Today I am going to talk about a Personal Financial Advising by the name of Dave Ramsey. Dave Ramsey is a radio talk show host for the "Dave Ramsey Show" and also an author of many books including "The Total Money Makeover".
In my last few posts I have been talking about Personal Finance Budgeting and also the importance of Savings. I went over the importance of setting up Personal Budgeting Strategies and sticking to these strategies in an attempt to meet goals for financial freedom. I also went over the value of using a Savings Calculator to actually see how saving small amounts over time can truly payoff. A savings calculator can be very important because most people don't understand the power of compounding interest until they see an actual example .
I have been trying my best to give my readers useful and practical financial advising information that will truly help them to achieve financial freedom. My goal with this blog is to give my readers the best financial advising tips that I possibly can and in turn help change some lives. If there is any possible topic that you readers would like me to cover that is related to personal financial advising then please shoot me an email and I will cover it to the best of my abilities.
In a country with so much wealth one would think that people would have a better grasp on basic personal finance techniques. This is clearly not the case and it makes me wonder if we should be requiring all people to take 2-3 Personal Finance training classes while in high school. I believe that we should do this and hope that this does happen in the future.
I have some very good information today for those of you that are having trouble with your personal finances or for those of you that are just looking more personal finance training.
Today I am going to talk about a financial advisor named Dave Ramsey. Many of you may have already heard of him and many of you may be saying "Who is Dave Ramsey?" at this very moment. For those of you that don't know who he is I am going to explain everything about him and even suggest that you go ahead and scrap reading my whole blog and instead just start reading his books about personal finances and personal finance management. Dave Ramsey gives out, by far, some of the most basic and easy to follow personal finance advising of anyone out there. And the best part about this is that you can get it all for free from the "Dave Ramsey Radio Show".
Dave Ramsey is a radio talk show host on the "Dave Ramsey Show". His show is broadcast on over 300 different radio stations across the United States each week. The Dave Ramsey Radio Show is set up with a format where listeners call in and ask for Personal Finance advising tips from Dave Ramsey.
Ramsey has also written a lot of books related to personal finances and money management. Some of his most well known books include The Total Money Makeover, Financial Peace, and More Than Enough, just to name a few.
He has a very simple and basic ideology that sums up his teaching. This is the "no debt" idea. His ideas are based around people paying cash for everything and not racking up debt.
I think that this alone is the most sound piece of personal finances advice that anybody can be given. The only way to get ahead in life and begin to experience financial freedom is through savings, and how can you save money if you are in debt.
A short excerpt from http://daveramsey.com/ says this:
"The Dave Ramsey Show"
Dave Ramsey offers life-changing financial advice as host of the nationally syndicated radio program, “The Dave Ramsey Show,” which is broadcast on more than 300 radio stations throughout the United States to over 3 million listeners each week . The three-hour live radio talk show focuses on life, love, and relationships, and how they happen to revolve around money. Dave says, "It's where life happens...caller after caller."
I find everything from this statement to be true and recommend that each of you check out the "Dave Ramsey Radio Show" sometime and learn from his wealth of knowledge about personal financial advising. If interested you can check here to see the Dave Ramsey Stations in your local area.
I am also here to tell you that if you use the information provide through the Dave Ramsey show and also read some of his books you will never need to hire a financial advisor. Yep, that's right! He will give you all the information that you need to handle your personal finances on your own.
I would highly recommend that you go ahead and purchase Dave Ramsey's book "The Total Money Makeover". These ideas and strategies in this book are absolutely timeless and I cannot find any comparable book on the market. It there you can find all kinds of great information about credit cards, investments, mortgages, and even student loan advice.
That is all for today's post. Do yourself a favor and start listening to the Dave Ramsey Show, purchase a book or two from him, and get started on your quest for financial freedom.
In my next post I am going to continue to talk more about the wonderful advice that Dave Ramsey gives and and dive into more detail about his "Total Money Makeover" book.
P.S. I was joking about scrapping this blog, please come back, that is of course unless you have found my posts to be completely worthless. Also, ff you are looking for a financial advisor please email me and I wil suggest a few financial advising companies that I think you should consider using for your financial advising.
Sunday, December 28, 2008
Today I am going to talk about a Personal Financial Advising by the name of Dave Ramsey. Dave Ramsey is a radio talk show host for the "Dave Ramsey Show" and also an author of many books including "The Total Money Makeover".
Wednesday, July 23, 2008
I have been quite busy lately working on some new things and have since been neglecting this blog.
Over the next few weeks I will be back and will be providing more practical and useful information related to personal finances.
In the meantime, feel free to email me with any questions you might have about personal finances, dave ramsey, suze orman, or anything else.
Thursday, May 22, 2008
Financial Advisor Suze Orman - Women and Money: Owning The Power to Control Your Destiny
In my last few posts I have been reviewing a financial advisor by the name of Suze Orman (not suzie, susie, or suse) and her 9 Steps to Financial Freedom Book. Although not a huge fan of financial advisor Suze Orman I do agree that as a financial advisor she does give out good enough information to help people in their quest for financial peace and financial freedom. I think that there are clearly better financial advisors out there but that following Suze Orman's financial advising can be sufficient.
Today I wanted to write a post specifically for all of you females readers out there (And for any men who want to see what their wives might be reading). I am going to give you all the best review I can on the financial advising book Women & Money: Owning The Power to Control Your Destiny by financial advisor Suze Orman.
I think that Women & Money is a very important financial advising book that should be read by all women that do not have experience in handling or helping with their families personal finances. Women need to educate themselves on the mechanics of personal finances so that if there is a divorce or their husband passes away they will be able to take control of families financial situation. Women also need to take a more active role in their families personal finances simply because having two heads instead of one always works better.
Financial Advisor Suze Orman does a sensational job with Women & Money and it is something that all women should read. In this book financial advisor Orman talks about the complicated and often dysfunctional relationship that women often have with personal finances. Financial advisor Suze Orman does a great job of using a non condescending and very insightful tone in giving out very useful financial advising information to her readers. Financial advisor Orman goes into detail about how Women often leave all of the financial planning to men but need to be more involved. She talks about how women are just as capable as men when it comes to personal finances and financial planning but they often chose not to be involved in it.
In the first half of Women & Money she goes into great detail about why women often do not handle personal finances and financial planning despite being just as capable as men. Financial advisor Suze Orman gives out several potential reasons for why this happens including that women feel that coveting money is wrong and women are more team-oriented. Often times when asked most women say that they feel insecure about their financial position but at the same time they are doing nothing to change it. Financial advisor Suze Orman says that this is usually because women are embarrassed to admit that they want a lot of money and see coveting money as wrong. Financial advisor Suze Orman also says that women are also usually more team-oriented and worried about everybody doing well instead of just focusing on themselves. This issue often comes up during salary negotiations when women are employed and contributes to the disparities we see in pay between men and women.
The first half of the financial advising Women and Money book is based around the psychological and mental aspects of personal finances and financial planning. It is based mainly around attitudes women have toward personal finances. This section of financial advisor Suze Ormans book is not much of a financial advising book but more of a self-help section that teaches women to understand the who,what, when, where, and why about personal finances and financial planning.
The second half of Women & Money is where the real meat and potatoes of financial advising comes into play. In this half it talks about what the author calls the "Save Yourself Plan". This plan is a 5 step financial advising plan that is intended to help women get their personal finances in order. The fives steps in this plan are each simple and easy steps that anyone can follow with just a little effort. Suze sets up a time table of five months to implement this financial advising plan with a goal of finishing 1 step each month. Financial advisor Suze Ormans 5 step financial advising plan to save yourself is a great plan that would work well for anyone, no matter what financial situation they are in.
The first step in this financial advising plan is "Checking and Savings Accounts" In this step the author tells here readers to setup a higher-yield savings account.
Step two is called "Credit Cards and FICO Scores". This financial advising step includes checking and building up/establishing your credit score. In this step the author also includes the suggestion of paying down your bills and debts.
Step three is called "Retirement Investing". In Step three the author goes into detail about the importance of starting to save for retirement. It includes financial advice about 401K's, IRAs, and Roth IRAs.
