10 Years of Financial Peace

10 Years of Financial PeaceDo you remember what your financial situation was 10 years ago? I do and very vividly. It was not a good situation at all. Let me share with you where we were:

I had a very good stable job, with a great income. But we like many people, were living paycheck to paycheck.

We were using credit cards to make up the difference at the end of each month.

We also had almost $50K in consumer debt (car loan, credit cards, student loans, medical bills, etc.) and had no savings for emergencies or retirement and no plan to pay for college for our son.

Worst of all, my wife and I were not working together as a couple and we also realized that we were not honoring God in managing the money He had entrusted to us.

However, and most importantly, we also realized that we needed help to change our situation.

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What Did We Do?

It is true that the first step in solving a problem is admitting that you have a problem. Once we did, we turned to God for help. I prayed for a way to change our situation and He answered in a big way.

In September of 2005, our church offered Dave Ramsey’s Financial Peace University (FPU) course and I attended the course (which back then lasted 13 weeks).

I started learning and applying biblical principles for sound financial management. My wife joined me in the process and we began a life transforming journey for our family.

What Happened?

The changes we made paid off. We are still living on a budget. We still have a plan for our finances. We have learned to live on less than we make.

In 29 months we paid of all of our consumer debt ($50K). We now have a 6 month emergency fund. We were also able to pay for our son’s college education without borrowing money and without him borrowing money.

We have a structured plan for retirement savings which we know will give us options and control of when and how to move on to the next stage in our lives when the time comes.

More importantly: we are honoring the Lord with our financial management and we are working together as a couple in every area of our lives including our money.

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What Have We Learned?

As I reflect on how our lives have changed over these past 10 years, several thoughts come to mind.

First of all, I am always going to be thankful to Dave Ramsey for his FPU course and his financial teachings.

You may not agree with him on everything he teaches or on his methods and you may not like his personality, but for us, what he does was life changing and I know that he has helped millions of people more. So Dave, thanks for what you have done for us and what you continue to do for others.

You truly led us to have financial peace. I hope I can join you in helping others to win with their money.

Second: once I understood the incredible power of learning to control your money I knew I had to share what I learned with others.

That’s why I became a financial coach. That’s why I blog. That’s why I do a Podcast.

I want you to have hope for the future!

If we could achieve victory with our finances, you can too! All you have to do is decide that you need help and that you will do what you need to do to change your financial destiny.

Third: I am fully convinced more than ever that if you are married, you need to work as a team with your money. You can’t have the view that it is “my money” and “your money”. Or “your debt is your problem”.

You have to be all in as a couple. If you are engaged to be married, start talking about money now. Your goals and dreams. Your fears about money. Your mistakes with money. Your view on money.

Put it all on the table and begin your life journey together by getting together on a plan for your money.

And finally, the most fundamental lesson I have learned is that we are to honor and serve God by managing our money well.

It is not only about giving tithes and offerings although that’s important for those of us who claim the name of Christ.

It is also about honoring God in how we use our money. How we save, how we plan for the future.

And it is also about having a lifestyle of generosity. If you are in a position of strength, you are in a position to really help those who are in need. Only the strong can help the weak.

We are designed to be givers. To be rivers through which the blessings of God can flow to others.

Regardless of where you are today, decide that generosity will always be an essential element of your financial plan.

So what about you? Where will you be in 10 years with your money? Or where will you be in 10 months?

Will you have financial peace? Will you be in your way to financial peace or will you simply stay where you are?

The last lesson I have for you: It is all up to you!!!!

Question: What would financial peace look like in your life?

Managing vs. Eliminating Your Debt

Managing vs. Eliminating DebtI have a question for you. Should you be managing your debt or eliminating your debt?

This is a key question that you must answer and your response will determine your level of success with your finances.

If you are comfortable with keeping and managing your debt, you will spend your time making just the minimum payments, worried about how to increase your FICO score, and looking for options to move your debt around to the next card that offers you a “free interest balance transfer”.

