Tag: budget

No comments

Money Time and Energy

  By ,

Money. Time. Energy.

Most of us have ideas about all the things we would like to accomplish in our lifetime, but seem to protest too much about not having enough money, time or energy to do them.

The solution is simple but hard. We have to plan.

Money

  • We have to create a budget to make sure we are setting money aside and not spending more than we make. Then we have to follow it, changing it as necessary.
  • Bust a Myth: Budgets are not set in stone, they can be changed as often or as little as you want. The only unchanging principle is you can’t spend more than you earn.

Time

  • We have to plan ahead and schedule in the important things. If you want to read more, schedule time each day to read. If you want to meditate more, schedule the time each day and meditate. Whatever it is that you never seem to have time for, schedule the time and then do it.
  • Bust a Myth: Schedules lock us in, they restrict our freedom, man. Actually, done right, scheduling in the important stuff and doing it actually frees us up to enjoy the remaining free time more fully, because we aren’t being nagged by our subconscious about all the things we aren’t getting done

Energy

  • In order to have energy we need to plan time to take care of our bodies. We need about 7-8 hours of sleep consistently. We need exercise or activity of some kind daily. And we need time for stillness, to clear our minds and just be still.
  • Bust a Myth: I have too many things to get done.  Sleep can wait.  I’ll hit the gym tomorrow.  Sitting still doing nothing is a waste of time. Time is money.  And so we burn out.  Our ability to accomplish tasks efficiently and precisely is greatly increased with healthy sleep patterns (when our brain kind of “reboots”), regular exercise (which increases the efficiency of oxygen flow to the brain), and periodic times of stillness (which gives us time to make sure we are on the right track or off down a rabbit trail).

Planning takes effort. It’s sometimes a painful process (at least at first). But the weird truth is the more you plan, the more money, time and energy you will seem to have.

No comments

Finding 50 – Play the Savings Game

  By ,

blog-image-2016-01-19In my last blog post I mentioned my belief that most of us can find $50 a month for saving, paying off debt or investing depending on what your current goals are.

But how do I save fifty dollars when I can’t even pay my electric bill?  Or my car insurance?  Or rent?

The problem is that most of us never even try.   Better yet, try is all we ever do.  Trying tends to let us agree without any sort of commitment.  Taking action gets us to the finish line.

It might help to think of Finding $50 as a game.  (Tweet this)

Since we are thinking in terms of a game, it is helpful to think in terms of levels to beat.  For our purposes, I think the 7 Baby Steps used in Ramsey Solutions’s Financial Peace University will do the trick.

The 7 Baby Steps of Financial Peace University

  1. Save $1,000 as a starter Emergency Fund
  2. Pay off all non-mortgage debt using the Debt Snowball
  3. Build up you Emergency Fund to cover 3-6 months expenses
  4. Start investing 15% of your income for retirement using tax deferred programs
  5. Save for college
  6. Pay of your mortgage
  7. Build wealth and have fun giving some away

 

The following are areas you might be able to find savings, and if you end up finding $50 in one of these categories alone, keep going!  You’re on your way to winning the game!

Housing

If your rent is more than 1/4 of your monthly income, and your income is not likely to increase much in the next year or so, you might consider moving to a smaller or less desirable place for a time.  Or find a responsible roommate who can share the costs.

This can be the best way to find $50 or more, but it usually takes time to accomplish as housing either has a lease that needs to be ended, or if you own a place you have to deal with the time and effort of selling.

If you own your home but can’t make your mortgage payment each month, you may want to look seriously at selling your property sooner than later.  Falling behind on your mortgage can lead to foreclosure and losing everything you put into it.

Cable/entertainment

Almost anyone who currently has cable can find $50 a month or more just cancelling their cable.  You can stream Netflix for $12 a month and hit your local library for books and DVDs that won’t cost you anything.

Side benefit:  No cable means no commercials telling you to buy unnecessary things every 10-15 minutes.  Believe me, get rid of cable for a year and see how much the urge to buy stuff subsides.

Phones

If you have a smartphone consider switching to a prepaid tracphone to control your phone expenses.  If you have a mobile phone and a home phone, consider getting rid of your home phone.  This is usually a $40 a month bill just to have it turned on with no long distance or caller ID.

