How to Have More Money with the Beauty of Budgeting

When you practice budgeting, you get to be in charge of exactly where your money goes. Sometimes, we can forget the true value of every dollar—that each one was earned with a specific amount of our time. When we see our paycheck come in, we feel flush with opportunity and we can lose sight of all that time we worked to earn it. Remind yourself how much work went into each dollar. Do you want to waste precious time by spending those dollars wherever your impulses take them?

This is just one of many important reasons to keep a budget. Here are a few others:

  • It lets you keep your eyes on the prize.
  • It ensures you don’t spend money you don’t have.
  • It leads to a happier retirement.
  • It helps you prepare for emergencies.
  • It sheds light on bad spending habits.
  • It’s better than counting sheep at night.

As we learned in the last Focus on Your Money webinar, we have to know the full scope of our financial situation in order to change it. Hope is simply not a strategy. You’ll have to take a more realistic look at your money before you can gain control over it. Luckily, we’re here to help.

Essential Steps to Budgeting

It may seem overwhelming at first, but by following the steps below, you’ll see that budgeting is actually quite simple—it’s just a habit that you need to form. Before you begin, set a financial goal to look forward to, like a dream home, a place to retire, or an exciting vacation in Europe. These goals will help you stay focused and make budgeting a little easier.

Know your income

The money you take home will become your budgeting baseline. The catch? You can’t build your budget on your salary alone—you’ll have to build it on your net income. Deduct your income tax and set it in your savings account before you pay yourself. Then, you can use the amount that’s left over to start your budget.

Determine your basic expenses

Count up the bills that have fixed payment amounts, such as your mortgage, your car, your insurance, or your student loans. This is also a good time to set up your emergency fund—pick a number to save monthly and factor that into this category.

Determine your variable expenses

Variable expenses are those that will change from month-to-month. These are your phone bill, your groceries, meals at restaurants, and entertainment—all things you have control over.


Now that you know your expenses, determine what’s really important to you. We all tend to think we won’t be able to live without the latest iPhone, but gadgets like this fall in the “Like to Have” column instead of the “Necessity” column. Be ready to make tough choices: do you really need unlimited texting? Do you really need 400 channels? You’ll have to take an unsparing look at your lifestyle to figure out what’s truly necessary and what is a luxury.

Follow your spending and review it monthly

Keep an eye on your spending—especially credit cards—and watch out for small things that quickly add up. It’s easy to cave on these minor expenses from day-to-day, so stay diligent!

Keep track

Find the best way to keep track of your expenses and income. You can use pen and paper or your favorite mobile app if you prefer, but luckily, Maria Riofrio of the LiSA Initiative has made a budgeting spreadsheet that will do most of the heavy lifting for you.

FFS Monthly Budget Tracker

Customized just for you, this spreadsheet is built with specific formulas that will automatically do all the math your budget needs. To begin, put your projected income and expenses into the left-most column. This will anticipate every dollar coming in and out of your budget each month. You’ll find your fixed expenses are coded in green, the flexible expenses are blue, and the intermittent expenses are represented by yellow.

After you’ve projected your expenses for the month, you can start tracking what you’re making week-to-week and stay on track by adjusting accordingly. Place your income in the top row (remember to save your taxes first and only use net income), and the sum total will automatically populate in the upper right-hand corner of the sheet. Your weekly expenses will also populate just below your total income as you go along. The difference between the two will then be calculated to show you the money you have left as the month goes on.

Start budgeting today with our LiSA Budgeting Sheet.

The Ten Best Ways to Save Money

Soon, you’ll be able to see which habits you need to change to have more money every month. The best way to positively affect your budget is to lower your expenses and increase your income. For this, an irregular income can actually be a good thing—when you need more income, you can simply go out and do more business.