You will be ok with always having a car payment and just using credit to get anything you think you need.

Debt will always be your companion.

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However, if your focus is on eliminating debt, you will put your energy on how to increase your income or cut your budget so you can apply more of money to your debt snowball.

You are not simply playing with credit cards, you are ready to break up with them for good.

You will learn to be patient and save for the things you want to buy.

Debt will no longer your companion, but your enemy. The enemy of your financial prosperity. Once you are done with it, you can move on to bigger and better things.

What will it be for you? Will you keep working on managing your debt or will you put your focus and passion on eliminating your debt?

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Out of Slavery: Life After Debt

Out of Slavery - Life After DebtThe other night I was flipping through channels on TV (you know, 300 channels nothing good to watch) and I landed on the SyFy Channel and an episode of “Star Trek: The Next Generation”.

It was one of my favorites (“Redemption“) so I decided to go ahead and finish it.

Of course, since I was watching live TV, I had to endure the commercials.

Interestingly enough, several of the commercials were devoted to companies offering debt consolidation, credit counseling, and mortgage assistance services.

The promises by each of these companies were pretty enticing. Some of it went along the lines of: “Payoff all your debt quickly and easily!“, or “You have the right not to pay what you owe!“, or “We can save you thousands of dollars on interest!“, “It’s free!“.

It sounded too good to be true, and given we were watching the SyFy Channel, it made me think that these companies knew the audience would be willing to believe in claims that have very little to do with reality.

When something sounds too good to be true, it usually is. The reality is that there are still some lingering effects from the Great Recession of 2008.

Banks and lending companies are enforcing tight standards for granting credit. Even the government has tried to help by putting more controls around consumer credit card companies.

And certainly everyone had to stop and take a moment to evaluate how we handle money in view of potential down cycles of our economy.

But as you think about your particular situation, let me challenge you to consider some basic principles around debt and how to overcome it.

Regardless of where you are today: lots of debt, little debt, or no debt, these principles are true and when they are applied they will cause you to win with money.

There is life after debt.

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First, what’s God’s view on debt?

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

Think about that statement for a moment. In essence it says that when you owe money to another person or entity, you are a slave to that person.

Think about what you owe. That person or entity chooses what interest rate you pay, when you pay, and what the minimum is. They control that portion of your income.

If you fail to pay for any reason they can take the asset or garnish wages after securing a judgment against you. They are in total control.

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Second, why do we use debt?

  • We don’t plan for expenses. When we don’t have control of our money through a budget it never seems we have enough to cover all expenses.
  • Lack of discipline for saving money leaves us relying on debt to cover emergencies.
  • We seek to take advantage of “deals” such as airline miles, hotel points, cash back, etc. We typically spend more when we use plastic. So we tend to spend more by chasing the magical free air fare or hotel stay.
  • We are influenced by the culture. We accept that paying interest is a way of life and that is the only way to get what we think we need.

There is no easy fix for getting out of debt.  There is no magical pill or perfect government program to get you out of debt.

You have to do it, you have to take control. You will get out of debt only when:

  1. You admit that using debt/credit will not bring you prosperity.
  2. You get sick to your stomach when you realize how much money you are paying in interest.
  3. You get tired of carrying the debt burden.

I know it can be stressful to carry the debt load because I have been there. I know it might seem impossible to pay it off but you can do it.

Let me tell you that I know it is possible to be debt free because my wife and I have done it. We paid off almost $50K in unsecured debt in 29 months.

We did it with God’s provision and by applying His principles. It was not easy but it was totally worth it.

Today, we are no longer slaves to debt. We are free of debt and we are walking with hope and in control of our finances.

How would life look to you if you were debt free? What could you do?

Contact me and let me show you how you can have life after debt.

It can happen!

