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Managing Your Household Finances Like a Business

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Manage your household finances like a business to see your finances in new and enlightening ways, so you understand your money better than you ever have before.

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Would you benefit financially by managing your household finances like a business? The two of us have. We think you will find it helpful as well.

We discussed this on The BIGG Success Show today. It’s part of a series explaining why we created the Financial Freedom Tool and the thinking behind its various features.

We started with the “What”: What is financial freedom? We shared our definition of financial freedom:

Plenty of money for life.

Last time, we shared our “Why”. Why did we create the Financial Freedom Tool? We created the Financial Freedom Tool to…

…help good people have more money to do more good.

Today, we talk about a new way to view your household finances. Here’s a summary of our discussion…

Why manage your household finances like a business?

Businesses have access to tools which have largely been ignored for personal finance. These tools help you see your finances in new and enlightening ways, so you understand your money better than you ever have before.

Your household is like a SMALL business

We’re taking one bite at a time. We just said that you should manage your household finances like a business. But now, it’s important to realize that it’s not just any business. It’s a SMALL business.

When it comes to finances, large companies have advantages which small companies don’t. The financial side of our households fits the small business model more closely.

As a simplified example, let’s say a large company and a small company decides to buy a new vehicle.

Some time before this decision, the large company raised a large sum of cash from the public by issuing bonds. So, they just go shopping for a new vehicle. When they find one they want, they write a check.

Once the decision was made, the small company gets pre-approved for a vehicle loan. With that commitment in hand, they find a vehicle and take out the loan.

As you can see, household finances work like the small company’s finances. That’s why we like to call it “entrepreneurial personal finance”.

How can I manage my household finances like a small business?

1) Understand and accept your role

You are the owner (or partner). NOTE: You are NOT just the Chief Executive Officer (CEO) or Chief Financial Officer (CFO).

You don’t have a golden parachute like senior management. You have too much skin in the game to exit. Like an entrepreneur, you have to persevere each day so you can fight another day.

You don’t answer to the owners. You are the owner. Like an entrepreneur, you are in charge. You must take control of the wheel to direct your ship.

Of course, you may fill the CEO role and/or the CFO position in your household. Like a small business owner, you wear many hats.

2) Don’t save. Don’t spend. Invest.

See every dollar that goes out your door is an investment. It’s an investment in your present and/or future happiness.

In some cases, if you’re honest with yourself, you’ll realize before making a purchase, that the happiness you will gain will be fleeting.

In addition, saving money isn’t enough. You have to put it to use. While you’re in the earnings phase of life, you need to fund the harvest phase – the years when you enjoy the fruits of your labor.

Your goal is to maximize your return on investment. In other words, to create the greatest amount of happiness for yourself in your time here on this earth. It means enjoying life now and later. It means looking back with no regrets. Many happy returns!

3) Determine how your financials stack up

Businesses, large and small, have tools to benchmark their financials. For example, they can compare their financial performance to their competitors. From this simple exercise, they can make sound strategic decisions.

But there wasn’t anything like that for our personal finances. So we created it! OurFinancial Freedom Tool helps you see how your personal finances stack up to your neighbors.

For example, how much do people like you spend on their house, their cars, food, clothes, etc. You’ll know.

And even though this tool uses sophisticated concepts, all you have to understand is that smiley faces are good and frowny faces aren’t. So you’ll know in an instant how your finances stack up.

So you can:

– pinpoint opportunities to manage your household finances better

– make sound strategic decisions in your life

– determine your next money move

– feel a new sense of calm regarding your personal finances

– expand your choices going forward

Learn more about our Financial Freedom Tool

Here’s to your BIGG success!
signatures: George & Mary-Lynn

George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00960-011619.mp3

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5 Financial Resolutions for 2019

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5 Financial Resolutions blog image

We talk with Consumer Reports’ Senior Money Editor Tobie Stanger about timely financial resolutions for 2019.

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Consumer Reports published a great article on smart money moves for 2019. On The BIGG Success Show today, we talk about them with Tobie Stanger, Senior Money Editor at Consumer Reports. Here are the highlights of our conversation…

Financial resolution #1: Protect your nest egg from inflation

The best way to do this is to make sure your portfolio is broadly diversified. You should own both stocks and bonds. Consider TIPS (Treasury Inflation-Protected Securities) for a portion of your bond holdings.*

Financial resolution #2: Freeze your credit report

Thanks to Consumer Reports lobbying on behalf of we the people, you can now freeze your credit for free. If you do not anticipate needing applying for credit in the near future, freeze your credit by contacting each of the three major credit reporting agencies – Equifax, Experian, and Trans Union.

Then, even if a scam artist gets your personal data, they won’t be able to open a new credit account in your name.

