Financial Freedom: Two Things….Windfalls and Local Resources

By Phil Oliver

Thing One:   How to treat a financial windfall in a healthy way

Were that it was just about money—-this concept of financial freedom would be such a breeze!    However, when the financial situations become dire, we are ready for help and assistance in creating quick financial solutions to solve a complex set of multi-reason patterns of spending that upset EVERY aspect of our lives…not just financial.

In past blog articles, I have addressed many ways I help clients as a Financial Coach to look authentically at their income and spending and look at the possible resources in our community to help “bridge the gap” toward reaching their main financial goal.  I take a much different approach than a Financial Advisor because he looks more for investment opportunities, while I deal more with looking at how to better spend and enrich the relationships in your household with the income you currently have.

So, this article will look at healthy ways I would recommend as a Financial Coach to handle a possible time when a financial windfall is placed in your lap.

For some, it is this season of tax refund, for others it is an inheritance, for others it is a work bonus, or another unexpected cache of cash.    Whatever the source, thought and planning will give much more lasting results than quick, random spending.

First, I will go back to my first question in this series:

What is the main financial goal you seek?     This is the foundation for all subsequent decisions, sacrifice, budgeting, and celebration.

The second is just as important, but a little more allusive:    Why?

This is where the income becomes intentionally targeted on the GOAL, rather than the SPENDING.    Money is simply the means to better accomplish what we really want to happen in life and the relationships that drive the real source of our true wants.

Looking at cash windfalls is no different than the budget building process we have already covered.  The biggest change is to move from planning for needs (or even temporary wants) to planning for shared dreams and life enriching experiences and events.

This process is easily done during the budget building process.    After the Bare Bones Budget is done, then a consideration of wants is added as the income improves.    For a windfall, the next step is to come up with household “dreams plan list” that, while unfunded now, can be anticipated, reviewed and considered for any future unexpected income.

Some common categories for households to use to construct a “dreams” list could be:

  • Buying a House
  • Starting a business
  • Education
  • Moving
  • Giving
  • Purchasing A Car (for cash)
  • Eliminating all debt
  • An Emergency Fund

Each of these can be part of a long-term dream list that can be intentionally planned for with overage each month, while an additional windfall would simply expedite the opportunity to fund the dream(s).

So, the first step is to get together as a household and “dream”.   A household brainstorming meeting could easily be part of the regular budgeting process where everyone is given input.    Then, use the conversation to make your “dream list” that is added to your budget as an additional page or addendum.    You can either make a plan to allocate a percentage of overages and/or windfalls to the listed items,

Which might look like this:

  • 30% to Giving
  • 30% to Eliminating all debt
  • 40% to An Emergency Fund

or to completely fund the list from item one to the next until the money runs out.

Which might look like this:

  1. Giving
  2. Eliminating all debt
  3. An Emergency Fund

Both continue to focus on intentional spending, rather than random and impulsive spending.

Once the list is compiled, the financial aspect can take a back seat to the relational possibilities of looking, anticipating, announcing monthly updates, or even “window shopping” for the things on the “dream” list during the month.   That can be just as exciting and rewarding as the actual spending!

I hope you will use these as just the beginning examples of ways of handling a windfall to maximize the current and future impact on your household.

Be Creative and invest in what matters most—-relationships!

Thing Two:   Getting Financial Help Locally 

We are fortunate in Waco to have so many community resources.   I have begun to compile and locate resources here in Waco that can help with Financial Literacy, Money Management, and Personal Financial Counseling.

Here are two of the best starting points for those who are seeking assistance:

  • Prosper Waco with their “Get Help Locally” page: www.prosperwaco.org/get_help/. — Look currently at Housing (to Buy) and Housing (to Rent).  Both of these categories give local agencies that help with financial literacy.   More will be added soon!
  • Call “211” or if your cell phone can’t call it, dial 1(877)541-7905. — Ask for resources in McLennan County for “Personal Financial  Counseling”

Most current resources are available with links on these sites and I personally know that Prosper Waco will continually and regularly add to their resource page as a direct result of their growing commitment to be a One Stop Shop for resources to enhance life for all residents in the Waco area.

If you have additional resources you would like to recommend, please call or text me directly at 254.744-8328, or Prosper Waco at 254.741-0081 ([email protected] )

Blessings and best wishes for a fulfilling, fantastic financial future!


