Beware the ongoing battle with budgeting

battleArticle from Winnipeg Free Press on the importance of budgeting.

“BUDGETING is a simple concept to grasp. We all understand that a budget is basically a plan so we don’t spend more money on expenses than we earn.

But the reality is, budgeting is much more difficult than we likely realize. If it were as simple as spending less and saving more, Statistics Canada wouldn’t be reporting year in and year out another increase in our personal indebtedness….”

>Read the entire story

Applied Principle 2 – Awareness Is The First Step On The Path

applied_principles_02Awareness Is The First Step On The Path

Have you ever heard the phrase, “ignorance is bliss”? While this may be true for a short period of time, reality will catch up to you, sooner or later. Unfortunately when it does catch up with you, it will probably sting a bit.

“The first step to changing your financial course is to recognize that the direction you are currently pursuing may be a dead end. This realization is often much more difficult than it sounds. While most of us have a general feeling for our level of financial fitness, we are often in a complete state of denial regarding our financial weakness. With the overwhelming availability of consumer credit, home equity loans, and debt consolidation loans, we are able to successfully mask the impact of our overspending and poor financial decisions.”

It is fairly easy to see the state of our own physical health, after all we look in the mirror every day. It’s not always as easy to see our financial health. It takes more effort to candidly assess your financial health. It takes courage to really look at your financial state and even more to commit to changing it.

“Now is the time to recognize the need for change. To help add clarity to your general thoughts, candidly answer the following questions:

  • Do you carry over balances on your credit cards from month to month?
  • Have your credit card balances increased year after year?
  • Have you participated in a home equity loan or debt consolidation loan in the past three years for the purpose of paying off consumer debt, only to have consumer debt return?
  • Do you schedule the payment of monthly bills around the receipt of your paycheck?
  • Do you pay your bills and take care of all monthly expenses before you determine an amount for savings?
  • Have you used credit cards or charge accounts to fund major events or purchases during the year, including holiday spending and vacations?
  • Do you make major purchases based on the amount of a monthly payment rather than a cash purchase price? Have you borrowed money to purchase an automobile and then purchased a different one before the previous vehicle has been paid for?
  • Do you constantly monitor your bank account balance to make sure you are not bouncing checks?

If you answered yes to any of the above questions, you are very likely following the masses.”

Unfortunately this path is leading you nowhere… and coming to this realization is the first step to achieving true financial fitness.

The New Money Rules for Recent Graduates

Great article from the New York Times on budgeting advice for new graduates entering the job market.


Click To View Article

Applied Principle 1 – The Financial Path Least Traveled

applied_principles_011The Financial Path Least Traveled

In Applied Principle 1 of Money for Life, we learn that the financial path of many Americans is one leading directly to disaster.

“According to the Wall Street Journal, more than 70 percent of Americans live paycheck to paycheck. That means that nearly three-quarters of Americans may be as close as one paycheck away from financial disaster. These startling statistics represent the personal financial path most traveled, the path of least resistance, the path to financial anemia. When you take an honest look at your level of financial fitness, what do you see? If you are on the path most traveled, you will see a struggle to make payments on time; a significant credit card and consumer debt load; a lack of emergency savings; little or no measurable savings for handling long-term objectives, such as your children’s education; and no real plan for achieving a comfortable retirement. As we tread this well-worn path, we often lull ourselves into a false sense of security: Our society constantly tells us that the path we all are on is taking us in the right direction. Banks and credit card companies allow us to “handle” more debt with the “convenience” of small monthly payments. Advertisements barrage us with the message that our hard work entitles us to an ever-increasing collection of material goods. Society measures success by what we have rather than by what we are doing to secure a future. But focusing on what others prescribe for us can be a dead end.”

“For many, it is not until they experience a major financial setback that they look around and really understand that their journey down the financial path most traveled has led them right back to where they started.”

In order to find personal financial success, you must get off this path and onto the path least traveled.  Get out of the overspending cycle. Get out of the habit of relying on credit to get by. Take control of your money. Make a conscious decision to change your spending habits for the better.

“Often in life, the path we should seek is the path least traveled. When you get to the top of a mountain, there aren’t many others there-most people are coasting in the by-ways or resting in the valley. Becoming financially fit requires a break from the masses and a discovery of the path to the top.”

Follow along as we progress through each of the Applied Principles from Money for Life and learn the path to financial fitness.  Get on the path least travel and take back control of your financial future.

VIDEO TIP: Traditional Envelope Budgeting

This video is for our members still grappling with how envelope budgeting is different from “traditional” budgeting. Nick Lashley, Money for Life Coach, talks about the core principles of Envelope Budgeting: creating a spending plan, funding envelopes, and performing envelope transfers to cover overspending in any single envelope.