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I just heard a news story where they said that 88% of people surveyed said that they had never been taught financial literacy in school. I thought that was interesting, because your income never exceeds your ability to spend it.

Your brain is a problem-solving machine. When you get a little more money, your brain, being the problem-solving machine that it is, will figure out ways to spend that money almost unconsciously. That’s why you can never get ahead – your your brain is wired to figure out ways to spend this new money. That’s why you have to make saving money a rule that you consciously follow rather than a plan.

Manage the money that comes your way now.
My book, Understanding Money, teaches you is how to manage that 85% that you’re allowed to spend, so that you can save the other 15%. The key is managing the money that comes your way right now – not earning more money. Earning more money is not the answer.

We all want to be independent. We start out as children who are dependent on their parents, but as adults we don’t want to be dependent on anyone or anything. Achieving independence happens through our pursuit of happiness – and the money that we get should be giving us the maximum amount of happiness possible.

An emergency fund comes first.
When it comes to saving, you’ll need to start by building an emergency fund. Emergencies always come up, and you need to have money there in your savings to handle it.

It’s also important that we learn to prioritize our spending. Essentials always come first – those are the things that are essential for life, like food and shelter.

It’s important that you achieve your money goals in order. The first thing to achieve financially before anything else is solvency. This is the ability to pay your bills without going into debt. Only after that you can think about achieving security and then success.

Life needs purpose.
It’s important to have a purpose in life. We’re not here just to consume – we’re here to achieve things, to bear fruit, to make our mark on the world. My book includes a series of exercises to help you identify your purpose. There are tests that you can take as well as instructions on how to set the long-term goals for your life.

Most people think that the answer to happiness lies in earning more money. I’m here to tell you that it doesn’t.

My book Understanding Money isn’t about how to earn a big pile of money. It’s about managing the money that comes your way.

Why would we want to manage our money? Money is just a tool, it’s not an end unto itself. The reason we want to manage money is to gain the maximum amount of happiness from our money. Accumulating money by itself means nothing.

How do we achieve happiness? We do it through becoming solvent, obtaining security, and getting to a state of independence.

Independence means freedom from worry and stress. It’s the ability to meet our obligations without going into debt. So in other words, I don’t advocate being completely debt-free – that would be nice, but a lot of times that’s not realistic. The point is to not have too much debt that it becomes hard to repay.

Happiness and independence come from setting long-term goals and prioritizing spending. I advocate that you spend a lot of time thinking about your long-term goals for your life, and writing them down. Examples of some long-term goals are

• To be more independent financially
• To not spend every dime you make
• To not take on excessive crippling debt
• To live a more balanced life
• To avoid extremes
• To live a simpler life
• To not be thrown into a tizzy when an emergency comes up
• To understand human nature as it relates to money
• To get better at prioritizing
• To get better at planning
• To do things in their proper order

What are your long-term goals for your life? Write them down so that you can focus on them when you are managing your money.

Stay tuned for future posts where I’ll go into more detail on these topics.

For even more on these topics, order my book Understanding Money and subscribe to my YouTube Channel.

Today I’m going to share the second big idea in my book, Understanding Money. The idea is the 30,000 foot view of how to think about your money.

My book is divided into three sections  – Solvency, Security, and Success – and the important thing to learn is to do these things in order.

The first thing you need to do is become solvent. Solvency is the ability to pay your essential bills. Only after you are solvent, then you can worry about security. After you have security, then you can worry about success.

But again, you need to do these things in order. For example, you wouldn’t want to become a day trader to buy stocks (success) when you can’t even pay your car payment without going into debt (solvency).

Solvency
In the solvency section of my book, I talk about setting your long-term goals first. By doing this, you give yourself a main focus – to keep yourself on track to achieving those goals. Then, I talk about earning and spending. Earning and spending are the two main categories of how you’ll deal with your money.

Security
In the security section, you’ll learn about insurance, savings, and credit.

