Powering Down

March 16, 2009

It is commonplace for the cost-concious, the frugal-minded to power down lights when leaving a room or unplug unused appliances.

Since I became unemployed yet again back in November, I began taking my power usage one step farther.

I open my blinds as soon as the sun comes out, turn the thermostat down as far as I can comfortably bear, and try to avoid any usage of electricity other than the occasional push of my vaccum (which I have reduced down to once a week).

I cannot say that such tiny measures have placed millions into my pockets, but it has made me more aware of what I use and why.

Do I really need the lamp on when I read? Or can I sit by the window in my livingroom and enjoy my book in the dull March sunshine?

Such “hacks” work in my day to day life. With the arrival of spring weather on its way, I am sure that I will find other ways to cut back, and power down my home.

Budget.

It is almost a fowl word in many households. People rationalize their resistance to the budget in many ways. However, there is nothing scary or intimidating about a budget.

Putting it in Writing

Dave Ramsey often says the budget must be “on paper, on purpose”. I agree. Budgetting is essentially putting everything in writing. A basic notebook, calculator and pencil will work. If you are more technologically inclined, then Microsoft Excel, QuickBooks, and other financial software does exist. The key is to pick something that you will actually feel comfortable using and USE it!

Income –

Begin by listing all money that comes into the house. This includes salaries, bonuses, tips, gifted money or found spare change. Every copper coin that comes into your household must be writen down. If you are a single adult, then you are accounting only for yourself. if you have a spouse, children, or other tendents, then their incomes must be recorded.

What MUST be paid

Now that you have on paper or spreadsheet all income that comes into the house, you must begin calculating what MUST be paid. Dave Ramsey often refers to this as “prioritized spending”. Home, food, and utilities must come first. To insure that my family has shelter, the first thing I list in my budget is the payment on our home. Secondly, the second thing on my list is food. We have a family of 4, so I have slated about $100 a week on our grocery budget. Thirdly, we pay our utilities. Every other bill falls somewhere else in the list.

This part is about the barebones minimum. I am not saying that other bills should be ignored, or that this number will not change. This is being real about what is the bare amount that has to be paid, no matter what.

Tweakin’ It – Or the Emergency Budget Committee Meeting

Once you have placed in writing what comes in and what must come out, then things will begin to get hairy. Realize that your first, second, or even third spending plan/budgets will need some tweaking. Let’s say you estimate that your family will only spend $50 a week on groceries, and that come 2 weeks into the month, you are finding it impossible to do. Don’t give up on your budget. Just Tweak it. Look at how you can adjust or sacrifice in one area to give yourself some extra in another. The key to the tweakin’ is in not giving up. My husband & I are in our 4th month of living “on paper, on purpose” as Dave Ramsey says and I suppose we have had about 6 “emergency budget committee meetings” since.

The key is not to give up. Find a system of record keeping (budgeting) that works best for you and tweak it until it becomes second nature. It is the budget that has helped to put my household on track to getting out of all debt.

Links:

Gather Little By Little: “Create a Budget and Follow it”

Christian Personal Finance: “How to Budget”

Bible Money Matters: “Cash Flow Planning (part of Dave Ramsey’s Financial Peace University)”

‘Recession’ Response

August 13, 2008

Introduction

The media is plush with stories on the current economy. I believe that you would be hard-pressed to flip through the news tonight without the “recession” storm overtaking you. The media is using the term “recession” so much, that people actually are buying into it. My post, however, isn’t really about the current financial situation in the USA. It is about money/economy in general.

Spoiled mentality

Why is it that so many people rationalize purchases with the words “because I deserve it”? That’s a little presumptuous. I resolve that we don’t necessarily “deserve” everything that we buy. I think that humans deserve the essentials: food and shelter. Some might deem that “basic essential needs”, yet how many people will curl up on the cold ground tonight without anything in their stomach?

Can’t Buy me…

There are a lot of things that money itself cannot buy. Money cannot buy back a ruined relationship. No amount of stuff can truly fill a void. Money is also very temporary. When we die, it will not go with us to our eternal destinations. “Money is merely a method of exchange, and is only worth what someone else is willing to give you for it” (Dave Ramsey).

What it all comes down to

Money is paper and coin. We can buy stuff with it, but obviously that stuff is just stuff. Invest your time, invest your love, invest your energy and you will reap better rewards than simply investing your money will.

Let me guess: you have realized that you have debt. Most Americans due, but that does not make it a normal thing by any means. You know you have debt because there is more month than money, you can’t ever seem to “get ahead”, or that big minus sign in your bank account tells you so. It doesn’t matter how that you came to the realization that you have debt, it only matters that you do realize that you have debt and that you actually would like to get out of debt.

Checking Your Supplies

I point to Dave Ramsey as the source for the following advice: “put it on paper on purpose”. Use a spreadsheet program of your choice, or just a pad of paper and a pencil. The idea here is to know exactly how much income that you have coming into your house. Use your net income.

In addition to income, its time to see what you have packed into your wagon. Are there items that you could sell to lighten up your debt load? Evaluate carefully what you could sell, and the profit from that sell. Include this income on paper, and commit yourself to a deadline by which you will have posted the item for sell, or to have your yard sell.

Plan Your Trip

If you were going to take a huge trip across country, you would probably make a plan for your trip. Getting to the Land of Better Money Days is going to take preperation as well.  Just as one individual is different from another, every person’s money plan will be different from anothers. Make a plan. Make the plan realistic, though.

Know the dangers

Getting out of debt does have dangers: they are called tempations and lack of responisbility. Be firm when temptations come – remember where you really want to go (Debt-free-opia) and stay AWAY from things that try to stir you from that directions. Others may try to get you to splurge on something, but remember that just one little splurge will default your debt-free efforts. Be responisble. If you are wanting to get yourself (and family) out of the valley of debt, you must be responsible with your decisions. Don’t be a five year old and want, want, want. Disciple yourself, delay pleasure – be an adult.

Get Started NOW

Don’t put it off any longer. If you want to get to the land of Better Money Situations, start today. Any procrastinating, any excuses – are not going to produce real results. Start TODAY!!!

Station: Fox Business
Time: 8pm, both nights
Event: According to the show that aired 4/25, the episode May 1st will be on Dave Ramsey’s “babysteps”.

Link:
http://www.daveramsey.com/etc/cms/dave_fox_business_network_7703.htmlc