Remember...You Can't Take Your Money With You When You Die

"You'll never see a U-Haul behind a hearse...I can't take it with me and neither can you. It's not how much you have but what you do with what you have."
 - Denzel Washington

Recently, I had a conversation with someone who reads my blogs. This person asked why I talked about money so much in my blogs. This person was under the impression that I was completely obsessed with money and he confirmed this when he told me, "Allen, you can't take your money with you when you die."

I completely agree with that statement. It is definitely true, you won't be able to take any wealth with you when you die. So why try, right? Perhaps it might be better for me to explain why I even write these blogs on money in the first place. Secondly, I want to explain why I truly feel that money is important. Finally, I want to explain what, I believe, you do take with you when you die.

Why do I write blogs on money?
I am not rich. I don't consider myself wealthy, either. However, I do consider myself blessed. God has given me the strength to learn quickly, apply what I learn, be brave, work hard, persevere, believe and achieve. Although I have not yet accomplished all of my goals in life, I have accomplished most of them. Although I am not financially independent yet, I have made great strives to get there. Over the last three years I have read books, watched videos, attended conferences and was mentored by others about money, finance, leadership, management, investments, etc. I have accumulated (and am still accumulating) an abundant amount of knowledge about many topics - money being one of them. I write blogs on money to share information and knowledge to those that might be struggling personally. I write about money because I know there are many people around me, people in my family, close friends that do struggle financially. I write about money to help people. I write about money to teach people how they can change their situation. I write about money to share my experiences with others. I write about money because I care about you. I don't want to live in a world where I achieve all my dreams and those that I love do not. 

Why is money important?
Unfortunately, we need money. We need money to provide for our family. We need money to pay rent, bills and our debt. We need money to attain the things that we really like. We need money almost every day. However, my philosophy on money is different. My intention is not to get rich. My intention is not to become the next top billionaire and buy a private jet. I believe money is important because it can lead to financial independence. If I am able to make proper investments, have a consistent positive cash flow and control my expenses, then I can achieve financial independence. To me, financial independence simply means that you do not have to depend on a paycheck or someone or something else to have money in your pocket. Instead of working for money, I would rather have money working for me. The only reason I want to achieve financial freedom is to have the ability to design my lifestyle. What would you do with your time, with your life, if you never had to worry about money? What would you do with your life if your investments took care of you? If I achieve financial independence by having enough passive income, I would spend my days helping people, spending time with my loved ones and trying to make a difference in the lives of others. I would wake up on Monday morning ready to go take care of my niece's kids so that she can take care of her errands. On Tuesday, I would go to an orphanage and spend time volunteering. You get the point. To me, money is a way to get to that ultimate goal.

What do we take with us when we die?
Nothing. Nothing tangible, that is. We can't take our money with us. We can't take our wedding rings with us. We can't take anything. Yet, we have been given life. Life is not a video game where we have 5 lives to live and then we can press the 'restart' button. Every minute is precious. Every moment counts. My goal is not to get rich. My goal is not to try to make a fortune so I can take it with me. My goal is to touch as many lives as possible while I'm alive. I can't take my pride, my glory, my accomplishments with me when I die either. I can, however, leave many things behind for others to have - from smiles, to money, to knowledge and assets. I'm not worried about what I'll be taking with me when I die. God will take care of that. I'm concerned with what I will leave behind. 

My intention was not to try to defend myself in this blog. My sole purpose for writing this piece was simply to give you an idea of what my true goals in life are. It's all embedded with a purpose. What is your purpose in life? Have you thought about it? Share. Comment. Have a great three day weekend. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

How To Turn Your Cash Flow From Negative To Positive

"Discipline is doing what you know needs to be done, even though you don't want to."
- Unknown

Yesterday, I began to tell my story (Read How I Survived With $11 In My Pocket). Let me pick up where I left off...

So I finally got a job and things started to look a lot better. However, if you remember the story, I was still deep in debt, I received a lawsuit, shortly after a sheriff came to my office to let me know that my wages were going to be garnished, and I still had some bill collectors calling me consistently. 

It took me a few years to get out of this financial hole. This is not easy to do, but yet I was able to do it and I wanted to share the two main ways I was able to turn things around. At the time, I felt as though i was living paycheck to paycheck and most of my money went to paying bills, debt and other people with little or no money staying in my bank account. I had negative cash flow every single month for years. This is how I eventually got out. 

