Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. (1 Tim. 6:17-18)

Tuesday, September 25, 2012

Hate The Player, Not The Game

Photo courtesy of PT Money
I Hate Money!

I recently heard a former Financial Peace University student make the statement, "I hate money." I know this person struggles with both the income and the outgo sides of the money equation.

Unfortunately, this former student doesn't truly understand the money game. They have some faulty "money scripts" running in their subconscious mind. They don't have a complete understanding of the game and how to play it. They're blaming the game when they should be blaming the player.

It would be better if this particular person looked in the mirror and determined that the money game isn't the true issue. The player doesn't understand how the game is played! They need to become a student of the game.

Become A Student Of The Game

If you don't want to struggle your whole life with money problems, then you need to get in there and figure out the money game. You need to get counsel from people who get it. You need to attend seminars of wealthy people who teach it well.

You should read books on how to make it, manage it, and spend it. Some books I highly recommend are:
There are some great blogs on personal finances that I recommend reading. The following is a short list of blogs I follow on a regular basis:
If you want to become good at anything, then you have to study and learn that subject. In today's avalanche of information, there's really no excuse for any of us to be ignorant regarding sound, financial wisdom. Read these books, follow these blogs, and I guarantee that in a matter of a few months you will be further head than your next door neighbor or your broke golfing buddy. Knowledge truly is power.

Now, Play The Game!

Having a bunch of head knowledge is great, but just having the knowledge is not going to win the money game. You have to pull the trigger. You must take action.

So, what I recommend is to take the money game one step at a time, one day at a time. Sometimes, we can increase our head knowledge to the point where we are so overly enthusiastic that we have so many great ideas or plans, but we end up paralyzed by too many ideas.

We need to slow down, make a prioritized list of the top 3-5 steps we can currently take to get our financial life in order. So, if my finances were in a complete mess and I was just starting from the very beginning, my top 5 steps in my first financial plan might look like this:
  1. Determine the basic, important numbers. What is my income? What is my current outgo (budget/cashflow)? Does my outgo exceed my income, and by how much?
  2. Create a reasonable cashflow plan. If my outgo is the primary issue, what can I do, at least temporarily, to reign in my expenses? Are there expenses/bills that I can eliminate without creating too much pain in my life?
  3. Focus on the income. Wealthy people focus on bringing home the bacon. How can you temporarily as well as long-term bring home more income? 
  4. Set-up a baby emergency fund of at least $1,000. This is straight out of the FPU plan. Emergency savings help keep you out of long-term debt.
  5. Work your debt snowball. List all personal debts (except 1st mortgages) from smallest to largest and attack that debt with a vengeance. Pay it off as quickly as possible.
Focus on just accomplishing a few, smaller set of financial goals as fast as possible. Once you finish that set of goals, then create a new short list and attack that new list. Don't get to overly involved with a complicated, long-term financial plan. You don't want to overwhelm yourself, because then you will fail.

Educate the player, and then get out there and play the money game with excellence!

Also, check out these related posts:

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