Archives For Money

By Eric on December 23, 2014 +

I recently wrapped up a 90 day financial coaching program with Rob. He was looking for help getting his finances under control, and wanted to make some intentional changes to his financial life to set himself up for success in the months and years to come.

We started by capturing Rob’s short-term and long-term goals, and then over the next three months worked through cleaning up his budget, organizing his cash flow, and creating a strategy for him to meet his goals.

Rob uses YNAB so we met over Google Hangout and talked through how to best manage his finances and what was going to work for him. He did a great job of digging deep inside himself and being honest about what would work for him and where he was going to stumble.

I love that about the coaching process! Pin-pointing hurdles that individuals have and helping to find a way to overcome them… mmm… doesn’t get much better than that.

There were lots of wins throughout the coaching process for Rob, but I want to share with you some of the highlights of the process, and keys to Rob’s success.

Short-term Goals

  • Break the habit of spending: Gain self-control between wants and needs.
  • Create a solid plan to pay off credit cards.
  • Stop using credit cards all together
  • Savings: Move beyond paycheck to paycheck.

Long-term Goals

  • Emergency fund of 3-6 months of expenses.
  • Grow his consulting business to support himself financially.
  • Purchase a home (Rob lives in the San Francisco area where home prices are sky high).
  • Retirement: Being able to work when I want and having the finances in place to make the possible.

Process

After honing in on Rob’s goals, we went through some principles of personal finance and concepts that need to be understood before starting to set the foundation for strategy moving forward, and sorting things out.

We had 10 meetings throughout our time together, each one building on the one before it. Reviewing victories and discussing action steps from previous meetings, which helped us document progress as we went.

Budget

Every budget is different. That’s what makes them so personal! Everyone thinks of money in different ways and has their own set of priorities, and goals.

We worked to set Rob’s budget to not only meet his needs, but to ensure he was saving for things that were coming down the road, and helped level out his expenses.

Cash Flow

Since Rob runs his own small business on the side, we talked about ways to ensure that his business finances and personal finances were separated. We walked through what that looked like, the accounts to have set up, and how to manage his cash flow from the business into his personal accounts, and  personal budget.

Within his personal budget, Rob not only stopped relying on his credit cards for everyday purchases, but he stopped using them all together. And during our last meeting, he was ready to cut them all up and be done with them forever!

He found freedom with his budget by controlling his own destiny. Rob started using cash for 12 budget categories!!!! There were some challenges with that as we worked together, but he did a great job of sticking with it until it became a habit.

By using cash, he now has tangible control of his money and is spending well within his means. After budgeting for 3 months consistently, Rob’s monthly cash flow swung by over $600 per month. That’s $7,200 per year he’ll by putting toward debt.

He’s working the plan we developed and on his way to being debt free in the next two years or SOONER! Sorting everything out and understanding the game plan was key for Rob to see the long-range plan, and helps him make daily decisions.

Big Accomplishments

  1. $1,000 starter emergency fund.
  2. Saved at least $600 in cash flow per month ($7,200 per year!)
  3. Separated business and personal expenses.
  4. Started using cash envelopes for 12 budget categories.

Taking control of your finances is more than just a one time look at the numbers. It’s a process you must invest in. Taking the time up front to understand what’s going on will set a foundation to build upon for the rest of your life. And nothing brings me greater joy than seeing the light bulb go on for Rob week after week as we worked together.

His main key to success was that he was willing to learn, and willing to make the necessary changes to achieve his goals.

Ready to Make Some Changes?

If you want to experience financial coaching and all it has to offer, I would love the opportunity to work with you. The typical process for coaching is this

  • Free 30 minute consultation: Discussing your situation and finding a coaching package that serves you best.
  • 2 Hour Session: One intensive session covering as much ground as we can and setting a game plan to meet your goals.
  • 90 Days: Initial budget set up, and on-going meeting to develop strategy, break down habits with built-in accountability to ensure you stay on track.
  • 6 Months: Extends the 90 day coaching format over a six month period.
  • Accountability: For those that have gone through at least a one hour session. I offer on-going accountability programs to ensure you stay on track with your goals long-term.