If you have a normal 9-to-5, you’ll have to focus more on cutting down your expenses, as there’s not much you can do to raise your income outside of getting a promotion or a new job. Here are the best ways to cut your expenses and save money:

1. Eliminate debt

Interest and annual fees

You Have to Know Your Numbers to Change Your Numbers

The easiest way to put your financial life in order is to start budgeting, yet most people are still resistant to it. In fact, only 4 in 10 American adults would be able to cover a $1,000 emergency using their savings. Not only is financial security good in and of itself but getting your finances under control can also lead to better sleep at night, sturdier romances, and greater overall happiness.

Where should you start? We’ll show you, but first, there are two truths that you must address to get in the right mindset for financial health. First is understanding that, when it comes to your money, you are the one in the driver’s seat. The bad news is that no one is coming to save you—this is all on you. The good news? Budgeting is not that hard, as long as you dedicate yourself and commit to change.

The second truth is the importance of delaying gratification. Humans were designed to move toward pleasure and away from pain, even if it costs us more pain down the line. This instinct toward pleasure is called instant gratification—evidence of its existence can be found in the Stanford Marshmallow Experiment of 1972. In the study by Dr. Walter Mischel, a group of children were each given one marshmallow on a plate and told that it was theirs to eat. Then they were told that if they waited a certain amount of time before eating it, they could have another marshmallow as well and get to eat them both.

Plenty of children ate the first marshmallow instead of waiting for the other. In follow-up studies, children who waited for the second marshmallow were found to lead better lives overall—they had better SAT scores, lower amounts of substance abuse, better responses to stress, more educational achievements, and more success in relationships. These children were practicing delayed gratification, and their lives were better for it.

Luckily, your willpower can be strengthened like a muscle. It is never set in stone. “The ability to delay gratification for the sake of future consequences is an acquirable cognitive skill,” according to Dr. Mischel. We budget to reverse our human conditioning—getting the pain out of the way early and enhancing our reward later in life.

Identifying Your Needs and Wants

To budget properly, you must first learn the difference between the things you want and the things you need. Wants are the things that give you pleasure, such as a beach home, the latest fashions or a nicer car, while needs are all the things you have to buy to survive, including food, shelter, basic clothing and transportation.

Before making any purchase, determine whether you’re satisfying a want or a need and whether it will bring you closer to your financial goals or farther away. Cover your needs first, and then, with the money you have left, you can move toward your wants. Don’t be fooled, though! Think carefully—sometimes something that looks like a need can actually be a want in disguise.

How to Start Budgeting with an Irregular Income


This helps create financial awareness—if you don’t know where your money is going, how will you know which habits to change? To make your money work for you, you have to make sure you aren’t wasting it. For the next two weeks, keep track of every dollar that you spend, and write it down using our downloadable Expense Tracker.


The following expenses make up your baseline:

  • Groceries – include the lowest food cost that is reasonable.
  • Housing and Utilities ­– mortgage or rent, utilities, insurance, taxes.
  • Medical costs – copays, cost of medicines.
  • Transportation – car payment, gas, maintenance, insurance.
  • Miscellaneous – expenses you were not anticipating.

With an unpredictable income, you must work “backward” by starting with the money you’re spending and figuring how much of that you really need. Knowing your baseline will give you that number.


Keeping your money in different bank accounts ensures that you know the specific purpose for every dollar you have. You should have the following bank accounts, at the least:

  • Business checking account – this is where your commissions will be deposited.
  • Personal checking account – pay yourself with every commission by transferring money from your business account to your personal checking account.
  • Savings account – this is for personal goals, long-term savings, and your emergency fund.
  • Tax savings account – this is for the money you owe the IRS. Keeping this money separate is essential to keeping track of tax payments.

Start by doing some research in your hometown to find out which banks have fewer fees and more advantages and go from there.

These tips will help you build a foundation to start budgeting. Use this week to track your expenses and get an idea of what your baseline looks like; in the meantime, set up your bank accounts. Next week, we’ll provide you with our budgeting template, available for download during our next webinar * and in the accompanying blog post.

