At this time of year, after the holiday and before the end of the year, you may reflect back and look forward to the New Year fast approaching. I felt that this article, one of my most-read classics from three years ago, was perfect for today. Even if you have read it before, it may be worth another read. It may be helpful as you gather your own thoughts on your life.
“Enough is enough!” Have you ever said that to yourself?
You absolutely decided you were going to make a positive change in your life. Immediately and with conviction, you started taking action. Was it in a relationship? Chasing your dream? Managing your money?
That was the challenge for me recently: money management. I’d taken classes, read books, and managed to get myself out of my college loan and business failure debt on very little income. I read Secrets of the Millionaire Mind and The Richest Man in Babylon.
Then, somewhere along the line, I got lazy in my money management. I kept fooling myself by thinking, “When I start earning more, then I’ll start saving more. Then I’ll put more away for retirement.” LOL! What a fool I was. “Then” might be a decision, but it isn’t a commitment.
As an entrepreneur with fluctuating income, I’m never quite sure how I’ll end up until the end of the year. One concept that has helped me is tracking my net worth each month on a simple spreadsheet. The record makes it easy to see if you’re making progress or losing ground. Income doesn’t really matter. As I learned from Patricia Fripp: “It doesn’t matter how much you make, only how much you keep.” There are many people — at every income level — who are broke.
When I was looking at the results of my money management decisions, I realized that although I was paying my monthly mortgage, I wasn’t really making any progress on my net worth. When I moved to Las Vegas more than five years ago, I was carrying a business credit card debt averaging $40,000. I decided many times that I had to do something about that.
Well, if you have to make the same decision more than once, you aren’t really committed! I’d pay it down and then make some other risky money management decisions that would put me right back at that $40,000 balance. Ouch!
What I wasn’t doing was living beneath my means. It’s a common problem. In December of last year, I went back to the intensive training of Millionaire Mind and made some breakthroughs. And this time, I committed to making progress.
I decided to use creativity and accountability. I told close friends from my church about my commitment and asked for help. My pastor, Vince, noticed that I ate out a lot and routinely bought my favorite Dunkin’ Donuts coffee. He pointed out that making coffee at home costs 11¢ per cup.
Well, I wasn’t perfect, but I started making some better decisions and transferred some non-interest-bearing savings to an IRA. Just the act of acting, I believe, helped me gain momentum. Little things add up on both the positive and negative balance sheet. When you look at the compound effect, it can be scary.
I also started tuning in to the Suzy Orman show and listening to a Dave Ramsey interview where I gained a new insight. Dave mentioned that tithing (giving 10% back to God) is not enough. He said that he sees it as God’s allowing him a certain amount of money to handle, meaning that it’s all God’s money. Hmm . . . Interesting.
I thought of my favorite parable of the three talents, which makes the point that people who take care of things will be given more, while those who don’t care for what they have will see it taken away. What I surmised from this was, why should I get more if I can’t even handle what I have? I wasn’t living beneath my means, but more like exactly at my means, according to my spreadsheet. Yikes!
That motivated me. I asked God for help. I did daily affirmations. That helped me make better decisions. I took half of all my income and immediately put it towards that credit card debt. That momentum and watching the progress on my spreadsheet got me really excited. Last week, while speaking in India, I was able to transfer the final payment! My first milestone in my money management goal: business credit card — zero balance. Accomplished.
Sometimes it’s easy to look at others and think, “They’re making it.” They’re earning enough to quickly pay anything off. Judging others is easy, but all that matters is looking at the results of your decisions.
I heard about a conference recently where that had to cut off registrations because they couldn’t afford more attendees. When they did the numbers, they realized the cost of food and activities for each person was more than they were charging! To hold the conference, they had to get more sponsors. Sound crazy? From an outsider’s perspective, it is. In a way, that was exactly what I was doing. When I looked back at what I was paying in interest on that $40,000 over the past five and a half years, I realized that it cost me at least $42,541.60. Yikes! That’s a year’s salary to some people. That was my cost of deciding without committing.