Many times you can save simply by shopping for a new service provider or reevaluating your plan needs – some of you may be paying for way more than you ever use.

Internet

If you can’t pay electric, your internet is going to be useless when your electric is shut off, so lose the Internet for a while and pay the electric and use the wifi available at your library, local coffee shop, or other location.  Obviously no internet will mean Netflix won’t work at home, but reading more might actually improve your ability to earn more, as long as you read a few non fiction books.

Given that the internet is relatively inexpensive and is used for education, blogging, online businesses, and on and on, I understand that this may be the item of last resort to cut.  It would be very challenging for me to do everything I do without it.

 

Remember:  None of these things are bad things or wrong things, just areas where we might be able to save a bit extra just by paying attention.

 

Sell some stuff

Even the poorest of us probably have more stuff than we need or use regularly.  Stuff that has been handed down or that we picked up somewhere because we thought we might use it someday.

Getting rid of stuff is also cathartic in the sense that it lifts off all the weight of responsibility for taking care of these things or the guilt for never having used them as you intended.

When you are out of debt and making more money, you can always go and buy more stuff, although you may not want to at that point.  You might find you enjoy having free space and less clutter.

This one is gonna ruffle some feathers.  SELL THE CAR.

Car payments are one of the biggest offenders in the battle over our finances.  Leasing a car is even worse.   The average car payment is somewhere in the $350-450 a month range.  That’s ridiculous!  What if you didn’t have that car payment every month?  That’s a lot more than $50 right there.

Some of you are already driving an old beater car with no car payment and so this option doesn’t help you.  However, I would like to congratulate you on resisting the urge to get into a car that is more than you can afford.

Just to be clear, if you have to finance your car, you can’t afford the car.  You can afford the monthly payment, but not the car.  Sell the car, buy a good used car for a few thousand that will get you through the next year and pay yourself the car payment you were making to the bank for the next 12 months.  If your car payment was $350 per month, you would have $4200 after 12 months that you could use to fix the car, buy a slightly nicer car or pay off some other debt.

 Check out this great video on a better plan to pay for you car.

 

If you have a car payment you will never convince me that you can’t find $50 a month.  You’re driving it and throwing and extra $50 out the window at the same time (cars depreciate in value rapidly after the first year, so it’s almost like throwing the cash out the window as you drive).

Groceries and eating out

Again this is an area where people spend way more than they realize, and often pay more than they should for many items.  Track all your food and grocery related spending for the next month and total it up.  Take that amount, subtract $50 and put the rest into a cash envelope for food and groceries.  Then  use that envelope for any food or grocery purchases.  Once it is gone it’s gone, so spend wisely.

Bulk shopping is also an area to save, but not in the way you might think.  Bulk shopping is unnecessary for most of us for most things and ends up with us wasting a lot, especially with food.  Buy what you need for the week and plan your meals ahead.  At most take advantage of two for one specials for the items you use or consume the most.

Avoid the temptation to hit the drive through; 5 trips to McDonalds or Burger King for one person can easily approach $50.  If you are a coffee drinker, and you tend to get your fix from Dunkin’ Donuts or Starbucks a couple times per week, start bringing your coffee from home and save around $25-30 per month.

 Vacation and Travel

This is a tough one, but if you can’t pay your bills, you probably can’t afford to go on vacation.  I’m not suggesting you don’t deserve a few days off, but try staying home and taking some day trips to local parks or museums instead of flying 6 hours away to some resort.  You can always do that later when you have saved up and can pay for it in cash.  Otherwise your vacation will follow you home and haunt you in your credit card statements for years.

 Get a Second (or Third) Part-time Job

First, this is not suggested as a permanent fix, but a temporary solution to help you get to the next level.  Part-time jobs offer more flexibility than full-time jobs, and if you work hard and are dependable to show up when scheduled, you will find many employers willing to work with you on this.

While this might be really exhausting for a time, the side benefit is that you are not only earning extra money, you are gaining new experiences and making new connections that will help you advance in your job searches in the future.  The idea here is to eventually find a single job that pays close to what your 2-3 jobs are paying now.

Conclusion

I hope this has been a helpful approach.  The main thing is to try.  If you don’t find $50 this month, don’t quit.  Do it again next month.  Just keep doing it.  And if you have suggestions or comments on any of this, I would love to see your comments below.

