Help for America’s Homeowners – Government Home Affordable Refinance Program

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The Federal Housing Finance Authority recently announced that the Home Affordable Refinance Program, (HARP) would be extended through June 30, 2012.   This is great news for millions of homeowners that are making their monthly mortgage payments but are unable to refinance their current mortgage due to the decrease in their home value.  As a result of the decreased home value, they do not have sufficient equity to qualify to refinance their home under the current lending guidelines.  An additional benefit of this program is that a homeowner would not be required to add mortgage insurance to the new mortgage loan (payment) if their current loan does not have mortgage insurance.  This applies even if the loan-to-value on the new loan exceeds 80%.

The HARP program offered through the government is designed to help homeowners refinance into a lower fixed rate mortgage loan only if their mortgage is owned by Freddie Mac, (FHLMC) or Fannie Mae, (FNMA).  The HARP program is not a government loan.

The company that sends you your mortgage statement every month may not own your mortgage.  They may only be servicing the mortgage.  To determine if FNMA or FHLMC actually owns your mortgage you can log onto their individual websites and enter some basic information to determine if FNMA or FHLMC owns your mortgage.  In addition, if your loan is owned by FHLMC or FNMA the HARP program can be obtained from most lenders.  However, it is very important to work with a lender that has experience and expertise with this specific program.

Here is a link to each site.

Fannie Mae (FNMA)

http://www.fanniemae.com/loanlookup/

Freddie Mac (FHLMC)

https://ww3.freddiemac.com/corporate/

In addition, there is some additional criteria that is used to determine if a homeowner may be eligible to take advantage of the HARP program:

  •  1-4 unit home that is your primary residence
  • Mortgage owned by FHLMC or FNMA
  • Current on mortgage payments & have not been more than 30 days late making a payment within the last 12 months
  • Have a first mortgage not exceeding 125% of the current market value of the home
  • Have sufficient income to support the new mortgage payments
  • Can improve the long-term affordability or stability of your loan with the refinance

The HARP program has been a great resource for homeowners and has helped them take advantage of the low mortgage rates and lower their monthly payment.  Unfortunately, many homeowners do not know this program exists.   Here is a link to the government site for more information on the HARP program and other programs within the Making Homes Affordable program.

http://www.makinghomeaffordable.gov/

This article is intended for informational purposes only.  For specific program guidelines, eligibility and or other information please refer to the Making Home Affordable website or call their number  888-995-HOPE (4673) to speak with a HUD-approved housing counselor for free.

I hope you have benefited from this post on real estate and refinancing you home.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this special government program.

I hope you will follow Fiscal Literacy on Twitter & Facebook or subscribe via email to receive free personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

Financial Literacy begins with – The Power of a Vision to Transform Your Life and Your Finances

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What are you hopes, goals and dreams for your life?  How many of your goals or dreams for your life are tied to money or dependent upon money to achieve them?   Many of our personal goals are tied to money.  Not money itself, but the lifestyle or financial freedom that is a result of our financial achievements.  Therefore, it is essential that we work on improving our knowledge of money, personal finances i.e. our financial literacy

We must be willing to accept full responsibility for the outcome of our lives.  This is why our vision and goals for our life are so important.  They can inspire and empower us.

People become empowered to take action to transform their lives when they learn that they have the ability to impact their lives, to achieve their goals and make their dreams become a reality.   This realization or breakthrough creates hope for the future.   It is this hope for the future that will compel people to take action, to stay the course, to overcome setbacks and to make conscious choices on a daily basis to move closer to their goals.

History is full of compelling stories of individuals who overcame adversity, lack of education, physical limitations, lack of financial resources, etc. to accomplish great things in their lifetimes.  They were able to accomplish these great feats because they had a crystal clear vision of what they wanted to accomplish in their lives.  They were unwilling to accept failure or be deterred from achieving their vision for their life.

Therefore, it is essential that we work on developing a crystal clear vision for our lives.   This is the first step in our pursuing Financial Literacy for our lives.  Financial Literacy is not just about the money.  It is  all about understanding the power of money, the impact of our financial choices, and how we can use our financial resources to accomplish our goals for our lives.

