I Was Broke. Now I'm Not!

Ever had an experience with customer service that really puts the CUSS in Customer Service?

I have had some seriously frustrating experiences with my cable over the past year.

I will list some of them.

* Cable goes out during nearly every rain storm
* When cable goes out, my INTERNET goes out (it's amazing how tied to the internet I have become!)
* My cable has went out for periods ranging from 1 hour to 17 days
* I can shake a wire outside and the cable service MIGHT come back on, but the company can't figure out why
* I have had no less than four different issues/outages.
* Cable went out during a Purdue Boilermaker football game. That is bad news for the cable company.

When I talk to Cusstomer Service, they have yet to say, "I am so sorry for your problems. You are a very important customer to us, and we are committed to fixing this right away to your complete satisfaction."

In fact, when I do call Cusstomer Disservice they attempt to sell me something! Every. Single. Time. "Sir, would you like to try out our VOIP phone service?" "Sir, would you like to upgrade your entertainment package?" NO! I just want my stinking cable and internet back!!!

So recently I read

my friend's blog post about blazing fast internet service without having to have a home phone AND he saved a ton of money. You can bet that I have contacted him to figure out how I can do the same deal.

I KNOW that companies have issues. ALL companies have issues from time to time. That is when Customer Service is most important!

So cable company, the next time I call with an issue I want to provide you with a written checklist for your customer service agents to follow.

* "I am so sorry that you are having issues today. We strive for excellence, and we are sorry you are having this issue."
* "You are a very important customer to us, and we will not be happy until we have restored your service to its full capability."
* Upon verification of the issue, call and tell me, "I am placing a credit for one month's service on your account. We are so sorry for the inconvenience."
* If you really want to knock it out of the park, you can send me a written repair statement telling me exactly what the problem was, how it was repaired, and what has been changed to prevent this problem from occurring again in the future.

Perhaps you could really go out on a limb and benchmark some companies that are highly regarded for their great customer service. A company that comes to my mind is ING Direct. They have GREAT customer service AND they have a GREAT product!

But it may be too little too late for the Sangl family. Four strikes add up to an out with a mulligan.

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So Robert and Helena have joined the ranks of those marching toward debt freedom!

Today, Robert and Helena brought me this picture of their credit cards.



They SHREDDED their credit cards to spell the words "NO NEW DEBT!!!"

And guess what? For over two months now, they have incurred NO NEW DEBT!

I guess they have had their

IHHE Moment!

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I am starting to invest in a mutual fund for my non-retirement dreams.

I thought I would share some of my non-retirement dreams.

* A LONG trip to Australia and New Zealand
* A LONG trip to Europe - starting in England, including Denmark, Germany, Austria, and ending in Poland.
* A LONG trip to Israel
* My daughter's wedding (whether I like it or not, she will probably get married some day)
* A really nice ski boat
* A really nice fishing boat
* A 100 acre farm
* A LONG trip around the United States

What are some of your dreams?

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Note: This situation has occurred MULTIPLE times in multiple venues and does not reflect any one situation.

As a financial counselor and teacher, I have encountered many horrible financial situations.

There are times that I leave the conversation thinking, "I don't think they get it!"

I have had people approach me for advice. Their situation? They are three months behind on the house payment and cars have been/are in the process of being repossessed. Their car payments are 40% of their take-home pay. The amount owed on cars is equal to two year's salary! The list of horrible, depressing situations could go on …

When I ask them how many hours they are working and how many jobs they have, the answer is forty hours and one job!

How is that possible?!!! If being three house payments behind does not motivate one to go get more hours and income, at what point does the fire alarm start ringing?

If I were even close to being behind on a house payment I would have five jobs by the end of the day! I would work eighty or ninety hours each week to get out of the situation!!!!!!

I feel like I am having to sell the concept of earning more money to pay the house payment.

I hear excuses like, "I'm not going to work at McDonald's. They only pay $7/hour."