Sacrifice
I used to hate the word sacrifice. It pretty much means that you give up things that you like. Most people kind of want to change their situation, but they don't really want to do anything about it. Most people worry that they're in a financial hole but they don't want to give up anything to get out. I'm sorry to put it this way, but the most effective way to get out of a financial hole is by committing to sacrifices.

In order to prioritize my life and financial goals I gave up quite a few things that were not easy to give up. For five years I didn't own a television. This meant that I also didn't have cable. I had to be content with the car that I drove that was falling apart. I drove that car until (literally) the wheels fell off. For three years I didn't have a bed, just two mattresses on the floor. Beds are expensive and so are cars. If you add up the total amount you would spend on a TV and on monthly cable, it also begins to be expensive to have those luxuries. The phone I had was never new. In fact, I was trying to downgrade at one point but T-Mobile wouldn't let me. I bought clothes maybe once or twice a year and tried to take care of them so that they would last me for five more years. I also gave up going out so much so I can save a little on gas and dining out.

Discipline
As I mentioned before, none of this was easy. Most people feel that they need to reward themselves immediately after they receive a paycheck. Some people I know spend half of their paycheck the Friday they get paid. 

If you really think about it, I didn't have enough money left over (positive cash flow) to buy a new TV. Most people buy things with money they don't really have. I strategically put money aside every month for the bigger goals in life. For over four years I tracked my income and expenses on a spreadsheet (until I learned about mint.com three years ago.) Every month, I sat down for hours to look at where I needed to cut, what other sacrifices I needed to make and stuck to my plan. I also made sure that if I had money, I didn't spend it. the biggest discipline I attained was the ability not to spend money when I had it. I read tons of books and articles about managing expenses, investments, getting out of debt, how to save, how to develop better habits, how to become more disciplined, time management, all read to help me achieve my goals. I read (or listened to) a book every month. I read articles every single week. I forced myself to wake up earlier every morning although I convinced myself in college that I wasn't a morning person. I even gave up french fries for 9 months and eventually became vegetarian. People ask me why I became vegetarian and my simple answer is that I just wanted to see how long I could do it. It's now been five years. 

Throughout this experience, the money I made had nothing to do with me getting out of a hole (read Why How Much Money You Make Doesn't Matter). It was truly the discipline I developed and the sacrifices that I made that eventually helped me reach my goals. What was the end result? Now, I have a TV ( and I do have cable but I just bought it to watch the World Cup games - I'm about to cancel it) and a better car. However, I'm more proud of the fact that I have no loans, no credit cards, positive cash flow and I have been able to reward myself lately with trips to Hawaii, Cancun and Orlando. It also takes discipline to reward yourself at the end. 

Warren Buffet once said, "The most important thing to do if you find yourself in a hole is to stop digging." Can you stop digging?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

How I Survived With $11 In My Pocket

"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."
- Martin Luther King Jr.  

I humbly write these blogs to help encourage others and help people understand that whatever financial situation they might be in, whether they're in a hole or not, that they can improve their circumstances. Yesterday I received great feedback from my Interested In Improving Your Monthly Cash Flow? Follow These 5 Steps... blog. I received a few emails and some text messages about this blog with a few folks wanting to know more about my story. I decided to take a quick detour with my blogs and introduce to you my story as it pertains to my finances. This is not a "How I got rich quick" story. It's more of a survival story.

Most financial planners that I have met might know a great deal about 401Ks or investments. However, most of them might have never struggled to make ends meet, had to live paycheck to paycheck or had bill collectors calling them every day. Therefore, many of them might not be able to tell you how you can get out of your tough financial situation. I feel as though most people can relate to my story and this is why I encourage others to keep pushing. Here's my story...

During the recession of 2008 I found myself jobless. After working for multiple education companies and trying to become a substitute teacher, I was once again applying for unemployment and applying to jobs only a teenager would apply for during the summer. I was a college graduate with a business degree and a huge appetite for success but at the time no one gave me a chance to prove myself. I had two bill collectors harassing me, a warrant for a failure to appear in court (which to this day I still can't remember why I had to go to court in the first place) and a car that kept breaking down.

One day, in late May, I closed my bank account before they charged me again with overdraft fees. I decided that I would just live off of the $300 or so I had left and whatever I received from unemployment I would use for rent. At the time, I lived in a small two bedroom house in Fontana with my nephew. That day I told my nephew I couldn't pay rent anymore so I called the landlord and gave the 30 day notice. I had no clue where I would go or what I would do. In the meantime, my goal was to find any job to have enough money to last me through this.

