How Can I Save When I’m Behind on Bills?

So, you realize you need to get your finances in order. You know you need to get your debt paid off and some money put away in savings. But how are you supposed to do that when you aren’t even current on your bills?

I’m going to share some great tips for getting current on your bills so that you can start your battle plan today!

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Battle Plan for Financial Freedom

CAM offers a two phase program. STEP is for people just starting out on their path to financial freedom and walks you through getting completely out of debt. Once you graduate from STEP, you will enroll in DFAS where you will build up savings, retirement and pay off your house. If you are interested in learning more about the program or would like CAM to walk with you on your journey contact us me at Charles@CAMFinancialCoach.com.

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“Look Ma! No Hands!” How to Temporarily Let Go of the Handlebars

With all of the holidays, it is easy to focus on just the season and giving and to forget about all other plans. I want to give you permission to put things on autopilot while you deal with the holidays. Yes, that is right: you can have an autopilot schedule for your finances during hectic times.

Does this sounds too good to be true? Who would say to have an autopilot for finances? When we think about the absurdity of this, it is a little hard to grasp. However, for most of us, having our finances on autopilot is how we handled our finances before we started taking control and being in charge of our finances with a budget. BUT just like riding a bike, you can, momentarily, strategically take your hands off the handlebars without crashing.

bicycling-1160860_1280While controlling your finances there will be times where everything just takes over and you may forget something. This is when you take another look at your monthly budget and adjust. Or maybe some things came up that weren’t really planned for, but you still have a sinking fund for, so there is no need for concern.

During the holidays there are always surprises, whether that be gifts under the tree or family and friends showing up or inviting you over to share in holiday cheer. The holidays are for spending time with family and friends and not the time to be stressing over every penny in the budget.

Now don’t jump out of one ditch and into another. This does not mean blow the budget! What it does mean is you are in control and have been doing great so allow the budget to work for you. Just like you do with the bike allow the momentum and wisdom you have learned over the past couple of weeks or months to give you the confidence you need to take your hands off and have a controlled moment of autopilot. And just like when you regrab the handle bars on your bike, there will most likely be a slight correction needed, so street-962796_1920prepare for that.

But don’t get too excited because, unfortunately, this cannot be for everyone. Just like with our children, I would not recommend to my two year old, who is new to a bike, to ride without hands. So, if you are new to a budget and still learning how to control your finances, don’t let go. You need to keep control of your finances through the holidays and maybe if your momentum slows just a bit, that is fine. The biggest thing is don’t lose momentum all together. And definitely don’t allow yourself to go backwards. All of those deals, stores handing out credit cards like candy, can be very tempting. Don’t fall for it. Keep your hands on the handle bars, keep your budget fresh on your mind, but know that a budget is a learning process.

 I really hope no matter where you are in your journey, that you realize that its not going to be easy. You will fall, you will scrape your knees, but the important thing is to get up, wipe it off, and keep pushing. Strategically place people around you that will keep you accountable, offering encouragement when you fall, and cheering you on when you make a win.

DW and I sat down with a family recently. We were helping them get ahold of their finances. Now, this couple was going through Financial Peace University and were sold into making a change.

The hardest decision to make is the decision to change.

We were just there to help them wrangle everything in, to offer support and accountability. We went through and put all of their information into a CAM Workbook for them. It was obvious through talking to them and presenting the information that change was needed and the question was just how much change were they going to commit to. We did a budget together. They did a budget multiple times before committing and signing to the change. Everything looked great. The first day on their budget one of them forget their lunch at home and some coworkers wanted to go to lunch. They fell off the bike and went to lunch. Later that evening they were going to buy groceries (and following the cash system they had pulled cash out so they could feel their spending) and the money was lost. This wasn’t just falling off, this felt like being pushed straight into a thorn bush and crashing off the bike.

Many people would have just quit here. They didn’t. They had fully and irrevocably bought into change. In fact, since our meeting they have made more progress than they had committed to on paper in our home that night. They didn’t let the nicks and scrapes or battle scars of a new decision keep them down.

