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Financial Literacy Month 2015: Budgets – The First Frontier

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Guest Contributor – Gil Michel, CPA, MBA

GilM

Gil Michel, CPA, MBA, CEO The Caleb Group

Gil Michel is a CPA and financial planning expert, and is the CEO and President of The Caleb Group, Inc., a small business solutions firm.  Gil’s experience has evolved from working in top ten CPA firms to working one-on-one with small business owners in developing realistic budgets to create wealth for their families.  Gil’s passion to see urban cities turned around in the next 10 years inspired him to form TACTT, Inc. , Teens Achieving Community Through Training, in 2003.  TACTT is a financial literacy program that empowers teens in the five areas of entrepreneurship, real estate, banking/personal finance, investing, and positive life skills.

 

 

We’re Celebrating Financial Literacy Month

Know Your Money
Friday – April 10, 2015

Financial Literacy Month 2015
Budgets:  The First Frontier
By Guest Contributor – Gil Michel, CPA, MBA, CEO The Caleb Group

 

If I had a dollar for every person who told me that they didn’t feel a need to budget, because they didn’t have that much money to budget for, I would be a much wealthier man.  Consider this- over one third of those who have won the lottery are bankrupt within 7 years.  Why is this?  It’s because, like yo-yo dieters, many have not developed a disciplined approach to handling the financial resources to which they’ve been entrusted.  What is a budget?  Dave Ramsey describes the whole notion of budgeting as giving every dollar that you earn and spend, a name.  It is accounted for and is given a very particular purpose.

The reason I mentioned the extreme example of lottery winners, is because when talking to people with limited incomes, such as college students, they will often not see the need to engage in the budget process because they have relatively smaller incomes.  I would contend that in these cases, it is even more expedient to budget your funds for several reasons.

Lay The Foundation
While you are in college, or in a place of having limited funds, you have the opportunity to get creative and make the most out of your money.  As a matter of fact, if you come from a family where, money was always scarce, you have the honor of breaking the cycle and becoming aggressive toward craving a new path for generations to come.  The financial habits that you develop when you earn $10,000 per year will be the same habits that follow you when you are eventually earning $100,000.  If you squander the extra money you have on frivolous things like eating out, when you’re receiving your stipend from school, you will probably buy that extra jet ski when you’re a lead engineer.

 

working like a dog

 

How To Get Started
When the subject of budgeting is mentioned, many people will say, “Well, yeah, I mean I budget my money, but its not formal, or anything…’ What most people think is budgeting, is simply cash management.  The intent is not to have a purpose attached to every dollar, but rather they ask the question, “Do I have enough money to buy ______ (fill in the blank)?”  Here is how you can get started:

  1. Make a list of all your sources of income and expenses, such as salary, utilities, car payments, and mortgages.
  2. Go through your check register or bank statement to determine what you spend on eating out, contributions, and other incidental expenses.  This is crucial because what is hurting most people financially are these types of expenditures.  One woman was able to eradicate two credit card balances in less than one year when she saw on paper how much she was spending on her favorite daily mocha latte.
  3. Determine how much you have “left over” each month, and monitor how close your actual funds reflect your budget on paper.  Working on your budget is a constant work-in-progress, and you may find that you are not taking all expenses into account (like taxes or annual payments), of are overstating your income.
  4. Work hard and stick to the plan.  You are putting yourself on a high-level allowance.  If you neglect the road map you’ve laid out for yourself, you can’t blame anyone else for why you end up in another destination.

There is a plethora of tools available, for you to take advantage of.  Use them, because if you get serious about being intentional with your money, you can enjoy a financial life of peace and prosperity.

 

About the author:  Gil Michel is a CPA and financial planning expert, and is the CEO and President of The Caleb Group, Inc., a small business solutions firm.  Gil’s experience has evolved from working in top ten CPA firms to working one-on-one with small business owners in developing realistic budgets to create wealth for their families.  Gil’s Caleb Group is the parent company of BlackMoneyMatters.com, an interactive website that seeks to educate, inform, and enlighten the Black community in areas of financial health.  Currently Gil is featured on Sheridan Gospel Network’s The Light, which is syndicated in 56 radio stations/48 cities across the United States.  In addition, Gil is also featured on The Good Life Radio broadcast financial segment every week in a feature called “Stacking Paper.”  Gil’s passion to see urban cities turned around in the next 10 years inspired him to form TACTT, Inc., www.tactt.org,in 2003 (Teens Achieving Community Through Training).  TACTT is a financial literacy program that empowers teens in the five areas of entrepreneurship, real estate, banking/personal finance, investing, and positive life skills.

Contact Information:
Caleb Group, Inc.
922 East Wayne St.
South Bend, IN 46617
574-288-8260
BlackMoneyMatters.com

 

Here is today’s step to financial wellness from Thirty Steps to Financial Wellness developed by Money Management International:

Step 10 – Set Your Priorities

 

EVENTS AND RESOURCE LINKS:

Hosting A Financial Literacy Month Event

2015 National Savings Forum

Financial Literacy Month Articles from Huffington Post 

The FoolProof Foundation

FoolProof Teacher

FoolProof Solo

 

If you have questions or need help we are just an email away.  Send your questions to Info@KnowYourMoneyGlobal.com

 

We Would Like To Hear From You.  Are There Any Brave Souls Out There Willing To Share?
If you would like to share with our readers how “bad” spending habits have affected you, anonymously or otherwise, for our upcoming special, “Confessions Of Spendaholics,” please send your experience to info@knowyourmoneyglobal.com.

 

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Disclaimer:  I have a Bachelor of Business Administration degree but I am not a financial adviser. However, I have acquired years of knowledge about personal money management through my life experience working through my own personal finances that allows me to share that knowledge with readers of Know Your Money. The Know Your Money Blog posts written by me are my own common sense observations and opinions and are for informational use only. Although my blog includes contributions from experienced financial professionals, please make your own financial decisions based on personal research or contact a financial adviser.

 

Copyright © 2015 CWR Media – All Rights Reserved

 

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