A Bodey in Motion

Building momentum, one step at a time

Quick Hits: On coaching well. Regulating alcohol like marijuana. Crayon sculptures.

April 2, 2013 Posted by | Quick Hits and Links | , , , , , , , , , , , | 1 Comment

The Best Defense…

As a financial coach, one of my key responsibilities is to teach you, my client, strategies to overcome your financial troubles and to start succeeding with money. When that happens, it frees you to be more generous and more available to follow your dreams. When that happens in the lives of enough people, it can change the world, and I love being a part of that.

Not a place. Not a time. But a battle of wit and skill and strategy and little plastic playing pieces with numbers on...I'll come in again.But, I digress.

And I really just want to discuss that word strategy. It’s important. When you’re choosing a strategy, you are deciding on a plan of action, and developing tactics to fall back on when things don’t go according to that plan. Every winning strategy has two key components: Offense and defense.

OFFENSE

This is your income. However it is that you go out and bring the money home is time spent on the offensive.

And we spend a lot of time and effort on the offensive.

We work long hours to earn overtime and get big bonuses.

We fight and negotiate for better raises and compensation.

If the money is good, we move into management. We might even change careers altogether.

There’s nothing wrong with having a great offense. In fact, without it, you’re not even in the game at all. You need to put forth your best effort if you want to succeed. Never sell yourself short when it comes to your income.

However, beware the opposite problem. You can’t spend all of your time and effort on the offense. There’s a common misconception that if you earn enough income, your money will take care of itself. That if your offense is good enough you can ignore your…

DEFENSE

… and that’s a lie.

Your defense is all about your spending. How well you control every dollar leaving your home is time spent on the defensive.

And we don’t usually focus a lot of time or effort on the defensive. Spending still happens, because it has to, but we don’t like to think about the when, where, and why about each dollar that leaves.

Off the top of your head, do you know how much you spent on food last year? What about clothing?

How much do you annually spend on your electric bill? What about your mortgage payment?

How big a chunk of your yearly income do each one of those items take?

Being great on defense means not only knowing how much is going where, but also being careful and frugal when spending.

This is where I spend most of my time when coaching people. When a family is forced to come face to face with their poor spending habits and complete lack of defense, when they see how little they must have to survive, and how much is being wasted, they’re free to change. Their budget becomes the key to achieving goals and their ultimate success.

So, how’s your strategy? Is your offense hurting? There’s only so much you can cut before you have deal with your income. Don’t neglect your offense.

Is your defense in shambles? No matter how much you earn, you will always find ways to spend it if you don’t have a plan. You have to start making a budget. Don’t neglect your defense.

Questions: What’s your strategy? How’s your defense? Get political and think about how great your city government is on offense and defense. How could changing individual families habits affect the community you live in?

August 13, 2012 Posted by | Past and Future, Work and Money | , , , , , , , , , , , , , | Comments Off on The Best Defense…

The Money Story, Revisited

I’ve covered this story before, but it’s been a couple of years. We’re going to be teaching another session of Financial Peace University (New and Improved! Only 9 weeks long!) in a couple of weeks, and I always like to start it by sharing my family’s money story. The story continues, and some things have changed.  So, it’s time to revisit it.

When my wife and I got married almost 16 years ago, we were both broke and in debt. We both had credit card balances. I had a car payment. She had a student loan. Neither of us any money saved in the bank. Financially, we were in sorry shape. Fortunately, we were both young and in love. Our relationship was strong and we didn’t know any better.

Unfortunately, we were both young, and we didn’t know any better.

After a couple of months of failing to pay the bills on time, I turned my back on it all and handed the money management of our home completely over to my wife. She handled the payments and the debts while I went out and started bringing in an ever-growing income, and that suited me just fine.

She’d whittle our debts down month after month and finish them off when we received a windfall, like a big tax return or a cash gift for the holidays. It would have been a good system if I’d been more involved, or if we’d had a better understanding of the principles we needed to follow to treat our money correctly. Instead we’d wind up using the freed up money poorly.

A new car. A mortgage. Appliances and furniture. Every loose dime was tied up with a new payment, and credit cards caught our slack. We’d pay it all off quickly enough, but there was always something new, and it was always what we thought we could “afford” – not what could we actually pay for out of our savings.

Twelve years of this nonsense. Twelve years of bigger incomes and zero financial headway. Twelve years and I have no one to blame but myself. I’d finally had enough. With our third child on the way we knew that everything had to change. Fortunately, my wife knew how to start.

The Total Money MakeoverWe began with a few couples gathered together in a family room reading through Dave Ramsey’s book, the Total Money Makeover. We bought in completely. We struggled through writing our first budget. We talked and fought about things that we’d ignored for over a decade. We compromised, made hard choices, and sacrificed together.

