Is it Better to Make Resolutions or Set Goals? – Post 421

Welcome to Feb. Well, we’re a month into the New Year, how are you doing so far?  How are your New Year’s resolutions going? Are you still on track?

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Probably not. Most of us get off track within the first few months of the year. We just keep on marching forward in life, day after day, traffic jam after traffic jam, cubicle after cubicle. Life is moving faster and faster, month by month, year by year but we’re really not getting anywhere.

Why do most of us fail at keeping our New Year’s resolutions and what simple change can we make that will help us achieve what we want to accomplish in the future?

Well that is what we are going to discuss on today’s episode of the ProsperityRx Podcast. So lets get on with the show.

Every December and January we RESOLVE to change our path. To get healthier. To become fit. To get out of debt. To save money. To do something different yet within the first month or two we fail to change.

December is a month attached with lots of emotions. As the holidays close in we get caught up in an emotional roller coaster. We’re in a giving mood but realize, no matter how prepared we thought we were, our finances aren’t in line with emotional aspect of giving. Family dynamics during the holidays test our emotions. And then the hustle and bustle of the season combined with all the special foods and holiday treats, we find ourselves not making the best choices when it comes to our health and what we eat.

On top of that, after the holidays have past and we start facing a New Year we reflect on the failures of the past year and we tend to make resolutions for the New Year that are overly ambitious and destined to fail.

As the New Year starts we are a bit apprehensive because we really don’t know what the New Year will bring and at the same time we realize that we have set the same resolutions in the past and have failed to succeed in completing the resolution, many times year after year.

It’s important to set some intentions for positive change in our life for the New Year, to hit the refresh button, so we need to take a different look at how we set those intentions for this New Year.

By definition, resolutions are more do-or-die which makes them more intimidating and more likely to fail. The definition of resolution is “a firm decision to do or not do something” or “the action of solving a problem, dispute, or contentious matter.” A resolution tends to be ridged and inflexible. More conducive to failure.

Nearly 90 percent of those optimistically life-altering plans fail. And, that’s never good for our ego. It makes us question ourselves. It makes us want to avoid making future commitments to ourselves. It makes us not just quit our plans to make ourselves better, but it can actually turn us in the wrong direction. The “I want to eat salad for lunch everyday diet,” doesn’t just derail into a simple tuna sandwich and a bag of chips. Our frustration instead leads us to a box of donuts, with a side of fries.

Meanwhile a goal by definition is “the object of a person’s ambition or effort; an aim or desired result; the destination of a journey.”

Just by these definitions alone, a goal sounds more attainable. Instead of setting a “firm” resolution that requires a very specific result we need to set a goal which is a part of a journey and enjoy the road to reaching a better place in our life.

While resolutions seem set in stone, goals are more malleable. Achieving a goal is an entirely different process than achieving a resolution.

For example if we set a resolution to eat healthier we become more obsessed with the result. If we cheat we feel like we failed completely. Do it enough time and we lose our resolve. Meanwhile if we set a goal to eat healthy, if we slipped up, it didn’t ruin our intention. We can start over tomorrow and continue to work toward eating healthier. We hadn’t broken an ultimate or overarching rule.

If we set a resolution, every day will be a battle to uphold that resolution but if we set a goal every day will be a journey toward that goal, with ups and downs, good days and bad days. By the end of the year we will be able to look back on our year and think about the progress we made toward our goal and be proud of the work we put in instead of evaluating whether we did or did not uphold our resolution.

Ultimately a resolution is a pass/ fail grade while a goal is graded on an A-F scale.

If we don’t reach the goal we have at least made progress and we can continue that progress into the next year.

Setting ourselves up for success in the New Year is one of the most crucial aspects of goal-setting. Bettering ourselves involves challenging ourselves, but we also don’t want to force ourselves to do anything we simply cannot achieve.

When setting goals, it’s important to consider how we’ll achieve it. Consider the steps we can realistically take to get there, breaking them down into baby steps that we can accomplish along the way, giving us little wins that keep us motivated.

Setting goals that aim too high are bound to fail, setting goals too low can also be similarly bound for failure. When we set goal and then break them down into baby steps, our minds perceive them as easy to achieve. And as we progress along the way, we feel a sense of reward.

