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“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” – Edmund Burke

The statistics speak for themselves.: Debt versus income is an increasing problem, particularly consumer debt. Here is what Statistics Canada has seen for 2019:

  • Household debt is growing faster than income: $1.79 credit market for every dollar of disposable income.

  • The average amount of credit card debt is $2, 627

  • The average consumer debt (non-mortgage debt) is $20, 967

These are sobering statistics and, of course, they are not limited to Canada. The same is true the world over.  How have we gotten here and what can we do?

Money” is a struggle for many. One of the main problems or factors is that most of us really didn’t get much of a financial education growing up. We didn’t learn the basic principles and probably learned by trial and error (hit and miss). Many of us grew up with a foggy and somewhat negative idea of what money is, what to do with it and how to keep it.

The reality is that money  (getting it and keeping it) really has very little to do with luck and more to do with making good decisions. In fact, financial health does not really depend on how much we earn, but rather on how much we keep from what we earn. It comes down to knowing what to do and then consistently doing it. before even beginning to take a chunk out of the debt we may have accumulated, we may first need to ask ourselves some very important questions.

  • What is money and what is its purpose?

  • How much time (in our day) do we spend making it?

  • How much time do we want to exchange for money?

  • What is the current value of money

These questions are important because they help us to go back to central values. For example, itf we do not have a correct understanding of what money is and how it should be used, we will end up wasting it on things of little value. If we see it as a pass to do whatever we want indiscriminately, we will have a hard time keeping it. But if we see it as a tool (in the same way as a hammer or snow shovel) to use for things that are important (families, for example), then it will be easier to make decisions as to how to spend it.

Likewise, we should have a healthy perspective on the value of time. We need to need to think of how much time we put into generating money. How many hours, weeks, months do we give in exchange? Time is our most precious resource; it can not be renewed. Money, on the other hand, can always be renewed. Thinking about what money means also means thinking about the cost of time.

Having more money in our pocket begins with a healthy view of both time and money and everything worth having begun with education. If we want to improve our current financial circumstances, the best way to start is to learn more about basic principals. Getting the right information is the first step. Then acting on the information will bring about the changes you want to see. Information can only take you so far. It is not very helpful if it is not applied.

In the book Resolved, A look Into The 18 Resolutionsauthor and speaker Orrin Woodward includes a chapter entitled: Financial Intelligence which outlines 10 Steps to overcoming financial problems which he has developed in his personal life over the years.

1. Identify Your Net Income

The number one step is to know how much your take-home (net) income is after taxes. It really does not matter what your salary is because that is not what is fully available to you to spend. It is what you have to work with. If you do not know this amount and have not clearly identified it, then it will be difficult to proceed through the steps toward financial health.

2. Identify Your Expenses And Profit

Do you know what you are actually spending? Many people have no idea and others think they do, but it is not accurate. the only way to know is to write down, record your expenses – all of them! Add these up each month to know what your monthly expenses are.

Your net income – your expenses = your profit

It is important to determine what your profit is because that is where your increase will come from. The author talks about making a budget – something most people cringe at- and says that we are all already on a budget. The question is” Who is in charge? Us or the budget? Basically what we need to know is: How much money is left in the bag at the end of the month?

3. Set A Financial Goal

Next, it is important to set a tangible and doable target financial goal. For example, you might want to reduce expenses and increase income so that you are able to save 10 – 15%  (or more – 25%) each month. It doesn’t have to happen right away- it,s a goal. When we set a financial goal we are actually reclaiming control over our income and expenditures,  We can work towards a set time. Also, our new control over our finances puts us in the position of financial decision making – what to buy and what not to buy.

4. Never Finance Anything That Depreciates In Value

This is where a good understanding of compound interest comes in handy. Remember compound interest can either work for you or against you; either way it is working. When we pay long term interest on an item, a car, for example, we can end up paying much more, sometimes double or triple the amount of the actual retail value. Furthermore, when we lease an item with monthly installments, we don,t actually own the item. We are just financing the depreciation and the company’s profits.

At any rate- it is our decision at the end of the day. but financing an item that depreciates is not a winning solution.

5. Determine A Price Limit For Spontaneous Purchases

Most purchases are made emotionally and then rationalized after.  They are called spontaneous for a reason. It is far better to have a plan and be proactive. The author suggests :

Set an absolute, agreed-upon price limit on all spontaneous purchases, and commit to the rule that the decision to buy anything above this limit must be slept on (24 hours) before purchasing.

6. Make The Shift From Credit To Cash Where Possible

Some studies have shown that “spending increases by an average of more than 23 percent when credit cards are used as opposed to cash”. The author calls credit card debt ” one of the biggest sinkholes of American household finance”. Especially when trying to reduce and eliminate debt, it is highly recommended to use cash where possible to pay for necessities. Unless you are one of those who is able to and does pay off the total balance each month, it is best to avoid credit cards.

7. Get Rid Of All Consumer Debt

Where do we start? Some think they should begin saving first before attacking the debt. The author states: Pay down debt first

If there are leaks in your financial boat, you need to plug the leaks. You can’t afford to have money coming in the front door only to have money being sucked out through the windows or a leak in the basement. Plug up the holes.

Unless your savings after taxes and expenses is more than the interest you are paying on debt (which is not likely), you need to wipe out the debt head-on as fast as possible.

8. Understand The Difference Between An Investment And An Expense

The author is also careful not to suggest throwing the proverbial baby out with the bathwater. Understanding what an investment is and what an expense is is crucial. An expense consumes money and investment brings a return. For example, buying a new stereo system would be considered an expense (unless it is needed for your business), whereas investing in books or a course would be considered an investment since you would be developing new skills and increasing knowledge, both of which could lead to other financial opportunities.

9. Pursue Quality Of Life And Peace Of Mind

Have a balanced view of money and time. Spending all of one’s energy and time in the pursuit of money can put a serious dent into the important areas of life such as family, friends and health priorities. We should not live to work, but rather work (as a healthy endeavor) to live, but we should also live fully.

Never lose focus on what is important in life. Money comes and money goes, but people are more important. Don’t squander money or foolishly “invest ” it in anything that is not solid. Always ensure that you can sleep soundly with no money worries.

10. Be A Blessing To Others

When you have finally been able to overcome financial roadblocks and become in control of what comes in and what goes out, you will certainly be in a much healthier position financially speaking. Let me bring you back to the first of the four questions listed at the top of this post:

Money And Its Purpose – Thoughts

I believe that money is a tool to be used to grow blessings which can then be passed on to others. It is not for our sake alone. Yes, we need it to get along, but how much more enjoyable is it when we can share our blessings with others rather than stockpile it in our storehouse. we can bless others with what we have been blessed with.

I hope that this information has blessed you and that it will help to set you on the path to financial wellness.

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Diana Lynne’s passions are family, travel, self-improvement, and the pursuit of a debt-free life. She loves hanging out with family & friends  Diana is a Quebec City girl. who loves living life.  You can connect with her through