Tag: giving

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Finding 50 – Play the Savings Game

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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.

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The Secret Motive Behind Good Personal Finances

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blog-image-2015-12-25I didn’t plan it this way, but it seems only appropriate that my final post in this series on personal finances is posted on Christmas Day.

Why?

Because it is about giving, and for those of us who are Christians, Christmas Day represents the greatest gift ever given – Emmanuel, God with us in the person Jesus Christ.

You may not believe in God, or if you do, you may not see him as a benevolent God, a giving God.  It may always seem like He is taking something away.  I would suggest to you that the only thing God takes away from us is our sin.  It is the process through which this happens that is uncomfortable and sometimes painful.  Then again, sore muscles are a necessary result of a good workout.

So what does this have to do with personal finances?

God is a giver, so we, being designed in His image, are designed to be givers.

Or, for those of you who may hold different beliefs or come from different religious backgrounds, perhaps this will be a more approachable truth:

Humans are at their best when they have learned to give well.  (Tweet this)

What Does Giving Well Look Like?

There are stages for every area of our lives that have a learning or growth curve.   Giving is no exception.

  • We give to make ourselves feel good.

At this stage we give primarily because it makes us feel good.  This is not bad or wrong, just merely the early stages of learning to give.  The down side of this stage is that if your sole purpose for giving is to make yourself feel good, you will ultimately withhold giving anything, because no one seems to appreciate the gifts with the appropriate level of recognition.

  • We give to make others feel good, which makes us feel good in return.

In this stage, we start to shift our focus to making others feel good, but we still look for our own warm, fuzzy feeling as proof that we’ve “done good.”

  • We give because we are compelled to help, even if it requires a sacrifice.

This stage sees us giving out of empathy – we are compelled to help by identifying with the needs of others.  The big change at this level, is that we are willing to sacrifice some of our own need to feel good, as well as time, money, or items that we otherwise would have used for ourselves.

  • We give because we recognize that what we have was never ours to begin with; holding on to it only brings us misery, whereas giving brings joy.

At this stage, giving is done with joy from the gifts we have been given.  At this stage the giver is detached from material possessions, not in a destructive way (i.e. it is not suggested that one toss their family out into the street to give their house to the homeless) , but in a way that allows an effortless ability to share and give with seeming abandon.  This comes from the knowledge that what we have was never ours to begin with.  It was entrusted to us, but we were never owners.  We trust that our needs will be met.

There is no wrong stage here – just a place we start and a place which we strive to attain.  Some stages may take longer than others, and some of us may stay longer in a stage than someone else.  it doesn’t matter – as long as you are giving.

The Secret Motive

I’m sure you figured it out by now.  The Secret Motive to good personal finances is Giving.  Learn to give and your relationship to money will change.  Learn to give well and you will learn to avoid anything that gets in the way of your ability to give, like piles of debt.

Whether or not you agree with me, see eye to eye with me, or believe something else entirely, it’s okay.

Just keep giving.

 

 

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Not just a Season of Giving

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The Christmas holiday season has long been considered the season of giving.

  • Parents give toys and other gifts to their children,
  • friends and coworkers buy small gifts for each other in a spirit of goodwill, and
  • charitable organizations see an increase in fund raising as people are subtly guilted into being more generous and as tax accountants are encouraging clients to increase deductions before the tax year ends.

We quote sayings and scriptures like, “it is better to give than to receive,” and cry while watching heartfelt movies like Charles Dickens’ A Christmas Carol when Scrooge gives away his money, and comment to our kids how giving increases the heart while watching Dr. Seuss’ The Grinch Who Stole Christmas.  All of these things are good.

In fact, in the Christian tradition, this is the time we celebrate the birth of the Christ child, often referred to as the greatest gift the world has ever known.

But yet, something has been forgotten, and something is amiss in this candy cane, Ho-Ho-Ho Santa down the chimney fairyland.  Can you guess what it is?

Knowing how to receive.

Yes, that’s right.  In a sense, knowing how to receive well is how we make a gift complete.  When a gift is received well it brings great joy to the giver.

Think of the last gift you truly gave – one where you had the perfect idea and just could not wait to see the joy on their face when you gave it to them.

Then you hear, “Oh, I couldn’t possibly accept this,” or “you didn’t have to do that,” (I confess I did this just last week), or your gift is barely acknowledged, and your heart sinks a little bit.

It hurts, doesn’t it?  Now think back to a time where maybe you reacted that way to a gift someone had given you.  Ouch, right?

Now consider that God gave us the gift of His only Son, who laid down his life for our sins.  Yet we tend to receive this gift poorly by promising all the things we will do for God as a way to earn this gift.  But gifts are not earned.  By trying to earn this gift we have in essence promised to pay for the gift, and thus spoil its true intent.

If we learn to receive well, I think we in turn understand how to truly give well.  And ultimately we come to understand for ourselves just why giving is so much better than receiving: because of the joy it returns to us.

In Receiving well we allow the giver to experience the full Joy of Giving.

This Christmas season, reflect on the gifts you receive and receive them well, returning a blessing to the giver.  In the same way reflect on the gift of Christ given to us, and receive Him well, giving glory to the Father.

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Giving & Tithing

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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.