Stephen Scoggins walks through seven financial principles: build a five-year plan, budget with specific percentages, eliminate debt, automate your actions, and measure progress. He paid off $80,000 using these steps.
Questions this video answers
At least a five-year plan.
Roughly $80,000.
About 12% of income.
No more than 15%.
No more than 10%.
Welcome to the Journey to Principles. I'm Steven Scoggins, and most people have no idea they can actually stop missing their financial goals if they actually followed a proven process to help you get there. So we're going to go over seven principles to help you actually begin to win the day. So stay tuned.
Most people don't actually realize they're truly struggling to actually get advancement or financial life because it only tends to show up when the bills can't get paid or there's not enough money to go around at the end of the month. Well, I don't want you to feel that way. And especially with this Covid stuff going on right now, it's never been more important than right now to make sure that you've got the principles you need to carry your financial life basically to success. The truth is, I'd still be struggling myself if I hadn't been taught these seven principles that I'm going to share with you today from my first mentor, Steve Myrick. And when I put these things into practice, not only did I get ahead, but I also never had to look back. And that's exactly what I want for you. So let's jump in. Principle number one, focus on where you want to go instead of where you are today. So much of understanding where you want to go is determining your vision for your future. Far too often we evaluate our lives and evaluate our circumstances only based on where we've already been. So we've only known poverty. If we've only known situations where there's not enough money, then we're basing our belief that somehow our worth is tied to that. What I want to encourage you to do is, is to understand that you need to focus on where you want to go instead of where you are so you can actually take steps to get there. Think about creating a plan, for example. Now, principle number two is just as important. Commit to a five year plan at a minimum. One of the biggest traps most people fall into is having some wins, but unfortunately, accidentally spending those wins and those resources they need to actually build the foundation. Because they get overconfident, they begin making some money and think, okay, now's the time for me to go ahead and level up my life. Not realizing that without a five year plan, it's going to be very difficult for you to actually take the time to build a strong financial foundation. I personally used a five year plan to get myself out of roughly $80,000 in debt so I could actually take the cash that I was getting from that debt in an Effort to actually use it to create an ROI and invest in something else was actually going to make me resources and not take my resources. So make sure you take the time to develop a five year plan with the vision that you have.
Now. Principle number three is just as important as the others. If you fail to plan, you plan to fail. Now I'm sure you've heard that before. But it's important that you understand that if you're going to get somewhere with your financial life, you've got to follow a plan, right? You spend all this time creating that five year idea concept of where you want to go. But if you're not actually putting it in writing, making it a priority and following through with it, you're going to mess yourself up. I personally use some various ratios like this housing and rent. I try to use no more than 15% of my income. Utilities no more than 10%, my giving no more than 10% to get started. Food no more than 15% and transportation which can get you a lot in trouble, no more than 10%. For example, when it comes down to cars, I know a lot of people who have very, very nice cars, but they also have incredible amounts of debt and unfortunately that prevents them from buying the house they've always wanted to buy. Alright, so make sure you're not making that same mistake. Also consider that saving. You need to save roughly 12% of your income on a regular basis in saving to help you actually succeed. When it comes down to insurance, trying to earmark no more than 15%. When it comes down to paying off debt and discretionary, I also Recommend spending about 15% of your total income to help you get there. Those ratios will help you actually build a budget based on your income that allows you to put a plan in place to actually make that a reality. So make sure you do that. Principle number four and I can't say enough about this get out of debt and stay out of debt. One of the biggest missing examples or biggest mistakes people make, including myself, right, I made this mistake myself is the get it now, pay for it later mentality. Nothing will keep you poor longer than actually having a lots of debt which takes your cash, takes your capital and does not allow you to invest it properly. For example, did you know that if when you go to buy a car for example, they're going to sell you on a three to five hundred dollar payment, in most cases, maybe there's zero down, maybe there's whatever down, but it's still going to be a 3 to 500amonth payment. Anywhere from 3 years to 7 years. If you were to buy a beater and pay cash for it and just sacrifice for that same three years, you could buy a nicer car by taking the same payment that you were about to use in order to make it work for you. So keep this in mind. You get out of debt so you can have cash, so you can make your money work for you and actually have a true roi, AKA something like a return on investment, that really works for you. So make sure you're doing that. Principle number five Only action leads to traction if you don't take action on the plan, if you don't fully implement it, then you're not going to be able to get out of debt. You're not going to be able to invest in the car or the house or other things that really matter to you. What good is creating a plan without using it? All plans need routines to set them in place before they actually become effective. Decide today and right now you will use your money wisely. You'll put it to work for you rather than you working for it. For example, if payday is on the 1st, you should do as much as you possibly can to automate as much of the disbursement as possible to make sure that money is already being pre spent without you having to make a judgment call. What you're trying to prevent here is the emotional purchase. You want to take the time to make sure a strategy is being followed with action steps and routines to make it reality. And that way you can actually make that budget make you money. Principle number six is just as vitally important. Remember to measure your milestone or you're going to miss them so many times. We put the budget in place, we take the actions we need, but then we're not inspecting what we expect. In other words, some of those oh moments or those Murphy's Law things tend to get in our way and then cause us to spend money that we thought we were actually saving. The goal when it comes to measuring your milestones is to actually understand where your money's going and actually be able to pivot on a regular basis in an effort to actually make your money work. Right? You don't want to get stuck in this time frame where you're constantly spending money that you're not expecting solely because you're not taking the time to measure your progress. So make sure you're measuring your progress on a regular basis. Now, our final principle is just as important as the rest. As you can imagine, these seven principles help you win with money in general. But principle number seven is adjust the approach until it works. So many times I got stuck in my own financial life of not having or having those unexpected things happen that when I didn't adjust, they just caused me more pain. When you look at your milestones, you need to be looking constantly to figure out what needs to be shifted. And then you have to change your approach and adjust your approach until it works for you. For example, some of these Debts may take $20 a month for a little while, but then you're going to get to a place where you can do $50 a month. So then double it, right? Take the time to make sure the stuff works for you. You want to take the time to adjust your aspirations to make them actually become to a reality. Now that about does it for the seven principles, but if you'll use them, they'll actually help you win. If you want to do a deeper dive, take the time to click on the video in the description or on the screen right now so you can actually start winning with your money.
Hey, it's Connor with the Journey principles. If you enjoyed that lesson on improving your financial health, you should also check out our whiteboard lesson we did earlier this week about the four steps to financial wellness. Also, we put together an Entire Life Mastery 101 playlist right here on YouTube, so feel free to check that out as well.
