Windshield or Rearview??

Happy Thursday as the sun shines and cool weather has set in.

Today’s question seems simple enough… “When driving to work this morning did you happen to look out of windshield of your car or did you only use the rearview mirror?”

Silly question right? It would be terrible if everyone decided to use their rearview mirror to drive all over town. I think my friend Kevin would have a lot more work in his industry as an auto insurance adjuster!

Financially how are you driving? Do you know how much you’ve spent every month, feel comfortable about that and use the past month’s expenses to know exactly the amount it took to make it to the end? This would technically be the same as driving using your rearview mirror. Some people even write out their “budget” and have expenses marked down on a nice spreadsheet and track them very clearly. This is a step in the right direction, although we are still focusing on where we’ve been and not where we’re going.

Just like our cars, the best way to navigate financially is to look forward, see what’s ahead and plan to steer around the curves and stop when we come to an intersection. A Pre-Planned Zero Balance Budget is the best way to plan your month’s money. We start by looking forward into the upcoming month, writing down our income that we expect to bring in, and then working down the list of expenses until every dollar has been spent. Also this should be done at the beginning of each month because expenses change as the months change. We can plan our lives a month at a time and make adjustments along the way knowing that we are staying on the road we’ve planned out the entire time.
Some folks have irregular income amounts and may feel it’s impossible to plan things out this way. On the contrary, it is even more important to get a written plan ahead of time to know where to put money as it comes in. With the same form that you can download in the link below, write out all your expenses for the upcoming month. Then in the left column put a priority number on each expense. #1 would be food, then utilities, then house payment, then car gas, payment & insurance… Food, Shelter, Clothing & Transportation are the 4-walls it takes for all of us to live.  Make sure and spend out categories up to the amount you expect to bring in and beyond. Then as the money comes in, pay yourself into each category by the numbered order on the list. Do not spend money on a credit card bill or to eat out until the house payment is paid. This will make sure your basics are taken care of and you have a plan for each dollar as it arrives.

Click Here for Aaron’s Zero Balance Budget Tool -on the Resources page at TrueNorthFFC.com where I’ve uploaded my Zero Balance Budget Tool and some other great documents to help you get your financial ferrari on the autobahn!

Now we have to be honest here… Not everyone is looking out the windshield or the rearview… some are wearing a blindfold and mashing the gas! The results of this plan of driving are obvious. The car gets beatup, rides really rough and sometimes causes fender-benders with others out there on the road. By downloading my budget form and filling it out, we take off the blindfold and know where we are at. Seeing on paper how much we have coming in and going out helps us to know if we should slow down some spending or plan to pull into a service station!

All of us are really driving ourselves somewhere financially every day. I hope we are headed where we want to go! I would love some feedback on the budget files I’ve posted for download. Remember that you can get yourself going in the right direction, but if you need navigational help, a tune-up or overhaul, I’ll be at your service.

Money flows from those who don’t manage it to those who do. ~Dave Ramsey

Sincerely,

Aaron Nichols

True North Financial Fitness Coaching
785-218-6134
Free 30 Min Financial Analysis – No Obligation – Completely Confidential

Shop More, Save More & A Toilet Seat

Good Morning, Happy Thursday & Thanks to all the Veterans and those who’re serving and their families today!

Even with only an antennea to bring TV into the house, I’ve noticed that the Christmas ads are starting to pop up quickly. The Retailers are hitting those emotional buttons and we’re probably starting to feel excited and nostalgic about the holidays to come… This reminds me so much of a story of a Toilet Seat, told by Russ Carroll, the man who was with Dave Ramsey from the beginning. I heard this first hand while attending Counselor Training at Dave’s home offices in Nashville, TN.

Anyway, the Toilet Seat Story goes something like this: At Russ’ house (which I’m positive is VERY nice) they needed to replace a broken seat on the throne in a guest bathroom. He checked around the local ads and knew that Home Depot usually had revolving sales on things. He wanted to save money. Yes, many rich people are rich because they know how to do this! Read The Millionaire Next Door by Tom Stanley. When he went to Home Depot and asked the clerk if toilet seats ever go on sale. The clerk replies, “Nope. A toilet seat is a Need. We don’t advertise and discount Needs.”

Wow. Come to think about it, do we Ever see something that is truly a Neeeed shown on one of these fancy holiday only ads. How about the Target or Wal-Mart Black Friday Flyers? Do we sometimes see those ads and convince ourselves that a Want has now become a Need? This is exactly the intention of those retailers, and they are absolutley Awesome at transforming our emotions! If we Needed it, they wouldn’t be advertising it and it wouldn’t go on sale because those items are carried in every store and the price is already competitive, like when you buy a toilet seat.

Okay, so Christmas should be fun and meaningful and we should buy some Wants and put smiles on little kids’ faces and enjoy seeing them play and be happy. If you really want to create blessings with your gifts, they cannot be burdens to your financial status. Paying all year for last year’s gifts with credit card bills just plain takes the fun out of Christmas. Families who practice “buy now, pay later” for gifts have very little chance of having extra income to save and invest for emergencies and their future.

Here’s some bullet points to incorporate in your holiday shopping.

  • Decide AHEAD of time how much money you Have available to spend for gifts.
  • Decide the max price you have for each person/gift you are going to buy.
  • Then decide on the gift type.
  • Do LOTS of online shopping and ad scouring for the lowest price on the item you already decided you wanted to buy.
  • Don’t let the ad tell you what you want to buy.
  • Use CASH

Then, Enjoy Christmas to the fullest knowing that it is all paid for and you don’t need to have the New Year’s Resolution to “Get my credit cards paid off ASAP”!!

Thanks for reading this post. I appreciate every person out there and love sharing these thoughts with you. Remember, these ideas are coming from a Debt Free Dude, so I also live what I’m writing. Thanks!

Sincerely,

 

Aaron Nichols
True North Financial Fitness Coaching
785-218-6134
aaron@truenorthffc.com
http://www.truenorthffc.com/

Free 30 min Financial Analysis – No Obligation – Completely Confidential