Personal Financial Counselors

Normal is … too much month left at the end of the money, broke, no savings, credit card debt, making minimum payments, can't cover an emergency, no retirement fund, no college fund, student loan debt, stress, money fights, anxiety, worry, relationship pressures, etc…, just like the Jones Family next door.

The statistics are terrible! Yet perception is often, "I'm OK. I'm fine. I'm good with money."

You work too hard to settle for "normal."

Keep doing the same things you've been doing, you'll get the same things you've got.

Do something different to get something different! Change can be hard, but worth it!

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Part 1 - A Seven Part Spending Plan – Gain Control of Your Money

Not a Budget! Budgets don't work!

The Spending Plan must be IN WRITING!!!

Don't carry all that information and stress in your head. It becomes more "real" and "do-able"… a goal when it is written down. Digital apps and software help make the whole process easier.

1 Net Income - Be aware of gross pay and all the taxes, benefits, and deductions, but make it easy - just set the plan in place based on net pay. Automate with direct deposit.

2 Minus Regular At Home Expenses - These are bills that everyone has: rent or mortgage, auto insurance, phone bill, utilities, car payment, etc… Automate these bills as much as possible; use calendar reminders, auto-pay, bill pay, average pay, etc...

3 Minus Reserve Fund expenses - save ahead every month for irregular and future expenses you know are going to happen. Christmas fund, vacation, kids school start-up expenses, auto and home maintenance, tires, property taxes & insurance (escrow account), pet expenses, etc...

4 Minus Outside Home Expenses - groceries, restaurants, gas, clothing, etc... and fun money. Fun must be in the plan! A plan that cuts too deeply, or is too controlling and restrictive will not work – it is not sustainable.

Consider Cash Envelopes vs. plastic cards; they are not the same! Cash is real. It provides pain feedback, gives negotiating power, and immediate control of spending.

Cards are too easy and convenient. Average spending is +20%. with cards If you use cards, they must be carefully tracked and controlled. It is easy to over-spend with cards.

5 Minus Minimum Debt Payments - we'll get to paying off debt later, but first cover the minimums to avoid penalties, interest, collections calls, credit score hits, etc...

6 Minus Giving - giving changes emotions, focus, and attitude. Do you care about something bigger than you… a Church, a homeless shelter, a veteran's cause, a mentoring program, homeless programs, a women's shelter, the local food bank, a political candidate or cause, "Save the _____!", a school, your kid's teachers, some kid's activity, etc… etc... or IS IT ALL ABOUT YOU?

Even a small amount given changes us, and dramatically helps the cause we support. What do you want your kids to see you doing?

7 Equals Gap Money - Extra money that can be applied to an Action Plan. There must be a positive gap – the gap between your income and your expenses. Negative Gap (additional debt) is not sustainable!

Only the Beginning … A Spending plan is the first step on the path to Financial Well-Being. Maximize the Gap in Part 2, and Become Really Good with Money in Part 3 of the 7 - 3 - 7 Spending Plan Series. Over time, this "recipe" will change your financial life.

The most important part of any journey - the first step… and the first step is the most difficult. You must commit to start. You must commit to doing something different. It won't be easy; change never is. There will be obstacles and difficulties; adapt and overcome! Trust me, the results of change will be worth far more than the pain of change!

Do you want to get well? ...or are you OK with "normal"?

You must commit to start… and start now!

You can do this!

The Personal Financial Counselor is here to provide all information and support you need.

Maximizing the Gap will speed progress toward your goals, and get you farther down the path toward Financial Well-Being.

1 Can You Increase Income? Take advantage of education and training opportunities, seek additional responsibilities, take extra hours, work hard to earn a promotion, part time work, etc… sell some "stuff" you don't need (especially if you're paying for storage). A garage sale is often a good first step.

A short term sacrifice and commitment can give large results as you start, but do not expect for these steps to be sustainable over the long term.

Long term steps usually take a large commitment of time, energy, and often an investment of money – but the results tend to pay dividends for a lifetime.

2 Can You Decrease Expenses? Carefully evaluate needs vs. wants. Set priorities. Are you willing to sacrifice for a short time to meet larger goals in the future? How much? Buy experiences instead of more stuff. DO NOT cut too deeply, and be very careful about cutting an expense category to zero - it may cause too much pain. Your actions must be sustainable.

