Category Archive: Money Management

Take Back Control

Happy New Year!

Here’s how I rid myself of consumer debt – and took back control of my financial future.  (No gimmicks necessary…)

First, I sat down with my wife and had an honest conversation about our finances.  We talked about where we were, where we were headed, and where we wanted to be.  This conversation – and the many similar conversations that followed it – changed our lives.  I will ever be grateful for my awesome, amazing wife.

Second, I created a plan to get out of debt.  My plan was simple, easy-to-execute, and realistic.

Third, I found freedom through structure, by using a zero-based monthly budget.  Every dollar that enters our home is designated to either spending, giving, or saving.  The smartest decision I have ever made – even smarter than the decision to get out of debt – was the decision to live on a budget.  Without a budget, money finds a way of disappearing.

Fourth, I created a system for organizing my financial documents, bills, taxes, online accounts, etc.  The shear volume of information and paperwork associated with personal finance can become overwhelming.  For me, it is imperative that I keep things neat, organized, and (my favorite organizational word) de-cluttered.  Simplicity rocks!

Fifth, I accepted accountability.  For me (and this still feels very strange to think about, even after all these years) my accountability came from this blog.  Literally, I told (and still tell) my story – to the entire world.  (Okay, I will not exaggerate.  The site has yet to reach the entire world – but I still have hope!  Help me out!  Be sure to subscribe to No Credit Needed via free daily email or rss – and don’t forget to follow me – twitter.com/NCN.  Also, use the buttons below to share this article!)  It’s good to share your story (warts and all) with someone.  Trust me, you are not the only one going through what you are going through.

Sixth, I just kept (and keep) going.  It’s one thing to have a good plan, to put it into place, to get started, and to make some progress.  It’s another thing, entirely, to keep going, to keep moving forward, and to keep making progress.  The day after I paid off that final debt, I already knew that my journey – rather than ending – had really just begun.  Surround yourself with like-minded people, positive voices, and folks who will pull for you – but you will still have to be the one to impliment the plan.

No Credit Needed is an independently-operated, single-author, personal finance blog.  Rock on.

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Structure And Freedom

Over the years I have learned the true value of creating structure and following a routine.  My wife and I use the following structured systems to control spending, plan for saving, and manage our finances.

Monthly Calendar – Each month we sit down and plan out that month’s events and scheduled activities.  We brainstorm and try to be thorough.  We list doctors visits, school functions, church events, etc.  Out goal is to know where we’ll be and when we’ll be there.  This helps us know two things, vital to all other systems – how we’ll spend our time and where we’ll spend our money.

My wife is old school – and uses a simple spiral-bound day-planner.  I prefer the calendar on my phone, which easily syncs with my computer and email.

photo by – Joe Lanman

Noted next to each event on our calendar, we approximate how much money that event might cost.  If we are taking the kids to one of their ballgames, that needs to be in our budget.  Or, if we’re taking the dog to the vet, that too needs to be in the budget.

Using a calendar to map out our month really helps us see where our money will be going.  If you struggle to create your monthly budget, try building a monthly calendar – filled with spending approximations – first.

Family Budget –  Once we have created our monthly calendar, we fine-tune our monthly budget.  Since we have been doing this for many, many years, our budget remains (relatively) unchanged, from month-to-month.  The calendar helps us make any changes that we might need to make, with increases or decreases in specific categories.

We use a simple zero-based budget for our regular monthly income.  For my business income (writing here at No Credit Needed) I use a budget based on irregular income.  We use the awesome You Need a Budget software to keep things nice and neat.

Meal Planner – This is a new one for us.  We take our monthly calendar, and based on where we’ll be and where our kids will be throughout the month, we create a meal planner for our family.  Basically, we figure out how many of us will be at home, how many of us will be elsewhere, and we plan a month’s worth of meals.  This does two things – First, it allows us to fine tune our grocery budget.  Second, it takes the pressure off of “what’s for dinner”.  We know what we’re going to eat, weeks in advance.  So far, the kids love it and we do, too.

Grocery Price Book –  As odd as it sounds, I actually enjoy shopping for groceries.  A few years ago, I created a printable grocery store price book (click to check it out and download, for free) to keep track of grocery prices at my favorite stores.  The grocery price book helps me stock up on items, when they’re on sale, and also helps when creating our meal planner.  (Do you see how all of these systems help with and connect to each other?)

Cash Management – Once we know what our month is going to look like, and once we’ve created our budget, it’s time to plan for cash spending.  We use cash for daily or weekly purchases, like gas and quick trips to the grocery store.  We use the envelope system (click to view a video that I made, explaining how the system works) to manage our cash.  The calendar helps us plan for each week’s envelopes and each week’s spending.