And for those of you new to a budget I want you to use that story of perseverance to hold on through the holidays. For those readers not on a budget or wanting accountability partners please reach out to us. We are here to help and want to help everyone to be able to take your hands off the handle bars.

charlesheadshotCharles Moore is a veteran, rocket doctor, financial coach, and blogger. If you’ve decided its time for you to suit up and fight for your financial freedom, check out his website at www.CAMFinancialCoach.comwhere you can get information on the coaching process, package options, and an unbeatable library of knowledge on winning financial battles.

When Should I Talk to My Child about College?

When should we start talking about college to our children? Is Jr. High too soon? What should I say?

As parents we deliberately do many things when we care for our children: make sure they don’t touch the hot stove, teach them principles and values to live by, allow them to make mistakes that we carefully calculate the outcomes of to ensure they learn from but don’t get too hurt by. College planning and finances should be just as calculated decisions that parents and children make together. Unfortunately money and many areas surrounding money (such as the expense of higher education) are viewed almost as taboo and are whispered and not spoken of intentionally. Money is not taboo and money should not be an obstacle or challenge, it should be the enabler of all the things you wish to do.

Many families do discuss college but the reverse planning and discussions start later than they need to. Let us do some reverse planning.

College age: 18years old

Things that affect college:

  • Grades
  • Community Involvement
  • Money

Applications

Scholarships

Place of Study

Focus of Study

Looking at the things that directly affect the college decision we can now start reverse planning the decision and addressing some questions you might have.

When do grades start to affect college acceptance?

Many would say high school. However, can a child simply wake up and start getting good grades? Can a child go from a mediocre work ethic when it comes to school as an 8th grader to starting as a freshman in high school and have the discipline and consistency togirl-669823_1920 do homework and make the grades? Probably not. So this means we as parents need to start helping our children with these things prior to high school. We need to build the character and resolve for our children to know the right things to do and the discipline to do them even when they are in high school and all the distractions start to overwhelm and influence them.

Our oldest daughter is in the 6th grade and she understands that she has a college fund and will be going to college. She sees me pursuing another degree and the work ethic it takes to go to school, work, and be the best father for her. She is starting to ask questions about college and what to study and where to study. As a 6th grader she has the beginning discipline that it takes and understands that we sometimes have to postpone what feels good so we can do what is right. I saw this from her when she was in Taiwan with me. We were in taiwan while the rest of the family was in the US taking care of some legal and medical concerns. To keep up with the expectations of this strict, foreign school she had homework that many nights lasted until 8 or 9 pm. This also was working around my work schedule where she had to wake up around 5am. She was a trooper while it was just us two. She understood that there was a reason we were doing this and why the rest of the family was in the US. The only reason she understood this was because of intentional and well thought out communication that my wife and I talked about before sharing it with her. We as parents feel the need for intentionality with our children is one of the biggest callings we have on our lives.

Because we instilled these values and the knowledge about the future in her early to build a firm foundation, she will carry that all through Jr. High and be able to go into High School prepared to put in the work, thought, and effort to achieve the grades she needs to.

So, we recommend to start discussing college and the importance of good grades with your children just before they enter Jr. High. If you have a child around that age, just sit them down and ask them what they love doing, what they would love to do when they grown up (even if its several things), and then start talking about what steps they might need to take to get there. Talk about the importance of education, but more importantly, the importance of a good work ethic.

When should we discuss the costs of college with our children and make decisions on how it will be paid?

Money was discussed in another blog for this series and that planning for parents can be found here.  That blog tells you how much to save, where to find some great calculators, options for where to put that savings, and options for the different revenue sources the costs can come from (parents saving, child’s savings, scholarships, etc.).

You’ve already laid a good foundation down for your child when they entered Jr. High, so youth-393656_1920when they are about to enter High School, I recommend sitting them down and really showing them the costs that will be thrown at them immediately after they graduate.

