7 Principles For Financial Success

How are you building your financial household? Is what you are doing working? Do you see positive results?

Our family has been on a financial transformation journey for a little over 9 years now and I have had some time to reflect on how far we have come.

We have experienced the rewards of applying God-given, time-tested principles for winning with your finances.

I wanted to share these 7 Principles for Financial Success with you today because I firmly believe you too can win with your money if you are diligent in applying them.

If you want to know more, you can check my e-book in which I share more about how these principles have changed our lives.

If you are winning with money, I would love to hear how have you applied these or other principles to succeed. Share those blessings with others!

“The law of the Lord is perfect, restoring the soul; The testimony of the Lord is sure, making wise the simple.”
Psalm 19:7

7 Principles for Financial Success

Frightful Finances?

Frightful FinancesAre you one of those people that really gets into the Halloween celebration?

You spend a lot of time deciding on your costume and you love to attend a Halloween party.

You might be one of those that fills the house with candy in preparation for all the trick or treat visitors.

On the other hand, you might be one of those people that looks forward to Halloween just so you can watch the all weekend horror movie marathons.

After all for you, watching Michael Myers, Jason, or good old Freddy Kruger never goes out of style.

Speaking about scary things, you might prefer to spend the night in a haunted house than 30 minutes looking at your budget for the next month or thinking about what will happen when you reach your retirement age.

And if you watch too much CNN or Fox News, you might conclude that winning with your finances is a terrifying and impossible proposition.

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But just like there is a way to deal with a werewolf or with a vampire, there is a way to deal with your frightful finances.

  • Afraid of not having enough money to cover your bills every month?
    • You need a plan for your money before you spend it.
    • Prepare a budget every month before the month begins.
    • You still have time for the month of November and it is easier than you think.
  • Afraid of all the consumer debt you have piled up?
    • Afraid of what new fees banks will create to take more of your money?
    • There is a way out of the bondage of debt.
    • You simply have to decide to live a different way.
  • Afraid of the next time the car breaks down or the furnace goes out?
    • You would not be afraid if you had 3 to 6 months of expenses saved away in an emergency fund.

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  • Afraid you wont’ have enough saved for retirement and that Social Security won’t be there?
    • There is a way for you take charge of your retirement.
    • You need to be saving 15% of your household income into retirement every month.
    • Of course, that’s a lot easier when you have a budget that works and your money is not constantly going to pay credit card bills or car loans.
  • Afraid you won’t be able to cover college expenses for your kids?
    • You can put a plan in place to save $2,000 per kid every year and have it grow tax free.
  • Afraid of the housing crisis and a foreclosure?
    • You can put a plan in place to pay off your house early.
    • Nothing will give you more peace than the security of a paid-for house.

To deal with your frightful finances you need two things: knowledge and the will to act.

I can help you with the first one and I can coach you through the second one. But it is really up to you.

You can choose to live in fear and worry or you can decide to take control and begin the journey towards financial peace and freedom.

“Whoever is slothful will not roast his game, but the diligent man will get precious wealth.
Proverbs 12:27 (ESV)

What’s Your Financial Compass?

Financial CompassMy wife Stacey and I just returned from a great 10 day vacation. It was our third straight year of going on a baseball tour road trip.

You see, we are huge baseball fans and we have a goal of attending a game in each of the 30 Major League Baseball (MLB) stadiums.

This year we hit numbers 14 (Chase Field, AZ) and 15 (Coors Field, CO).

I usually do all the driving and because I don’t have a great sense of direction, I leave all the navigation to my very bright wife.

All I need to do is follow her directions because she has planned the trip and is constantly looking at the map. She is my compass.

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Because I have a sense of peace and direction, I can focus on my driving which requires my full attention especially if I am going to places I have never been.

A compass will always tell you which direction you are headed, but most importantly what is the true north.

When it comes to your money, what’s your financial compass? How do you know you are headed in the right direction with your finances?

Your financial compass is defined by your view of money, who is influencing you on money, and your priorities and goals.

What’s Your View of Money?

This is a most fundamental question to answer. Do you see money as something good or something evil?

Do you see money as a tool to help you achieve your goals or do you see money as the goal to achieve?

