ICFE eNEWS #15-06 - January 26th 2015
Getting Control Of Our Finances - As Easy As Pie!
By Jim Garnett,
a/k/a Ask Mr.G, a member of the ICFE's Board of Educational Advisors
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.
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 guests.
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 in control of our
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 next day.
So, here are three simple steps to follow
to change your perspective to the proper one:
Our money is seen as "pie” 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.
- 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.
- Divide 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.)
- Distribute 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.
Change your perspective, change your practice, and you will begin
to have control of your money.
Easy as pie!
© Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023
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Also, visit the ICFE's new Web site: StudentDebtHelp.org
Paul S. Richard
President - Executive Director
Institute of Consumer
Financial Education (ICFE)
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.