One Comment

It can’t be done. But I dare you to try.

  By

blog-image2016-01-07A good friend recently sent me an email with a heartfelt and complicated question about saving for retirement.  The concern was not primarily for themselves, but for the many of us that are simply starting too late or earn too little.

I proposed that everyone can save something; everyone has some area where they can cut back and choose to save, whether to pay off debt or save for retirement.  Their response was honest, but disheartening:  for some it cannot be done.

I want to tackle this belief in three parts, first to acknowledge that poverty exists, second to address one of the main obstacles to being able to save, and third to challenge you face the impossible head on and try.

Poverty exists.  It always has and always will.

For you always have the poor with you, and whenever you want, you can do good for them. But you will not always have me. (Mark 14:7, Biblegateway.com)

Let’s face it.  Poverty exists.  Severe poverty exists.  Unfortunately there are those who through their own choices or by circumstances beyond their control are destitute, relying solely on government subsidies and the generosity of strangers to survive.  I concede that it is far less likely that those who are in this group will ever be concerned with saving for retirement, when mere survival is a daily struggle.  While I believe that there is hope for those in this situation, and know that some will overcome and someday thrive, I also recognize the plight they are in.

And that is all the more reason the rest of us need to get our act together, start handling our finances wisely, save to provide for our families so they aren’t a burden on the government or others, and give generously to lift up as many of the poor and destitute as we can.

Sometimes we fail to grasp that poverty is relative.  A millionaire is poor compared to a billionaire.  Someone with a hundred thousand is poor compared to a millionaire.  If you make $40,000 per year you are poor compared to someone making $100,000 per year.  Guess what?  If you make $40,000 per year, you are in the top 1% of the wealthiest people in the world.

Did you catch that?

Let’s flip it around.  If you make $40,000 or more per year, you are wealthy compared to 99% of the rest of the people on the planet.  Cut that in half and you are still in the top 11% of the wealthiest people in the world.

I really hope that disturbed you one way or the other.  Research it for yourselves.  But like it or not, if you live in the United States and make minimum wage, you are wealthy compared to the rest of the world.

You are rich.  But someone else is richer.  Poor you.  Guess what else?  If you cannot learn to be content with what you have today, you will NEVER be content with what you have EVER.  Someone will ALWAYS be richer than you.

Start where you are.  (Tweet this)

The Prison Wall that keeps us from the Land of Saving.

There is a massive prison in the world, and in the United States particularly.  It is a debtor’s prison, bigger and more insidious than any every before constructed.  Yes, I know that physical debtor’s prisons don’t really exist in the U. S. today.  That’s what makes this prison I am speaking of so insidious.

The rich rules over the poor,
    and the borrower is the slave of the lender. (Proverbs 22:7; biblegateway.com)

Debt is a prison.  It tells you how much to make, makes your job choices for you, keeps you locked down and prevents you from experiencing true freedom.

Debt as we know it today is a modern dilemma.  Yes, debt has been part of the human existence as long as poverty has, and likely will be with us as long as poverty exists.  But it has never engulfed society to the extent that it has today.

The biggest obstacle to saving is debt.

Debt is a result of wanting what those richer than us have, before we are rich enough to have it.  Debt is rooted in the deadly sins greed, envy and pride.

  • Greed – we are not satisfied with what we have, so we crave more
  • Envy – we are not happy with what we have, so we desire not only for what others have, we also desire to take it from them
  • Pride – we cannot bear the thought of other looking down at us in our poverty, so we create a facade of wealth by borrowing heavily

Saving and wealth building cannot occur while we are making payments for things we could not afford.

The good news is that there is a way out – stop borrowing, sell some things (you can get more later), cut your expenses down to the 4 walls (shelter, food, clothing, transportation), and increase income (work a second job; take as much overtime as allowed; ask for a raise), and pay off as much as you can using the Debt Snowball method.

This may deserve a blog post of its own to flesh out more on how to do this, but I believe that, while it may seem impossible, most households can find $50 a month or more to pay of debt or save.

