“Yes, I know the way to financial security is to get out of debt, and save money, but when will someone finally show me exactly HOW to do it all?”
This is the complaint I hear very often from many of my clients who come to me looking for help. They realize that proper spending, borrowing and saving are the way to get in financial control, and they have most of the pieces of their financial puzzle in hand, but sadly they don’t know how to put them together in an integrated way that makes sense.
What most financial gurus give people are bits and pieces of a larger puzzle that when placed on the “table of life” make absolutely no sense because there’s been no instruction on how to properly sort through the pieces, how to assess exactly what those pieces mean, and how they must fit together in a logical and orderly fashion.
I have also noticed that authors of financial books and programs are very skilled at telling people they need to get out of debt so they can invest in the stock market, for instance, but they don’t show people how. They spend much of their time on subject matter that has little relevance for the average consumer, giving advice about how to play complex financial games on the stock market, for instance, before helping people understand exactly how to control their spending, or pay down debt.
It is not enough then, to know that you need to make sense of the financial pieces you hold in your hand. Until you are shown how to make sense of them, those pieces will not fit together. You must have a systematic way to integrate spending, borrowing, saving, and taxation (a piece of the puzzle no one else will address in relation to the other three, but which has a powerful effect on all areas of personal finance) so you can get in COMPLETE control now and stay that way, forever.
An abundance of time, money, and resources are not just for the slick financial wheelers and dealers on Wall Street. Anybody can learn the secrets of true money mastery if they will apply principle-based financial management.
The Secret to Making the Pieces Fit
Getting out of a pattern of knowing what you should do and actually doing it, requires that you understand how to make sense of the “Four Big Financial Puzzle Pieces” (as I like to call spending, borrowing, taxation, and savings) before you begin trying to fit them together. When you understand what to do with each of these four pieces, then it becomes much easier to get them to work together as one integrated whole.
The “Spending Piece”
Most people think that the rich ar
e wealthy because they make a lot of money. Actually they are wealthy because they have learned to deal with the emotions behind money so they can make the most of that which they already have. Dealing with your emotions is best done by adopting a systematic approach to spending and applying unique tracking tools by which you can determine what’s going to be left over after you have spent money each month. The Money Mastery principle of tracking I teach my clients helps them find money they are wasting (an average of $312 per month) and reveals their true spending priorities. This in turn helps them make different choices about the way they will spend money going forward, and helps them find money they can apply toward paying off debt without requiring any additional money out of pocket.
The “Borrowing” Piece
Life-long debt is not normal, despite what Americans have been taught. And contrary to popular belief, mortgage debt is not a good tax write-off. If you are living in a mortgaged home, this is not a money-making asset — it’s a liability because it’s costing you money. Getting out of all “bad” debt like this is how the rich get richer and it can be done in nine years or less by applying the Money Mastery principles of spending control and debt power down. When bad debt is paid off quickly, it opens so many new doors – doors leading towards increased self esteem, increased cash flow, increased retirement savings, and increased long-term financial security. When individuals labor under credit card debt, consumer loans, and 30-year mortgages, they miss the opportunity to put their money to work for them to make compound interest. Under this debt load, they end up paying three times as much as they borrow and miss the chance to pay that compound interest to themselves. The Money Mastery Principles help people eliminate that debt, while at the same time keeping their spending under control so they don’t get in further debt.
The “Taxation Piece”
Taxes comprise the largest expense for Americans exceeding what they pay for housing, transport
ation, food, and clothing combined! But few understand what an important piece of the financial puzzle taxation is, and how it controls and affects all the other pieces. Without reducing their tax burden, the extra money people find when they control their spending and pay down debt is eaten away by excessive taxation. The Money Mastery Principles help educate you about what the law actually requires of tax payers, and helps you to see that you are paying far more in taxes than even Uncle Sam requires, simply due to your own ignorance. These principles motivate you to learn the rules about taxation and how to reduce it so you can put saved tax money to work for you to make more money.
The “Savings” Piece
Saving money seems unfathomable when debt is looming, a mortgage must be paid, and taxes are due. But what if at least 1 percent of net income is being wasted due to poor spending habits? The Money Mastery Principles teach you how to systematically “find” that wasted money and invest it in you own future, taking better advantage of compounding interest, even while you are paying off debt. Those who have mastered their money always pay themselves first by saving money every month, not only for their future, but for their immediate emotional wants and needs as well. Knowing how to spend money so that you can actually have it at a future date, and also for current needs and wants as well, is a powerful concept that can double — even triple — retirement savings.
The principles and tools that will help you make sense of each of these four puzzle pieces are within reach through the Money Mastery® system of personal financial management. Contact me for more information, alan@moneymastery.com.