Here are a few tips to help us with our goal setting.

  1. Never shoot for sameness. It makes sense that trying to remain the same can lead to failure, because there is nothing more natural than change. Expect to change. Strive for improvement.
  2. Make it public. Sharing our goal holds us accountable to achieving that goal. Tell our friends and family. Tell our coworkers. And be vocal about our intentions and progress.
  3. Make it focused. Being a better boss, becoming rich, or losing weight are hard to quantify unless we get focused and specific with our words. We should define each step toward our goal, and stay focused only on the next step.
  4. Make it scalable. While we can all hope to find a Genie to grant us wishes, the truth about achieving any change is that small actions eventually create large results. Don’t be discouraged by small change. Applaud it. It’s part of the process. Weight is lost pound by pound. Money is made dollar by dollar. Books are written one word after the other.
  5. Give it consequences—both good and bad. We all hold ourselves more accountable when consequences are present. Set consequences—plan something that stings a little when we fail, and celebrates when we succeed. While many goals focus on quitting negative habits, others should focus on adding rewarding habits. For example, it’s great to say we want to quit smoking or quit eating French fries. But, if we quit something negative, we should also add a goals to do something we enjoy—like having a date night with our spouse.
  6. Seek support. There are few more powerful things in life than knowing someone is cheering for our success. When we set a goal, seek out a person who will support our decision and be our champion. And, even if we’re not chasing the same goal, to become a cheerleader for their goals as well.
  7. Manage expectations. There’s a reason we didn’t achieve all our goals in the past. We can probably list many of them—we got busy, distracted, stressed, and so on. Know that while we’re trying to create change, a lot of our life demands won’t change. We’ll still be just as busy. We’ll still find distractions. And, we need to manage our expectations when setbacks happen. Don’t throw in the towel.
  8. Start Doing. Advice can come in many ways. Yes, there are psychological, physiological, and social elements included with any intended change we want to make this year. But, ironically, when we achieve our goal, our friends, family members, and coworkers will summarize our achievements in one simple sentence. They’ll say, “You did it!” So, possibly the best advice I can give anyone is this, “Start doing.”

We also have to consider why we are setting the goal in the first place. If we’re not doing it for us, what are we doing it for? Having a really big why increases our chance of success.

While a resolution to do something specific in the New Year feels like it must be completed by December 31st. Let’s be real, we are fallible creatures. Life is hard and sometimes it gets the best of us. Sometimes, the outcomes in our own lives are out of our own control. Since so many things in life are out of our own control, why are we so hard on ourselves when we don’t meet a resolution by the arbitrary deadline of December 31st?

It’s better to set a goal, so we can evaluate our progress and adjust along the way rather than write off a failed resolution and give up on it. Life is hard enough without the added pressure from ourselves. A goal can be a symbolic finish line that we’re working toward, whether the finish line is December 31st, or a metaphorical point we aim to reach for over the rest of our life. When life gets the best of us and circumstances happen that are out of our control, with goals we can reevaluate and adjust, eliminating the feeling of failure that we experience when we “break” our resolutions.

We should all absolutely aspire to our goals and light fires under our asses to achieve them, but at the end of the day, and the end of the year, it’s important to show ourselves some love for everything we’ve already made happen in our life. To celebrate our successes.

Change is inevitable. It’s going to happen. And, that means we should all focus on setting goals to make the best changes possible. Best wishes in 2019!

I hope you enjoyed this episode of the ProsperityRx Podcast. If you did find value please subscribe and feel free to share it with others.

Do you find yourself wondering where your money goes each month?

You’re not alone. People at every point on the financial spectrum experience the same feelings of frustration and stress that can come from not having complete control of your finances.

One of the first steps to achieving health, wealth and prosperity is to get control of your finances. And the first step to getting control of your finances is to create a spending plan. A spending plan is how you tell your money where to go instead of wondering where it went. A spending plan is the most important part of getting out of debt and gaining control of your finances.

Once we began following our own spending plan we were shocked to see all the ways money was wasted and how quickly we could start paying off our debts. By getting control of every dollar we finally were able to get out of debt and start building for our future.

