How much does it cost to keep you alive?
How much does it cost to keep you alive?
In this blog post, I will share with you the importance of knowing what your monthly needs are and how much they cost. To know what you want (use ideas from dreams list) and to know what envelope to feed first. I do this step by explaining how I was watching TV one day and there was someone talking about the envelope system (I think it might be Dave Ramsey) but I'm not sure but this is the system that I've used and created over the years to get where I am today. I will share with you the story of how this system got me through the 08 economic crash in Branson with two little kids. I will also share with you the three steps that you can take to take back control of your finances.
They are:
1. Monthly Nugget
2. Dream List
3. What is the order of importance
The outcome is to KNOW your monthly needs, get clear on what you want and how much it costs, and open an account to get things started. The outcome of this is to get crystal clear on what gets filled up first every time. Knowing your monthly nugget of expenses alone, and taking care of them first every month, can set you free, and place you firmly on the road to financial security.
What if you could actually check off all the boxes on your dream list and make them happen? With the system I'm about to teach you, it has literally saved my life. I can't even imagine how I would have gotten through raising two kids alone with some of the circumstances I've experienced without it. And I'm so excited to share it with you because I KNOW that it works.
One day, I was watching TV. And I was surfing through channels and I saw this guy talking about this envelope system. I think I watched maybe 10-15 minutes of it, I didn't watch much. But what I saw there made sense to me and so I started the envelope system. I now believe that maybe that gentleman's name is Dave Ramsey, because people have told me "Oh, that's Dave Ramsey's program". And I'm like, "I don't know. I just saw something while passing by." So I have no idea if this is Dave Ramsey's program or not. But this is my program I put together after seeing that 15 min segment and have used for years. And if it was Dave, Dave, I thank you. Because it's amazing.
The first thing to understand about your finances is to know what your monthly needs are. In other words, if you were to lose your job tomorrow, what are your needs to survive? It's your shelter, food, water, gas, phone, electricity, and things like that. I write them on envelopes, and then I number the envelopes in order. I put my rent or my mortgage first, and then food, and then everything else after that in the order that is of importance to you. After that, I include my wish list, and so I usually have a total of about 30 envelopes going at all times.
I have envelopes for clothes, the vet and for the dentist and for the doctor. For fun, and for gas for the car. And for vacations. If you have a car or cars you will need maintenance or insurance as well. Put everything on your list that is important to you, you want to have an envelope for it, you want to put it in the order of importance. Needs first and then your wants. Right after my needs, the first envelope is always vacation, and travel, because it's my favorite thing to do. I would rather not buy new clothes than travel. So put your wants in the order of importance as well.
Then what you do is you load up the envelope with the amount that is needed. So if your mortgage is $2,000 a month and you get paid bi weekly, then you would need to put $1,000 in the envelope each pay period. That way by the end of the month, you can pay your mortgage. If your gas is $200 a month and you get paid weekly, then you would put $50 in a week so that at the end of the month you would have the $200 that you need. And as long as you do that, when it comes time to pay the bill, you simply just go to the envelope, pull out the money and pay it. It's amazing. You always pay your needs first, and then your wants after in the order you desire.
So if you want to put more energy into one thing, you can put more money in that specific envelope. Or you can spread it out evenly amongst your dream list. The bottom line is, the envelopes grow. Literally, for years I used actual cash and envelopes, and it’s worked for me. I love my envelopes. I don't carry them all around in my purse. I always keep my savings in the bank and things like that. But, I usually have three envelopes in my purse and they are food, fun and gas, because those are the things that I would use out and about.
One of the hardest times of my life was in Branson Missouri. Otherwise known as Misery. I arrived with the boys after my divorce, as I had a new job in sales there. Three weeks later, a guy in a suit walked in and shut down the job that I had moved from Mexico to have. The guy that hired me, stole money from me and because I was Canadian and didn't have credit in the States, I had to pay three months rent upfront. I was tapped out. It was brutal! After my first lease ran out, I ended up moving in with a couple single guys, in order for all of us to be able to survive in those months after the big crash in 2008. January rolled in and January in Branson you can roll a bowling ball through Main Street and not hit anything. My job was determined by tourism, most jobs in Branson were. So three months after moving there I was unemployed and had to go on unemployment. It wasn't enough to feed the kids and pay the rent and everything. So I applied for food stamps, and they were such a blessing. Thankfully, I didn't have to be on them long. It was extremely tough times, but I had my envelope system. Once I got off food stamps and I was working, not making a ton of money, but was able to cover my needs, I would put $10 in the envelope every week for vacation. Sure enough, after a period of months, I looked at my envelope, and I had enough money to take the kids somewhere nearby. We drove, but we were able to get a hotel for a few nights. We actually went to meet up with the family in Frenchlick, Missouri. We had this beautiful week together. We cooked our own food, and created our own fun! If someone was looking at me and my situation at that time, It would not have made sense, that I was able to have a vacation, with the amount of money that I was making. Nobody helped me, I paid my way for the boys and I to have that vacation, how, because I put my $10 away every week.