Success
The success section of my book is last, and for a good reason. You need to achieve solvency and security before can think about doing things that involve being successful. In the Success section, I write about investing, real estate, stocks, and starting a business.

Stay tuned for future posts where I’ll go into more detail on these topics.

For even more on these topics, order my book Understanding Money and subscribe to my YouTube Channel.

Today I’m going to give you details on Van Cleve Rule Number Two that I wrote about in my previous post. The rule is this: Save 15% of all of your income, no matter what the source, and live off the remaining 85%.

Before we start, I’ll mention Van Cleve Rule Number One which is: Your income never exceeds your ability to spend it.

This leads to rule number two because most people reflexively think, “All I need to do is earn more money and that’ll solve all my problems.” This is simply not true. The more you earn money, the more you will spend, even if you don’t realize it.

So how do you implement Van Cleve Rule Number Two? Any time you receive income – whether it be a check or cash – calculate 15% of that. Transfer that 15% to a savings account right away.

Which bank should you use for your savings account? I prefer having an online bank account like Ally – they pay a higher rate, their website is very user-friendly, and their rates are much better than a traditional brick and mortar bank.

Make this a rule, not a plan.
My number one tip for making this work – it needs to be a RULE,, not a PLAN. You need to make the transfer right away, as soon as you’re depositing your check or getting cash.

What if I already set aside money for a 401(k)?
On a side note, if you have a 401(k) and you’re already putting 5% of your gross pay into that, then you can just add 10% of your income into your savings account, so that you have a total of 15% going into savings (5% to 401(k) + 10% to savings).

How do I live off of just 85% of my income?
It may take some time to adjust to living off of only 85% of your income. You can do it in one of two ways (or both).

Cutting Expenses
Method #1 is to cut your expenses. You’ll need to divide your expenses up into two categories: essentials and discretionary. Essentials are things like food, utilities, transportation, shelter, health care, and insurance. These things are your number one priority when it comes to allocating your money. When you are able to pay these essential bills each month, you are considered solvent.

Discretionary expenses are all of the other things that will not affect your health and your life – things like cable TV, entertainment, and vacations. If you need to make cuts, these are the first things that you’ll want to consider.

Attrition
Method #2 for adjusting to live off of 85% is attrition. For example, if you get a raise, then put 100% of that raise into your savings. You won’t miss it, because you weren’t getting it before. This can help increase the amount that you are adding to savings, until you reach that 15%.

In Conclusion…
I know all this sounds obvious, but the cause of most people’s problems with money boils down to this – confusing the essential things with the secondary. So again, your first goal is to be solvent, which is the ability to pay all your essential bills without going into debt or tapping into your savings. The good news is you get to spend the other 85% however you want.

Stay tuned for future posts where I’ll talk about what to do with that 15% as you’re accumulating it, getting out of debt, and why I think budgets are stupid.

For even more on these topics, order my book Understanding Money and subscribe to my YouTube Channel.

The number one big idea in my book, Understanding Money, is a tip that will change your life if you implement it successfully. I call this Van Cleave Rule Number Two.

The idea is this put 15% of ALL income, no matter what the source, aside from whatever you make. This means living on the other 85%.

You may dismiss this because it sounds so simple – but that would be a mistake. It works because it is simple.

Make this a RULE, not a plan. A rule is always done no matter what, whereas plans sometimes get set aside. You’re going to pretend that you you only have 85% to to live on.

To learn more, check out my YouTube Channel where I talk about these concepts in more detail.

You want your payroll funds safely handled and not “impounded” right away like almost all payroll services do.

Some taxes aren’t due until the end of the month AFTER the quarter ends. Some might be due only at year-end.

At RockLedger, we process payrolls and tax remittances out of your checking, meaning money does not come out until actually due. It stays in your account, we are able to process payrolls and taxes only, not actually being able to obtain money for any other reason. Your money is safe.

