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

Financial Literacy Month: The Savings Series

FLM: Savings Series

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As you know, in honor of Financial Literacy Month (FLM), I am sharing some of our previous posts on what I consider the four key categories for financial management: budget, savings, debt elimination, and giving.

I believe if a household can learn how to deal with these 4 areas of money management, it will get on a path to financial wellness.

Last week we began with the budget series and this week we turn our attention to the topic of savings. The skill of saving money can bring a great deal of blessings to your financial situation but you have to make it a priority. You can have peace of mind knowing you are ready for emergencies and that you are preparing for the future.

The Savings Series

 

Additional Information

 Presione aquí para la versión de este artículo en Español.

New e-book Now Available: 7 Principles for Financial Success

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My e-book, 7 Principles for Financial Success” is now available for purchase on Amazon for $2.99. The book is also available in Spanish (“7 Principios para el Exito Financiero“) for the same price.

In this book, I am sharing with you the 7 God-given, time-tested principles for succeeding with your personal finances. Giving you the what, why, and the how for winning with your money. Please share this great news with your friends and family and thank you for your continued support!

Click on the pictures below to go to the Amazon site for each version and enjoy!

7 Principles for Financial Success Cover SM

Cubierta para 7 Principios para el Exit Financiero

The Blessings of Learning to Save Money

savings

“There is precious treasure and oil in the dwelling of the wise, But a foolish man swallows it up.”
Proverbs 21:20 (NASB)

A few months back I wrote on the blessings of budgeting. I wanted to share my belief that having a working budget is the key to turning your financial situation around.

When you learn to live on a budget you also receive the blessing of having the ability to learn how to save money.

The skill of saving money can bring its own set of blessings to your financial situation but you have to make it a priority. My wife and I took that step to become intentional about saving money and we can attest to the benefits.

If you choose to do the same, here are some of the blessings you can expect:

  • Peace. Emergencies have become simply inconveniences now that we have an emergency fund. If the car breaks down we fix it. If an appliance wears out we replace it. It took time and sacrifice, but we no longer worry about where the money is coming from or having to decide which credit card has the most available balance. The emergency fund will allow you to absorb the blows that will come from time to time.
  • Patience. Since my wife and I made the decision to no longer rely on credit cards for purchases (5 years and counting!), we had to learn to wait until we had money saved for what we wanted to buy. We have gone from the “microwave” approach to buying to the “slow cooker” approach. We take our time and we make better choices when we buy something. It takes time to save and we want to make sure we get the best for our money on large expenses.
  • Possibilities: Learning to save money is a required skill to plan for the future. When you save for college expenses you can give your kids the gift of starting their professional life without a mountain of debt. When you decide to save for retirement, you take control of what you will do in your senior years. You could keep working if you wanted to do so. But you are not forced into it when perhaps you want to do something else with your time.

The Bible says it is foolish to spend all that you receive but that the wise person saves. What’s keeping you from being intentional about saving money?

What do you need to start? Would love to hear what you think!

“If you do the things you need to do when you need to do them,
then someday you can do the things you want to do when you want to do them.”

Zig Ziglar

Presione aquí para la versión de este artículo en Español.

Savings: The Long Term View (Part I)

Over the next two weeks we will turn our attention to the subject of saving money for long term goals. As you get your finances under control (living on a budget, paying-off consumer debt, having a full emergency fund), you also need to start paying attention to the future.

Two of the most critical areas for long term savings are retirement and college expenses. We will focus on savings for college expenses this week and next week we will focus on retirement.

As parents, we are compelled to take care of our kids in every possible way. For most of us, that includes covering the expenses of a college education. Education is critical to success in the market place and typically college graduates tend to have more options for employment.

So the question is not: should you pay for your children’s college costs; the question is how to best accomplish that goal without putting your future or the future of your kids in jeopardy.

Unfortunately, like with everything else around finances, the lack of preparation leads us to believe that there is only one way to pay for college: by using debt in the form student loan.

Let me share some statistics with you that will help us put the consequences of this belief in perspective:

  • The price for room and board at schools has doubled since 1982 and tuition has gone up 439% in the same period.
  • Outstanding college loans now total over $1 trillion, an amount that recently exceeded the amount of credit card debt in the US.
  • Student loan debt has increased 511% since 1999. Students now graduate with an average debt of $24K, an amount that has grown over 50% in the past decade.
  • More than 45% of students do not graduate so they are left with the debt and no degree to show for it.
  • Since 2008, 85% of college graduates have been moving back in with parents after they graduate.

In addition to these staggering numbers, there are larger implications of getting deep in student loan debt. This type of debt can not be eliminated through bankruptcy. The decision to go in debt at 18 can follow you for years to come.

You know what else happens to you when you have a large amount of student loan debt? You lose career options. You need to stay employed at any job you can get so you can make those payments. If you think a better option is for parents to take out student loans on behalf of their children, that simply transfers the risk to the parents.

They might be in a better position to pay the debt back, but the debt could hamper their ability to save for retirement and achieve other financial goals. Certainly, there has to be a better way than debt and that is through savings.

The best option for college savings is the Education Savings Account (ESA) also known as the “Education IRA”.

  • You can save up to $2,000 per year per child and get this: it grows tax free!!!!
  • Above the ESA, you can use 529 type plans. Focus on those that leave you in control of the funds. Morningstar has done the research on the best and worst of these 529 plans. This article looks at the 10 least and most expensive of the options.
  • After this, you can move to an UTMA/UGMA plan. This stands for “Uniform Transfer/Gift to Minors Act“.  The account is listed in the child’s name and a custodian is named (parent or grandparent). The custodian is the manager of the account until the child turns 21. At age 21 (Age 18 for UGMA), control of the account goes to the child.

The great Zig Ziglar has said that “If you do the things you need to do when you need to do them, then someday you can do the things you want to do when you want to do them.

In our topic today this means that you have to start saving now so you can prepare for the day when you need to cover those college expenses.

Already started? Great for you and keep going! Not started yet? Don’t delay any longer, the time is now. Start today!!!

“No discipline seems pleasant at the time, but painful. Later on however, it produces a harvest of righteousness and peace for those who have been trained by it.”
Hebrews 12:11 (NIV)