For every offense, there’s a good defense. Some of the best sports coaches out there will tell you that. Your favorite team may perform well at making touch downs, scoring goals or execute exciting plays. But behind those offensive dynamos, many times, you’ll find equal strength with the defense.
Have you done well for yourself to make extra money, hold down a good paying job, or been blessed with great income all together? These are all admirable offensive financial accomplishments because they generate income. Perhaps you used some creative offensive strategy and hard work to get you there.
But behind your abilities in this area, you’ve got to have a good defensive game plan. If not, you could eventually lose the game. Your expenses could eat up your income.
So, what are some defensive strategies you can use in everyday personal finance to help you win? Consider this list of ideas and then let me know what you think.
Hide money in your checking account
We’ve all heard of having an emergency account, right? But beyond the emergency fund, why not keep a little extra unbudgeted cash in your account? Unbudgeted and out of sight, this money will be available to you if you run short in your checking account one month, or need extra cash fast. Try to forget about it until it’s needed.
Budget for contingencies
So beyond your standard monthly savings for your emergency fund (you’re doing this, right?), plan ahead and budget for contingencies. The key is identifying financial risks. What could happen? This is tough, but the idea is to try to identify a financial storm on the horizon such as a washing machine breaking down (perhaps yours is 10 years old).
How could you mitigate the risk? There may not be many options, especially if you’re not mechanically gifted with the required skills. So, identify a contingency plan. The contingency plan might be to begin saving now for a replacement washing machine. When it goes out, you’ve played some good defense and avoided accumulating debt.
Have regular meetings about money
Of course communication about money is always a good defense against cost and unforeseen expenses. Set up a regularly scheduled family financial meeting with your spouse to plan, discuss spending and review your goals. Having a healthy discussion about money and working together will improve your marriage and your saving account balance.
Spend time each day looking at your spending
I’ve preached this one many times before and I get upset with myself every time I ignore my own tip. Folks, just spend 10 minutes a day tracking your spending! Review purchases, record them against budget categories and know your balances. That’s it! 10 minutes and you’ll be glad you did it. Especially, when it comes time to sit down with your spouse and talk about the state of the family finances for the week. You’ll be prepared to have a fruitful discussion.
Talk to creditors
In debt and can’t repay? Do you have creditors calling? Offensively, someone in the family may have to take action to generate more income. Defensively, humbly engage with the creditors and let them know your situation and that you sincerely want to pay what is owed. Don’t have a plan yet? Crown Financial Ministries Money Map Coaches will be happy to sit down with you and help you create a monthly budget and debt repayment plan.
Control spending
And what would our defensive strategies be without a tip in controlling your spending? Every good budget will have common categories of entertainment, food, transportation, etc. Your job? Go download the spending % guidelines from Crown Financial Ministries and compare to what you’re spending.
Where are you busting your budget? Once you’ve identified these areas, focus on one or two of them and commit to reducing them by 25% each month. Have to say “no” to eating out with friends? Well, sure! You’re playing solid defense to win with your finances.
Final thoughts
Next week we’ll discuss more defensive strategies in part two which includes budgeting with a freedom account, identifying your personal finance team and more. For now, get your game face on and go play some good “D.”
Hey, are you interested in being mentioned in the next defensive strategy post? Send me your ideas. If I’m not already planning to write about your strategy, I’ll include it in a list of other strategies giving credit to you and/or your website.
What do you think of these defensive financial strategies?
{ 5 comments… read them below or add one }
I’m currently working on re-vamping my financial tracking/planning system. As soon as I get my spreadsheet remade, I’ll be able to apply your “10 minutes a day” advice.
I used to be good at this, recording expenses, seeing where my money was going, etc. Recently, however, I have noticed that my system had become too cumbersome, and I wasn’t spending the necessary time on it. So I have become lax in my tracking.
It’s time to fix that, so I’m streamlining my system so that I can keep in better touch with my finances.
Great advice, can’t wait to see the next post!
Matthew, I’ve found 10 minutes tracking my spending saves me a lot of time on the weekends. It becomes too large a task when I have to sit down and catch up on reviewing purchases and entering them in Mvelopes. Tracking each day also helps us to avoid over spending.
Hi Sarah, thanks for your comment. I hope you do start tracking your expenses against a budget or spending plan. Please let me know if you have any questions. jasonprice@onemoneydesign.com
The spending point is key, and I would add that it is incredibly important to set those recurring expenses up in a way that doesn’t break your back. We’ve all splurged a little too much on the dinner out with friends, but its a one-time thing.
If you get yourself locked in to a lease, rent situation, or other recurring expense that busts your budget, it is really hard to shake it.
Good article.
Being of a rather compulsive nature, I’ve done all you suggested (except we don’t have debt), and more, but it wasn’t enough. Our budget is very tight and something always happens to throw a wrench into the works. I was reminded by a friend today to pray about our finances. (Slap myself in the head!, I feel like such a dummy.) Give me neither poverty or riches. Have God set the benchmark and rest in that.
Amen, Olivia! My husband and I, in addition to meeting and talking about our finances and making sure we’re on the same route, pray for wisdom and guidance as stewards of what the Lord provides for us. He is faithful, and our testimony for the past 20 years is that He has always provided what we needed when we needed it.
That being said, it does take diligence and self-control. Separating wants from needs is very important and helps keep us on track with our spending and saving.
Great post!