I told my story a few months ago. If you missed it and would like to read it, you can click here. As I told in my story, I am passionate about helping people get unstuck so they can make a positive impact on their world.
We can’t separate our lives from money. Money is a part of our every day decisions and it is a part of our big life decisions as well. Until we can tell our money what to do, money will be telling us what we can and can’t do with our life.
There are four main stages we teach people for moving from financial stress to personal significance. We call these:
- Take control
- Escape the pit
- Climb the mountain
- Leave a fingerprint
A lot of people have a certain level of control with their money. Many track their spending to a degree, and can, for the most part, avoid overspending their paychecks. However, this ‘take control’ stage is about taking this to the next level.
This stage is about being able to write down, for example, $500 for groceries and not spend a dollar more than that $500 for groceries that month, and be able to do this every single month. If you have only a loose idea of how much you spend each month in certain areas, you have room for improvement.
When you can tell your money where to go each month, then you have enough control of your money that you can begin your journey from stress to significance.
Escape the Pit
This stage is about getting out of debt so you can free up a substantial amount of money in your cash flow each month. At this stage you pay off all your debt except for your house.
We’re talking about:
- car loans
- student loans,
- 90 day-same-as-cash deals
- 401(k) loans
- medical debt
- credit cards
- and any other money you owe except your house
These all need to be gone from your life. For many folks, monthly payments on these items add up to be from several hundred dollars to the thousands.
The rest of your stress to significance journey can’t resume until you free up significant money in your monthly cash flow.
Climb the Mountain
This stage is about securing your financial freedom and building wealth. To secure your financial freedom, you need an emergency fund. For many people, the pattern of using debt began with an emergency. We don’t want that pattern to get a chance to ever take hold again. The emergency fund covers financial emergencies without needing to go back into debt. We recommend an emergency fund that covers 3-6 months of expenses.
Finally, you are out of debt, have an emergency find, and you can start to financially build for your future. Depending on your age, you should be saving 10-15% of your gross income into retirement savings.
Once you are saving up to 15% into retirement accounts, as your income goes up, you start to pay off your house early.
After you have your emergency fund and before you are done saving for retirement and paying off the house early, you should get ready for the final stage.
You begin considering your unique passions, strengths, life experience and values. You start exploring and testing ways you can leave your fingerprint. Finding ways to change the world that match your unique qualities is a process – not an event. Being exploring now so when your house is paid off, you’re ready to get going.
Leave a Fingerprint
This is the final stage. At this point, you have no payments including your house, and you have an emergency fund. Your retirement is being funded, and you have probably around 30% of your monthly income available for whatever you want. You can now combine your passions, your strengths, your life story, and your values with your money, and you are ready to change lives.
Here are some thoughts on what you can do at this stage:
- Provide support and help for single mothers
- Provide computers or other equipment for schools
- Set up a scholarship fund
- Help families adopt kids
- Become a mentor for young entrepreneurs
- Provide a safe haven for inner city kids to escape the slums
- Help homeless folks get their life back
- Improve the quality of life for seniors
- Connect people, projects and money for endeavors you like and believe in
The idea is that it’s something in which you believe, draws you in, and makes meaning in your life.
These stages aren’t easy. If they were easy, everyone would be doing it. Many factors from within and without will try to derail your journey. Yet, in the end it will be worth it, and you will take satisfaction that you lived well.
What about you? What could you get so excited about that you’d be willing to being your journey from stress to significance.