Money Mondays: Saving up.

I hate saving money. Or maybe I'm just not very good at it. When I have an idea (or a whim), I kind of want it right then. It's bratty, I know. It usually doesn't pose that much of a problem, because I rarely want things that are going to cost a large chunk of money. I'm more of a nickel and dimer.

So when our computer finally bit it, after a few years of nursing the poor thing along, we decided not to finance a new one, but to save up. It's hard for me to save, and it is hard for me to be offline. Thankfully, I work in front of a computer all day, so things like online bill paying didn't suffer. Also, I have full browsing on my smart phone. Ok, I didn't really have to struggle much at all. The point is not that I made great sacrifice here, but that I did it. Well, we did. But for me, it was an accomplishment.

We overestimated on purpose for what we wanted to save, and when the back to school deals on laptops started coming out, we were able to score one for way under what we had saved. So far under, in fact, that my husband used what was left get a charcoal grill and smoker that he has been waiting for. And what's left from that will go toward a Spanish class that we can hopefully get enrolled in for fall.

It is exciting for me to have something that we bought free and clear. I tend to give up on saving up. Also, it showed me just how much I really can squirrel away when I really want something. It honestly didn't even pinch our budget that much. Which tells me that I have room for improvement in my budgeting and spending! Our goals starting with the "second half" of our month are a higher giving amount, continued "squirrelling away" until we reach a certain number, and for me, a better grocery budget.

It's amazing what you can do when you put your mind to it. I hope to keep working toward having that kind of discipline in more areas of my life!

Money Modays: Mind Your Own Business {at all times!}

I am not talking about the idea of not worrying about other people. I am talking about being mindful of all of your home economics at all times. You are running an establishment: your home. A Proverbs 31 woman looks well to all the ways of her household, as we've been talking about. What's the number one thing that Proverbs 31 talks about? Yup, money.

Can you answer each of these questions?

1. Exactly what is your total debt that you need to pay off?
2. When are each of your bills due?
3. How much of your income is going toward expenses, debt, and necessary bills (like electric)?
4. When will you pay off your next debt?
5. How much extra money do you have for expenses after paying the bills?

If you aren't sure on some of these answers, it's time to do some research...on yourself. It's scary to rip off that band aid, and see exactly where you are financially. Sometimes people will be pleasantly surprised, and sometimes not. I'm guessing if you are avoiding this crucial step, it may not be good. Do it anyway. You can't move forward until you know where you are now!

I love the clip from the movie Confessions of a Shopaholic where Beks has to go through her credit card bills, and see how much she owes! Hopefully in our real lives, it's not quite so painful! She makes it hilarious, but there are definitely those of us who throw out over-the-limit warnings and final payment notices just hoping they will go away. You can try to budget and "do better" all you want to, but until you dig in and get involved with your money, your efforts will be futile! So what's the solution if you really don't know where you are financially?

START WRITING IT DOWN! Last week we talked about tracking income and expenses, and this just takes it a step further. You not only want to have, in writing, your income and expenses, but also things like your balances and minimum payments.

This is what I track, in writing, on a CONSTANT basis in our house:

1. A calendar dedicated to our due dates. This means everything- rent, electric, credit card payments, Netflix. Every single thing that has a due date goes on the calendar. These are your planned expenses. Your constants.

2. Our written budget. I split our month into halves, due to the way our paydays are, and I plan for the bills that are due during that "half" and also the expenses, like gas, grocery, etc. I absolutely could not do this step without having my payments calender! We will talk about budgeting more in coming weeks.

3. Our checkbook. I balance it about every other day. If you wait, and gather a stack of receipts, you will be sorely disappointed when you have finished the task of balancing your checkbook. Know what you have at all times. This is especially important for us, since we use a virtual "envelope system." I prefer my debit, and I hate carrying cash. I love the digital age. I know lots of people out there would disagree and say that cash is best. I may change my mind someday, and switch to cash- I definitely see the benefits! But for now, our "envelopes" are in Excel. My checkbook MUST match what my Excel spreadsheet says, always!

4. A running balance of our debt "snowball." I always know the balance on everything. This is so vital if you want to pay off debt. You will be able to see clearly which debts make steady progress as you pay, and which ones you are just throwing money at every month. You will be overjoyed at seeing the list get smaller and smaller as you pay off your debt! Always know what you owe, who you owe it to, and how soon you can be done with owing them!

5. A list of monthly expenses, and about how much you need for each one. This list will be born as you track your expenses, in the pre-budget step. You will get a good understanding of how much you have to have for gas, instead of just hoping you make it to payday. Now that we plan for the expense of gas, we don't waste time and money by putting a few dollars in the tank to get us through. You will have the opportunity to see how much you spend out to eat at restaurants, and you will be able to decide if that is a practical amount, or if you should be putting some of that money to better use.

