Communication before Marriage

One of the most important things to do prior to marriage is to seek pre-martial counseling. Find a good counselor or pastor and sit down and find out about your future spouse. Building strong lines of communication before you get married is essential to a good marriage and a strong financial future.

Money fights are one of the leading causes of divorce in America today, so make sure that you can agree on your spending and savings goals before you tie the knot.

Combining Income

Do not combine your income before you getting married. Once you say “I do!”, then it is time to combine your finances. Starting out your marriage with a spending plan and a budget to reach your goals will get your marriage off to a strong start. Do you need to pay off debt, student loans or the wedding reception? Set a budget and stick with it. Doing so will also help you save for a home and your future.

Agree on Your Goals

In order to be able to focus your energy and your financial management to reach your goals, you first need to know where you are going and why you want to get there. Sit down together and dream about your financial future. Do you want to own a home, send your future kids to college or retire early and travel? All of these things are within reach if you set goals early, learn to save and have the power of compound interest and time on your side. To calculate your goals with compound interest click here.

Gerken Financial Coaching Can Help

We have a pre-marital coaching package that can help you and your fiancée get on the same page with your finances. We can help you to set goals, to create a plan for eliminating debt, and to save for your future purchases. Most of all we can walk you through the process of learning to talk about money.

Whether you seek help from a professional to learn to communicate effectively with money or you work on communication with your partner, in order to be pointed in the right direction you must be in agreement on where, how and why you are spending and saving money for your future.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community through classes and speaking in the greater Seattle area. Their coaching services are uniquely tailored to each client.

Create Your Budget

The cash flow plan or budget is the best way to change your circumstances for the better. By knowing exactly what is coming as income and telling your money where to go during the month, you decide where your income goes by spending on paper, first, before you begin each month. Do this without the outside pressure from creditors or marketing experts using commercials. Make a situation for yourself where you are in control of the spending and you can set your own spending priorities.

Prioritizing Your Budget

Your cash flow plan should have savings at the top. If you don’t save money, there isn’t anyone else out there that will do it for you. Your next priorities are food, shelter, utilities, basic transportation and basic clothing. Having these necessities covered in your plan will allow you to work through your debt from a position of strength. With your basic necessities covered, you can prioritize paying off of your debts. List them from smallest amount owed to the largest amount owed and then pay the minimum payments for all of them. If you have any extra money, apply it to the smallest debt to pay it off the fastest. With the smallest paid off you can take its payment and any other extra income that you can make and apply it to the next debt payment.

Get Up and Look For a Better Life

You are in control of your life. Married couples must talk together about your hopes, dreams and goals for your family. Getting on a plan and paying off debt is a means to those goals. But you have to know WHY you are sacrificing your life-style and living differently than the rest of society. You have to know where you are pointed and have a plan to make your dreams a reality.

The best way to have a great outlook and future in your money management is to create it

By having a budget, prioritizing your spending and working a debt payment plan to accomplish your goals and dreams you will change your circumstances to fit your life, without living a life of circumstances dragging you down. Get off your couch, turn off your television and take control of your life and get pointed in the right direction today.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area by teaching classes and speaking for groups as well as coaching.

Is Your Money Management Plan Working?

In the lasts several years our national economy has made it obviously easy to tell if we are living with a money plan that can withstand the ups and downs of a weak economy. If you have been able to sail smoothly through theses turbulent waters, then you probably have a money management plan that works well. If you have had to resort to credit cards and stress while the economy is rocky, you may want to consider changing your plan.

Emergency Fund is The Key to Peace

Having an emergency fund will help relieve the stress of unexpected events. Everyone should have an emergency savings. Even though these events seem unexpected, we know that it is only a matter of time before one will occur in our lives. In the 7 steps to financial health, we recommend a starting fund of $1,000. This is large enough to cover most emergencies, but small enough that you have some urgency to make it larger. Paying off debts is the next step. The emergency fund will help you to keep from incurring more debt while you are working your way to clean up debt that you already have.

Debt Elimination Takes Change!

The habits to change are those that started with your unstable financial plan.  That plan, which may have been no plan at all, is the first thing you will need to break. This is a group effort. It will not work unless every adult in your home is willing to change. That change should start with you! Whether your spending is the main problem or not, you can lead by example. You can work with your spouse to establish a budget and live on less than you make. Save for emergencies and pay off your debt. This is a huge step in relieving your stress over money and fights over money. It is the first step to put you into the “Stable” side of the nation.

Budgeting Works!

Telling every dollar where it is going to go during the month, before the month begins, is the key to getting ahead and paying off debt. controlling your money instead of it controlling you will lead you to get pointed in the right direction for financial stability. Stick with your budget corner stones first, before you pay any debts, so that you can stay in a strong position to fight your way through the time it takes to become debt free. You can do it. Stay strong, keep motivated and be successful!

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

No Cost Tips

If you are trying to get out of debt and stay on your budget, talk to your spouse first. Decide together if you will be exchanging gifts this year. You could rename your gifting to pay down a debt instead. If this is not an option consider a few of these:

• Get out for a walk or drive to see the sunset.
• Have a picnic dinner – at your house in the living room. (Don’t forget the music)
• Make some “gift certificates” for some of the chores on her list.
• Go downtown and “window shop” together

Low Cost Tips

• Splurge a little at the grocery store and cook a “nice” meal.
• Purchase “budget” flowers like carnations, which, by the way, last longer than roses.
• A small box of nice chocolate is better than a huge box of cheap chocolate
• For some more suggestions see this article

Remember

If you are getting out of debt, it truly is the thought that counts. Making this committment to each other to build wealth and get pointed in the right direction is the ultimate sacrifice and shows your love everyday of the year.