Until then, remember that you’re the one who has to take control. Practice delaying gratification, keep track of every dollar and identify your wants and needs. Recruit a “budget buddy” to help hold you accountable, and don’t be afraid to ask your family for support. Remember: keep it simple! There are no more excuses—if you start budgeting, even you can have financial security and peace of mind.

There’s a candid conversation we all have to have with our parents at some point in our lives regarding things like long term care, overall finances, outstanding debt, and the amount of savings they have. It may feel awkward, but it’s best to have this conversation sooner rather than later, particularly to find out if they have life insurance. Getting life insurance early can help provide for your parents if they face a chronic or critical illness or injury and waiting too long can mean it’s no longer possible.

If they don’t have any coverage, you might find yourself wondering if you can buy a policy for them. Luckily, the short answer is yes; however, there are a few factors you should take into consideration before settling on a policy.

Consent and Insurable Interest

There are two things you must have to buy life insurance for your parents: consent and proof of insurable interest.

Obtaining the consent of the insured is simple enough. All you’ll need is their signature on the application, and you’ll be the owner of the policy and able to make premium payments on their behalf.

Insurable interest means proving that the insured’s death will have a financial impact on you. If it would cause you financial loss, then you have an insurable interest—being the child of the insured fulfills this requirement most of the time.1

How to Determine Coverage Goals

After you’ve confirmed consent and insurable interest, the second thing you’ll want to consider is the amount of coverage your parents will need.

If your goal is only to cover the final expenses—which includes funeral services and some existing hospice and hospital fees that aren’t covered by Medicare—a policy between $10,000–$50,000 should suffice.

If you need coverage beyond these final expenses, you’ll want a different type of policy. For example, if your parents leave you a house with a sizeable mortgage that you’re not prepared to pay off, you’ll want a higher death benefit. If you don’t plan accordingly, the house you’ve been handed could be lost or forced into a sale during an already difficult stage of grief.

As a rule, it’s best to budget a little higher than $10,000 per person, if at all possible; that should be the minimum death benefit necessary to meet funeral expenses and any unforeseen costs.

What Factors Affect Policy Rates?

The following factors will determine what kind of policies and rates your parents will qualify for:

  • Age
  • Gender
  • Height and weight
  • Health history
  • Marital status
  • Tobacco or nicotine usage
  • Alcohol usage
  • Drug usage
  • Hobbies

Some policies may require a health exam, while some may not. You may assume that taking a health exam will automatically increase rates, but that’s not always the case. If you bypass an exam, the insurer has a harder time estimating risk, and rates may actually end up higher than they would be if they’d taken an exam. Talk to your parents about their existing health conditions and decide whether they’d like a policy with a medical exam or not. 2

The Best Types of Life Insurance for Parents

So, which types of policies could be best for your parents? Here are a few options:

1. Guaranteed Issue Life Insurance

With Guaranteed Issue Life Insurance, there are no health qualifications, and your parents cannot be denied as long as they meet the age requirement. The policies range from $5,000 – $25,000, which should be enough for the funeral and a bit extra, making this a nice solution for anyone who needs guaranteed coverage.3

2. Simplified Issue Life Insurance

Another no-exam solution, this whole life policy is to be used specifically for funeral and burial costs. Your parents will have to answer a detailed medical questionnaire, but an actual medical exam is not required. With coverage up to $50,000, this type of policy is usually only available to people over the age of 50 and is a great solution for getting insured later in life.4

3. No Medical Exam Term Life Insurance

With no exam, this is a conventional policy that ranges from $10,000 – $1,000,000, which is great if you need higher limits of coverage. While your parents can still be denied for certain health conditions or age, the larger death benefit is worth considering for potential debts and income loss. 5

Or You Can Help Them Insure Themselves

It’s easy enough to buy life insurance for your parents, but if all else fails, it may be easier to help them buy a policy for themselves. If you can get them to understand the necessity of having a policy in place, they can apply on their own and there’s no need to prove insurable interest.