“Debt is dumb. Most normal people are just plain broke because they are in debt up to their eyeballs with no hope of help. If you’re in debt, then you’re a slave because you do not have the freedom to use your money to help change your family tree.”
Dave Ramsey, Author and Personal Finance Expert

Year End Financial Checklist

Year End Financial ChecklistCan you believe we are near the end of the year already?

Time flies and I am sure that if you are like me,  you are looking forward to the holiday celebrations and some well deserved rest.

However, before the year runs out, I wanted to give you a year end financial checklist.

The great Zig Ziglar said: “It’s true. Spectacular preparation precedes spectacular performance.

These actions will help you prepare to  start the new year on the right foot with your finances:

1. Check your Credit Report

Have you checked your credit report lately? This is something you should do at least once a year.

According to the Federal Trade Commission (FTC):

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy.

Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

So take the time to request a copy of your credit report.

  • You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to:
    • Annual Credit Report Request Service
    • P.O. Box 105281
    • Atlanta, GA 30348-5281
  • Get a report from each one of the agencies.
    • They are supposed to cover the same information but there can be differences.
    • In some cases entries in one report will not show up on the other reports.
  • In case you cannot get a copy of your report from the online website, proceed with the phone call or complete the form to request via  mail.
    • Just make sure you get your hands on that report.
    • If I had done this, I would have taken the steps to correct the problem before starting the mortgage refinance.
  • Review your report for any inaccurate entries.
    • Keep in mind that only entries that are inaccurate can be removed from the report.
    • Don’t fall for scams that promise to “clean-up your credit”.
  • If you find any inaccurate entries, contact the appropriate credit reporting agency.
    • Send a letter via certified mail, return receipt requested detailing the inaccuracies.
    • Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information.
    • Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days.
    • Additional information can be found at the FTC website.

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2. Assess Your Insurance Needs

As you work on your financial plan, I also want you to consider the need to manage the risks to your finances by evaluating the role of insurance in your financial plan.

What is the role of insurance? In simple terms, insurance is the tool that is designed to protect you and your family against what might happen.

Ensure you have the right type of insurance and the right coverage to protect your financial plan.

3. Check Your Retirement Plan

Understand how your plan is progressing and make adjustments as needed.

Even with all the focus on personal finances today, planning for retirement is one area where we continue to come up short.

The good news is that you can do better than average. Seven years ago, I was part of those statistics but now I have a plan that is yielding good results.

Here is how I am preparing for retirement.

4. Prepare a Will

Do you have a will? If not, you are among 50% of Americans with children who have neglected this important step.

So what are some of your reasons for not dealing with this issue? You might think it is costly (it is not), or complex (it is not), or that simply you don’t have anything to leave to anyone so you don’t need a will (oh but you do).

Or you might just not want to think about your own mortality.

However, the reality is that we will all face death and the sooner you face that fact, the better off you will be.

So here are the 3 Reasons you should prepare a will:

  1. Because it puts you in control:
    • If you die without a will, the state takes over deciding what happens with your property.
    • The state already has too much say in what happens in our private lives.
    • There is no wisdom in leaving the disposition of your assets to the government.
  2. Because it is simple and cost effective:
    • You don’t need a high priced estate lawyer to do this. For most of us it is really a simple process.
    • Personally I used an online service that provided my wife and I with the required state specific forms for our wills.
    • It just took a few hours and less than $50 and we are able to put our last wishes on paper.
  3. Because it shows love for your family:
    • Imagine if something were to happen to you. In the midst of the grief and sorrow of losing you, your family also has to deal with the legal ramifications of what to do with your assets.
    • Don’t leave a problem behind. Love your family to the end by taking care of your will preparation today.

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5. Get on a Budget

I have always told you, the budget is the key to your financial success.

If you can’t control your money, you can’t build savings, you can’t pay-off debt, you can’t plan for the future.

Make 2015 your best financial year by starting to get control of your money today!!!

What other steps could you take this month to help you make progress with your money in 2015?

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