124. FLOP – a Financial Life On a Paper

Here’s the 4 step process to filling out a FLOP – a Financial Life On a Paper.

Download the spread sheet here: https://docs.google.com/spreadsheets/d/1g5CLcVAiYSKvWr1f-5JA-8f0m44rrEQuuiH9EeV3WGo/edit?usp=sharing

1. Fill out a Balance Sheet

A balance sheet captures the full picture of your financial health. Update it twice a year to see your progress.

It not only accounts for all the debt you have been paying off but all of your good financial decisions such as increasing your emergency fund, paying down debt, making wise investments which will affect your balance sheet in a positive way.

To get a clearer picture of your financial health you need to look at Assets (What you own), Liabilities (What you owe), and Net Worth (What you own minus what you owe).

It looks like this:

Assets – Liabilities = Net Worth

2. Choose a Pass Code

A passcode is a phrase that you can use with different variations. For example, what if you chose the following Pass Code:

Good2know!

This Pass Code has a capital letter “G”. It also has the number 2. And it has a symbol in the exclamation mark “!”. You can rotate the Pass Code by putting a combination of letters or numbers at the end of it.

For example:

Good2know!14

I chose 14 because the year is 2014.

Using a Pass Code allows you to remember passwords a lot easier too!

I would recommend changing your Pass Code every 30 days. I wouldn’t wait longer than 60 days if you forget.

Set a reminder on your phone or mark your calendar. Or even perhaps simply make it a habit to change your Pass Code on the 1st of the month.

3. Organize of all Login Information

After adding all your accounts and balances above in the first step with the Balance Sheet simply start filling in the account information, Login ID, Website, Phone, and Comments.

I’d put a pass code or password hint in the comments section.

4. Leave A financial Roadmap for my Spouse or Significant Other

In most families one person manages the finances – this person is often called “the Nerd” in the relationship. As opposed to the “Free Spirit” – the uninhibited one. But I digress….

What would happen to the spouse or significant other if “the Nerd” were to pass away?

Are you the money savvy person in the relationship? Does your spouse or significant other know about or can they access your bank accounts, investment accounts, safety deposit box, insurance policies, email accounts, social media accounts, etc.?

I would either burn the file onto a CD or copy the file onto a thumb drive. Then put it in a safe or safety deposit box. Update the FLOP every 6 months. If you want to track your progress with your debt fill it out every month or two.

Losing a loved one is a terribly difficult process. Having a plan in advance for your loved one will eliminate additional, unnecessary stress.

Note: If you can’t open the file download and install the free version of Microsoft Office: http://www.openoffice.org/download/

#FLOP #PassCode #FinancialLifeOnaPaper #Login #NetWorth, #Password

Are you ready to do your...

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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

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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

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Follow me on Twitter! @JWKEagle

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121. Zero Based Budgetting

Are you on a budget? Have you heard of zero-based budgeting? Why not try a zero-based budget today?

I've found the concept of a zero-based budget to be pretty simple and very useful. The basic concept is: income minus expenses equals zero.

Or... I'm more visual so here's how it looks:

Income - Expenses = $0

That way you know where every dollar is going and every dollar is accounted for. Not knowing where money is going hurts our financial situation, causes stress, and often means we end up with a shortage at the end of the month.

So… Here’s what I’d do:

1. Take a sheet of paper and list all your income for the month. Paychecks, side jobs, child support, etc. Then add it all up.

2. On the other side of the page write down every expense you have each month. This can include rent/mortgage, food, gas, car insurance, internet, cable/satellite, kids school expenses, and everything in between. Every month your expenses will vary so you need to adjust this on a monthly (or weekly/bi-weekly basis).

3. If the income doesn’t match the expenses don’t freak out. This just means you need to do something to adjust one of the numbers down, up, or possibly both.

4. If you spend more than you make you’ll need to make some cuts to help make your income match your expenses.

5. You should have $0 left over. Meaning if you end up with $50 ahead you haven’t finished your budget. Put the $50 towards a category be it your savings (emergency fund), your debt, another expense category, or something else.

6. Remember you are the boss of the budget. It doesn’t control you. You control the budget and adjust it as needed. It is a guide to help you win with money. :)

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120. Tips to Save Money - Part 14

What are some of your tips to save money? Here’s some personal experience on great ways to save an extra buck. I'd love to hear your tips! I have a list of about 60+ tips to save money. This is part 14 tips 51-53. I hope you enjoy!

51. Ditch Delivery Pizza.

Buy frozen pizza at the store. Save $10-20 by pre-heating the oven and cooking at home instead of using Papa’s. Where we live you can get a large supreme pizza for $7.49 or a large cheese pizza for $6.99 at Aldi’s, Sam’s, or Costco.

52. Skip the Ice Cream Shop

Buy your ice cream at the grocery store. Typically, you can get 3 to 4 times the ice cream for your dollar at your grocery store. 

53. Invite friends over instead of going out. 

Have friends over for a cookout, potluck meal, tacos, or homemade pizza, etc. Great time to hang out playing games or watching a good movie.

See the full list of tips to save money for the other tips and parts! Leave a comment! 

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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"? 

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Follow me on Twitter! @JWKEagle

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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"? 

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Follow me on Twitter! @JWKEagle

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

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