College is expensive and thats not the only thing they have to pay for in the upcoming years. When they turn 16, they will want some sort of transportation (and you will probably want them to have it too), and whether they are paying all of it or you will be matching their contribution, thats a very large expense. This is a good spring board to teach them about saving in a sinking fund for an upcoming expense. They will be getting their first jobs usually as a freshman and they need to have a good plan for that money.

They also should understand that while scholarships and grants are an amazing way to take the cost of college down, they need to have good grades (or a lot of community service for some) to win those. BUT the more outside assistance they get, the less money they would have to put away now to help pay.

If your child is getting ready to enter high school or start their first job, sit down with them to look at some different in-state schools and the costs of those schools. Let them know how much of that (if any) you will be covering and come up with a reasonable amount for them to save in advance as well. Look briefly at some of the available scholarships and what the qualifications are for those, so that they have an idea of what they need to accomplish over the next 4 years. Remember, however much is not saved for in advance or covered by outside assistance will determine how much they will need to work through college to cover the remainder. Loans should NOT be an option. (Read my blog about the statistics of college loan debt)

When do we start planning where my child will go to college?

My recent trip to Boston had my daughter asking questions about not only my work but also Harvard. I intentionally sent her pictures of Cambridge and campus to spark questions. She may not understand what the school is but she does understand that there are choices in the decision of school and college and that she has a major decision in her future to make pertaining to what school she wants to go to. She is now asking to visit Cambridge and see what college students are like. She is starting to dream of possibilities and her future.

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Because the costs of colleges can be so different depending on where your child chooses to go (i.e. local community college, in-state university, out-of-state university, private university, etc.), the earlier you have this conversation, the better. Now, I’ve never met a young person that hasn’t changed their mind about something within 5 minutes of talking, so this choice doesn’t have to be set in stone, but its important to have goals and a plan. Most careers today don’t care at all where you went to school, just that you went and learned skills that you can apply in the real world (read an article by Time here). We recommend either going to a local community college for the first 2 years or attending all 4-years at an in-state public university to keep costs down. But whatever school your family decides on, get some pennants, mugs, shirts, etc. of that school and hang them up in your child’s bedroom. Keep that goal in front of them, so they can see it everyday and never forget why they are working so hard.

sunflower-834999_1920I hope I’ve answered some of your questions and concerns about when you should start talking to your children about higher education and just the future in general.The other parts of the reverse planning can be done simply by laying out the goals for each and timeline for those and then working backwards. If you feel like your child is already too far along, too old, or that you’ve missed your chance: you haven’t! There is no time like the present. More importantly then when you do it, is that you do it.

When it comes to our children, we will always have some kind of impact on their lives, but we only have a short while that they will be under our roofs and an even shorter amount of time that they will want to hear what we have to say. Over all, we want to preface those difficult years of raising teenagers and young adults as best we can with intentional teachings and intentional communication. College planning is one of those things. We start communicating college to our children young and as they get older we intentionally add more information and more opportunities for growth.

 The greatest thing is that these discussions will cause your child to dream about their future. That is what we as parents want and we don’t want them to ever lose that.

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Charles Moore is a veteran, rocket doctor, financial coach, and blogger. If you’ve decided its time for you to suit up and fight for your financial freedom, check out his website at www.CAMFinancialCoach.comwhere you can get information on the coaching process, package options, and an unbeatable library of knowledge on winning financial battles.

What You Need to Know About Saving for College

We are continuing in our College series. Last week we talked about having a plan for your higher education (you can read that here). My goal is to help just one person with the road to college, whether that is a parent or if that is a student, as long as they want to make a change and break the continual cycle of loans, debt, and free flow planning instead of intentional living.

This week we will start at the beginning of college planning which we feel is the financial planning or saving for college. Financial planning we put first because with this out of the way many obstacles and objections to college can be overcome.

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“I don’t have time (working three jobs to make ends meet).”

“It’s too expensive.”

“I don’t need to go to college; there are many successful people who haven’t.”

“College is a business and not about education anymore.”

These are just a few of the mindsets people have today about the possibility of higher education, but if you were to have college already taken care of financially, would your stance change?