The fourth step is called "Must-Have Documents". In the fourth step financial advisor Suse Orman's plan goes into detail about wills, living trusts... All the good stuff that needs to be done.
The fifth and final step Suzie gives her readers is "Protecting Your Family and Home". In this final step financial advisor Suze Orman goes into detail about the importance of life insurance, renters insurance, home owner's insurance, and personal liability insurance.
Overall I think that this book is a great read for anyone who is looking for financial advice information about personal finances. I think that this book can help many women to realize the importance of understanding personal finances and help them see why they should be involved in their families financial decisions. The best part of this financial advisor book is the second half, which gives women an actual plan for taking control of their personal finances.
If you are interested in more information about this financial advising book or financial advisor Suze Orman please visit the Suze Orman website.
In my next post I will go into more detail about financial advisor Suze Orman's 5 step plan to save yourself.
P.S. If you are interested in getting your own personal financial advisor email me and I will give you a short list of the best financial advising companies out there.
Tuesday, May 20, 2008
I have included a link to 4 different financial advisor Personal Budget Calculators that are all from one page. Each of these financial advisor Personal Budget Calculators is set up to run as an excel spreadsheet. If you use these personal budget calculators it should make your personal budget planning a lot easier. If you can be successful in establishing and sticking to your personal budget it will help you out greatly in your quest for financial peace and financial freedom.
Personal Budget Calculator
Go ahead and follow the financial advising advice of financial advisor Dave Ramsey and use this financial advising tool to get started on your personal budget.
P.S. If you are interested in getting your own financial advisor send me and email and I will give you a short list of the best personal financial advising companies so that you can get the best financial advising available.
Monday, May 19, 2008
In my last post I wrote about a personal financial advising icon among Americans by the name of Suze Orman. I talked about financial advisor Suze Orman's biography, what she can do for you as a personal financial advisor and wrote about all the different television shows she has appeared on including Oprah and CNBC (The Suze Orman Show). If you are interested in more information about financial advisor Suze Orman please visit the Suze Orman website.
In my last post I also wrote about how I think financial advisor Dave Ramsey's financial planning advice is better than Suze Orman and how it is much more results oriented.
For those of you that were wondering (I only included this because everyone always asks "Is Suze Orman Married?" and "Who is Suze Orman's Husband?") Financial advisor Suze Orman is not married but rather is a lesbian / homosexual and is in a relationship with Kathy Travis. She has said she would like to be married but our current laws do not allow same sex marriages. Sorry if this is awkward to talk about but it is always asked so I figured I would address it before I got the question.
Despite preferring financial advisor Dave Ramsey and his 7 Baby Steps to Financial Peace I still feel that I have a responsibility to you, one of my readers, to go over financial advisor Suze Orman's financial planning and advising information so that you can have a better feel for her ideals and make your own choice about who you would like to use for your financial advising.
Today I am going to go over financial advisor Suze Orman's 9 Steps to Financial Freedom. I am going to explain each step in detail and also let you know the importance of each one of them. 9 Steps to Financial Freedom is a book that was written by financial advisor Suze Orman back in 1997. Despite being over 10 years 9 Steps to Financial Freedom has stood the test of time and is still applicable to today's financial planning environment.
Financial advisor Suze Orman's 9 Steps to Financial Freedom
Step 1 - Seeing how your past holds the key to your financial future
Financial advisor Suze Orman's first financial advising step of her book is about how each of us has some memory from our past that effects how we perceive money and personal finances. The plan with this chapter is to realize that past memory and move on from it so that you can start new with your personal finances.
In my opinion this steps seems to be sort of out there for most people. There are some people who have a bad memory and bad history with money that first needs to be dealt with but in general this is not true. For most people it is merely a lack of discipline and laziness, rather than some horrible memory from the past, that keeps people from seeking the personal financial planning advice needed from a financial advisor.
Step 2 -Facing your fears and creating new truths
This second financial planning step is sort of connected to step one. In this step financial advisor Suze Orman's the goal is to have you look at your past memories and feelings toward money and see how they cause you to act toward money today. The plan is to list out your fears related to money and personal finances and realize how these can be overcome.
Again I find this financial advising step to be more of a mental step to help motivate those that need a more motivation and push in the right direction. The first two steps of 9 Steps to Financial Freedom appear to be traditional "self-help" steps rather than personal finances help and financial planning.
Step 3 - Being honest with yourself
In this financial advisor step Suze has you take all of your spending and income records for the last 2 years and get monthly averages for each. This allows you to create a personal budget for the future and control your spending. The goal here it to budget your income properly so that you are bringing in more money than you are spending.
This step is extremely applicable and probably the most important financial advising step in all of 9 Steps to Financial Freedom. Without implementing this financial advising step you will not have a foundation for the remaining 6 steps in 9 Steps to Financial Freedom.
Step 4 - Being responsible to those you love
In this section financial advisor Suze Orman give you a personal financial advising tip about setting things up so that your loved ones are taken care of if there is some type of disaster. The basic focus of this step is how to set things up in case you die or are badly hurt. It goes over insurance, estate planning, trusts, and wills.
I find this financial advising step to very important but to me it is out of order. How can you begin to plan for everyone else when you are dead when you haven't even got your own personal finances in order for your own life. To me this seems like it should be step 5.
Step 5 - Being respectful of yourself and your money
The focus of this financial advising tip is on getting your own personal finances in order. This includes putting money toward retirement and eliminating debt. In this chapter financial advisor Suze Ormans talks about how taking control of your personal finances will help you to feel better about yourself.
This financial planning step is very good and applicable to everyone who is trying to achieve financial freedom. Without proper saving, debt elimination, and future planning there is no way one can even begin to think about financial freedom.
Step 6 - Trusting yourself more than you trust others
This financial advising steps goes into detail about how one should trust themselves over others when making their financial and investing decisions. It talks all about how one should always go with their gut-feelings.
I find this step to be a bunch of crap. In the area of financial planning people should always seek out the proper advice from personal finance experts and have everything planned out (hence the words financial planning) rather than going with a gut-feeling out of nowhere. I also think that people should get a financial advisor to help them with their investment decisions. It seems Suze says here that it is OK to get financial advising tips from her but after reading her book we should just go with "gut-feelings".
Step 7 - Being open to receive all that you are meant to have
This financial advising steps talks about how money does not bring out happiness but the opposite is actually true. It also talks about the joys of giving to charities.
In this financial advising step financial advisor Suze Orman contradicts the rest of the book where she constantly talks about how you can achieve happiness with financial freedom. Here she says you are happy and then you can achieve financial freedom. What? How does that work? Happiness and financial freedom are actually completely unrelated and happiness comes and goes independent of our personal finances.
Step 8 - Understanding the ebb and flow of the money cycle
This financial advising steps talks about how a lot of good can come from the bad times in our lives, especially financially, and can teach us good lessons for the future.
I find this step to be true but again... Where is the financial planning and financial advising tip in this? Is this a self help or financial advising book?
Step 9 - Recognizing true wealth
In the ninth and final step financial advisor Orman talks about how the truly valuable things in life are not monetary and money cannot bring out true happiness.
Again, this contradicts other sections of the book and is not really much of a financial advising tip. It is more of a self help tip.
I think that 9 Steps to Financial Freedom is a great book for those that are looking for a book about the psychology of money and looking to change their mental perspective on it. It is also an excellent self help book for those that are looking for that type of advice.
Orman's book gives little in the way of true financial planning and there is not a lot of mechanical substance to it. I would recommend this book to someone who is interested in the psychology of money but for anyone who is interested in the true mechanics of personal finances and financial planning your money would be better spent elsewhere. For you I would suggest "The Total Money Makeover" by financial advisor Dave Ramsey or doing a quick read of his 7 Baby Steps to Financial Freedom.
Either way, whatever you are looking for, the most important thing is to do something today rather than doing nothing or putting it on hold. You need to take some sort of action or your personal financial situation will only get worse and be harder to recover from.
Do yourself a favor and get started today with your financial planning and begin your quest for personal financial freedom.
Click here to read about the financial advisor Suze Orman free book give away on Oprah.
If you are interested in getting your own personal financial advisor please email me and I will give you a list of a few of the best financial advisor companies available.