Want to try out coaching for yourself? I’m offering a one hour coaching session for a reduced rate. The normal investment per hour of coaching is $125, but between now and January 15 you can book a one hour coaching session for $87 (30% off).

We’ll go through setting up your budget, and creating a strategy for your money. So, if you’re looking to clean up your financial life in 2015, a one hour coaching session would be a great investment in your future.

Having a plan for your money is freeing, and working the plan will literally change your life! If you’re ready to create a plan for yourself, purchase the one hour session below.

If you need more coaching at the end of the one hour session, we can discuss how to best meet your needs at that point.

 

By Eric on December 18, 2014 4

Have you heard of the boiling frog experiment? It goes something like this…

A frog, held near a pot of boiling water on a stove and enticed to jump in, would leap away from the steaming pot of water. But, place the frog in a pot with room temperature water, and turn the burner on low heat and the frog will sit contently as the water temperature rises.

By the time the water starts boiling, the frog doesn’t realize that it’s being boiled to death.

Boiling FrogOriginal photo from Wikipedia CC

A sad story for sure, and  a good analogy of how our society finds ourselves in such a devastating amounts of debt. A little debt, here, a little more over there, and sooner or later, we’re left with payments for stuff we already have, and neck deep in payments.

What do I mean by things…. well, anything paid for on credit, essentially things that are wanted now vs. waiting for later. Sure, there is always the “I get rewards” argument, and “I pay it off every month” statement.

I hear ya! I know… we’ve been there and done that. But, having that line of credit and plastic card in our wallets creates a false sense of winning financially.

Continue Reading…

By Eric on December 9, 2014 6

I knew striking out into the world of self-employment would be tough. It’s been tough, but what seems to be troubling me and my family the most over the past few months is the continual stream of cash that is leaving our pockets for things that keep breaking.

In budget terms, these are the things we save for on a monthly basis, but don’t really like spending money on.

Like car repairs and house repairs. Let’s just start there for example…

In the past three months we’ve had a terrible series of unfortunate events that have kept us busy just trying to solve problems and fix broken things. So, many that I’m convinced someone is playing a joke on us.

First was the car…

As I mentioned in “The Price You Pay to Drive,” cars break down. I know this. We save for this. But, it was working so well for so long, I guess I took for granted what “reliable” transportation was.

Fixing the Car

On a Friday evening after work, I went to start the car, and it refused to do so. After some tinkering, and jumping it, I convinced it (prayer) to start and managed to drive it home where it sat for a week while I tried to fix the problem (thanks Google, and Dad for all the assistance). It wouldn’t start at all after I got it home that night.

The total to get the car running was $272.30. But, the problem seemed fixed and the car was restored to working/reliable condition.

Until about a week later and a totally unrelated issue poked it’s head up… Overheating… OK, no big deal, filled the car with coolant ($7.80). I checked a few other things to make sure it wasn’t something more serious, but couldn’t find anything… (we’ll come back to the car later).

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By Eric on November 25, 2014 +

As is the case with most everything I talk about here, being proactive is the key to winning with your money. The “normal” way to pay for Christmas is to forget it’s coming until Black Friday, panic, and then proceed to put everything on a credit card and spend the next year paying for last year’s Christmas. (Been there, done that)

Christmas Shopping

YUCK! Almost sounds as good as figgy pudding (I actually have no idea what figgy pudding is, but it sounds horrible).

So, let’s make a better plan if not for Christmas 2014, then for Christmas 2015 for sure!

Make a List & Check it Twice

The key to keeping the sanity in the Williams’ house when it comes to Christmas shopping is having a plan. We keep a very simple spreadsheet in DropBox that we can both access where we list who we need to shop for, how much we have budgeted, ideas we gather throughout the year, and how much we actually spent once the gifts are bought.