As parents, we want nothing more than for them to have the opportunities we didn’t have so they can have the life we didn’t. Something my father always said was, “Listen and adult-education-572269_1920learn from my mistakes; there is no reason for you to make the same mistakes.” As I look back on this, I see how important and how much wisdom could have been gained if I would have grasped all of that phrase when he was saying it. With all of this being said, I want to make it clear that neither me or my wife had college paid for upon graduating high school. In fact, I went out of state to a college I was paying $10,000 per semester, all paid for with student loans. After one semester of partying and $10,000 in loans with no transferable grades to show for it, I moved back home to my dads and decided to go to work. I don’t want my children to continue this cycle.

As parents and, more importantly, as a team, my wife and I continually tell our children that they will go to college (even if they choose to serve in the military). Not because we think it is necessary for success, but because we believe that the knowledge gained, connections made, people met, and the real-world experience learned are all valuable tools for life. We, however, do feel that it is our responsibility to provide this financially for them and so we have started saving for all of their tuition costs. Many people have different feelings on whether it is their responsibility to provide this for their children and I do not believe any of us are necessarily right or wrong, but no matter what your belief is, one thing that is for certain is that we as parents must plan.

How Much to Save

block-1512119_1920To fully fund a college education at an in-state school, it currently costs approximately $40,000 in tuition. Now this is a 4-year degree at a state school completed in 4-years. We can lower this number with grants, scholarships, and financial aid, but for this let us use this as the base number. In order for parent(s) to fund this $40,000, we have to start now.

I will admit that my wife and I are behind on this. We also have 4 children (11,9,2,1) and will fund all of their college (plus we want more kids: YIKES!). Let’s figure out what my family will need to save assuming a 3% annual college inflation rate and a rate of return of 10%. To fund this starting at age 11, we have to save $300 per month at least, for the 9-year old it is $225, 2 it is $110 and we would need to save $100 per month for our 1-year old. Obviously the sooner we start the easier and lower the number. Also something to consider, if for a new born you were to put back $7,000 when they are born, you would have $40,000 at the age of 18.

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The reason I break these down is to show you how starting early can save you money. The $300 needed to fund our oldest daughter’s college, is as much as a car note. The $100 (lowest number) needed for my youngest is the same amount we were paying for my student loans that have been around for the past almost ten years. We have put a priority on our children’s education and even it is expensive, I want to provide this so that our children don’t start out their adult life with that insane student loan debt lingering over their heads when they graduate.

Check out this college savings calculator (or any of the many out there) to figure out how much you need to be saving for your children for college.

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Where to put the money

For college education, there are many options for college savings from government bonds (probably the most famous grandparent gift), taxable savings account, 529 college savings plans, and 529 pre-paid tuition plans.

What we recommend is to put the money first into a 529 college savings plan and to diversify and control the investment. Investment options with your 529 plan can include stock mutual funds, bond mutual funds, and money market funds, and even age-based portfolios that become more conservative as the child gets closer to leaving for college. 529 plans allow your money to grow tax-free (some states will still charge state tax) and to withdrawal without penalty as long as the money is going toward eligible college expenses (tuition, room and board, books, etc.). You can learn all about 529 plans in this article from the US Securities and Exchange Commission.

Things to Remember

income-tax-491626_1920Contributions to your child’s (or grandchild’s, niece’s, etc.) college saving plan count as a gift from you. You have an allowance of $14,000 per year for gifts (you can choose to pay up to 5-years worth at once as long as it wouldn’t exceed that allowance). Check with your accountant for tax implications.

You don’t have to be the only one saving for your child’s college. In lieu of big expensive gifts that will go unplayed with, you could ask friends and relatives to instead give children college contributions for birthdays or other holidays. Also, when your child is old enough to start earning his/her own money, a portion of that should be going toward their education.

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Charles Moore is a veteran, rocket doctor, financial coach, and blogger. If you’ve decided its time for you to suit up and fight for your financial freedom, check out his website at www.CAMFinancialCoach.comwhere you can get information on the coaching process, package options, and an unbeatable library of knowledge on winning financial battles.