Everyone wants to achieve financial independence but few people actually achieve it.  Why?  Most people end up consuming their future by the financial choices they make every day.  They never stop to consider the how their financial decisions today will impact their future.  Unfortunately, many people never received any formal education in school regarding financial principles on money, budgeting, investing, etc.   Therefore, they were at a disadvantage from an early age.  For many people their only source of input on money came from their parents.  Well intentioned parents may have never received any formal education on money during their lifetimes as well.  Therefore, they may not have been the  best source of information or set the best example with their personal finances for their families.

However, there is a group of people who achieve financial independence. There was a great book written that examined the lives, lifestyles and financial habits of self-made millionaires.  There are no get rich quick stories.  It is about average people who achieved above average results in their lives.  The common denominator is revealed as you see the similarities in their lives.   The book will provide you encouragement and insights into achieving the same goals for your life.

The book is “The Millionaire Next Door” by Thomas J. Stanley Ph.D. and William D. Danko Ph.D.  Here is a link to Google Books for a preview and review of the book.   http://bit.ly/asJ15s

It is interesting to note that approximately 80% of the people who achieved financial independence did so on their own, they did not inherit their money.  They worked hard, lived conservatively, learned sound financial principles and became financially independent.   These statistics should provide hope and encouragement for any person who wants to take control of their finances and move closer to financial independence.   It all starts with a vision of what can be possible for our lives when we see that it became a reality in other people’s lives.

Therefore, It is critical that you stop and take some time to reflect on what you want, why you want it, what will it give you.  This will help you create a vision for your life.  Here are some questions to help you start working on creating a clear and concise vision for your life.  A vision that you are passionate about achieving in your life.  The list is not all-inclusive, but is only meant to serve as a reference to help get you started.  It is your life and your future. Think Big and don’t limit yourself!

Questions to help you create a compelling vision and goals for your life

What are your hopes and dreams for someday?

What’s missing in my life?

What are you passionate about?

What things do you value most in life?

What gives you meaning and purpose in your life?

What is your idea of the perfect life?

What would it look it?

Where would you live?

How would you spend your time?

How would you touch and impact others lives?

What your natural gifts and talents?  Are you using them to your benefit?

Are you living a balanced life?

What things do you value most in life?

What are you committed to personally that would be bring balance to your life?

How much money do you want to make?

What would you do with the money?

Why is being successful important to you?

How would you use your success to help others?

Vision Planning – This is the first step to creating a compelling vision for your life.  You need to take your answers and insights from your planning questions and clearly articulate the vision for your life.  This needs to be written as if it has already occurred in your life.  I suggest writing from the perspective of a journal entry reflecting back on your awesome life at a given point in time in the future that you select.  For example, a key birthday, a specific date like 12/31/2020.  This vision for your life must be written be so clear that you can see it, feel it, touch it and experience it as if it has already occurred in your life.

Convert your vision into specific goals and commitments.   Once you have clarified your vision for your life and committed your vision to writing, it will be much easier to establish meaningful goals.  You want goals that will inspire you to take action.  Goals that keep you committed to achieving your goals and ultimately the vision for your life.  Why?  Because your vision for the future will compel you take action today.

What actions MUST you take to achieve your goals? Break them down yearly, monthly, weekly daily.   Nothing meaningful ever happens with our hopes, dreams or goals for our lives until we commit to a “specific date” that we will achieve our goals.  Therefore, once you  have committed to these dates, you are on a path to achieve your goals.  Next you can start creating an action plan to achieve the goals you set for yourself.  Therefore, you must take your goals and break them down into measurable tasks, activities and results that you can measure.  This provides you a basis for tracking your progress and celebrating the achievement of your short-term goals and successes on the way to celebrating the achievement of your ultimate vision for your life.

What are your personal commitments to achieving your goals?  You can create an awesome vision for your life, set specific goals and create action plans to help you achieve your vision for your life.  However, without an unwavering personal commitment to changing your habits, actions and thoughts you will never achieve them.  You need to realize that there will be setbacks, road blocks, break downs along the way to achieving the ultimate vision for your personal life and finances.

However, just like with every other person who has achieved something meaningful in their lives, they remained committed to their goals, hopes and dreams for their lives.  They were unwilling to accept failure or be deterred from achieving their vision for their lives.     Therefore, I suggest you read and reaffirm your vision for your life on a daily basis.  Think about it, dwell on it and act on it every day until it becomes a reality in your life.   You can achieve your dreams…..

I hope this blog post has added value to your life.  I hope it has inspired you to take action.   If so, I hope you will forward this post to someone else who might benefit and become inspired in their lives.  You can follow my posts on Twitter as well.

