Chapter One


Materials required to complete this chapter:

6 #10 business size envelopes or equivalent
6 clear plastic containers

1 Black magic marker or any tool you can use to write on the envelopes or plastic containers
30 uninterrupted minutes in a quiet location

You have already completed step 1.
You are reading this book and hopefully have decided to give it a chance. Though most finance books would now launch into budgets and spreadsheets for many of you it is too soon for that.

You may be overwhelmed with getting through today and just thinking about a budget makes your head hurt. So instead, my action plan is for you to pull out the envelopes, and label them using the black magic marker as listed below.

Necessities (Must have) (NEC – 55%)
Long Term Savings for Spending (LTSS –10%)
Fun (FUN - 10%)
Charity/Giving (GIVE - 5%)
Education (ED – 10%)
Retirement/Financial Freedom (RET – 10%)


Stop and do the exercise now


The percentages listed on the envelopes are your long-term goal. You want to spend at most 55% of your income on necessities, such as food and shelter. For today, I will assume that you are living like I was several years ago, living paycheck to paycheck. Any emergency that required an immediate cash payment, no matter how small, was enough to cause panic.

If you have trouble with percentages, don’t panic. I will explain more about how to divide up the money using the above percentages in Chapter 2. For today we will focus on 2 envelopes only, FUN and RET. For some of you an envelope labeled FUN looks like a cruel joke. How can I have FUN with circumstances like this? Though I may not have been exactly where you are, I do understand your skepticism.

However, I asked you to follow my step-by-step plan to improve your life and this is the second step. Skepticism is ok, but do not let your doubts get in the way of putting this plan into action. Eventhough the longer-term goal is to put money in all 6 envelopes, in the proper percentages and live a more balanced life, you are not in a position to do that yet. You need to start somewhere and this is a place to start.

What we are creating is a life long process for you to follow that will help you to reach your goals.


Sign up for our newsletter for fun facts, tips and techniques delivered straight to your email.

Design downloaded from free website templates.