how to jumpstart your financial success2

7/23/2019 How to JumpStart Your Financial Success2

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JUMP START YOUR FINANCIAL SUCCESS

2 | www.RichSinnersPoorSaints.com

© 2014 by Vincent Duncombe. All rights reserved.

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Cover design using Piktochart

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OUR GOAL

70% of all consumers live paycheck to paycheck;

meaning they run out of money before their next

paycheck.

The average family would have to use a credit card

to pay a $1,000 unexpected expense.

If you follow the simple steps in this guide you will havesuccessfully positioned yourself in the top 30% of all

consumers. No more living from paycheck to paycheck …

and no more using credit cards to pay emergency expenses.

This is your personal finance jumpstart!

BEGINNER’S TIP

About 90% of all personal finance advice is the same.

Why? Because it is PROVEN! This is good news for you. If

you stick to the plan you are going to succeed. Even if you

get off track, regroup and refocus. Keep moving in the

right direction and you will be amazed at how far you get.





1MAKE A COMMITMENT

The first thing you need to do is to commit to the process.

Decide right now that you are going to get your finances inorder and start winning with money.

I have decided that from this day forward I will

begin my journey to financial success.

I will not take out additional debt as an easysolution to my money problems.

I pledge that I will limit any further student loans

to only what is necessary and return/save excess

amounts for the next semester/repayment.





2GATHER FINANCIAL PAPERWORK

ORDER A CREDIT REPORT

Federal legislation requires the three large credit bureausprovide you 1 free report per year. So every 4 months

download a credit report from a different bureau. This

allows you to check your report throughout the year and

spot any issues. Visit www.annualcreditreport.com

I have downloaded my free credit report.

LIST ALL FIXED MONTHLY PAYMENTS

Fixed monthly payments are made once per month and

have a predetermined (fixed) cost that remains the same

from month to month. Fill out the Fixed Monthly

Payments Table (exclude debt payments).

https://www.annualcreditreport.com/

https://www.annualcreditreport.com/





FIXED MONTHLY PAYMENTS COST

Rent/Mortgage

Electricity

Heating

Water, Sewage and Garbage

Car Insurance

Renter’s / Home Owner’s Insurance

Cable

Home and/or Cell Phone

Internet

Totals $

I have listed my fixed monthly payments.





LIST ALL YOUR DEBTS

Anything that has a minimum payment per month is a

debt (exclude mortgage). Include the name, total amount

left to pay (BAL) and the minimum required payment each

month (MIN). Check credit report for additional accounts.

NAME OF DEBT BAL MIN

Car Loan

Student Loan

Credit Card 1

Credit Card 2

Medical Debt

401(k) Loan

Payday Loan

Totals $ $

I have listed all my debts.





3REDUCE FINANCIAL OBLIGATIONS

Take a look at your Fixed Monthly Payment table [Ch.2]. Ask

yourself, “Is there anything that I can live without orreduce?” Below are common problem areas.

1. Is Car Payment below 10-15% of take home pay.

2. Is Rent/Mortgage below 25-35% of take home pay.

3. Close any Credit Card that charge annual fees.

4.

Downsize/Discontinue any Cable TV Plan.

Write down a list of reductions you plan to make below.





TAKE ACTION

Look at your list of reductions. Do what you can today to

put those reductions into practice. Make a commitment to

reduce your lifestyle and stick to it.

Putting a check in this box is difficult but I guarantee you

it will make the rest of your steps that much easier.

I have made or begun to take the necessary stepsto reduce the financial obligations listed above.





4OPEN A FREE CHECKING

ACCOUNT

To automate your financial success you need to have a

checking account. It will save you time, money, and is

safer. Best of all you can open a checking account for free.

To open checking accounts you:

1.

Must be18 years of age or older.2. Have a Social Security Number

3. Have a Home Address

4. Have an Email

5. Have an Opening Deposit (varies)

6. Co-Applicant Info (If applying for a joint account)

Notice that this must be a free checking account. Do not sign

up for a checking account that has annual fees!





If you want a free checking account check with local credit

unions in your area or online banks. They may require a

direct deposit to be setup in order to qualify for a free

account.

Here are some things you should know:

1. Avoid accounts with minimum monthly balance

fees.

2.

Checking should come with a zero fraud liability

credit/debit card.

3. The checking account should be free; no yearly or

monthly fees.

I have opened my Free Checking Account.





5SETUP DIRECT DEPOSIT

Direct Deposit will be used to automatically deposits

income from your employer directly into your bankaccount. Not all employers can pay through direct deposit.