I took any job that came my way. At the time I also played in a band but we were lucky if we even got money for gas when we performed. I painted a house (or tried to paint a house) for a few bucks, I put strings on guitars for a music store for a few dollars and I babysat here and there. Once a week I tutored my friend's daughter in reading and since she didn't have money to pay me, she blessed me with shrimp tacos every time we ended a lesson. On Tuesdays, I drove to San Bernardino to teach a kid's mariachi group how to play mariachi music. The families would pitch in to give me $20 for gas. In no way did I complain about my situation. Yes, it was tough and I would get sad at times but my mom taught me to be happy for what I do have. I cheered loudly even if I only received $20. 

Shortly after, my cash was low and I had to move out of my house so I began to sell my possessions: microwave, toaster oven, TV, etc. I made a few hundred dollars but now I only had four boxes left with my name on them filled with books, clothes and a few memories. I was close to selling my guitar but some of my bandmates didn't let me. I was lucky enough to have a brother that let me stay with him. I was happy to just sleep on the floor so that I didn't have to sleep in my car. I stayed with my brother for a few months as I continued to apply for jobs every day. I interviewed with so many companies but felt as though I had the worst luck in the world. I didn't have a suit to properly present myself so I always wore the nicest shirt I had (which had a small hole that I had to cover during interviews). I didn't know why no one would hire me. 

I finally received a call in early August from a company that called me a week before to tell me that I didn't get the job. This was an education company that did SES tutoring and they offered me a 3-month assignment as an independent contractor. If I met certain targets in three months, I would be able to stay with the company. If I failed, I was out. I had no choice. The day I received that call I only had $11 and had to decide whether I used those $11 for gas or for food. I used the money for gas and hoped that I would somehow survive until I received a paycheck. I started work on a Wednesday and, by an act of God, I received a small paycheck on Friday for my first three days of work. At that point, I knew things were going to change...

To be continued...

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Interested In Improving Your Monthly Cash Flow? Follow These 5 Steps...

"Do not save what is left after spending, but spend what is left after saving."

 - Warren Buffet

Yesterday, I wrote about the concept of Cash Flow (read Why How Much Money You Make Doesn't Matter). For those of you that might not have had the time to read my blog and are in the dark of what Cash Flow is, let me quickly explain it. Cash Flow is what you have left over when you calculate what you earn (i.e. your income) against what you spend. Your monthly Cash Flow might be positive or negative depending if you make more money than what you spend or you spend more money than what you make on  a monthly basis. 

If you think that I'm going to give the top five secrets on how to make more money or how to reduce your expenses, you are wrong. Realistically, yes, there are only two ways to increase your Cash Flow: Either you have more money coming in or you have less money coming out. Instead of going over how to make more money or how to spend less, I decided to go over something a lot more valuable. 

Before I continue, I definitely wanted to let you know that in no way do I currently have a crazy amount of positive monthly Cash Flow. Although my monthly Cash Flow is consistently positive, it's important to note that for many years my monthly Cash Flow was consistently in the red. I share this with you because I hope to encourage you a bit more. I hope that you feel as though your situation is not unique and that things can turn around just like they did for me. Below are five things I wanted to share about how I was able to turn my monthly Cash Flow from negative to positive.

Enjoy The Hard Work
People are always looking for a quick way to make money. They prefer to hear the stories of someone who won the lottery and became rich instantly instead of the true stories of those who have worked hard with their blood, tears and sweat to become wealthy over a course of many, many years. Most successful people that I know never got rich immediately. It was their hard work that paid off. They happily worked more than 60 hours a week to move up the ladder in their company. They worked tirelessly day and night because they opened up their own restaurant and they had no time to sleep. In fact, I met a guy at a conference once who said he's working hard because he doesn't like to work. His goal was to retire by age 35. Hard work will pay off. Enjoy the ride. 

Get Educated
If this is the only blog you read, then you're in trouble. Most people think of education as a plan to go to a university and get a degree. However, you can almost learn anything through books and now that we have YouTube, you can practically learn how to do anything on YouTube. Be proactive. Learn about controlling your expenses. Learn about how to accomplish your goals. Learn about investing, how to play the guitar, how to sing, whatever it is, but learn. A few years ago I decided to read a book every month. That type of education was relatively cheap and it helped me learn more about improving my Cash Flow. 

