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This is part two - a continuation of Mindful Money Meditation.
Oh yeah, the old adage: "Money can't buy happiness." This is one you need to rip from the pages of your brains. It's a clear indicator of a negative money mindset. While it is true that money alone can't make anyone happy, neither can passion or purpose alone. One must purposefully find something to do, that they are passionate about, that can make you lots of money. Then balance that out with their faith, family, friend and plenty of good food. All fun aside though, that saying is dangerous to your psyche and imminent success. Money and happiness are identical twins—Two peas in a pod. You have to look long and hard to find the difference. Recognize that, unless you intend on being a monk, you need money here on earth. Passion and purpose don't pay bills. So while you should find your passion and pursue your purpose, make sure that they lead you to the money. The Bible tells us in Matthew 18:18, that whatsoever is forbidden/permitted on earth is also forbidden/permitted in heaven. So you are supposed to have money, lots of it! —It is your birthright—your birthright of prosperity. And while the old adage is catchy, it is a dangerous mentality to maintain; especially if you are looking for more out of life than just paying bills or being a monk. Personally, I can't see how struggling to pay one's bills, go on a fancy vacation, make ends meet or invest in one's self or future make anyone happy. But if money can't make you happy, your credit sure can! You see, most people don't have lots of real money. They have access to money by virtue of their credit. Pledge to become a money magnet as of today! Protect your credit. Don't be promiscuous with your credit cards running it through every machine or shopping site in sight. As hard as they are, they can make you really comfortable if you handle them with care. Get yourself a prepaid credit card, the kind with your name on it, and use it for website shopping. |
The Balancing Act
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Secondly, complete your personal financial statements comprising of a balance sheet, income statement, and cash flow statement.
- Balance Sheet - This is a clear picture of your financial situation at any point in time. It will reveal your net worth: your personal assets (everything you own), less your liabilities (everything you owe); known also as your personal equity (which could either be negative or positive). So, if you own a house, how much would it sell for in its current state; how much is the mortgage(s) balance on it. Do you have a car? How much is the loan amount and what is the current balance, how much could it sell for. Make a T-chart with the headings: ASSETS and LIABILITIES and start listing all of your assets and loans/debts. To determine the current market value of what you own (how much you would get if you were to sell them now), look on Craig's list for similar items (age and model) or get an estimate or an appraisal. On the other side of the chart, list all your debts and amounts owing (call your creditors and request a payout statement), on there you'll find all the information you need. Minus the "owe" total from the "own" total. That's your net worth.
Sample personal balance sheet - google image |
- Income Statement - This is also known as a budget sheet. It reveals all your income, expenses, and net income over a period of time, usually a month. Your expense amounts are different from your debt amounts. Expenses are what you pay out as monthly bills. Debt amounts are your total amount owing to each creditor. Create a 3 column chart like the one below. In the first column, just below your name and date of the statement, write the word INCOME and list all sources of your income including net earnings, part-time wages, business income, rental income, tax credits, tips, dividends, and bonuses. Below that, write EXPENSES and list all your expenses for the period; including rent/mortgage, utilities, insurance, auto payment, groceries, other regular bill payments, and obligations. Below that, write NET INCOME. In the second column, write the monthly amounts of each item. In the third column the total income, expenses and net income. The purpose of this statement is to show your bottom line and to adjust your income or expenses for major purchases or lifestyle changes as needed.
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- Cash Flow Statement - This is similar to the income statement but reveals actual cash in and cash out for a period. So let's say you budgeted $300 for Groceries every month but after adding up all the grocery receipts from actual supermarkets, drugstore, and Dollar store, you find that you actually spend $450. This is a true manifestation of your cash flow. It is a great way to monitor your spending and see if you are on the right path to wealth and whether or not you have enough money for emergencies. Such as how much money is currently in your bank account and/or on-hand and how much is budgeted to go out. It is the best measurement for tracking miscellaneous spending and to ensure that you are staying on track, as per you income statement above. You could be making lots of money, but if you are always overspending you still won't have enough to pay your bills at the end of the month. So, use this statement to curb habitual spending. The best way to control this is to limit the use of plastic and pay with paper. You will also cut down on those extra fees that drain you like a leaky faucet. The goal is to consistently spend less than you earn.
Income/Expense Calculator
To figure out monthly rate, calculate your Base pay or expense using these formulas:
- Hourly rate X hours worked* X 4.33 (Example: $10 X 40 X 4.33 = $1,732/month)
- Weekly pay X 4.33 (Example: $400 X 4.33 = $1,732/month)
- Bi-weekly pay rate (every two weeks) X 2.16 (Example: $800 X 2.166 = $1,732.80/month)
- Semi-monthly pay (twice a month) X 2 (Example: $866 X 2 = $1,732/month)
Alternatively, divide the final amounts respectively. I.e 1,732.80/2.166 = 800.
*Hours worked is defined as the number of regular hours listed on the pay stub (OT is not included when calculating base pay) (Source: roadloan.com)
Building A Better Financial Relationship
Once you have laid all your cards on the table and balanced your money, it's time to start building a better relationship with it. Gather the statements and reflect on them during your meditation to get more clarity and direction on where your money is going or coming from. While money in and of itself can't buy you happiness, it can meet your earthly needs if you learn to balance it properly. When your needs are met, it's darn hard not to be happy—at least most of the time.
So balance your books and stay out of the deficit. Find ways to improve your bottom line or duplicate it so that you always have a surplus without sacrificing good morals and your freedom. Ask yourself what are some habits you need to change in order to meet your financial goals? How can you change your poor spending habits? What financial goals (short-term and long-term) are unmet and why? Also, make a habit of checking your credit report at least once per year. This ensures there are no erroneous filing, fraud or identity theft going on.
Maintaining your personal financial statements is very important if you want to get ahead in life. It will help you organize your life and manage your money much better. Knowing where you stand financially is the best knowledge you'll ever have of yourself. Learn to develop a great relationship with your money and your credit. Treating them as if they are the enemies is poor judgment and seriously misguided and could ruin your prosperity.
I challenge you to maintain a healthy financial relationship with your money. Pledge to become more fiscally responsible. Review your statements at least once per month, meditate about them, and update them often so that you can manifest the money and lifestyle you desire. Part 3 to follow: Keys For Changing Reckless Spending Habits And Saving More
I challenge you to maintain a healthy financial relationship with your money. Pledge to become more fiscally responsible. Review your statements at least once per month, meditate about them, and update them often so that you can manifest the money and lifestyle you desire. Part 3 to follow: Keys For Changing Reckless Spending Habits And Saving More
Until Next time,
Be Blessed. Be Bold. Be Strong. Be You!
-AggieStrong
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Andrene Gregory is a life coach at Aggie Strong Ultimate Life Coaching Services. You can follow her on Instagram, Twitter, Google+, and LinkedIn for more tidbits of information and learn more about her.
She provides one-to-one coaching and group workshops to adults seeking to improve their life skills, lifestyle and leadership capabilities for greater confidence and work-life balance.
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