To help you I have created a free course that takes you through the process of getting control of your money.

You’ll learn how to track your household budget and find the money to get the life you really want.

I put together this free 2 part spending plan class to walk you through the entire process. In Part One we discuss the budget process and explain the importance of the different steps. In Part Two I will walk you through the process by creating a sample spending plan and explain the process in more detail.

To enroll in this FREE class visit SpendingPlanClass.com

Instead of wondering where your hard earned money went learn how to create a spending plan and gain control of your finances.

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Avoid Making These 4 Mistakes During Open Enrollment

Fall is a time of leaves changing colors, children going back to school, families enjoying Thanksgiving dinners, and… open enrollment. Yes, it’s the opportunity for most employees to select which benefits they will choose for the following year. Here are some of the most common mistakes we see people make:

1. Not fully understanding the value of an HSA-eligible health insurance plan

According to a recent study, HSA-eligible high deductible health plans have gotten 400% more popular over the last decade. These plans tend to come with lower premiums (what you pay per month or paycheck for your coverage) but higher deductibles (what you pay out-of-pocket before most of the insurance benefits kick in) than more standard health insurance plans. In addition, they make you eligible to contribute pre-tax dollars to an HSA (health savings account) that can be used tax-free for qualified medical expenses at any time.

Possible free money

While it’s easy to compare the difference in premiums and deductibles, don’t forget to factor in the value of the HSA. First, many employers will actually make contributions to your HSA for you. That’s free money! If you contribute on top of that, you also get a break on your taxes.

For example, I recently spoke with an employee who would save almost $1,900 a year in premiums by choosing the high deductible health plan. In addition, he would receive $1,000 in his HSA from his employer and would save almost another $2,000 in taxes by contributing another $6,000 to the HSA. The $4,900 in total savings dwarfed the difference in deductibles.

2. Under or over funding an FSA

FSAs (flexible spending accounts) let you put money away pre-tax that can be used tax-free for health or dependent care expenses. If you’re in the 24% tax bracket, that’s like getting a 24% discount on those eligible expenses! Not taking full advantage of these accounts could cost you hundreds or even thousands of dollars in lost tax breaks.

However, there is a catch. Unlike HSAs, FSAs are “use it or lose it” so you don’t want to contribute more than what you’re pretty sure you can spend. (Having a general health care FSA also precludes you from contributing to the more valuable HSA in the same year.) If you do end up with extra money in the account at the end of the year, try to use it by stocking up on qualified supplies like contact lenses and prescription drugs. You can find FSA-eligible items here.

3. Not taking advantage of a prepaid legal plan for estate planning

Do you have updated estate planning documents like a will, durable power of attorney, advance health care directive, and living trust? If not, you can save a lot of money by using your employer’s prepaid legal service to have these documents drafted or updated. You pay a fee per paycheck, but the legal services are free or heavily discounted. You can then choose not to renew it the following year after you’ve gotten your documents in place.

4. Ignoring insurance benefits you may actually need

Disability insurance

Disability insurance is often overlooked even though about 25% of 20-yr olds are likely to be out of work for at least a year due to a disability. If your employer doesn’t provide it, you may want to purchase it. The good news is that employee-paid disability benefits are tax-free.

Life insurance

Your employer may offer you life insurance coverage equal to one or more times your salary, but you may want to purchase supplemental life insurance if you have dependents. You can use this calculator to estimate how much you need. Then compare the cost of purchasing it through your employer with the cost of a policy in the individual market. (See if your coverage at work can be converted to an individual policy once you leave the job.)

Your benefits can be a significant part of your total compensation and open enrollment can be your only chance to take full advantage of many of them. When in doubt about your selection of benefits, see if your employer offers a financial wellness program with free guidance and coaching from unbiased financial planners who are trained on your particular benefits. Then go and enjoy the holidays knowing that your family is protected.

A version of this post was originally published on Forbes

Define Your Dream and have a Burning Desire to Achieve It – Post 420

“Do you want to fail or do you want to succeed?”

Until You Know Why, the How Doesn’t Matter. Define Your Dream and have a Burning Desire to Achieve It!

