 "If you help enough people get what they want, sooner or later you will get what you want."
~Zig Ziglar Well, friends, the day has come! We just paid to purchase a home, funded our Roth IRAs, and paid for a tropical wedding vacay! I never thought this would happen so soon. My fiancee and I have been working our wealth-building plan side by side for 3 years. I've been teaching Money Makeover classes and seeing private Financial Coaching clients, helping others to get out of debt and build wealth. Our progress seemed very slow but steady. And our longterm goal of buying a home seemed still so far away: as our savings increased so did the cost of homes in our local inflated market! With 2 self-employed incomes we could see our home dreams getting pushed years out. I guess I have my 12 year old son to thank. Puberty and his need(who am I kidding? MY need!) for him to have his own room propelled us into looking for a larger home sooner! And our landlord raised the rent for each of us another $100 a month. So a few months ago we began looking around on craigslist. And lo and behold, before the holidays we found a beautiful 3-bedroom, 2 bath home with stainless steel appliances, pergo floors, and level streets for biking. The best news of all is that we have financial balance: we were able to fund our Roth IRAs before the end of the year and also pay $10,000 for our honeymoon in Hawaii. All of these goals have been ones we have been working toward and saving for, thanks to our wealth-building coaches' guidance and having a plan. Sometimes blessings come in 3s! But we could not have predicted that. We only knew they would happen eventually. Here are our secrets to PAYING CASH for everything: 1. MAKE SAVING A HABIT. Most of my life spending was a habit. Then I became a tither, and giving and spending were habits. It wasn't until I also became a saver that I began to build wealth. Both Steve and I have a habit of systematically putting a percentage of our income in savings each month. It does mean saying no to some of our wants, but not all of them. We still give and spend, just not outrageously. 2. HAVE A PLAN. Decide what your financial goals are, and break them down into steps. You can use the 7 Baby Steps to wealth-building, or simply your own wishes of what you'd like to achieve. Write them down. And use a monthly budget to be able to aim your dollars along the path of your plan. Check out www.everydollar.com, a free budgeting tool to help you get started. 3. BE PATIENT. Rome wasn't built in a day. A garden doesn't grow in a week. And your nest egg takes many seasons to mature. Start now, and keep going. The old story of the tortoise and the hare was not far off: the tortoise ended up the winner through his patient, careful steps forward, while the hare leapt about wildly and erratically, wore himself out, and never made the finish line. Practice contentment in the little things, and then the big things will eventually come. Celebrate with us, friends! Our story is one of many. Please share your stories of paying CASH for things, and the freedom that it brings! Blessings to you and have a peaceful & prosperous New Year! love, Kathy Kali
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 "But Godliness with contentment is great gain." ~Timothy 6: 6-7
On the path of wealth contentment is our silent partner. When we embrace gratitude for what we have, the big things, and the little things, suddenly our path becomes filled with grace & ease. Life is not so hard anymore! We can savor the little things in life: a brisk walk crunching fall leaves under our feet, gathering a sweater or warm blanket around ourselves or lighting candles.... This concept of simple coziness and enjoyment, no matter the season, is called "hygge"(pronounced hoo-ga) in Denmark. And I believe it is essential if we want to build longterm wealth and meet our big life goals! I used to spend tons of money on lifestyle, but I was chasing happiness! I was not happy. My kids and I actually have become more content with some monetary restrictions. We have found joy in spending time together, creativity, and simple entertainment. Ironically, now that I am debt-free, with a good nest egg, I find spending money actually has a cap on enjoyment! Don't get me wrong, I do love to eat out, and the occasional latte! But large extravagances don't create real happiness for me~they are like fancy frames around the real picture, which is the people I love & work I enjoy. Ways to be more content, no matter which Baby Step you are on! 1. Get a plan for your money. Learn about budgeting and the Baby Steps to Wealth Building. When I started my Baby Steps, I instantly felt more wealthy because I felt I was following a smart plan. I could relax, and enjoy the moments with my children. Stopping the crazy debt cycle and getting clarity on my investments was also liberating. I no longer had the stress of the money fog! The monthly budget helped me see exactly where my money was going and exactly how much wealth I was building. And hearing stories on www.daveramsey.com of other people who had paid off debt and saved money was very inspiring. I gained a million dollars in peace of mind. That was huge! 2. Savor the simple things. Simple meals together, board games, playing music, watching shows on netflix, all became more meaningful for me the last 3 years. Julia Cameron speaks about nurturing your inner child in her book "The Artists Way". She says a little "artist date" does not have to be expensive, just fun! A trip to a vintage store to snoop around, $5 for new paint brushes, hearing a concert in the park....This weekend I had a blissful time resting & puttering around the house....napping, cleaning out the fridge, writing this blog...just letting the spirit move me however. What a treat! Money does not buy happiness. My sweetie and I paid for an expensive weekend trip to a local tourist spot with the kids where we ended up mainly hunkering down together in the living room, watching videos and playing games!! The togetherness was what mattered. And that is free. 3. Practice active gratitude. Speaking out loud what you are grateful for, and being generous from what you have, ups contentment. 