I understand that they don't want to work at McDonald's, but desperate times call for desperate measures! By working 20 hours per week at McDonald's, they will bring home an extra $400 take-home pay to address the past due situation payments!

Don't get me wrong. I want them to earn as much per hour as possible, but when McDonald's is the option available - take it!

There are times when the world seems all wrong, the bills are stacking up, and life is just not fun. There are two choices available - stand around and watch it all be taken away OR take matters into one's own hands and generate enough income to recover!

You can AVOID falling behind on your payments by spending your money on paper BEFORE the month begins! Click

HERE for free budgeting tools.

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I am the youngest of six boys in my family. There are no sisters.

You can imagine the state of chaos that our family was in most times. Six boys smashing, pounding, beating, trashing, yelling, and generally misbehaving at all times.

When times got particularly out of control, my mother would have an IHHE Moment. She would announce (to no one in particular) in a LOUD voice - "I Have Had Enough!!!" She had an IHHE Moment.

I can tell you this from experience - when mom had an IHHE Moment, things were changing! Life as we knew it was OVER!

I wonder today if you have had an IHHE Moment with your financial situation. Have you had enough? Are you sick and tired of never having enough money to pay all of the bills on time? Are you sick and tired of falling behind on the house payment? Maybe you are not able to invest money because of the amount of debt you have.

My IHHE moment was in December 2002. My first ever

blog post relates some of the story.

Here are some characteristics of IHHE Moments:

* Change happens
* It is an emotional event
* Everyone around that person KNOWS that an IHHE Moment has occurred

If you have had your IHHE Moment - tell everyone about it by writing a comment or e-mailing it to me.

I love to hear stories of life change!

Another edition of the Weekly "I Was Broke. Now, I'm Not!" Podcast was released today! To subscribe to the podcast via iTunes, click

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Introduction

This couple has announced to their debt that they are breaking up with it. Their friendship with debt has waned and frankly, it's time for them to cut debt out of the picture.

It has now been three months since Couple #2 began their March Toward Debt Freedom! This PUMPS me up! Why? Because I know that the third monthly spending plan is when financial plans really begin to take off!

On to the update.

Here is their updated

Debt Freedom Date calculation.



What went well this month …

Great news!! We paid off two credit cards; Belk and Home Depot!!! This will free up $125 to put toward paying off the Providian. We are so excited!! We did not accumulate any new debt this month either. The cash envelopes have really helped us to “live within our means.” We never thought of ourselves as “living above our means” before, but that is exactly what we were doing over the last several months. Thank God for Joe and his plan to help us become debt free. We have a ways to go, but I feel like a different person…like I have more control over our future.

Challenges and struggles for this month …

We had to practice saying NO this month. Both of our envelopes ran out of cash pretty fast, so we had to "just say no." In a way it was nice, but still tough. Sometimes we think we need to do everything just because we are asked, but now we have realized if it is not budgeted, we don't do it. Our family and friends were very understanding. I simply explained to them what we were doing and they were very respectful of our decisions. The cash envelopes take time to get used to, but in the long run we know if we say no today we can say yes in the future. Next month we are going to work on making the cash envelopes last longer.

One more thing…in the beginning, we estimated on how much we owe on our Student Loans and Vehicle One. However, we realized that we estimated a little high on Student Loan Two & Vehicle One and low on Student Loan One. We owe about $900 less on Student Loan 2, $500 less on Vehicle 1 and $400 more on Student Loan 1. Lesson learned…double check everything, even if you think you are correct. Luckily, we owe less than we thought, but it would not have been encouraging to learn we had more debt. This was irresponsible on our part, but I want to tell everyone just in case someone else out there did the same thing.

Sangl says …

I am so PROUD of Couple #2! They have made it through the three most difficult months of developing good spending plans. They are well on their way to Debt Freedom! I think it is awesome to see that the Debt Freedom Date has moved up 1.6 months from last month!

Couple #2 - Make sure that you are preparing for Christmas in your spending plan. You want to make sure that you can pay cash for Christmas and continue your awesome progress!

