with wisdom.

I Need a New One!

One of the starkest examples I’m aware of that illustrates this danger dramatically is the following story.  A man owns an older car that he had purchased years ago and maintained well.  One day, as he’s tuning through presets on his car’s radio, one of the buttons pops off.  “Well, I can get by with only four presets,” he thinks.  No big deal. A few days later, while setting his coffee cup in its usual place, he hears a loud “Crunch!” as the well-worn plastic cup holder finally gives way.  A week after that, he notices that his brakes start squeaking, and then grinding.

“That’s it, he exclaims, “I’m getting a new car!”  And off he goes to trade his $2,000 car in for a $15,000 brand new one, for which he’ll take out a loan.  Normally our man would know better than to do such a thing, since he’d read the TotalThriver post on the value of saving for large purchases.  But, he let that information drift far from his mind in this moment of weakness since, even though he didn’t have the money saved up yet, he HAD to do this because it was an “emergency.”

Upselling Yourself

Before we’re too hard on our reckless friend, we should recognize how easy it is to let yourself begin down this road, and then justify a higher and higher purchase price, ignoring the fact that you don’t have the money for any of this.  Our man did have a real problem.  His car radio, cup holder, and brakes all needed to be repaired.  Let’s even imagine that in this case, the total repair bill would have been high enough that putting such a large sum into an old car wouldn’t have been wise.  In this case, what our friend should have done was sold the car as-is.  Perhaps it would only bring $1500 because of the defects that he left unrepaired.  But here’s where our man went awry:  He thought to himself, (as we have all done one time or another), “well, since I’m getting another car anyway, I might as well get a nicer one while I’m at it…”  Though this isn’t necessarily a terrible sentiment, problems come when things go too far out of proportion.

A more prudent decision for our friend to would have been to spend $800 or so from his savings account to put with the $1500 that he received from the sale of the old car in order to purchase a $2300 vehicle.  Notice that this is an upgrade from the car he had before, and should definitely include functioning cup holders, a radio, and brakes.  Though a $2300 car isn’t as fun to drive as a $15,000 one, our man would have solved his problem while staying out of debt, thereby preserving his options.  By avoiding entering into a loan agreement, he will have more of his income available to replenish his emergency fund, and then begin his car savings fund.

I’ll Bet You Like Options

This brings us to the more pleasant side of the coin—enjoying the good things in life in a prudent way.  According to the revised plan outlined above, our friend is on the path toward a better car, without the risk and bondage of the debt that came with the “new car today option.” As he saves the money month by month, he can evaluate how important a premium car is to him.  He lives, as most of us do, with some limit on his available cash.  Because we have these limits, we must decide which things are most important to us, and conversely, which areas we will tolerate a lower-quality product.  What we often don’t realize is that when we sign up for a $15,000 loan on a new car, we’ve just locked ourselves into a high-quality vehicle and low-quality everything else—potentially even very important things like a future home, retirement savings, kids college, and many other aspects of our lifestyle.

The point is that by having the cash saved up, you have multiple options.  You can think about what areas you desire a quality product, and what areas you’ll tolerate something lesser.  Perhaps you want a really nice car and don’t care about eating at restaurants or buying expensive gifts for others.  Or perhaps you don’t mind driving an old car but you’ve got to have a new iPad and an unlimited data package.  For you ThirveFit members, perhaps your priority is high-quality weight equipment, supplements, and nutritional products, and you’ll put up with a five-year-old computer and TV without complaint.  Whatever your combination is, the important thing is that you find out who you are—what’s important to you—and then make sure to limit your big purchases in lower-priority areas.  Though this sounds obvious when put this way, it is so easy to find ourselves “ponying-up” for a great ______, (car, tv, washing machine, computer) when we can’t really afford it, and then later regretting having so much money tied up in that item.  The point isn’t that you can’t have nice things; it’s that we all must be vigilant to resist the “kid in the candy store” mentality ruling our every purchase.  We are wise to remember that money saved on a purchase today is money we’ll have available for those things we truly value.*

*Incidentally, this could be another purchase, or something even more valuable like giving to others or supporting spreading the Gospel.  But we’ll save that topic for another day!  🙂