However, having this will save you time and pave the way

for further automation of your financial plan.

You will need:

1. Your Bank Name

2. Bank Routing Number

3. Your Account Number

All of this information is located on your bank check.

Many employers request a voided check for setup.

I have setup Direct Deposit through my employer.





6INSURANCE COVERAGE

Accidents and disasters can and do happen, and if you aren’t

adequately insured, it could leave you in financial ruin. Youneed insurance to protect your life, your ability to earn income,

and to keep a roof over your head.

financialplan.about.com

The following are the insurance types you absolutely need:

- Homeowner’s / Renter’s Insurance

- Health Insurance

- Term Life Insurance [If you have dependents]

- Car Insurance [If you own an car]

I have the insurance I need.





7CREATE A SPENDING PLAN

Budgets are tedious. Some people experts say you don’t

have to worry about budgets you can just do estimates andthen automate. WRONG!

BUT I ALREADY KNOW WHERE MY MONEY IS GOING!

The common thought is, “I already know where my money

is going. Let me squash this myth. Take this 30 day

challenge to setup a proper spending plan.

At the end of this month you will have enough

information to accurately plan your financial future. No

more guessing games!

You can use the information you already uncovered. [Ch.2]

E.g. Debt Payments = Debt Table [Ch.2] total ‘MIN’ column.





DAY 1: CREATE ESTIMATE SPENDING PLAN

Total Income Month Year

Salary $3,333 $40,000

Expense Type Month Percent

Tithe $333 10%

Food $466 14%

Rent

$766 23%

Utilities $266 8%

Clothing $166 5%

Transportation $333 10%

Debt Payments $333 10%

Savings $166 5%

Medical $166 5%

Personal/Rec/Ins/Other $166 5%

Investments $166 5%Total Expenses $3,327

If there is not enough money, these are your top priority!






Salary


Tithe

Food

Rent

Utilities

Clothing

Transportation

Debt Payments

Savings

Medical

Personal/Rec/Ins/Other

Investments

Total Expenses

I have completed my Estimate Spending Plan.





DAY 1 – 30: TRACK EVERY PAYMENT/EXPENSE

Don’t worry this is easier than it sounds. Here are some

tips. Get receipts for everything you purchase or pay.

Everyday track your expenses.

If you are tech savvy there are free electronic applications

that will track your spending for you, like www.Mint.com.

ot : It is okay if you go over what you recorded in your

estimated saving plan. You are just learning what really

goes on in your wallet. We will make adjustments later.

Expense Type Place/Date Amount

Food Subway 9/17/14 $7.35

http://www.mint.com/









Total Expenses

I have tracked one month of expenses.





DAY 30: CREATE A (REALISTIC) SPENDING PLAN

Revise your Estimated Spending Plan based on the

information you gained from tracking. Here are some tips:

1. Increase or decrease Expense Types that were not

realistic.

2. Look for areas to cut back on. What could I do

without?

Begin long term planning based on your findings.

1. Can you begin saving an emergency fund?

2. Does your income cover all of the expense types

listed?

If your current income cannot cover all of the expense

types listed chances are you have too little income or too

much debt. Here is some advice for getting more income

now.

1.

Find a Need: People have needs and they are willing to pay for help. Can you walk a dog, cut a

lawn, wash cars, tutor a student or baby sit? Then

you can make more money. Keep it simple.





2. Find a Convenience: There are also people who

are willing to pay for a convenience. Can you

make grocery runs for an elderly person, type

papers for college students or braid children’s

hair? Then you can make more money. Again …

keep it simple.

If too much debt is your problem, it is likely you will need

to sell some of your toys, cars and tools to reduce or rid

yourself of some of these payments.

Rework your Spending Plan on the next page.






Salary


Tithe

Food

Rent

Utilities

Clothing

Transportation

Debt Payments

Savings

Medical

Personal/Rec/Ins/Other

Investments

Total Expenses

I have completed my Realistic Spending Plan.





8THE BANK ACCOUNT BUFFER

Let’s face it, we are human. That means that from time to

time you will go over your budget. So instead of thisoverage causing a crisis … why not plan for it!

Creating a buffer in your bank account is very simple. Now

that you have completed your Realistic Spending Plan you

know that you have money set-aside for savings. Simply

leave your savings money in your account until you havebuilt up your buffer.

A good buffer should be at minimum $100 - $200. Once

you have this amount hanging around in your account at

the end of the month you can place a check mark in the

box.

I have a $100 or more bank account buffer.





9THE EMERGENCY ACCOUNT

Financial emergencies crop up when you least expect them.

