The Power of Focus in Personal Finance

Focus

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How do you get things done? I mean, how do you manage to accomplish the myriad of tasks that are in front of you every day? And in the middle of doing that, how are you ensuring you’re staying on track to meet your goals?

This post is a little different from my regular teaching on personal finance, but it does have an important application there as well so stay with me.

The Background

Over the last few months I have been dealing with the questions in the opening paragraph. As you may know, I have a full time day job as a Project/Program Manager for a large IT/Services company. I have been with that company for a little over 20 years now and I have had what I consider a successful career.

But as you also may know, I have been working on launching a personal finance coaching practice for a little over 3 years now. Since I have a full time job, the time I have left to devote to this personal finance coaching practice comes from evenings, early mornings, and the weekends.

So I recently started taking stock of where I am with the coaching practice. As a good project/program manager, I defined a set of key monthly measurements and I have been keeping track of them since January of this year.

After careful analysis of my results, I have determined that time is the limiting factor in taking the coaching practice further in the next couple of years.

Don’t get me wrong, I have learned quite a bit over the last 3 years and I have connected with some great people. I started blogging on a regular basis and I also jumped into the social media fray.

I also can tell you that I am very proud of the new things I have learned to do this year like writing 2 e-books, starting a monthly newsletter, and launching a personal finance Podcast in Spanish. So I have made some progress and I am thankful for that.

The Decision

But I also know that when you are working on something new and you want it to grow and prosper, it needs more of your attention and time. In other words, it needs the power of focus.

When I look at the amount of “free time” I have outside of my day job, it has to be enough to cover everything else in my life. This includes my spiritual and physical well-being, my marriage, my family, and my service to God.

In other words, you and I can’t do everything and I found myself having to make some tough decisions about where to spend my time at this juncture.

In his book “Start”, best-selling author Jon Acuff speaks about the concept of “dropped balls”. These are things in your life that you may have to set aside so you can focus on achieving your dream.

These are not bad things, but you can only do so much in any given day, month, year. It’s like Gandalf told Frodo: “All we have to decide is what to do with the time that is given to us.

So after much prayer, I decided to stop serving in 2 ministries that I love because I was spreading myself too thin. I was not putting enough focus on the coaching practice and I did not think I could continue at that pace and still reach my short and long term goals.

As the great Zig Ziglar said: “I’ve got to say no to the good so I can say yes to the best.

The Application to Your Personal Finances

And here is the application for your finances. Regardless of where you are with your money today, the power of focus will be your best weapon going forward.

There is nothing like laser like intensity to help you accomplish what you are trying to do with money. For example:

  • If you are just getting started, your immediate focus should be on gaining control of your money via a monthly budget.
  • If you have no savings, your immediate focus should be on saving a beginner’s emergency fund so you can avoid having to rely on debt when you have an emergency.
  • And if you are trying to get out of debt, focus on that with all your energy and attention. This is no time to worry about retirement or college savings. You will get there, trust me.
  • If you are out of debt and are thinking about buying a home, make sure you focus first on saving an emergency fund of 3-6 months of expenses and then focus on saving enough for a down payment for your home.

There are exactly 61 days left in 2013 after today. This might be a good time to take a moment and see if it is time for you to turn on the power of focus in your life.

It could be in any dimension: spiritual, professional, relationships, finances, health, etc. But spending some time deciding where your focus should be, will enable you to finish strong in 2013 and start 2014 on the right foot.

Question: Which area in your life could benefit the most from the power of focus?

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Personal Finance: It’s All About You

Cash; Uncle Ben

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As you know, this is a personal finance blog. My goal is to teach and coach on the aspect of managing and winning with your money.

Have you ever stopped to think about why it’s called personal finance? I reflected on that question a little bit the past couple of days. I believe that it is called personal finance because the main ingredient is very personal: it’s you.

If you are not an active participant in the management of your money, you won’t be able to achieve victory. It’s that simple. You can’t be on the sidelines waiting for something to happen. You have to get in the game.

More information won’t do the trick. I heard a preacher say once that the crew of the Titanic had plenty of information about what they were facing and it still sunk.

We have to be able translate new information into action. So let me ask a few questions today to get us thinking about how we become intentional about our personal finances.

1. What are you trying to do with money?

This is your starting point and it all depends on where you are today. But you do need to have some goals to guide your efforts.

For example, if you are simply trying to get a handle on your spending, you need to make the time to develop the habit of living on a monthly budget.

If you are drowning in debt, you have to decide if you are sick and tired of paying interest to the banks with nothing to show for it. Maybe it’s time get a plan to get out of debt for good.

Or perhaps you are past that point and you just want to figure out how to save more money whether is for emergencies and large purchases or investing for long term goals.