That’s the first step. That’s always been the first step. It is still the first step.

Until you know why you’re on the Financial Peace journey, or building a business, or really anything else you want to accomplish in life, until you know why, the how doesn’t matter. You have to take the time to ask, “OK, what do I want to accomplish from this journey?” You have to decide.

You aren’t going to make it. If you don’t know why the how doesn’t matter.

At the end of 2011, 3 weeks before Christmas I lost my pharmacy position. Long story short, they were replacing those of us that had been there quite a while with new grads that they were paying 20 grand less than I made before. After a year of ny finding temporary or part time work I decided to get involved in my first side gig business outside of pharmacy. I had three goals that compelled me. Number one, I wanted to save my home, the dream home that I built with my own blood sweat and tears, I wanted to save it from being sold or foreclosed on while I was underemployed. Number two, my Malibu was on its last leg and I needed a new car. Number three, I needed to finish paying for my youngest son’s private school tuition. That’s why I got started in this business. Now my goals of course have changed since then because I was able to accomplished all three of those with the help of this business. But those were the first goals.

In my consulting and personal development business I teach people that when they first get in business to focus on the real reasons they want their business to succeed. Likewise, my good friend and business mentor, Dale Calvert asked me to go and sit down with my spouse and come up with 20 really good reasons I wanted success in my business and then out of those 20 he asked that we decide on our top 3 reasons then focus on those. He said you have to decide, “OK, what do we really want to accomplish from this business?”

Until you have that and it is inside of you, you will not make it. You will fail. Those principles apply to anything you want to accomplish in life. In this episode I apply these principles to the financial peace journey and show you how to define those dreams and then ignite that burning desire to accomplish them.

 

 

To learn more about creating extra income for yourself by creating your own business like I did visit http://AIMHighForSuccess.com

Do you want to fail or do you want to succeed? – Post 419

Do you want to fail or do you want to succeed? In this podcast we are going to talk about defining your dreams. Until you know why the how doesn’t matter.

 

Until you know why you’re doing ANYTHING, the how doesn’t matter. You have to take the time to ask, Why do I want to become debt free? What can I do or become if I’m debt free? What do I want to accomplish in life? You have to decide.

You’ve got this!

Now is the best time to start taking control of your money! I’ll be covering many topics to teach and encourage saving and debt freedom. Be sure to subscribe to this blog at ProsperityRx.com to learn how to save money, make a budget, pay off your debt, reduce your taxes and invest for your future.

And if you found value in the information that I’m providing please like and share this with others.

Also if you want to learn more about how to create extra income by starting a home business that requires no startup capital, no pyramid that requires a monthly auto shipment that cost you money every month instead of creating money, and no selling of lotions, or potions or pills, or quick magic diet aids that melt away inches in minutes or other such scam promotions visit http://AIMHighForSuccess.com.

The Mindset Pendulum – Post 418

On today’s podcast I want to talk about the “Mindset Pendulum.” What goes on inside your brain as you embark on the financial peace and prosperity journey. Once you have an understanding of what’s going on in the 6 inches between your ears then you have a better chance of recognizing how your thoughts affect your success and you will be better equipped with ways to change what Zig Zigglar refers to as “Stinkin’ Thinkin’.” You will be able to stop the stinking thinking and get yourself back on track.

In your brain there is this pendulum swinging back and forth. When you start this journey you have attitudes, opinions and beliefs. All of us. We have opinions about everything. We have opinions about things we don’t need to have opinions on. We have attitudes which are stronger. Strong feeling about things. And we have beliefs.

We are made up of opinions, attitudes, and beliefs.

When you start this journey you usually have a neutral or negative opinion. What happens, in our mind, we get a little bit of information. Maybe we go to a financial peace university class or we see a video podcast or webinar by Dave Ramsey or one of his associates and our opinion changes to somewhat positive. And when that opinion changes from neutral or negative to positive then we say, “What’s the worst thing that can happen? What’s my risk, what’s my reward? I’m doing this.”

That’s what happens. Then we go into the world and somebody says, “You can’t live without credit, you’ll never buy a home or a car” . . . Then what happens to that opinion?