3 Tips to Help You Budget Better

Budgeting, to families and people who have never done it, is a word that can cause anxiety, alarm, and even fights for couples.

But budgeting doesn’t have to be a dirty word.

A budget should be the most important part of your battle plan. It will free you and allow you to spend money on the things you need and want without guilt or shame. It will keep you on track to getting financial freedom.

Whether you’ve never created a budget before or you’ve been doing one your whole life, there’s always room for improvement. Through our journey for financial freedom my wife and I have found these three techniques have helped our budgeting process and also our communication.

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I occasionally provide links to excellent financial products that I personally endorse. If you do decide to purchase the item, I may receive a small commission on the sale. Do not feel obligated to purchase anything I link to.

3 Techniques to Help You Budget Better

1. Admit You Are the Problem

This may seem like a no brainer or a very simple technique but this is by far the hardest one to conquer. You have to recognize that you are the only reason you are in this mess and then decide that from this moment on there will be a change. Decide that you are in control of your money, and then start being intentional with your income.

 

I know that before my wife and I started budgeting monthly there was communication on bills and money, but the communication normally was “Hey, we need to watch our spending until payday.” Fortunately we were able to pay our bills and had money left over, but it always felt like we we were just treading water.

 

The first month we did a budget and saw all of our income on paper we truly did not know where it was all going. Why don’t we have more money in our pocket each month? Why are we always waiting for the next paycheck to arrive? These were just a couple of the questions we asked ourselves.

 

We had to recognize that we were the problem and figure out how to address it in our budgeting process. No one else was eating out for us, no one else was making weekly trips to the grocery stores using our money because they forgot to meal plan, and certainly no one else was drinking our Starbucks coffees. Once we got through the admitted that we were the reason for our problems and then set a realistic budget, we really did feel more in control and like we had the money to not only reach our goals but also to fight for complete financial freedom.

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2. Communicate Through Dreams

Whether this is with your spouse, with an accountability partner, or even just with yourself, communicating your dreams will give you goals and the motivation to continually try to reach them. As Chris Hogan, NY Times #1 Best Seller, says, “Dream in HD”. This will amplify your dreams and build them up. Let that thought of a secure and even lucrative retirement build and put more than just an age next to it. Amplify that dream with what your plans are during retirement. Amplify that dream with your numbers needed so you can make a plan a reality.

Dreaming with your spouse can be one of the best opportunities for communication. When my wife and I talk about our dreams, so much more than just the goal is discussed. When we are dreaming, we are planning and those plans aren’t just for us but for our family. Those dreams become our why, and our why becomes the motivation we need to get to the next step.

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3. Sticktuitiveness

This is a word that I heard almost 15 years ago and has stuck with me ever since. When budgeting we must have an ability to stick to it! That means accountability and the ability to tell yourself NO. Sticking to anything takes a decision and having a why – that is why this is tip three.

 

This is a long term concept. Having the sticktuitiveness to apply your budget and maintain the numbers through the month is not always easy. However by using tips 1-2,  it will be easier.

 

Just like when you are trying to create any other habit (or stop one), it takes a daily decision to do what you need to. When trying to get fit, you have to make up your mind every morning to go work out even when you don’t feel like it, or eat that salad instead of those cupcakes. That’s all willpower is, a decision. You don’t “have” direction-1015716_1920willpower”, you create it. In order to win your fight for financial freedom, you have to wake up tomorrow morning and decide that you are going to stick to your spending plan, that you aren’t going to impulse buy that new TV, or go out to eat just because you don’t feel like cooking. You have to decide when to say no because its not in the plan. You have to decide everyday that you made the best decision of your life by deciding to get financially free, trust that decision, and stick to your battle plan!

 

So there you have it. Whether you are just starting out budgeting or you have been doing it for years, these 3 tips will take your budgeting and mindset to the next level.

Charles Moore is a veteran, rocket doctor, financial coach, and blogger. If you’ve decided its time for you to suit up and fight for your financial freedom, check out his website at www.CAMFinancialCoach.com where you can get information on the coaching process, package options, and an unbeatable library of knowledge on winning financial battles.