This is how I have built 5 homes, seen 56 countries and shown my kids over 20 countries, and much more. This is not to impress you but to impress upon you that this system works.
How you can learn from me…
1. Monthly Nugget
The importance of this step is to figure out what your monthly needs are and how much they cost.
I do this step by explaining how I was watching TV one day and learned about a cool envelope system that I choose to implement for myself.
To start…
A. "What are your monthly expenses to stay alive per month?"
Now I want you to breathe deep into the lungs. Make sure it’s through your nose, hold for 5 seconds and exhale through your mouth making the sound “ahhhhhhhhhhhhhhh”. Exhale for as long as you can to release any stale air. After at least three deep breaths, ask your higher self, "Source in you, the question, "What are my monthly expenses to stay alive per month?" Write down everything that comes to mind. I call this your monthly nugget number. If you aren’t used to knowing, because someone else in your home does the finances, I encourage you to do this with them. It is important that both people know where the money is going and what the needs of the family are. For me understanding this helped me realize that it wasn’t actually that much. My needs to survive were minimal. That gave me peace of mind. Maybe your needs will be higher than you think they are. Either way, knowing this is the important part. "What are your monthly expenses to stay alive per month?" This will take 10-20 min to complete.
B: Check if anything will be changing in the upcoming future so that you can start saving for that now.
For this second step, I want you to ask your higher self, “Will anything be changing in the upcoming future so that I can start saving for that now.” Add whatever that may be to your monthly nugget number. For instance, if you are paying 1000 for rent now, but you know that you are moving and your rent will be 1200 then add the extra 200 to your monthly nugget number. “Will anything be changing in the upcoming future, so that you can start saving for that now.?” This will take 2-3 min to complete.
C: " How much per pay period do you need to put away in order to have what you need by the end of the month?"
Now for this third step, I want you to ask your higher self this question, " How much per pay period do I need to put away in order to have what I need by the end of the month?" If you are paid, once a month, the number above is the same as here. If you are paid bi- weekly you will divide your monthly need number by 2 to get the answer. If you are paid weekly then you will divide the monthly needs nugget by 4 for example. I was paid weekly so I knew how much I needed to put away weekly to have what I needed, safe and sound. "How much per pay period do you need to put away in order to have what you need by the end of the month?" This will take 2-3 min to complete.
The outcome of this step is to KNOW your monthly needs are.
2. Wish List
The importance of this step is to know what you want ( use ideas from dreams list).
I do this step by sharing about how I write down on envelopes what I want and how much it costs in the corner. Set up a Dream List Account.
Here’s what you want to do…
A. What are the things or experiences you want?
Now I want you to breathe deep into the lungs. Make sure it’s through your nose, hold for 5 seconds and exhale through your mouth making the sound “ahhhhhhhhhhhhhhh”. Exhale for as long as you can to release any stale air. After at least three deep breaths, ask your higher self, ''Source in you'', the question, ''What is the order of your needs in the most important to least important order
For this step I want you to go back to your monthly needs nugget list and ask yourself, “What is the order of my needs from the most important to least important in order?” Write a number beside each one. I would rewrite the list so that it stays in order more clearly. I always put my savings away firs,t with 10% of every dollar that comes, then my rent or mortgage second, then food, then electric, gas, phone, gasoline for car etc. You place your list in the order that is important to you. This will take 3-5 min to complete.
B. How much do they cost?
For this second step, take a look at that list and ask yourself, “What is the amount needed to make each item or experience a reality?” Write down the amount next to each one. If you need to research the amount, then do that now if possible. If you can’t now then schedule a time right now on your phone to do that. I knew that if I met up with my family it would take a few hundred dollars to chip in and share the cost of a house for 5-7 days. We would cook, so my food bill wouldn’t have to change. I would just need a little extra for fun stuff. So in 7 months at 10 bucks a week I was able to save enough to have a great time with my kids on vacation. Easy. “What is the amount needed to make each item or experience a reality?”
C. Set Up a Dream List Account
For the third step I want you to open a separate bank account called Dream List Account. This is so you can put money away every pay period towards your dreams. Having the account separate allows you to see it grow and also keeps you from spending it on anything other than your Dreams. I have had a dream account for years and it’s so fun to see it grow and then actually make those dreams happen! Isn’t this what life is about? What’s the point of working so hard if you can’t have some fun!!! You have to make it happen though, otherwise life takes over and you will miss out on all those things you could have experienced or purchased to add value and fun to your life. So open a Dream List Account right now. If you can’t this minute then schedule a time right now to go do that. This will take the time it takes to open a bank account.
