Change is Strange

So what if you live beyond your means?  If you don’t pay your bills and it’s coming back to haunt you, you may want to look at your options. If your debt affects your life negatively you may want to brainstorm solutions. After completing the Master Plan you can assess whether or not you are living beyond your means. Your total income minus your expenses equates what you have left at the end of the month, after all the bills are paid. Don’t forget, pay your bills in full on time! When you divide your total debt and by the magic number (income – expenses), you will find out how many months it will take to pay off your debt. Sometimes this can be a yikes!  However this yikes can also motivate a family to make small changes to lower this number considerably and improve your overall quality of life.

What changes? Well there a number of aspects in which change can occur, 3 of which are; reduce expenses, minimize waste and reduce fees.

Reduce Expenses

Look at your master plan and determine what expenses can get shaved down a little. Do you need to spend $250 on groceries each week? Can you shop using a flyer and make an effort to buy what is on sale or in season? We can become a little spoiled getting what we want, when we want it. Making that effort can shave off $25 a week, that’s $100 a month already! Next…been with the same insurer and never had any other quotes? What about your satellite bundle? Is that 19.99 promo that got you to switch providers now over? Plus movies you purchased, plus additional receivers…do you really need 5 tv’s teaching your children who knows what?  Remember bundles of any sort lock you into a contract limiting your flexibility. Involving other family members with changes helps to avoid backlash.

Minimize Waste

Do you turn things off when not in use. In Ontario our hydro just went up again! If you are on time of use meter can you do laundry on the weekend and after 7 when it is half price?  Do you grocery shop once a week and eat what is in the fridge?  Eat what needs to be eaten before the food that won’t go bad (frozen and canned) to avoid throwing out 1/3 of your fresh food by the next week. What about making things last? Between the toilet paper, toothpaste and the shampoo I sometimes thought it was a race to see who could use them up first lol. Educate, don’t berate. Kids don’t know and when we teach them kindly they listen because they feel like an important part of the team.

Reduce Fees

Are you paying fees for using other ATM machines? Do you have multiple bank accounts with fees on each and just transferring money from one to the next to pay bills? Interest on a credit card, overdraft fees, interest and monthly bank fees are why bank profits are in the billions each quarter. That’s your hard earned money being handed over. Is that why you work so hard, for their benefit?

Often when I sit with people we can find $200-300 to carve out of their monthly budget and lower their debt repayment time period to half! It takes a bit of brainstorming but you can do it! Remember let your goals guide your efforts. Cutting back on something isn’t that hard if there is a reward! Reward the whole family and they will be more likely to play the game 😉

Changes don’t happen overnight however…one change can lead to two, and two can lead to three…Focusing on what we CAN change is the secret to success. It is healthy for the earth, healthy for your finances and healthy for us all!

Let us Start the Forward Movement!

Money Moving Forward is a concept I encourage households to work towards. It’s a process, not a snap of the fingers, but certainly doable. So many people live pay check to pay check. The other day some gent was telling his wife that he wasn’t going to start saving since he was paying 17% interest on a credit card. I thought that once too and I realized it doesn’t work. You will just not save then. My question to him would be, so what happens when life happens and you need $1000 for a car repair?  You put it on your credit card right? Guess what? The credit card balance will never go away. This is debt. Therefore you will never get that forward motion of your money in place. And without your money moving forward you pay interest, fees, spend more time and feel stress, and you allow money to dictate your life as opposed to the other way around.

Using credit at all, whether it be a line of credit (which is a nicer way to say second mortgage), credit card or even a relative, is not beneficial to your financial snapshot. It’s too easy and promotes you to live beyond your means. I say this because I’ve been there, done that! I have had many life lessons about finances and counselled hundreds of households.  I have seen what works and also what doesn’t. I am passionate and to the point because the PRICE people pay is not only in dollars but in relationships. 😦    

This is not a parenting blog however I am a parent. My children have been my greatest motivator for me working from home, seeking out marriage counselling, and creating financial security for my family. The relationships that are most affected by money issues are the ones that matter most to us…..so please hear me out. By the end of the day so many adults look forward to bed time because the stress of money, their job, relationships, their health, has sucked all of their ability to give any more. SO many greet their children’s requests with sighs, snarls or barks while they spend their valuable time on the phone, on facebook or watching reality tv. When your child comes into the room does your face light up with pride 90% of the time? If not, is this how you want your child to feel every day? It is not healthy in any way for anyone. As the adult, the onus is on you to recognize it and work towards changing it. Why not start trying today 🙂 I know from experience it is doable and worth it! My children have me as a loving Mom 90% of the time. Helping them with things, giving them a hug, listening to the stories of their day or snuggling with them at bed time. They are my priority because giving them this positive attention is the foundation of healthy self esteem and what will make them capable adults who have the capacity to cope when their life happens. (I am not a poster MOM but I will give myself credit to illustrate the implications of money stress)