You will need to have all of these factors in place as you begin to make your finances work for you, instead of being enslaved by them. The Bible says that we can't serve God and money. Most of the time, we think of serving money as spending lavishly, or being greedy and materialistic. Have you considered that it can also mean that you are trapped by money? When we are constantly concerned about money, or where it will come from, or how far we can stretch it, it is enslaving us. Sometimes life circumstances are such that these worries are not going anywhere soon. I understand. In our economy of unemployment, you may find the idea of financial peace unreachable. But let's at least do what we can to make our money work for us. To be the masters of money, instead of it being our master. We start here, by having a working knowledge of everything that we have. By taking inventory of our financial lives, and getting the good, the bad, and the ugly down on paper.

Money Mondays: Track Your Spending

Last week, we talked about the importance of creating a budget. However, that can be really overwhelming if you don't know what you're bringing in and what you're spending! The first step toward sticking with a budget needs to be tracking your income and output.

You can start as simply as writing down your expenses in a spiral notebook. Just make a page for each category of your soon-to-be budget, including a page for your income. At this point, don't worry about trying to set limits on your spending. Proceed with "business as usual" for about a month, just to see what your habits are. Write down everything that you make and that you spend. Don't just write amounts from your receipts, but try to be a little more detailed. Later, when you are examining your budget, this will be helpful. Are you spending a lot fast food, or impulse buys at the grocery store? You will be surprised how fast purchases like that add up.

Some categories you could include are: out to eat, grocery, gas, bills, debt payments, entertainment, etc. If you spend some money that doesn't fit into one of the categories you made at the beginning, that is a clue to you that you may need to create a new page. For example, my husband's hair is pretty high-maintenance. As silly as it might seem, I knew we needed to make a separate category of our budget for this expense, so that it wasn't a surprise every other month.

At the end of a month, you should have a good overview of how you spend money. You should also have a good idea of whether or not you are spending less than you make, or if you need to make some drastic changes!

Now look through your pages carefully. What percentage of your income went toward gas? Toward debt? Toward clothes shopping? Look at where you could afford to decrease your spending. If you commute, decreasing your gas category may not be practical. But could you skip the fast food breakfast on the way to work? You'll save time, money, and calories if you can make something at home. How about your grocery shopping? Is it excessive, or are you already pinching pennies in that area?

The first time I tracked our money, I couldn't believe how much the spending was outweighing  savings and debt payoff. We could immediately adjust certain areas to reflect more balance. There were also categories that I knew we could not decrease, and may even benefit from increasing.

If you can look at your spending, and honestly say there is no area where you can cut back, you will need to look at increasing your income in some way. You may have to get creative. Dave Ramsey talks a lot about this, and I love the ideas he throws out there. If you need encouragement to get radical about increasing your income, and decreasing your spending, I would really suggest visiting his website.

However, I believe that unless you have already taken drastic steps, and have already created a nice, tight budget, you probably have somewhere in your spending that you can pare down. I know that even now, while working on being accountable and maintaining a budget, I can still cut back. I can still stretch myself to be more creative, more frugal, and more accountable to my budget.

The most important things that I hope you take away from this post are to WRITE IT ALL DOWN, and ASSESS YOUR SPENDING. Until you really evaluate where you're at, you can't go anywhere. After this vital step, you will be ready to set your budget! Don't be discouraged if you don't "find" wads of money that you didn't realize you had. Honestly, only the people that are making a lot of money, and don't have to worry about how much they have to spend are going to find wads of money. In our current economy, there are not many people who don't have to think about limits on their cash flow. Even the wealthy incur debt, and I believe everyone is called to be a good steward of finances. It doesn't matter if you don't have to budget; you should. That's how you stay wealthy! Don't be fooled- people live at or above their means. It takes just as much discipline and hard work to be on a budget when you are making $100,00 a year as it does when you are making $40,000. The percentages of income spent in people's "categories" are probably pretty similar, even if the dollar amount is larger. Does that make sense? There are millionaires in debt. So don't worry if you don't make a lot. You can still be a good steward of what you do have, and you can still find some extra cash in your budget that you can re- prioritize.

So- what are you spending? Is it more or less than what you make? Are you doing great in some areas, but a little shabby in others? Do you have some areas that you simply need to plan for so that you can afford to put your money toward what you love or want to have? I'd love to hear your comments, and see how you're doing!

Money Mondays (A day late!): The Importance of Creating a Budget

My husband and I both came into our relationship "pretty good" with money. Neither of us had major issues or flaws, or debt. We also didn't have major money skills or savings! My first step toward better finances as a single gal was to cease all credit card use. I cannot tell you how incredibly important this was for us! Making the choice to not use credit cards on my own saved a lot of argument in our future, I'm sure.

The next step for us as a couple was to create a budget. We did well not spending more than was in our accounts, but actually putting our money into categories was a new thing for both of us. It still is, but we are slowly getting better at it!

When you do not have a budget, it is easy to blow through your money. For some, this will mean living paycheck to paycheck. Some will have just enough, but never extra. For others it will mean being "in the red" all the time, and accumulating debt.

