Financial Freedom: Attacking Deficits

(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances.  For other posts in this series, click here: Financial Freedom. — ABT)

By Phil Oliver

Financial patterns are established over time through both experiences and family practice.  Sometimes these patterns turn into family spending habits that lead to some type of financial deficit.  So, these patterns must be considered and addressed if true change will be accomplished.

It all begins with a spending plan and knowing exactly how much money you have coming IN and how much going OUT–where it actually goes by week-month-year.  Once you know your patterns and habits, you can then decide where YOU want it to go by week-month-year. If you don’t know how much you have and where your money is going, you’ll never be able to make any new choices about it.

Remember, borrowing from others (even family) CANNOT be part of your plan!!!  ATMs CANNOT be part of your plan!!

Debit cards and cash cards can continue to cause you to overspend if not part of your agreed plan.  Practice spending cash—it hurts more than swiping plastic!    (As explained in previous blogs, you might want to implement a cash envelope system in your household spending plan.)

Also, it is vital that all members of the household participate in MUTUAL, agreed sacrifice to attack and deficit. This is where EVERYONE in the household is required to participate (age appropriately) in the monthly FLOW process decisions both for family spending and PERSONAL spending.  This brings the buy in and commitment that is critical into growing future SUCCESS!  The financial deficit should give opportunity for conversations of changes that could be attempted and new goals to be discussed and decided on. These mutual, self-determined changes become the basis for ACTION STEPS that can be tried, discussed, revised, and then fully practiced.

When this is in place, THREE WAYS to address the deficit can begin:

1.Save (by spending less) – This is not just putting money in savings to have for emergencies, but looking at ways to save money and cut back on what you’re already buying by becoming a smarter shopper and intentional spender.

Some universal saving strategies are:  competitive shopping using coupons, sales, buying in bulk, buying generic (the products are always satisfaction guaranteed so you can try it to see if you like it and want to substitute it regularly……..if not, take it back and try another.)

Here are some websites to give practical ideas you could use in your household financial discussions.   Some will not apply to your household, but some will.    Part of the discussion and financial education is deciding what will work the best for your household at this time.

2. Sell Something – Yep….collect those things you no longer need or haven’t used for awhile and have a Garage Sale or list it on an electronic forum. Here are the most popular and most used:

There are also MANY emerging apps for your smart phone that will allow you easy, quick ways to “click and post”  Some even specialize in certain type of merchandise.

Here are a few:

  • Letgo
  • Neerbuy
  • Mercari

3.Work More – I know that many of you readers are finding it increasingly hard to just maintain your current standard of living, and many are already working several jobs to just make ends meet, especially with wages continuing to stagnate.   That being said, I highly recommend that if you do seek more employment, to set up an account with the Texas Workforce Commission.   The account is free and once you set it up, you can modify and adjust any of your job seeking choices at any time.  There are many local and national employers who extensively use this service to help them find employees.

Another great possibility is to find a product or service you really enjoy, get familiar with it so that you become an expert on it then look for sources to buy and sell it.    I have worked with people who were able to supplement their income by buying and selling golf clubs, baby items, sports equipment, or anything else that they already knew about because they used them personally during the week.

It really doesn’t matter what your (legal) choice is because once you know a product or service thoroughly, you know the prevailing cost or charges and can then buy it cheap and sell it for a quick profit.    You can even use some of those same selling sites to find customers.

Finally, As you look to adjust your finances to match your INs and OUTs, be aware that you can’t do it alone.   Enlist and engage your entire household in the process, and then bring in others that have shown financial stability and wisdom over time that you know in your family, fellowship or favorite civic organization.

I have found in my many years of financial coaching that healthy finances tend to flow from healthy relationships.    I believe the approach I have presented here will help you make sure that you are investing in your relationships while you are attacking your deficit. The biggest product will be to grow mutual financial freedom now, and the tools to continue the legacy in your family’s future.

If you have further questions, please feel free to e-mail me directly:  [email protected]

Phil OliverPhil Oliver is a retired educator.   He is an independent Financial Coach, active mentor, and community activist.   He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system.  He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending.  He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances.  You can contact him at:  [email protected]









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