PCC Scroll – Your Money Matters

The following is an article I wrote for the “Your Money Matters” section of the January 2017 issue of the Scroll. It is titled “What is Your High.”

Your Money Matters – What is Your High?

Our relationship with money can sometimes be unhealthy. Because of this, we don’t always use the resource as we should. For example, if you have experienced a scarcity or lack of money as a child or an adult, your viewpoint on money can sometimes come from the viewpoint of lack. This view impacts the way we deal with money and can cause people to hoard money or to impulsively spend when they do have money at their fingertips.

From an emotional level, money is something that can be used to get a quick high. This includes shopping sprees that we can’t afford. This includes the high we can get from buying a new car or flat-screen television that we can’t afford. This high is immediately followed by feelings of depression and guilt, which can lead to a vicious circle of highs and lows.

So why do we overspend financially?

Instant Gratification

We could be seeking instant gratification without any regard to the consequences. I never understood the shopper’s high until a few years ago. I went clothes shopping, and when I was finished, I felt extremely high. It was a good feeling. And it remains a good feeling if it is within budget. Otherwise the high from the immediate satisfaction comes crashing down when reality hits.

Dealing with Stress

Spending money could be a way to temporarily deal with stress, but after the high is over, it leads to another type of stress.

A big question is what role does money play in your life? It is important to control your emotions toward money and try to learn the triggers that cause you to overspend. Also, try to figure out what you are getting out of the ups and downs of emotion when it comes to money.

Maybe something to do is to not make purchases when you are emotionally distraught. Especially purchases that will end up costing you a lot money. For example, getting a new car should never be an emotional, impulse purchase.

As we move forward into the New Year, we need to challenge our viewpoints on money. It serves a purpose and that purpose is to take care of our needs. Let us change our perspective on money and view it from a healthier standpoint. Because let’s face it, money is important. Money is what pays your rent/mortgage, groceries, light bill, gas, etc.

Spending should be based on needs coupled with a few wants. Ask yourself why you are spending, especially if you don’t have the money to pay for the item.

I am all for treating ourselves. We work hard for our money, and we do want to experience the reward from working hard. The thing is that we must be careful that we do not spend it to get a quick high. And the bottom line is that if you can’t afford something, you should not spend the money. The emotional high you receive from spending will come crashing down. This is especially true if you are already in financial trouble.

Since we are beginning a New Year, it is the perfect time to take control of your money. If you are interested in talking to a financial planner, please see me. I began a relationship with one last year, and it has been a relationship that has me seeing money from a holistic view. Let’s make 2017 a year about making our relationship with money healthier.

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PCC Scroll – Your Money Matters

Here is an article on finance that I wrote for my church’s newsletter. The title was “Seeing Beyond the Now.”

 

When it comes to financial planning, especially medium- and long-term planning, it is very important to see beyond today’s needs and look toward the future. This can be difficult in a microwave and credit card, I want it now culture. But there is something to be said about delayed gratification.

So what are your financial goals? As you are working out your goals, it is helpful to think about the goals by how long it will take for you to realistically achieve them.

Short-term Goals

Short-term goals are items you can accomplish in a year or less. They can be things like paying off a low balance on a credit or saving for a trip.

Medium-term Goals

Medium-term goals are items you can achieve in between one to five years. Some examples are saving up for a down payment on a house, paying your car off early, or paying off a large balance of credit card debt.

Long-term Goals

Long-term goals are items that will take over five years to complete. This includes planning for your retirement, paying off your mortgage early, and saving for your children’s education fund.

It is the long-term planning that gives me the most concern, especially around retirement planning. It is abstract because I have no idea how long I will live. While I hope to be healthy, I am not sure how my health will hold up, so there is the potential for unplanned medical costs.

It could be very tempting to spend the money in the here and now and put my head in the sand, but it is important to think about retirement. Even starting to invest $50 a month when you are in your twenties will have a huge impact when you retire.

So what are some things we can forego in the here and now to put away for the future?