The focus of this blog will be Financial Literacy.  The goal of Financial Literacy is to help educate and empower people transform their lives in a way that not only touches and impacts their lives but also gives them the resources to touch and impact others lives.  That is why I have created Fiscal Literacy.

I wanted to leave you with a compilation of famous quotes on the subject of vision, goals, etc.  I hope they inspire you to take action in your life today, not someday….

Inspirational Quotes

“People never plan to be failures; they simply fail to plan to be successful”  William Ward

“Vision is the art of seeing the invisible”  Jonathon Swift

“Goals are not only absolutely necessary to motivate us.  They are essential to really keep us alive”  Robert Schuller

“Goals determine your thoughts – thoughts determine your life”  Anonymous

“The greatest thing limiting ourselves, is our conversation with ourselves”  Scott Cummings

“Your life is an expression of all of your thoughts”  Marcus Aurelius

“What the human mind can conceive and believe, it can accomplish”   David Sarnoff

“Some men succeed because they are destined to, but most men because they are determined to succeed”  Anonymous

 “Success if it is to be, it is up to me”  Anonymous

“Only those who dare to fail greatly can ever achieve greatly”  Robert F. Kennedy

“If one advances confidently in the direction of his dreams and endeavors to live the life which he has imagined, he will meet with success unexpected in common hours.”  Henry David Thoreau  

I hope you will follow Fiscal Literacy on Twitter, Facebook or subscribe via email  to receive personal finance, news and updates.

Copyright © 2011  FiscalLiteracy.com, All Rights Reserved

Personal Finance Challenge – During April’s National Financial Literacy Month

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Are you ready to take control of your personal finances, get control of your spending and work on achieving the goal of getting freed up financially?  If so, I challenge you to take the Show Me The Money – Challenge during April’s National Financial Literacy Month.   The show me the money challenge is the first step in taking control of your personal finances and transforming your financial life.

What is the Show Me the Money Challenge?  It is a personal finance challenge that focuses on tracking all of your expenses for 30 days to provide insights and ideas on how to cut, reduce or eliminate unnecessary expenses, and help you start saving money.

 Show Me The Money – Challenge

  • #1 Goal – Make it fun, get creative, but also be 100% committed
  • Track “every dollar” you spend for minimum of 30 days
  • Create a ledger with expense categories
  • Break out every expense into a specific category
  • Expense Categories – the more specific the better i.e. separate dining out, from groceries, category for Starbucks, school lunches for kids, etc
  • Track ALL cash purchases
  • Enter each individual charge card expense into a specific category
  • Enter ALL of your fixed expenses for housing, insurance, utilities, etc
  • Total each expense category at the end of 30 days

Step Up – Accept the Challenge and Change Your Life Forever

I hope you will accept this personal challenge.  It is about challenging yourself to take control of your personal finances and work on achieving your hopes, goals and dreams for your life.  It is about breaking free of our consumer driven world and becoming debt free.  If you have children it is also about setting an example for our children.  Therefore, I hope you will commit to this challenge starting this Friday, April 1st, 2011.    What better time to get control of your finances than during April’s National Financial Literacy Month.  There will be numerous tools and free resources available to help you work on changing your financial habits, improving your personal finances and improving your financial literacy.

Challenging Our Family

My family and I completed this challenge last year.  We were blown away at how much money we were wasting every month.  We were only able to identify these unnecessary expenses by tracking every dollar we spent and keeping every receipt for 30 days.  This simple exercise dramatically impacted our spending habits and has freed up a lot of money.  It has been over 6 months and we want to take the challenge again.

My wife and two teenage kids discussed this last night over dinner. We are all committed to taking the Show Me The Money – Challenge again.  We are starting this Friday, April 1st, 2011.   Our teenagers will also be tracking every dollar they spend as well.  This is a great opportunity for us to teach our kids financial literacy skills that will last a lifetime.  I will provide some updates throughout the month on our progress and also our revelations regarding our spending habits.  I hope you will share your thoughts with us as well.

The Guarantee:

I guarantee you that if you will commit to this challenge for 30 days you will be blown away by what you learn about your spending habits and where all of the money goes on a monthly basis.  More importantly, I guarantee that the results will provide you new insights and ideas on how to cut your expenses, improve your cash flow and use the monthly savings to become debt free, build up your savings and investment accounts.  This simple challenge will dramatically impact your personal finances.  I guarantee it!