Give More
You're probably thinking, "Wait a minute...if I give more, how will I be able to keep more of my cash flow?." It's the law of life. I'm just not talking about money, but anything that you might have that you can share or give to others. Give your time to someone in need, or give more time to spend with your children. Give your heart to more people and you will see how it will open up doors you never knew existed. Even during times of struggle, I tried to give what I could to others. I had no money to give to anyone at the time, but I gave away my knowledge by volunteering to teach kids how to play mariachi music. I also tutored kids and got shrimp tacos in return. Eventually, everything worked out for the best. Give. 

Make Better Decisions
Most people would rather not think about money and convince themselves that money isn't important. They base their decision on this philosophy and they find themselves struggling consistently to make ends meet. A spontaneous trip to Vegas means nothing to them although they might have spent $800 on the trip that they are now trying to work hard to make up for. Eating out every day and spending almost $900 a month on fast food doesn't matter, right? Take responsibility. Start now. Put down your phone as you read this blog and start making changes immediately. 

Believe
Nothing is impossible in this life. Most people get discouraged because they 'don't make enough money.' Others decide that it's impossible to become as wealthy as the people they see on TV. Your mentality is half the battle. If you think the worse will happen, then it will. If you don't believe in yourself, then why should anyone believe in you? If you truly want to change your situation around, whether it's a financial struggle or something else, you must believe that it is possible. Don't defeat yourself before you try. You'll be surprised how strong you are inside and how believing can come a long way.

This article might not have been what you expected, but I felt I would be doing you a disservice if I continued to give you tips that you wouldn't put into action. Do you really want to change things around or is it just a nice thought? As I mentioned before, half of the battle is setting your mind to it. The other half is really just doing something about it. 

Was this blog helpful? Please share your comments. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Why How Much Money You Make Doesn't Matter

"It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for."

 - Robert Kiyosaki

Do you sometimes feel like you don't make enough? Do you sometimes think that if you just made a little bit more money you would be better off? If you answered yes to these questions or have ever thought about these questions, then you're in for a real surprise. Making more money will not solve your problems. Many times, we're stuck just getting by because of how we spend, not because of what we make.

Let me give you an example. Let's examine this person that we will call Robert. Robert works as a warehouse manager and makes about $40,000 a year. If  you break that down monthly, he makes $3,340 a month. If you look at Robert's monthly expenses, you'll see that by the end of the month, Robert has a total of $3,040 that he spends on rent, bills, shopping, gas, food, etc.

Robert, Warehouse Manager
Monthly Income: $3,340

Monthly Mortgage: $1,050
Monthly Bills: $650
Other Expenses: $1,340
Total Monthly Expenses: $3,040

By the end of the month, Robert actually has $300 left over. This is is his monthly Cash Flow. Robert can choose to put these $300 in a savings account or he might just leave it in his checking account. Regardless of what Robert decides to do, he is making more money than what he spends at the end of every month. 

Let's look at another example. If you see below, you'll see that Stephanie makes about $90,000 a year. This equates to $7,500 a month. However, if you closely examine Stephanie's expenses, you'll see that her total monthly expenses add up to $7,715. This could be due to high school loan payments, more debt, etc.

Stephanie, VP of Finance
Monthly Income: $7,500

Monthly Mortgage: $1,595
Monthly Bills: $1,080
Other Expenses: $5,040
Total Monthly Expenses: $7,715

Most people who make more money tend to also spend more money. As you see with Stephanie, at the end of the month she actually has a negative monthly Cash Flow of $215. 

If you compare Robert to Stephanie, you would think that Stephanie would be better off because she makes more than double the amount of what Robert makes, but in these examples, that isn't the case. Although Stephanie makes more money, Robert has more monthly Cash Flow than Stephanie. If you annualize these amounts, you'll see that at the end of the year, Robert will have $3,600 left over because he makes more than what he spends. However, at the end of the year, Stephanie is -$2,580, thus spending more than what she makes. This will typically lead a person like Stephanie to attain more credit and get deeper in debt.

In conclusion, you want to make sure that you have positive cash flow consistently every month. It is not uncommon to see someone who makes what Robert makes be wealthier than someone like Stephanie. 