You can always do the heavy lifting for them by comparing rates, filling out their application, and preparing enough so that all they have to do is sign. Offering to do this will also open an important dialogue about long-term care, wills, executors, and the overall state of their finances. You’ll all rest easier knowing your future will be protected, and you can focus on the good times to be had every time you see each other.

Four Benefits of Using a Financial Expert

If you’ve never considered it, you ought to know the many benefits of checking in with a financial expert.

While it may seem like your finances aren’t complex enough to make consulting a professional worth it, having someone you trust to help you meet your financial goals can make it worth it. Spending money to manage your money can seem like a rich person’s game, but no matter your income, there is a real benefit in getting the best resources to make your money work better for you.

If you’re hesitant about meeting with a financial expert, here are four reasons to reconsider:

1. They have the time and resources to do the work for you

Anyone who has started a DIY home project knows how simple things can quickly get complicated when done by a novice. It’s easy once you know what to do, but the time and energy it takes to master a new field — like cabinetry, electrical work, or finance — isn’t always worth it. Making wise decisions with your money can require a lot of research and mental energy. Piling this on top of responsibilities like your job and family can take up more of your time than you might first expect. It would take you years to reach a professional level of expertise with such limited time. A financial expert can help you make better decisions faster and can give you a blueprint to follow in the years to come.

2. Give yourself the chance to explore your options

Financial experts have knowledge that can open up new options and financial paths that you may not even have known existed. Because you’ll be working with a professional, they may be able to point you toward financial outcomes that you thought were impossible. Taking advantage of those options can make all the difference in the world of money management. This becomes even more crucial if you don’t have a ton of money to work with — a planner can help you make that money go further and set realistic goals.

3. See your situation from an objective perspective

Money can be an emotional topic, complicating the ability to make rational financial decisions. A financial expert will analyze your situation and provide you with his or her objective perspective. They want to help but, at the end of the day, they don’t have the emotional attachment to your money that you do. Most of the time — particularly if you’re trying to navigate a difficult or potentially life-changing situation — they can see things much more clearly than you can and help you to make the wisest decision.

4. Enjoy your peace of mind

If you’re not an expert, there may be gaps in your knowledge that can’t be filled by light research. A financial expert can look at the specifics of your situations, explain a variety of options that fit your needs, and recommend what they would do if they were in your shoes. Selecting a path forward is easier when you’ve had the opportunity to weigh a few strategies. It will offer you peace of mind in knowing you haven’t missed any better financial solutions.

So, if you’ve been hesitant to consult a financial expert, reconsider. They offer the specific expertise, objective perspective, and intellectual tools you need to help take your financial decision-making to the next level.

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Smart Start For Your Retirement Savings

When you imagine your retirement years, what do you see? Long walks on the beach, spending time with your grandkids, traveling the world, or fishing on the lake? Whatever your dream, retiring for the workforce in time to enjoy your golden years means you need to start planning now!

Here are some popular investment vehicles that can help you build your retirement nest egg and plan for a financially secure future.

401(k) or 403(b) Plan

A company-sponsored 401(k) or 403(b) plan is one of the most popular ways to fund your retirement. With automatic payroll deductions, pre-tax contributions, and tax-deferred growth, it’s a smart way to reduce your current tax liability and save over the long term. These plans typically offer a broad range of investment options with varying degrees of risk, and a loan feature. Many employers also offer a matching contribution, up to a certain percentage, which is essentially free money!

Traditional IRA

A Traditional IRA allows you to deduct the amount of your total annual contributions, in most cases, when you file the same year’s income taxes, with taxes taken in the year you withdraw funds from your account.

Most Traditional IRAs offer a variety of investment options, including stocks, bonds, mutual funds, and money market securities, and any earnings receive the benefit of tax-deferred growth. Contributions can typically be deducted from your taxable income, depending on your income level and whether you or your spouse have 401(k) or 403(b) accounts. You then pay taxes on the contributions and earnings when you withdraw the funds.