The Results:

What can you learn from tracking every dollar you spent for 30 days?  Look through your credit card statement at each transaction and ask yourself if  “you would have made the same decision if you had to pay cash”.   Look through your cash receipts how much money are you spending our small things that add up over a week, a month, a year or a lifetime?

More importantly, ask yourself where can you cut or reduce unnecessary expenses to improve your monthly cash flow i.e. health club membership, dining out, cell phone bill, cable tv, internet, commuting costs, car insurance, discretionary or random shopping purchases, etc.

Ultimately, we live in a consumer driven world and it is our spending habits that are consuming our financial future.  Therefore, we must all take control of our spending habits if we ever want to become debt free and achieve financial freedom in our lives so we can pursue our hopes, goals and dreams for our lives.

Take the Show Me The Money – Personal Finance Challenge.  It will change your life and your finances….

Do you know someone who might benefit from taking this personal finance challenge?    If so, please forward this article to them.  Encourage them to take the personal finance challenge with you.  You can encourage each other to stay committed for 30 days.

I hope you will follow Fiscal Literacy on Twitter, Facebook or subscribe via email to receive free personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

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Is Your Current Lifestyle Consuming Your Financial Future?

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For millions of families and individuals their lifestyle choices are consuming their financial future. Why? Because they are only able to support their lifestyle through the use of credit cards and consumer loans for automobiles, boats, RV’s, etc.  As a result of their personal debt and lifestyle choices, they are unable to save any of their hard earned money for themselves to their fund retirement accounts, pay college tuition for their children or even fund a simple savings account.

 

Therefore, the real question that each of us should asking ourselves is “Who are we really working for, ourselves or the banks and credit card companies?”  It is easy to say “ourselves” because we receive a paycheck from our employer.  However, how much did you pay yourself last year and put in a savings or retirement account vs. how much did you spend last year?

A 1st century B.C. Roman author, Publilius Syrus made this statement approximately 2,000 years ago “Debt is the slavery of the free”

How much more true is this statement today?   It is our debt that keeps us trapped in our jobs and keeps us from pursuing our hopes, goals & dreams for our lives.  Ultimately, it is our debt that keeps us from ever being able to retire.  Unfortunately, millions of seniors are facing this reality today in their lives and are forced to continue working.

This does not have to be our reality.  We need to take control of our own personal finances.  We need to understand and accept that our choices have consequences.  Ultimately, we are responsible for the outcome of our lives.

Therefore, the most important question we must ask ourselves is “when will we step up and take control of our personal finances?”

The answer cannot be someday.  Someday is a day that never comes until it is too late to do anything to change the course of our lives.  Someday robs us of today. Someday is a convenient way for us to settle for less in our lives and hold onto our dreams.  We tell ourselves and others that someday we will make it happen.  Someday we will take action to achieve our hopes, goals and dreams for our lives.  We use this convenient excuse because it allows us to rationalize settling for less today.  It allows us to believe that the timing is not right in our lives.  That “someday” the timing will be better, we will have more money, more time or resources.  The truth is there will never be a perfect time.

Therefore, the only answer is ”Today.”  Today is the day you must be willing to step up and start taking control of your personal finances.  Today is the day you start working on becoming debt free.  Today is the day you take control of your financial future.  You can do it!

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short lesson on personal finances.

I hope you will follow Fiscal Literacy on Twitter & Facebook or subscribe via email to receive personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

Financial Literacy 101 – Personal Budgets

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A personal budget is absolutely critical for anyone that is committed to taking control of their personal finances.  Why? Because a budget provides us the input we need to manage our income, track our expenses, improve our cash flow to payoff debt and start a savings plan.  A personal budget provides us a tool to work on achieving our financial goals.   It is the first step in taking control of our personal finances.

Therefore, I hope I hope you will commit to using a personal budget.   This does not have to be an overwhelming task.  There are countless free personal budget resources and free personal budget software resources online to help you get started.  Don’t get caught up in selecting the perfect budget format.  It is not that important.  What is important is capturing all of your income and expenses.  Pick something that is simple to use.  We use a simple budget worksheet in Excel. Here is a link to a Microsoft personal budget template that has over 3.4 million downloads.   http://bit.ly/gatAnx

It is also very important when creating a personal budget to capture all of your miscellaneous expenses that occur throughout the month.  The only way to accurately capture all of these expenses is to save every receipt for every dollar you spent for a minimum of 30 days.  This information  is essential to preparing an accurate monthly budget.  It will also provide you some great insights into where all of your money goes on a monthly basis.