12 years ago My coach Toni Stone taught me to say affirmative prayers every day. I've been doing a prayer call with a good friend ever since, and it helps me remember my blessings...especially when I get into a "pity party" because I've forgotten to be content. Some people like to keep a gratitude journal and write down their blessings. Giving also helps when we are feeling tight, poor & constricted. Toni taught me the practice of tithing 10% to churches & charities, and I have been a tither ever since. Dave Ramsey also recommends you continue your tithe while getting out of debt! Giving, even a little, reminds us that we "have it to give", and that we are blessed. Thank you, and Happy Fall! Many of us are eager to work the 7 Baby Steps of Wealth Building! And yes, please do. But before you step up on that mountain, get your base camp of the Four Walls together, or you will never make the climb. As a working single mom for 5 years, I can tell you, getting your household in order first gives you stability, and breathing room. Even if you are a 2 income household, you may find yourself out of work, or having more debt than savings. When your Four Walls are in jeopardy, that means crisis. What are the Four Walls? They are the basics of survival: food, shelter, transportation & utilities. They can also include necessary clothing. The Four Walls help us meet our basic needs, experience comfort, and create the mental clarity necessary to begin to strategize for the future. When your lights and water are about to be cut off, or you don't have a place to live, fear and stress become your constant companions and you can't even think about the future. I know. This happened to me. When I first got divorced, I had no clue about the Four Walls. I knew how to care for my children, cook & clean, and run my business so that it brought in $75,000 a year. But I was a princess~I had never run a family household on my own, and did not have a realistic sense of what was the appropriate amount to spend on each household category. And I was addicted to looking good, so I spent out of control and accumulated a lot of debt. But that's another story. The main thing is, as a working single mother I got a crash course in the Four Walls. I learned first hand how it does NOT work to have your housing be 50% of your income, how it does NOT work to have your food budget take up 40%, and how it does NOT work to spend more on credit card bills than utilities. Thank goodness I woke up from my mistakes claimed my status as Queen of my world, and saved $20,000 in 2 years. For families in crisis, this is what I recommend, so you don't make the same stupid mistakes I did~ Write down on a piece of paper how much money you bring in each month. Then write down how much each of these Four Walls cost: Food, Shelter, Transportation, and Utilities. Then divide each wall by your monthly income to get the percentage each wall takes up of your total pay. For the time being, don't worry about paying on credit cards or other collectors. They are not as important as your Four Walls. You can deal with your credit score later, when your life is stabilized. 1. Food, 5-15%. Food is your first wall. This is crucial. You gotta feed yourself and your kids. Ideally food will take up 5-15% of your takehome pay. If it doesn't, don't beat yourself up. You are not alone! Many families are spending astronomical amounts on food. I just spoke with a couple a few weeks ago who found out they were spending $1500 on food, simply because they were not paying attention. Start shopping at the discount stores(yes, they carry organics!), meal plan, eat cheaper items(can you say, rice and beans?) and if your income is below the poverty line, consider food stamps. It is very possible to rein in food costs when you start being intentional. I cut my grocery budget in half simply by meal planning & shopping at the discount stores. 2. Shelter, 25-35%. The second wall is shelter, or housing. Having a roof over your head and a place to sleep that is comfortable and safe brings relief. The recommended percentage for this category is 25-35%. The reason for this is that housing is the place most people overspend, and that keeps them from being able to build any wealth. When I first moved to my new town, I was grateful for a safe home for myself and my children. However, that home took up 50% of my income, so I had little leftover to cover food, debt payments, utilities & transportation. Many people in this inflated housing market are paying very high costs for rent. I recommend getting roommates, doing airbnb, downgrading your rent, or even selling your home if your rent/mortgage is too high of a percentage. It's an incredible feeling when you can cover your housing and then have money left over to save, give, and spend!  :3. Transportation, 10-15%. Required transportation is your third wall. This means the kind of transportation you need to get to work, get to the grocery store, and get your kids where they need to go. Not transportation to take a vacation that you put on the credit card. Not a new car that you lease, or borrow money for. This means basic transportation: bus, train, or car. The recommended percentage is 10-15%. Dave Ramsey often recommends when you are in crisis to drive a beater car, take the bus, or get rides until you can afford upgraded transportation with cash.