Do you have positive cash flow coming in every month? Comment and share. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

The Question Most People Struggle With When Dealing With Their Money

"People with goals succeed because they know where they're going."

 - Earl Nightangale

Every month I meet with family and friends to help them go over their finances and put systems in place so that they have a budget to stick with. Every month, I also receive a phone call, or a few phone calls, from someone who frantically wants me to help them with their finances. When I receive that phone call, that particular person feels as though they're the only one struggling with their money and that their situation is unique.

I have yet to encounter a situation that is unique or a situation I truly believe can not be improved. However, you might think that most of the time I spend going over people's finances, I spend creating budgets, reviewing bank statements or teaching them about money. Although this is true, most of my time, however, I spend helping each individual answer one single question. This one single question is the toughest question to answer and is why I truly believe some people are struggling with their money. Most people can't answer this question.

The question most people can't answer is this: What do you want to do with your money? 

Most people earn good money, but they have no clue what to do with it so they spend it. Month after month, people receive a paycheck and month after month that paycheck disappears. What is the most common response to this question? It's: "I want to pay off my debt." Interestingly enough, the most common answer I receive with people has to do with spending it on their bills and paying other companies, not spending it for themselves. 

I don't want to make it seem like I have the answers to everything in regards to finance, but my purpose with these blogs are to help. If you have trouble answering that one simple question, now is the time to really start thinking about it. The following tips are ways I have tried to help others answer this question.

Ideas are OK
One individual I met with spent almost 30 minutes thinking about this question to only give me an, "I don't know." I then asked her to just jot down ideas and just think of what she would like to do. She told me she thought she couldn't answer the question because she hasn't really set goals for herself. I told her that's OK. An idea is a great start. All goals start off as an idea or a dream. It can be something as simple as "go to a Dodgers game," to "I don't want to work for my company anymore," to "I want my  kids to go to college." Later, we'll talk about goal setting, but you have to start somewhere.

Short-Term Goals are OK
I feel as though some people ponder that question so much because they try to look at their future a lot more. However, if you have trouble thinking long-term, think short-term for now. What are things you want to buy or have your money do for you in the short-term? Some people might want to take their kids on a family vacation in the next year. Some people want to go back to school this fall. Some people might just want to buy a house or move out of their crummy apartment. Although, I do suggest thinking longer-term at one point in your life, start off thinking about the next one month to three years. 

Get Educated

Some people can actually save well and have money saved up. Some people might be planning on saving money but might still not know what to do with that money. Eventually, these folks tap into this pool of money because they have no other choice. For those of you that might be dealing with this situation, I recommend doing some research. Just google, "what to do with money I have saved." For those that are thinking about investments, look into real estate investments or setting up an investment portfolio. Most people don't know how to do this because they were never taught these things. However, if you start asking the right questions, you'll start getting the right answers.

Spend this weekend trying to answer the question: What do you want to do with  your money? Discuss it with your spouse, write down some ideas and you'll see how things will begin to improve very quickly. Was this blog helpful? Share. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Do I Need A Budget For Everything? Even If I Just Want To Buy A Pen?

"Don't spend more money than you've got. Don't spend money before you've got it."

 - Lillian Vernon

A few months ago I was meeting with one of my 'clients' to go over how they did against their budget for the previous month and to create a budget for the following month. As we were creating their budget for the month of June, I asked the question, "Are there any birthdays coming up in June that I should be aware of?" The couple looked at me with a question mark on their face. "If so," I continued, "then it needs to be in your budget." The couple said that they had three birthday parties that month so we added a budget for those birthday presents. 

"Wait a minute," the wife asked, "so we should also have a budget for Father's Day presents?" I nodded, of course. "Is there something we shouldn't budget for or do we have to put a price on everything?" the wife asked. The husband finally chimed in, and jokingly said, "Yeah, should I create a budget even if I just want to buy a pen?"

When I first began to create a budget for myself, I realized that I was actually pretty good with sticking to most of my budgets. However, time to time I did go over on something. After carefully analyzing my spending habits, I then realized my problem. My problem wasn't that I was overspending on certain areas I budgeted for, my problem was that I was spending on areas I never budgeted for. These items were not emergencies, if that's what you're thinking (we'll talk about emergencies at a later date). These were items I did not plan to buy, that I could have easily planned a budget for. Below is a list of some budgets you might want to create to help you better plan your budget.