Bill Payment –  I have managed to schedule all but one of our monthly bills so that they arrive during the first week of each month.  On our monthly calendar, I make a notation of when the bills are expected to arrive.  Using our budget software (again, the awesome You Need a Budget, long-time site sponsor) and online bill pay, I plan for and schedule payments for each of our bills.  We do have one bill which arrives during the third week of each month and it is auto-drafted from our checking account.  In less than fifteen minutes, all of our regular, monthly bills are paid – and I can spend the rest of the month working, relaxing, finding ways to increase income, hanging out with family, but not worrying about paying bills.

Adding structure to our lives has lead to, in an odd twist, more freedom.  We do not spend our time worrying about money or fretting over our finances.  Instead, we have the systems in place, systems which work from a unified structure, to help us stay organized and prepared.

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Resource Reminder – 7 Hours For Healthier Finances

Last year I wrote a series of articles entitled Dedicate 7 Hours for Healthier Finances.  Since that time, readership of No Credit Needed has increased – and I want to make sure that new readers (and folks who might have missed the series the first time around) are aware of it.

The premise behind the series is pretty simple:  Let’s see if we can take 1 hour, each day, for one full week, and improve the health of our finances.  I’ve actually used the series as a guide for simplifying and organizing my finances, and I hope you’ll find it interesting.

Click to view Hour 1 – Analyze Current Financial Situation

Click to view Hour 2 – Organize Financial Documents

Click to view Hour 3 – Simplify Finances And Filing System

Click to view Hour 4 – Discuss Finances With Spouse

Click to view Hour 5 – Think About Emergency Fund

Click to view Hour 6 – Create Career Portfolio

Click to view Hour 7 – Analyze Insurance Situation

I hope you enjoy the series.  If you haven’t done so, please consider subscribing to No Credit Needed via email or rss and follow me via twitter.com/NCN.

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Achieving Financial Goals – The Process Remains The Same

I do not like distractions.  When I am working on an article, I don’t want to listen to music.  When I am watching television, I do not want to hear the noise of the dish washer.  My mind is of the proverbial “one-track” variety.  Multitasking is not for me.

When it comes to the management of our finances, I find things work best when I’m focused – intensely focused – on either one goal – or a few, very closely related goals.

For instance, let’s assume my goal is to be debt free.  Well, I might have two credit card debts, a car payment, and a student loan.  Each of these debts are part of my debt repayment plan – but my main goal is to be debt free.

I will be focused on achieving that goal.  Along the way, the actual plan that I put in place may call for some actions not directly related to debt reduction (say, saving up for an emergency fund), but my goal – and my focus – will remain the same.

I use the following process:

Identify goal.

Establish time frame.

Create plan.

Implement plan.

Anticipate obstacles.

Remain resolute.

Accomplish goal.

Repeat for next goal.

I’ll use the “to be debt free” goal as an example.

Identify goal – to be debt free

Establish time frame – two years

Create plan – budget, emergency fund, pay lowest balance first, roll payments from paid-off debts into existing debts, etc.

Implement plan – follow through, communicate with spouse, weekly budget analysis

Anticipate obstacles – miscellaneous expenses, job-loss, friends that overspend

Remain resolute – reflect on progress, redouble efforts when facing setbacks, find encouragement from like-minded

Accomplish goal – share good news, celebrate, enjoy

Repeat for next goal – don’t stop, think big, educate self

Over and over, I find myself returning to this tried-and-true process.  When I’m feeling overwhelmed, thinking about saving for retirement, increasing income, managing investments, and the dozens of other financial management areas of my life – I stop.  I go back to my process.  I break each area down into a manageable goal, put a plan together to achieve that goal, and implement that plan.

Obviously, there will be times when goals (and thus planning) will, in a sense, overlap.  For instance, I currently have a goal of saving enough money to buy a newer automobile for my wife.  Well, that goal overlaps with my goal of maximizing retirement account contributions.  Both of these goals are important, but I’m not a big fan of dividing my focus.  So, for the first six months of this year, my focus will be on saving enough money to buy a newer automobile for my wife – and the last six months will be on maximizing retirement account contributions.

Now, I realize that I could focus on both goals at the same time, but that’s just not how my mind works.  Instead of putting $200 in savings for the newer automobile, and $200 in my Roth IRA, I’d rather put the full $400 in savings, thus focusing on just one of the two goals.  Then, six months from now, I’ll turn my attention towards retirement and put the full $400 in the Roth IRA.

Why?  I don’t really know why this works so well for me, but it does.  After nearly six years of tracking my finances, I look back and see that I always accomplish more when I am focused on time-based goals.  I just do.

When it comes to paying off the mortgage, that’s a very long-range goal – and overlaps several, much shorter-range goals.  This is my one goal that doesn’t fit neatly into my process, just because it’s so big and will take such a long time to accomplish.  Right now, paying off the mortgage isn’t at the tip-top of my priorities list, but one day it will be.  When that day comes, I’ll laser-focus on it – and pay the thing off.

(Please note, I still send extra towards my mortgage each month, but I do so as a part of my regular budget.  I have yet to turn my full attention towards our mortgage debt.  That day, to be sure, is coming.  Right now, however, increasing our cash reserves is a priority.)

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