4. Utilities, 5-10%. The fourth wall is utilities: lights, water, electricity, sewer, garbage. What it takes to keep your household comfortable in hot or cold weather. Again, if you are in crisis this is the basics, not the fancy version. Can you get a $50 air conditioner off of Craigslist in the summer? Can you conserve energy by turning off lights and taking shorter showers? You probably know the ways you can be more energy-efficient already. Actually in my experience most folks are paying decent prices for their utilities, but sometimes don't prioritize them right. Be sure and pay your light bill before your personal spending or your credit cards! Now you have a good look at your Four Walls and their percentages. If the percentages are way out of wack, or if your Four Walls alone are more than your take-home pay, this may be a time to make some hard decisions about where you spend your money. Time to cut someplace, and make more money. Time to cover the basics. I can assure you, when your Four Walls are covered, you will breathe easier. And then you will be able to look up from survival mode, and begin to set your sights on the 7 Baby Steps of Wealth-building. Your days of struggle are over! For a FREE budget form to get you started, click here: cdn.ramseysolutions.net/media/pdf/forms/fpu_monthly_cash_flow_plan_forms.pdf?ictid=btxt.ny13  Cash Flow is King(and Queen!) for small businesses. We all know that having regular net profits is essential for a business to keep running. However many small business owners overlook the dangers of debt until it is too late! Debt creates personal and business risk. I know this firsthand, as the business debt I carried for many years kept me from investing in business growth, and destabilized my household. When there are economic downturns, personal transitions, or challenges in your business, debt payments can take over your cash flow and reduce it to a trickle. It is very painful to have to keep making payments when your income is down and you have no cash in the bank. And all businesses experience cycles of ups and downs in gross income. So what can we do?