Phil Oliver is a retired educator.   He is an independent Financial Coach, active mentor, and community activist.   He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system.  He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending.  He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances.  You can contact him at:  [email protected]

 The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected] for more information.

 

 

 

Financial Freedom: Have a wonderful, financially healthy holiday season!

(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances.  For other posts in this series, click here: Financial Freedom. — ABT)

By Phil Oliver

Welcome to undoubtedly the most generous, unplanned, impulsive time of spending in America—–Thanksgiving and Christmas!!

These wonderful times encourage us to give and spend freely on the ones we love and causes we passionately care about.

So, how do YOU plan to balance the WANT to give with the healthy ABILITY to give without growing debt that will last long into next year? This is the question that many families and individuals struggle with as they face ever tightening budgetary situations.

I addressed the main component of this desire in my very first blog about motivation.   Refuse to give in to the ever increasing pattern of proving and buying love with stuff, but rather deepen and extend love with time, involvement and more stress-free planned giving/spending.  Each family and individual can have a WONDERFUL giving experience as they realistically plan for the stuff and then intentionally budget their time for more longer-lasting relational investing.

First, the Christmas gift giving season demands advanced planning.  Luckily, it happens each year at the same time, so it can be expected and anticipated.   Ideally, each family would have a little savings set aside every month for gifts and celebrations that would include a large portion for Christmas– gift giving, travel, food, and decorations.

The reality for most is that this doesn’t happen.   As the holidays approach the excitement (and tension) grows for the individual gift purchases and with it the expectations to show love and appreciation with stuff.

What to do?

  • If you haven’t yet set a Christmas spending plan, do it NOW!!
  • Determine ALL the people, agencies, organizations and ministries that you plan to give to and prioritize.
  • Determine closely and reasonably how much money you have available to spend.   This could be from your current savings, extra work, or even spending less on yourself.
  • Let your entire household help decide on any spending outside your direct family.  DON’T BORROW ON ANY ANTICIPATED IRS REFUND!!
  • Write down the individual people and organizations and divide the money you currently have to give to each.  Then, you can also include an additional percentage of any extra money that comes in before the gift is given.  You would probably want that to be for close family members.
  • Use your listed amounts and look/search online and sales for items that you and your family want to purchase for the best deals.  Also, consider gently used items that are more budget friendly.
  • Commit as a family to follow your budget without borrowing or going into more debt.   Involve even the youngest in the process–make it a game and be creative together!
  • Plan for shared shopping, buying, and wrapping.   It then becomes an exciting, shared giving experience/memory.

Here are some great apps that may also help in planning:

  • EveryDollar (free for Android and iOS) — Christmas and all year
  • Santa’s Bag – Christmas Gift List (free) — Specifically Christmas spending

Here are some links for more ideas to help:

As you and your family begin to look at areas of seasonal financial health and security, I hope some of this information will help to propel your progress to include intentional generosity in ALL your financial planning!

Finally, if you have decided you want to start a comprehensive financial plan for your family, please check out the Federal Reserve’s Free publications and web resources that have been endorsed by many of our local financial institutions as well as Prosper Waco:

Have a WONDERFUL, FINANCIALLY HEALTHY holiday season with family and friends!!


Phil OliverPhil Oliver is a retired educator.   He is an independent Financial Coach, active mentor, and community activist.   He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system.  He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending.  He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances.  You can contact him at:  [email protected]

 The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected] for more information.

 

 

 

 

Financial Freedom: Attacking Deficits

(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances.  For other posts in this series, click here: Financial Freedom. — ABT)

By Phil Oliver

Financial patterns are established over time through both experiences and family practice.  Sometimes these patterns turn into family spending habits that lead to some type of financial deficit.  So, these patterns must be considered and addressed if true change will be accomplished.

It all begins with a spending plan and knowing exactly how much money you have coming IN and how much going OUT–where it actually goes by week-month-year.  Once you know your patterns and habits, you can then decide where YOU want it to go by week-month-year. If you don’t know how much you have and where your money is going, you’ll never be able to make any new choices about it.

Remember, borrowing from others (even family) CANNOT be part of your plan!!!  ATMs CANNOT be part of your plan!!

Debit cards and cash cards can continue to cause you to overspend if not part of your agreed plan.  Practice spending cash—it hurts more than swiping plastic!    (As explained in previous blogs, you might want to implement a cash envelope system in your household spending plan.)