Recently I have been writing about a financial advisor by the name of Dave Ramsey. I have been explaining Dave Ramsey's financial planning methods for helping people to get out of debt and achieve financial peace / financial freedom. I have gone over a review of The Dave Ramsey Radio Show, his debt snowball debt reduction plan, his 7 Baby Steps to Financial Peace and also talked about Dave Ramsey's Financial Peace University course. Dave Ramsey is an expert financial advisor and I would suggest him to anyone who is looking for a real solution to real personal financial problems.
As we know sometimes people just do not like others and this means there is a pressing need for other expert financial advisors for people who prefer a style that is different than financial advisor Dave Ramsey's.
Today I am going to give you all a review / bio of another financial advisor. This personal finance expert is Suze Orman (See Suze Orman Photo above). Financial advisor Suze Orman is a personal finances expert who has been on numerous radio and television shows over they years. Suze Orman has here own television show called "The Suze Orman Show" (On CNBC), and has written several New York Times best selling books including "Women & Money: Owning the Power to Control Your Destiny" and "The Money Book for the Young Fabulous and Broke". Financial advisor Suze Orman has also appeared on the Oprah Winfrey show where she offered a free book give away. Financial advisor Suze Orman's reach to her audience as a financial advisor has been so vast that she was recently named one of the worlds most influential individuals by People Magazine.
Despite her vast reach I am not a huge fan of her. I think she gives decent financial advising tips but in the end I think finnacial advsior Dave Ramsey is 100 times better.
Financial Advisor Dave Ramsey is a christian who bases his principles on the bible and financial advisor Suze Orman does not have a speficic basis for where her principles come from, they are simply based off of sound principles and smart living. Nothing wrong with that at all, principles based on smart living are just fine. Some people shy away from financial advisor Suze Orman because she is a homosexual / lesbian but I see that as a moot point. What financial advsior Suze Orman does in her personal life has absolutely nothing to do with the financial planning advice she gives out to people. I am simply suggesting that she not be used merely because I do not believe that her plan for achieving financial freedom is nearly as good or easy as financial advisor Dave Ramsey's.
For most Americans the area of personal finances and advising needs to be broken down into very simple and basic steps by a financial advisor / financial planner. This allows people who have little knowledge and little time to take their personal finances one step at a time and see progress as they go.
Financial advisor Suze Orman is a certified financial planner who specializes in give out financial advising / financial planning tips and information to people all over the world. Financial advisor Suze Orman is from American and is a writer, television show host (The Suze Orman Shows) and also owns here own company which is called Suze Orman Financial Group.
Financial advisor Suze Orman gives out financial planning advice that could be beneficial to some but is often not something that can be easily applied to our lives like Dave Ramsey's advice. Financial advisor Suze Orman's basic personal financial advice is just like all others: pay off your debts, cut unnecessary expenses, invest your money for retirement, 401K, IRAs etc... The problem is that financial advisor Suze Orman does not setup as easy of a step by step plan like financial advisor Dave Ramsey does. With that being said I cannot see how I can suggest financial advisor Suze Orman over financial advisor Dave Ramsey when her plan is simply harder to follow.
Financial advisor Suze Orman has also been criticized for giving out very basic financial advice that does not really help people. In today's world the topic of personal finance is very complex and people need real answers for how to solve their problems rather than being told to look for the spare change in their closets or couches.
Another problem with financial adviosr Suze Orman is the fact that she talks about how Americans need to invest their money in the stock market but she has less than 5% of her money in the stock market. Now I don't know about you but I don't want someone who doesn't invest in the stock market telling me that I need to invest my life savings in the stock market. Financial advisor Suze Orman is estimated to have a net worth of over $25 million but has only about $1 million in the stock market. The rest of her money is in Triple-A, 100% safe, extremely low yielding municipal bonds. This means she is taking no risk and also earning very little interest. Financial advisor Suze Orman is investing like she is an prehistoric grandmother who has no heirs to her money. The whole idea of financial advisor Suze Orman not following her own financial planning and advising tips makes me very skeptical and I often wonder if she is out to make money or really help people with their personal finances.
Overall, in the end, financial advisorSuze Orman does gives out sound financial advising tips and information. I am simply here to tell you that I would suggest Dave Ramsey over Suze Orman 100% of the time. Financial advisor Suze Orman can help you with your personal finances so if you have some sort of personal problem with financial advisor Dave Ramsey I would reccomend Suze Orman as a possible replacement.
If you are interested in more information about financial advsior Suze Orman you read about her at the Suze Orman website by visiting her website http://suzeorman.com/.
Below I have listed financial advisor Suze Orman's 9 Steps to Financial Freedom. In my next post I will go over these in detail and explain which ones make sense and which ones you can safely ignore.
1. Seeing how your past holds the key to your financial future
2. Facing your fears and creating new truths
3. Being honest with yourself
4. Being responsible to those you love
5. Being respectful of yourself and your money
6. Trusting yourself more than you trust others
7. Being open to receive all that you are meant to have
8. Understanding the ebb and flow of the money cycle
9. Recognizing true wealth
Click here to read about the financial advisor Suze Orman's free book give away on oprah.
P.S. If you are interested in getting your own personal financial advisor email me and I will give you a few of the best financial advisor companies.
Wednesday, May 14, 2008
Major Mistakes That Cause People To Fail or Quit On Their Personal Budget
In my last post I gave you all a financial advising tip about personal budgets and tried to explain why we all must make our own personal budget worksheet. Today I am going to give you all a quick list of some common personal budgeting mistakes that people make when writing a personal budget.
1) Not having a personal budget
Sorry, I had to put this one first because I know that some readers out there are stilling thinking that they can get by without writing their own personal budget. This is the most important step and sadly most people don't even make it to the step of starting their personal budget. You cannot fail or succeed if you do not try.
2) Making sure that the personal budget worksheet is added correctly
This is another dumb, yet common mistake people make. People incorrectly add the numbers and end up thinking they are spending $200 less than they actually are. Double check all of the numbers on your personal budget template frequently to be sure they are correct.
3) Inconsistent Savings
This is another common mistake with peoples personal budget plans. People need a specific line item for savings in their personal budgeting worksheet and they need to stick to their personal budget and save the planned amount each month.
4) Failure to plan for unexpected expenses when developing a personal budget
Most people do not realize that you need a specific column in your personal budget for an emergency fund. This money is then set aside and kept in case of an unexpected expense.
5) Paying the minimum payment on credit cards
People often make the mistake of only budgeting to pay the minimum on their credit cards. People need to setup their personal budget so that it allows them to make the largest possible payment on their credit card. This will allow them to get out of debt quicker and eventually have a less restrictive monthly budget plan.
6) Cutting all the fun out with your personal budget plan
When you make your budget plans you need to plan for some of your money to go to entertainment and fun. If you do not set your personal budget up this way you will find it to be to restrictive and likely not follow it. You need allocate some of your income toward fun and entertainment and budget for it by cutting out some other expense.
7) Spending more money than you make
This is often a huge mistake. When creating a personal budget need to set it up so that you are only planning to spend what you actually make and no more than this.
This is a quick list of 7 major personal budget mistakes that people make. In my next post I will continue to talk about personal finance budgeting and give you more financial advisor tips that should help you on your quest for financial freedom and financial peace.
P.S. What is a purple parrot personal budget manager?
If you are looking for a personal financial advisor email me and I will give you suggestions on a few good financial advising companies.
Tuesday, May 13, 2008
Importance of a Personal Budget
In my last few posts I have been writing about a personal finance advising expert by the name of Dave Ramsey. I have gone over his Debt Snowball Debt Reduction Plan, Financial Peace University, and even done a short review of the Dave Ramsey Radio Show. What I have been trying to do is give you a bit of good information about financial advisor Dave Ramsey so that you will begin to listen to his radio show/visit his website and learn how to make a change in your life. Once equipped with all of the information Mr. Ramsey provides you will be ready to attack your debts and begin to live a life of financial peace, financial freedom, and financial prosperity.