Having a pro-active strategy to use cash to start and grow your business is the answer. Even large businesses such as Apple, Amazon, and Bed Bath & Beyond all grew and operate debt-free! The key is to start small, with a product or service that you know will be profitable. You then grow the income from that product or service as fast as the market will allow, or "organically". Keeping business expenses low and putting some money from the business aside for taxes & retained earnings ensures you have stability for any fluctuations in the market. Then you also have the ability to invest in business expansions with cash. Cash in the bank will make you feel like a King or Queen in your business, empowered and wealthy! Here are some basic tips if you are starting a business, or have a successful business and want to create better cash flow. 1. SAVE UP FIRST. To get your business started or to make improvements in a current business, save up cash first. 60% of small businesses start with less than $5000 cash. Whether you are investing in a prototype product, or getting your first business cards & office supplies, use the leverage of your day job, or current source of income, to get things up and running. This step requires patience, and resourcefulness, but it sets you up for a lifetime of wealth in your business. 2. PAY YOURSELF FIRST. Use the "Baby Steps" of Wealth-Building** to begin to build some retained earnings for emergencies, market fluctuations, and business expansion. Set aside a percentage of your net profits for: 1)Baby Step 1, $1000 in business savings, 2)Baby Step 2, paying off all business debt using the debt snowball, and 3)Baby Step 3, 3-6 months operating expenses in savings. Once you complete Baby Steps 1-3, you can move on to Baby Steps 4-6, serious wealth-building for household & business. **For more info on the Baby Steps, see the blog posts below. 3. GROW PROFIT FIRST. Look at your business and determine which products/services are profitable, and which are not. Remember, net profit is gross income minus business expenses. Spend most of your energy growing those aspects that are profitable. Profit will feed your family, grow your retained earnings, and fund investments. A hobby will not. Decide if you want to continue the "non-profitable" aspects as a hobby/ministry or if you want to cut them out completely. Now you are the Queen or King of Cash Flow! You should have regular income coming in from your business, money in business savings, and no business debt whatsoever! Your cash flow is regular, and you have reserves. When an emergency comes you are prepared. When the market fluctuates, you are prepared. When your personal life requires attention you are prepared. Your business is funding personal and business investments. You are becoming wealthy. Congratulations! How does it feel? I can bet you've got incredible peace of mind. When you reach this point in your business let us know! We'd love to celebrate with you!  Yes, that is a picture of my car back end taped together with guerilla tape! No, it does not look good. My liftback opener part broke a month ago. Any other time in my life, I would have been so embarassed at how this looked. I would have rushed out and spent the $500 to have my tailgate part fixed at the dealer. However, since I have been on a Total Money Makeover, now I am willing to look bad for a while if it means maintaining my nest egg. So I decided to cashflow Christmas and a computer repair in December, and put this car repair in January's budget. Got the part used for $200 and I am going to install it myself! The whole point of my story is that "keeping up with the Joneses" and trying to look good can actually keep us from achieving our financial goals. We can spend beyond our means just trying to impress other people. Other people don't usually really care, and this puts a neediness in our spirit, an unwillingness to be content with what is. When we are always striving to please others, we are not content. So dropping the need to please helps us feel better, AND it helps us save money. Sometimes we can even make big sacrifices in our desire to look good in order to hit our goals faster! Another thing that helped me pay off $20,000 in debt and save an extra $20,000 in 2 years was deciding to have a roommate. Would I rather have my townhouse apartment for myself and my children alone? Yes absolutely! But does having a roommate help me save $ faster? Yes! Thus the decision was made. What are your financial goals? Perhaps you'd like to have extra in the bank as a cushion for peace of mind? Want to pay off debt? Build some wealth for your retirement? Whatever your goals may be, take a look at your lifestyle. Where could you sacrifice temporarily to amp up your cash? Here are some ways people have been willing to "look bad" in the short-term so their bank accounts can look good in the long-term! 1. Driving a beater car. Dave Ramsey often talks about how he drove a beater when he was getting out of debt, and it helped his family dig themselves out of a financial mess. He recommends a safe, reliable car, that is UGLY. That will do the job. 2. Having a roommate or cheap housing. Many people pay way too much for their housing. The recommended amount is 25% of your take-home pay. If your rent/mortgage is more than that, or if you want to accelerate saving, you may want to consider taking on a boarder. One great benefit of a roommate is they can help feed the cat when you are gone. 3. Wearing your old clothes until they wear out. Most of us(except my 11 year old son who has grown 3 sizes in one year!) have plenty of clothing in our closets. Why shop for the latest fashions when you can shop in your own closet? Of course get what is necessary. But adding a new pair of earrings or scarf can jazz up old clothes anytime. 