It goes back to negative. Then we hear callers give the “Debt Free Scream” and are all fired up and our pendulum swings back to excitement.

Then you get on facebook and you see all the posts from your so called friends about their exotic vacations and the luxury car or boat that they bought while you are on a “beans and rice” diet getting out of debt and your pendulum swings back to the negitive.

This thing swings daily in the beginning. Your pendulum is going to swing. It’s normal.

Sometime we think we’re going crazy because we’re up and down about it. Because we are all made up of opinions, attitudes and beliefs. If you just hang in there eventually your opinion will become an attitude. And it’s stronger. Then over time the attitude becomes a belief.

That is in anything we do in life. Not just on the financial peace journey but in business as well. We get involved in whatever we make a commitment to and think we don’t like this swinging back and forth in our mind so we think something is wrong. Sometimes they’re excited and sometimes we want to puke. Its just the way people are and most people can’t get through this because they don’t understand what is really going on in their mind..

Listen to my podcasts or watch my video blogs. Catch Dave Ramsey or one of his team members on the radio or over the internet. Stay plugged into folks that are on the same journey as you and folks that have gone there before. It will calm your pendulum down.

We all go through it.

So you have to understand your pendulum will swing. But if you continue and stay on the right track, it will get to a point where it just doesn’t swing as bad, and eventually just doesn’t swing any more. Stay plugged in and when you get to a point, it just doesn’t matter any more.

You’ve got this!

Now is the best time to start taking control of your money! I’ll be covering many topics to teach and encourage saving and debt freedom. Be sure to subscribe to this blog at ProsperityRx.com to learn how to save money, make a budget, pay off your debt, reduce your taxes and invest for your future.

And if you found value in the information that I’m providing please like and share this with others

Also if you want to learn more about how to create extra income by starting a home business that requires no startup capital, no pyramid that requires a monthly auto shipment that cost you money every month instead of creating money, and no selling of lotions, or potions or pills, or quick magic diet aids that melt away inches in minutes or other such scam promotions visit http://AIMHighForSuccess.com.

You’ve made the decision to get out of debt, now what? – Post 417

anchorYou’ve Made the Decision to get Out of Debt, Now What?

Congratulations!

You’ve made the decision to get out of debt.

So now what?

Some people never get beyond this point because they don’t know where to start. The big picture is overwhelming, so people often quit before they ever write the first check to pay off a debt. But you don’t have to worry, because you’re about to discover the first step toward saying goodbye to debt!

Before you learn this secret, you need to be forewarned: This step may surprise you. It will seem like the wrong thing to do. You won’t guess it offhand because most people don’t think it has anything to do with getting out of debt. Are you ready?

The first step is this: Save $1,000 as fast as you can.

You weren’t expecting that, were you? Why would anyone put money in a savings account instead of using it to pay off debt?

Because life happens.

Think of your emergency fund as a safety net. Saving first allows you to get in the mind-set of being in control of your money. It forces you to make a change. Saving money can actually become addicting once you see you can do it!

We don’t know when a storm will come our way, but we know rainy days do come eventually. Your air conditioner breaks in the middle of July. Your car has a busted transmission. Your kid breaks their arm at baseball practice. Surprises like these are a part of life. But if you have $1,000 in an emergency fund, you won’t have to go deeper into debt when the inevitable comes your way.

Jump-Start Your Savings Fund

If you’re serious about getting out of debt, work as hard as you can to put away $1,000 quickly. Here are a few ideas!

Make a budget.

Zero-based budgeting is essential to your financial success. Your budget is the key to saving your $1,000 emergency fund. It will show you where you’re overspending and where you can cut back to save instantly. But if you don’t make a monthly budget, you’ll never know how many different areas you could be saving in.

Scale the grocery budget way back.

We know it might sound impossible, but it is doable! Make a shopping list and stick to it. Stop purchasing “wants” and only purchase necessary items. If you cave in to impulse purchases when walking down the aisles, consider doing curbside grocery pickup. Switch to store-brand products. Challenge yourself to get creative and only cook with the items left in your pantry. Make slow cooker meals and see how far they’ll help you stretch your groceries throughout the week.

Purge the house.