Ways to Save

  • Eating out. Eating out is expensive. When you do eat out, one way to save money is by having water to drink.
  • Bringing your breakfast and lunch to work with you could save you hundreds of dollars each month as an individual or couple.
  • When going out to dinner, look for Groupons that you can buy. Another option for dinner is to eat out earlier. Many restaurants have
  • early-bird specials where you can get three courses for cheap. Also, consider going to happy hour. Happy hour food is normally cheap and can be filling if you go to the right restaurants. There could be a drink minimum, which could be the price of a soda or fancy non-alcoholic drink.
  • Coffee. There is a coffee shop on every corner, but make your coffee at home. If you are going to a coffee shop Monday – Friday, it could easily cost you $100 a month individually.
  • Unplug from cable. Cable can run over $100 each month. Try Netflix or Hulu.
  • Do it yourself. It is nice getting manicures and pedicures. Save that experience for special occasions and save or invest that money.
  • Shop smarter. Buy things you use a lot in bulk, especially items that are non-perishable. Buy things that are in season, and don’t buy pre-cut/prepared foods. It is a time saver to buy pre-cut fruits and vegetables, but you will feel it in your wallet.

It is important to prioritize what is most important you. While you are doing your planning, you have to make sure your goals are achievable. Otherwise it will lead to discouragement on your end. It is better to over plan financially than under.

 

Your Money Matters – Being Creative in Your Giving

The Your Money Matters section  from Volume XV Issue II of the PCC Scroll. The issue continued with the calendar year’s overarching theme of “Walking Out Your Purpose” with a theme of “Being a Good Steward.”

I realized the article I wrote last quarter is actually quite perfect for this quarter, so I decided to repurpose it! As I mentioned last quarter, giving is something we can all do. Many people jump to finances when thinking about giving, and we can all give financially regardless of how little or much we make. There are also plenty of ways to give beyond finances and plenty of people in need in our community. We can be creative in how we give to the causes or needs we feel the most passionate about.

Homeless
For example, if you feel a calling to help the homeless in our community, there are numerous ways you could help. The help could be done by providing packed breakfasts or lunches once a month in a park. The help could be done by making hygiene kits to give out. The help could also be done by volunteering in a soup kitchen once a week or month. The help could be done by purchasing scarf, glove, and hat sets and taking them to a shelter. Bigger items like sleeping bags, coats, and blankets are also needed during the cold months. You could assist a shelter in doing a drive for these much needed items.

Food Banks
Another way to give to those in need is to give to food banks or bring food to PCC for our ongoing food drive. We joke about “government” cheese, peanut butter, beans, etc., but I can remember eating those things growing up, and they came from a food bank model. I can remember my aunt making macaroni and cheese with government cheese and Top Ramen (I am smiling at this memory). Giving to food banks could be as simple as deciding you are going to spend $5 every week or month to buy canned food, beans, rice, or baby food to help those in need. Individually, it might not seem like a lot, but collectively that is a lot of food! Food banks are especially in need during the summer months and school breaks when children are at home and not getting the free or reduced breakfast and/or lunch they would have normally gotten at school.

Children
Maybe you have a passion for children. You could volunteer your time to read to kids in the hospital. If time is an issue, you could buy books for kids who are in the hospital. You could also donate supplies or books to a school or volunteer your time there in some capacity. If you have children, perhaps you could donate clothes, toys, and books your kids have outgrown to a program that serves children in need.

Services
And remember, you can also donate your services. If you are a lawyer, doctor, accountant, life coach, etc. your specialty can be donated to help people who are in need who can’t afford the service. You could also look into donating your talents to nonprofit groups who may not have the staff to do presentations, graphics, etc.

Clothes
It could also be as simple as cleaning out your closet. Perhaps you have clothes that can be donated to Dress for Success.

We may not be millionaires, but I think we all have a lot to give. I would encourage you to make 2016 a year about using your gifts, talents, and resources to serve and give to those in need.

