I recently did a podcast with my friend, Phil Conrad from Intentional Parenting. In the episode we talked about the topic of money. He asked me a question that had me thinking for a couple of weeks: What is the common mistake people make with money? I gave a quick off the head answer, but I knew something was missing from it. It came to me a couple hours later which is now leading to this blog post.
Where most of us mess up in our finances is that we simply are not intentional about them. We take them as they go, ignore the truth of what is happening and just believe all will be ok. That is about as far away from reality as we can get. I looked up the word intentional and this is what was printed in the dictionary – done on purpose; deliberate. I think of that definition and wonder – How many of us are working our financial situation on purpose?
Here are a couple of areas Chelsea and I have been intentional about in our financial journey over the last 3 years that has helped:
1-Track all your money that comes into your home!
I’m actually shocked at how simple this is yet how little people do it!! Most of us have no idea how much we really make, we just turn in our tax info at years end and hope for a return. This is dangerous. You can never improve your financial situation if you have no idea where you are starting from.
2-Track every cent that you spend!
And I mean every cent! Have you ever received your tax info at the end of the year, you see the total your company has paid you and then said wow where did it all go?! When you start tracking you get a real look into your problem spending areas. You would be shocked at how much everyday little expenses are killing you.
3-Never stop doing 1 and 2!
After getting debt free, I stopped tracking income and outgo. However, in 2015 we never fell behind, but at the end of the year I knew we were not where we wanted to be financially. The cause for this? We stopped doing the things that helped us become debt free, simply tracking where our money was going. When 2016 began, I started back to those basics and the results have been amazing. Our income actually went up and we were actually able to both save and give more – while being home with our children.
4-Make saving a habit
You can easily learn how to live on less. If you don’t start where you are right now – you for sure won’t start later. Make this a habit and you will be shocked at how well you do.
5-Make a habit of giving
Giving should be just as regular as saving. Giving provides for a feeling of being grateful for what you have. It also takes the focus off yourself and puts it on others. Also from our experience, when you become debt free this becomes one of the most fun categories in which to play!!! It’s a blessing to be a blessing to others, especially when they have no idea it was you!
This can be a hot topic that I may write about later. But there is nothing wrong with going out there and earning more money, as long as you keep your priorities in order. It’s ok to dream of a better life for you and your family as long as the money doesn’t own you, but if we are in debt than we can argue that money currently does own you. I’m amazed at the amount of people who have spent thousands to get a degree so they can make six figures but they knock down the guy who builds a business to make the same amount. Take the path that makes the most sense for your family and the goals and dreams you have for your life. I am obviously a fan of business ownership – I think it develops a certain level of guts to go out and build or create an industry and I also believe business ownership is a huge key to freedom in our country.
7-Get a financial education
If you don’t want to be owned by finances then get an education in financial literacy. I always recommend the Financial Fitness Program as a great place to start. There are other good programs out there but I believe the FFP offers the best full picture. You can check out more info here: https://financialfitnessinfo.com/default.aspx?61236932 It teaches excellent defense (getting out of debt) and offense (making more money) and equally as important the playing field (the bigger picture of finances). I also highly recommend after the FFP, start to dive into the Beyond Financial Fitness – which offers a complete picture of the ‘offense’ of personal finances, goes in depth on every asset category and their risk level from low to high.
Money isn’t everything but we do depend on it to live.
That is why I highly recommend being intentional about the way you handle your finances. Hope this helps you on your journey to a more complete financial picture.