The first thing you will have to do to create a budget will be to track all of your expenses and your income, which we will talk a little more about next week. Everything going in, and everything going out will have to be on paper.

The most basic rule of budgeting is to assign all of your money a category. Hopefully your income is more than your output. (We'll talk about what to do if it's not a little later on!) Rather than just spend through the amount of money in your bank account every week, divide your money up into categories like bills, out to eat money, gas money, entertainment, etc.

Instead of running out of gas money because of spending too much on entertainment, you simply run out of entertainment money, and still have your assigned amount for gas.

This is budgeting in it's most basic form, but we'll keep exploring and building on these concepts! If you haven't already, I would encourage you to check out Dave Ramsey's Total Money Makeover!

Money Mondays: Budgeting During the Holidays

It's been about a week since I have blogged! The holidays get so busy, don't they? Time flies by before you know it. It's that way with money this time of year, too, unfortunately. As you pick up things here and there while you're out, you realize your bank account has dwindled away. Enter credit card spending to get through the gift buying. Lots of people are still paying for their holiday and "catching up" well into the new year. This is definitely not the best way to spend wisely, pay off debt, and live abundantly!

There are a few ways to avoid these holiday pitfalls. First, remember that Christmas comes every year, on the same day. Which means....you guessed it....plan ahead! You have an entire year! Decide early who you will be buying for, and try to keep your eyes open for deals during the months leading up to Christmas. If you budget for a little bit every month, you won't have to spend a huge chunk in December. Or worse, accumulate credit card debt that will haunt you later.

Another way to avoid the holiday spending trap is to set a spending limit. Decide ahead of time how much you are willing to spend on each person on your list, and stick with it.

One final thought is to put it in perspective. Realize that buying gifts isn't really what the day is all about. Consider giving to someone who is really struggling. Or even having your kids join in the giving by receiving fewer gifts and helping a family in need. That is an experience that will last a lot longer than the latest toy.

The most important gift you can really give to your family this year is wisdom in spending. Freedom from debt, peace of mind, and giving to others are invaluable. Consider going against the grain of the consumer culture this year!

Money Mondays: Beginning the Journey, Part 2

Last week I began to tell you about the road to financial freedom that my husband and I are on right now. We wanted to start off on the right foot by paying cash for our wedding and honeymoon. And we did it! It felt so good to come back from our honeymoon, and not have to face how we would continue to pay for our special day. We were done with it, and could move on into our future. We were so blessed throughout our wedding planning to receive generous gifts from others, opportunities for overtime, and encouragement from each other to save rather than spend. It was hard, but it feels really, really good. Not only were we able to pay for our wedding and honeymoon, but we were able to pay off two small balance credit cards. They really weren't very big, but the feeling of crossing them off of our debt snowball was so wonderful! Now that money can be used toward the next debt we want to eliminate! A couple of weeks after our wedding, we did make the decision to finance an SUV. It was scary, but necessary. We hope to make that our last debt-creating purchase while we pay off what we have and live freely! This last week, I got to pay off another credit card!

As I continue the Money Mondays series, I hope to share what we are learning and accomplishing with our money. I am certainly no expert when it comes to money. However, I am very organized and hope to be able to offer you some tools and some encouragement if you are on the same journey!

Happy Spending this Cyber Monday! Remember to only buy what you can pay for!

Money Mondays: Beginning the Journey, Part 1

I am naturally frugal. I don’t like large, expensive purchases. I love getting a good deal; getting the most bang for my buck. That should mean that I always have a bunch of extra cash, right? Wrong. The downside of loving bargains is….well….loving bargains. They can get really hard to resist.

When I was younger- those exciting 19-20-ish years- I was foolish and discovered credit cards. I found so many great deals that I couldn’t pass up, and I eventually got myself into some debt. I learned how to justify every purchase instead of saying no or waiting until I had more money.

I had always considered myself to be good with money because of how far I can stretch a dollar. One thing I never really learned was to save that dollar instead of stretching it. So, between the exciting swipe of plastic payment, and the lack of a savings account, I learned some hard lessons about money and how debt keeps us weighed down.

I started dating my husband about three years ago, and we found that we had a lot of good things in common. We had a few things in common when it came to money too. Neither of us had been taught how to save, although neither of us were extravagant spenders, either, for which I am thankful. By this time, I had at least figured out what a bad thing credit card debt was, and was trying to figure out how to dig out of the hole I had made. Thankfully, my husband had never used credit cards, so we did not compound the problem. But he had school loans, and with combined income, comes combined debt.

When we got engaged, we were learning some really great things about money. However, we found ourselves responsible to pay for a wedding and honeymoon. What to do? We wanted to be wise, but also to have a nice wedding. With only nine months until our wedding, we decided to make some changes.

We knew that we wanted financial freedom as a married couple, and we wanted to start off on the right foot, despite our mistakes or lack of knowledge in the past. We committed early on to only have what we could pay for when it came to our wedding and honeymoon. And you know what? God greatly blessed that commitment. This would be the beginning of our journey toward better money management!