4. Using older electronic devices, including phones. Do you really NEED an iphone 7? When we think about it, all of our cell phone and digital entertainment devices are wants, not needs. So what if your phone doesn't have the latest bells and whistles? If it works, it works. 5. Taking your lunch to work and making your own coffee at home. Aah...leftovers! I used to hate them, and I have grown to love them. They are actually delicious! Especially when they come with the taste of success! And don't get me started on how much money giving up my latte habit has saved me! Cha-ching! What ways have you been willing to "look bad" in order to get financial traction? Let us know what has worked for you! And remember, when you are not driven by the desire to please others all the time, you actually have true contentment. You can be grateful for what you have right now. And as you grow into more prosperity, that contentment goes with you. Then you have spiritual, as well as material, wealth.  "No one ever became poor by giving." ~Mike Todd
So the holidays are upon us! Hopefully we planned ahead in our budget for them. But statistically speaking, most of us didn't. So what do we do with Hanukkah & Christmas coming up and the consumer swirl all around us? If you are trying to keep up with the Joneses in your entertaining and gift giving, you may abandon your financial goals and end up back in debt. If you don't do anything, your kids will cry their little eyes out. So you gotta do something. Here are some tips from my personal and professional experience making and managing money at Christmas. These tips are geared toward your particular Baby Step, or in other words, "how much real money you have". And remember, you are never too poor to give. Through all the steps it is recommended that you give 10% of your net income to your place of spiritual inspiration or charitable works. Tithing helps you stay connected with what has heart and meaning, creates contentment, and gives a sense of overall abundance. And most people can live off 90% of their income. If you can't, you are not a good money manager! 1. Baby Step 1: If you are working on getting your starter emergency fund together that means you have some debt to pay off and are just beginning your journey with wealth-building. You hopefully have woken up to the dangers of credit cards and would like to have real cash savings in the bank for emergencies, big purchases like houses & cars, and retirement. At this stage of the game, it is best to keep your gift-giving & entertaining to a minimum. Explain to your family and friends that you are turning your financial life around, and would love to give everyone a thoughtful homemade gift. For kids that require a store bought game or toy, just give one decent-sized gift, and find bargains for the rest. Find free things to do like attending holiday tree lighting displays or school winter concerts. Potlucks are a great way to entertain without giving up your goal to save that $1000. Find contentment in the little things: homemade cookies, children singing, a walk in the crisp winter air. 2. Baby Step 2: Congrats! You have $1000 in the bank and are now intensely working on paying off your debt. This is serious stuff. To stay gazelle intense you are cutting expenses like crazy, working all kinds of extra jobs, and doing a monthly budget. Your kids have learned a new word, "NO", and are hopefully doing chores to help out around the house and earn their own spending money. When you are getting out of debt, continue on the "free" train! Free entertainment, inexpensive gifts, and potluck meals will support you in continuing to throw all extra money at the debt. You will probably spend something on your kids. That is fine. But enlist them in the adventure. Explain "we are getting out of debt as a family, and we all are working together so Christmas will be simple this year". You can make homemade gifts together: simple bath salts or homemade vinegars are easy and don't cost a lot. Doing a service project together can make things extra meaningful too, like serving a meal to homeless or giving to your local food bank. 3. Baby Step 3 & 3b: Allright, you are out of debt! Woohoo! Now that you no longer have any debt payments it will be tempting to start to ramp up your lifestyle with all your extra cash. But don't stop your gazelle intensity: keep going to save up 3-6 months of expenses in savings. This step makes sure that you are prepared for most of life's common challenges, such as a job loss, vehicle replacement, or medical event. And then Baby Step 3b is to save a down payment for a home purchase. While in Baby Step 3 & 3b, you probably will be able to spend a little more on the holidays than you did before. Since you are now a pro at budgeting, you may even have a Christmas fund saved up. But don't go crazy! Be sure you are still saving $ toward your e-fund or down payment, in addition to funding Christmas. I found a balance in this step by giving a blend of homemade AND store bought gifts, and enjoying entertainment that was both free AND paid for. Drawing names for adult gifts works in some families. If you want to give to co-workers and friends, a card and a little treat are just fine. Baby Steps 4, 5 & 6: Fantastic! You are in the serious wealth-building phase now. You have your foundation of your emergency fund and home under you, and are now saving 15% for retirement, saving for your kids' college, and paying off your home early with any extra money. These steps are done all at the same time, and usually take the longest of all the steps. During this phase, you will want to be more generous. You will definitely have a Christmas savings fund, and be adding to it throughout the year. That Thanksgiving "Oh my God Christmas