Your Money Matters

Financial Section – Latest Scroll

In a recent Sunday service, Minister Jo Ann warned us to be ready for the storm. This readiness included being ready in the natural and the spiritual areas of our lives. When our storms come, will we be prepared to stand against whatever hits us? This readiness takes us beyond the day-to-day struggles and issues. It gets down to preparation and making sure our storehouses are full in all of the areas of our lives, including our finances. Saying that it is important to be in a solid place financially is an understatement.

For example, what would happen if you or your spouse lost your job? The event in itself would be stressful. How much more stressful would it be if you were not prepared for the unexpected. But how great would it be if you were prepared financially? What if you had an emergency fund and savings account in place? What if you were out of debt and did not have that hanging over your head? It would certainly lessen the blow. Not that we would be putting our trust in those things because God is a provider. But because God gave us the foresight to be prepared for the storm, and we were ready.

So what is financial health? It is simply the state of your financial situation. There are different dimensions to your financial health like savings, emergency fund, retirement fund, etc. The foundation to good financial health is learning to not spend all that you make. It is learning to budget (and keep your budget) and have the discipline to put money away for emergencies, which will happen, and your retirement.

Having overall balance in your finances is the key to financial health. There are many areas to juggle. Some experts recommend that about half of your income go toward fixed expenses like rent and utilities, 20 percent for financial goals like savings, and 30 percent for day-to-day expenses like groceries and gas. Hopefully as time progresses, these guidelines will be able to be adhered to.

Each of our financial situations are different. A single person with no children would have a different financial objective than parents with three children to put through higher education. And an empty nester would have different financial objectives than both of the former. You have to develop goals that work for your situation and be prepared when the unexpected happens.

There are certain objectives that are true for all. Having a budget that shows you where your income is going is the road map to success. Oftentimes, we may find that we are spending more money on discretionary items (eating out, beauty treatments, coffee, etc.) than we may have realized. It can help us divert that money toward long-term goals like savings, emergency funds, and retirement investments.

In terms of a financial-inventory checkup:

  • Do you have a budget and are you keeping it? Know where your money is going!
  • Are you out of debt or striving to be there? Cash is king. Save for what you want to buy.
  • Do you know your credit score? This can be a good gauge of your financial health.
  • Do you have a retirement saving? Some experts recommend investing 15% of your salary.
  • Do you have an emergency fund? Some experts recommend six to twelve months of your monthly budget. Having this in place can keep you out of debt when emergencies happen.
  • What is your net worth? As you see this number move toward the positive and grow, it will help you know that you are heading toward better financial health.

Strive for good financial health. It will help you be better prepared for the unexpected.

PCC Scroll Volume XIV Issue II Your Money Matters

Hopefully, over the course of the last newsletters, you have done several things. One, you have assessed where you are financially. Two, you have made financial goals to get to where you want to be. The next step is creating a financial plan to get there.

As I have mentioned in the past, finances are hard to juggle. It is hard to balance month-to-month expenses with financial goals like paying off debt, building an emergency fund, planning for retirement, and saving for college tuition while actually getting to enjoy the fruits of your labor.

It’s good to create a financial plan to help you achieve the goals you created. Your plan can help you determine exactly where you are going. You have goals and aspirations, and your plan will keep you focused. You can make future financial decisions based on whether they help or deter you from your financial goals. So how do you create a financial plan?

Step one is figuring out where you are going.

The goals you created are the driving force behind your financial plan. Goals could be anything from getting out of debt, building an emergency fund, starting a college fund, or investing toward retirement. Your goals will probably be a mixture of short-term (within one year), mid-term (between two to five years), and long-term (five or more years) goals. Remember to be realist and specific. For example, if you want to get out of debt, consider the amount of debt, the interest rates, and how much you can dedicate toward paying debt off without incurring more. Then, from there, you can determine your get out of debt date goal.

Step two is building milestones.

