Tag Archives: money

Budgeting 101: Why Saving is So Important

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Saving money is very important.
Next to tithing, saving should be the next most important item in your budget.
Also, like tithing, your goal should be to save 10% of your income.
It must be at the top. If savings is at the bottom of your budget then all it gets, or all you get, is what’s leftover, if anything at all.

Why is saving so important?

Savings is like preventative care.
Savings is Murphy repellant.
Saving prepares you for emergencies.
Savings keeps you from having to use credit cards.
Saving gives you freedom.
Saving keeps you out of debt or from from getting further in debt.
Saving gives you peace of mind.

Saving must be a priority. After giving back to God, pay yourself first.
10% of your income adds up quickly. You will be surprised how much money you can have if you will just discipline yourself to save.

Proverbs 21:15. “The plans of the diligent lead surely to plenty, but those of everyone who is hasty, surely to poverty.”

The surest way to save is to make it automatic.
Have it auto drafted into your savings account from each check.
If it’s taken out before you can even get your hands on it, like taxes, then it’s easier to get used to not having that money to spend.

You can do it. You can be a saver!
Take action and start today. Do it now!


Budgeting 101: Creating a Budget

Budget

 

Living on a budget is not something everybody does, but it is something that everyone should do.

As Dave Ramsey says, “If you don’t manage your money, your money will manage you”

For those ready to take control of their lives and their money, creating a budget is the first step.

Be intentional about getting started.  Don’t just let each day go by and see if time just happens to tap you on the shoulder and suggest that you sit down and do this.  Schedule a day and time that you can sit down for an hour, then follow these steps.

 

Step 1: Grab a pencil, some paper, a calculator and sit down at the table.

  • Use a pencil because you likely will need to so some erasing.
  • Lined paper would be helpful, but not necessary
  • Don’t sit on the couch in front of the TV.  Sit at the dinner table where you can focus.

 

Step 2: At the top, write down how much you make in a month.

  • This part can be tricky if your income is variable. There are multiple ways to budget with variable income.  For now pick an average of what you expect to make each month.

 

Step 3: Start making a list different places that your money goes each month.

  • Don’t worry about the amount spent on each item yet.  Just list everything that you can think of that your money goes to.
  • Start with the items that are essential to life first.

Examples of essential items

  • Tithing
  • Savings
  • Mortgage or Rent
  • Power or Electric
  • Food or Grocery (not dining)
  • Gas
  • Water
  • Gas
  • Phone/Internet/Cable
  • Auto insurance
  • Home insurance
  • Life insurance

Examples of non-essential items

  • School misc
  • Kids activities
  • Birthdays
  • Recreation
  • Dining
  • Kids allowance or commission
  • Clothes
  • Home maintenance
  • Music lesson
  • Dental
  • Eyecare
  • Medical
  • Retirement
  • Vacation
  • Christmas
  • etc…

The the non-essentials will look different for everyone, but it is is important to get everything that you can think of listed.

 

Step 4: Write a dollar amount beside each and every item

Some you will know and some you might have to estimate.

 

Step 5: Pick up the calculator and punch in the income number at the top of the page, then start subtracting each item from that number.

Most of us will run out of money before we get to the bottom of the list.

 

Step 6: Balance your budget by adjusting the numbers or items until all of the money is accounted for and your final number is 0.

 

In future posts I hope to go into more detail about why I listed things like vacations, birthdays and Christmas in the monthly item list.

I would also like to explain further why I think that tithing and saving are essential to life budget items.

For now…Have fun creating your budget.  It will feel good to take control of your money.


How To Live Without Credit Cards

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Life without credit cards is possible.

My wife and I have been able to survive without credit cards for more years than I can count now.
You can do it too and here’s how.

The secret to living without credit can be done with 3 simple steps.

1. Budget
2. Save
3. Buy, using cash or debit

The main reason most people use credit cards is because they do not have enough money in the bank to make a purchase and they want it now.

Why would there not be enough money in the bank to make the purchase?
Because they didn’t save.
Why did they not save?
Because they were not living on a budget.

Get on a written budget and make sure savings is near the top of the list (right under tithing)

Plan on putting 10% of you income into savings.
The best way to do this is to have it auto drafted into savings each time you get paid.

Make a goal to have at least $1,000 in the bank for large purchases and emergencies.
Save more if you need more, but this is the very minimum to keep in the bank for purchases.

Once you have money in the bank you can use cash or a debit card to make purchases instead of a credit card.

Get on a budget, save and cut up those cards.

Tell those creditors that you don’t need them any more.


Money Saving Tip # 2

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Tip # 2: Skip the Barber

I am very fortunate to have a wife who is very conscious about where our money goes. She gets all the credit for this tip because she is the one who decided many years ago to save our family some money by cutting mine and our boy’s hair.

When you have 4 boys in the family, going to the barber every month can be expensive.
If the average cost of a haircut is $10, then we are saving $40 per month or $480 per year.
It is also much more convenient and your saving gas money.

This tip also applies for women.
My wife does not cut her hair, so there is no need for her to go to the salon.
Now, the reason she does not cut her hair has nothing to with saving money, but it sure is a nice benefit.
How much money do women that cut their hair spend each year?
I am not sure, but I hear it is much more than it costs for a guy.

If you take this advise be sure to tip your new family barber.

This is the continuation of a series on different ways that we, as a family, have learned to stretch the dollar.

The hope is that I can be of help to someone and, through comments and replies, learn from you as well. So please feel free to leave a comment with your own tips and at some point, with your permission, I would like to compile all the tips together in one resource to share with everyone.

Please enter your email address in the “Follow” link to the right and all future posts will come straight to your email.


Money Saving Tip # 1

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I’m starting a series on different ways that we, as a family, have learned to stretch the dollar. This is the first of many to come.

The hope is that I can be of help to someone and, through comments and replies, learn from you as well. So please feel free to leave a comment with your own tips and at some point, with your permission, I would like to compile all the tips together in one resource to share with everyone.

Tip # 1: When dining out drink water

As a family, and even as an individual, going out to eat can be expensive.
One way that we have saved a lot of money through the years is by ordering water to drink.
Restaurant sodas are typically $2 or $3 a piece and for a family of 5 that adds up to about $15 per meal.
Multiply that number by how many times you go out to eat per week, month or year and figure the math.
It will add up to a pretty large sum of cash that could be used better.

It was not easy for our kids to accept at first, but in time they have learned to actually prefer water over soda. If your kids are used to drinking sodas then this will be a tough adjustment for them. Make sure you order for them and hang tough.

 

If you would like to be sure to get the next tip just enter your email address in the “Follow” link on the right.

All future posts will be sent directly to your email account. Thank you.


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