is in 4 weeks!" panic will be a thing of the past. Continue to get good bargains with items for your loved ones on sale, and lean towards what they truly want, rather than the latest and flashiest. A great rule of thumb is: something they want, something they need, something to wear, and something to read. Some holiday travel can be budgeted in here, as long as you are continuing your Baby Steps 4, 5 & 6. Baby Step 7: WOW! You have made it to the final step! Your kids college is paid for, your home is paid for, now all there is to do is continue funding retirement to the maximum you can now that you do not have any payments. This is the time to build wealth, and be outrageously generous! At this point, the holidays may be a time when you can afford to take a big family trip to Hawaii, a cruise with your sweetheart, or gift all the kids or grandkids with a larger ticket item. Feel free to splurge, you've earned it! Don't forget the heart of the matter by supporting the church and charities that are most meaningful to you. When you are in this step you can begin doing some serious philanthropy. Give bigger than your usual tithe and see how good it feels! Practice random acts of kindness by giving a $100 tip to a waitress just for fun, or paying a single mom's light bill for a year. Don't forget to enjoy those little things: homemade cookies, a beautifully lit tree, or a walk in the crisp winter air. But know you can afford some big things too, and that is ok. Happy Holidays everyone! Enjoy your gift-giving and entertaining at every Baby Step! My hope is that we all learn contentment through this process, so we can enjoy the meaning o the season no matter what is going on with our money. Cheers! Congrats! When you get to Baby Step 3 you have $1000 in the bank and are completely debt free! Now it's time to start upping your net worth. But hold on! Before you start throwing all your money at investments, it's time to finish Baby Step 3, which is to put 3-6 month of expenses in savings. Okay, this is not as sexy or exciting as the previous 2 baby steps, but it is important. Baby Step 3b is like insurance. It keeps you from going into debt ever again by providing a safety net for many common emergencies that can come up over a 10 year period: needing to replace a vehicle, temporary loss of a job, medical challenges, or fulfilling the deductible on home insurance for repairs. And I can tell you as a working single mom, this step is a game changer! It means you sleep so much better at night, knowing you have $10,000 in the bank. Whew! I used to pray my way out of emergencies, but no amount of positive thinking ever took away the stress have no emergency fund caused. Now that I have that money in the bank, not only do I sleep better, emergencies seem to happen less often! And when they do, they are merely an inconvenience, not a huge source of stress. The average 4 person household needs about $10,000 to cover 3-6 months of expenses. Now this is expenses, what you require to keep your household afloat. It does not refer to monthly income, or "fun" spending. It is bare bones expenses. If you make $4000 a month but can run your household(mortgage, transportation, food & utilities) with about $2000 a month, then that is what you should save. Should I save 3 months or 6 months? It depends. If you have a two income household, an extremely secure job(like with the government), you could lean toward 3 months. If you are a one income household, self-employed, or simply want to feel more secure, you should lean toward the 6 month rule. Among spouses, whoever wants the 6 month emergency fund wins! Helping that person feel more secure is worth it. To work on saving your emergency fund, you use the same tools that I have taught you before: cut lifestyle in order to reduce expenses, work extra, sell things to up income. Continue to do your monthly budget and stay on track with knowing your ins and outs! The average person saves 3-6 months of expenses in 6 months. I did it in 3. The place to keep your emergency fund is in a place where it is liquid and accessible, like a simple Money Market account at your bank or credit union. If you do not own a home yet, and would like to own one, saving the money for a down payment is considered Baby Step 3b. It is recommended to save between 10 and 20% down on a home for which the monthly payment is no more than 25% your take home pay. This gives you a good start on a home mortgage while still having money left over to do the later wealth building steps in Baby Steps 4, 5 & 6. A 15 year fixed rate mortgage will protect you from market fluctuations in interest, and make it easier to pay your home off early in Baby Step 5. If you are applying for a mortgage without a credit score, it is recommended you have a 20% down payment. It is very possible to do this with a company like Churchill Mortgage that does traditional underwriting, but the requirements are a bit stricter. So that's Baby Step 3 & 3b! Please let us know how YOUR baby steps are going below, we look forward to supporting YOU to dump debt and build wealth! Love, Kathy  Why is coaching so valuable? How can it help me? Is it worth the cost? As a Master Financial Coach I know that coaching works. Besides coaching hundreds of people over the last 10 years I myself have been coached by several people who help push me, help me achieve more, help me improve my relationships, and help me win with money. My recent stint of being coached by Dave Ramsey's team helped me pay off $20,000 in debt and save an extra $15,000 in a year and a half! In my coaching practiceI have helped others to grow their businesses, improve relationships, and yes, win with money! I personally love giving and receiving coaching, but for many folks this process is new. Why hire a coach?
