123. Tutorial on a (Written) Monthly Cash Flow Plan

This Monthly Cash Flow Plan is going to be a bit more involved than the Quick-Start Budget. But totally worth your time! This is where we get really serious about our budget, money, saving, cutting expenses, and changing our family tree! 

For clarification in the tutorial example I'm assuming I'm making this budget for December 2014 and including Christmas gifts in my budget. 

Here's the direct link to the video: http://youtu.be/PHyEG3B-SIc

Print off the Monthly Cash Flow Plan here and follow the video tutorial: http://www.daveramsey.com/tools/budget-forms/

Dave Ramsey says:

“Budgeting means spending every dollar on paper, on purpose BEFORE the month begins.”

“Having a plan with money doesn’t just help you right now, it also gives you a vision and hope for the end goal.”

“Budgeting for the first time can be scary, but you MUST face your fear.”

“Doing a budget means learning an ancient and powerful word: NO!”

“While getting out of debt, you’ll need to scale back on gifts or outings with family. Have the courage to be real about why.”

Are these tutorials helping you? Please like the video or post a comment so I can get a feel for how many people still are needing help with a budget.

#TotalMoneyMakeover #TMMChapterFour #Budget #Budgeting #MonthlyCashFlowPlan #FinancialFreedom #DaveRamsey

Find the group on Facebook! Dave Ramsey - Financial Freedom

-------------------------------------------------------

Follow me on Twitter! @JWKEagle

Check out my pins on Pinterest! http://www.pinterest.com/jonathanwkey/ 

‪
Also look for the blog's website online with the hashtag:
#‎eaglesoaringhigher

Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.  

122. Tutorial "Quick-Start Budget" - YouTube

Tutorial on how to create a "Quick-Start Budget". Hope this helps! Leave a comment, like, and share!

To find the form go to: http://www.daveramsey.com/tools/budget-forms/

“Budgeting for the first time can be scary, but you MUST face your fear.”

“Doing a budget means learning an ancient and powerful word: NO!”

#TMMChapterFour #Budget #Budgeting #MonthlyCashFlowPlan #FinancialFreedom #DaveRamsey #TotalMoneyMakeover #Eaglesoaringhigher

-------------------------------------------------------

Follow me on Twitter! @JWKEagle

Check out my pins on Pinterest! http://www.pinterest.com/jonathanwkey/ 

‪
Also look for the blog's website online with the hashtag:
#‎eaglesoaringhigher

Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.  

119. Re-Thinking Finances - Part 2 (Total Money Makeover)

Time to continue re-evaluating some things based on what I’ve learned from “The Total Money Makeover” by Dave Ramsey. Be sure to check out part 1 too. 

Here’s part 2 of what I call “Rethinking Finances”:

D. Cosigning Loans

It is said that you are helping by cosigning a loan for a friend or family member. While it may be helpful for people trying to establish credit, be ready to repay that loan. The credit union, bank, or lending financial institution wants a cosigner for a reason. That reason being that statistically speaking the lender doesn’t expect the friend or family member to pay. If the friend or family member doesn’t pay on their loan it will seriously negatively affect the cosigner’s credit as well. And if the friend or family member doesn’t pay the bank will come after the cosigner! (TMM, Ch. 3)

“We continue to believe the myth that a loan to a loved one is a blessing.” – Dave Ramsey

“This sums up cosigning; broken hearts and broken wallets.” – Dave Ramsey

Here’s’ some passages in the Bible that speak to this issue of lending money to family.

One who has no sense shakes hands in pledge and puts up security for a neighbor.
Prov. 17:18

The rich rules over the poor, and the borrower becomes the lender’s slave.
Prov. 22:7

Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay your very bed will be snatched from under you.
Prov. 22:26-7

E. Cash Advance, Rent-to-Own, & Payday loans

Cash advance, lay away, payday loans, rent-to-own, title companies, and pawn stores help lower-income people get ahead. Absolutely false! These businesses are designed to take advantage of lower-income people in "helping" them buy or spend what they can't afford. The only people who make money are the salesmen, managers, repo men, and owners. (TMM, Ch. 3)

“It is human nature to want it and want it now; it is also a sign of immaturity.” – Dave Ramsey

Towards the end of my nearly decade-long career in the retail industry, the company I worked for began a partnership with a rent-to-own company. With our company customers could expect to pay 21 to 29% interest. If the customer didn’t qualify for our store credit they were directed towards this rent-to-own “alternative” where they could pay 3-4 times the value of the product. A $500 Plasma TV through our company would’ve cost anywhere from $750 to $1000. But a $500 Plasma TV might end up costing the customer $2000 or more with the rent-to-own company. 