Nearly four years later, we have money set aside for emergencies and no consumer debt. No car payments. No student loans. We’re saving for the future. If all goes well, our house will be paid off in just four more years. I’d say that all the pain was worth it.

It doesn’t stop there, though. To keep ourselves fired up we went to a Total Money Makeover Live Event. The next time our church did a Total Money Makeover book study, we were helping to lead it. Then we took FPU at a local church to learn more, and the next time it was hosted there we were helping to coordinate it, and we’re ramping up to do it again for the third time.

These days, I read four or five work and money related books a year. I’m constantly trying to improve my knowledge about the right principles to follow regarding money. It’s drawn me closer to my wife. It’s made me more available to my children. It’s given me a purpose, and all of that is thanks to God.

No radio hosts were harmed in the taking of this picture.Also, I’ve started to coach and mentor people who are struggling with their finances. People who are searching for a plan and principles to follow. People who are struggling and fighting, learning how to compromise and sacrifice. I even took a trip out to Nashville recently to learn to do it better.

The last few years have been a wild ride.

Maybe you’re at a point in your life where you’ve had enough. If you are, great. It’s time to start learning how to do it right. Read a book, take a class, find a mentor. Find a voice that inspires you to change. And you don’t have to go as crazy as we did, but it helps.

What’s your biggest struggle with money? Do you have a money story to tell? Have you given up? Have I gone completely mad? Comment below or drop me an email to let me know.

August 6, 2012 Posted by | Marriage and Family, Past and Future, Work and Money | , , , , , , , , , , , | 6 Comments

Zero Is My Hero

Fair warning: We’re talking about writing a monthly home budget again this week. I’ve done it a few times before, especially since I’ve started doing more and more home finance coaching. If the word ‘budget’ scares you, I’m sorry. Try calling it a ‘cash flow plan’ instead and keep reading.

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We’re in the thick of June as I write this. In a couple of weeks I’m going to sit down at my computer, open up my budget cash flow plan spreadsheet and work out where the money is going to go for July. Some things are the same every month, like groceries or the mortgage. Some things change, like school supplies or medical bills. Did the cable bill go up? Do the kids need haircuts this month?

I do this usually the weekend before the first of the upcoming month so my wife and I have time to go over the details and make any changes, and so we can both agree where every dollar of our income is going to go. Our income equals our outgo, and our spreadsheet ends with a big fat ZERO at the bottom. It’s called a zero-based budget, and it changed our financial future.

See, before we did that, we were like a lot of people. My wife would figure out how much we needed to pay the bills and take care of our outstanding expenses. Whatever was left we’d leave as carry over for the next month.

The problem was that it never carried over. In fact, we would often over-run and let our credit cards catch the slack. It’s one of the biggest reasons that we were saddled with unnecessary debts and failed to gain momentum with our finances for as long as we did.

When you’re staring at several hundred (or even a couple thousand) extra dollars, it looks like a lot of money, and that list of things you’ve been wanting to buy pretty much writes itself. Plus, if some small purchase comes up, you write it off as no big deal, because there’s “plenty of extra cash this month.” Yet, no matter how big the pile, it’s never really as large as we imagine it is. It could never cover all of things we want.

That’s why you have to make a plan for every dollar that comes in. Nothing gets left over. It all gets spent, saved or invested somewhere. Zero is my hero, because it puts all of my money to work.

Give every dollar of your income a name before the month begins…Income minus outgo equals zero every month.

– Dave Ramsey, The Total Money Makeover

Now, having drilled into that like an over-eager dentist, I need to clarify a couple of things.

1. Saving to cover a general category is a good thing. You don’t need to get overzealous about specifically naming every dollar. For instance, we save ahead for car maintenance. We don’t have money set aside individually for each upcoming oil change, and tire replacement, and minor repair. Instead, we have a general Car Maintenance Fund that we sock a little away into each month. In the same way, we save for medical expenses by putting a little away into a Medical Fund. And so on.

2. Your budget needs to end with a zero, but your bank balance doesn’t. Not everyone is going to be comfortable with draining every last penny out of their accounts to achieve financial goals (like paying off a debt). That is perfectly alright. In our home there is a figure in the bottom of our checking account lovingly referred to as the ‘bounce’. When I create a budget for the upcoming month, and I’m looking at our current balances, I pretend that amount doesn’t exist. It gives my wife peace, and that lets us work together on every dollar that’s left.

So, what’s your plan? How do you make the most of every dollar you earn?

June 11, 2012 Posted by | Work and Money | , , , , , , , , | Comments Off on Zero Is My Hero