1. Coaching helps you define your goals. Many people are under such day-to-day money stress that they don't dream anymore. It's hard to look up towards the future when you're looking down at a pile of bills! Coaches help you to begin to dream again, to envision what your life could be like when your money is handled. What do you see for yourself and your family? Would you like tropical vacations? To purchase a nicer home? Have the freedom to do work you love? Have a retirement full of choices and opportunities? Talking with a coach inspires hope. 2. Coaching gets you in action toward your goals. Filling out the net worth sheet, and monthly budget, with your coach, is like a basic action step that gets you out of the "money fog", and into clarity on what needs to be done. A coach helps you get the numbers in front of you, and then helps you brainstorm opportunities to increase your wealth. Oftentimes the solutions are obvious: cut housing costs that are 50% of your income, or apply for a raise when you have been at a job 3 years with no increase. However, a coach can oftentimes help you see things you have overlooked: places in your budget where you can cut costs, or unexpected income sources and places to move money around so that it meets your goals faster. Coaches also help teach the give/save/spend money method, which creates overall life balance through meaningful giving, saving some money for the future, and spending wisely. 3. Coaching can save your marriage! Money fights and money problems are the #1 cause of divorce in North America! Don't be a statistic. Talking with a coach often helps both partners to feel understood, and to diffuse emotional tension that has been building up over money. Coaches can also help couples get on the same page with their goals and dreams, so there is unity. Once couples unite, figuring out the strategy and action items to get there is often easy. And a coach can help facilitate actions to take, and help the couple stay accountable to their goals with regular budgeting and follow-up. The cost of financial coaching is comparable to a standard therapy session. In my opinion coaching is uniquely valuable for couples tackling financial issues, because you get emotional support as well as tactical money strategy in one session. Some people say, "oh, I can't afford coaching". If you are struggling with money, I say you can't afford not to hire a coach! Most people can cut their cable bill and afford coaching. Before I found Dave Ramsey's method and turned my life around, I wasted so much money on emotional spending. A few hundred dollars spent on financial coaching earlier in the game would have saved me thousands! How much is it costing you to put off getting your money handled? To inquire about coaching, please visit our private coaching page here. The Debt Snowball~this is it, folks! Baby Step 2, the "heart" of the Dave Ramsey Baby Steps to building wealth! This is where you find out how serious you are about managing money for the most benefit. Truth is, in our debt-happy culture, this step represents a major change in attitude, lifestyle, and heart. This is where the rubber meets the road. Are you going to change?
