- Cash a $5 bill every time you go to the vending machines at work. Save the change. If you go to the vending machines three times in one day, cash a $5 bill every time. Save the change. I have a friend who become debt-free using this very technique!
- Use cash envelopes for any budget item that is subject to impulsive spending. For me, my impulsive spending list includes groceries, restaurants, clothing, entertainment, and blow money. By pulling out the budgeted amount and placing it into the envelope, I will not spend more than I budgeted. Period! This is a key reason that Jenn and I became debt-free. By the way, we saved over $200 PER MONTH by putting our grocery money into an envelope.
- Have your insurance rates quoted every two years. Get at least one quote from an independent insurance agency. Many people can save $200 – $500 per year! Consider raising your deductible and driving more carefully!
- Make it automatic! If you begin investing $50/month and need to write a check every single month to make that investment happen, there is a big chance that you will not invest $50/month. It will be too easy to say, "I'll make two deposits next month, I need the $50 for something else this month." By making it an automatic draft, it will happen without a question and without any action taken by you. You will be amazed at how fast this can add up!
- Get rid of the huge, honking car payments! Sell the expensive car with the big payment! Drive a beater! I know that this is not "cool" and it is not "your style". My question is this, do you want to be stylish and broke with a bad case of stuff-itis or do you want to be wierd and actually have money to pay cash for things. Listen, I love a nice car, but something is out of line when it is robbing you of your ability to give and save money!
- Don't go to Aruba for vacation. Go to the local campground! Again, I love to travel to nice places, but something is out of line when you have not saved a dime for retirement and are taking really expensive trips.
- Share items. If you need a drill, borrow one! If you need a saw for a small, two-day job, borrow one! If you are going to cook a whole pig, don't go buy the pig cooker – borrow/rent one! If you want to go fishing/skiing, rent a boat! It is so much cheaper to rent a boat for the 5 times you actually go fishing/skiing than it is to pay for the payments, insurance, storage fee, winterization, summerization, breakdowns, frustrations, etc.
- Refuse to buy anything unless you have the cash on hand to do the deal. By making this commitment, it will prevent you from making a bunch of dumb decisions! I can tell you this, when Jenn and I established this rule, it really helped us out when we experienced bad cases of stuff-itis!
- I am including this MORTGAGE CALCULATOR for the person who requested it last night.
- You can do this! I believe in you!
I am on a crusade to help others accomplish far more than they ever thought possible! I am on this crusade because my life has been changed because someone else took the time to help me. My world was rocked because I took note of wise counsel and listened. While I listened, I actually heard what was being said! Then, I did the outrageous! I actually applied what I had learned!
Guess what? It worked!!! My savings and checking accounts had always hovered around $4.13. I was never able to hold on to any money that we earned. It all just went right back out to pay someone else for something that I just could not resist (and now was usually relegated to storage in the garage or attic).
My life has been changed! I want the entire world to know about it! This is life-changing stuff! Jesus Christ rocked my world through dying on the cross for me. Guess what? When I was "saved" from my financial idiocracy (word?), it felt a whole lot like when I was saved by Jesus Christ! I am FREE! I am free to pursue the very thing that I have been put on this earth to do! I am free of the worries related to paycheck-to-paycheck living. I am free to help others!
How awesome is that? Won't you join me in this crusade? Who do you know in your neighborhood or family that needs "salvation" from a financial mess? Who do you know that you could take the time to teach about "saving for a rainy day" and "spending less than you make" and "INCOME – OUTGO = EXACTLY ZERO"?
What have you got to lose by offering? If they actually do this, they will NEVER forget you, they will never be the same, and their worlds will be rocked. Then, when their worlds have been rocked by the kindness you have shown them – they will go tell others about it! They may even consider a relationship with Jesus Christ as a result of the experience!
I am on a crusade. Won't you join me?
In other news …
- I will be speaking in a breakout session of this conference on Thursday, March 15, 2007 at NewSpring Church. I can't wait!!!
Financial counseling. When these two words are put together it seems to strike fear into the heart of man. I mean, you are going to reveal your financial situation to someone else. That can be scary!
Why would it be scary?
A key reason is that a person's financial situation tells a lot about that person! You may have heard the saying, "Show me your planner and your checkbook and I will tell you what is important to you." In financial counseling, you are revealing your financial situation to another person and sometimes the way we have managed money has been, well, frightening!
