by Derek Sisterhen on February 19, 2010
I joke often that, in spite of my degree in finance and career in the banking world, had I just read the Book of Proverbs I would have gotten a much better – and much cheaper – financial education. In this series I’ll highlight a few key principles from Proverbs that you can apply to your finances today.
“Know the state of your flocks, and put your heart into caring for your herds,” is written in Proverbs 27:23.
Back when Solomon was writing Proverbs, flocks and herds were currency (which often makes me wonder how they made change for a sheep, but that’s beside the point).
There are two words in this verse that leapt off the page the first time I read them: know and care.
Know. You have to know what’s going on with your money. How you behave will reveal a lot about what you know of your personal finances. Do you regularly balance your checkbook? Are you creating a monthly plan for every dollar you earn and tracking where it goes?
John Maxwell said, “A budget is telling your money where to go rather than wondering where it went.” When you know the state of your personal finances, you don’t have to wonder where your money got off to.
Care. When you care about your financial situation, you honor and respect your most powerful wealth building tool – your income. Stewards are those who manage the resources of someone else to the very best of their ability, even though they have no ownership rights. Understand that you don’t own anything, but everything – from income to assets – is a blessing.
Caring requires attention and intention. There must be a greater purpose for these resources, some larger goal to accomplish – whether retirement savings or giving to those in need.
Knowing demands your mind; caring demands your heart.
by Derek Sisterhen on January 28, 2010
It’s a new year and everyone is beginning to receive their W-2s and 1099s as the tax season quickly approaches. I was speaking just yesterday with a woman who said she looked at her W-2 and the first thought that crossed her mind was, “Where did all that money go?”
I talk at length with folks about the personal side of personal finance – how you behave with money will indicate your likelihood of financial success with far greater accuracy than how much you know about the world of finance. However, we can’t leave out the fact that our household is a distinct financial universe, complete with its own micro economy. If you want to stay on top of that economy, you’ll need to approach it from a business perspective.
Keep good records. I’m not going to say you have to journal every transaction in a spiral bound notebook, but if you already live on a budget you should be able to account for your actual monthly spending in each budget category and aggregate that for the year. Also, how much money did you actually make last year? I use spreadsheets to track my regular income from employment along with income received as gifts. This helps me stay accountable as I distribute ALL my income among my expenses and savings goals for the year.
Stay organized. Tax time can be very stressful if you aren’t organized throughout the year. Use folders to keep all tax-relevant documents together like mortgage interest, property tax, and charitable giving statements.
What you own and what you owe. Review your assets, from retirement plans to vehicles. Do your investments reflect your risk tolerance? Have your insurance needs changed? What loans and debts are currently outstanding? How much were you able to pay off last year? How much interest did your debt cost you?
Look at it this way: you’ve been hired to manage You, Inc. Taking stock of your performance on an annual basis is like a job review. So, do you deserve a raise?
by Justin Lukasavige on December 15, 2009
I spoke with someone recently who said he felt like he’s selling McDonald’s hamburgers in a Burger King parking lot.
Does your life feel like that? You might be doing the right things, but in the wrong place or at the wrong time?
You probably got there because you didn’t have a plan. We’re at the end of the year as I’m writing this and it’s a great time to put things in perspective regarding your future.
You’re in your current place now because the choices you’ve made put you there. There’s just no other way to put it. If you want to be somewhere else you have to not only begin making different choices, but also acting on them.
What will you chose to do differently this year to make your life better? Add to the discussion below.
Picture by eneko123
by Justin Lukasavige on November 20, 2009
“Things may come to those who wait, but only the things left by those who hustle.”
- Abraham Lincoln
Planning is great, but I have a feeling it’s time for you to take action. I don’t know what it is but you may have to jump into it. Start your business, get out of debt, take your wife out to dinner. Stop talking and start doing.
President Lincoln was obviously smart enough to get his face sculpted into a mountain in South Dakota. If it worked for him, I’m guessing it will work for you too.
