Episode #46 – 10 Financial Questions for Better Control Over Your Money!

Hi everyone, welcome to another wealthy and wise Wednesday, glad you can join me, hope your weeks are going well, you know I am always reading about something in the financial world, I seem to have a lot of alerts and text and pop ups that come to me, I mean whether it is another podcast or an article or something because I just feel like you need to always be financially aware and what is going on and especially in my line of work obviously I want to make sure staying on top of things. I ran across this thing that was kind of interesting and it was more or less about how your family is functioning so to speak more on the financial side, not on how you are raising your kids but it was really kind of like interesting, a kind of quiz if you will and it is just kind of ten questions and it talked about some other things you might consider if you are not doing and see how well you are doing in other areas.

[00:01:36] so let’s just kind of go through these ten questions, talk about them for just a seconds, let’s see how you are doing, alright. First one is pretty simple it is, do you pay your bills on time? Now that sometimes is not all that critical but it puts you in a very good habit, in fact, you might even pick a day, we do that in our building systems, we pick a day where we know those bills are going to get out and that way we are in a very consistent mode, so give yourself a little check mark, a little bonus, a little pat on the back if you are paying your bills on time and a little extra bonus if you are paying them consistently on the same day each month to have that again, that consistency in your life.

[00:02:31] The second one, now this is a big one and it is an important one and the question is, do you save 10% or more of your income each month? Now the reason why that is a huge one is because most Americans aren’t and I go back to the early 80s when I read the book the richest man in Babylon and basically say the first thing you do is pay 10% to church, charity, God, and the other, the next thing you do is you pay 10% to yourself and if you do that, you are just going to almost naturally by default have enough wealth to sustain your life. But more importantly, you are working all these hours, I mean day in, day out, you are putting in the time and if you are not paying yourself, if you are not ending up with something at the end of the month, so that you can you know either contain, either build your wealth and eventually someday retire. I mean that is a lot of work for nothing, so you should eventually get to 20%, that gets a little tough but certainly 10%. And then if you just start this out, I mean day one of your marriage, just start plugging away that 10%, you will never miss it, you will be amazed where that would grow to. So some profits and some [00:04:02] and some bonus points if you are saving at least 10 percent and if you are closer to 20 were all good on you.

[00:04:10] Okay, the third question if do you have at least three months of income saved for the raining day funds, the emergency fund, whatever you want to call it, so that if something happens to you, you could live at least the next three months without having to worry about income. That might be a job loss, that might be some sort of a short-term disability and injury and surgery, who knows what can come up but you definitely need that. We put a heavy emphasis on that in our course and talk about how to do that, why you should do that and then we kind of compares them in different places where you can put your rainy day fund and see what makes the most sense, from a growth perspective, from a tax perspective and access perspective. So you might want to check that out but again few point part on the back if you have got at least three months on your rainy day slash emergency fund.

[00:05:14] Number four, is do you plan ahead or save for large expenses? Now, a lot of times we call this major purchases. Let me define that really quick; a major purchase is any purchase that you can’t pay for in one-month discretionary income, and what does that mean? It means at the end of the month, you have got a few bucks left and you have saved, you have paid your bills, you have got your groceries, you have bought the cloths for the kids, whatever you need for that month and if you have some money left over, what that does is if you have got enough to pay for an expense then that is really not a major purchase. A major purchase is if you don’t have enough money at the end of the month to pay for that, now let’s just use a couple of examples, maybe you need a new battery for your car. Alright, well hopefully you have got enough at the end of the month that is not a major or large expense but what if you need a new washer or dryer or a new roof on the house, something like that. Those definitely will be major expenses, so the question is, do you plan ahead or are you saving for those. A lot of people say that this is my emergency fund or my rainy day fund, it is not. This is your capital savings fund or the money that you set aside or you have designated for these large purchases. It might be for a car, it might be for some sort of a toy like a boat or RV and motorcycle. Those things that you save for.

[00:06:56] Now of course, we don’t want you saving for those things and then go and pay cash. That is just you know taking a pile of money and getting rid of it, taking a pile of money and getting rid of it, we don’t want to do that. So we have got special ways to do that especially through the banking system that we teach and again that is talked about quite a bit in our course. But the main thing is no matter how you end up paying for it, you definitely want to save for those large purchases, it is how you made that purchase in the end that is important. Alright so few points if you are saving for your large purchases or you have made your expenses.