Today I wanted to give you all some more great financial advising information from financial advisor Dave Ramsey. The topic I am going to discuss today is Personal Finance Budgeting. I have already addressed this topic several times on my blog but I don't think my readers understand how important personal finance budgeting is. This piece of advice is something almost any financial advisor would give you and is one of the basic building blocks of financial freedom.
Unless you make a personal budget and set up your personal budget worksheet (personal budget template) you will never be able to begin your quest for financial freedom and financial peace. A personal budget is essentially a set of training wheels and financial advising tool that helps steer you in the right path. For some it is necessary to keep a personal budget worksheet for your entire lives and for others a personal budget worksheet is not needed after a few years of learning how to spending your money properly.
I am going to repeat this again because most people just do not get it.
Personal finance budgeting is one of the most basic building blocks to financial freedom and you will not be successful in your quest for financial freedom without following this financial advising tip and starting your own personal budget.
Now that you should have that drilled into your head I am going to elaborate on the personal budget. When people here the "B" word they often cringe and want to stay as far from it as possible. Usually they will even run as fast as they can from a financial advisor that suggests that they make one. I am here to tell you that a making a personal budget is not really as bad as people say that it is and it can be done with just a small bit of work.
The real resistance comes from those that see a personal budget worksheet as a trap that forces them to live a certain way and restricts their freedom. I find it funny that the same people that see a personal budgeting plan as a restriction or also the ones that go out and rack up a ton of credit card debit and end up restricting themselves because they have to put all their money toward credit card payments.
I am here to tell all of you readers that cringe at the word budget that personal budgeting is merely a way of spending your money with intent. Instead of aimlessly spending your money on whatever you choose at the spur of the moment personal budget planning helps you to have everything planned out so that you do not spend more money than you make. Your personal budget may seem like it is hard to follow and restrictive at first but once it allows you to save money and move away from reliance on credit cards it will actually provide you with more financial freedom than you ever thought possible.
When you start your personal budgeting worksheet/template you should wait 4-6 months for it to start working. When you are first setting up a personal budget you will most likely forget about necessary expenses and budget incorrectly for certain things. In 4-6 months time you should be able to work out the kinks and your personal budget worksheet will nearly mirror your actual spending.
Once you have your personal budget set up you need to stick with. The point where most people fail is right here. Anybody can set up their personal budgeting template with ease but the real test comes in sticking to it each month. If you can stick to your personal finance budgeting plan then I promise you that you will feel and see more financial freedom in your life.
I hope that after the constant rehashing on this subject you will begin to understand that a personal budget is one of the most important step in achieving financial freedom, financial peace, and financial prosperity. Without it you cannot even begin to pay off debts and save money because you cannot track and properly allocate your income.
Do yourself a huge favor today and open up a notebook and begin working on your personal budget worksheet. Its not hard and it is completely free to start your personal budget worksheet. You could easily sit down in the next hour and have a very good personal budget in working order.
In my next article I am going to go over some of the top personal budgeting mistakes that people make which cause them to either fail or quit on their personal budget plan. If you need any free assistance regarding your budget feel free to email me and I will be happy to help.
Tuesday, May 6, 2008
What is Financial Advisor Dave Ramsey's Financial Peace University (FPU)?
In my last few posts I have been talking about a personal finance advising expert by the name of Dave Ramsey. I have gone over the Dave Ramsey Radio Show, Dave Ramsey's 7 Baby Steps to Financial Freedom, and also given you all a detailed explanation of his Debt Snowball Debt Reduction Plan. If you are interested in any information about financial advisor Dave Ramsey you can read my previous.
The financial advising information financial advisor Dave Ramsey provides everyday on his website and radio show is really great information and does wonders in helping people achieve financial freedom. Financial advisor Dave Ramsey is providing Americans with the personal financial advising and financial planning advice that they need to begin to achieve financial freedom and financial peace. I have seen and experienced the personal financial principles (from listening to the Dave Ramsey Radio Show) and know for myself that if followed they can be very powerful (I have seen it in action with family friends). With this blog I am trying to also help Americans with simple, clear, and useful personal finance information and personal financial advising. I know that I could never be as influential as financial advisor Dave Ramsey, so I figured, why not write about him and then direct my readers to his website and his personal finance advising / financial planning.
Today I wanted to write about a very amazing financial advising product that he has been offering to his readers and listeners for sometime now. This financial advisors product is not as much of a product as it is a course on personal finances. It is called Financial Peace University (a.k.a Financial Peace University Online or FPU) and has been helping many Americans to learn about and follow financial advice to create wealth for themselves. Financial Peace University can be a life-changing experience for those that take it seriously as it acts as a personal financial advisor for you. Financial Peace University teaches its members to begin to think about money in a whole new way and shows them how to reach their financial goals and achieve financial freedom through sound financial planning
Financial Peace University is a 13 week financial advising program and can be done in a live setting with other members (it is sort of like a class and meets every week) or through Financial Peace University Online. The Financial Peace University program includes 13 different 1 hour financial advising video lessons and then usually involves a 1 hour open discussion about each lesson with other FPU members. Each FPU groups average size is about 10 families, which allows for a small and intimate group of families that can grow together and help support each other on their quest for financial freedom and financial peace.
The Financial Peace University membership kits costs $149, according to the Dave Ramsey online store and Financial Peace University Online is listed at $99. The picture above shows what you get with the membership as of June of 2007. I am not sure but they could have added more things as of today.
According to financial advisor Dave Ramsey's Website Financial Peace University personal financial advising has been used by over 500,000 families and on average each family pays off over $5,000 in debt and saves over $2,500 by the end of the 13 week program. Obviously a quick look at these numbers shows that the financial planning information and financial advising Dave is providing is working well.
The 13 week Financial Peace University financial advisor program includes all of the following lessons (Courtesy of Dave Ramsey's website)
1) Super Saving
This lesson includes financial advising on the 7 Baby Steps to Financial Peace and also goes over why you should save money and why you should start doing it immediately. He gives easy and practical advice about all kinds of different information from bank accounts to jumbo cd rates. He also suggest that you monitor bank rates and look for the right time to invest your savings in them.
2) Relating With Money
This financial advisor lesson is designed to help married couples to communicated and stick together in their efforts to achieve financial peace. This lesson all teaches parents how to teach their children about money.
3) Cash Flow Planning
This financial advisor lesson teaches members how to develop a monthly personal finance budgeting plan to help track and plan for where their money goes.
4) Dumping Debt
This financial advisor lesson gives its member a solid and concrete plan for getting out of debt and staying out of debt.
5) Credit Sharks in Suits
This financial advising lesson gives its members a comprehensive explanation of credit ratings and also explains how to handle collection agencies.
6) Buyer Beware
In this financial advising lesson Dave Ramsey goes over how marketing affects our everyday buying decisions. He gives his members the skills they need to make the right buying decisions.
7) Clause and Effect
Dave Ramsey goes over insurance in this financial advisors lesson and explains what kinds of insurance you need and what kinds you do not need.
8) That's Not Good Enough
In this financial advising lesson Dave goes over some secrets related to buying at bargain prices and doing it often. One of the most important things here is using a Real Estate investing guide.
9) Of Mice and Mutual Funds
Dave Ramsey uses this personal financial advisor lesson to teach his FPU members about long-term investing and empowers them to make their own decisions about their investments. He also teaches about how to save for retirement and how to do a 401k rollover if you change jobs.
10) From Fruition to Tuition
Here FPU members learn about different retirement options available and also about the different ways parents can help save for their children's college.
11) Working in Your Strengths
In this financial advising lesson Dave Ramsey teaches Financial Peace University members how to job hunt, write their resume, and how to be successful in their interview.
12) Real Estate & Mortgages
In this personal financial advisors lesson Dave uses his extensive real estate experience to teach FPU members how to a make good home purchase decisions and also shows members what mortgage programs are available and which ones they should go for.
13) The Great Misunderstanding Warning
In the final personal financial advising lesson Dave Ramsey challenges you to change the way you think about your money. He also goes in to depth about how generosity is an important part of your personal finances.
To get started with FPU and get sound financial planning tips you need to first purchase a membership kit. This can be done at the Dave Ramsey website. The next step is to find one of the classes that is going on in your area and join. You can also sign up for Financial Peace University Online instead of meeting with an actual class.