Once you have completed an accurate monthly budget and have captured all of your expenses you can start looking for creative ways to reduce or eliminate unnecessary expenses and save money.  The monthly savings you create can be used to start paying off consumer debt and funding your savings goals.

A personal budget is the first step in taking control of our personal finances, controlling our spending and achieving our financial goals for our lives.    Start today and change your life and finances forever.

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short financial literacy lesson.

I hope you will follow Fiscal Literacy on Twitter, Facebook or subscribe via email  to receive our free personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

How to Create a Cash Cushion / Emergency Fund

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It is a lack of personal savings that forces us to use our credit cards or obtain personal loans to pay for the expenses we incur in our lives.   Many of these expenses are unplanned expenses for car repairs, kid’s braces, home repairs, etc.  We also use our credit cards for pay for other large expenses i.e. vacations, holiday shopping, home furnishings, etc.  These large expenses dramatically impact our overall debt, increase the costs of every purchase due to the interest we pay over time,  and also reduces or eliminates our ability to save money and fund our retirement on a monthly basis.  A cash cushion is a simple financial solution.

What is a Cash Cushion – A cash cushion is a separate fund that is established and set aside solely to be used for the purpose of covering these unforeseen expenses, repairs, etc. that come up in everyday life.  As a result, this will keep you from incurring these expenses on your credit card when emergencies arise.

Why it is Important – By eliminating the need to utilize credit cards for unforeseen expenses you can focus on limiting your use of credit.  You can establish and commit to a plan to pay off all consumer debt.   What is the benefit of a cash cushion?  Debt free living and the peace of mind that comes from knowing that you have some cash to fall back on in an emergency.

How to Fund Your Cash Cushion – The key to funding your cash cushion is controlling your spending.  All of us can free up the cash we need to fund our cash cushion if we take the time to track all of our expenses for 30 days.  We can also look for creative ways to reduce our discretionary lifestyle expenses for lattes, dining out, pleasure shopping, etc.  We can also look for ways to live more frugally.  If you are willing to make the effort, I am confident you can find enough cash to start funding your cash cushion.  If you need some ideas on reducing your expenses look under our debt free living section at http://www.fiscalliteracy.com/

How Much Cash?   This is only a question that you can answer based on your individual financial situation.  However, I think it is a great idea to work through several different unforeseen expense scenarios.  This exercise will help you to get an idea of how much cash may be required to keep you from using  a credit card to cover the expenses.   This most important point is to commit to establishing a cash cushion and funding it every month.  This discipline and commitment will pay significant dividends when an unforeseen or unexpected expense arises.

Where to Keep Your Cash – It is vitally important to set aside this cash in a separate account where you will not be tempted to spend it.  Remember, a cash cushion is for unforeseen and unexpected expenses.  Therefore, this money must always be available to you to cover those emergencies and save you from using your credit cards.   Therefore, I suggest that you set up a separate account at a different institution from your normal bank accounts.  This will prevent you from easily transferring the money to another account.   Select an account type like a savings account or a money market account that does not put your money at risk.

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short financial literacy lesson.

I hope you will also follow Fiscal Literacy on Twitter & Facebook or sign up via email to receive our free personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

Financial Literacy Lessons – Principle of the Piggy Bank

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How many of you had a piggy bank when you were growing up?  I had one of the classic ceramic piggy banks that you had to break at some point to get out the money.  I always remember how excited I got every time I dropped coins into  the piggy bank through the small slot of top of the piggy bank.   I would pick up the piggy bank to feel the weight of all of the coins and shake it to hear all of my money in the bank.  It was an incredible day when I got to break open my piggy bank and see all  the coins spill out on the table.  My eyes lit up with amazement at all of the money that had accumulated.  I could not wait to take my hard earned money that I had saved and spend it.   It was an incredible feeling to walk into the store with all of my money and pay cash to buy that cool toy I had been dreaming about for months.

Now that I am an adult, I have had a change jar for years where I deposit my loose change at the end of every day.   I am still amazed at how fast and how much money accumulates in my modern day piggy bank.   In today’s high tech world, I take my change to the coin counter at the grocery store.   I pour in the coins and watch the total build up until all of my coins are counted.  I am sure you have a change jar or spot where you deposit your change every day.