Ideally, distributions occur during your retirement years when you qualify for a lower tax bracket, benefiting from the tax deferment. With traditional IRAs, you must begin making regular withdrawals after age 70 ½, with the ability to withdraw up to $10,000 without any withdrawal penalty for qualifying expenses before the age of 59 ½.

Roth IRA

A Roth IRA also allows you to contribute after-tax dollars to an account. Your contributions, however, grow tax-free, which means that you won’t pay any income tax when you take a distribution. These accounts are especially attractive for young investors and those who expect to graduate into a higher tax bracket in the future. Since your contributions (excluding earnings) were made with after-tax dollars, you can initiate a withdrawal at any time. To withdraw earnings without penalty, you must be 59 ½ years of age and have held the account for at least 5 years.

Permanent Life Insurance

One often overlooked retirement savings vehicle is an Indexed Universal Life Insurance policy (IUL). Not only can it protect your family’s financial security during your working years with a death benefit, but it also provides the potential for significant cash value accumulation. Depending upon the policy, the cash value can be invested in a fixed fund that offers access to higher credited interest rates and the protection of a guaranteed minimum, or in several different equity indexes. IULs do place a cap on your gains, but they reduce your risk by protecting your principle so that if the market performs poorly, none of your funds will be lost.

Upon retirement, you can take tax-free distributions of your cash value, and when you pass on, the tax-free death benefit will protect your beneficiaries against financial uncertainty. Unlike other forms of investment, these funds will be available immediately to the beneficiaries as tax-free income.

Take a Step

The secret to saving money for a comfortable retirement is to start early and contribute regularly.  Talk with your financial advisor to discuss the most appropriate investment vehicles and options to help fund your golden years!

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The Sooner The Better: Simple Ways to Save For College

Whether you’re rocking your sweet two-month-old baby to sleep or teaching your three-year-old to say please and thank you. Savor it, because they’ll be packing the car and heading to college in the blink of an eye. With the cost of a college education on the rise, your goal is to be thinking about how you’ll be spending their holidays, not how to pay for tuition.

With an early start and small, continuous investments, you’ll be better prepared to tackle the tuition costs. Here are some options that can help you get started:

529 College Savings Plan

A 529 College Savings Plan is a state-sponsored, tax-advantaged, education savings plan. It offers features and benefits that encourage early investing and helps families create a stronger financial strategy for continued education. Any citizen or taxpayer can open an account, and almost anyone can contribute funds—think birthday, graduation, and holiday gifts that will grow over time!

A 529 Plan also provides valuable tax benefits. Most every state offers at least one plan, and the majority of those states also offer full or partial state income tax deductions, so everyone wins!

Prepaid Tuition Plans

A prepaid tuition plan allows you to pay for tuition credits in advance and at a preset price. With the rising cost of tuition, the state generally assumes the market risk in exchange for your early investment. There are a few caveats, though. Not all states offer these plans and, if they do, you’ll need to be certain that your child will attend an in-state public school.

Prepaid tuition plans offer the same tax benefits as 529 Plans, and you’re able to change beneficiaries, or possibly be reimbursed for all or a portion of your investment if your child opts for another path.

Before you invest, be sure to get the full details on these plans since they can vary wildly from state to state.

UGMA and UTMA Accounts

The Uniform Gift To Minors Act (UGMA) or Uniform Transfer To Minors Act (UTMA) accounts enable parents to establish an account and name the minor child and soon-to-be student as the beneficiary. These accounts offer significant tax benefits. Under the Federal Gift Tax treatment, the first $1,050 in unearned income is tax-exempt. For certain children under 24 years of age, unearned income over $2,100 is taxed at the estate and trust rates.

When the child reaches the age of majority, 18 or 21, depending on the state, he or she can withdraw the funds to pay for college, or any other purpose. If he or she doesn’t decide to earn a degree, there’s no need to transfer it to another beneficiary, which is a common concern with 529 and prepaid tuition plans.