Birthday Parties & Special Occasions
If you're like me and you have a big family, birthday parties happen every month (and depending on the month, they might happen every week). Set a budget for birthday presents, birthday parties you might be throwing for your kids, anniversaries, and for other Holidays that require you to spend: Thanksgiving, Christmas, Valentine's Day. Set a limit for yourself so that you don't overspend and then regret it. For example, for birthdays presents, you might set a limit to not spend more than $20 per present. After you set your budget for the month, try sticking with it.

Trips & Vacations
Before committing to a trip or a vacation, try to set a budget first. You should think about gas or other type of transportation (i.e. rental cars, plane tickets, etc.), the hotel stay, food, entertainment (i.e. theme parks, zoos, etc.) and the shopping you want to do. If you like to take souvenirs, don't forget to add that to the budget. Try to avoid the spontaneous trips to the casinos or Las Vegas. Instead, make plans and make a budget. 

Big Purchases
When I moved to my old apartment, the goal was to make it look sexy. However, it takes quite a bit of money to make it look sexy. There were also some things we needed for the apartment such as an iron, a vacuum and a blender. I could have bought all those three items during the first month of us moving in. However, I decided to time my budget. The first month, I set a budget to buy the iron. The second month, I bought the vacuum and the third month we purchased the blender. Afterwards, I began to set a monthly budget to add to the sexyness of the apartment. However, it took time to purchase these items and every month there was a budget allocated for those items we wanted to purchase.

Remember, the goal is not to break your head trying to budget for the cost of a pen. The goal is to plan a lot better. Plan those dates with your wife. Plan for those birthday parties. Plan to buy that laptop that you need. Plan, plan, plan...and set a budget as you go. 

Can you think of any other things you should set a budget for?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

5 Ways To Create A Budget For Yourself - Anyone Can Do It!

"A budget is telling your money where to go instead of wondering where it went."

 - Dave Ramsey

A  friend of mine was sharing with me how much he makes a year but was angry with a realization he had the other day. "Allen," he says, "I just found out that I make $45,000 a year, but that I only have $238.53 in my bank account. Why don't I have $45,000 in my pocket? Or at least half of that!"

When I was in college, I too had this realization. I told my roomate that I felt like I was just a middle-man for companies. I get paid only to hold that money for a few days before I give it to Verizon, the electric company, and other companies that I have to pay on a monthly basis. Although, I won't go over how to stop being a 'middle-man' during today's blog (or getting out of the Rat Race as Robert Kiyosaki would say), I do know that budgeting is the first step to taking control of your personal finances.

The following 5 steps will help you budget a bit better. 

1. Start by knowing how much money you make a month, on average
For some of us, our monthly income is the same every month, but this is not true for everyone. Start by putting down how much money you make a month and if it's not a number that is constant, then just use an average. 

2. Use basic categories to track your expenses
Before you start to jot down all the expenses you have on a monthly basis, first start off with the basics. Below is a list that I use when creating my basic categories:

• Auto & Transportation
• Bills & Utilities
• Education
• Entertainment
• Food & Dining
• Gifts & Donations
• Health & Fitness
• Home
• Personal Care
• Shopping
• Travel

3. Break down the basic categories into subcategories

The more detailed you are with your budget, the more you'll understand where your money goes and where you want to allocate your money. From the basic categories that you created, create subcategories to track each transaction. Here's an example of the subcategories that I use:

• Auto & Transportation
• Gas & Fuel
• Auto Insurance
• Car Wash
• Maintenance
• Bills & Utilities
• Electric Bill
• Phone Bill
• Water
• Internet
• Education
• Student Loans
• Books
• Entertainment
• Movie Theaters
• Music (Yes, I still pay for music)
• Concerts & Shows
• Food & Dining
• Fast Food
• Restaurants
• Groceries
• Gifts & Donations
• Presents
• Donations
• Health & Fitness
• Gym
• Doctor
• Dentist
• Sports Team
• Home
• Rent
• Decorations
• Home Improvements
• Personal Care
• Hair Cut
• Spa & Massages
• Shopping
• Clothes
• Desired purchases (tablet, laptop, etc.)
• Travel
• Timeshare
• Hotel
• Food for Travel

4. Look first at where your money went

Before you begin putting targeted amounts next to each category, first find out what your spending habits look like. Most bills and payments that we make are the same, for the most part, so those can stay constant. However, you do want to find out how much you are spending on clothes, a hair cut, fast food and other expenses that might change every month. You might want to look at the last three months and see how much you were spending on each category. Then, you should continue into the final step. 

