What Happens After you Get out of Debt?

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What happens after you get out of debt? You might be thinking that you can’t even begin to think about that right now. You are doing just well enough to work your budget every month, pay the bills on time, and apply any and all extra money to that debt snowball.

Or perhaps that’s exactly where you are. You have sacrificed and paid the price, you have budgeted each month, you built that initial emergency fund, you cut back on expenses, and you worked extra hours.

And now, that last debt on your list is finally gone. So this coming month will be the first time that your “debt” line item in the budget will have a $0 associated with it.

Congratulations!!! So what happens now? Where do you apply all that energy and focused intensity you used to get out of debt?

Well now you can relax a little but without losing your purpose. There is more work to be done :-).

I like to think about financial wellness, as a journey in three stages that are analogous to the building of a home: laying down a firm foundation, building up your financial household, and letting the trees grow.

Let’s talk about each phase.

1. Laying down a Firm Foundation

Every home needs a great foundation. In terms of our finances, this is the stage where we move from standing in quick sand to higher, firmer ground. This where we get on a budget so we can gain control of our money and where we eliminate our consumer debt.

When this stage is completed, you know where your money is going and you have some savings for emergencies. Peace of mind with your money is now part of your life. You know what else comes with debt freedom? Options! You are in control and you get to decide what happens next, not the creditors.

2. Building up your Financial Household

After the foundation is laid, the frame of the house is added and the different rooms are laid out.

In this stage of your financial wellness journey, you now can focus on adding to the firm foundation, by directing your attention to other elements of the plan. Here the focus is on strengthening your financial position and minimizing risk.

3. Letting the Trees Grow

When a new home is constructed, usually the builder plants a couple of trees in the front yard. Initially they are of course small and fragile, but with time and proper care, the roots grow deep and wide and the trees flourish.

In older neighborhoods you can see strong, tall trees that provide beauty, shade, and a place for kids to climb or for friends to gather.

In terms of your money, you want to go beyond the initial foundation that benefits you and your family today. You want to share the blessings with others around you and with future generations. You want to give extravagantly and you start thinking in terms of the legacy you will leave behind.

Before we go any further, I want to emphasize a point about giving. Even though I see stage 3 as the place where you can give extravagantly, I don’t want you to think that giving should be ignored in the first two stages.

Generosity does not have to be limited by the size of our bank accounts. You can be generous with your time, talents, and your treasure at every point in your journey. The more generous you are, the more blessed you will be. In the words of Anne Frank: “No one has ever become poor by giving”.

Over the next two weeks I will have a mini-blog series, focusing on stages 2 and 3 of our journey towards financial wellness.

Next week, we will focus on stage 2:  building up of your financial household. The following week we will shift our attention to stage 3: letting the trees grow.

Hope you will come back next week!

What do you think of the three stages of financial wellness? What stage are you in right now?

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My 15 Favorite Bible Verses on Money Management

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If you are a regular reader of this blog, you know that the personal finance advice I offer is based on what the Bible has to say about money management.

I believe God has provided in the Scriptures the true foundation for a life well-lived and that includes how we manage our money. So, this week I am sharing with you My 15 Favorite Bible Verses on Money Management.

God’s Ownership and Provision

The earth is the Lord’s, and all it contains, the world, and those who dwell in it.
Psalm 24:1 (NASB)

11 Yours, O LORD, is the greatness and the power and the glory and the victory and the majesty, indeed everything that is in the heavens and the earth; Yours is the dominion, O LORD, and You exalt Yourself as head over all.
12 Both riches and honor come from You, and You rule over all, and in Your hand is power and might; and it lies in Your hand to make great and to strengthen everyone.
I Chronicles 29:11-12 (NASB)

But you shall remember the LORD your God, for it is He who is giving you power to make wealth,
Deuteronomy 8:18a (ESV)

I have been young, and now am old; yet I have not seen the righteous forsaken nor his descendants begging bread.
Psalm 37:25 (NKJV)

And my God will supply all your needs according to His riches in glory in Christ Jesus.
Philippians 4:19 (NASB)


 9 Honor the LORD from your wealth and from the first of all your produce;
10 So your barns will be filled with plenty and your vats will overflow with new wine.
Proverbs 3:9-10 (NASB)

In everything I showed you that by working hard in this manner you must help the weak and remember the words of the Lord Jesus, that He Himself said, ‘It is more blessed to give than to receive.’
Acts 20:35 (NASB)

Now this I say, he who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully.
Each one must do just as he has purposed in his heart, not grudgingly or under compulsion, for God loves a cheerful giver.
And God is able to make all grace abound to you, so that always having all sufficiency in everything, you may have an abundance for every good deed;
2 Corinthians 9:6-8 (NASB)

Managing Money

But godliness actually is a means of great gain when accompanied by contentment.
I Timothy 6:6 (NASB)

Be diligent to know the state of your flocks, and attend to your herds;
Proverbs 27:23 (NKJV)

The rich rules over the poor, and the borrower is the slave of the lender.
Proverbs 22:7 (ESV)

Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.
Proverbs 21:20 (ESV)

 But if anyone does not provide for his own, and especially for those of his household, he has denied the faith and is worse than an unbeliever.
I Timothy 5:8 (NASB)

A good man leaves an inheritance to his children’s children, and the wealth of the sinner is stored up for the righteous.
Proverbs 13:22a (NASB)

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ecclesiastes 11:2 (NASB)

What are some of your favorite Bible verses on money management?

