3 Dumb Things People Do With Their Money. Part III – Having No Financial Plan or Goals

In case you missed them, read Part 1 here or Part 2 here.

A budget is the most important money tool you’ll ever have. It allows you to be in charge of your money. It guides you towards your financial goals. A budget is a plan to:

1. Get out of debt
2. To stay out of debt
3. A way to start saving
4. A way to start earning profits
5. A way to eliminate financial worries

Following are four lessons to learn about money.

1. Respect money
2. Save money
3. Budget what money you have
4. Make a plan for your money

Respect Money

It turns out that respect for money is a real thing. There are several ways to show respect for the money you earn. Here are six to consider. Knowing what you have and where it is going is very important to the wealthy. So, follow their lead. When you learn to respect your money, you’ll soon have more of it.

1. Organize your paper money. Keep all your paper bills in order, 1s, 5s, 10s, 20s, 50s & 100s facing the same way and unfolding bent edges. The law of attraction applies here. I was always amazed at how often people would pull out a wad of cash in a crumpled heap and handed it to me when I was delivering pizza. Giving someone a mess of money is no way to respect it.

2. Keep a minimum balance in your checking account. When I first decided to do this, $100 was my goal. The very next day, as I was standing in line at the bank, the man in front of me mentioned that he had seven overdraft charges. I quickly did some math. $25 X 7 overdraft charges = $175 in fees. “Yikes,” I said.

Right then and there, I decided I needed to increase my minimum. I immediately changed it to $500. Now, I find I’m most comfortable with $1,000 being my zero baseline. That means I can spend what I have above $1,000. Anything taking me below that amount must be an emergency to use, say for a vehicle repair.

This one simple act has changed my entire outlook on money. Everything that was an emergency is now only an inconvenience.

3. Follow the golden rule of money—save some, give some and spend some.

The first habit you’ll need to work on is budgeting. The best way I’ve found to do this is through something called zero-based budgeting. That is, before the month begins, set your budget by assigning all of your money to the categories you set out, then stick to it.

If an expense comes up that isn’t on your budget postpone it until next month when you can add it to your budget or rearrange your current budget by eliminating some things to accommodate the new expense. This takes some time to figure out but puts you in charge of your money.

4. Spend less than you make. This is key to getting out of debt and staying out of debt. Money only does what we tell it to do, so you need to get into the habit of controlling your expenses, not allowing any whim or crisis to control you. A strict budget really helps you be in control of your finances and save money.

Being frugal is a vital habit to form to create wealth. In Chris Hogan’s book, Everyday Millionaire, we learned that 94% of millionaires spend less than they make. They know that saving is the secret to their wealth-building plan.

5. Earn interest don’t pay interest. Nothing shows respect for money more than when you are using it to your long-term betterment. Use your savings to grow your savings. There are many resources to help you do this. Start by reading Rich Dad Poor Dad and discover your financial IQ.
The average millionaire has multiple income streams. The average non-millionaire has multiple loan payments. To have more money, you have to have multiple streams of income. A side job is a good starting point.

6. Giving is a great way to show respect for money. Use some of your income to help others. This is a very underrated form of respect but has lasting life-changing results. The benefits to you and those you help are easily noticed but only in retrospect.

I have found that giving has become an important part of my plan. At a minimum, it forced me to consider how I use my money. Having to choose, each month, where my extra giving fund is to go has tempered me. I’ve learned to be careful to send it where it can do the most good.

One month, for example, a private college on my list had a 3x matching grant. So my $25 turned into $100 for them.


Respect for money and respect for yourself are irrevocably linked. A detailed financial plan is vital to building wealth. So is your dedication to self-improvement. Opportunities will increase, both financially and physically, in proportion to your continued efforts to improve. It is not hard, but it does take discipline, time, and planning on your part to become successful.

As you can see, there are many subtleties about money we weren’t taught. Money is both physical and spiritual. By changing a few habits, you too can live a more financially abundant life. When you are in control of your money, you will begin to build wealth, and in the process, you will help others be more successful too.

If you do whatever you want, you’ll ruin your life! And, you’ll be broke too. It’s harder to come back from financial ruin than it is to make a new plan today and stick to it. I know. The road to recovery is long and hard and painful without a plan. Learn the habits of the wealthy. Your financial success depends on it.

The most important skill of your life will be how to make money work for you. Get it right and you’ll be a millionaire several times over. Get it wrong and you’ll always live paycheck-to-paycheck.

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