Sell the mysterious items in the attic and the clothing you didn’t even know was lurking in your closet. Get rid of the high-priced jewelry you bought to keep up with the Joneses. Sell the boat. Sell the car. Look for social groups or websites like facebook marketplace and Craigslist to sell everything you’re not using. After all, one person’s trash is another person’s treasure.

Find ways to bring in extra cash.

Are you a great photographer? Can you knit masterpiece blankets in no time? Now is the time to use your hobbies or skills to generate extra income. Look for opportunities to work overtime.

If your job doesn’t give you that option, consider finding an extra gig to take on during weeknights or the weekend. Sure, it might not be glamorous delivering pizzas or stocking canned goods at the grocery store—but then again, swimming in debt isn’t too glamorous either.

I’ve had side gig incomes for years. I can show you how you can build a side gig business which will generate additional income for you and at the same time help you save considerably on your income taxes. I can show the side gig that I’m doing that doesn’t require a financial investment investment to get started. None of these pyramids where you have to spend money on monthly autoshipments that cost you money each month instead of creating money. No selling lotions, potions or pills, no magic juice or magic diet aids that claim to cause you to loose inches in days or other such nonsense that you see all over social media. Stay tuned to the end and I will share with you how to get more information.

Decide what you can live without.

Are you ready for some 21st century sacrifice? Go through your bills and cancel any needless memberships and subscription services. Wave goodbye to that unused gym membership and monthly magazines you never read! Maybe it’s time to ditch the cable (and even Netflix) and get to know your DVD collection once again.

Look at it this way: If you’re working an extra job, do you even have time for binge-watching numerous TV shows? A little bit of sacrifice for a period of time can add up to extra cash in your pocket pretty quickly!

Once you’ve reached the magic number, take your money to the bank. Don’t keep it at home—you’ll use it because it’s there! You’d be amazed at how easy it is to justify an “emergency” when you forget to get cash for a field trip, the pizza driver needs a tip, or your co-workers are pooling money for a farewell gift. Instead of tempting yourself with cash on hand, open a savings account separate from your regular checking account. Put your $1,000 in it and leave it alone. Don’t touch it. It’s for emergencies.(Oh, and a clearance sale at your favorite store is not an emergency.)

You Can Do It

A safety net for the unexpected isn’t the only plus in starting your emergency fund. This first step also gives you confidence, a feeling of accomplishment, and a sense of control. This step proves you can save money. You can control your behavior. You’ve discovered the power of intense focus and determination. Now keep using those skills to tackle the next step—getting rid of your debt.

You’ve got this!

Now is the best time to start taking control of your money! I’ll be covering many topics to teach and encourage saving and debt freedom. Be sure to subscribe to this podcast and my blog at ProsperityRx.com to learn how to save money, make a budget, pay off your debt, reduce your taxes and invest for your future.

And if you found value in the information that I’m providing please like and share this with others

Also if you want to learn more about how to create extra income by starting a home business that requires no startup capital, no pyramid that requires a monthly auto shipment that cost you money every month instead of creating money, and no selling of lotions, or potions or pills, or quick magic diet aids that melt away inches in minutes or other such scam promotions visit http://AIMHighForSuccess.com.

Jim Rohn Once Said:

In the process of living, the winds of circumstances blow on us all in an unending flow that touches each of our lives.…

What guides us to different destinations in life is determined by the way we have chosen to set our sail. The way that each of us thinks makes the major difference in where each of us arrive. The major difference is the set of the sail.

The same circumstances happen to us all. We have disappointments and challenges. We all have reversals and those moments when, in spite of our best plans and efforts, things just seem to fall apart.…In the final analysis, it is not what happens that determines the quality of our lives, it is what we choose to do when we have struggled to set the sail and then discover, after all of our efforts, that the wind has changed directions.

When the winds change, we must change. We must struggle to our feet once more and reset the sail in the manner that will steer us toward the destination of our own deliberate choosing. The set of the sail, how we think and how we respond, has a far greater capacity to destroy our lives than any challenges we face. How quickly and responsibly we react to adversity is far more important than the adversity itself. Once we discipline ourselves to understand this, we will finally and willingly conclude that the great challenge of life is to control the process of our thinking.