Clients who want to not mingle payroll and taxes in their operating checking open a separate payroll checking and we tell you what to transfer to it so you can know you’re all set.

We pay almost all taxes electronically and on-time so you never are faced with penalties. If we mess up, we pay the penalty.

It’s Simple.

We would be “too busy” and unavailable for at least the first ONE THIRD of the year. We’d be occupied doing income tax returns. This is how most CPA’s spend their time.

Besides, I don’t enjoy doing taxes. In fact, I hate it. I don’t even do my own, I have a CPA for that. That’s what they are good at. They train for hours every year just to keep current on the new rules and laws.

Most CPAs dabble in bookkeeping and payroll just to keep certain clients happy who insist they do them. They usually relegate these tasks to low level clerical staff. CPAs don’t really want to be doing my kind of work.

You should have the right people doing the right work. That’s what is most efficient and therefore cost saving.

Excuse my bluntness: doing your own bookkeeping and/or payroll is not working smartly. It’s the last work you, the business owner, should be doing. Why?

First, you should be spending all your time and energy doing the work your business does and working ON your business. Not IN it.

What’s better, to earn presumably good money doing what your business does, or work for free being the company clerk?

And another thing, you are not saving money working as a clerk doing non-profit chores.

You probably don’t actually like doing paperwork and odds are, you’re not good at it.

Outsourcing your bookkeeping and payroll will cost much less than having an un-skilled, un-trained hourly wage employee.

All we do at RockLedger is small company bookkeeping and payroll. Call 321-474-9106

It’s not an overstatement to say our payroll service is the simplest and safest possible.

Some payroll services motto seems to be: “We’re not happy until you’re not happy.”

How is it simple and safe?

First, we do all the work, unlike those online payroll services which make you set up the employees and withholdings and any other deductions. We do all that. They require you to process and verify the pay. You only need to give us the employee hours, and we’ll even make you a spreadsheet for that.

Then we do direct deposit for employee’s pay and our fee per pay. We draw from your checking so we never impound your funds in advance for pay and taxes. (Exception direct net pay money taken 2 days prior) Because we are working from your account, we don’t actually touch your money.

We charge our fee per payday, all inclusive. There’s no quarterly fee, no annual fee, just a fee per W2 if there are more that just a few. No nickel and dime fees.

We tailor our service to you instead of forcing you into our system. Some of our clients prefer to write their own net paychecks but have us do the quarterly tax returns.

We work with your CPA to provide all they need to do your income tax return. We also work with you if you do your own bookkeeping and we also do as much as the bookkeeping as you need.

Outsourcing your payroll to us keeps all your pay information confidential from your employees.

If you use a separate payroll checking account, we give you a total figure to transfer to cover pay and future tax remittances. And your money stays in your account until taxes are due, some of which are due quarterly or even annually.

Finally, we give you simple entries to “book” your payroll into your accounting software, which takes about 2 minutes.

To sum up, all you do is get us the hours and we take it from there, direct deposit, paying taxes when due, giving you any reports you need after each payday.

We serve the Treasure Coast- Vero Beach, Sebastian, Fort Pierce, Stuart and the Space Coast- Melbourne, Rockledge, Viera.

Call us at 321-474-9106

Loud budgeting means proudly exclaiming your 2024 spending intention to live more frugally. This is a healthy trend to combat the high inflation and high interest rate environment we find ourselves in today. It means not being ashamed to say our money is tight and we are not going to be stupid about money anymore because we want to come out ahead despite the economy.

I wrote a book, “Understanding Money”, which teaches how to think about money, how to set the priorities to get the most happiness from the money we earn.

It’s not about denying yourself for the sake of piling up money. I say you can spend all of 85% of money that comes your way, no matter the source. Life is still meant to be enjoyed!

But controlling money so you don’t cause financial problems it turns out is one key to enjoying life.

Buying this book could be some of the best spent money in 2024.