You Can’t Win if You’ve Already Thrown in the Towel

Shortly after graduating from college, a friend gathered a group of us together for a bible study.  One of the topics centered around tithing (giving 10%) of our income to our church.  At the time I was not regularly attending a church, and certainly was not tithing.

I argued vehemently that it was IMPOSSIBLE to give 10% of my income and survive.  None of my friends could change my mind.

I wish I could say that on the way home a great blinding light appeared and a voice spoke saying, “David, David, why do you withhold from Me what is Mine?”  That didn’t happen.

What happened was much the opposite.  A quiet thought popped in the back of my mind, “How can you say it is impossible if you have never tried?”

A Challenge!

I set out to prove how impossible it would be, and, long story shortened, I eventually was able to tithe 10% of my income faithfully.  The process I went through of just trying to do it changed me, my outlook on finances and my faith in God.  I started spending less on myself, I cut costs, I worked harder and got raises, I started attending a church where I eventually became the Treasure of the Board and have since coordinated more than 10 Financial Peace University courses to help others gain back control over their finances.

Prayer and meditation are essential parts of this process.  Both practices help us to unload our burdens and distractions and focus on what we can do right now, today.

You know what else?  I paid off my debt, except for my mortgage, saved up about 6 months of expenses, and left my job of 17 years to pursue whatever God had for me next.  That was 4 years ago.  2012 was the last year my adjusted gross income was over $40,000.  I haven’t missed a mortgage payment, I’ve tithed consistently, and I’ve worked hard at several jobs while also being self employed, and I am more content now than I have been in my life.

I trust God to provide what I need, I recognize more and more the difference between a want and a need, and I keep moving forward and trying new things.  My desire to earn more money now is driven by what I will be able to give.  I already know what I need to live.  The rest is for the work of the Kingdom of God.

I am not suggesting that you need to follow exactly what I did.  My path is mine to travel.  Your path is ahead of you, if you are willing to take a step forward.

You don’t even have to do this.  You can stay where you are if you want.  I really is up to you, no one else.

Do me one favor though, don’t say it’s impossible if you’ve never really tried.

 

 

 

No comments

You Probably Left This One Category Off Your Budget

  By

blog-image-2015-12-17Just because you are doing a budget, paying off debt, and trying to save more, doesn’t mean you have to turn into a brooding hermit, or be caged up like a werewolf when the sun goes down.

A few simple things to remember about your budget:

Okay, so what is the one category you probably left off your budget?

Wait for it….

FUN!  

Play money, blow money, the money you know you’re going to spend in a moment of weakness or after receiving an unexpected invitation.  You know what I mean.  There’s no use denying it, so you might as well stop cheating on your budget and get this category in there.

This category is critical to remember in your budget for 3 reasons (there are probably more, but 3 is good for blog posts):

  1. planning some fun is almost as rewarding as the actual experience
  2. you are going to buy that pizza or go out to dinner spontaneously with friends or whatever it is, so you might as well put money aside for it
  3. you actually enjoy things more when you aren’t worried about how your are going to pay for it

A budget enables you to enjoy life without sabotaging it at the same time. (Tweet this)

 This is what I have observed to be good: that it is appropriate for a person to eat, to drink and to find satisfaction in their toilsome labor under the sun during the few days of life God has given them—for this is their lot.   Moreover, when God gives someone wealth and possessions, and the ability to enjoy them, to accept their lot and be happy in their toil—this is a gift of God.  They seldom reflect on the days of their life, because God keeps them occupied with gladness of heart.  (Ecclesiastes 5:18-20)

No comments

Put Your Money on a Schedule and Give it a Job Description

  By

blog-image-budgets-failPlanning is not second nature for all of us, and neither is making a budget, basically a plan for your money. They are really disciplines or habits that must be developed through practice.  Habits and disciplines can’t become ingrained without regular repetition.

The main reason budgets fail is we think we only need to do them once. (Click to Tweet!)

Put Your Money to Work For You

Think of your money as an employee at a company.  What happens to employees who show up late all the time or constantly make excuses for why they can’t come to work?  They usually lose their jobs.

Now think of a budget as a work schedule and job description – it is what tells your employee (your money) when to be at work and what to do.

