A Bodey in Motion

Building momentum, one step at a time

Quick Hits: Credit scores are dumb. Listen more, talk less. Orange rolls on an open fire.

  • There is obviously far more Quick to this chart than there is HitsWe’ve been coordinating another session of FPU this Summer. Our next lesson will be Dave Ramsey’s famous Dumping Debt lesson, which includes a thorough explanation of what “Gazelle Intensity” means, what a debt snowball looks like, and the busting of several debt myths. One of my favorite debt myths to bust is the need for a good credit score. Your credit score has nothing to do with how financially successful you are. It’s only about your relationship with your debts. And debt is a product being sold, it’s not something anyone needs.
  • I’ve had the opportunity recently to work with someone who has the particularly nasty habit of talking over his coworkers. It’s lead those who have to regularly deal with him to communicate around him, and not to him. They only tolerate him. And when his back is turned, eyes roll and actual plans are made. He thinks everything is fine, because he’s mistaking silent acquiescence for agreement. They’re not the same thing, and confusing them will be your undoing. Whether we’re at work, out with friends, or at home with our families, we need to be listening more than we speak, and promoting communication.
  • I love three things about this blog post.  1) It’s a camp out cooking recipe. Everything tastes better when prepared over an open flame. II) The finished product looks really yummy and unique. C) He allowed his niece to have the experience of using a sharp knife to cut the oranges in half. That is excellent. Giving a child the opportunity to take responsibility and understand the risks involved while being properly supervised is a great way for them to have the chance to grow up to be adults who take responsibility and manage risks well.

June 26, 2013 Posted by | Quick Hits and Links | , , , , , , , , , | Comments Off on Quick Hits: Credit scores are dumb. Listen more, talk less. Orange rolls on an open fire.

How to Build Your Financial House

When you’re first beginning the process of trying to take control of your finances, it can be totally overwhelming. In a world as complicated as ours, you find yourself having to juggle so many payments and fees and bills that it’s hard to know where to start.

But those who won’t care for their relatives, especially those in their own household, have denied the true faith. Such people are worse than unbelievers.

1 Timothy 5:8

The right way to start is by building your financial household first. Get to know what your core basic needs are and take care of them before you worry about anything else. Unfortunately, our complicated world has begun to confuse what a need is, so let me elaborate. Basic needs can be limited to three categories, which make up our roof in the picture below.

I usually scratch this out on a piece of paper for the people I'm coaching. You have the benefit of Photoshop to clean it up and make it legible. You're welcome.

Healthy: The stuff that keeps your family alive and in reasonably good condition. This will include groceries and any medicine your family must take. (i.e. medicines for high blood pressure, diabetes, chronic depression, and the like. My acid-reflux medication wouldn’t make this list.) It might also include health insurance and/or co-pays.

Safe: The stuff that keeps you out of the elements and a reasonable amount of security. This will include your basic utility services (such as electricity and water) and your mortgage or rent. You might want to include the cost of necessary home repairs here as well. Don’t include every possible security measure, though. No amount of money can make you 100% secure.

Productive: The stuff that keeps you generating an income and ready to work. This will include transportation, which could be a car, a bus pass, or a good pair of shoes. It will probably also include a phone of some kind. It might include Internet access and an email account, a reliable cellular phone, and a reasonable clothing budget.

In all cases, the goal is to determine a reasonable number for your basic needs. Keep your numbers realistic, and don’t overload any of the categories with fluff you really can do without. For example, a young couple, just married, probably shouldn’t be spending $800 each month for groceries. A $200 per month cell phone contract with all the bells and whistles doesn’t qualify, either. And an Xbox will never be a necessary component to maintain productivity, no matter what anyone says.

Also, you’ll have to plan for different types of expenses.

My simple picture just got all complicated. "Expenses?" "Variable Cost?" What is this madness!?

A good example of a fixed cost expense would be your mortgage or rent. It’s a bill that’s due every month, and the amount owed doesn’t change very often, if at all. They’re predictable costs, and we wish that every core item was a fixed cost expense. Unfortunately, they’re not.

A variable cost expense would be things like gasoline for your car, or your electricity bill. Each month the amount spent on this item is going to change, either because the price of the good is constantly under change (gasoline), or your use varies (electricity). The is the simplest thing to do is put down a number that represents a high average for that item that month. It’s rare that you’ll find yourself at risk of going over.

Items like car maintenance or clothing would be a non-monthly expense. It’s a cost you know will be coming eventually, and you’re socking money away for it now so it won’t break the bank later. Use a savings account and put a little aside every month for each of these types of expenses.