Permanent Life Insurance

One frequently overlooked option for college savings is an Indexed Universal Life Insurance policy (IUL). Not only can the cash value accumulation be withdrawn to fund your child’s education, it also provides a death benefit, which offers your family financial security in the event of your untimely death.

Depending upon the policy, the cash value can be invested in a fixed fund that offers access to higher credited interest rates and the protection of a guaranteed minimum, or in several different equity indexes. IULs do place a cap on your growth, but they also provide valuable principle protection that offers you more financial security for the future.

Start now!

Whichever option you choose, start early and save on a regular basis. Be sure to meet with your financial professional to discuss the most appropriate options that can help you reach your college funding goals.

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Should You Be Happy With Group Life Insurance?

When you get a new job, you’re going to have to answer a lot of questions right off the bat. What’s your direct deposit information? Are you going to join the dental or vision plans? Which slot would you like on the kitchen duty roster? Chances are you’ll be asked how much life insurance you’d like through your employer. As part of their benefits package, many employers offer free life insurance known as group life. Sometimes you don’t have to do anything, and you’re automatically enrolled.

While some employers offer free life insurance, it’s often nowhere near the recommended amount to insure your family effectively. The basic group life plan could be a round figure, often between $25,000 and $50,000, or it could be your annual salary rounded to the nearest $1,000.

Should You Accept this Group Life plan?

Absolutely. There is no reason not to accept a group life plan through your employer, as coverage is generally free up to a certain point and guaranteed. To participate, be sure to fill out any necessary forms by the deadline provided; you may have to wait until the next year to enroll again if you miss it. You will need to select one or more beneficiaries on the policy so that it’s not left up to the courts to determine who will receive the benefits in the event of your death.

Buying Additional Group Life Insurance Through Work

You may be able to buy up to three or four times your annual salary in supplemental group life insurance through your employer. While the free group life may be guaranteed, higher levels of insurance could require you to show “evidence of insurability” by filling out a health questionnaire. Depending on your health or other risk factors, you may be required to provide access to medical records as well as submit to a physical exam and other medical tests. This further coverage is not guaranteed and can be rejected based on your test results.

Buying into a group life plan through work can give you great insurance rates and incredible convenience. Any insurance is better than no insurance at all, and a group plan is one of the easiest ways to get coverage. If you have health conditions that may affect your qualification for life insurance, group policies may give you better rates than going it alone.

Should You Rely Only on Group Coverage?

While having group coverage is a useful foundation, it’s not your best bet if you want lifelong security. The advantages of a group policy—convenience, cost, and guaranteed coverage—can also become disadvantages if you move employers. Great rates and an easy process come from limiting your options. When there are no decisions to make, it makes things simple: say “yes” and move on. While term life insurance could be working for you, a more complex product like whole life or universal life might be a better fit for your needs. Talk to your agent to see what options would be best to consider.

Though the price of coverage may be cheap when you start a job, it’s not likely that you’ll be with that employer for the entire time you need coverage. According to the Bureau of Labor Statistics, the average American holds 12 jobs before the age of 50. The odds of holding the same job for longer than 4 years get slimmer as our working habits change. You may be able to convert your group policy into individual life insurance, but the cost could be significantly higher. If you can’t, you may find it difficult to qualify for new coverage due to changing health circumstances. Rates increase as you age, so no matter what, insurance is going to be more expensive when you leave an employer than when you started.

Finally, group life is generally capped at a certain amount. If you need more than that—and you probably do—you might need to consider buying insurance on your own in addition to group life.

Weighing Your Options

While navigating all your employment benefits may seem daunting, life insurance can be the simple part. Take advantage of the group life policy if your employer offers it but know that this coverage is likely not enough. Meet with an FFS agent to discuss your options—from group life through your employer to individual policies—and ensure that you’re safeguarding your family’s future today.

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