“These types of businesses are legalized loan-sharking.” – Dave Ramsey

“We buy things we don’t need with money we don’t have in order to impress people we don’t like.” – Dave Ramsey



How have you been rethinking finances recently? Have you read "The Total Money Makeover"? 

-------------------------------------------------------

Follow me on Twitter! @JWKEagle

Check out my pins on Pinterest! http://www.pinterest.com/jonathanwkey/ 

‪
Also look for the blog's website online:
#‎eaglesoaringhigher

Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.  

118. Re-Thinking Finances - Part 1 (Total Money Makeover)

Time to re-evaluate some things based on what I’ve learned from “The Total Money Makeover” by Dave Ramsey. Here’s part 1 of what I call “Rethinking Finances”:

A. Debt Consolidation

Debt consolidation is the answer to your financial problems right? It will save you on interest and you'll have a smaller payment. But hold on a minute. The truth is by consolidating debt you are typically just extended the terms of the payments. (TMM, Ch. 2)

In other words, for example instead of paying $500 a month for 20 years ($500 x 12 months x 20 years = $120,000 in total payments) you are paying $400 a month for 30 years ($400 x 12 months x 30 years = $144,000 in total payments). Sure you lowered the monthly payment but you are paying an additional 24k in total payments...

B. Playing the Lottery

It is said playing the lottery will make you rich right? People do it every day expecting the "big payout" where they can leave their job and live the "good life" when they win. Some of my co-workers do this very thing. And they're fairly educated and financially savvy which is a little frustrating. The lottery is a tax on the poor and those who can't do basic math. 

Let's say for example that winning the lottery is one in 175 million. If I recall correctly you have about a good a chance of winning the lottery as getting struck by lightening twice in the same exact place. Very improbable.  Gambling in general offers false hope while taking people's money paycheck to paycheck. Getting rich quick doesn't work. What people need is a "Total Money Makeover". (TMM, Ch. 3)

See this article if you're a nerd like me and want to look at the numbers in more detail. 

C. Loaning Money to Friends or Family

It is said that if you loan money to friend or relatives you are helping them right? Often when loaning money to a friend or relative the relationship will be strained or even destroyed. The relationship becomes that of a master (lender) and a servant (borrower). The way I see it is best just to offer a friend or family member a gift. If they pay you back then great. If the debt or gift is not repaid there are no hard feelings. 

Also keep in mind that with friends or relatives that are constantly making poor financial choices may in fact be detrimental or enabling to them. Carefully consider if a gift will help or hinder the person by encouraging bad behavior.  (TMM, Ch. 3)


Be sure to check out part 2 here!

How have you been rethinking finances recently? Have you read "The Total Money Makeover"? 

-------------------------------------------------------

Follow me on Twitter! @JWKEagle

Check out my pins on Pinterest! http://www.pinterest.com/jonathanwkey/ 

‪
Also look for the blog's website online:
#‎eaglesoaringhigher

Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.   

117. Do you believe that car payments are a way of life?

Do you believe that car payments are a way of life?

We have been free of car payments since 2011. We bought a 2003 Toyota Sienna last year (2013). Paid $8k for it cash. We were very happy to let someone else pay for the depreciation on our family van. We hope it last till 200k to 250k miles! Still, we are saving a little each month towards the purchase of a new vehicle.

Here's what Dave says about car payments... in Total Money Makeover chapter 3:

“Myth: Car payments are a way of life; you’ll always have one.

Truth: Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire.

Taking on a car payment is one of the dumbest things people do to destroy their chances of building wealth. The car payment is most folks’ largest payment except for their home mortgage, so it steals more money from the {family} income than virtually anything else.

A new $28,000 car will lose about $17,000 of value in the first 4 years you own it. That is almost $100 per week in lost value. To understand what I'm talking about open your window on your way to work once a week and throw out a $100 bill. The average millionaire drives a 2 year old car with no payments. He or she simply bought it.”


From my book review of The Millionaire Next Door:

3. They believe that financial independence is more important that displaying high social status. The authors point out on multiple occasions that millionaires don’t have fancy cars. Millionaires drive the same vehicle for years.

============

“There is an inverse relationship between the time spent purchasing luxury items such as cars and clothes and the time spent planning one’s financial future”

============


Of interest…

*Over 80% of millionaires purchase their vehicle while the rest lease.

*Only 23.5% of millionaires interviewed own a brand new car.
*A typical millionaire only spends on average $24,800 for his or her most recent car purchase. *About half of the millionaires surveyed never spent more than $29,00 for a single vehicle. 

*Most American millionaires like to buy American-made vehicles such as Fords, Chryslers, Chevrolets, and Cadillac’s.