A good financial plan ensures that you are prepared.Having an emergency account will give you the peace of

mind you need to handle unexpected events.

AUTOMATE YOUR EMERGENCY ACCOUNT FUNDING

1. Open a separate bank account for your emergency

fund.

2. Setup an automated monthly transfer from your

checking account [Ch.4] into your newly created

emergency fund account.

3. Transfer an amount equal to the amount

budgeted for Savings on your Realistic Spending

Plan (Assuming your Bank Account Buffer is

complete).





4. Continue this automated transfer until you have a

Basic Emergency Account of $1,000.

A Fully Funded Emergency Account is your next goal. This would be an amount equal to 3 Months Fixed Expenses +

3 Months Minimum Payment on Debt. You can get both

of these amounts from your tables in chapter 2.

The Fully Funded Emergency Account is important but

not as important as beginning to reduce debt. You can

make a decision on how much you want to continue

contributing to your emergency account versus how much

of this you want to dedicate to paying down existing debts.

I have a $1,000 Basic Emergency Account.

I have a Fully Funded Emergency Account (You

can move on without having this box checked but

make sure that you come back to this step).





10BEGIN REDUCING DEBT

In order to succeed with money you need to regain control

of your income. Monthly payments rob you of yourfreedom to give and grow financially. Here is how you

tackle this beast.

THE DEBT SNOWBALL

The debt snowball method works by paying off the debt

with the smallest balance first. I recommend this one

because it is the fastest track to seeing progress. Seeing

progress will keep you motivated throughout your debt-free

journey.

1. List all of your debt in order of the total amount

owed. Start with the smallest balance up to the

largest balance. Use Debt table from chapter 2.





DEBT BAL MIN

Totals $ $

2. Continue paying the minimum balance on all

your debt.

3.

Use any extra money budgeted for Debt Paymentsand Savings categories and pay that amount to the

debt at the top of your list (lowest balance).





4. Once you have completely paid the lowest balance

debt repeat steps 2 and 3 until debt free.

DEBT SNOWBALL EXAMPLE

DEBT BAL MIN

Credit Card 1 $327.32 $20.00

Credit Card 2 $521.11 $15.00

Student Loan $28,321.78 $215.00

Assume the above debt. Your total minimum payments =

$250. In our example from chapter 7, I budgeted $333 for

Debt Payments and $166 for Savings. Assuming my BasicEmergency Fund is complete I have a total of $499 I can

use for debt.

1. Make the monthly payments on all debt.

a. $499 - $250 = $249 remaining.

2.

Pay the entire $249 to Credit Card 1 (lowest

balance).

3. Continue until Credit Card 1 is paid off.





4. Make the monthly payments on all debt.

a. $499 - $230 = $269 remaining

5.

Pay the entire $269 to Credit Card 2 (second

lowest balance).

Notice that the amount remaining increases between steps

1 and 4. This is why it is called a snowball. This ensures

that you see constant progress, keeps you encouraged and

focused.

I have filled out my Debt Snowball table.

I have made my first Debt Snowball payments.





11CONGRATULATIONS!

If you have check marks in all of the boxes outlined in this

guide you are now in a better financial position than 70%of consumers!

If you want to take your financial plan to the next level

here are some other things that you can begin thinking

about.

CREATE A WILL

- Important if you have children

- Important once you start having assets

KEEP FINANCIAL DOCUMENTS SAFE

- One safe place for all important documents.

- Let a trusted person know where these documents

are in case of an emergency.





AUTOMATE REOCURRING BILL PAYMENTS

Never be late for another payment. You can either use your

debit card from your checking account with your utility or

bill accounts and the utility companies can automatically

withdraw from your checking account when your bill is

due.

You may also use Online Bill Pay through your bank. This

puts you in control and you can specify how much you want to send to pay bills instead of companies accessing

your account.

BEGIN RETIREMENT PLANNING

Begin investigating what your retirement needs are and

start saving towards them.

CHILDREN’S EDUCATION FUNDING

Have a plan for assisting your children’s education.




ABOUT THE AUTHOR

Vincent Duncombe is a Christian Stewardship writer and

speaker. His goal is to rekindle the passion of true

stewardship first in his own life and to spread it to others;

with one purpose, to win persons for Christ and hasten

His soon return. He lives in Berrien Springs, Michigan

with his wife, Kemmoree, and two daughters Maya and

Hannah.

To receive his free newsletter on how to increase your

affluence, influence and purpose in life, along with other

exclusive content like this eBook go to

richsinnerspoorsaints.com/download.

CONNECT

Email: [email protected]

Website: richsinnerspoorsaints.com

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