I am so appreciative that you are willing to share your journey with thousands of others!

Readers …

How has Couple #2 inspired you to take control of your finances? Would you leave a word of encouragement in the comments?

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Introduction

Couple #1 has HAD IT with debt! They have been married for many years and have two children.

It has now been two full months since they embarked on their Debt Freedom March!

Here's the update for this month!

What went well this month …

The budget is in effect and being cursed daily. Smile. The debt is being taken out 1 by 1. Two Cards are ZERO and a 3rd will fall this month The emergency fund is funded.

Challenges and struggles for this month …

It is hard because Christmas is coming ,and I have obviously not looked at a calendar. I am going to do the best I can to go without in other areas and cut back on total Chistmas spending. This time next year I will have Christmas already funded.

Here is what their updated Debt Freedom Date calculation looks like.



You can calculate your own Debt Freedom Date by clicking

HERE!

Sangl says …
The first three months of budgeting are the most difficult. You are changing your spending behavior and that takes a lot of effort! I am proud of Couple #1 for sticking to the plan! The plan will work if Couple #1 works the plan!

Couple #1 gained 0.20 months toward their debt freedom over the past month, but don't miss the HUGE accomplishments! Two of their credit cards have left AND they now have an emergency fund! Take a lesson from Couple #1 - BEFORE you go attack debt, make sure that you save up at least $1,000 in a beginner emergency fund. If you have kids or a house, I recommend at least $2,500!

A note to Couple #1 - You don't have to incur debt for Christmas! This is THE YEAR and THE TIME that you are changing your spending behavior! The best Christmas in the world is the one that is a blessing to you and your family. Avoiding debt will bless your family!

Way to go Couple #1, you are on your way!

Readers …
Would you write Couple #1 a note of encouragement - especially as to how you have avoided Christmas debt?


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Jenn and I had the awesome opportunity to carry the crusade for financial freedom to Revolution Church in Canton, Georgia where

Gary Lamb is the pastor.

It was a fantastic weekend!!! Here is why it was AWESOME!

* On Saturday afternoon, I was able to meet up with Executive Pastor Malcolm Young and a couple from the church who have a passion for helping others become debt free! I was able to walk them through the financial counseling process that I have used to counsel hundreds of people. I LOVE being able to meet and teach others who are on the crusade!

* After the counseling training, we went out to dinner with Malcolm and his wife Amy and Chris and Carlene (sp?). I love meeting people who are fully bought in to a ministry!

* On Sunday morning, I had the opportunity to see a portable church in action (setting up in a movie theater). It reminds me of the old days at NewSpring Church.

* I was able to share my story with the church on Sunday morning during both services. I love sharing what has happened in our life financially. It is why I went on a crusade!

* After the second service, we raced over to the church offices to teach the Financial Learning Experience. Get this - I had to teach the FLE twice!!!! The first one sold out, so I had to teach it again!

* I taught the class two times - one at 1PM and the other at 4PM. LIVES WERE CHANGED - No doubt about it! That FIRES ME UP!!!!

Why did the Financial Learning Experience sell out? Because Revolution Church had the absolute best series on finances that I have ever followed with a FLE. Gary and Malcolm taught practical how-to type finance topics that were taught via take-home-and-do-this type teaching. You can hear the message series by clicking HERE. The message series is called Pirates - Reclaiming Your Lost Treasure.

Gary, Malcolm, Amy, and all of the awesome staff and volunteers of Revolution Church - you made this Financial Learning Experience AWESOME!!! Thank you!

Interested in having Joe teach the Financial Learning Experience at your church or business? Contact Joe

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Here is what has been taking place in the Sangl household from a financial standpoint.