When I was B-R-O-K-E, I was very determined to NEVER share any of my personal financial information with anyone. NO ONE! Why? For one, I was B-R-O-K-E, but I wanted people to believe that I was doing well (it's called living a lie). If I sought financial counseling, someone would (GASP!) know that we were not doing as well as some may have thought. OOOOOHHH! Scary!
It was when I decided to stop putting on airs and really apply God's word to our finances that Jenn and I started to win financially. During the course of becoming debt-free, we developed a we-could-care-less attitude about our financial situation. In fact, I am on a crusade to tell our story so that they too can experience financial freedom!
There is this verse in the Bible that really cuts to the quick on this thing.
Proverbs 1:5 (NASB) – A wise man will hear and increase in learning, and a man of understanding will acquire wise counsel.
WOW! You should read the entire first Proverb. It is all about acquiring knowledge.
That is what financial counseling truly is. It is acquiring knowledge and learning from someone who is winning financially by managing their money God's way.
"A man of understanding will acquire wise counsel." It just rings in my ears.
I am a HUGE fan of cash envelopes because they are a key reason that Jenn and I started winning with our finances.
Here is how we use cash envelopes:
Every month BEFORE the money comes in, Jenn and I work together to spend all of our money on paper. We FORCE our money to behave by making it follow the INCOME – OUTGO = EXACTLY ZERO formula. This usually takes less than 20 minutes per month!!! After we have completed the budget, we figure out how much needs pulled out for the cash envelopes.
How do we decide how much to put in cash envelopes? Well, it is something that has been developed over time. We have learned that there are certain categories that we are more likely to impulse on. These categories are where we are quite likely to overspend if we use the debit card. As a result, we pull out the amount of cash that we budgeted and put it into a labeled envelope.
Here are some categories that Jenn and I use cash envelopes for (because these are categories we could overspend otherwise):
Think about these categories for a minute. It is pretty easy to go crazy and overspend these categories isn't it?! By using cash envelopes, we KNOW FOR SURE that we will NOT overspend. We will only spend the amount we budgeted!
Guess what? I have never overspent a cash envelope in 4 years!!! If I were using a debit card, I can guarantee you that I would have overspent at least 24 of the past 48 months!!! Why? The debit card doesn't allow me to keep a running amount of how much I have left to spend for each category. The cash envelopes? – Yeah, I can just open it up and count. Presto! I immediately know how much I have left for the month!
Try it! If you are nervous, try just one envelope – GROCERIES!!! It can quite possibly change your life!
Wow! I remember our 1st-ever budget. My fine bride, Jenn, came into the living room with this scrawled out budget on a piece of lined paper. She had been trying to get me to budget for the past 6 months or so, but I was not playing along!
You see, I thought that budgets were controlling, restricting, live-in-a-Maytag-refrigerator-box pieces of trash. I wanted no part of that!
STOP! There we were, ME managing the money, with $4.13 in our checking account and our credit cards run up with a balance for the third time! There we were, 105% financed car, 100% financed truck, and nothing in our short-term savings account. There I was, B-R-O-K-E, and in COMPLETE DENIAL!
Folks, I can not write it strong enough! I was B-R-O-K-E and telling my wife, "NO!" to doing something different! At that MOMENT, something happened to me that changed my life and marriage forever. I turned off the TV and looked at the budget she had drawn out. It was amazing! It actually balanced without incurring any additional debt!
LIFE-CHANGING does not describe the next few minutes. I moved on into the computer room and started entering the expenses into Microsoft Excel. As I was putting together the formula to subtract expenses from the income, I realized that all of this time I could have been managing my money with a 1st-grader's math ability. INCOME – OUTGO = EXACTLY ZERO! After a few minutes, we had a budget that was EXACTLY ZERO.
My life and marriage have been changed forever because we discovered that a budget is NOT restricting! It IS controlling! It is YOU telling your money what to do! It allows you to pay off debt, save up for known, upcoming expenses, save money for emergencies, and fund your dreams.
The first budget – yeah, it was tough. Not everything went according to our plan. I mean, every month we were spending an enormous amount of cash at Wal-Mart and really did not know what we had spent it on. As a result, month one was a little tough. Month two – that was a bit easier. Month three – that was even easier.
Listen to your feelings as I write this next line: We don't worry about money ANY MORE. We did something different. We applied God's word and Grandma's advice to our money and our lives have never been the same.
You CAN do this! You CAN get through the 1st month's budget! What have you got to lose?! Click on "TOOLS" at the top of the page or click HERE to download your FREE budget form and get started!