Do you have too much month left over at the end of your money? Are you slowly accumulating debt, even though you try to control your spending? Maybe you need a plan— a spending plan. Howard Dayton joins us today to talk about that.
“Commit your work to the Lord, and your plans will be established.” Proverbs 16:3.Howard Dayton is the founder of Compass— Finances God’s Way and the former host of this program.
HOW DOES A SPENDING PLAN HELP WITH MANAGING YOUR MONEY AND REDUCING YOUR DEBT?
Howard, founder of Compass Finances God's Way, introduces the concept of a spending plan (budget). He explains that a spending plan is not just about restricting expenses but is a strategic tool that helps direct money towards achieving life goals and reducing debt. The plan also controls impulse spending and is flexible enough to adjust as needed.
A spending plan is a strategic tool for directing money towards life goals and debt reduction.
It controls impulse spending and is flexible for adjustments.
Spending plans are ultimately freeing, not stifling.
WHAT ARE THE CHALLENGES IN IMPLEMENTING A SPENDING PLAN AND HOW CAN WE OVERCOME THEM?
The implementation of a spending plan can be challenging due to lifestyle changes and the need to make hard decisions. Howard advises that to effectively reduce spending, individuals may need to trim expenses, or even sell assets with high liabilities. He emphasizes that making both big and small cuts can significantly reduce monthly expenses.
Implementing a spending plan may require lifestyle changes and hard decisions.
Cutting back on expenses like entertainment and dining out can help reduce monthly spending.
Selling high-liability assets (like a car with a loan) can also contribute to your financial health.
HOW SHOULD COUPLES APPROACH SETTING UP A SPENDING PLAN?
Howard highlights the importance of teamwork and communication for couples in setting up a spending plan. He mentions that patience and flexibility are key, considering the different personalities and money-handling approaches of each partner. The goal is to achieve unity in financial decisions, reflecting the harmony intended in marriage.
Couples should work together and communicate openly while setting up a spending plan.
Patience and flexibility are important due to different financial personalities and approaches.
Unity in financial decisions is crucial for marital harmony.
WHAT IS THE CONCEPT OF A 'MONEY DATE' AND HOW OFTEN SHOULD IT OCCUR?
Howard recommends regular ‘money dates', ideally every other week, where couples review their financial situation. These dates are for reviewing income, expenses, and encouraging each other, avoiding the blame game. This regular check-in ensures both partners are aligned and accountable in their financial journey.
A 'money date' is a regular meeting for couples to review and discuss their financial situation.
It should occur at least every other week for effective financial management.
This practice encourages mutual support and accountability in managing finances.
WHAT IS THE IMPACT OF HAVING A SPENDING PLAN ON LONG-TERM FINANCIAL HEALTH?
While not directly addressed in the conversation, it's implied that a well-implemented spending plan positively impacts long-term financial health. By ensuring money is spent according to set goals and priorities, individuals and couples can avoid debt accumulation, save for emergencies, and invest wisely, all of which contribute to financial stability and growth.
A spending plan leads to better control over finances and avoids unnecessary debt.
It facilitates saving for emergencies and wise investments.
Long-term, it contributes to financial stability and growth.
You can learn more about the new video study from Compass — Finances God’s Way, Navigating Your Finances God’s Way, at navstudy.org.
ON TODAY’S PROGRAM, ROB ANSWERS LISTENER QUESTIONS:
I sold my house and used some Roth IRA money for a new house, planning to put it back when I sold another property. Should I use more retirement money for a bigger house without a mortgage?
My wife and I are wondering if we should tithe before or after taxes. What's your opinion on this?
I recently inherited some money and my advisor recommends a fee-based account for stock and bond trading. Is this a good idea as I approach retirement?
As a 55-year-old with a special needs son and limited retirement savings, how can I prepare for retirement and ensure my son is cared for?
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