* We have finally received the final bill from the hospital from my hernia repair surgery in June. If I had not had medical insurance, I would have been on the hook for over $23,000 - WITH DISCOUNTS. Since I did have medical insurance, I am obligated to pay the full deductible which was $3,000. If you don't have medical insurance, GET IT NOW! At least acquire major medical/catastrophic health insurance with a super-large deductible!
* My health insurance qualifies for a Health Savings Account (HSA). That means that I don't have to pay taxes on the $3,000 in health insurance costs! If my tax rate is 25%, I would have had to use $4,000 of my income to get $3,000 in take-home pay! I love tax-advantages!
* I recently paid my annual health club membership fee. By paying this annually instead of monthly, I only have to pay for eleven months! Every month I save 1/12 of the annual membership fee and PRESTO! the money is there when the bill comes due! I call it the

Known Upcoming Expenses Escrow Account - and you can put together your own escrow account by visiting the TOOLS page.
* My annual life insurance premium and Christmas shopping are also going to happen next month. I am GLAD that I have the escrow account! It makes it SO MUCH EASIER to save for these larger, non-monthly expenses.
* I noticed that ING Direct lowered their interest rate by another 0.10% when the Fed dropped rates this week. Oh well, they are still paying 4.20%! If you have not opened an on-line savings account with ING Direct, you can still get $25 FREE if you open the account with at least $250. I still have a few of those links left. You can click HERE to open your account and get $25 FREE!
* My daughter turns eight in a couple of weeks! Where did all of the time go? I think it is high-time that I review her 529 college savings and make sure we are on the right track!

What financial activities did you embark on over the past week?

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Why is it that I have five different places to spend each dollar that I earn?

My wife and I put together monthly budgets (get yours FREE by clicking

HERE) and that means I get my spending money once per month.

By the end of the month, it is extremely rare for me to have money left! Why? Because, I am the spender of the family. Take for an example this month. I had $3 left on Monday. It left me by Tuesday. On Wednesday and Thursday, it was $0 expenditure days! It was impossible to overspend because we use cash envelopes! When the money is gone - it is GONE!

Some might say, "Joe, you are dad-blamed crazy! You have no debt except the mortgage and could easily increase your spending money. Why do you insist on living this way?!"

The reason? Jenn and I have some big huge dreams. Some of those dreams include paying cash for Melea's college, paying cash for her wedding, funding our retirement well, giving Melea a paid-for house to start life out with, and giving to some worthy causes that we really believe in!

Sure, I can bump up the spending money, but I will just be robbing myself of some of my future dreams!

I hate robbery and theft, and I REALLY HATE IT when I rob from myself!

So yesterday started a new month. I have money to spend again. Trust me, I am confident that I will spend 90% of it during this next week.

With all of that said, here is how I have planned to spend the money this month. By the way, I used the Mini-Budget to plan my Spending Money. You can get your FREE copy HERE.



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I am so excited to be teaching the Financial Learning Experience in Canton, Georgia on Sunday! The first session has sold out, so I will be teaching the FLE twice! There are a few tickets remaining for the 1:00PM - 3:00PM session. You can obtain more information by clicking HERE.

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Every month there will be an update of Joe & Jenn's Home Pay-Off Spectacular! The second monthly update is TODAY!

I have had ENOUGH of the stupid house payments!

While I could pull money out of my investments and pay off the mortgage, the penalties are too great (vast majority of investments are in tax-advantaged retirement accounts).

So Jenn and I have shook hands and made an agreement that the house payments will be gone within four years. You guys will all get to watch the mortgage leave by watching the "Sangl Family Home Pay-Off Spectacular" turn green!

With that, here is the update!

Total Squares: 2,426

Paid-For Squares: WAS: 658 NOW: 674

Squares Remaining: WAS: 1,768 NOW: 1754

% of House Owned By The Sangl's: 27.8%

% of House Owned By Wells Fargo: 72.2%



Here is the fact that is making me hate the house mortgage this particular month. We sent in MORE than TWO monthly payments this month. That is a LOT of money!!! BUT, it only paid off 0.6% of the stupid mortgage. ARGH!!!! I HATE house payments! Maybe next month, I will send in 50 house payments … Anybody want to donate to the Joe & Jenn Mortgage Early Pay-Off Charity?