These memories from my childhood got me thinking about The Principles of the Piggy Bank.   What can we learn from our childhood lessons on money that we can apply to our financial lives today?   Here are some key points that can dramatically impact your personal finances.

 Set-up a Piggy Bank Account – The piggy bank works for kids because it is lockable. It cannot be easily accessed.  Therefore, the money is saved and not spent.   It is essential that you set up a savings account that is separate from your normal bank account.   Do not get a debit card / ATM card or any other way to easily access your piggy bank account.

 How bad do you want it? – Do you remember how obsessed you were over the latest toy as a kid?  That obsession was your motivation to put as many coins as possible into your piggy bank so you could save up the money you needed as fast as possible.  You need to rekindle that same motivation today for saving money, reducing expenses, paying off debt and achieving your financial goals.  Crystal clear goals will inspire you to take action and remain committed to achieving your goals.

Change (Coins) Happens. –  Everyday we accumulate change from all of our cash purchases.    We typically never think about spending our change because it is too small to spend.  Once we set our change aside we never think about spending it.  We need to apply this principle to our monthly income.  We need to set aside a portion of our monthly income every month in our piggy bank account.  We need to look for ways to save money each and every day so we can take the dollars we save each day and deposit them into our piggy bank account.    The power of small financial changes can dramatically impact our personal finances.

  Time – As kids we did not fill our piggy bank over night.   We worked hard, saved a portion of our allowance, etc. to fill our piggy banks as fast as possible.  We need to understand that it is going to take some time to fill our piggy bank accounts.   The key to remaining committed is the same today as it was when we were kids.   We need to stay focused on the prize or the goal we set for ourselves just like we remained committed and focused on filling our piggy banks as kids.

 Compound Interest A Grown-Ups Secret Weapon – As kids we saved our coins in a piggy bank.  We never earned one penny of interest.  We had to save every penny.  However, as grown-ups we can set up our piggy bank account using a variety of savings and investment accounts that earn interest.  It is the power compound interest than can dramatically multiply the results of our piggy bank account over time.  I will devote a separate post to explaining and illustrating the compound interest.  It is a simple financial concept that can have a dramatic impact in our lives.   There is a money quote that states “Those who understand interest earn it, and those who don’t understand interest pay it.

Cash is King –  One of the most important lessons to be learned from the Principle of the Piggy Bank is the discipline of saving and paying cash as opposed to using a credit card or getting a loan.  This single point has the ability to transform your life and your finances if you are willing to commit to only paying cash and living debt free.   Millions of Americans have consumed their futures as a result of their spending habits.  However, it is never too late to take control of our personal finances.  It may be as simple as implementing our childhood lessons we learned from our piggy bank into our adult lives.  It may also be an excellent opportunity to use a piggy bank to teach our children the principles of the piggy bank. Simple lessons that can have a profound impact on our lives.

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short financial literacy lesson.

I hope you will follow Fiscal Literacy on Twitter, Facebook or subscribe via email  to receive personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

Frugal Living – The Key to Spending Less, Simplifying & Loving Life

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Frugal living is about making conscious choices with our time and our money.  It allows us to free up our resources so that we can pursue the things in life that really matter to us.  Frugal living is something that each of us needs to quantify and define in our own lives.  Unfortunately, many people do not want to consider living a “frugal lifestyle” because they think it means living the life of a miser and never spending a dime or doing anything fun.

I disagree.  Frugal living is simply about making better decisions with our money, our time and our other resources.  Frugal living provides the framework for us to get freed up financially and achieve our financial goals.  More importantly, it provides us the basis for making all of our financial decisions on a daily basis.  It is the summation of these daily financial decisions that impact every area of our lives.

Frugal living is also about simplifying our lives.  Our worlds are becoming more complex with every passing day.  What is consuming your life, your money and your attention and distracting you from the real things in life that are truly important in your life?  What can you eliminate or give away that will cut your expenses, free up your mind and simplify your life?  How would you live differently if you had more time and more money?

Have some fun and get creative with the concept of frugal living.  My family and I have had a blast challenging each other and looking for ways to spend less and still enjoy life.   As a result, we have been able to dramatically reduce our monthly expenses without impacting the quality of our  lives.  In fact, the opposite it true.  We have had more fun and spent more time together than ever before.   Frugal living is one of the best lessons on money, personal finance and financial literacy we could ever teach our kids.