FPU is an amazing personal financial advising / financial planning tool and contains thee exact type of personal financial advising tips that we all need to get on the right track. I suggest that all of you visit Dave Ramsey's website and check out more information on Financial Peace University and see for yourself about how it can help you on your quest for financial freedom and financial peace.
Financial advisor Dave Ramsey is personal finance advising expert who specializes in giving out information to help people get out of debt and achieve financial peace. His radio show The Dave Ramsey Show is aired on over 300 different radio stations each day and heard by over 3 million listeners. Dave Ramsey is also the author of many great books including The Total Money Makeover, Financial Peace, and More Than Enough.
Sunday, May 4, 2008
Financial Advisor Dave Ramsey's Debt Snowball Method for paying off debts
In the last few posts I have been writing about financial advisor Dave Ramsey and all of the incredible personal financial advising information he has to offer. Their are most certainly Dave Ramsey critics out there but for the most part everyone thinks that the information he offers is extremely helpful. The only complaints come from those that argue that his plan for financial freedom and financial peace is to conservative. I could agree with this if it was not for the debt epidemic among Americans. Unfortunately the criticisms from these critics does not take into account the fact that a lot of Americans do not have the discipline to pay off their credit cards in full every month or keep a handle on their debt.
Today I wanted to talk in detail about financial advisor Dave Ramsey's Debt Snowball reduction plan for paying off debts. This plan shows us excellent ways to get out of debt. The Debt Snowball reduction plan is the second step in financial advisor Dave Ramsey's 7 Baby Steps to Financial Peace training course and is probably the most important step in a persons quest for financial freedom and financial peace.
The ideology behind financial advisor Dave Ramsey's Debt Snowball reduction plan is to organize all of your debts and setup an easy, manageable, and results oriented plan for paying these debts off. These debts can include credit cards, car loans, student loans, payday loans, faxless payday loans or personal loans. It basically includes any debt that you have excluding your home mortgage.
The first step in the financial advising debt snowball debt reduction plan is to make a excel spreadsheet list of all of your debts with the lowest balance at the top of the list. He doesn't actually suggest personal debt consolidation but rather thinks you should pay off each debt ASAP starting with the smallest. After you make this list you then need to allocate as much of your monthly budget as you possibly can to debt elimination. After you have listed your debts in order from lowest to highest and decided how much you can put toward debt each month you need to determine what your payments for each account should be. This financial advising step is very simple. In the debt snowball debt reduction plan you pay only the minimum payment toward each debt you have except for the one at the top of the list (one with the lowest balance).
The plan is to pay off the smallest debt as quickly as possible and then once it is paid off you move on to the next smallest debt you have. When you move on to the second debt on your excel spreadsheet you then allocate the whole amount that was originally going to your smallest debt (the debt that is now paid off). These means that you will continue with the minimum you were paying on the now smallest debt and add the total amount that was going to your debt that is now paid off. After paying of the second smallest debt on your debt snowball excel spreadsheet you will move on to the third smallest.
The idea with the debt snowball reduction plan is to continue doing this until you have paid off all of your debts (excluding your house payment). Financial advisor Dave Ramsey's rational with the debt snowball method is to gain steam and see results by paying off the smallest debts first. The Debt Snowball method will help you to see real results and help motivate you to continue. For most people they need to see results and feel like they are making progress or they will quite within 6 months of starting a plan to pay off their debt.
Below I have included an example of the financial advisor Dave Ramsey debt snowball debt reduction plan for my readers. I have also included several links to Debt Snowball Calculators. The debt snowball calculator should help give you an idea of how long it will take to pay off each debt.
Example of the debt snowball method (Courtesy of Wikipedia)
Ignoring interest rates, let's pretend you have the following debt and minimum payments:
Car Payment - $2500 balance - $150/month minimum
Credit Card A - $250 balance - $25/month minimum
Loan - $5000 balance - $200/month minimum
Credit Card B - $500 balance - $26/month minimum
Your minimum payments for all debt would be $401 per month. You would order your debts in the following order (lowest to highest):
Credit Card A - $250 balance - $25/month minimum
Credit Card B - $500 balance - $26/month minimum
Car Payment - $2500 balance - $150/month minimum
Loan - $5000 balance - $200/month minimum
Now, assuming you had $100 extra per month to send in, you would apply that $100 to the Credit Card A so that the payment for it would be $125 per month and the other debt would receive the minimums.
After Credit Card A is paid off (in two months), you would apply the extra $100 to Credit Card B PLUS the $25 you were sending in to Credit Card A. So now your payment to Credit Card B would be: $26 normal minimum + $25 that you normally sent in to Credit Card A + $100 that you are able to send extra.
Your payment to Credit Card B would be $151 instead of $26. Therefore, you would pay it off much faster. Then, when Credit Card B is paid off, you would now send in the following to the Car Payment: $150 normal minimum + $25 that you normally sent in to Credit Card A + $26 that you normally sent in to Credit Card B + $100 that you are able to send extra. Your payment to Car Payment would now be $301 instead of $150.
To follow the debt snowball debt reduction plan you would simply continue to follow this plan until all debts were paid off.
Links to a download able and java script debt snowball calculator: (The java script one is more like a debt snowball calc and the other two would probably be considered debt snow ball calc software.)
Downloadable Excel Spreadsheet Debt Snowball Calculator
Java Script Debt Snowball Calculator
Mr. Peanut Debt Snowball Calculator
The debt snowball debt reduction plan is one of the best plans available for paying off debt. It helps people to see immediate results and gain momentum in their plan to be debt free. Go ahead and start your own debt snowball reduction plan and begin your journey toward financial freedom and financial peace.
Financial advisor Dave Ramsey is personal finance expert who specializes in giving out information to help people get out of debt and achieve financial peace. His radio show The Dave Ramsey Show is aired on over 300 different radio stations each day and heard by over 3 million listeners. Dave Ramsey is also the author of many great books including The Total Money Makeover, Financial Peace, and More Than Enough.
I found a really cool website today that has nearly all of the financial advising Budget Forms that financial advisor Dave Ramsey uses.
Click here to see these Budget Forms
All of these financial advising forms are include in PDF format and can be saved and printed out very easily. This should help some of you to get started with your personal finance budgeting.
Financial Advisor Dave Ramsey is personal finance advising who specializes in giving out information to help people get out of debt and achieve financial peace. His radio show The Dave Ramsey Show is aired on over 300 different radio stations each day and heard by over 3 million listeners. Financial Advisor Dave Ramsey is also the author of many great books including The Total Money Makeover, Financial Peace, and More Than Enough.
If you are interested in listening to his radio show or anything else please see my post about Dave Ramsey for more information.
P.S. If you are looking for a personal financial advising feel free to email you and I will give you a few suggests on which financial advising companies to consider to use for your personal financial advising
Financial Advisor Dave Ramsey Coupon Code
I cannot guarantee that any of these coupons work anymore. Some might be outdated or only available to certain individuals.
In my last post I talked about Financial Advisor Dave Ramsey's 7 Baby Steps to financial peace. I went over all seven of his financial advising baby steps and gave a short explanation for each them. Dave Ramsey is a Christian Debt Consolidation expert who bases all of his teachings on biblical principles.
I think that the information financial advisor Dave Ramsey gives out in very good and it can be used by all people to better their personal finances situation. For those of you that agree with me I have included a list of some coupon codes I have found for some of the his products.
The codes listed below are for discounts to his financial advising book "The Total Money Makeover" and his financial advising website "My Total Money Makeover". I am working on finding a coupon code for his financial advising Financial Peace University (FPU) online course but have yet to find one out there.
If you would like to find out more about financial advisor Dave Ramsey before considering some his products you can read my last post on his 7 Baby Steps to Financial Peace. I would also suggest listening to the Dave Ramsey Radio Show a few times so that you can get a better feel for his ideas and see if he is the right person for you. You can also check out the his financial advising website to find out more information.
Financial Advisor Dave Ramsey Products Coupon Codes:
1) Coupon Code: 2CDBP09
Join financial advisor Dave Ramsey's "My Total Money Makeover" online course website and get his "Total Money Makeover" book for free and 2 DVDS on "Dumping Debt & Cash Flow Planning"
Join financial advisor Dave Ramsey's My Total Money Makeover website here.
