The reason many Americans do not have control over their
money is because they have the wrong perspective toward their
money. They view their money as a whole pie instead of a pie
that is sliced into pieces. It's really that simple.
If you will change your perspective, you will change your
practice, because how you view your money determines what you do
with your money.
Let's say you invite a family of three over for pie and ice
cream this evening. You then learn that two of your adult sons
will be stopping by your home for an afternoon visit.
Red flags go up! You envision your sons spotting the pie and,
of course, wanting some. You are not afraid they will eat all
the pie, just that they will not leave enough for your evening
The action you take is simple. You slice the pie into pieces
and separate the "promised pieces" from the rest of the pie. The
boys are then free to eat the pie that is left in the pan now
that you have made sure your guests will get theirs.
Changing your perspective from seeing a "whole pie" to a pie
sliced into pieces will enable you to provide what you have
promised. From the sliced pie you easily can see what is
"designated" from what is "discretionary."
This is the proper perspective we must take toward our money.
We must see our money as divided into what is designated (set
aside for bills), from what is discretionary (left over for
non-essentials). This simple change in perspective will help put
us to be in control of our finances.
Most Americans view their money as a whole pie and never know
what is spendable and what is not. They spend their last $75 on
an evening out, then fail to pay their cell phone bill due the
So, here are three simple steps to follow to change your
perspective to the proper one:
- Determine what bills are "have to" bills and
total their amounts for the entire month.
Include an amount for savings as a have-to bill.
- Separate that amount of money from the rest
of your take home pay by putting it in a
separate checking account. This amount is
designated for bills and should not be spent for
other things. (If you are paid weekly, take
one-fourth of the total amount needed from each
paycheck; if bi-weekly, take one-half the total
amount needed from each paycheck.)
- Divide the rest of your discretionary monies
into 3-4 labeled envelopes like Entertainment,
Clothes, Gifts, Vacations, etc., so you can plan
to have money available for these things. If
there is money in the envelope you can buy it;
if not, you cannot.
Our money is seen as "pie" as sliced into designated pieces,
not a whole pie. The money needed to pay bills is separate from
the rest, and the left over money is divided into envelopes.
Change your perspective, change your practice, and you will
begin to have control of your money.
Easy as pie!
Copyright ' 2009 Jim Garnett
The above information should be understood to be a general
discussion of the subject matter and DOES NOT constitute a legal
opinion about the situation. For further information please
consult a qualified attorney.
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About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.