Day 25--Get Smart
Remember SMART? This is important, so we're going to go over it one more time.
In order to reach the priorities you set, you need a logical (SMART) approach. So what if you find you can't apply the SMART principles to your goals? No problem. Not being able to apply the SMART elements to your goals, is just a signal that you need to change the goal, or eliminate it in favor of one of the goals you initially removed from your list.
Today's short lesson gives you time to go back and review some previous lessons. Because it takes a few months to get a feel for managing your money in a new way, reviewing the lessons on working with the paycheck allocation and the "envelopes" are a great idea.
Day 26--Do you have an emergency living expense fund?
Who doesn't want one of these? Who has one? I have a little one. Because I am focused on eliminating debt, I don't have a big emergency fund. Both Bryan, and my long term financial planning guy feel this is the next step after you demo the debt.
All I know is that I would love to feel covered in an emergency or a job loss. After having many job losses with noemergency fund, I can say on some pretty good authority that this does not feel good at all!
Bryan suggests you sock away 3 to 6 months of your living expenses, and if you live in a location with greater than 8% unemployment (that would pretty much be the USA these days) you should consider a nest egg of 5-8 months. Sound impossible? It sure did to me.
However, ever the financial ray of hope, Bryan explains that with the joys of compound interest you can truly make this happen.
Building wealth is a marathon, not a sprint
Bryan then goes on to explain Sinking Fund Purchases or SFPs (my acronym). You create an SFP to put money away for things you will want or need in the future. Novel concept, huh?
Here's one of Bryan's examples. Say you know you will need tires for the car, and those tires cost $400. (I remember when you could get 4 tires for 100 bucks!)
If you need those tires in 6 months, you need to save $67/month.
If you need them in 12 months, that would be $37/month, and if you can wait 24 months, you only need to set aside $17/month.
However, if you buy them at the last minute and charge them, paying over that 24 months, you will pay an extra $111.88 (at 24.9% interest).
Of course it makes far more sense to save for the tires, but we don't tend to do this. It may take a while to get your thinking and your finances turned around so that you are able to proactively put money away for these purchases, but that's OK. If you think about it...if you can afford to make the payment after you buy the tires, you can likely make the smaller set aside payment before you buy the tires. Even if you don't get to the full amount before you have to make your major purchase, in money, every little bit helps.
Who can't use some great financial advice? Enroll in Balance UP! today!
Day 27: Insurance!
Insurance. We hate to pay for it, we are so thankful to have it when we need it, and we really don't quite understand it.
Today Bryan shares the ins, outs, and definitions of all those different insurances we need to know about. You will definitely want to print this handout and keep it with all your important paperwork!
So what kind of insurance are we talking about?
Here's the list:
Just like an emergency fund, insurance saves your behind in a crisis. The only difference is that while your emergency fund is there for day-to-day shortfalls, insurance covers the catastrophic events that could wipe you out financially for a long, long time.
Here are Bryan's 7 General Principles of Insurance:
1. Understand the purpose of insurance.
2. Know your needs and your coverage.
3. Carry adequate insurance.
4. Understand the real cost of deductibles.
5. Watch your credit score.
6. Avoid filing too many claims.
7. Shop around.
With Bryan's definitions, coverage details, and tips for decreasing your insurance premiums, you will most certainly have the protection you need should Mr. Mayhem come to visit you!
Balance UP! and get the info you need today!
*Not included in today's lesson.
Day 28: Got your umbrella?
Do you have an umbrella insurance policy? Until Balance UP! I had never even heard of such an animal. However, it seems this animal is rather important, and Bryan takes the time today to explain this coverage, and to provide a few tricks to cover what matters to you without breaking the bank in the process.
When I was a kid and "the insurance man" came to our house my mom panicked because she had to feed us dinner, my dad was grumpy because he was tired from work, and we all had to clean the house. We didn't have a lot of money, and my mom was always sure that after meeting with "the insurance man" we'd have even less. I have had a lovely insurance man for the last 24 years, and the thought of talking to him still causes me a little post childhood stress.
However; using Bryan's tips, you can adequately assure you are covered and maybe actually save some out of pocket costs in the process!
Consider raising your deductible. With your new emergency fund you can cover an additional $250 or $500 if something horrendous happens, and you can save some money each month.
Once you have enough money in the bank, cancel your comp/collision because you can replace the vehicle yourself.
Look for exclusions and be honest about how you are using your home and your car. If you are delivering pizzas or running a daycare you'll want to be sure you are covered if something happens during those moments.
Upgrade your insurance when you upgrade your home. You'll want your new kitchen back, not your old one.
Video the contents of your house, and store the video off-site. You don't want to remember your grandma's jewelry was destroyed after the insurance claim is closed.
And finally, make sure your insurance covers the replacement cost of your stuff, not the actual cost. You want a new refrigerator, not a 7 year old refrigerator.
Got a money saving tip? Share it here.
Day 29: 8 Steps to Success
After 28 days in the financial trenches it's time for some review. I hope by now you are feeling as optimistic as I am about a healthy financial future. Sometimes the continuous drumming from the outside world beating into your head the idea that because you are a single mom you are poor, regardless of how much income you have, can be hard to drown out. I think it's also a bit challenging to plan for the future when there is no one to plan with. As single moms our kids are it, for better or for worse. It's only been in the last year or two that the thought of not raising kids has even occurred to me. Getting through each day took absolutely every ounce of everything I had. (And often quite a bit more than that.) It wasn't that I couldn't see the forest for the trees, it was more that I spent every free second praying there were only trees.
But with Balance UP! I can see that I can have a different financial future, and that I can start that process right now. Let's review the...
8 Steps to Maximize, Energize, and Organize Your Life
It's hard to know where you're going if you don't know
where you are. ~Bryan Cooper
Step 1: Know your financial condition.
Step 2: Establish your long-term goals.
Step 3: Calculate Real Cost. How many hours do you have to work to pay for that $1000 couch?
Step 4: Create a spending plan and improve on that plan each month. Think about the impact of $20 here and $20 there.
Step 5: Create and maintain life balance.
Step 6: Establish an emergency fund. Consider a financial fast to do this. For example: No eating out or new no new clothes until you have your fund.
Step 7: Eliminate all debt but the house. Use the debt snowball calculator and have fun with this. Reward yourself for your progress and pay off the smallest bill first to get a win.
Step 8: Establish emergency Living Expense Fund. This is the bare bones amount you need to live.
It will take time to walk through these steps and get your finances turned around so your money is supporting the life you want. You may feel frustrated as you try to get started. That's OK. Don't quit, but rather focus on how good you'll feel once you master each step.
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Your website is amazing. I am going to make some time for this. I will learn tons from what you have on here. AWESOME!
I just finished reading 3 of your sections, particularly your story about raising a teen and connecting with God and became very inspired!! I needed to know that as a single mom I'm not alone...