Professional Athlete managing his money

It is refreshing to hear about the professional athletes that choose to manage their money.  It was nice to read a recent article from the Deseret News about how Trey Burke is positioning himself to have money in the future.  The amount of money we have varies greatly across each of our economic circumstances.  However, the principle of preparation still applies.  We must prepare financially for our future living expenses.  

The Ten Commandments of personal finance

There was an article printed in the local paper (online) that came from the LenPenzo.com blog post entitled, The Ten Commandments of Personal Finance.  I personally know of the importance of living the ten commandments in the christian world for our spiritual well being.  These timeless words of advice are similarly important to our financial well being as we live by them.  So,  here are the principles listed:
1. Spend less than you earn.
2. Behold the power of compound interest.
3. Always pay thyself first.
4. Faithfully track thy household income and expenses.
5. Knoweth the difference between wants and needs
6. Keep thy budget holy
7. Thou shalt avoid paying interest.
8.  Keepeth thy spouse involved in the financial decision process.
9. Blessed are those who knoweth a high income doesn't beget financial freedom
10. Undertake thy chosen vocation for love, not money.

Each of these ten commandments of personal finance has been a key part of the financial structure in our home and marriage.  I cannot emphasize enough the importance of living by these.  Doing so will bring greater financial freedom and more peace.

Preparation for the unexpected

Each day at work I have the chance to speak with borrowers, real estate agents, and attorneys regarding financial hardships that people are having in today's tough economy. Many of these financial hardships are involuntary. People often cannot control when they are going to lose their job, have a car break down, require surgery, or even have a spouse leave them.

Certain phone calls seem to make a lasting impression on me. I sometimes find myself asking the question, "Could they have done something to better prepare for this hardship?" or "What else could these borrowers trim from their current budget in order to afford their payments until they can get another job?"

To the individual couple that had a home valued at over $1 million with $400,000-$500,000 in mortgages and only Social Security income--"Why did you not plan differently? Why didn't you think about what would happen to the mortgages when the other income stopped?"

My plea to everyone that reads this post: Please plan for the future! Think about what you need to do to weather the storm if you lose your job. How will your spouse make the mortgage payment if you die unexpectedly? What will you do if you have to get surgery? Please prepare for the unexpected!

Rewards

I recently ordered some gift cards with some rewards from by credit card at the local credit union. This reminded me of when I realized that I was using my credit card for normal purchases anyway. Why not take advantage of rewards that were offered through the credit union anyway. All I had to do was opt in to the rewards program. Now we have reaped many free meals with the gift cards to restaurants we would not get to as often.

Now there are many different programs out there that offer nice perks. This should't mean we need to go out of our way to spend, spend, spend just to get rewards. Taking advantage of the rewards programs that are in place for things we do anyway is a no brainer. We didn't change our way of life at all to get set up on the rewards at that credit union. Setting up an account at another credit union so we could take advantage of a nice interest bearing checking account is another example of getting rewards for doing what you do anyway. No matter what program you choose, just keep in mind that businesses do reward customers for doing what they already do.

Electronic Envelope budgeting

Janell and I have tried different ways to manage our budget throughout our marriage. The different things I have done with excel to organize our budget have evolved to what we now use.
Our current system is pretty much a virtual envelope system. We use excel to break down the amount of money in our checking account to different categories. Each category receives certain dollar amounts credited to the total after each paycheck. When we spend the money from the different categories the balance is then decreased. The goal is to only spend money that has been allocated to the category.
This system has certainly helped us have a fresh look on our finances. It supports our desire to live within our means. We are able to better stick to our budget. Ultimately, it is vital for everyone to find the budgeting system that works for them and use it!

Just Say No!

After work today, my wife told me about the few things she purchased from a yard sale this afternoon. One great find was a used national bestseller, "Financial Peace Revisited" by Dave Ramsey.

Although it has been a while since I have posted, I could not help but post about a simple thought from the beginning of chapter 2. In elementary school I was taught to "Just say no to drugs." In college I was taught to "Just say no" when my schedule was already too full for anything else.

Dave Ramsey indicates that the nation's situation at the time was a reflection of our inability to "just say no" to ourselves! What is it that makes it so difficult to stop the impulse purchases when we cannot afford them? One possible answer could be a lack of vision for the future. I assert that cultivating the ability to "just say no" to ourselves when we really don't need something will certainly allow us to be better prepared for the future when our money is needed elsewhere as money just doesn't grow on trees.

Investing our Time wisely

I know I touched on the wise use of time in my last post, but this principle is really something that I need to work on.

When I think of a financial investment I often think about what the potential return is going to be. This varies based on the risk involved with the investment.

For some reason, it is easy to forget that our use of time is really an investment. What return am I going to get from my chosen use of time? Some returns come right away while others don't become apparent for some time.

What is the return for using my time to complain?
What is the return for using my time to show gratitude?
What is the return for using my time to learn new things?
What is the return for spending time playing cars with my son?
What is the return for doing date nights with my wife?
What is the return for giving service to others?
What is the return for spending time to ponder or meditate?
What is the return for . . .

Regular financial returns come when we diligently invest in that which brings good returns.
Likewise, we get regular returns in other measure when we consistently do that which brings the reward. In other words, we reap what we sow.