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short financial literacy lesson.

I hope you will follow Fiscal Literacy on Twitter, Facebook or subscribe via email  to receive personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

Control Your Spending to Achieve Debt Free Living

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The first step to financial independence and debt free living is to control your spending.  We live in a consumer driven world that encourages the use of credit for every purchase.   As a result, Americans are burdened by excessive consumer debt.  A recent report by the Federal Reserve stated that Americans owe approximately 826 billion in revolving credit card debt.   The burden of this debt is overwhelming families and robbing them of their hopes and dreams for the future.

A roman author, Pubilius Syrus from the 1stcentury wrote this quote 2,000 years ago.   “Debt is the slavery of the free” How much more true is this quote today?

If you are ready to take control of your financial future you must start by taking control of your spending.  Here are some proven tips and ideas to that are easily implemented that can dramatically impact your personal finances.

Breakout Your Expenses – Pull out all of your credit card statements, bank statements,  etc. and breakout all of your expenses into specific categories.   Create a ledger and enter each individual expense into the appropriate category.  Review each expense to determine what is a regular monthly recurring living expense and what were discretionary purchases.    Then total each category for last month.  This first step will provide you with some interesting data on your spending habits.  It will also provide you ideas on where you can start reducing or eliminating unnecessary expenses.

Track Every Expense for 30 Days – This exercise is absolutely critical and it will provide you some great insights into your spending habits if you track every dollar you spend for 30 days.  Use the memo pad in your cell phone or keep a small notebook with you to write down each expense as it occurs.   Don’t see this exercise as a burden.  Have some fun with it.  Set up a ledger with different expense categories and enter all of your expenses at the end of every day.  Use the same ledger system to enter all of your normal payments on the 1st and 15th as well into their specific categories.

Debt Free Living is Possible – What if you were debt free?  How would you live differently?   Debt free living can be a reality for anyone that is willing to commit to the goal.  I hope you will take some time as part of this exercise to stop and think about your life, your finances and your hopes, goals and dreams for your life.  Take the time to reflect on how your debt has impacted your life and your finances.  More importantly, take some time to declare some new goals for your life.  Goals based on being debt free.   Goals that will motivate you and inspire you to take action today to take control of your personal finances and change your life forever.   See my previous post Financial Literacy begins with – The Power of a Vision to Transform Your Life and Your Finances.

Accept the Challenge – I hope you will make the commitment to track your expenses for 30 days.  The exercise is truly valuable.  It will provide you new insights into where all of your money goes every month.  It will also provide you with some ideas and insights on how to reduce or eliminate unnecessary expenses.  This is the first step in taking control of your finances and moving closer to debt free living and achieving financial freedom.

Challenging Our Family – I am going to take this challenge as well.  I will keep you updated on my progress, my breakthroughs and my insights.   This will be a great exercise for my wife and two teenagers.  We will make it a fun family challenge with a prize for achieving the goal of tracking every expense for our entire family for 30 days.  This is an excellent opportunity to share financial literacy lessons with our kids.

Quotes to Motivate and Inspire:

“Empty pockets never held anyone back.  Only empty heads and empty hearts can do that”  Norman Vincent Peale

“A miser grows rich by seeming poor.  An extravagant man grows poor by seeming rich” William Shakespeare

“If you would like to be wealthy, think of saving as well as getting” Benjamin Franklin

“If you want to feel rich, just count the things you have that money can’t buy” Proverbs quote

“It is not how much you earn, but how much you save”  Anonymous

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short financial literacy lesson.

I hope you will follow Fiscal Literacy on Twitter, Facebook or subscribe via email  to receive personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

Financial Literacy Lessons – 10 Keys to Financial Freedom

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The financial crisis has impacted the lives of millions of people. Therefore, there has never been a more important time than now to educate and empower yourself to take control of your own personal finances.   Here are some ideas and proven financial concepts that can dramatically impact your personal life and finances.   I hope you will take the time to read through them.   More importantly, I hope you will take the time to implement some of these ideas into your own personal finances.

1.  Our Choices, Have Consequences – We must accept full responsibility for our own financial futures.  We must understand that our financial decisions and choices today will impact our lives tomorrow.  Therefore, we must evaluate all of our financial choices, expenses, purchases within the context of our overall long term financial goals and objectives.      