2) Coupon Code: 2VHBP09
Join financial advisor Dave Ramsey's "My Total Money Makeover" online course website and get his "Total Money Makeover" book for free and 2 VHS Videos on "Dumping Debt & Cash Flow Planning"
Join financial advisor Dave Ramsey's My Total Money Makeover website here.
3) Coupon Code: davefan1011
Get 10% off tickets to the his financial advisor Live Event in Birmingham, Alabama. Order at his website.
4) Coupon Code: PL1
Save $13 on tickets to a financial advisor Dave Ramsey Live Event. Tickets are normally $35 but with this code you can get them for $22. Order at his financial advisor website.
I think that financial advisor Dave Ramsey would be right for anyone and everyone but clearly some people will not like him and be a Dave Ramsey Critic and come with some type of criticism. For these people it would be better to find someone else to give you the personal finances advice you are looking for.
If you are interested in listening to the financial advisor Dave Ramsey Show click here to see what station / stations he airs on in your local area.
I would suggest that each one of you check out the information that financial advisor Dave Ramsey has to offer and if you like it go ahead and get his Total Money Makeover book. Regardless, please find someone to help you with your personal finances and make a conscious choice today to begin your journey toward financial peace and financial freedom.
P.S. If you are looking for a financial advsior feel free to email you and I will give you a few suggests on good personal financial advising companies to consider.
Saturday, May 3, 2008
What is Dave Ramsey's 7 Baby Steps to Financial Peace Program?
In my last post I talked about a financial advisor radio talkshow host by the name of Dave Ramsey and also did a short review of the "Dave Ramsey Radio Show" that airs on over 300 different radio stations each week and reaches over 3 million listeners.
Dave Ramsey is a personal finance advisor who specializes in giving out information that helps his listeners achieve financial freedom and financial peace. Dave Ramsey is also an author of many personal finance advising books that provide his readers with simple ways to achieve financial peace.
Some of these books include The Total Money Makeover, More Than Enough, and Financial Peace Revisited. Each year thousands of people are able to use the financial advice from The Dave Ramsey Radio show and his books to achieve financial freedom and financial peace.
Today I wanted to give my readers a very quick review of Dave Ramsey's "7 Baby Steps" program to financial peace.
The 7 Baby Steps program is designed to be very simple and easy for anyone to follow. When someone is trying to achieve financial freedom they must first start out with baby steps just like a child who is learning to walk. Each baby step in Dave Ramsey's financial advisor program builds upon the others and leads to a bigger step in moving toward financial peace. If you can follow his seven baby steps one by one then you will have a great start on your quest for financial freedom.
The Seven Baby Steps are listed below with a short explanation of each.
Financial Advisor Baby Step 1: $1,000 To Start An Emergency Fund
The first baby step is to establish a $1,000 emergency savings account fund. The point of this step is help people build up a small amount of savings so that they can be released from the dependence they have on credit cards. Having an emergency fund allows people to have money available when unexpected expenses comes. When this occurs this people are then able to dip into their emergency fund rather than having to charge the expense on their credit card.
Financial Advisor Baby Step 2: Pay Off All Debt Using The Debt Snowball (excluding your house)
The second step financial advisor baby step is to slowly pay off all of your debt using his debt snowball method. I will save a full debt Snowball explanation for a different post and just give you the general idea here. The idea is to start out by paying the minimum payment on your largest debts and then put the rest for your money toward your debt that has the lowest balance. Once this debt is paid of you can then move on to the next smallest debt and put all of your excess income toward this debt. Dave Ramsey's rational is to gain steam and see results by paying off the smallest debts first. The Debt Snowball Method will help you to see real results and help motivate you to continue. Using the debt snowball method and getting your debts paid off is the second baby step and must be completed before you can move on to baby step three. Sometimes in very bad situations the only choice is to look for the best debt consolidation company so that they can help you get a debt consolidation loan.
Financial Advisor Baby Step 3: 3 to 6 Months of Expenses In Savings
The third financial advsior baby step is the program is to establish a full emergency savings account fund of at least 3 to 6 months of expenses. The issue is that it is called an emergency fund because an emergency is something that we cannot anticipate. If we do not have this emergency fund in place and a large unexpected expense comes up we could be forced to put it on a credit card and then be right back in the middle of baby step two. Dave Ramsey suggest that the best place to put this emergency savings account fund is in a money market savings account that earns at least a small amount of interest. You could also consider putting it in a high interest CD if it is liquid enough for immediate access if needed.
Financial Advisor Baby Step 4: Invest 15% of Household Income Into Roth IRAs and Pre-Tax Retirment
If you have reached this point in the financial advisor 7 baby steps program then you should not have any payments left except for your house payment. When here you are finally at a point you can begin to build wealth and starting saving up that large nest egg of money. The idea here is to start saving for retirement. At this point some people often disagree and want to pay the house off quicker but they often don't understand the power of compounding interest and realize that time is of the essence when saving for retirement.
Financial Advisor Baby Step 5: College Funding For Children
This step in Dave Ramsey's baby steps program is very important and can be applied to saving for your own college or your childs college. You need to estimate how much it will cost to go to college. Then you need to use a savings calculator to find out how much you need to save each month at X interest rate to end up with that total amount needed for college.
Financial Advisor Baby Step 6: Pay Off Home Early
After setting up your college savings and retirement savings financial advsiors suggests that you put all of your extra money toward paying your home off early. The idea here is to eliminate this payment as quickly as possible so that you can then put even more money toward your retirment and investments.
Financial Advisorv Baby Step 7: Build Wealth And Give! (Invest In Mutual Funds And Real Estate)
The final step is the financial advsior seven baby steps program is to build wealth. To do this you should begin putting most of your excess money toward investments. This means putting this money in investment accounts that are invested in mutual funds.
This review of the Seven Baby Steps program has given you a good idea of how it works and also shown that anyone can be successful if they tackle their personal finances one step at a time.
Please follow Dave Ramsey's personal finance advice and begin your journey toward financial freedom and financial peace.
P.S If you are looking for a financial advisor and don't know where to start email me and I will give you a few good financial advising companies to consider.
Thursday, May 1, 2008
I have included a new and improved Savings Calculator on this page that will hopefully help you with your financial planning. This Financial Planning Savings Calculator can also be used as a Financial Planning Retirement Calculator.
Using this financial planning savings calculator is very easy. You want to start out by entering the amount of money that you plan to budget to save each month. Then put the total number of months that you plan to follow this budgeted savings plan for. Finally, enter the interest rate that you anticipate you can earn per year and then click compute.
The result from financial planning savings calculator will show exactly how much money you will end up at the end of your savings plan if you save the budgeted amount each month.
If you use this financial planning savings calculator properly then you should be able to find out exactly how much money you need to financially plan to save each month to retire with amount of money you want.
If you do this it will help you to work your savings amount into your personal finance budgeting plan.
The ultimate goal of pulling numbers from this calculator is to find out how much you need to plan to save each month to achieve financial freedom at whatever age you would like.
Suggesting that you use a savings calculator to help figure out how much you need to financially plan to save each month is one of the most basic personal financial advising tips that I can give you.
Wednesday, April 30, 2008
Personal Finance: Savings Calculators and the Power of Compounding Interest
In my last post I explained the importance of savings small amounts of money over time. As you all saw this is very important in achieving your goal of financial freedom and is not something that can be ignored. You also saw calculating what saving can do for you can be done very easily through the use of a savings calculator.
This post is intended to show how financial freedom can be achieved easily if someone just has TIME and small amounts of savings. It shows how starting today with small amounts of money will help you to have millions of dollars in the future and experience personal financial security. I have once again included a savings calculator for your use and also used a savings calculator for all of the calculations I have included.
What if I told you that if a person wanted to achieve financial freedom and take control of your personal finances and be extremely comfortable with their financial situation at retirement it would only take $20,000 of investments. Most of you probably would not believe this but I am going to show you how this can be done. This is a very basic tip financial advisors tip that all people should know about. The ultimate key to financial freedom is time and money. Not a lot of money but a lot of time and some money.
