Episode 73
The world acts as if money is THE most important thing in life. We disagree! Money is not the most important thing, but money can be that vehicle that helps you accomplish that which is most important.  On this episode of Getting Money Right we conclude our 4 Financial Steps to Purposeful Living.  It’s a way of managing money that ensures your life is lived with purpose and impact.

SHOW NOTES

Methods of managing money to achieve financial freedom

1.     Dave Ramsey - 7 baby steps.

2.     Crown Financial - Money Map.

3.     Gateway Stewardship - Financial Roadmap.

4.     Radical Personal Finance - 5 Pillars of Finance.

 

Our mission

Getting Money Right is dedicated to helping you achieve financial freedom through education and inspiration, so you can be free to pursue your true life’s purpose.

4 Financial Steps to Purposeful Living

  1. Spend on purpose
    We recommend that you, “spend on purpose...so that you know where you are.”

  2. Save before you spend
    We recommend that you, “Save before you spend...so you experience stability today and in the future.”

  3. Increase your financial margin
    We always recommend that you, “Increase your financial margin...to pursue your true life’s purpose.”

  4. Invest wisely
    We always recommend that you, “Invest wisely...to increase your impact.”

Step 1 - Spend on Purpose

  • Live on written plan

    • Yearly plan managed monthly.

    • Categorized spending (use guidelines).

    • Unity with your spouse.

  • Track your expenses

    •  Daily at first, then as often as necessary to keep you in the know.

    • Excel, apps, pen and paper, receipts. (YNAB, EveryDollar).

  • Net worth statement

    • Visual way to see if you’re moving in the right direction over all.

    • iShows what you own and what you owe so you understand your true Net Worth.

    • Net Worth Statement - Download

We recommend that you, “spend on purpose...so that you know where you are.”

 

Step 2 - Save Before You Spend

  • 1 Month of Living Expenses in Stability Fund (bare minimum)

  • Continue $150 into savings (any increment of $50 based on income)

    • Should I be saving or paying off debt? Both … always need to grow the habit of saving.

  • 3-6 Month Stability Fund

    •  A smooth transition from one season to the next (job loss, medical emergency, maternity leave, other budgeted items in excess).

  • Levels of Saving

    • Short Term (stability)

      • Everything above

    • Mid-Term (replacement)

      • Save for down payment on house or business.

      • Car Replacement, Appliances and furnishings.

      • Anything that will need replacing in 2 to 5 years.

    • Long-Term (retirement)

      • More on this in Step 4 (Invest Wisely).

We recommend that you, “Save before you spend...so you experience stability today and in the future.”

Step 3 - Increase Your Financial Margin 

Two ways to increase margin: spend less or make more (or a combination of the two).

  • Spend Less

    • Debt elimination (snowball)

      • Episode 34 - Help! I Can’t Pay My Credit Cards.

      • Episode 35 - Dangerous Debt.

      • Episodes 36 & 37 - Psychology of Credit Cards Use.

    • Life long consumer debt-free  lifestyle

      • Paid off cars.

      • No credit card debt.

      • No personal loans (student, furniture, 401k, home).

    • The Importance of Perspective - Episodes 38 & 39

      • There are outside influences that shape our view of money

        • Advertising, culture, materialism.

        • “More is better mentality.”

        • Wealth is increasing exponentially, but what are we doing with it?

      • Setting a proper lifestyle by defining needs, wants, desires

  • Make more

    • Career focus.

      • Learn a new skill (in person or online) to improve your income or change career fields.

      • Will a Master’s degree or additional certification increase your income?

    • Side business

      • Episode 30-31 (small business episodes).

      • Find your niche - you don’t need to be an expert, you just need to know more than someone who is interested to learn more about a topic.

      • Branding.

      • Passive income.

      • Business Structures:

        • Sole Proprietor

        • Partnership

        • LLC

        • C Corp

        • S Corp

      • Business vs Personal Bank Accounts

      • Business Taxes

        • 12.4% S.S.

        • 2.9%Medicare

        • 15% Federal

 

Ask yourself: How does increasing margin help you?  What is your end goal?

 We recommend that you, “Increase your financial margin...to pursue your true life’s purpose.”

Step 4 - Invest wisely

  1. Strategy

    • Tax-favored retirement accounts

      • Episode 11, 12, 13.

      • Episode 41 - Darryl Lyons Money & Retirement.

      • Real-estate - Episode 14.

    • Invest in a business

      • Episode 30-31 (small business episodes).

        • Diversified

        • Fees

        • Goals

        • Asset protection

We recommend that you, “Invest wisely...to increase your impact.”

RESOURCES

Net Worth Statement - download
Budgeting and Debt Elimination Tools
Episode 11 - Stocks, Bonds, Mutual Funds, IRA, Roth’s and 401(k)’s
Episode 12 - Index Funds and Brokerages Part 1
Episode 13 - Index Funds and Brokerages Part 2
Episode 14 - Real Estate
Jesus on Money by David Thompson - stewardshippastors.com
Book cover design - vote here: https://www.stewardshippastors.com/jesus-on-money-book-cover.