5. Decide where you want your money to go

If you truly did this exercise, you might already have gotten depressed before you got to this final step. Most people realize later in life that they are spending more money than what they make. This is the main reason why you might feel that you're struggling to make ends meet every month or every week. This is the same reason why you feel like you never have money. You're probably spending more than what you're true means are. If this is the case (and even if it isn't), you want to place controls and decide how you want to spend your hard earned money. 

As I mentioned in my last blog, this will not happen overnight. Take the time and have the discipline to do this consistently for at least a year and you will start to see positive changes. It's not how much money we make but how much money we actually get to keep. 

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Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

5 Easy Steps To Follow...For Those Struggling With Finances

"Too many people spend money they haven't earned to buy things they don't need, to impress people they don't like."

 - Will Smith

Some people call me the accidental Financial Planner. Well, actually, no one calls me that but I thought it was a catchy name for my informal title. Since last November, I have gladly spent numerous hours helping people trying to get their finances together. My goal has always been to help people control their expenses so they can have enough money to not worry about money. (Don't worry - I won't be disclosing any names!)

Interestingly enough, I found myself giving the same tips to different people over and over again. These tips are essentially very basic and simple and will make a huge difference with the way you handle your money. If you properly follow these 5 steps, you will learn a lot about they way you handle your money, where your money actually goes and what changes you need to make to ensure financial health for yourself and  your family. 

1. Track Your Expenses
The first question I typically ask someone when I meet with them is, "what do you spend your money on?" The most common response I get from parents is: "on the kids." However, after fully reviewing all expenditures, it always turns out that perhaps less than 15% of the total expenses are spent on the kids. Other people can't remember or don't even know how much they spent on their phone bill or that they had a gym membership. It is important for everyone to track their expenses. There are many free tools out there that will actually do this for you. Most banks have online banking but a great tool for those that might have multiple accounts, and my favorite tool, is mint.com.

2. Use Less Cash
Cash is bad for a few reasons. One reason: if you have cash, you will spend it. If you don't have cash, you won't have something to spend. Another reason cash is bad: most people who heavily use cash to make transactions, payments or to buy things don't track their expenses. Many people have the habit of cashing their paychecks or going to the ATM frequently to take out cash. Unless you are writing down why you took out $100 on July 2nd of 2014, you will never know where your money went. Use your debit card to make transactions instead so that your transaction can be tracked and you can truly find out what you're spending your money on. 

3. Tag Your Expenses
Most people are lazy. They want a program or their online banking system to track perfectly what they spent when they went to Target. I have yet to find a system that will read your mind. It's impossible for a program to know that on August 2nd, you went to Target to buy groceries and that on August 8th you went to Target to buy clothes. Most people don't want to tag the expenses appropriately. Spend two to three days a week looking at your account and making the appropriate adjustments to your transactions. 

4. Review Your Expenses
Usually, after I meet with someone for the first time to go over their finances, the individual is excited about making changes to their financial habits. They leave with a mint.com account and with some financial knowledge about where their money went. However, when we meet a month later, I ask the question, "how many times did you look at your mint.com account?" The typical answer is one to three times. If you're only looking at your bank statements or checking your budget one to three times a month, you are doomed to repeat the same financial mistakes. It's of no value if you have online banking or a program that tracks for your expenses if you're never looking at your numbers. Try looking at the numbers at least once weekly, and then get in the habit of looking at them twice a week. I personally look at my mint.com account three times a week. 

5. Create a Budget
Most people are scared of the word "budget". When I told a certain individual that we needed to get her on a budget, her response was, "A budget? A budget will just tell me that I can't spend my money!" This is actually not true. A budget is a way for your to plan how you want to spend  your money. So, if you deemed it valuable to spend your money on video games every month, then you can definitely do that as long as you create a budget and a plan to execute that budget. I personally love going to the movies so I have a budget every month allotted to going to the movies. A budget really helps you decide where you want to put your money. 

Taking control of your finances will not happen over night. This will take time and discipline. Many of us were never taught about budgets, expenses and money. I hope to educate those that might be struggling taking control of their money. Am I an expert? Absolutely not. However, those of you that know me well, also know that at one point, I was also living pay check to pay check, getting deeper in debt, having collections calling me and a law suit from a credit card company. If you're in a hole - trust me - you can get out. Anything is possible. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

A Deeper Look Into Our Habits

"Successful people are simply those with successful habits."

