Simple tips on how to gain control over your finances
Danny Kofke shows how to live wealthy with little money
- Duration 6:07
- Date May 4, 2012
Danny Kofke shows how to live wealthy with little money
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To Atlanta where we have been getting -- the author of a simple book of financial wisdom.
Teach yourself and your kids how to live wealthy with little money and so legacy could that everyone would love to know Danny so first of all welcome.
Two FB -- NTELOS what is the secret how do you feel wealthy but with just a little bit of money.
While they sit.
Leon you know we -- have a set amount coming in so to me it's important what you do with that.
And for us living wealthy I think personally it's just I get to go to a job that I -- -- about.
And better yet my wife was able to stay home for seven years and raise our children so we may not drive a Mercedes we may not live in a huge house.
But we have the freedom to pursue things that we are passionate about in that have needing to us so that's any kind of -- wealth and in -- of that.
We we still have an emergency fund in place we invest each month for our retirement.
And basically kind of get to do -- have the freedom to do some of the things that we want to DO.
That sounds like you before you himself to write the book you -- to make a plan and -- for some people they -- seems to be a lot to be your arms around it.
Talk to us a little bit about what the first steps are in two taken these steps tuned to feelings wealthier -- getting your fiscal house in order if you.
-- you mentioned -- first and foremost is having a plan in place and my wife Tracy was a schoolteacher before becoming a state Oman.
And honestly at that time mom before we had children teacher salary of about 3738000.
Dollars a year so knowing that.
If we didn't have a plan in place and we had a huge mortgage lot of credit card debt carloads in those types of things.
It would be next to impossible to live off a one teacher's salary raise if -- only.
But before we had children we had that plan and place a long term plan of where we wanted to be -- a few years and you know ultimately -- god and we did that sort of we kind of had a role in that.
So I'm so we play -- for that on its no different than if you're going to go on trip a road trip.
You're gonna consult -- map the same thing holds true with your financial future if you wanna get somewhere you have to have a destination in mind and having a plan in place and then.
What really help the secondly is we know exactly where our money is being spent on there -- so many people I talk to right now on -- -- -- I don't have any money.
Yet they have the newest iPhone they have new Coach bags with what I've -- also watching you do have money.
You're just choosing to spend in this way so what help -- so much is.
For one month shortly after we got married we walk around the piece of Paper and pencil and we wrote down everything we spent.
And I can get some general tips Internet a latte factor don't -- -- the vending machine those things but that doesn't fit everyone's salute you write this down for one month you're making -- personal.
Your handwriting the numbers don't lie you let them down yourself.
So at the end of the month you -- in.
Analyze and say oh my gosh you know we get around five times -- month that we -- the movies or whatever and then you can cut out where needed because let's face it there's two ways that make more money.
Either they have to get a higher paying job which it is possible.
But for many a lot more -- -- now than it was five years ago which leads us into its B we cut back on what we're spending money on which puts more money back into our bank account and with.
Lest you guys have accountability to at this -- -- with yourself ultimately at the end of the month the U.
Still find yourself doing now from time to time maybe with a larger discretionary items that you will sort of by journal write this down in a journal or are keep track of those and maybe not this outside of any machine -- your local coffee place.
Right no we actually we still because I think reaganesque we kind of know where every dollar is going to instill trying to get to live -- pretty moderate income reason to god earth we do have to make every dollar count.
But actually you know kind of what we do here is an easy trick to her for your listeners viewers.
Is we write down at the beginning of the month in our checkbook we have -- post -- -- and it lists are expenses that have to come out more -- Car insurance those types of things and then we automatically deducted at the beginning of the month from the paycheck and then we just use whatever is left over and that is for -- weekly spending so within the month the things that already have to come out.
Party taken out before we have a chance to spend that money because it has to go towards something not announcers like.
You guys had your plan from day one you talked about it clearly you had this.
You know it through the -- -- -- certainly through the engagement because you are ready to go right after the wedding with writing this stuff down but.
What about for people who were you know older who have already been a relationship for a while.
-- us about what steps you and advise them to take in terms of getting -- arms around the situation prioritizing.
Is it paying down the debt obviously have to pay up the monthly expenses or is it starting to work on that rainy day fund -- -- do you recommend working on them simultaneously.
Right -- -- first performance -- -- with -- you have to get together and come to some sort of agreement -- we have to be on the same page and unfortunate -- myself we did talk about that while we're engaged in kind of discusses future financial plans and for so many unfortunately right now financial topics still remain -- taboo issues so you get those same -- but what I recommend -- kind of -- -- -- type approach where we need to start off with a small emergency funds and 80015100.
Dollars build that up.
And then we start paying off that debt and I know -- -- funny different people say pay off the card that has the highest interest rates first.
I'm gonna more with the debris -- -- approach of these pay off the smallest that first because I think most people have gotten into trouble with money because of the emotions I think most of us can do the math on credit card -- just a put a hundred dollars on a credit card point 4% interest.
You'll make a payment only hear how much are you going to -- four point 4% of 100 dollars 24 dollar so 124 dollars so.
Eighth ninth grade basic math but many people they buy things on credit.
And it's not because of that math problems they know they're doing that is because the emotional impact so lot of people have they had this fear of failure with money they think I can't handle it.
So we start off small we help those smaller dad's first.
To build that self confidence to say you know what I can do and it's very similar to -- did you -- on a diet the first -- could lose two pounds and actually the news tonight you're going to be motivated to go forward in the same thing holds true that we have to kind of give ourselves that psychological lose so we can say you know what I can do this now -- -- be that hard when Danny thanks so much for joining us here is the author of a simple look at financial wisdom.
Teach yourself and your kids how.