Talking About Money with Family and Friends

Talking About Money with Family and FriendsWhat topics do you avoid discussing with family and friends?

Typically if we want to have a peaceful family gathering or a nice evening with friends, we tend to stay away from the topics of politics and religion for sure.

And if we are honest, we also avoid talking about money.

The discussion of finances can get very, very personal and very, very uncomfortable, very, very quickly.

But is there a time when we can discuss the subject of money with friends and family?

And if so, how do we go about it?

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In my opinion, there are 2 scenarios where it is ok to discuss money with friends and family:

  1. When someone asks for our advice.
  2. When someone asks to borrow money from us.

So let’s see how we can talk about money with family and friends in these situations.

1. When someone asks for our advice.

If someone is asking your opinion about money, they probably feel that you can be trusted and you have something to offer.

So start by building on that trust by showing the person grace. We all have made mistakes with money.

We all have made purchases we would like to take back. We all have wasted opportunities with money. This is not the time to offer criticism or judgment.

Second, stay on the topic. No need to spend time covering everything you want to say on the topic of personal finances.

This is not about you. This is about helping your family member or friend in their time of need.

Finally, talk about how you have personally handled that particular financial issue.

Share what has worked well for you and what did not work so well. Be transparent and real.

If you have good trusted resources, share them with your relative or friend.

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2. When someone asks to borrow money from us.

If you are doing well with your financial situation, you will find yourself in this position sooner or later.

As I have written before, I think it is a mistake to loan money to a family member or friend. It changes the relationship into one of slave and master (Prov 22:7).

When this situation comes, you need to carefully evaluate how you define help. Of course, we want to show love and compassion.

But you have to be careful that you do not enable harmful behaviors. You want your relative or family member to get to the point where they can walk on their own strength financially.

So if you have the ability and you think the money will help them and not harm them, give them the money.

Buy the groceries for that week. Pay for the electric bill. Cover the medical prescription.

And since they have asked you for money, they have opened the door for you to give them help in some other way.

You can be part of their recovery by sharing your lessons learned. Talk to them about your own journey.

If there is a book or class that you think will help them, share it with them. If they are receptive, offer to pay for it.

Remember, your ultimate goal is to help your family member or friend never have to be in that position again.

If they are willing to receive your help, take the opportunity to walk alongside with them.

“So then, while we have opportunity, let us do good to all people, and especially to those who are of the household of the faith.”
Galatians 6:10 (NASB)

6 Steps To Debt Freedom

6 Steps to Debt FreedomDid you know that our national debt is now over $18T)?

Since September 30, 2012, the National Debt has continued to increase an average of $2.43B per day.

Or how about this fact: as recently as 2012, The U.S. government had to borrow 46 cents of every dollar that it currently spends, four times the rate in 1980.

I could go on but you get the picture. This is the kind of stuff that should scare you or make you really upset.

We have dug ourselves a pretty deep hole and the situation looks hopeless.

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However, while the solution to the national debt crisis is out of your hands, taking care of your personal debt is not.

But you need to reach a great level of disgust and frustration with yourself. You have to decide that you are done with debt.

That you are done being a slave to the lenders. That you are taking control of your financial destiny.

If you are ready to change, if you are truly done borrowing money, there is a way out.

6 Steps to Debt Freedom

  1. Establish a beginner’s emergency fund of $1,000. You need to have a small cushion so when the car needs a repair you don’t have to use a credit card to pay for it.
  2. Stop borrowing money. Do not add more debt while you are trying to get out of debt.
  3. Stop your retirement contributions temporarily. Yes, even if your employer provides a match. You need all the cash flow you can get. Plus you need to focus on getting out of debt instead of having your attention divided on multiple tasks.
  4. List all your individual debts (except your mortgage) smallest to largest. Make sure you are current on each one of those debts and keep making the minimum payments. Then start paying extra (as much as you can) on the smallest debt.
  5. When you are done paying off that smallest debt, take the amount of that payment and apply it to the next debt on the list.
  6. Repeat steps 4-5 until you are done with all of your consumer debt (credit cards, medical bills, car loans, student loans) is paid off. This process is known as the “Debt Snowball“.

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Do’s and Don’ts

  • Do consider working extra hours or taking a second job so you can have extra income.
  • Do consider selling some assets (have a garage sale for example) to jump-start your debt snowball process.
  • Do close your accounts when you pay them off. You don’t need them anymore.
  • Don’t fall for the trap of debt consolidation. All you are doing is moving the debt around. Interest rates are not your problem.
  • Don’t borrow money from your retirement plan. If you lose your job or you leave your job, the payment is due within 60 days. If you don’t pay it then, it is considered an early withdrawal (if you are younger than 59 1/2 years old) subject to taxes and penalties. By taking the money out you are also losing out on any investment gains on that money.

So there you have it. You have the steps plus some additional guidance on how to get out of debt.

This is the process my wife and I used to get out of consumer debt almost 10 years ago.

It took us 29 months but we paid $50K in debt. We have never looked back.

It can be done but it is up to you. There is no product without the process. There is no victory without sacrifice.

Decide today and act today!

The rich rules over the poor,  And the borrower becomes the lender’s slave.
Proverbs 22:7 (NASB)

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Posted in Debt by Jose Figueroa. 1 Comment

The Ultimate List of Budgeting Resources

Ultimate List of Budgeting Resources

As you get ready for the new year, I wanted to give you a little help with what I know will be one of your New Year resolutions: get control of your money.

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If you are a regular reader of this blog, you know that the key for winning with your money, for getting control of your financial destiny is to have a working budget.

With that in mind, here my the ultimate list of budgeting resources:

  1. The Recipe for a Great Budget
  2. Back to Basics: Regain Control of Your Money with a Budget
  3. Back to Basics: Keep Track of Your Money
  4. Back to Basics: Pay Yourself First
  5. Budgeting Help: The Envelope System
  6. What if I don’t really have enough money to pay my bills?
  7. 5 Common Budgeting Mistakes
  8. What if I lose My Job?
  9. Budget Priorities: Protecting the Four Walls
  10. Budget Priorities: If I Had To, What Would I cut?

Make this upcoming New Year the best ever or your finances. You can start at the beginning by learning to live with a monthly budget.

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Posted in Budgeting by Jose Figueroa. No Comments

The Purpose of Wealth

17 Teach those who are rich in this world not to be proud and not to trust in their money, which is so unreliable. Their trust should be in God, who richly gives us all we need for our enjoyment.
Tell them to use their money to do good. They should be rich in good works and generous to those in need, always being ready to share with others.
By doing this they will be storing up their treasure as a good foundation for the future so that they may experience true life.

I Timothy 6:17-19 (NLT)

The purpose of getting your finances in order and building wealth is so that you can be a blessing to God and others.

You see, it’s not just about you and me.

So using the passage quoted above, here is how I summarize the purpose of wealth:

The Purpose of Wealth

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Posted in Giving Stewardship by Jose Figueroa. 2 Comments

10 Goals for Your Money in the New Year