Do you believe you can win with money are you convinced that the game is rigged and only the rich get richer?

Do you tend to be generous with money or are you more of a hoarder of money, the more you have, the more you want? In other words are you a river or a pond?

Your attitude, your philosophy about money will frame your financial compass and your actions.

Who is Influencing You on Money?

Your first influencers are your family of origin. What did your parents teach you about money? More importantly, what did they show you about money?

Were they spenders or savers? Did they rely on debt for anything and everything or were they patient and saved for what they wanted to buy?

Did they work together on money or fought about it constantly? Or did they simply not talk about money at all?

However your parents dealt with money, it will have an influence on what you do with money, so you need to understand that and adjust as needed.

And what about today? Your friends and immediately family are your influencers. They probably have their opinions on money and are not shy about expressing them.

Is that driving your decisions and views? More importantly, are they winning with money? Is their advice worth something?

And then you have what the world says about money. There are lots of people (including me!) offering advice and counsel on what do about money.

Are you going with the majority opinion on money matters?

Just let me say one thing: conventional wisdom is not the same as common sense.

Whose advice are you following?

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What are Your Priorities and Goals?

Do you know what you want to do with money? What is it that you want to achieve?

Is your end goal merely living for yourself and for the moment? Get what you want, when you want it, regardless of the cost. Just because you deserve it.

Or is one of your goals to love your family well and take care of them first? To leave a legacy of wise financial management for generations to come.

Do you want to work at that job forever just because you need it to pay bills? Or do you want to have options and do things on your own terms?

Is your goal simply to look inward and take care of you? Or do you want to extend your influence with generous, extravagant giving?

The answers to these questions put the final frame on your financial compass.

Your view of money, your influencers, and your priorities and goals will define your beliefs and will drive your actions.

Give yourself honest answers and you will know what your financial compass is and where you are headed with money.

Question: Is your financial compass pointing to the true north?

What If You Had No Debt?

What If You Had No Debt?How much of your monthly income is going to debt payments?

Whether you look it from a monthly dollar amount perspective, or as a percentage of your monthly income, that figure truly represents this:

The amount of debt we carry, keeps us from doing something else we want to do.

In other words, the longer we stay in the shackles of debt, the longer it will be before we can move on to use our money to achieve our goals.

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The Cost of Debt Payments

Think about this. Let’s say that only 20% of your monthly income is devoted to debt payments. On a take home amount of $4,000 that represents $800 every month.

What if you had no debt? If you completely eliminated your debt, what could you do with that $800?

Here are a few ideas:

  • Build up your emergency fund so it can cover 3-6 months of expenses.
  • Start to save up for retirement in your 401K/403B plan or IRA.
  • Start to save for college expenses for your children.
  • Save enough so you don’t have to cover Christmas expenses with credit cards this year.
  • Save enough so you can replace your car by paying cash for the new car.
  • Save enough to pay cash for a much needed vacation.
  • Complete that home remodeling project you have been wanting to do for a long time.
  • Give more to your church or your favorite charity.

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The Consequences of Debt

You see debt is not a tool to help us prosper with money. At best, debt is a crutch that keeps us from walking on our own financial strength.

And at worst, debt is a modern form of slavery that puts the creditors in charge of our income.

You want your money working for you and not for the bank. When we are in debt, compound interest works against us.

When we can devote our money to savings and investments, compound interest works for us.

So do you want to be in control of your money? Do you want to be the person who dictates your financial destiny?

Get rid of your debt payments as soon as you can. And do it with intensity and almost a sense of desperation.

Work extra, get a second job, and cut your budget down to cover the essentials of life.

Yes, getting out of debt involves hard work, sacrifice, and persistence.

But anything in life that is worth something costs us something. We have to pay the price to achieve success.

And that’s 100 times better than paying the high cost of staying in debt.

Question: What financial goals could you achieve if you had no debt payments?

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10 Applications for the “Sinking Fund”

What’s a sinking fund? This is a savings fund which you target for large purchases/expenses.

The sinking fund is separate from your emergency fund. Below are 10 applications for using a sinking fund.

Can you think of other applications?

10 Applications for the Sinking Fund

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