3 You Must Track & Control "Leakage" "Where did it go?" Leakage is money that cannot be accounted for. The money is just gone, and no one knows where it went. Maybe it went to extra spending that was not a priority or part of your plan: restaurants and coffee, for example. Find money that is spent outside of, or over budget. Cash envelopes help to control leakage. Apps and software can help. Consider You Need a Budget (what a great name!)
I highly recommend this software.

If you are still with me, You are making great progress … recognize and celebrate accomplishments! ...but there is still so much more to do! The goal is NOT to make, find, and squeeze every penny, but to find "enough" to maximize progress in Part 3 of George's 7-3-7 Spending Plan. "Become Really Good with Money" will happen by applying the Gap Money in the Action Plan in Part 3 over time.

The Personal Financial Counselor is here to help provide you with unbiased information... and, should you choose, referrals to other trusted professionals who provide additional personal financial products and services.

The following are some topics to consider following up on:

Debt reduction

Relationships & money

Credit reports and credit scores

Handling collections issues

Avoiding bankruptcy

Major purchases

Identity theft protection

Analyzing loans

Investing for retirement

Wills & estate planning

Real estate and mortgages

Negotiating for purchases

Setting and achieving goals

Including all types of insurance:

Medical

Life

Auto

Home

Short & Long Term Disability

Major purchases

College funding

Kids and finances

Increasing income

Resume / job search

Etc… Etc…

Seven Steps to Apply the Gap Money - Becoming Really Good with Money

1 Starter Emergency Fund - Build a minimum of $1K and up to one month expenses in savings. Squeeze the Spending Plan. Sell some "stuff" you don't need. Having this fund in place lowers stress, avoids most emergencies, and allows you to stop using cards. Prioritize this step- make it happen fast (within a month is best). Celebrate your progress!

2 Debt Snowball - List debts, smallest to largest by balance. Put all the Gap Money on smallest debt #1 until it is paid. Then payment #1 and Gap Money go to debt #2 until it is paid… Then payment #1 and #2, and Gap Money on debt #3…, etc… Destroy the cards, close the accounts, and don't look back. If an emergency happens, stop the Debt Snowball, and rebuild the Starter Emergency Fund. Celebrate becoming DEBT FREE!!!

3 Full Emergency Fund - Grow emergency fund to 3 to 6 months expenses. Three to six - depending on your circumstances, stability of income source(s), and comfort level. Ladies, in particular, tend to react very positively to the feelings of safety and security with the Emergency Fund in place. Now, even more major life events are not a source of stress; just pay the expense to cover the situation… and move on. Re-build the fund as quickly as possible. Let's talk about where to put this money. Celebrate your progress!

4 Fund Retirement - Invest 10% to 15% of income in diverse, growth Mutual Funds. Ask for training on the time value of money. tax advantages, Roth vs Traditional investments, dollar cost averaging, risk assessment and the potential for losses, the Rule of 72, vesting schedules, employer matching moneys, 401(k), IRA, TSP, BRS, diversification, stocks vs mutual funds, etc...

Find a great Certified Financial Planner, and be sure they communicate clearly, educate and inform, and explain options for you to choose within your goals and risk tolerance.

***Sorry kids, #4 happens before #5. First responders know you must help yourself first, before you help others. If you don't care for yourself first, you become a problem later.

5 Fund Kids Education – Consider 529 plans. Do not "give" kids their entire education, but help them if they work for it. Kids who are given too much generally do not have positive outcomes. Consider offering kids matching monies for their contribution to their own education. Take advantage of advanced high school courses offering college credits, internship experiences, vocational / trade schools, community college transfer programs, using employer education benefits, etc…

There is NO rule in the parenting handbook requiring parents to provide college - it is not an entitlement.

"College is not for everyone… but education is, and for a lifetime."

6 Pay off Home – No mortgage and no interest is better than a mortgage tax deduction. A deduction is not the same as a credit. Let's look at the math on this.

7 Live Beyond Normal - Build wealth – live, and give far beyond normal. Almost anything you want can be enjoyed... but not everything you may want. Your income is still not an unlimited resource. Enjoy Financial Well-Being!