I realize this is not a perfect analogy, but it is one that most of us can relate to.  When I worked for the government I had to be at work by 8:10 am Monday through Friday.  In order to do that, I had to be up by 6:40 am.  I do not naturally get up at 6:40 am.  Therefore I had to discipline myself through repetition to get up on time in order to get to work on time.

Without a set schedule, I didn’t have a reason to create the discipline.  Without adhering to my schedule, I probably would not have been as effective an employee, and, let’s face it, would eventually have been fired.

It’s the same with money.  Without a schedule and job description, your money doesn’t know when to come and go, and definitely doesn’t know why. (Click to Tweet!)

Try writing down every purchase you make in the next week in a small notebook.  You will probably be amazed at what you discover about your spending habits.  You are most likely spending more money than you thought.  You have an employee without a schedule, who doesn’t know what their job is, so they are just running amok wreaking havoc in your life.

Use a budget to give your money (your employee) a schedule so it actually shows up to work for you, and a job description, so it knows what it is expected to do when it shows up.

Doing a Budget every month is key, and as with all habits, it becomes easier the more you do it.

 

Resources for Creating & Maintaining Budgets

The Truth About Budgeting, article on daveramsey.com

EveryDollar from Ramsey Solutions

Basic: Budget and manual expense entry (Free) / Plus: Link financial institutions to pull in expenses automatically ($99/yr)
everydollar.com

This is the online budget tool created by Ramsey Solutions, and requires an annual fee for automated features provided for free by other services like Mint.com, but before you dismiss it because of the cost, realize that this online tool is not going to bombard you with ads for credit cards, mortgage rates, car loans, bigger better deals, etc.  It also follows the concepts outlined in Dave Ramsey’s Financial Peace University course, so you know exactly what you are getting.  (And while they do take Visa and MasterCard DEBIT cards, they do not take CREDIT cards of any brand).

Mint.com from Intuit (think Quicken, Quickbooks and QuickenLoans)

Free, but comes with targeted ads for financial products and services
mint.com

If you can ignore the targeted ads it pushes to you, Mint can be a very useful tool for budgeting and tracking expenses, and includes numerous charts and features to help you analyze your spending.  It also has a fairly smart algorithm for categorizing your expenditures, making it a little easier to see where you are spending your money.  It can tend to have issues staying connected to your accounts, so it requires a minor amount of maintenance and patience in that respect.

Budget forms from Ramsey Solutions

Downloadable Forms with Instructions

For those of you who aren’t as willing to budget online, Ramsey Solutions provides some great forms with step by step instructions to get you started doing your budget the old fashioned way.  On paper.

No comments

Save more money, stop spending so much, get rid of debt, and build wealth

  By , ,

So, how do I save more money, stop spending so much, get rid of debt, and build wealth?

First, you have to work.  Hard.

You can’t go anywhere if you’re not in motion in the first place.

Second, you’re going to need some help

  • If you’re married or otherwise in a committed relationship, make a plan with your spouse/significant other and work together to see your plan through.  Doing this the right way might even improve your overall relationship!
  • If you’re single like me, find someone who is willing to work with you and be honest with you.  This person is often called an accountability partner.

 Third, you need to have a plan (often called a budget).

Think of it as a fence with a gate – keeping your sheep from straying away, but allowing them to come and go as you allow them to.

 Fourth, you’ve got to rev up the intensity.

Rocky didn’t win because he sat around wishing himself into shape – he trained.  And he trained hard.  Get yourself a theme song if that helps 🙂

Fifth, allow some room in your plan to have some fun and blow off some steam.

All work and no play makes Jack a dull boy.  Allowing yourself a little fun will also remind you why you are doing this in the first place…so you can do more fun things later.

 Sixth, consider giving more as a goal to inspire you along the way.

Giving more can really change people’s lives in some really cool ways.  Guess what?  Giving more will definitely change your life in some really cool ways as well!

I’ll cover each of these in more detail in future posts, so stay tuned!

For more really great information right now on saving money, paying off debt, and building wealth check out Ramsey Solutions and if you are really serious, consider taking a Financial Peace University class near you.

One Comment

Where Did My Money Go?

  By


Have you ever reached the end of the month and asked yourself where all your money went as you scramble to pay your rent or mortgage?  You know you’ve been working hard, you know your paychecks were deposited or the cash was in your hand and in your pocket when you were paid.  So where did it go, and why does the same thing seem to happen every month?