“Then” doesn’t happen. Each decision in the “Now” matters. We all have challenges and know we have to do something. Small decisions can be built upon to gain momentum. All of your decisions become results, good or bad. Track your results. I’ll bet there’s an app to track anything. If you get a Starbucks coffee for $3.50 every day, that’s $1,277.50 for the year! Enjoy a cup of home-brewed coffee for 11 cents. That’ll cut your expenses down to $40.15 over a year.
The compound effect of small decisions adds up. I’m applying my momentum on my personal card now — my next milestone. What’s your next milestone? Want to get motivated? Just figure out what your non-commitment is costing you!
Share your thoughts below!
Awesome facts about money management !
Darren everyone should study this topic before they graduate height school!
Fantastic article. Really enjoyed it. Thank you for revealing so much about your situation, it has inspired me to earn more and save more so I can make my dreams come true. Fabulous article.
My next actions are to make the sales calls I always put off! Alan
I’m proud of you. I need to “decide” and commit. I too have a big balance on my AMEX. God has been good to me and given me a lot of business lately. May is a record month. I will commit and pay off my debt in 2013. What a feeling it will be to be debt free. I’m close. I will let you know once it is here.
A friend doesn’t have a very good job and said he wants to move out of his mother’s house(free rent!),and get his own aprtment,and invite friends over….I’m glad he asked…because you do stupid stuff when you don’t have someone to talk to!
Well,I was humorous, by pretending to be Suze Orman,doing her show, while saying No!…and pointing out what needs to be looked at and focused on NOW.
Scraping by myself,I may rent him a part of my apartment/complex priviledges.
Now that’s using our noggins.
Thanks Darren,you ROCK!
Your money message resonates with what I have been advising people (when asked) on so many levels it’s incredible. Live within your means. Save part of all you earn. Examine all the things you buy for convenience sake and see if there are less expensive alternatives that work just as well. Your Starbucks example speaks volumes!
Your sharing of your situation, if it reaches only one person, and that person makes a decision to do things differently and follows through with it, makes it a rousing success. Good for you!!
Managing money so it doesn’t manage me. Tithing is important for me as well as my church. These two statements are interlinked to me. For me, my church is important; as is my money management. Thanks for the reminder.
I have my accounts with Fidelity. Their “Full View” function (and I know other companies offer similar) allows you to reflect the balances of all of your electronically-accessible accounts in one place – asset/brokerage/bank/life insurance accounts and various debt accounts (mortgage, credit card(s) – and tallies your net worth. Once the accounts are entered, the balances update automatically or with a click of a button. With it, I can easily see assets, liabilities & net worth at any time. Maybe the asset numbers aren’t going up (if the stock market isn’t cooperating) but the net worth number is because of progress paying down debt, and so forth. It has been very motivating and gratifying.
Poignant, touching and exactly what I needed to hear. Thanks 🙂
Congrats on changing yourself, which is one of, if not the absolute, hardest thing to do. I love Suze Orman also. I doubt if I will go to this year’s Toastmaster International convention, even though it is in nearby Cincinnati. For one, it costs $ 600. And for two, I can picture Suze Orman saying, “Oh you are so Denied, it isn’t even funny”. Ouch!
Consider for yourself reading the book “The Richest Man In Babylon”.
I get my coffee free at work, and it costs me about fifteen cents on the days off.
Where there’s a will there is a way. I would encourage you to follow Dave Ramsey’s beans and rice to be able to afford the International Convention as it’s only 100 miles away from you. There’s more to attending International than the price – there is a pride of being an Area Governor in the District where the Conference is being held and supporting the District. It’s ridiculous if District 40 is not the District with the most attendance of any District in the world. You can help make that happen. Hope to see you there!
Carol Kormelink – Division F-abulous Membership Motivators.
Personal experiences always reach us; excellent article, which I have forwarded to some others who will appreciate it!
Dave Ramsey would be so proud of you!!! I love that you have made a wonderful teaching from your own learning. What you learned is what everyone needs to embrace and follow. Good job. My favorite scripture is Malachi 3:10 . . .” Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it!.” God blesses good stewardship of what He provides for us.
Good for you Darren.
