Friday, January 12, 2018

A Budget Does Not Have to Be Scary

Many people don't know how to create a budget or spending plan and don’t know where to start. The first step to getting out of debt is by creating a budget.  Creating a budget shows accountability for your spending and shows you how much you have coming in and how much you have going out.   

A budget is an itemized summary of your total monthly income after taxes minus - everything you spend money on. A budget helps you prioritize your spending and helps you manage your money no matter what your income.

A budget is only restrictive if you don't have any extra cash left over after you pay your bills. Make your budget flexible so you have "wiggle" room for unexpected expenses. If you don't have an emergency fund or savings to cover those unexpected expenses you can see right away what areas in your budget you need to reduce spending instead of using a credit card to pay for those unexpected expenses. 

The first step is to determine if there are some areas where you are spending too much money, you want to have a balanced budget of 70-20-10 and make sure you don't spend too much money in any one area of your budget.  Develop financial goals for yourself when creating your budget.  

Seventy percent of Americans live paycheck to paycheck and forty percent of Americans live above their means. This statistic shows there is a serious problem in America. 

When your budget is out of balance you use credit cards or risky financial options when causes you to go into debt and this can lead to serious financial problems such as foreclosure, bankruptcy, etc. If you know how much money you earn you should also know how much you spend. Here are 7 ways to create a budget and track spending. 

  1. Spend 70% of your monthly income, save 20% of your monthly income and donate 10% of your monthly income to charity. This ensures you have a balanced budget and prevent overspending.
  2. Subtract monthly expenses from your monthly income. If the total is negative or less than 5% of your total monthly income that is a red flag that you need to make some major adjustments to your spending.
  3. Track spending daily, weekly or monthly. Keep all your receipts and reconcile your bank accounts.
  4. Use an automated software tool, pen and paper or the envelope method.
  5. Surround yourself with at least three people who are doing better financially and gain financial advice from them.
  6. Don't keep making the same mistakes.
  7. Seek professional help if necessary.

Friday, January 05, 2018

9 Ways To Achieve Financial Wellness

January is Financial Wellness Month. Financial Wellness is the overall financial status or state of an individual that involves a combination of the mental and physical aspects of money. Financial wellness is based on a strong financial mindset that determine an individual’s thoughts, actions, behaviors and attitudes regarding money.

Financial wellness involves understanding your financial situation and having the desire, skills and knowledge to adequately handle risks and changes to your financial situation. Financial wellness involves knowing how much money you earn, spend and owe at any given time and developing a plan for the future. Financial wellness can also be called financial security, financial freedom, financial independence or financial stability.

Financial wellness ensures that you don’t have to stress or worry about your finances and involves developing a financial plan on your own or by hiring a financial expert that will help you to achieve your financial goals and consistently live within your means. Financial wellness means having a consistent cash flow to pay for all of your needs and wants and being able to achieve the dreams and lifestyle your desire in a balance manner.

According to the Federal Reserve, 43% of Americans live above their means. Many Americans live paycheck to paycheck and are living in either low- or middle-income households – some just one paycheck away from being homeless. If they lose their jobs, they have no backup plan, no savings and no safety net to help them through a financial crisis.

Many school systems do not teach financial literacy. These statistics show the importance of financial wellness in America. To successfully navigate through life Americans must make the right financial decisions that will affect their future and their future generations. Here are 9 effective ways to achieve financial wellness.

CHANGE Mindset
Change your mindset. You have to change your thinking regarding finances. It takes 23 days to start a habit and make a new action part of your daily life. If you want a different financial outcome, you have to make a permanent change regarding your finances.

Avoid YOLO and FOMO
Think about your future today, every action you take today affects your financial future so plan ahead and develop contingency plans.

Get your finances organized – file, categorize, prioritize, and automate your finances.

Use tools
Use tools to help you such as online banking, alerts, software, webinars, teleseminars, TV shows, seminars, classes, or radio shows.

Use apps
Use apps such as Mint or Mint Bill, Build Guard, Yodlee, You Need a Budget, Expensify or Toshl to manage your finances.

Read self-help books on personal finance that discuss budgeting, investing, retirement, saving, and taxes. Read articles on websites such as CNN Money, Yahoo Finance,, MSN Money and The more you know the more you grow. Money can generate wealth or generate debt, you make the choice.

CONDUCT Estate planning
Hire an estate lawyer to setup a will, trust and advanced medical directive.

Hire a CPA to prepare your taxes (personal and business) to minimize tax liabilities.

CREATE A Financial plan
Hire a financial planner, financial advisor or financial coach to help you map out a financial roadmap and plan for retirement.

Friday, December 29, 2017

How to Protect Your Money From the New Tax Code

Many people know they should track their spending and create a budget or spending plan but don’t want to.  The thought of knowing how much money you actually owe, how much money you earn and how much money you actually spend each month is terrifying.  If you create a budget you will quickly see how you spend your money.  You won’t be able to hide it or run from it any longer.  If you know, other people may know too, yes those other people are your creditors who continue to call asking for a payment. Learn more at
Many people are fearful of creating a budget and have good intentions by creating one but don’t stick to it.  To stick to creating a budget you have to view a budget as a tool to help you.  You are the only one who has to see your budget.  Many people today live paycheck to paycheck and are in mounds of debt, in some cases because they didn’t create a budget or didn’t stick to it.

If you know how much you earn, how much money you owe and how much money you spend you can change the direction of your life.  A budget helps you if you have an unexpected expense and when an economic change occurs such as tax code change. In 2017 the country experienced several fires, hurricanes, floods and earthquakes some in areas that were not expected.  If you did not have homeowner’s insurance to cover the damages that is example of unexpected expense. 

Create a budget by writing down everything you spend money on each week or during each month and subtract your income.  If the result is less than 10% of your monthly income you need to make some adjustments to your spending.  A balanced budget consists of: 15% transportation, 15% debt, 10% savings, 35% housing and 25% other expenses. 

Create an emergency fund to cover your total monthly expenses for 9-12 months.  Creating a budget will help you to reduce spending and prevent you from using credit cards to pay for purchases.  Use credit cards for emergencies only.

Develop financial goals when creating your budget. Financial goals provide motivation for you to work towards reaching that goal and provides a sense of accomplishment when the goal is met. Some examples of financial goals are: pay off a credit card, buy a home, start a business, take a vacation, etc.  Here are 6 ways to create a budget and stick to it.

  1. Take accountability. Take accountability for your actions, don’t blame others for your current situation.  Learn how to be flexible and adjust to changes in your life.
  2. Use pen and paper, use a software tool like Quicken or Microsoft Money or use the envelope method.  Once you visually see where you are spending your money it will make it easier to reduce spending.
  3. Create goals. Write down a list of at least 5 financial goals. If you cannot achieve any or can only achieve 1 or 2 of your financial goals you need to make some changes in your spending habits. Write down a list of all of your debts.  Develop an action plan and beside each debt write down steps on how you can pay the debt off: reduce spending, use coupons, use money savings tips, earn extra income, etc.
  4. Pay off small bills first. Pay down any small bills and debt first.  Once all your small bills have been paid off start tackling the larger bills. Setup payment plans for bills you cannot pay off in full. Be sure the account balances are updated on your credit report.
  5. Support network. Surround yourself with at least three people who are doing better financially and gain financial advice from them.
  6. Seek professional help. Consult a financial coach, financial planner or advisor to help you create a budget or spending plan and provide recommendations to help you stay on track.
Get more tips at