Learning to reset the sail with the changing winds rather than permitting ourselves to be blown in a direction we did not purposely choose requires the development of a whole new discipline. It involves going to work on establishing a powerful, personal philosophy that will help to influence in a positive way all that we do and that we think and decide. If we can succeed in this worthy endeavor, the result will be a change in the course of our income, lifestyle and relationships, and in how we feel about the things of value as well as the times of challenge. If we can alter the way we perceive, judge and decide upon the main issues of life, then we can dramatically change our lives.

Set your sail for prosperity, get out of debt, create additional streams of income, and life life to its fullest. That is your prescriotion for prosperity.

Start Today!

 

7 Baby Steps to Prosperity – Post 416

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Episode 9 – 7 Baby Steps to Prosperity

I am a huge fan of Dave Ramsey’s baby steps from his book, The Total Money Makeover. It was the baby steps that helped us get rid of $140,000 in consumer and student loan debt, and we are not the only ones. Millions of people have taken his course and followed his baby steps as well, so you can be confident that if you follow these steps, you will build a strong financial foundation for you and your family. A foundation that will lead to peace and prosperity.

Today we’re going to go over each step briefly and explain how they are so important to accelerating your path to peace and prosperity, financial independence.

Let me just list what the baby steps are and then I will give a short explanation of each.
Baby Step 1 – $1,000 in an Emergency Fund
Baby Step 2 – Pay off all non-mortgage debt using the Debt Snowball
Baby Step 3 – 3 to 6 months of expenses in savings
Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement
Baby Step 5 – Funding College for children
Baby Step 6 – Pay off your home early
Baby Step 7 – Build wealth and give a bunch away

To help you figure out where you are in the process here is a breakdown of what each baby step entails.

Step 1. Save $1,000
This is a starter emergency fund. It might seem silly to sock a grand in the bank when you could be putting that money toward reducing debt, but here’s the logic behind this first baby step:

Unexpected expenses happen to everyone, and for some reason they often tend to happen more when you’ve just committed to getting out of debt. In order to avoid being tempted to use your credit cards to handle these unexpected costs and rack up more debt, save a quick $1,000 and put it aside as a buffer for those emergencies that will happen.

If in the course of paying off your debt, you have to use some of the money in your starter emergency fund, you simply stop paying extra on your debt and put any extra money into your starter emergency fund until it reaches $1,000 again. This step will help ensure that your credit card balances continue to go down and not up.

The starter emergency fund also serves as training ground for both paying for emergencies in cash and for developing a habit of saving money.

Step 2. The Debt Snowball
As a math geek I understand that paying off debts according to the highest interest rate first will save money in the long run, but the debt snowball is often a better choice when it comes to keeping you motivated for the long journey of becoming debt free.

With the debt snowball method, you start by listing your debts from smallest to largest. You make the minimum payment on all debts, putting any extra funds toward the smallest debt until it’s paid in full.

Then, you take the minimum payment you were paying on the smallest debt, the minimum payment on the next biggest debt, plus any extra funds, and put that money toward the next biggest debt until it too is paid off.

This method of keeping your total monthly minimum payments the same and then adding any extra funds toward your current smallest debt means that you will pay off your debt at a faster rate than you have been up to this point.

Being able to mark those smaller debts as “Paid in Full” more quickly will give you more motivation and faith that you really can win the battle against debt.

Step 3. Finish the Emergency Fund
Once you have paid off all your debt except for your house the next step is to increase your emergency fund until it contains 3 to 6 months’ worth of expenses for your household. To get this emergency fund built as quickly as possible is to take all of the monies that you were putting toward your debt snowball, which should now be paid off, and put it toward finishing your emergency fund.

A 3 to 6 month emergency fund will keep you and your family well buffered against major financial emergencies such as job layoffs and large unexpected expenses such as major home repairs.

Developing a habit of saving BIG money will make it easier for you to develop a habit of putting money into a separate fund for expected major expenses like I did to pay cash for my daughters wedding.

Step 4. Maximize Retirement Investing
After the consumer debt is gone and the emergency fund is fully funded, Ramsey suggests maxing out your retirement investing.