By the way, 50 house payments would only pay off 15% of the stupid mortgage. Proverbs 22:7 sure rings true! I am so OVER house payments!

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Almost every day, I have a financial counseling meeting with someone who has a car loan that has a balance that is much more than the car is worth. They are "upside down". They owe more than the car is able to be sold for.

During the counseling session, we develop a written spending plan (budget - start yours

HERE) and calculate their Debt Freedom Date (calculate yours HERE).

Let's look at a sample of what I am talking about. Here is a person's Debt Freedom Date calculation.



This person owes $19,000 on a car that is only worth $14,000. They want out of debt! They have had enough! Thirty-six months - THREE YEARS - is NOT good enough! They want to become debt-free now!!!

So how does one get rid of a car that they are upside down on?

There are many options. Here are a few:

1. Sell the car and use $5,000 of savings and use it to bridge the "gap" so the car's title is clear for the sale. Use another $1,000 to purchase a "beater" vehicle that will get you from point A to point B.
2. If you don't have $5,000 in savings to bridge the "gap", approach the current loan holder. Tell them that you want to get out of debt and are going to sell the vehicle. Obtain a secondary loan for $6,000 ($5,000 for the "gap" and $1,000 for a beater vehicle).
3. If the current lender will not provide the "gap" funding, approach your local bank or credit union and obtain a signature loan for $6,000 to cover the $5,000 gap and purchase a $1,000 beater.

If you use $6,000 of savings to get rid of the car and buy a $1,000 beater, your Debt Freedom Date will now look like this!



By using $6,000 from savings, 16.7 months were ELIMINATED from the Debt Freedom Date!!! This person will be DEBT FREE in less than 20 MONTHS!

If this person followed options 2 or 3, here is what their Debt Freedom Date will look like.



By obtaining a $6,000 loan and selling the car, this person ELIMINATED $13,000 worth of debt and will achieve Financial Freedom 11.4 months SOONER!!!!

Selling a car can many times be THE CATALYST to achieving Debt Freedom!

Are you going to get rid of your "upside-down" car?

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Some people believe that I have too much energy and enthusiasm. They believe that I am

quixotic - so much so that a group of folks created a desk nameplate that says "Mr. Quixotic" and provided me a printed definition of the word "Caught up in the romance of noble deeds and the pursuit of unreachable goals; idealistic without regard to practicality".

I would agree that I am idealistic. I do get caught up in helping others win with their money. I do believe in people!

Here is the part of the definition that I take major exception with - the pursuit of unreachable goals

I am here to tell you that the God-given goals that I have are not unreachable! I do believe that everyone who sets their focus on becoming debt-free CAN become debt-free! I KNOW that those who set their attention to providing a more stable financial situation for their family WILL be able to do so!

Whenever I provide financial counseling for someone (hundreds per year), my goal is to show them two things (1) There is a better way, and (2) exactly what that way is as it pertains to their situation. Each person who has debt leaves with their own Debt Freedom Date calculated. Each person who does not have a working monthly spending plan leaves with a plan that starts immediately and carries for at least the next month (start your own budget spending plan HERE).

What do I do when someone falls off of the wagon? I mourn for them. I am saddened by the fact that they won't achieve financial freedom. BUT, when they are ready to try again, I have an excellent wagon stapler in the office and we will meet together to get them back on the wagon.

At the end of each day, I clearly know that I am doing exactly what I was put on earth to do! I KNOW that lives were impacted for the better. I KNOW that skills and tools were taught that will change lives!

So call me Mr. Quixotic if you wish. I won't hear it, as I am out here in the arena, knee-deep in the messiness of life and finances, helping all that I can hear a message of hope and freedom.

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In this series of posts, I am sharing the process that Jenn and I followed to develop a budget that actually worked! We have developed a monthly spending plan (budget) every single month since that first one way back in July of 2003!

Here are the steps that have already been shared.

