I Didn’t Get a Raise. Now What?

no raiseIt’s that time of year again…annual reviews, raises, bonuses, etc. What happens when the increase you were expecting wasn’t as much as you thought it was going to be or maybe it didn’t come at all? You become responsible for giving yourself a raise! Say what?! Yep, you read it correctly. You’re now responsible for giving yourself a raise.

Here’s how: Spend less + Saving more = INCREASE!

No-brainer right? But seriously, that’s exactly how you’ll end up with more…by spending less. It may not be what you want to hear, but it’s what you’ll need to get you through this season. If you’re doing a budget regularly, which you should be, you will know where all of your money is going. If you’re not doing a budget, you need to start doing one, pronto! Now, take a good look at all of the businesses you’ve helped fund over the last year (you won’t be able to do this without completing your budget *hint, hint*). Whether you spent money on personal grooming, eating out, entertainment, electronics, etc…are funding those businesses more important than taking care of your “home” business? I guarantee you that if you call any one of their corporate offices and let them know that you’ve been a faithful customer, they will not write you a check to pay off your debt or to help pay any of your bills. They’ll simply say thank you, and find another way to get you back into their store. You have to think about your purchases differently. They aren’t just transactions, you’re helping someone worth millions increase their bank account while watching your own decline. The question I have for you is, is it worth it? That restaurant doesn’t need your money, you do. That new pair of shoes isn’t going to increase your savings account, it’s robbing it. What are you going to do about it? For the basic necessities that you have to fulfill like going the grocery store, gas station, buying basic clothing,etc., monitor sales, use coupons, and shop around.Whatever you have to do to reduce your spending.

It’s a new year, and it’s time for a new you. I don’t buy into the whole new year’s resolution thing, I’m merely suggesting a lifestyle change. You can only control that which is under your control, and that’s you. Whether you get a raise or not, you’re responsible for maximizing the dollars that you do have. Spend them wisely. Invest them wisely. Most importantly, take care of home first. So, who will be first on your “I’m sorry, but I’m temporarily out of cash list?” Tell them you’ll be back once you get out of debt, but in the meantime you have your own household business to take care of. Let’s start the new year off right. Taking care of you should be your first priority!

Change requires action!

Live free!

Arianne

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Making Dollars out of Sense

dollars and senseSome of you may not have grown up in a household where you saw your mom or dad doing a budget, saving may not have been a priority, tithing and investing may have been unheard of, and that’s OK. You don’t know, what you don’t know; but that doesn’t mean that you have to stay in the dark. Growing up, I was always familiar with saving, I started investing in 401(k) not long after I graduated, I didn’t really use credit cards, and I thought I had a pretty good sense about money. However, I was overwhelmed with student loans, car payments and repairs, medical bills, and trying to meet basic needs. I wasn’t doing a budget, barely had any money in savings, and I was struggling. Once I  finally got tired of being in the position I was in, I started praying for a way out. My relief came through reading and research.

I started studying the lives of millionaires. After all, they were much better off than I was financially, so there had to be something that I was missing. The books that I read are as follows:

  • The Millionaire Next Door
  • The Five Lessons a Millionaire Taught Me for Women
  • The Top 10 Distinctions Between Millionaires and the Middle Class
  • Rich Toward God
  • Secrets of the Millionaire Mind
  • The Total Money Makeover

I recognized that I needed additional knowledge and wisdom to move me beyond where I was, so I committed myself to doing so. The thing is, they all had some of the same basic principles outlined:

  • Spend less than you make
  • Save
  • Give
  • Invest
  • Manage your money regularly/budget

It’s not that it was rocket science, but I was lacking knowledge in those areas. Once I gained the knowledge that I needed, and actually started putting the principles into action, I saw results. My point is, don’t let a lack of knowledge keep you from succeeding financially. There are so many resources available that will help move you beyond where you are. I always recommend doing cross-references to check for inconsistencies. All advice isn’t good advice, so be cautious about using “free” resources that could cost you in the long run. Do your homework and find a method that will work best for you and your particular situation. In order to change your actions, you must first change your mind. In order to change your mind, you must gain knowledge in the area where you want to see change. So get to it! Freedom awaits!

Change requires action!

Live free!

Arianne

The 80/20 Rule of Financial Freedom

The Pareto Principle, also known as the 80/20 rule, states that roughly 80% of effects come from 20% of the causes. You may have heard this term used in the business world to some effect that 20% of the people do 80% of the work, or 20% of sales come from 80% of the customers, etc. The actual numbers may turn out to be a little less or a little more, but you get the picture. Well, I want to show you how to apply that same principle to your finances. We want 20% of our income to do 80% of the work for us as we head towards financial freedom. The formula that I use is as follows:

10% tithe + 5% 401(k) + 5% savings = 20% (the remaining 80% is used for day-to-day operating expenses)

(To calculate your percentage, simply add the total dollars that you’ve contributed to each of those categories over the last month, divide it by your gross monthly income, and multiply that number by 100).

If you remember the S.I.N.G method, the above breakdown actually takes care of 75% of the process, which is pretty close to 80%! My tithe qualifies as Giving, the 401(k) contribution qualifies as Investing, and the direct savings takes care of…you guessed it,  the Savings. The strategy here is to have money accumulating for you as you continue to pay down your debts. That way you’ll already have a head start when you’re able to really focus on increasing your net worth. 

Now, I have heard other sources say that you should stop contributing to your 401(k) or stop giving/tithing until you’re out of debt, but that’s not the route that I’ve chosen (mind you, I’ve had a positive net worth for over a year now in spite of a mortgage and paying down school loans). However, you may find that my method isn’t right for you at this time, and that’s OK. I’m just sharing the practices that have helped me thus far.

No matter which road you decide to take, just pick one and get moving. The point is, you have to start somewhere. The sooner you start, the quicker you’ll reach your goals. Once you reach the first goal, keep the momentum going until you get to the next one, and the next one, and so on. You can do it! Your financial freedom awaits!

Change requires action!

Live free!

Arianne