 - Brian Tracy

Last week, I disclosed some results from a study that compared the habits of the rich and poor. I wanted to spend some time going over these results and giving everyone more insight into the numbers and what this all really means. 

"I maintain a daily to-do list" 
The rich have the tendency to have a set plan for the day and follow the plan as closely as possible. Many of us might have one or two things to do for the day, and we might get lucky if we accomplish one of those things. 67% of the rich complete at least 70% of their daily tasks. 

"I love reading"
Although 86% of the rich love to read, they don't like to read for pleasure. 88% of the rich read self-improvement books at least 30 minutes a day. The rich heavily focus on improving their skills, their business, their finances and their happiness. Only 2% of the rich read self-improvement books more than 30 minutes a day. 63% of the rich actually listen to audiobooks during their commute to work, whereas only 5% of the poor listen to audiobooks. The rich strategically use their time to improve, even if it's in the car. 

"I do more than my job requires"

A job is just a job - right? Well, the mental aspect of what we do many hours a week is crucial for our daily lifestyle. 86% of the rich work an average of 50 hours or more a week, compared to 43% of the poor who work as much. Yet, when surveyed, only 6% of the wealthy individuals found that they were unhappy because of work. 

"I focus on my goals every day"
Goals are one of the key differentiators between the rich and poor. Remember - a goal is not a wish. It is not something that you hope will happen but something that you need to make happen.  Interestingly enough, 67% of the rich put their goals in writing.  The wealthy set daily, monthly and annual goals. 

"I watch reality shows on TV"
Looking deeper into this comment, I found out that 67% of the rich spend one hour or less a day watching TV! No wonder they don't watch Keeping Up With The Kardashians. The rich don't watch TV because they're against it, they would just rather use their time doing something more productive and they don't think much about watching TV. Instead, they created a daily habit of reading. 

"I play the lottery regularly"
The rich decided not to play the lottery, not because they don't want to risk their money on the jackpot, but because they would rather not rely on luck. Besides, most people that win the lottery lose their money within a few years after hitting the jackpot. Instead, the rich spend their time building their knowledge and taking other risks with their businesses, purchasing businesses, taking over investments and managing risks. 

In the end, no matter what you want to do in life, many of what we succeed or fail to do will be determined by our daily habits. Where are you spending your time? With who? Are there any habits you need to get rid of or be more consistent with? Share your thoughts.

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way. 

Are Your Habits Making You Rich Or Poor?

"Bad habits are like a comfortable bed, easy to get into but hard to get out of"-Anonymous

What did I do last week? What did I accomplish? How did I spend my time? These are questions I ask myself at the end of every week. For the last few years, I made it a habit to always evaluate my days and weeks, never keeping my eyes off of my goals and dreams. However, not everyone asks these questions on a consistent basis.

A few months ago I wrote a blog called Do You Have What It Takes To Be Wealthy?, discussing a study done about successful people. The study carefully examined the habits of successful people and it compared them to the habits of the poor. Your daily habits will determine your success in life. Thomas Corley spent five years studying the lives of both rich people (defined as having an annual income of $160,000 or more and a liquid net worth of $3.2 million or more) and those of poor people (defined as having an annual income of $35,000 or less and a liquid net worth of $5,000 or less). Below are some of the results of Corley's study.

"I maintain a daily to-do list"

• Rich people who agree: 81%
• Poor people who agree: 19%

"I love reading"

• Rich people who agree: 86%
• Poor people who agree: 26%

"I do more than my job requires"

• Rich people who agree: 81%
• Poor people who agree: 17%

"I focus on my goals every day"

• Rich people who agree: 62%
• Poor people who agree: 6%

"I watch reality shows on TV"

• Rich people who agree: 6%
• Poor people who agree: 78%

"I play the lottery regularly"

• Rich people who agree: 6%
• Poor people who agree: 77%

Next week we'll go over these results in a lot more detail. It's important to study the habits that might be keeping us from achieving some of our goals. The purpose of this study is not to come up with ways to get rich, but to compare how rich and poor spend their time and energy. Becoming rich might not be your goal, or my goal, but achieving certain financial goals, dreams, or aspirations might. 

Ask yourself these questions from the study. Which comments do you agree with? 
Share. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.