Also, it is vital that all members of the household participate in MUTUAL, agreed sacrifice to attack and deficit. This is where EVERYONE in the household is required to participate (age appropriately) in the monthly FLOW process decisions both for family spending and PERSONAL spending.  This brings the buy in and commitment that is critical into growing future SUCCESS!  The financial deficit should give opportunity for conversations of changes that could be attempted and new goals to be discussed and decided on. These mutual, self-determined changes become the basis for ACTION STEPS that can be tried, discussed, revised, and then fully practiced.

When this is in place, THREE WAYS to address the deficit can begin:

1.Save (by spending less) – This is not just putting money in savings to have for emergencies, but looking at ways to save money and cut back on what you’re already buying by becoming a smarter shopper and intentional spender.

Some universal saving strategies are:  competitive shopping using coupons, sales, buying in bulk, buying generic (the products are always satisfaction guaranteed so you can try it to see if you like it and want to substitute it regularly……..if not, take it back and try another.)

Here are some websites to give practical ideas you could use in your household financial discussions.   Some will not apply to your household, but some will.    Part of the discussion and financial education is deciding what will work the best for your household at this time.

2. Sell Something – Yep….collect those things you no longer need or haven’t used for awhile and have a Garage Sale or list it on an electronic forum. Here are the most popular and most used:

There are also MANY emerging apps for your smart phone that will allow you easy, quick ways to “click and post”  Some even specialize in certain type of merchandise.

Here are a few:

  • Letgo
  • Neerbuy
  • Mercari

3.Work More – I know that many of you readers are finding it increasingly hard to just maintain your current standard of living, and many are already working several jobs to just make ends meet, especially with wages continuing to stagnate.   That being said, I highly recommend that if you do seek more employment, to set up an account with the Texas Workforce Commission.   The account is free and once you set it up, you can modify and adjust any of your job seeking choices at any time.  There are many local and national employers who extensively use this service to help them find employees.

Another great possibility is to find a product or service you really enjoy, get familiar with it so that you become an expert on it then look for sources to buy and sell it.    I have worked with people who were able to supplement their income by buying and selling golf clubs, baby items, sports equipment, or anything else that they already knew about because they used them personally during the week.

It really doesn’t matter what your (legal) choice is because once you know a product or service thoroughly, you know the prevailing cost or charges and can then buy it cheap and sell it for a quick profit.    You can even use some of those same selling sites to find customers.

Finally, As you look to adjust your finances to match your INs and OUTs, be aware that you can’t do it alone.   Enlist and engage your entire household in the process, and then bring in others that have shown financial stability and wisdom over time that you know in your family, fellowship or favorite civic organization.

I have found in my many years of financial coaching that healthy finances tend to flow from healthy relationships.    I believe the approach I have presented here will help you make sure that you are investing in your relationships while you are attacking your deficit. The biggest product will be to grow mutual financial freedom now, and the tools to continue the legacy in your family’s future.

If you have further questions, please feel free to e-mail me directly:  [email protected]


Phil OliverPhil Oliver is a retired educator.   He is an independent Financial Coach, active mentor, and community activist.   He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system.  He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending.  He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances.  You can contact him at:  [email protected]

 

 

 

 

 

 

 

 

Financial Freedom: Dismantling Devastating Debt

(Note: This post is part of an on-going series on financial literacy. Two of the goals of Prosper Waco have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances.  For other posts in this series, click here: Financial Freedom. — ABT)

By Phil Oliver

Payday and Title Loans

As I shared in my last blog, I have spent many hours talking to individuals and households about honestly addressing their financial goals based on their money flow IN and the flow OUT.  In my Financial Coaching, I am finding more and more cases where the short-term allure and convenience of quick (expensive) loans ended up becoming a major source of debt and despair.   The complete cycle is more devastating as the flow slows. Medical bills or medicine, sickness or even car repairs, all become major setbacks in any household that basically operates from paycheck to paycheck. This is where many of the financially vulnerable turn to the predatory loan network.