The outcome of this step is to get clear on what you want and how much it costs and open an account to get things started.
3. What is the order of importance
The importance of this step is to know what envelope to feed first.
I do this step by sharing how I got through living in Branson with two little kids.
Here’s how you do it…
A. What is the order of your needs in the most important to least important order
For this step I want you to go back to your monthly needs nugget list and ask yourself, “What is the order of my needs from the most important to least important in order?” Write a number beside each one. I would rewrite the list so that it stays in order more clearly. I always put my savings away firs,t with 10% of every dollar that comes, then my rent or mortgage second, then food, then electric, gas, phone, gasoline for car etc. You place your list in the order that is important to you. This will take 3-5 min to complete.
B. What is the order of your Dream List from most important to least important
Now go back to your dream list, and ask yourself, “What is the order of my Dream List from most important to least important?” Write down a number beside each one and then rewrite that list neatly to see the order clearly. For me the first on my dream list is always travel, then more travel usually, with the occasional purchase in there. But mostly I live to see the world. What lights you up and gets you excited? Is it a new house, car, romantic vacation to Italy? “What is the order of your Dream List from most important to least important?” This will take 3-5 min to complete.
C. Feed your envelopes or accounts in this order.
For this third step, Join your Dream list to the bottom of your needs list and renumber your dreams list accordingly so that you have your Needs numbered first with your dreams list numbers after. Here is an example:
Savings- 10% of every dollar
Mortgage/rent -$1000 per month -$250 per week
Food -$600 per month - $150 per week
Gasoline- $400 per month -$100 per week
Electric - 400 per month - $100 per week
Gas for water heater -$100 per month -$25 per week
Phones X 2 -$200 per month -$50 per week
Internet -$110per month -27.50 per week
Life Insurance
Health Insurance
Doctor
Vet
Clothes etc.
Now Dream List begins
Vacation to Italy -$5000
New Car- $30,000
New Kitchen floors -$20,000
Bathroom remodel -$10,000
Gym equipment -$1000
Take kids to Disney-$3000
etc.
Get clear on the order and then write them out that way clearly. Have fun with it! Don’t get overwhelmed, stay excited! Keep breathing as you do this. Tell yourself, “Step by step is how it’s done Baby!” This is the order in which you will pay the items. Needs first always. Then your choice of dreams after. Without exception. Needs first. Always!
D: Fill Each Envelope in order of importance.
For this fourth step, as money comes in, pay your needs first. I actually used physical envelopes with cash in them for over 15 years. Now I use one account named Monthly Expenses. I put all of the monthly needed money in there, except that I use cash for my food, fun and gas money. I do that because it’s too easy to spend more than I have if the whole monthly nugget is in one place. For the regular bills that are more fixed I use the bank account with a debit card. For Food, fun and gasoline I use cash. This keeps me on track. If I want to do something fun, I look in my fun envelope and if I have the money, and it’s worth it to me to go, then I use it. If I don’t have the money, I don’t. Simple. Easy. If you ever borrow from another envelope, think twice, because you have to pay that back before you do anything else. Stick to the system, it works if you work it. If you start constantly borrowing from other envelopes you will lose track and then you are no longer in control of your money, which means you are out of control. I use a program called YNAB, which stands for. You Need A Budget. It is amazing and helps you keep all of your little expenses and categories straight and clear. This is where you can have the clothes, vet, Doctor, shoes, etc categories. It can connect straight to your bank so that you can see where the money has gone and if you have money in that category to spend or not. I highly recommend it. You are here to get your shit together no? So let's do this thing! Let's take back control of your money and therefore your life.
The outcome of this is to get crystal clear on what gets filled up first every time.
When you follow and implement these steps you will KNOW exactly how much it costs to keep you alive. You will know the importance of knowing what your monthly needs are and how much they cost per pay period. You will also know what you want and what envelopes to feed first. You will have the same system I have used for years clearly laid out for you and how I was able to go on vacation was I was hardly making any money during the ‘08 economic crash in Branson MO with two little kids. You will have the three steps that you can take, to take back control of your finances.
They are:
1. Know Your Monthly Nugget
2. Dream List
3. What is the order of importance?
The outcome is to KNOW what your monthly needs are, what you want and how much it costs, and open an account to get things started. You will also be crystal clear on what gets filled up first, every time. Knowing your monthly nugget of expenses alone, and taking care of them first every month, can set you free, and place you firmly on the road to financial security!
Your Action Steps: Are to implement the steps above, and come back and let us know what your results are!
READ the whole story http://www.getyourshittogether.life