STEP ONE Understand that budgeting is nothing more than "telling your money where to go"

Telling your money where to go is so much fun! Especially when you tell it to take you on vacation or go golfing!

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month.

Planning ahead allows you to determine if there are any gaps. By being ahead of the game, it provides you an opportunity to avoid "budget-busting" events.

STEP THREE Enter all of your expenses for the NEXT month.

Tell your money where to go!

STEP FOUR INCOME - OUTGO = EXACTLY ZERO

Whether you make $1,000 per month or $40,000 per month, it is limited. If you spend more than you make, you will erode savings or turn to debt!

STEP FIVE Follow the budget!

You have followed all of the steps. You now have a spending plan for the next month. It is time to live by it! After all, it was YOU who told your money where to go! Why wouldn't you follow YOUR plan?

As I have helped others develop their own spending plans, I have seen people completely break free of debt. I have seen people pay off their mortgages! I have seen marriages restored! I have seen the hopeless become hopeful!

That is what your budget will allow you to do! Develop a spending plan every single month BEFORE the month and the money arrives and then FOLLOW it! You will never regret this decision.

Maybe you have read this series in a guarded, protected way while wondering "I wonder if this will work for me? I don't want to get my hopes up. I've tried this before." I say that YOU CAN DO THIS!!! I believe in you! Why? BECAUSE I WAS THERE!!! I had an average bank balance of $4.13 and the STRESS was awful! The shame was real. I did not know how to break free.

Planning my spending one month in advance was what broke Jenn and me free! It will work for you too!

Why not pull up a free budgeting tool and get started winning with your money today?

If you have enough money in the bank to pay all of your bills at the start of the month, use the Monthly Budget Form (Excel) in the

TOOLS page.

If you are living paycheck-to-paycheck, use the Weekly Budget Form (Excel)in the TOOLS

In this series of posts, I am sharing the process that Jenn and I followed to develop a budget that actually worked!

Here are the steps that have already been shared.

STEP ONE Understand that budgeting is nothing more than "telling your money where to go"

It is so important to tell your money where to go - instead of wondering where it went!

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month.

This income is what you will be spending on paper BEFORE the month, the money, and the bills ever arrive!

STEP THREE Enter all of your expenses for the NEXT month.

Enter ALL of the real actual expenses that will need to be paid NEXT month into your budget form.

STEP FOUR INCOME - OUTGO = EXACTLY ZERO

Your income is limited. If you bring home $3,000 during the next month and spend $3,208, your spending plan will not work! Where will the $208 come from? It will have to come from savings OR from debt - usually in the form of a credit card.

YOUR INCOME IS LIMITED! Let me take it one step further. Let's say you are really blessed and bring home $70,000 during the next month (don't laugh - many people do!). If you spend $71,320, your spending plan will not work! The $1,320 will have to come from somewhere - and many times it is made up with debt.

In STEPS TWO and THREE, we entered all of the income and expenses into the budget and, no surprise, the OUTGO exceeded the INCOME. You can see the entire budget

HERE.



There are two options when the OUTGO exceeds INCOME:

1. Increase the INCOME - 2nd job, Overtime, side job
2. Decrease the OUTGO - Decrease the expenses

In this budget, let's say that this family receives salary. They cannot quickly increase their income, so they are going to focus on reducing their outgo! They need to eliminate $320 of spending.

NOTE: This is not a "perhaps, perhaps, perhaps" type budget! This is how the family will ACTUALLY spend their money next month! Remember - if your budget is not 100% relevant to you and your family THIS MONTH, you will ignore the budget and use it to start a fire in your fireplace!

What expense can they eliminate? Again, you can pull up a copy of the budget HERE.

After working together on their budget, the family decides on the following changes:



SUCCESS!!! INCOME - OUTGO = EXACTLY ZERO!!!



If you want to see the entire EXACTLY ZERO budget, you can view it by clicking HERE!

You might be saying, "These people are CRAZY! They cut out 1/2 of their dining out, entertainment, blow money, and all of their babysitting money! They are crazy!"

