Accountant

Learn. Grow.
Save.

Basic Principles of FINANCE

Tithe, give, and maintain your spiritual life.

You do not have to belong to a religion to have a spiritual connection to God. He created us as spirit beings. It wasn't until the fall of man that we began living from our selfish desires. Jesus came to redeem us from our choices. It is now only through faith that we can receive God's promises or understand His ways. When we learn to stop operating from our selfish desires and develop self-control, we can begin to live in the freedom God intended for us to have. We want to be sure our lives & finances are connected to God so that they can be blessed. God gives wisdom freely to those who search for it. Without wisdom, your finances will suffer. With wisdom, your finances will grow. 

2

Create a Budget.

A financial budget is an overview of your income and expenses. It is a financial plan for a defined period. Without a budget, you can't create a plan for long-term goals. I will show you how to create a budget so that it helps you to maximize your income.

3

Get an emergency fund. 

The emergency fund secures your finances for hard times. This is a fund that you set aside and use only for true emergencies. You begin with a savings account and add money to it until it reaches $1000.

4

Get life & health insurance if you don't already have it.

So many people get caught in a hard time without insurance. Their excuse is that they can't afford it. When hard times hit, like sickness or disease, you can't afford to not have it! Get insurance so that during a time of sickness, disaster, or death, you or your family won't incur financial hardship caused by medical bills or funeral costs. The purpose of insurance is to protect your finances. Without it, you can end up in bankruptcy.  

5

Pay off debts.

Paying off debts may seem impossible but it isn't. I like Dave Ramsey's debt snowballing idea. You list your debts from smallest to largest and pay the smallest one first, despite their interest rates. Ignore interest rates and keep putting all your extra money (aside from your emergency fund) toward the smallest debt. This gives you some small victories and motivates you to keep moving forward toward debt freedom. Once your smallest debt is paid, you take the money that you were paying toward that and begin to pay the next smallest debt until it is paid off. You keep doing this until all debts are paid.

6

Save money. 

Once your debts are paid, you take the amount of money you've been using toward debt and add it to your $1000 emergency fund.

The ultimate goal for the emergency fund is to save enough to cover 1 month's (some advisors say 3 months) worth of living expenses. This way if you get sick or get laid off from work, you're prepared. You add this to your emergency fund and don't touch it.

 

After you have 1 month's worth of living expenses in your emergency fund, you then begin to invest the maximum amount allowed into your 401k and an IRA plan and save the rest in a separate savings account. This way, your savings is separate from your emergency fund. Remember, your emergency fund is something you don't touch, so don't mix it with your savings. 

 

In a separate savings account, you continue adding money to your savings until you reach a goal of  $30,000. Once you reach this goal, you're ready to start investing.

7

Invest money. 

Depending on your situation and age, you may want to start investing in your 401k or IRA before all of your debts are paid. But because most situations are different, and there is no one-size-fits-all explanation on how to handle investing, I suggest waiting until you get your 1 month's reserve in your emergency fund. 

 

Once you reach the goal of $30,000 in savings you will need a financial advisor or someone trustworthy to help you learn how to invest. If you make it to this point, you've created a great financial foundation! 

"Come unto me, all {who} labor and are heavy laden, and I will give you REST. 

Take MY yoke upon you, and learn of ME; for I am meek and lowly in heart: and ye shall find rest unto your souls. For my yoke [is] easy, and my burden is light.  Matthew 11:28

*Individual circumstances are unique. If you have serious financial issues, I suggest speaking to a financial counselor or tax advisor. 

Finance, Real Estate & Business Coach