I found once I committed to it, this step was the easiest step of all so far. I became "gazelle intense"(like the gazelle running for its life from the cheetah!) and totally changed my lifestyle in order to focus on paying off debt. This single-pointed focus gave me the ability to just throw ALL extra money at the credit cards and loans. I had about $20,000 in consumer debt: credit cards, old phone bills, and my car loan, and I paid it all off in about 6 months. How did I do this as a single mother? Well, there are 4 things I did that I would recommend to others. Like Dave says, it's not rocket science, but it does require that you change the way you have been operating so far. 1. Spend less money. If you have been living beyond your means on credit cards, loans, and so on, that means there is more spending going on than receiving. Simply reducing the outgo will stop the bleeding. I cut my lifestyle drastically: from renting out a room in my townhouse apartment to couponing and meal planning instead of eating out. I said "no" to my kids a lot, and we found lots of fun free things to do, like going to the park, playing board games, and playing music together. I also reduced my expenses for work, and was more strategic about which activities in my business were profitable, and which simply weren't worth continuing. 2. Make more money. You can also up the income side of the equation! I hustled with my coaching & music business to get more clients, and signed up for as many added hours at my side job at a housewares store as I could! This was the hardest part~I felt like I was working ALL the time, and I was tired. But I could see my debt numbers going down, and that was a huge motivator. I also applied some savings toward the debt, so that gave me a big boost in the beginning of the journey. I sold furniture and household items on craigslist and facebook. I made a goal at the beginning of each month to earn $3-400 miscellaneous income, and achieved it most months! 3. Do a monthly budget! This is a key step: track all ins and outs of your money, and have a plan for where each dollar is going to go before the month begins. I found doing the budget was incredibly empowering for me. In the past I considered it constricting, but now I see it is a tool that helps me get to where I want to go. The budget also helps put each of your expenses into perspective. Dave Ramsey and many financial coaches recommend you keep housing 25-33% of your take-home pay. When I saw my housing costs were 50% of my income, I rented out a room in order to create more margin for paying off debt. 4. Be grateful for what you have. Learning to be content with one's current lifestyle is key. When you give up trying to impress others, life is so much easier! Good homecooked food, a comfortable bed, and quality family time are priceless, and not that expensive to acquire. I found I could be pretty happy without a fancy house, designer clothes, or expensive travel. This created a sense of freedom, and the ability to focus on my own goals without worrying what others were doing. Stop "keeping up with the Joneses". The Joneses are most likely broke and deeply in debt! When I paid off the last debt in September 2015, I did a "YES" day for my kids to celebrate! They got to choose what they wanted to do and eat all day, and got a spending allowance for treats. And then I took them out for dinner! How are you going to celebrate when you become debt-free? If I can do this as a working single mom, so can you!  In Dave Ramsey's 7 Baby Steps to wealth building, the first step is called Baby Step 1: Save $1000 fast in a starter emergency fund. As a single mother, I can tell you, this step saved my life, and got me on the road to turning my financial life around. You see, I had always made good money. But I blew most of it. At the height of my career I had been making $100,000 a year, but had so much debt and out of control expenses after my divorce that my dream of purchasing a home for myself and my children was out of reach. This was a wake-up call for me: I made too much money to be so broke! I decided to follow the Baby Steps, which help you build wealth by dumping debt and increasing savings. Baby Step 1 is to save $1000 fast. This breaks the debt cycle by giving you a buffer between you and life. Any new emergencies are paid out of this fund instead of using a credit card. This $1000 is insurance. It should be kept in a place where it is liquid and easily available, like a simple savings account, or cash at home. If you make less than $20,000 a year Dave recommends you save just $500 for Baby Step 1. There are lots of ways to save $1000 fast. Have a garage sale, or sell something on craigslist/facebook/ebay. Cut back on discretionary spending like eating out or traveling for a month or two. Take on an extra side job, or work overtime at your current job. I had some money in savings, so I simply took my savings down to $1000 and then threw the rest of the savings at my debt, which is Baby Step 2~coming soon in the next blog! In the past, I always used to "outearn my stupidity", as Dave talks about. I knew I could always make money to cover expenses and unexpected costs, but it kept me constantly scrambling, and on edge emotionally. Baby Step 1 changed all that. Once I had $1000 in the bank that was untouchable for anything but emergencies I slept better at night. There is such a deep peace that comes from knowing you have a backup. While I was getting out of debt I had to use the emergency fund 3 times for car repairs of about $300 each. This was easy and peaceful, without the stress and worry I experienced before. What a relief! I simply paid the bill out of the fund, and then replenished my emergency fund with my monthly income. How can you free up $1000 fast for your Baby Step 1? I guarantee it, this one step will change your life! It will take you from feeling out of control financially to having actual peace in the realm of money. It is a game-changer. And hopefully it will inspire you to go on to Baby Step 2, and knock out all of your debt except your home! |
Kathy KaliCoach. Teacher. Author. Speaker. Archives
May 2020
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