Easy Three-Step Plan to Financial Success

Here it is.  An easy, 3-step outline to household finance success.

1. Live on less than you make
2. Don't borrow money (except for a house)
3. Save for future wants and needs

Sounds easy, huh?  Well it might sound easy, but for many of us the execution of this little 3-step plan can be as elusive and difficult as scaling Mt. Fuji. 

"Why?" you ask.  "It looks pretty simple to me" (yes I heard you).  Well, the plan IS simple from a mathematical standpoint.  Addition and subtraction is all that's needed for the most part.  Some planning is required, but the hard part of successful money management is self discipline.  Ouch.  That sounds like it could be painful.  And at first, yes it is (a little).  Later though, the planning and discipline brings about a result of financial peace, which is super-sweet.

Close your eyes and dream with me.  You're sitting on the porch swing with your spouse drinking tea and you have no debt other than the house, the bills are all paid and you have money in the bank in case there's an emergency.  You have saved for Christmas and a nice vacation.  Likewise, college and retirement savings are on track.  You are tithing at your local church and you are able to give generously when you see a need a feel led to do so.  Life is good, is it not?

Now open your eyes and lets get back to reality.  The 3-step plan above really is the road map to the dream life.  However, executing the plan requires us to turn off the TV once in a while and do some planning.  We have to make and live on a budget and then tell ourselves "NO" sometimes.  Most of us don't like to do that.  I know I don't.  Those of us that are married have to sit down and communicate with our spouse regularly and reach agreement on our plans.  This means listening to each other and practicing some unselfish give and take.  Couples have to work as a team and be accountable to each other to stick to their budget.  All this requires a good bit of time and effort the first time you do them.  After a while, it gets easier.  If you have the persistence to continue to make a plan and follow it over time, your dream can become your reality.

Just to be clear, though, I'm not talking about living like you're in a straight jacket - having no life and no fun and eating dried
beans every meal (although a little self-denial might do some of us good).  I'm talking about being diligent, working together with our spouses, planning ahead and exercising reasonable restraint in our lives so that we can live more happily and avoid the frustration, anxiety and pain that inevitably comes with sloppy, lazy or non-existent household money management.

For more detailed, practical instructions on how to manage your household finances, I highly recommend that you attend Dave Ramsey's Financial Peace University.  Its the most effective way to learn household money management available.  Dave presents the material in 9 easy-to-understand lessons on DVD.  You can attend a class at a local church (click here to find a class near you) or take the class online.  Couples should definitely go through the class together.

I hope this helps!  Leave me some comments down below!   What topics would you like for me to write on in the future?