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It’s August, is your Christmas Fund Ready?

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My wife has been serving as an interim pianist for a local church, and this past weekend they started their rehearsing with Christmas music. They had the room decorated with Christmas nativities and someone even baked Christmas cookies.

No, they have not moved the celebration from December to August while you and I were not paying attention. But in terms of how soon it will get here they might as well have. We are talking about only 4 short months. So the choir and orchestra at that church have started their preparation now.

If we are not careful, Christmas can become a high spending season. We can easily get caught unprepared and fall into the normal habit of using debt for the seasonal expenses.

If you are normal and are planning to use credit cards for gifts and other seasonal expenses, you could be paying interest for many months. Statistics show that if you use credit cards, not only you will spend more money, you will still be paying for those expenses come May of 2014 with the added interest.

However, you and I still have time to prepare for Christmas and avoid making it an extended, long season.

Do yourself a favor and start preparing for Christmas now by taking these 3 steps:

  1. Decide on a budget amount for Christmas expenses. You will want to cover expenses such as travel (if you are going to visit family), decorations, entertainment, and of course gifts (make a list of everyone who would receive a present from you).
  2. Build a sinking fund by putting a line in your budget for a “Christmas Fund” and saving the monthly amount required to meet your target. For example, if you are planning to spend $1,000 you have 4 months to save (including August). That means you need to save $250 / month.
  3. When December comes along, spend only accordingly to what you save and what is in your budget. Don’t rely on debt to get you through the season.

We have been saving for our Christmas fund but we have to pick-up the pace to save according to what we would like to do this season. So we have started making the adjustments now by cutting back in our dining out budget. This will enable us to save put more money in our Christmas fund.

I hope you can have a joyous Christmas celebration without regrets and without bills that follow you into the New Year. Get ready now!

What other tips you have for saving for Christmas expenses?

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Budgeting Help: The Envelope System

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Would you like some help with your monthly budget? If you have been reading this blog for a while, you know that’s one of topics I love to discuss.

I cover the budget topic frequently because, I firmly believe that a working budget is absolutely essential to win with your money.

Today I want give you a little budgeting help by covering the concept of the “envelope system“. This involves selecting a few categories (no more than 3) on your monthly expenses and using cash instead of the debit card to pay for them.

These are categories where you might have trouble with impulse purchases or where you consistently exceed your budgeted amount for the month.

Why use Cash?

You might ask, what’s the difference? Why give up the convenience of just swiping the plastic? Here are a couple of reasons for using cash:

  • Typically you spend more when you use the plastic that when you use cash. That’s because there is more pain associated with green dollars leaving your wallet than with a simple card swipe.
  • Having an amount of cash designated to a particular budget area will keep you from overspending. When the cash is gone, you have to stop. There is no more.


How do I Start?

As I mentioned above, you don’t want to do this for more than 3 categories. Let’s say we will start with Groceries:

  • Determine what you will spend this month. For example, $400.
  • Assuming you get paid twice a month, when you get paid on the 1st take $200 cash out of the ATM or write yourself a check for that amount and cash it.
  • Put the $200 in an envelope and label it “Groceries” or “Food“.
  • When you go to the grocery store, pay only using the money that is in the envelope.
  • Next pay period (on the 16th), take out the remaining $200 and put it in the envelope.
  • For the month, only buy groceries with the money that is in the envelope. Once the money is gone, you can’t buy any more groceries.

My experience with using this system is that you will get your monthly grocery expenses under control. This will become a very predictable portion of your budget.

I suggest you try this for the next 3 months (Aug-Sep-Oct). Once you are confident in the system move to another category such as “Restaurants” and execute the same process.  Once you are satisfied try it with “Clothing“.

That’s exactly the approach we took in our household and we have never looked back. No more out of control spending for those categories.

Try it. You have nothing to lose and a lot of control to gain. Let me know how it goes!

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New e-book available: Not Mine, Not Yours, But Ours

Not Mine, Not Yours, But OursGreetings everyone! I am very thankful, excited and pleased to announce that my new e-book is now available for the Kindle @ Amazon.

The book is entitled “Not Mine, Not Yours, But Ours“. In this book I show you how to reach financial unity in your marriage, and together build the life you’ve always wanted.

I want you to win with money and with your marriage. So as a special introductory offer, the e-book will be available for free on August 5 & 6. Get it tomorrow and let me know what you think by leaving a review.