After years of coaching people on personal financial management, it has been interesting to me that the most common solution people think they need to solve financial problems is to “make more money.” I really cringe when I hear people say, “I just wish I had more money,” or “I just want to give up because I’ll never make enough to get out of this mess.” Well, of course more money is always a good thing to seek. However, if you are using a flawed personal money management system (or worse yet, have no system at all) then making more money will not solve your financial troubles. In other words, with a flawed system or no system at all you will remain very inefficient with your money, and thereby minimize and sometimes eliminate, the benefits of making more money.
It has been my experience, after 30 years, that given a choice of only one or the other (making more money or having a system) the most important single financial practice is to have a complete financial management system that actually works. Yes, making more money is always an important pursuit, it’s just not as important as good money management. The combination of a good system and more money dramatically accelerates the rate of growth of your financial assets and your level of financial peace and contentment.
So what does an effective personal financial management system look like? Here’s what to look for:
- It must be comprehensive and holistic, meaning it needs to cover every aspect of finances including spending, borrowing, savings, and taxation.
- It must be seen as a planning system, not an accounting program.
- It is not a budget, which is restrictive, but a plan, which is spending based on priorities and values.
- It must be rewarding and easy to use.
- It must be contemporary and use up-to-date technology.
- It must be handy and available to use from anywhere.
- It must have information-sharing capabilities.
- It must be efficient.
- It must find more money from within the amount you already make that you can use.
- It must dramatically shorten the time it takes to get out of debt.
- It must help you ethically and legally reduce the amount of taxes you must pay.
- It must increase retirement savings.
- It must facilitate better communication in families (and especially with partners) about financial matters.
- It must improve credit ratings.
Specifically, and this is the most important requirement: it must be able to do all of these things, at the same time. This system, to be effective, must have the following four interdependent elements that work together cohesively called the Master Plan:
- A Spending Plan that allows you to have anything you want (that doesn’t mean everything, mind you, there’s a difference) while still remaining in control.
- A Debt Plan wherein the elimination of debt is accelerated.
- A Tax Plan wherein federal, state, and Social Security are legally and ethically minimized.
- A Savings/Retirement Plan wherein emergency savings, emotional savings (yes, there is such a thing as “emotional” savings that is absolutely vital if you are going to stay in control), and retirement savings are maximized.
Now here is the central point about solving financial concerns using this four-point system: To be financially much better off you need to do all four elements of the Master Plan at the same time! When you apply this concept, you will get your dollars to do more than one thing at a time, thus having more money each month, thus getting out of debt quicker, thus minimizing your tax burden, and thus having several hundred thousand dollars more for retirement! Money Mastery is the only program that teaches this system.
For more information about Money Mastery, contact me: Alan Williams, alan@moneymastery.com, (800) 292-1099, ext. 1.