Making sure that you’re covering your basic needs gives your budget a foundation to build on. It shows you that, no matter what else happens, you can keep the lights on, put food on the table, and stay employed. And if you’re not covering your needs, then it’s clearly time to improve your income. Without any margin, you’ll never be able to move beyond the struggle of living paycheck to paycheck. Every dollar earned above that core is the fuel to be used for reaching financial goals, but you have to build your financial house first.

This is the form I built based around the information in this post. I’m using it to help people start getting their finances in order when they’re struggling. Feel free to share it, or this post, with others.

The total you figure from your core needs can be used as a base number for your emergency fund. How many months can you live off of your savings when you’re just taking care of your basic needs? How many months do you want it to be?

June 24, 2013 Posted by | Marriage and Family, Work and Money | , , , , , , , , , , , , | 2 Comments

Quick Hits: Trusting an online bank. What “organic” means. Legos are impressive.

  • Child's plaything or instrument of pain?I’ve been trying to figure out where I should stick our Emergency Fund to get a little bit better return. I know it isn’t supposed to be an investment, but it is a sizable chuck of change, and I don’t want it to sit an languish at the lowest interest rate possible while we wait for the next crisis. Maybe an online bank is a possibility. Their interest rates tend to be higher, they’re FDIC insured, and you don’t sacrifice accessibility…but my inner Luddite is having trouble with a bank that you can’t physically walk into. Am I being foolish?
  • The trend towards food labeled “organic” is interesting, especially if you actually take time to learn anything about what “organic” means. For example, when a food is labeled “organic,” it doesn’t mean that it hasn’t been treated with pesticides. In fact, it doesn’t even mean that it’s been treated with less pesticides than non-“organic” food, or even less toxic pesticides than non-“organic” food. The truth is, an “organic” label has nothing to do with being healthy, it just means that the grower jumped through all the hoops that are required to be certified as “organic” by the governing bureaucracies, which doesn’t always result in what you’re thinking when you read “organic.” So, maybe you want to research and rethink your decision. You can eat organic (AKA ‘carbon-based’) food without paying the “organic” (AKA ‘bulls**t-based’) prices.

June 13, 2013 Posted by | Quick Hits and Links | , , , , , , , , , , , | Comments Off on Quick Hits: Trusting an online bank. What “organic” means. Legos are impressive.

Where’s Your Energy Going, and Why It Matters

An organization has only 100 percent of its resources and energies to spend. I have no idea what is meant when a manager says, “Let’s give it 110 percent!” There is a finite amount of energy, and the question is simple: is it directed toward internal, political issues, or toward external, client issues?

In the best companies I’ve worked with (or observed), the ratio is about 10/90. That is, 10 percent of the energy is abraded away internally, but 90 percent of it is directed toward sales, service, retention, market share, and so forth.

Alan Weiss, Million Dollar Coaching

There are times I have to leave the house and socialize with other people. As an introvert, that isn’t my natural state. Occasionally, it happens that I have to engage a group of people that I don’t really know (aka “strangers”), adding a level of emotional awkwardness. If I’m physically uncomfortable on top of that (i.e. my chair is at a weird angle, or personal space is limited, or I have a headache, etc.) where do you think the vast majority of my personal energy is focused?

energy

Obviously, in those circumstances, most of my energy is going to go into coping with the situation. Very little will be reserved for making new acquaintances, smiling, or being friendly. I’ll want to use my wife and kids as a shelter, rather than be aware of how they’re feeling, and I’d be filling my time by checking the clock and eyeing the door.

And that’s just one event in a lifetime filled with thousands upon thousands of various such twists and turns. In each of those moments, I’ll only have a limited amount of resources to fall back on. Each day – each hour – each second only has so much energy to expend. That time I spend at work, or at church, or at home, or volunteering – how will I use it? Where will it be focused?

It’s important to understand that. It really does matter.

See, organizational energy is a byproduct of individual energy. We each contribute a portion of the greater whole when it comes to directing the energy of our places of business, or service, or worship. Whether you’re in a family of five, a church of fifty, or a company of twelve thousand, your focus makes a difference on the internal to external ratio of that organization.

Do an audit of the energy being spent by that sleepy church in the Midwest with a slowly shrinking membership. Are they busy trying to keep the people within the walls happy, or are they zealously focused on serving their neighbors and beyond? How have their members affected their ratio? It might be helpful to do an audit of each of them.

And when we’re criticizing the organizations we’re a part of,  maybe we need to do an audit on ourselves.

Just a thought.

June 12, 2013 Posted by | Christ and Church, Marriage and Family, Politics and Other Insects, Work and Money | , , , , , , , , , , , , | Comments Off on Where’s Your Energy Going, and Why It Matters