Of course, when you want credit yourself, you will just need to contact each of the three majors to unfreeze your credit. While it may not be the case, assume there will be a time lag between your request and the actual unfreezing.

Financial resolution #3: Safeguard against cell-phone account fraud

This is a new scam. But with the number of breaches which occurred last year, there’s a lot of personal information floating around. A fraudster uses that info to get a cell phone account in your name. Now, they can set up a new credit account, even if it requires two-factor authentication.

You can minimize the risk of this happening to you by setting up a PIN on your cell phone account. Note that this is a separate PIN from the one you use to unlock your phone. It provides you with another layer of protection from fraud.

Financial resolution #4: Rethink how you pay for doctor’s visits

Direct primary care (DPC) or concierge medicine is growing rapidly as more and more people discover its benefits. With this arrangement, you contract with a doctor directly, rather than through a health insurer.

In this case, you will actually pay more for medical care. But you also get premium service for about $100 a month. Do you:

– frequently visit your doctor’s office?

– need 24-hour access to a doctor?

– have diabetes, high cholesterol, or hypertension?

– need frequent tests?

– need regular checks on your vital signs?

– have a high-deductible health insurance plan?

Note, though, this is NOT health insurance. Nor does it reduce the need for health insurance (although, you may be able to afford a higher-deductible plan and, therefore, reduce your premium).*

Financial resolution #5: Get maximum returns on your savings

Interest rates are going up. Just a couple of years ago, you could only collect something like 0.01%T on your savings. Now, you can find savings products paying 2% – 3%. Visit the article on Consumer Reports for a great table of your options

*One final note before we go – As with all things financial, we highly recommend that you consult with your financial advisor about the specifics of your situation.

Here’s to your BIGG success!

signatures: George & Mary-Lynn

George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00959-010119.mp3

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What Is Financial Freedom?

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image of a soaring bald eagle with the words what is financial freedom

What is financial freedom? Plenty of money…for life! We share how to get to the next level of financial freedom.

Podcast: Play in new window | Download

Last time, we announced the release of our Financial Freedom Tool and how it fits our mission of helping good people have more money to do more good.

Today on The BIGG Success Show, we define financial freedom and discuss three ways to reach the next level of financial freedom. Here’s a summary of that discussion.

What is financial freedom?

Our definition of financial freedom is:

Plenty of money…for life.

Let’s take this definition of financial freedom part-by-part.

  • Plenty

First of all, let’s think about “plenty”.

Not enough. Plenty.

More than enough. An abundance.

It’s an individual thing.

  • of money

Now let’s turn to the phrase “of money”. Money is a valuable commodity, because it makes exchanging easy.

Money equals wealth in our definition. We really mean wealth in all its forms. For example, a person may have plenty of cash, yet feel a sense of emptiness which more cash will not solve. Reconciling with God will yield dividends that reconciling your cash accounts can’t.

Our definition of money also calls for thinking about both the present and the future. You need money when you need money. You can’t pay bills with your house, your car, or any other asset. You need cash.

But while cash is invaluable when you need it, it is generally a poor investment long-term. Much of the interest you earn on cash is flushed down the drain for taxes and inflation. Other investments fare better. So cash costs you money in the long run.

So, our definition of financial freedom means being able to enjoy life more now and later.

  • for life

This continues that last paragraph – you have enough money to live now and not wait for some artificially-set retirement date dictated by the government or an employer.

AND you have enough money to take care of your needs for the rest of your life. You don’t have to worry about running out of money.

Is it just a pipe dream?

We know – this all sounds great, right? But we can hear the mental objections. “Isn’t this about way off in the future?” “It probably involves a side hustle and I don’t have time for a side hustle.” Here’s the first thing to understand…

If you say it can’t happen to you, it won’t happen to you.

Like everyone else who has achieved financial freedom, you have to start where you are with what you have. And you must make the most of it.

That’s the price financial freedom demands.

It’s also the starting point on the journey to financial freedom.

The next steps

1) Look at your money flows

How much money do you have coming in? Where is it coming from?

How much do you have going out? Where is it going?

2) Benchmark your finances

Search for information about how much people spend, on average, in various categories. How do you stack up? Identify areas where you’re spending too much.

3) Develop an action plan

Once you know where you’re spending too much, map out actions you will take to cut costs in that area. And then, do it!

BIGG Takeaway

Success comes after Start (and not just in the dictionary)

Tweet our BIGG Takeaway

Do your personal finances stack up to your neighbors?

Our Financial Freedom Tool goes beyond what we described above about benchmarking your finances to an average person. It helps you quickly see how your personal finances stack up to peers with the same income as you – think of it as your neighbors.