We try to operate in our strengths as well. I come up with a decent idea for a gift, and Kelsey hunts down the best deal. She has some mad online shopping skills. Last year, I think we bought one gift in the store and the rest online!

Stick to your plan, get creative, but don’t overspend. Tis’ the season for giving, but Tis’ NOT the season to spend more than you intend to. If you find yourself in a pickle, wanting to buy one more stocking stuffer for your second Uncle’s great nephew, check that list again and see if that’s really in your plan? Giving is a great thing, but only if it’s within your budget.

Black Friday Christmas Shopping

I really don’t have a whole lot of great advice for Black Friday shopping. I guess the early bird gets the worm, right? I’ve never taken part in the festivities.

If I were to approach Black Friday shopping, I would likely keep the same rules as above. Plan ahead, have a strategy and keep your focus!!! There are so many crazy deals that it would be easy to get side tracked and walk away with more than you really wanted to. (One of the reasons I’ve never done it. I know myself too well)

Remember, the retail store’s purpose is to make money. So they bring in a few crazy deals, knowing that you will be in their store and will likely walk out with more than you bargained for (pun intended). So, be smart, don’t let them trick you into buying more than you need to.

Savvy Online Christmas Shopping

We subscribe via email to our favorite places to shop and keep a special eye on the deals this time of year. We’re typically able to score great deals by waiting for Cyber Monday and ordering online.

Our philosophy is based on neither of us wanting to fight the crowds.

When we shop online we always use Ebates to compound the deals as they pay cash back. (Make sure you download the Ebates cash back button to lock in your rewards.)

For those extra tough folks to buy for, a gift card is always an option. Use a site like Gift Card Rescue to buy gift cards up to 35% off! The options are sometimes limited, but if you create an account and are patient, you can score a sweet deal.

However you decide to complete your Christmas shopping, just remember the real reason for the season (the birth of our Savior). It’s fun to celebrate and have a good time, but do it with a plan and purpose.

P.S. We put up our Christmas tree a week ago, and Christmas music has been playing ever since. It helps take the edge off the frigid temps and slippery roads we get here in the midwest.

What’s your plan for getting your Christmas shopping done this year?

P.S. We put up our Christmas tree a week ago, and Christmas music has been playing ever since. It helps take the edge off the frigid temps and slippery roads we get here in the midwest.

By Eric on November 18, 2014 3

Fear of money can be a dangerous thing. I’ve experienced this firsthand the past few months. Launching out into a business whithout paid benefits, vacation, or health insurance adds a layer of complexity to our lives that we tried our best to prepare for. And even after getting all of that settled into our budget, let’s be honest, it’s scary not knowing what your paycheck will be every month.

One of the ways fear has creeped into our household has been a lack of communication. I’ve been so focused on growing and learning how to be my own boss that unfortunately I’ve done a poor job of keeping in touch with my wife on a day-to-day basis. (Excuses, I know! but that’s reality right now)

And at the end of the day we both get home with about 10% energy left in our tanks, and that goes toward figuring out what’s for supper and spending time with Rooney. And when she goes to bed, we sit down and realize how little we have left for each other.

Fear creeps in as we start thinking about the things coming up in the next month we’ll have to pay for, and wondering where and how that income is coming in the door.

The crazy thing is that we knew it would be this way before we got into it. We prepped, planned, and talked about it, but didn’t really have a clue until we started doing it.

Planning is good, but living it out is the real deal. We’re learning things we couldn’t have ever learned by “planning.” Same is true with parenting. We had no idea until we were in the thick of it how challenging parenting would be. But, we’ve learned and we’ve grown from it.

Let’s combine both problems… the other night we were laying in bed around 8 PM (Yup, we were exhausted!) and talking about our budget and how we thought December was going to shake out. Well, the whole situation ended in tears because Kelsey wants Rooney to attend preschool next fall, but that requires a deposit to hold her spot.

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