Sounds like you could use a budget.

 

Uploaded with ImageShack.us

“A Budget is simply telling your money where to go instead of wondering where it went.”
– John Maxwell

It’s Easier Than You Think…

The real problem with budgeting is that is rarely given sufficient priority.  Think about it.  You go to a job to work mostly because you need to eat and pay rent and perhaps be able to go out for coffee or a drink with friends (hopefully you enjoy it on it’s own as well – but that’s a topic for another post).

What if you couldn’t do any of these things without first putting together a budget?  Or, what if that special someone you were just dying to go out with required you to have a working budget in place before going on a date?

I think a lot more of us would be doing budgets.  It’s definitely easier than some of the effort we put in to get all the things listed above.

Budgets require basically the following information:

  1. Income
  2. Expenses

Told you it was easy.  Furthermore, YOU are the one who has the most control over each of these categories.  You can learn more, work hard, gain experience and thus increase your ability to earn income.  You can watch what you buy, put limits on your wants, and prioritize saving to decrease your expenses.

Once you have these two amounts totaled up, subtract your expenses from your income.  The goal is to hit Zero – where every dollar you make is given a purpose, or “spent on paper,” every month before you bring it home.

If you came up with a negative amount, you may need to decrease your expenses in the short term and work to increase your income in the long term.  Use an envelope system with cash to help limit spending on food or entertainment, for instance, or cut back on amenities like cable and underused or unnecessary phone or other services.  You can always get them back when you begin earning more.

If you came up with a positive amount, you need to tell this surplus money where to go.  Preferably this would go towards outstanding debt, an emergency fund, or if both of those things are taken care of, to savings for purchases, investments or retirement.  If you don’t do this up front, you’ll be wondering where it went at the end of the month.

…But It Takes Time

A quick Google search will tell you that the time to learn a new habit is about 3 weeks.  Budgets are generally done monthly, so it may take about 3 months to become a habit since repetition is a key factor in learning.  There are numerous resources on the web for help on the details of doing a budget, and I highly recommend the resources on Dave Ramsey’s website.  I’ve included a few specific links below to get you started.

“You will either learn to manage money or the lack of it will always manage you.”
-Dave Ramsey

No comments

Giving & Tithing

  By

Would you tell your landlord, utility company or mortgage lender that you’re only going to pay them if you have something left over in your budget?  Or would you tell your family that they only get to eat if there is something left over?

Of course you wouldn’t (I hope!).  But this is exactly what we tend to do when it comes to giving or tithing.

Giving and/or tithing (which means one-tenth) is an important part of any financial plan.  The problem is we tend to do it as an afterthought, with whatever might be left over.  The problem of doing it this way is that it robs us of any blessings that come from giving purposefully.

The prophet Malachi wrote the following to the Israelites while they were in exile and had not been giving a tithe to the Lord:

Will man rob God? Yet you are robbing me. But you say, ‘How have we robbed you?’ In your tithes and contributions.  You are cursed with a curse, for you are robbing me, the whole nation of you.  Bring the full tithe into the storehouse, that there may be food in my house. And thereby put me to the test, says the Lord of hosts, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need. I will rebuke the devourer for you, so that it will not destroy the fruits of your soil, and your vine in the field shall not fail to bear, says the Lord of hosts.  Then all nations will call you blessed, for you will be a land of delight, says the Lord of hosts.  Malachi 3:8-12

 

God tells us that purposeful giving or tithing will bring blessing!  In fact he says if we do this he will rebuke the devourer for us!  If we faithfully return to God a portion of what he has given us to manage,  He will bless us so that our needs are met as well as protect us from those who would steal from us.

Do I Have to Do a Tenth?

For now, the important thing is to start. With any amount.  What matters is that whatever you give, you give it willingly and joyfully and with thanksgiving.

Give whatever you decide is appropriate for you (praying about it doesn’t hurt, either!) and just start putting aside that amount to give every month as part of your monthly budget.   If it’s $10 or one tenth isn’t as important as the change you will feel in your heart and in your attitude towards the income you earn as a result of giving intentionally.

In time I encourage you to incrementally increase your giving at scheduled intervals, and test and see if God doesn’t provide what you need in order to do so.