Payday Loans and Title Loans are short-term (usually two week) contracts that require an upfront fee that must be paid back IN FULL in two weeks.   The lenders are very willing to arrange for the “convenience” of a direct withdrawal from the consumer’s checking or debit account on payday (That’s why they are called “Payday Loans.”)  More often than not, this arrangement results in additional fees and frustrations as the money needed to pay IN FULL is not available two weeks later.  To make matters worse, consumers are sometimes also hit with insufficient funds or overdraft fees from their banks on top of the fees already paid for the loan.    The larger the loan, the less likely the customer will be able to pay it off in the short term.  When that happens, the payday lender often encourages the borrower to start another short term loan with additional fees!   Most who borrow, WON’T have the money to pay off the loan in two weeks when it is due, and the cycle develops into devastating debt where eventually payments never chip into the principle at all, and interest mounts exponentially. In the case of an Auto Title loan, the period could be a month, but then thousands of dollars will be due in 30 days.   In my coaching meetings, I have found this happening across the city in alarming frequency.

Since my last blog, the City of Waco has passed a Payday Lending ordinance which will go into effect on Sept. 1.   This is AWESOME news for consumers in crisis!    Now the lending institutions will be held to a reasonable standard of high interest and number of renewals of the loan.  They will also be tasked with making sure the loan is not a crippling percentage of the customer’s take home pay. There will be grievance procedures in place for residents to file when lending institutions don’t follow the ordinance.

For more information on this important topic, I HIGHLY recommend contacting The Waco Citizens for Responsible Lending.  And keep an eye out for an upcoming “Predatory Lending Training and Update. ”  This session will include roundtable discussions concerning predatory lending updates at the federal, state, and local level as well as steps to get involved in your community. Special guest speakers will include Ann Baddour, Director of the Fair Financial Services Project at Texas Appleseed as well as staff from the City of Waco.   For more information about Waco Citizens for Responsible Lending, or to get on the list to receive information about the “update” when it is scheduled, please contact Meilana Charles at 254-757-5180 email [email protected] or Tiffany Fry at 254-753-7337 email [email protected]

Student/College Debt

My biggest shift in the last few years with all those I talk with is to emphasize a common investment phrase…. “Return On Investment (ROI).”   In regard to a college education, I highly recommend most high school students attend MCC or TSTC to start their studies for ANY degree or certification.   These institutions provide a seamless path to job security through an associate’s degree or 4- year college by transfer or at MCC under the University Center opportunity.  This combined with dual-credit classes in high school can allow residents to fully enter the job market or an undergraduate degree much more rapidly and with minimal debt.

It is not unusual now for graduates to build up a $40-60,000 student debt while earning an undergraduate degree.  This often means up to 20-30% of their take-home pay is committed for long-term debt repayment.   This is a huge issue especially when combined with housing costs which can require an additional 40-50% of take home pay.   If you add that up, it means that there is only 20-40% left for ALL other living expenses!!

This is where the concept of Return on Investment (ROI) becomes so important.  It is financially smart to think carefully about the ROI when planning for college and career.  Of course it’s important to consider passion, talents and general interest – adding some consideration of average starting salaries and job availabilities rounds out a healthy equation for financial freedom.  In most cases, there are many choices for career paths that are possible that use similar skill sets and training.   Most college advisors and high school counselors can offer information for future job salaries, demand data, and trends.

Another consideration to reduce college debt, is the ability to transfer as many credits as possible from the community college.  One of the best opportunities here in our area is the MCC University Center program.  It allows residents to dually enroll in MCC and a partnering 4-year University while staying in Waco and paying much reduced hourly tuition.   It also guarantees the acceptance of credits earned at MCC and puts NO LIMIT on the cumulative number of transfer hours!!    Considering that most 4-yr Universities will only allow up to 60 hours to transfer toward a degree, having no limit for transfer hours with partnering Universities could allow any student to actually transfer in as a senior!!  This is a HUGE consideration when it comes to debt!

To find out more of about this unique program go to http://uc.mclennan.edu.

We are blessed to have some great resources in our Waco community for growing financially healthy.   Our area is also fairly unique in the amount of networking and collaboration being practiced, especially through the new and expanding Prosper Waco initiative.  I have been actively involved in this amazing collective and see the growing influence and investment they are creating for our community. Please check out their website and resources at prosperwaco.org, as well as the recommended FREE, foundational curriculum adopted by Prosper Waco for financial training from the Dallas Federal Reserve Bank called “Building Wealth”.  That material is available for a FREE download at https://www.dallasfed.org/assets/documents/cd/wealth/wealth.pdf

In my next blog, we’ll look at the 3 main financial ways that deficits in a monthly flow can be addressed and brought into balance. If you have any questions, please feel free to e-mail me directly:  [email protected]