You simply enter your info in the pre-created categories. In almost no time at all, you’ll be able to pinpoint opportunities to save more. From this, you can develop an action plan to help you get to the next level of financial freedom. Learn more

Here’s to your BIGG success!

George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00958-121818.mp3

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Do More Good

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Do More Good blog image of an eagle soaring in the glow of the sun

Do more good by discovering how to gain more confidence, clarity and choices when it comes to your money.

Podcast: Play in new window | Download

Cue the drums. Sound the trumpets. Light the fireworks. Drum roll, please.

We’re excited to announce the release of our Financial Freedom Tool!

It’s software which helps you gain more confidence, clarity and choices when it comes to your money.

We talked more about this on The BIGG Success Show today. Here’s a summary of that discussion…

Financial freedom. What does it mean to you? Never mind that for now, we’ll talk about that next time. It’s the “what”.

Today, we want to share with you the “why”. Because the Financial Freedom Tool is more than just a software program. It’s a device to help you do more good.

But we’re getting ahead of ourselves. Let’s start at the beginning…

Personal finance powered by entrepreneurial finance

At BIGG Success, we’ve always been about bringing entrepreneurship to life. Whether or not you ever own a business, you are in charge of a very special enterprise – your life. You own it. So, it pays to think like an owner.

In addition, it can be useful to look at your household as a business. It’s not a large business. It’s more like a small business.

[Mary-Lynn] Since George teaches Entrepreneurial Finance at the University of Illinois, he’s familiar with the tools of the trade.

[George] I realized some of the main tools we use in entrepreneurial finance – tools which help owners really understand what’s going on with their business finances – these tools weren’t available in the personal finance space.

Our Financial Freedom Tool brings these powerful entrepreneurial finance tools to personal finance. We think of it as entrepreneurial personal finance.

Now, regular folks have access to the tools smart business people have used for years to manage their business better. (And while powerful, we make it so easy to use and understand. All you need to know is that smiley faces are good and frowny faces aren’t.)

It provides you with information about your money that you have probably never seen before. So, you can easily pinpoint opportunities to get ahead and make better money moves.

Do more good

Money itself is just a tool. It’s neither good nor bad. Money reflects the nature of the person who holds it. So we asked a question:

What if the good people of the world had more money?

We concluded:

If good people have more money, we can change the world for good.

Good people do good things with money.

What prevents good people from doing more? What holds us back from doing as much as we would like – for ourselves, for our loved ones, for the world?

When we think about how we can do more good, we tend to think in the future tense. It’s almost like a dream.

“It will be awesome when I can do that.”

“Once I’m making more money, I’ll do that.”

“I’d love to help that organization some day.”

But “some day” is usually just another word for “never”. Don’t delay.

Our Financial Freedom Tool helps good people have more money, so they can do more good.

It starts by seeing where you’re at. You may be able to start doing more good sooner than you think.

Hope for today and tomorrow

Let’s face it – we live in challenging times. We have witnessed one of the worst recessions in the history of the world. Even in good times, it’s not unusual for a large company to announce massive layoffs.

All the rules seem to have changed.

We used to have pensions, funded by our employer. Now we largely fund our own retirement.

Health insurance was a benefit for employees. Now its cost is largely paid by employees.

Fewer people have traditional jobs. We are moving to a “gig” economy.

Costs rise, even when wages are stagnant. People have to do more with less today. It’s harder. It can be discouraging.

We built the Financial Freedom Tool to give you more hope for today and tomorrow. It helps you know precisely how your finances stack up and you see exactly what to do to get to the next level. One level at a time, you reach BIGG success!

BIGG Takeaway

“Pinpoint opportunities to make more, save more, and do more good.”
Tweet this BIGG Takeaway

Do more good today

Want to make more? Want to save more? Want to do more good?

Then you owe it to yourself to learn more about our Financial Freedom Tool.

Here’s to your BIGG success!

George “The Professor” & Mary-Lynn
Co-Founders, BIGG Success

Direct link to The Bigg Success Show audio file | podcast:
http://traffic.libsyn.com/biggsuccess/00957-120418.mp3

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The Gratefulness Dividend

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image of woman with eyes closed and hands together for the blog titled The Gratefullness Dividend

A gratefulness dividend flows to those who fight off abundance denial.

Podcast: Play in new window | Download

We discussed abundance denial and the Gratefulness Dividend on The BIGG Success Show today. Here’s a summary of that discussion.

This show was inspired by a book by Gregg Easterbrook called The Progress Paradox: How Life Gets Better While People Feel Worse.* He coined the phrase “abundance denial.” We discovered his book when we did our show on the hedonic treadmill.

It’s easy to complain. The two of us fight the urge. So this episode was done as a reminder to us. We hope it helps you as well.

So, let’s look at how to fight off abundance denial and reap the rewards of gratitude.

Read more