2.  Stop Consuming Your Future – Control Your Spending   When was the last time you reconciled every dollar you spent for the last 30 days?   When was the last time you looked at every charge on your credit card statement?   I challenge you to track every expense for a minimum of 30 days to see where all the money goes every month.   Use this exercise to look for ways to reduce unnecessary expenses, save money, etc.  We live in a consumer driven world.  Our spending habits are consuming our future.  We must take control of our spending habits to start moving towards achieving financial freedom.

3.  Create & Live Within A Budget    A budget is absolutely critical for anyone that is committed to achieving financial freedom in their lives.  A budget provides us the input we need to manage our income and our expenses.  A budget provides us accountability. A budget provides us a tool to work on achieving our financial goals.  A budget will dramatically impact your personal finances.   It will provide you the roadmap to achieve your financial goals.

4.  Pay Yourself First – This is not a suggestion, but a key fundamental rule for anyone that has achieved financial freedom.   Have you ever stopped to ask consider how hard you work for your money?  Who are you really working for the bank, the mortgage company, the credit card company?  Stop making someone else rich!  You must always pay yourself first.   Start saving today and learn how to put your money to work for you.

 5.  Become Debt Free – Debt is consuming the lives of millions of people.   Debt is what keeps us from pursuing our hopes, goals and dreams for our lives.  Debt robs us of our future.  The only way we can take control of our financial lives and our future is by becoming debt free and never going back into debt.  Debt free living must become your passion and your unrelenting goal.  Debt free living can be a reality for anyone that is willing to commit to the goal.  What if you were debt free?  How would it change your life?  What could you do or pursue if you were debt free?

6.  Establish Cash Cushion   A cash cushion is an emergency fund that is created to cover your living expenses for 3-6 months.  It is also used to cover unforeseen expenses, repairs, etc. that come up in everyday life.  The purpose of a cash cushion is to keep you from incurring expenses on your credit card when emergencies arise.  A cash cushion will also provide you peace of mind that you have 3-6 months living expenses in the bank at any time.   I encourage you today to set up a separate bank account and start funding your cash cushion account.

7.  Commit Time Everyday to Improving Your Financial Literacy.  How much time will you spend on the internet and watching TV today, this week or this year?  How much time have you invested today, this week or this year improving your financial literacy?   What is more important?   There are countless free resources available on the subject of Financial Literacy.   Remember, we must take full responsibility for our own financial lives.  Simplify this task by working on one subject at a time.  Pick something basic like home budgets, etc. and get started today. Work on this with your spouse, family, friends etc.  Together you will learn more and encourage one another.

 8.  Create Clear, Concise Financial Goals – This is one of the most important steps in achieving financial freedom.  It is our clearly stated goals that we have committed to writing that will compel us to take action to achieve financial freedom.  Without clearly stated goals we will abandon our financial commitments for the future and only think of our immediate wants and needs.  We cannot afford to waste our precious time, money and resources consuming our future by our lifestyle choices today.  Therefore, it is absolutely essential that you take some time and write out your vision and goals for your finances and life.   You want goals that will inspire you.  Goals that motivate you to achieve financial freedom and live the life you have always imagined living.  For more information on this subject see my previous post.

9.   Simplify Your Life – Our worlds are becoming more complex with every passing day.  What is consuming your life, your money and your attention and distracting you from the real things in life that are truly important in your life?  What can you eliminate or give away that will cut your expenses, free up your mind and simplify your life?

 10.   Practice Generosity – Our lives will not be remembered for how much we earned or how hard we worked.  Our lives will be remembered for how we touched and impacted the lives of others.  Therefore, we should look for more meaningful ways to use our money, time and talents to impact others less fortunate than us.  Generosity creates wealth when we take the focus off our own selfish desires.  It provides us a bigger meaning for our money.  It provides us a purpose that empowers us to take action.   We don’t have to wait to become millionaires to start practicing the concept of generosity.  We can start today. There is always someone less fortunate that us and we can impact their lives.

I hope you have benefited from this post on Financial Literacy.  If so, leave a comment.  In addition, please forward this to anyone you think might benefit from this short lesson on the 10 Keys to Financial Freedom.

You can follow Fiscal Literacy on Twitter, Facebook or subscribe via email to receive personal finance, news and updates.

Copyright © 2011 FiscalLiteracy.com, All Rights Reserved

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