-------------------------------------------------------

Follow me on Twitter! @JWKEagle

Check out my pins on Pinterest! http://www.pinterest.com/jonathanwkey/ 

‪
Also look for the blog's website online:
#‎eaglesoaringhigher

Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.  

111. Eight Books on Personal Finance and Investing

Check out these books for free from your local library. If unavailable get them at www.half.com or Half Priced Books:

1. “The Total Money Makeover” (2003) by Dave Ramsey

Dave Ramsey is a personal finance g. Ramsey dispels many money myths. He also attacks many of the illusions and deception of the American dream which encourages massive amounts of debt and overspending. Dave says “Don’t even consider keeping up with the Joneses. They’re broke!” The book’s motto is “If you will live like no one else, later you can live like no one else.” At the core of Dave’s book are the 7 baby steps to financial freedom. Dave’s assertion is that by following these 7 steps in order readers can gradually progress from debt to wealth building. Critics claim Dave’s advice are simplistic. But the 7 baby steps work because they are simple and because people can get tangible results. Of interest you can also listen to the book for free on Youtube here.

2. "Investing for Dummies" (fourth edition 2014) by Eric Tyson 

The title isn’t too promising I know. But honestly Investing for Dummies is a great little book for beginners. I would skim through this one just to get a feel for the different categories and definitions. At least that's what I've done. I’d then move onto Malkiel’s book. Unfortunately, I couldn’t find a free pdf of this book.

3. "A Random Walk Down Wall Street" (2012) by Burton Malkiel 

Simply put, Malkiel takes some very complicated information and makes it so anyone can read and even more importantly understand it. Malkiel holds to a buy and hold approach to investing. A long-term approach to investing focused on passively managed index funds is the way to go. A great book for beginners. 

4. “The Richest Man in Babylon” (1926) by George S. Clason

This book is a classic. It is also a very quick, enjoyable read. Of interest it was originally a series of pamphlets distributed by banks and insurance companies. The Richest Man in Babylon gives an insight into the mindset of being a successful investor. The lessons presented are timeless regardless if you are just learning about finances and investing or if you are a seasoned veteran. The book quickly reveals that wealth building is not a secret. The same way people were accumulating wealth in ancient times is the same way people get rich today.  

5. "Rich Dad, Poor Dad" (2000) by Robert Kiyosaki

This book is great for absolute beginners. It is very inspiring and motivating. Kiyosaki challenges the reader to shift the way he or she looks at money. Rich Dad, Poor Dad gives you the “why” of investing and gets the reader on the path to the right mindset of becoming wealthy. Not sure I agree with using other people’s money to invest to make more money but most of what he writes is on target and there are some great quotes throughout this book. 

6. “The Essays of Warren Buffet” (3^rd edition 2013) by Warren E. Buffet & Lawrence A. Cunnigham

If you know much about Warren Buffet or follow his annual shareholder letters you know this will be good advice. Cunningham takes Buffet’s writtings and collated it by topic so it’s easier to follow.

If you’re interested in what Buffet as an investor looks for in a company this is the book for you. If you are into active trading this book might not be for you. Buffet has stated on numerous occasions that his holding period is “forever”. Again this is a long-term approach to investments. 

7. "The Intelligent Investor" (1949) Benjamin Graham

While this book was first published in 1949 the lessons in it are timeless. One of the key focuses of this book is Graham’s direction minimize losses and find the real value of a given company. In essence Graham argues to limit risk by long-term investing. Of interest Graham was Warren Buffet’s mentor. 

8. "Think and Grow Rich" (1937) by Napoleon Hill     

This book is unique in that it was written by Hill during the Great Depression. Since then Hill has sold more than 30 million copies all over the world. Hill was very interested in the lives of his wealthy friends during his life time. Hill published this book at the suggestion of industrialist Andrew Carnegie.  Hill published the 13 principles for success and personal achievement from his observations which included: 1. Desire, 2. Faith, 3. Autosuggestion, 4. Specialized knowledge, 5. Imagination, 6. Organized Planning, 7. Decision, 8. Persistence, 9. Power of the Master Mind, 10. The Mystery of Sex Transmutation, 11. The Subconscious Mind, 12. The Brain, and 13. The Sixth Sense. Some might call it a lot of psychological mambo jambo. Take what you can from it I guess. 

Bonus! Check out "The Millionaire Next Door" review here.

What books have influenced you in personal finance and investing?

-------------------------------------------------------

Follow me on Twitter! @JWKEagle

Check out my pins on Pinterest! http://www.pinterest.com/jonathanwkey/ 

‪
Also look for the blog's website online:
#‎eaglesoaringhigher

Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.