I would say - "NOPE, they have had enough. They are so sick of living paycheck-to-paycheck that they are willing to live differently and change their lives forever! All because of a little sacrifice now!"

Jenn and I prepare a written spending plan every single month before the month begins and before any of the money gets to us. This is THE REASON we have won with money.

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In this series of posts, I am sharing the process that Jenn and I followed to develop a budget that actually worked!

Let's review the steps already shared.

STEP ONE Understand that budgeting is nothing more than "telling your money where to go"

It is so important to tell your money where to go - instead of wondering where it went!

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month.

This income is what you will be spending on paper BEFORE the month, the money, and the bills ever arrive!

STEP THREE Enter all of your expenses for the NEXT month.

This is where you spend your money on paper! In Step Two, you determined your total income for next month, and it is now time to spend it on paper BEFORE the month arrives!

These expenses are the real, actual expenses that will happen. I have seen many people include average expenses for the year. Averages don't work!!! Enter the real expense because this budget needs to be highly relevant to the next month!

If the expenses are not relevant to the next month, it is highly possible that you will consider the budget irrelevant for the next month!!! Smile

If you don't know the ACTUAL cost (utilities, gasoline, etc.), enter an educated guess based on recent spending.

Enter all of the expenses into your budget. You can obtain your FREE COPY of budgets by clicking

HERE.

The budget form has some excellent features built into it.

* If OUTGO exceeds INCOME, the TOTAL will turn RED and tell you how much you have overspent!
* If INCOME exceeds OUTGO, the TOTAL will turn YELLOW and tell you how much more money needs named!
* When INCOME = OUTGO, the TOTAL will turn GREEN … This is the ultimate goal!

Even if the budget TOTAL turns RED, keep typing in the expenses that you know are going to happen in the upcoming month. The goal is to get all of the known expenses for the next month on paper.

YES, you will later have to remove some expenses or boost your income to get to GREEN, but the goal right now is to get all of the expenses into the budget form! By having all of the expenses in the budget, you can make a much more informed choice on what will be removed from the budget.

Click HERE to see an example budget with all of the expenses loaded.

In Part 1 of this series, I wrote about the negative feelings that some people have when they hear the word "Budget".

In reality, a budget is nothing more than telling your money where to go. I have heard Dave Ramsey take the definition a humorous step further - a budget is nothing more than telling your money where to go instead of wondering where it went!

EXACTLY!

So our first step in budgeting is:

STEP ONE Understand that budgeting is nothing more than "telling your money where to go"

Step One is the largest hurdle of any part of budgeting. The rest of budgeting is a breeze once you understand what a true budget is. Once you have internalized Step One, it is time for Step Two.

STEP TWO Determine the income (take-home pay) you will receive during the NEXT month.

There is a very key word in Step Two - the word "NEXT". I have learned that preparing a budget for money that has already been spent is not very fruitful. It is like being a Monday-morning quarterback for your finances. You want to get that money back. You wish you could have that money back. But it is GONE!

The budget must be completed BEFORE the month begins and BEFORE the money ever arrives. You are developing a spending plan for your money BEFORE you ever get it. The only way I have found to stop saying "I can't believe I spent my money that way" and "I wish I could have that money back" is to develop a spending plan BEFORE the money was paid to me for the month.

So think about it. What income will you receive during the next month?

Here are some common ways that people receive money during the month.

* Paycheck
* Bonus
* Side Job Income
* Child Support
* Alimony

Whatever your source of income is, write it down. In fact, write it down and put the dates that you will be paid this money during the next month. If your income is unpredictable, write down the amount of money that you can count on.

The series continues ... tomorrow!

Budget. The word alone sends chills to many people. Here are some things that people equate with budgets.

Budget = Restricting

Budget = I Am Broke

Budget = Controlling

Budget = No Fun

Budget = Constricting

Budget = Not going to do it!

Most people have tried budgets ... and failed! It was a bad experience, and many will say that they aren't EVER going to budget again.

