A Game Plan for 2015

While I cannot predict the economic events ahead, without question your preparedness for the ups and down of uncertainty will play a major role in supporting your emotional and financial equilibrium throughout 2015. So, how about a game plan for the New Year? We are going to be sharing some practical ways through the year to help you build a solid financial foundation. Since it must start with the basics, let’s first look at three pillars that support solid financial health. Make it your goal this year to address these areas, if you haven’t already, and you will be amazed at the results when December rolls around!

Rein In Spending

Nothing can sidetrack quality of life more quickly than misguided spending decisions. I typically see two extremes: On one side are those guilt-ridden over every dollar spent. On the other side are those making mindless or impulsive spending decisions with little thought to the long-term impact. Both are detrimental to your well-being. Finding a balance between these extremes is the sweet spot for you and your family.

The simplest way to begin a reality check is to strictly use cash for all discretionary spending for at least three months. Somehow parting with hard-earned cash drives home the significance of decisions and quickly identifies leaks in your cash flow. I also suggest asking yourself a simple question when you are about to make a purchase, “Is this a need or a want?” It is surprising how often this pause will help you make a better decision. It’s not always fun, and yes, it takes discipline, but financial freedom has exponential rewards.

Finally, keep in mind that the more limited your time horizon is with a spending decision, the greater the likelihood of regret. Buyer’s remorse anyone? Keep an eye on the future when making spending decisions today.

Eliminate All Consumer Debt

The elimination of consumer debt can provide an immediate tangible “return on your investment”. The wisdom of Solomon reminds us that “the borrower is servant to the lender” (Prov. 22:7 KJV). The less you have in committed expenses, the greater your flexibility. There are, in certain instances, wise ways to use debt, but these uses should be sparingly applied. If you currently have credit card debt, begin a crusade to pay that off. To do this as quickly as possible you must:

1) Stop charging

2) Focus on paying off one card (the emotional rewards for paying one card off are huge)

3) Then apply the amount you were paying on your first card to the minimum owed on the next card. You will be amazed at how quickly this snowball effect will pay off your cards.

An excellent resource for tackling your credit card debt head on is Debt-Proof Living, How to Get out of Debt & Stay that Way, by Mary Hunt.

Build a Cash Reserve

Depending on your circumstances, start with three to six months’ living expenses. If you are a single parent, self-employed, or have variable income, double it! It is much easier to stay on track if you have a cash cushion in lean times. It is also a sound biblical principal to prepare for hard times. Again, quoting Solomon, “Go to the ant, O sluggard; observe her ways and be wise. Which having no chief, officer, or ruler, prepares her food in the summer and gathers her provision in the harvest.” (Prov. 6:6–8 NAS). Lean times are inevitable. If prepared, however, you are far less likely to suffer lasting consequences. And while you’re at it, why not set aside a specific amount each month for Christmas this year. This will do wonders for your December celebration.

Money can provide a lot of things but it cannot buy peace or contentment Wealth accumulation is not the goal, but rather an abundant life that glorifies God. It begins with good stewardship of everything you’ve been given. The truth is (again from our good friend, Solomon), “An undisciplined, self-willed life is puny; an obedient, God-willed life is spacious” (Proverbs 15:32, The Message).

So what’s your game plan?

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