Remember Rome was not built in a day, and your emergency fund will not appear overnight (unless you receive a sudden financial windfall). Creating milestones is done by creating small wins along your financial journey that become key milestones in your financial journey. Let’s return to the getting out of debt example.

Last issue, we talked about the Dave Ramsey method of using the snowball effect. You pay off the smallest amount (by paying more than the minimum payment) first regardless of the interest rates of your debt (just making the minimum payment on all other bills). The quick win gives you momentum, motivation, and a sense of empowerment. Then you move on to the next smallest and so on until all debt is paid off.

So let’s say you have three credit cards, and your goal is to be out of debt in four years. Your first milestone goal could be paying the credit card with the smallest amount within one year. Your next milestone could be paying off the second smallest credit card within two years and so on.

Step three is setting goals toward your plan.

For this example, let’s talk more about creating an emergency fund. You should determine how much you want to save and when you want to reach the goal by. This will help you determine how much you should set aside each month. You should factor in items like bonuses and income tax refunds. In some cases, people have two months with an “extra” pay period each year. If your monthly budget is based on two pay periods, why not direct that third pay period check toward your emergency fund?

If you find that the goal might not be achievable in your timeline, then change the date you want to achieve the goal by. Other options could be getting a part-time job or reducing your spending in other places so you can save more.

There is a saying that, “When you fail to plan, you plan to fail.” This saying is true in life, especially when it comes to finances. Create your financial plan, set your milestones, and celebrate your achievements. Your first step toward financial health starts today!

Your Money Matters—Where Do You Want to Be?

The financial section:

The beginning of the New Year is a great time to chart new financial goals. Finances are a hard area. It’s hard to balance month-to-month obligations with paying off debt, building an emergency fund, long-term retirement planning, and saving for college tuition while actually getting to enjoy the fruits of your labor with family vacations and the occasional splurge. It seems like an impossible feat!

I remember walking to my bus stop with a coworker many years ago. We were talking about savings, and she mentioned the amount she likes to keep in her savings account at one time. My eyes got big, and at that time, it seemed like such a lot of money that would be impossible to save.

However, it did inspire me to begin getting my own financial house in order. Having that goal was an important first step, and I began to visualize how I wanted my financial house to look. I discovered Dave Ramsey, who has Seven Steps to a journey to financial peace. To me, his steps are very practical, and they are steps I feel like I can get through if I focus.

Step One: Establish an emergency fund of $1,000

This fund is for the unexpected events of life like needing new tires or a new car battery. These events will happen. It is just a matter of when. The fund will help you to not add to any debt when they do happen.

Step Two: Pay off debt

This includes listing all of your debt but your mortgage. His method is the snowball effect where you pay off the smallest amount (by paying more than the minimum payment) first regardless of the interest rates of your debt (just making the minimum payment on all other bills). The quick win gives you momentum. Then you move on to the next smallest and so on until all debt is paid off.

Step Three: Have three to six months of expenses in savings

This money is for emergencies and should be kept liquid in a money-market account. Then when the unexpected happens, you are prepared.

Step Four: Invest 15% of household income into Roth IRAS and other tax-advantaged retirement accounts.

In this step, your mortgage is your only debt. You are able to begin saving toward your retirement.

Step Five: Create a college fund for your kids

Look into things like Education Savings Accounts and 529 Plans.

Step Six: Pay off your mortgage

If you have any extra money, put that toward paying your mortgage off early.

Step Seven: Build wealth and give

With this step, you can think about leaving an inheritance for your kids as well as give liberally to the many charitable organizations in abundance.

None of the steps preclude the giving of your tithes and offering or giving to charity. At Step Seven, you can just give more abundantly.

The process can be a little painful. As I go through the steps, it helps improve my financial health. Like any process, you have to adjust it to fit your needs and reality. For example for me, being able to go on vacations is important. Yes; I could use the money toward investing in my retirement fund or paying off my mortgage, but living in the here and now is also important.

I have a plan and a vision to be financially healthy.