For 2018 this means contributing up to the legal maximum allowed by the IRS of $18,500 a year for 401(k)’s and $5,500 a year for IRAs (Ramsey suggests 15% of your income). Those 50 and over can contribute an additional $6,000 to their 401(k) and an additional $1,000 to their IRA holdings.

By maxing out your retirement investing based on your retirement funding goals, you are ensuring that your golden years will be secure and comfortable.

Step 5. Prepare the Kids’ College Funds
One of the things I like about the college section of the Total Money Makeover book is that Ramsey is clear that college is not a guaranteed career success for your kids. He goes into great detail about how important it is to calculate the cost vs. the benefit of college before you go sending your kid out to spend $25,000 a year on schooling.

It’s important during this step to talk with your spouse about how much money you can comfortably set aside for your child (ren)’s education.

The dollar amount is totally up to you. Just be sure you research the different college saving options and make sure that what you’re planning on contributing to your kids’ college educations is affordable for your family – and make your plan clear to your kids so they know exactly what to expect from you where college education help is concerned.

Step 6. Pay off the Home Mortgage
After you’ve paid off all consumer debt, have a fully funded emergency fund, are contributing at least 15 percent of your income toward retirement, and have a plan for contributing to your kids’ college educations, it’s time to dump the mortgage.

Put all extra funds (based on having created a solid budget) toward that mortgage and get it paid off in full as soon as possible. The less interest you pay to the bank, the more money you have available to give to worthy causes and to fulfill your dreams, whatever those dreams may be.

Stpe 7. Build Wealth and Give a Bunch Away
Here’s arguably the best step! Now that you owe no money to anyone and have a nice stockpile of savings, it’s time to start building some serious wealth.

That wealth-building can come in a variety of forms. You can invest in mutual funds, invest in real estate or simply sock the money away in a high-interest earning bank.

The goal is to put as much money as possible toward whatever your financial goals are, whether that means traveling the world, building your dream home or living life as a philanthropist.

Once you are completely debt free and have amassed a serious amount of wealth, the world is your oyster and your dreams are unlimited. So start working the baby steps in your life today, and work toward achieving all of your dreams

Now is the best time to start taking control of your money! I’ll be covering many topics to teach and encourage saving and debt freedom. Be sure to subscribe to this podcast and my blog at ProsperityRx.com to learn how to save money, make a budget, pay off your debt, reduce your taxes and invest for your future.

And if you found value in the information that I’m providing please like and share this with others

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Jim Rohn Once Said:

In the process of living, the winds of circumstances blow on us all in an unending flow that touches each of our lives.…

What guides us to different destinations in life is determined by the way we have chosen to set our sail. The way that each of us thinks makes the major difference in where each of us arrive. The major difference is the set of the sail.

The same circumstances happen to us all. We have disappointments and challenges. We all have reversals and those moments when, in spite of our best plans and efforts, things just seem to fall apart.…In the final analysis, it is not what happens that determines the quality of our lives, it is what we choose to do when we have struggled to set the sail and then discover, after all of our efforts, that the wind has changed directions.

When the winds change, we must change. We must struggle to our feet once more and reset the sail in the manner that will steer us toward the destination of our own deliberate choosing. The set of the sail, how we think and how we respond, has a far greater capacity to destroy our lives than any challenges we face. How quickly and responsibly we react to adversity is far more important than the adversity itself. Once we discipline ourselves to understand this, we will finally and willingly conclude that the great challenge of life is to control the process of our thinking.

Learning to reset the sail with the changing winds rather than permitting ourselves to be blown in a direction we did not purposely choose requires the development of a whole new discipline. It involves going to work on establishing a powerful, personal philosophy that will help to influence in a positive way all that we do and that we think and decide. If we can succeed in this worthy endeavor, the result will be a change in the course of our income, lifestyle and relationships, and in how we feel about the things of value as well as the times of challenge. If we can alter the way we perceive, judge and decide upon the main issues of life, then we can dramatically change our lives.

Set your sail for prosperity, get out of debt, create additional streams of income, and live life to its fullest. That is your prescription for prosperity.

Start Today!