In later years, when you have built wealth, if you want to fly to Paris for Valentine’s Day and pay cash to do so, you will be able to. That is real financial freedom in action.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

For budgeting purposes, a tax refund should be considered as extra income or irregular income. Other funds that fall into this category are bonuses, stock sales, and even raises at work. If you can maintain your current level of spending, assuming that you are not over spending your income, then a raise could go toward debt, emergency savings or retirement depending on which step you are on. It is very important to name the extra money that comes into your life, before you get it. Make a list of spending and savings priorities that you would like to do, but don’t have the money for. List them in priority order. Then when you receive extra money, you know exactly where that money should be spent. If you don’t name it, your windfall will blow away on who knows what.

Take a few minutes, make a list and get pointed in the right direction to put you in a position of strength when you receive extra income.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

Benefits of Prioritizing your Time:

1. You can get more done if you have a plan for your day or week.
2. You can attend to the most important aspects of your life first.
3. Managed time becomes more time, just as managed money (Budget) makes you feel as if you got a raise.

So many times during coaching sessions or classes I hear that people feel that they do not have enough time to write a budget, make a weekly menu for the family or even balance their check books! This is a grave mistake. Making these things a priority will save money over the long-term so that they can get out of debt and save for their future. Here is a great guide with some time-saving tips for the home. If we don’t save for our future, who else is going to do it for us? You must make this a priority for your time each month. If you can say no to time stealers like television, you will have more time to get pointed in the right direction and make a positive change in your life and personal finances.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle Area.

Let’s look at some ways to reduce expenses or raise your income.

Part-time or overtime work: It might be that until you get your debts paid off that you will need to take an extra job or work overtime in your current job to make ends meet. This will be a temporary situation if you concentrate on paying off debt as quickly as possible.

Sell Stuff: Is there anything around the home that could be sold to pay on debt or to pay extra on debt. How about your car? If  your vehicles, boats, etc. all add up to payments of more than half your take home pay then you may need to sell something.

Reduce Expenses: While you can’t reduce fixed expenses like your insurance, you can look at ways to make payments lower or at least more predictable. Does your utilities company have a monthly budget plan? Do you really need the cable or internet services that you currently have or could they be reduced. Do you have a land-line and a cell phone? Do you need both? Look at your expenses and ask yourself if you could do without, or reduce them some how. You may even try to et your interest payments reduced, if you have credit card debt.

It all comes down to paying attention to what you are spending and trying to find ways to increase your income, while paying off debt, so that you will get pointed in the right direction to become debt-free! In this way your income will work for you, and not the other way around.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

Spend the money on paper or a spread-sheet, before the month begins. As I write this, we are heading into February, so let’s concentrate on February’s budget.

Step One
Write the amount of your take-home pay at the top of the paper.

Step Two
Prioritize your expenses for the month. Food, shelter, utilities, basic transportation and savings should be at the top of the list.

Step Three
Estimate how much you will spend for the month on each expense. You can look at your quick budget from last week to help you out. Then spend your income as you work your way down the priorities. When your income runs out, you are done spending.

So, what happens if you still have expenses left? Well, either those items won’t get paid this month or you need to go back and adjust non-fixed expenses to free up more money to allocate to the other expenses. At the end it should read zero, which means that you have allocated all of your income into categories of giving, saving and spending.

This is not an easy process. You may need to go back and adjust your numbers on paper during the month so that you come out even. As the months progress you will see that you are learning to live within your means and begin getting pointed in the right direction for financial success in 2012.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

Before we get into the nuts and bolts of budgeting, I want to establish some ground rules that you and your family can follow.

1. Both spouses have to participate in the budget process. The person who is more numbers friendly can make the budget, but both partners must agree to the numbers
2. The spouse that did not prepare the budget must look the budget over and change a few things. This does not have to be an arguing point, it is so that both partners are participating and can agree on the spending plan. If you can not agree, the plan will fail. The most important piece of a budget is the agreement to live by the numbers on the paper.
3. Both partners can change the budget during the month if the need arises, BUT, you must agree and the budget must still BALANCE.

If some type of emergency comes up or if you begin to spend more in a certain category than planned, come back together and lower another category so that you can raise the category that needs more money.

A zero based budget is when you start with the money that comes into the house at the top of the paper. Then you spend that month on paper, before you spend it for real. The bottom of the paper should equal zero, which means that you have allocated all your money for the month. We will discuss how to fill out this form in the next blog. Get pointed in the right direction today and begin to budget, so that by the end of the year you know that your money went where it could benefit you most.

Tim and Kathryn Gerken are Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.

I think the use of the term “emergency” in this case is funny. Everyone knew (or should have known) it was coming. There was ample opportunity to get out and stock up on necessities before the storm arrived. Had the unprepared folks been ready, the emergency of this storm would have been at worst an inconvenience. It could even have been an adventure.

Real emergencies in our lives are those things we can’t see coming, but we know they will come when least expected. Things like the loss of job, extended illness or even car trouble can happen “out of the blue”. There isn’t the equivalent of Doppler Radar to tell us that kind of storm is on the way. What we do know is that in any 10-year period, the chances of suffering from a major negative event approach 80%. The time to start preparing for that event is now.

The how of preparing for that event is with an emergency fund. An emergency fund  is a sum of money equal to between three and six months of expenses. It is not an investment, rather it is insurance. Your emergency fund is kept separate from all other funds in a place where it is easy enough to get to should the need arise. A good choice might be separate savings account and a better choice might be a money-market account with check-writing privileges.

What will you do when an emergency comes? Will you go into debt “to cover it”? Do you have an emergency fund? Are you prepared for your own personal “Snowmageddon”?

Tim and Kathryn Gerken are Personal Financial Coaches in Newcastle, WA. They serve their community in the greater Seattle area.