The concept I will be explaining today is the power of compounding interest and how you can using savings calculators. Compounding interest is very important in relation to personal finance. You can find many very good examples explaining the power compounding interest on the Internet but most fail to provide simple examples that are easy to relate to. Here I have include an example that should sum it up for my readers. This example will show you how easy it is to achieve financial freedom and take control of your personal finances
There are two 18 year old students that are about to graduate from high school. When they graduate they both receive gifts from their parents. Their parents goal is to help them achieve financial freedom at retirement and have enough to live off of.
Jim gets $20,000 from his parents and puts it into a savings account while John gets $20,000 and puts it into a mutual fund. Jim's parents have also agreed to deposit another $20,000 into his savings account each year until retirement. Jim's parents are well off and feel that giving him another $20,000 each month will help him to have a larger amount of money at retirement and give him more financial freedom.
In both situations the children agreed to not spend their graduation gifts until they retire.
Sounds like John got the shaft and Jim has an amazing deal right? Wrong! Think again! I will explain below.
For this example we will assume that Jim's saving account earns 3% per year and John will earn 10% per year through the stock market. Then we will use a basic savings calculator to find out how the numbers shake out.
After getting these gifts Jim and John decide that they will compare the values of their accounts at each 10 year high school reunion and then at retirement. The results are listed below.
10 Year Reunion: At their 10 year reunion, Jim and John compare accounts. John's account is now valued at $54,140 and Jim's account is valued at $232,948. Naturally John feels like he got burned in comparison to Jim. Both individuals are and the right track in achieving financial freedom but time will show that John is actually better off.
20 Year Reunion: At their 20 year reunion, Jim and John once again compared accounts. John's account is now valued at $146,561 and Jim's account is valued at $547,279. Naturally John still feels like he didn't get a good deal. Both of them are now 38 years old and are certainly on their way to financial security.
3 0 Year Reunion: At their 30 year reunion Jim and John compared account for a third time. John's account is now valued at $396,748 and Jim's account is valued at $977,422. Of course John still feels like Jim got a better deal.
Retirement Reunion: John and Jim both decided to retire at 68 years of age and that this time get together again to compared accounts. Now John's account is valued at $2,907,398 and Jim's account is valued at $2,314,612.
There you have it. John's parents gave only $20,000 while Jim's gave exactly $1,000,000 and yet John ended up with more money in the end. This is due to the power of compounding interest. John only ended up with more money because he was making 10% per year for a long period of time while Jim was only earning 3% per year. This is a powerful example that shows how taking control of your personal finances today and beginning to save can help you in the future.
All the while Jim is happy to take is $2.3 million dollars but does not realize that if he would have had his money in a mutual fund at 10% instead of his 3% savings account he would have had over $28 million at retirement.I hope you can see from my post how important the power of compounding interest is and how saving often and early in live can help you to reach your goal of financial freedom.
Please follow this simple personal finance tip and get started on your way to financial freedom.
Here I have again included a savings calculator for you convenience. Just put in the numbers you feel are correct for you and see how it comes out.
Tuesday, April 29, 2008
Financial Freedom Mini Series: Lesson 3
In this post I want to focus on giving you some specific personal financial advisor tips about the part of personal finance budgeting that I find to be the very important.
Many people dream about winning the lottery but for most this is highly unlikely. Despite this I am here to tell you that there is another way to reach your personal finance goals. This way takes lots of time and discipline but is also guaranteed, unlike the lottery. It is a consistent and steady plan of saving and investing.
In personal finance budgeting the most important part is the savings part. Savings in the most crucial step in achieving financial freedom and using a savings calculator can help you to determine how much you should save. This is hands down the most important part, no argument about it. Without saving some of the money that we earn there is absolutely no way we can ever even think about achieving financial freedom. If there is one piece of personal finance advice that you take from my whole blog it should be this. Savings is by far the most important component in achieving financial freedom.
Today I am going to go over the importance of savings, how saving can help you achieve personal financial freedom, give you some practical tips to help you save a portion of your money, and provide you with a savings calculator that can help you calculate how much your savings can add up to.
In order to achieve financial freedom and create wealth we must save money now. This means that we must live below our means at the current time in order to experience financial freedom in the future. We must save our money and invest it properly so that it can work to our benefit. If we save our money and invest it properly the money itself will begin create more money with little to no work on our end and the result will be us achieving our goal of financial freedom.
Savings is very important initially because it can help us to stay out of debt and as we know one cannot experience financial freedom when then owe more than you have. Having an emergency savings account fund will allow you to pull from that in times of need instead of charging the expense on your credit card. Unexpected expenses that savings can help with can be almost anything such as car repairs or medical expenses. Having this emergency savings account to pull from is so important because it allows you to stay within your personal finance budgeting plan that you have set for yourself. Most financial advisors suggest that each person have at least an equivalent of 3-6 months of expenses set aside in an emergency savings account.
After you have set up and established your emergency savings account the next step is to begin to save for the future. Plainly said, if you want to experience financial freedom you take control of your personal finances and have a significant reserve of money that will last you a long time. In order to do this you must save small amounts of money over a long time. Saving small amounts over time coupled with good investment decisions (done through a personal financial advisor) will help lead you on the path toward your goal of personal financial freedom.
Here is an example of how savings small amounts can add up over time. I got these numbers very quickly from using a savings calculator and you can do the same. You can either use the savings calculator I have included or you can search google for "savings calculators" and find a bunch of different savings calculators.
Now, back to the example. A person that has a take home income of $3000 per month should try to save at least 5%-10% of this each month. That is $150 to $300 per month. If someone was able to put away, we will say, $150 per month and merely make the average stock market return of 10% per year a savings calculator shows that they would have roughly $30,000 after 10 years and over $200,000 after 25 years. Now if this person saved $300 per month instead then after 10 years the savings calculator says they would have over $61,000 in 10 years and after 25 years would have about $400,000. The numbers are ever more astounding if done over 40 years or if the person makes slightly over the stock market average of a 10% return per year. As you can see, the power of compounding is very powerful and saving a small amount can help you to have a lot of money down the road and in turn bring you financial freedom.
I have include a savings calculator so that you can see how much money you will have after a X number of years by savings $Y amount of dollars each month and earning Z% interest each month.
The most important aspect of saving is to set goals for how much you plan to save and then stick to it. We must treat savings like and expense/bill or we will skimp off of it each month. Taking money from our paycheck and putting it into savings should be the first thing we do when we get paid. Without setting goals we will tend to take away from our planned savings and this will hinder our efforts at achieving financial freedom.
We should never ever plan to "save whatever is left over" this is a recipe for disaster and will almost certainly leave us saving nearly nothing. It is OK to set a certain amount and then add "whatever is left over" as an extra amount of savings.
The only tip I can really give you to help you stick to your savings plan is to stick to your personal finance budgeting plan and put the planned amount toward savings first.
It is all about self-discipline now so that you can achieve financial freedom in the future. As I have said before this all comes back to personal finance budgeting. This is the most important aspect of personal finances and will help you to succeed.
Please check out the savings calculator I have include in this post and calculate how saving small amounts of money will help you to gradually build up a lump sum of money.
Without building up this lump sum of money you will never succeed in achieving your goal of financial freedom. Please take this personal finances information seriously and do yourself a favor and begin your quest for personal financial freedom.
Tuesday, April 22, 2008
Financial Freedom Mini Series: Lesson 2 - Part 2
In our last lesson I wrote about living within your means. Today I want to give you some more practical financial advisor tips that should help reinforce the previous lessons and also build upon them.
In order to achieve financial freedom we must live within our means and be take control of our personal finances through personal budgeting strategies. In order to do this we must track our income and expenses through personal finance budgeting. The first step in financial freedom - living within your means - is done by tracking our income and being sure to spend less money than we bring in.
Tracking income and expenses and preparing a personal finance budget is the easy part. The difficulty comes in sticking to your personal finance budget and continuing to track your personal finances on a daily basis. For most people this is very hard to do once we get caught up in the rush of daily life. In order to be successful we need to set up a personal budgeting strategie that allow us a planned time each day to keep our personal finance budgeting tracking up to date.