I want to make a deal with you. How about reading this series of posts for the next week? How about trying for just one month this method that I will teach you? How about giving one shot? Just one. My hope is that you will try a budget for the month of November,

In this series of posts, I am going to share with you the exact process that Jenn and I took to prepare a budget that works. Guess what? THE VERY DAY that we started budgeting was THE VERY DAY that we started WINNING WITH MONEY!

Some might say "I hate budgets" and "I don't need no stinkin' budget", but I would ask them the following questions:

* How are you paying for Christmas this year? I am paying cash.
* How much is your car payment? I paid cash for my car.
* How much did you invest this month? I have invested for retirement for over 130 months in a row and my daughter's college for over 60 months in a row.
* How much money do you owe to your credit cards right now? I owe $0.
* When is the last time you had a great discussion on finances with your spouse? Not a fight. A great discussion. Jenn and I develop a spending plan TOGETHER every single month.
* If your car broke down tomorrow, do you have money in the bank to pay for it? Car repairs are not financial emergencies. I am not surprised when my car breaks down. Why? There is a car repair joint on every corner of every street of every town and city in the country! It is normal for cars to break down!

At the end of this series, some might call me crazy. Some might call me insane. Some might call me a wacko. I would say to them - call me whatever you want, just don't call me broke anymore!

You see ... I Was Broke ... Now, I'm Not!

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Observed on a sticker - "I know the difference between right and wrong, but I choose to ignore it."

When it comes to finances, I have learned a lot about what is right and wrong. I hope I do not EVER choose to ignore it!

I have learned that:
- saving money is right and that spending all of my money is wrong
- having an emergency fund for emergencies is right and using a credit card for emergencies is wrong
- giving to worthy causes and individuals is right and not giving at all is dead wrong
- paying cash for purchases is right and paying on payments is wrong
- including your spouse in the budgeting process is right and not including them is wrong
- calling our money "ours" is right and our money "mine" and "yours" is wrong
- working together as husband and wife toward common financial goals is right and working separately is wrong
- having medical and life insurance is right and not having this insurance is wrong
- dealing with your financial situation is right and just throwing up your hands and declaring bankruptcy is wrong
- developing a plan and following it is right and handing your financial mess over to rip-off credit counseling is wrong
- facing your finances is right and choosing to ignore it is plain wrong

I would love to hear some other truths you have learned as you have dealt with your finances!

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I am SO sick of hearing story after story of people who obtained a worthless college degree and have nothing but $60,000 in student loan debt to show for it! I am even more sick of hearing stories of people who did not even obtain the degree and have piles of student loan debt to show for it!

As a person who teaches about personal finances to thousands and having counseled hundreds of people one-on-one, I see situations of immense student loan debt nearly every single day!!!

Here is how the situation unfolds. The individual graduates high school and really has no clue about what they want to do with their life. They end up attending a very expensive private school and obtain a degree that has low market demand.

How did they pay for the education? They financed it!!! Now they are in a position of huge debt and have a degree that won't support the debt. Even worse, they don't even finish the degree!

I know that the private school education may be prestigious, but there are very few instances where the private school education is any better than a great state school! And the prices are way better at the state school!

Consider this. I attended Purdue University and received a fantastic mechanical engineering degree. This degree is in great market demand, AND it was VERY CHEAP since Purdue is a state school! I then studied at Clemson University and received my MBA. This degree is in great market demand, AND it was VERY CHEAP since Clemson is also a state school.

I had the option of attending a private school for my engineering education. Even with the incredible amount of "scholarship" offers, I would have had to pay TWICE the amount of full-price at Purdue! For a private school MBA, I would have had to pay FOUR to EIGHT TIMES the amount of full-price at Clemson!

Listen, I want you to get an education. I want you to get that degree! But please consider the overall cost of the degree!

PLEASE! PLEASE! PLEASE! PLEASE!

PS - Student Loan Debt is not bankruptable. You WILL have to pay it back someday.