If you think Suze Orman is good, you NEED to check out Mr. Money Mustache.
He advocates early retirment through badassity.
And by retirement he doesn’t mean heading to Florida to golf every day, but doing the things you love when you want. He retired at 37 in non-extraordinary circumstances.
Since following his lead, we have been able to cut hundreds of our our monthly expenses which we had previously thought untouchable.
I don’t recommend just anyone. This guy is overflowing with common sense and is hilarious to boot.
Hi Darren! Everyday I find one more quality to admire about you.
My motivating factor for the tithe and other money I give away (besides scripture) was reading about
Robert Gilmour LeTourneau (November 30, 1888 – June 1, 1969), born in Richford, Vermont, and a prolific inventor of earthmoving machinery. When he didn’t have any money, he began tithing. As the Lord blessed him, he increased his tithe in thankfulness. The wealthier he became, the more he tithed. Way back in the sixties when I read his story in a Sunday School Paper, he was a multi-millionaire and had grown to tithing 87% of his income. Wow! If your heart is in the right place, you can’t out give God! I also love Suze Orman and swear by Dave Ramsey that living debt-free within one’s income is the only way to live.
Hi Darren, Another fabulous article. I teach this to my reps all the time, and I remind myself not to eat alot. Being single is expensive, I can do better at eating at home, all ready have. I more than pay my bills off every month. I use Quick books to keep track of my money, For bus and I treat my personal finances as I would a business as well. Hope this helps a few people, I am sure it will.
Wish I could travel around with you and get paid well… thanks to you sharing. My bucket list is getting longer and longer… LOL
Happy May, Kim 🙂
It is all very well for you to cut out your $3.50 coffee per day and replace it with your 11c cup from home, but what about the cafe or restaurant that now does not have your regular visit? Money is made to go round. What about having a couple of cafe coffees each week? All things in moderation!
When I was 23 and three weeks into my first ever job an “Investment Manager” told me a scenario of two people one who started to save $100 per month at age 23 then stopped at 33 and another who started to save $100 per month at age 33. He then asked me when will the second person’s investments catch up with the first person? Answer: Never. (as long as the rate of return is greater than 3.5% which is almost always)
That got me investing with my first pay check and NEVER spending more on my credit card than I could pay off at the end of the month..
My wife and I quit smoking. Cold turkey. Savings: $300 per month. We only have a little debt and that extra money will pay it off quickly. It’s a great feeling!
Cool article. I’ve learned from experience that you can’t out-give God. When I commit to tithing over and above the 10%, and give lavishly (whether it’s to the church, to ministries or to others in need) God rewards me in amazing ways. Sometimes it’s financial, and sometimes it’s not. But make no mistake…He delights in delighting us, especially in the area of finance. You learned a great truth about how to care for your money. Way to go! Read Malachi 3:10
Maureen. Thank you for sharing! I too have learned the lesson about tithing. Recently I began attending church again and spending more time with God. Once I started tithing I have seen blessing come my way more and more and I KNOW that it is a direct result of my obedience to God that He has blessed me financial and in many other ways.
i enjoyed ur meeting and following ur advice in the internet
Thank you Darren, for an excellent educational about money management. I love your transparency.
Everything you write is true. I know what scripture says, and practice tithing, and God shows me Favor! I saw others struggling so I researched money management for a TM speech. One of my reference books is The Millionaire Next Door, by Thomas J. Stanley,Ph.D. and William D. Danko, Ph.D. I’m going to dust off my speech and update it with your excellent advice (appropriate credit to you), and present it again–people need help in this area! And, some of us who are blessed and understand about tithing can teach this Biblical principle, as well as, managing our money to pay down our debt AND save for the future! It all works together for the good… (smile).
First of all I want to say great blog! I had a quick question which I’d like to ask if you don’t mind.
I was interested to know how you center yourself and clear
your thoughts before writing. I have had difficulty clearing my mind in getting my thoughts out.
I do enjoy writing however it just seems like the first 10 to 15 minutes are
lost just trying to figure out how to begin. Any recommendations
or tips? Many thanks!