[00:07:35] The next one is, do you set and keep financial goals for yourself? Now, I have never really been a good goal setter, especially financial goals because I don’t know why, they kind of drive me crazy. I certainly keep goals in my mind but I am not very good at just setting them on a regular basis but those that do find tremendous success. I have always been the one that just says look I know what I am going to be and I am going to get there and I just work for that but it is not bad to set some financial goals, we want to save this much, we want to invest this much, we want to be you know financially free at this stage in our life. So it is good if you can identify those things and set those goals and then stick to it, that is probably the hardest part.

[00:08:31] The next is do you follow a budget each month? Again, this is probably one of my weaknesses, I have never been a good budgeter because I have always been buying and spending the least amount of money I can. My wife might actually refer to me as cheap or penny pincher. So budgeting has never been all that difficult because I am not a spender, I much rather save and invest and build additional wealth but many people need that, we need that, that says okay, I have got x number of dollars for cloths, for eating out and those kind of things and those are good to have because otherwise you can get a little bit out of control but the nice part is when you budgeted money for let’s say eating out, you don’t have to feel guilty, it was budgeted. It came after you put away some money, you put away your 10%, you have got all your bills paid, this is some fund money, I mean some reward money for all the work that you do. So there is nothing wrong with that if it is budgeted and that is where you spend it for a great.

[00:09:43] What you don’t want to do, oh I have got all this money and you go crazy and you buy things that you later going to regret. Alright the next one is do you shop around and compare prices before you make a major purchase? So how do you do on that if you are looking for a car, of you are looking something quite expensive, how far would you drive or compare prices before you make that major purchase and it is funny because you think about let’s just take a $500 item, video camera, I don’t know something. If you want to buy some of this $500 and across town you can save $50. Well that is a pretty good savings right, that is 10% off the price. But maybe you are buying something for $10 and it is selling for $9, that is still 10% off but at times, often times you think well that is just a buck. Whereas the other one is oh wow, that is $50. So I don’t want to get you too worked up on making purchases but certainly when you are making those major purchases, well it is a significant amount of money, it is good to shop around and nowadays with online, boy you really shop and make sure that you are getting the best prices.

[00:11:18] Did you know that there are some sites that I won’t name but it is a big site, you can even put on some sort of alarm that if it hits, the thing you are trying to purchase hits a specific price you will be notifies. So, some ways to really save when making those major purchases. Okay, number A is, do you regularly check your credit report and you want to make sure you are checking your credit report, [00:11:57] that is easier to check but credit report is where you can go and see exactly what is being reported to the credit agencies, you probably had to check that, you know aggressively one to month and probably once or quarter, maybe every you know six month or so but go through it and see that you are getting credited when you make those payments because credit reports are often not wrong and you can write to the credit report correctly and get a lot of those things corrected and then of course had to eventually reflect your credit score.

[00:12:37] Okay number nine, are you looking at your check-in account statement each month, are you reconciling, do you know where your money is going? I mean if you don’t know where your money is going it is going to be really hard to track it. So make sure that those account statement are matching up with the bills and the cheques that you wrote or the payment that you made if you have done it all online. So at least at the end of the month, go jump online nowadays, you can just look at your account, look at your statement and see how you are doing.

[00:13:09] And the last one which kind of brings me back to the first thing I said is are you trying to become more financially aware and educated on regular basis. Books, podcasts, videos, whatever that might be. You are listening to this podcast, that is awesome, becoming more financially aware, more control. You know we live in kind of a do it yourself culture, where you really can be your best financial advisers and it is critical that you understand this stuff so no other financial adviser who doesn’t know what you are doing can take advantage of you because you know what is going on. You know what investments are, you know how they look, you know what fees do, all that good stuff. So be very financially aware and take some time, there are some great books out there, one day, I am going to make a list of some of the ones that I have read that really made an impact on my financial outlook. So those are the ten questions, how did you do, hopefully, you did at least fairly well, of each one of those were a point, that would be ten points total if you did everything perfectly. I would love to see you in the seventh to nine range at least on these things, so figure out what you can do better, what you can do in your family to have these principles put into practice so that you become more financially savvy that you become wealthy almost by accident through your savings.

[00:14:43] Okay that’s it, hope this was helpful, it is kind of fun to talk about. Don’t get too depressed, implement what you can and take it from there. Alright, I will talk to you next week, any questions reach out to me questions@wisemoneytools.com. Talk to you next week, take care.

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