Phil OliverPhil Oliver is a retired educator.   He is an independent Financial Coach, active mentor, and community activist.   He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system.  He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending.  He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances.  You can contact him at:  [email protected]

 

 

Financial Freedom: A Personal Approach

(Note: This is the first installment of what is intended to be an on-going series on financial literacy. Two of the Prosper Waco goals have to do with accumulating wealth: (1) Reduce the percentage of Waco-area households living without three months’ worth of savings if they were not able to work. (2) More than 50 percent of Waco households will have a net worth above $15,000. Our hope is that this series will help move our community towards accomplishing these goals both by sharing information about some of the challenges, complexities and practicalities of managing finances. — ABT)

by Phil Oliver

I write this blog NOT as a financial advisor but as a Financial Coach.   The difference is not about money, but about relationships.  As a coach over the past 8 years working with hundreds of individuals as well as churches and non-profits, I have observed many financial patterns both healthy and unhealthy that continue to impact valued relationships in peoples’ lives.   Some of these patterns contribute to financial freedom, others to financial bondage.  So, I offer to you in this blog series, my personal approach to helping promote financial freedom in our Waco community, as well as some of the observations, patterns, and choices I have seen that lead to financial freedom.

First, I must admit that this discussion will not simply be about money. Many components of a person’s ability to use money are bound and greatly impacted by the valued relationships in their lives.  This is why I am a Coach and not an advisor.

The idea of living financially free is indeed a universal pursuit; however, successfully arriving there is highly complicated because it is not really a hunt for more but an understanding of contentment.  This then gives birth to true freedom.

If I asked you, the reader, “How much money do you need to solve your financial issues?”    No matter how the answer comes out verbally, it is usually summarized by, “just a little bit more.”

This answer is ultimately the telling symptom of our society.

Many believe that money is the complete answer to freedom and happiness, but I have found, and try to lead others to discover, that contentment with money is the real issue and that valued relationships drive that contentment impacting their finances on many levels.  The guided pursuit of financial freedom then becomes a consideration, identification, and even discovery of patterns and choices in finances.

I have coached those are struggling just to make ends meet at or below the federal poverty, all the way to those who have substantial trust funds.  The underlying reason for their financial frustration is…wait for it…they spend more than they make.

As a coach, I do not give financial advice, condemn, or convince. I simply listen to their financial goals and stories and then share information and patterns for them to consider.

I intentionally reframe the whole budget approach because most households who are struggling with finances…and life…don’t believe they have anything to “budget.”   I call my approach for thinking about finances “FLOW.” My FLOW plan approach is totally dependent on the goal(s) that the person (and household) are committed to work toward to give them a sense of accomplishment with finances. I have consistently found agreement that they do have a FLOW of money and resources IN and OUT, and that right now something is NOT working for them.

My goal in a FLOW meeting is then to allow the “client” to authentically look at their FLOW and decide what they might want to change about their FLOW to achieve their current financial goal(s).

The entire process and conversation centers around the financial goal(s) for their household because of the relationships involved and the sacrifice that will be required of all participants once their REAL IN and REAL OUT is determined.

The secondary conversations occur after a deficit is found.  This usually gives way to a discussion over personal spending habits and then moving to mutual sacrifice rather than simply self-sacrifice on the part of one individual.   This is where EVERYONE in the household is encouraged to participate in the FLOW conversation and the process.  I have found this to be critical for future success!

Finally, the goal-driven discussion will ultimately lead to possible changes and action steps that could be attempted or practiced based on past patterns and habits. I share my personal experiences, research, and experiences of many others to give each client ideas and reasonable steps to consider taking toward their financial goal(s).  These self-determined changes then become the basis for their personal ACTION STEPS.  I then continue the coaching by encouraging them to courageously practice these steps and let me know how they work——or don’t work.  Both form the basis for continued, meaningful progress.

In my next blog, I will share how certain loans—payday loans, auto title loans, and even student loans—contribute to financial bondage for many in our Waco community.


Phil OliverPhil Oliver is a retired educator.   He is an independent Financial Coach, active mentor, and community activist.   He has spent the last 8 years empowering individuals and families to take charge of their finances through his FLOW system.  He is active in many community efforts to grow financial literacy and responsibility including Prosper Waco and Citizens for Responsible Lending.  He consults with many local organizations to teach and inspire their efforts to empower clients in personal finances.  You can contact him at:  [email protected]