OK back to money… When you have a goal of savings and debt repayment on your Master Plan, it’s like combining business with pleasure. You accomplish two important things. IMAGINE, you have a credit card of $1000 and a savings account of $5,000 and your bills are being paid in full, on time, every week. How does this feel to you? I know… how much, when, how much, where….the complexities of those questions reflect the overly complex world we are bombarded with daily. Simplify. Let your Master Plan guide you about how much, the what and where. Prioritize based on the smallest amount, largest amount, most dear consequence or highest interest. It’s your call. Once you are set up you have created the path to follow wherever you choose 🙂

Are you sure that you know the difference between debts and expenses? Debts include overdue expenses and monthly expenses are current. For example if you have a bill of $500 that is past due to hydro and your monthly bill is $150 then $500 is debt and $150 is monthly expense. Double check your Master Plan because this is an integral part of creating that forward motion.

Life is about living, not only working, and when we find the balance between these two things life can be so grand 🙂

Have a great weekend.

Cheers!

Money Angel

Financial Empowerment

It’s amazing how joyful days can be, filled with the simple things of life like nature and family and interesting weather. If you can get ahead of your finances you have a better chance of enjoying the simple pleasures of life! Trust me, aiming for no money stress is attainable.

Every household needs a Master and a Plan. Without either you will be financially where you are today, 5 years from now.  I would like to continue having no money stress so my efforts can be put towards my health, family and living life to the fullest. Am I wealthy? No. Did I receive an inheritance? Not a dime. Have I ever earned more than $40K a year? No to that one too. However I have no money stress and have been successful in attaining my financial goals to date, you can too!

Now that your Master Plan is detailed with your monthly expenses we need to include your income. On the right hand side of the same page, write down the monthly household income based on where or who it originates. Include all monthly income such as child tax benefit, cash from a side job, or any other funds you have coming in monthly. I do not include income tax returns or holiday pay or any other income that is not monthly. Those incomes are important but are not to be included at this time.

Total these amounts. Now you can subtract the amount of your monthly expenses from your monthly income. This is the magic number. This is how much your current lifestyle costs you each month. Do you know how many people have no idea what this number looks like? Too many, which is why this is has become my mission in life.

This number shows you where you sit once all your monthly expenses are paid. People have 2 reactions; either they don’t believe they have that much left and have no idea where it goes every month or they confirm how stressed out they have been feeling.

What is it for you? Either one, the process is not done yet… now the best part!

You now have two columns on one page, expenses down the left and income down the right. Now under the income section, half way down the page add the title GOALS. This is where we start to think of the things we want to accomplish, purchase, experience…those things that make your smile widen.

Do you have any debts you want to pay off?  Write each down separately with the exact totals for each. If you want to go out west to see your sister, write it down. If you want to buy a new car, write it down. But make sure you also write the amount of money it will cost. (please don’t guess here, research)

So that is the Master Plan! Look at it. Isn’t it beautiful! This document will be the changing point of your life. Have you heard that information is power? Well this is power baby! Empowerment actually. For all of you who need financial empowerment I am here for you!

Cheers!

Janet Ries, RSSW

Mobile Money Counsellor

Get ahead of your money

A life without love is like a year without summer. Swedish Proverb

The first long weekend is now a memory and although the weather here in Port Perry, Ontario, Canada is less than desirable, we are moving into our favourite time of year, summer! With that comes bbq’s, the cottage/trailer, swimming, boating, summer camps …. bring it on! But what about the cost of doing all of these things. Is it in our budget? What budget? LOL

In the workshops I facilitate, I always ask students to write down 3 goals they want to achieve from my course. The most common goal is to learn how to create a budget…the perfect place for us to start!

The key to creating your budget is the measurement you use. The best measurement to use is monthly. Remember in school, we were taught you can’t compare apples to oranges? Most expenses are monthly and those that are not can be easily converted. So write down all your monthly expenses; day of the month it’s due, expense/bill name and amount (including cents). Do not estimate. You don’t want any leeway. Then add it all up to find out what your lifestyle costs each month. Voila! This monthly snapshot of your expenses is a big part of your plan.

A budget is no doubt, the most essential tool for effective money management. Therefore I have upgraded the name to …the Master Plan. Hear the echo? Sounds much more important right? It is THAT important. Doing a Master Plan allows you to have an accurate and informative snapshot of your finances, at any time. However it’s not finished yet. To avoid information overload we will finish the Master Plan over my next 2 blog posts. If you’re eager let me know and I’ll write sooner than later. I have the time 🙂

…Because life happens. And as it does, the last thing we need is money stress sucking the life out of us.

Cheers from Janet Ries, RSSW