If you are reading this and wondering what a personal finance budget is or what living within your means is then I suggest you check out my previous posts. These will get you up to speed on the building blocks to financial freedom and then this post will make more sense to you.
Now, finally onto today's lesson. Today I want to give you all some practical real life personal finance advising tips and personal budgeting strategies that will help you stick to your personal finance budget and live within your means.
1) Take control of your spending- The most important thing in personal budgeting is to establish personal budgeting strategies that allow youto control your spending. Americans savings rate has dropped from 11% in the 1980's to a negative savings rate today. This is certainly not the way to live within your means and achieve financial freedom. You need to take control of your spending and be sure to only spend money that you actually have. This means absolutely NO CREDIT CARD DEBIT. Using a credit card is perfectly fine but only to the extent that you can pay off the full balance every month. As of today the average American has roughly $7000 in annual consumer debit. That averages out to an astounding $583 per month. You must give up on the debit and begin to stick to your Personal budgeting plan or you will never succeed in achieving financial freedom.
2) Be Organized- To achieve financial freedom we all must be organized. Without organization there is no way we can possibly track our income and expenses and stick to our personal finance budgeting plan. We need to keep receipts from all purchases and then add them to our personal finance budget on a weekly, if not daily basis. This is a very important personal budgeting strategy.
3) Hire a Personal Financial Advisor- The average personal does not have enough financial knowledge to properly use their money to have it work for them. For these people the smartest thing to do is hire a personal financial advisor. This person can help you to set up your personal budgeting, stick to your personal finance budgeting, help you with investment decisions, and even give you advice about the potential large purchases you are considering. There are also many other things a personal financial advisor can help you with, basically anything you can think of that has to do with money. The end result of sticking with a financial advisor should be financial freedom at some point.
4) Set Goals- Setting personal finance goals for your future is very important. If you can set goals for your future then it can help you stay on track right now. Seeing what the payoff will be at the end often helps people to stick to their personal finance budgeting strategies.
5) Cut the Unnecessary Expenses- In order to achieve financial freedom we need to live somewhat frugally today. Living frugally today will payoff and you will be much for financially free in the future because of it. We all have those unnecessary expenses that we can cut from our personal finance budget. All it takes is small things like packing a lunch for work instead of eating out.
OK, now I am going to get more specific with little everyday tips.
1) Buy Store Brands When Possible- You will be surprised at how much money this helps you save. Finding small money savings tips like this one will help you out significantly in sticking with your personal finance budgeting and will have you on your way to financial freedom.
2) Don't Eat Out So Often- Besides being extremely unhealthy eating out is also very expensive. If you could cut your eating out to 1-2 times a week instead of 4-5 then you could save $150-$200 per month. That would equal an extra $2400 per year. This is once again another way to cut out small expenses and help yourself stay within your personal budgeting plan and within your means.
3) Never Buy a Brand New Car- When you buy a new car for $25,000 it is instantly worth $18,000 once driven off the dealers lot. Buying new cars and getting a car loan will put you years and years behind in your quest for financial freedom. A new car should never be bought because it is to large of an investment into something that is simply going to lose value very quickly with each use.
4) Use Coupons and Stock Up on Sale Items- This can help you pinch those pennies and save money on groceries. Once again, another way to save money and be on your way tofinancial freedom.
I think you can see from my posts today that pinching pennies is the most important thing in achieving financial freedom and sticking to your personal budgeting plan.
Its not that you have to live like a poor person but instead you need to cut out the unnecessary expenses. Most people don't realize how much these add up to each day and each month. If you can follow all of the tips above I can promise that you will save at least $300-$400 each month. And maybe more depending on your circumstances.
Financial freedom is a great thing to experience but it definitely takes sacrifice for today in order to have that freedom tomorrow. If you can stick with personal finance budgeting and follow the personal budgeting strategies I have suggest I guarantee that you will be on your way to taking control of your personal finances.
Monday, April 21, 2008
Today I wanted to give all my readers a financial advisors tip about a personal finance software program that I highly recommend. This product is from Quicken and is called Quicken Deluxe 2008. It is the best personal finance software I have seen on the market. It is highly professional, very detailed, and easy to use.
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This product could go a long way in helping you to achieve the financial freedom that you are looking for and in a way will act as a personal financial advisor for you.
If you are interested in Personal Finance Software I would highly recommend this product to you.
Below I have listed details about Quicken Deluxe 2008 and given you the reasons why I believe it is a must have for anyone who is serious about achieving financial freedom.
Use Quicken Deluxe 2008 to easily track and manage your personal finances and assets all in one place -- they're the perfect companion to online banking.
Quicken Deluxe 2008 helps you manage and part of your personal finances including spending, savings, investments
Bring it all together. Manage your personal finances more efficiently with Quicken Deluxe 2008. Get the software tools that will help you manage personal expenses, simplify tax preparation and help maximize deductions.
Want to stop late fees from chipping away at your spending money? Quicken Deluxe 2008 makes it easier to see where your money is going.
If there was any product on the market that I would suggest that you get to help you with your personal finances I would suggest this or another product for Quicken. Quicken has by far the most professional and comprehensive personal finance software available on the market.
Do yourself a favor and get Quicken Deluxe 2008 to help you with your personal finance budgeting and get on the fast track to achieving financial freedom.
Saturday, April 12, 2008
Financial Freedom Mini Series: Lesson 2 - Part 1
I wanted to start out this lesson by giving a quick recap of lesson 1. Lesson 1 was about the importance of having a personal finance budget and personal finance budgeting. As we saw in lesson 1 without a personal finance budget people have no way to track their income and expenses to be sure they are being personally financially responsible. Setting up and sticking to a personal finance budget is probably the biggest key in achieving financial freedom. If you would like to get caught up on Lesson 1 of the series you can see is here: Personal Finance Budgeting.
The concept behind a personal finance budget is to determine how much you make and spend accordingly. Once you begin personal finance budgeting you can then begin to live within your means. Living within your means is the topic for today's lesson and now that you have the foundation for living within yours means (a personal finance budget) we can move on to the concept of living within your means. Simply put, living within your means means that you can pay for the things you need without having to take on debt to do it.
As stated in a previous post, Americans on average now have a negative savings rate (Usually unknowingly because they do not know anything about personal bugeting finance). This means that on average Americans spends more money that they bring in. In my mind this is astounding and certainly is not the way to achieve financial freedom. Living this way is also clearly not living within your means. When you spend more than you make the extra money has to come from somewhere and more often than not, for Americans, it comes in the way of credit card debt. Without a personal budgeting finance plan in place it is almost impossible for someone to achieve success in this area.
Another problem here is that most Americans have seriously confused the two words want and need. Americans think that getting the next designer label shirt or brand new car is a NEED and not simply a WANT. The more depressing part of this is that a lot of Americans think that their self-worth is somehow attached to these expensive, yet pointless, things. Americans need to put aside their wants and instead live responsibly and stick to a personal budgeting finance plan.
When someone establishes a personal finance budget they are able to consider all factors and realize how much money they are spending and better live within their means and control their personal finances. Most people do not realize all of the small expenses that add up and this ends up causing them to spend more than they take in. It's a coffee here, a soda there, some fast food after work and before you know it you have dropped an extra $200 a month on junk.
The main concept of living within your means is to spend less money that you bring in. When you set up a personal budgeting finance plan and stick to it you can track these expenses better and it will allow you to live within your means.
When you are not living within your means you are robbing yourself of financial freedom. Instead of funding your dreams your money fills the pockets of credit card companies. It would be better if the money you paid in interest could go into a savings account or an investment account. Paying for items by going into debt limits your choices because you are stuck paying for yesterday instead of moving toward tomorrow.
As I have said before, the best way to live within your means is to establish a personal finance budget for yourself and stick do it. Most people do not have the self-control to live with their means unless they have a specific plan laid out for how they are going to do it and this is where personal budgeting finance is so important.
That's all for today's lesson. In the next post I am going to continue lesson 2 by giving you all some real life examples of things you can do to help you stay within your personal finance budget and live within your means.
How to achieve Financial Freedom: Summary of Lessons 1-6
Financial Freedom Mini Series: Lesson 1
Financial Freedom Mini Series: Lesson 2 - Part 1