Maybe, one of your goals is to give generously. It’s hard to help others if you are struggling or just getting by with money.

Whatever your goals are, you need to take action now.

2. What’s happening with your money?

As I mentioned above, personal finance it’s all about you. And this means that you have to start paying attention to what’s happening your money.

And you need to know where you are with your money today as a starting point. How would you answer these questions?

  • What is your take home income is every month?
  • Do you balance your checking account every month?
  • Do you have a good handle on what your bills are each month? Are the bills paid on time?
  • How much debt you have?
  • Have you checked your credit report lately?
  • Could you calculate your net worth?

When you decide to take control of your money, you will be able to generate a picture of your financial situation with great ease.

3. Who’s counting on you?

This question goes to the motivation for winning with money. You see, money is just a tool. It can be managed for your good and the good of others, or mismanaged to your ruin.

If you have a family that depends on you, you need to take charge of your finances. If you are married, you and your spouse must work together on your money.

You need to think about the legacy you will leave behind for your children and their children.

And if you don’t have children, there are still plenty of people that could be blessed because you decided to get control of your money. That’s the real purpose of wealth.

It’s called personal finance because it’s all about you. What will you do about it?

“The key factor that will determine your financial future is not the economy; the key factor is your philosophy.”
Jim Rohn

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$500 Monthly Car Payment or $500 Car Repair Bill?

$500 Monthly Car Payment vs. $500 Car Repair BillSubscribe to future posts from Figueroa Financial by e-mail

I have thought about this question a lot recently. You see, my car is a 2003 Ford Escape (great picture, right?) and I have owned it for 10 years.

My wife and I finished paying it off in October of 2007 in the midst of our debt snowball.

But you know with cars, something is always up; especially as they get older they tend to breakdown more.

My car has around 180,000 miles on it and the latest repair cost me about $500, which is about the same amount of a monthly car payment.

So here is the question for many people: as a car gets older and repairs are more frequent, do you breakdown and get a newer car with a monthly payment?

Or do you rely on your savings (emergency fund/car maintenance fund) to keep up with the occasional repairs?

I have to tell you, getting a newer car would be nice (here is the one I would like). But I am committed to a debt-free life style.

We have not had any consumer debt since February of 2008 and I intend to keep it that way. A monthly car payment is not an option for me.

We are working on paying off the house to eliminate our last debt. My goal is to finish paying it off by my 50th birthday (I just turned 46 in case you were wondering). And my goal is to pay off the house before I upgrade my car.

So I will continue dealing with maintenance and repairs. It’s not fun to pay them, but it is better than paying interest on an auto loan. A new car would be great, but a monthly car payment would get in the way of my greater goal of paying off the house.

So what about you? What are you willing to do to eliminate debt from your life once and for all?

  • Are you willing to stop borrowing money? You can’t borrow your way out of debt. Raising your debt ceiling won’t cut it.
  • Are you willing to live on a budget and spend only to the level of your income? You can’t keep relying on the banks to catch your slack. At some point, you will be too much of a risk.
  • Are you willing to make the tough decisions and cut down on those items that are not basic needs? It will be painful and unpleasant, but necessary. Someone in your family will complain. Will you deal with it?
  • Are you willing to sacrifice to generate additional income to accelerate your debt elimination?

Remember, you are the solution to your money problems. It’s your life, it’s your money, and it’s your decision on what happens with your finances.

What’s your decision?

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5 Ways to Prevent a Shutdown of Your Finances

D.C. Shutdown

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This week the news cycle in the U.S. has been dominated by the shutdown of the federal government operations.

The funding authorization for those operations expired on Sep 30 without agreement between Congress and the President on how to move forward in the new fiscal year.

The result has been that non-essential operations of the government have been suspended while critical operations are still functioning. But the 800,000 federal government employees that are deemed non-essential, have been furloughed and sent home without pay.

If you look at recent financial statistics, about 75% of households live paycheck to paycheck. This means that they could not survive an extended period of time without income and would have to rely on debt to cover living expenses or emergencies.

A government shutdown is just one example of a loss of income. You could also experience an illness or family situation that prevents you from working for a long time. What would you do?

Here are 5 Ways to Prevent a Shutdown of Your Finances:

  1. Live on a budget so you can maximize your income and gain control of your spending.
  2. Prioritize spending to focus on the 4 walls: food, shelter, transportation, and clothing.
  3. Get out of consumer debt. In the event you lose your income, the last thing you want to worry about are credit cards or car loans. If you have those items covered, other non-essential things can wait.
  4. Build an emergency fund to cover 6 months of expenses. Give yourself a cushion to absorb the loss of income.
  5. Ensure that you have long term disability insurance. This is the type of insurance that would replace your income if you were to be disabled from working for an extended period of time.

Question: How would you handle the loss of income for an extended period of time?

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