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Part of the problem that a lot of us have with debt comes from the same root problem in other areas. We are trained to react rather than act. Because so many of us don’t have a plan in place, we are at the mercy of the moment or our perceived need at the time. Heaven forbid if an emergency strikes, because we might have some retirement savings, but statistics say that only a small percentage of us actually have any kind of emergency fund.
If you’re truly serious about getting out of debt– you’re going to have to get serious about planning where your money goes. I mean, let’s say that you average over your entire working years (20-65 for this example) only $30,000 a year. That means you will have, over that time $1,350,000 pass through your hands. All that money and what are you doing without a plan!?
What my family does it to construct a spreadsheet. Across the top we place the money we know is coming in for a given month. Going down the side we place every item that we are going to spend the money on, broken down into groups. We have a group of bills we have to pay, things that we are going to get out as cash (to help us control spending), our debt and our savings. The spreadsheet is set up with formulas on the bottom and right hand sides to make sure all the columns add up, and the total at the bottom (after we’ve spent the paycheck) is to be 0.
Now, this budget doesn’t have to be restrictive. This is just the plan, and it can start out lax and get more tight as you compare actual spending to planned spending. It also allows you to plan for savings, plan for big things that are coming up, and to have an easy tool to make a decision when the time comes.
One of our biggest enemies in our race to get out of debt is emotions of the moment. Don’t let the salesmen or the sale price talk you out of doing what’s best for you and your family.
I’ve been meaning for a long time to switch our record-keeping/budgeting from paper to computer. You know how slow I am when it comes to change and computer-ese! Can you recommend a good computer budgeting program? Something that I could just plug in the numbers and it will figure it out for me?
Typically, we do our budgeting in excel since we do a paycheck by paycheck budget. I use Quicken Deluxe 2007 to keep track of the family finances and it has a monthly budget functionality built right in.
Basically, the question is how sophisticated do you want to get, how many accounts do you have online, what kind of reporting would you like, and how are you budgeting now?
If you have a Linux machine or a mac, then gnucash is excellent.
I have an excel spreadsheet that I balance to zero each month. It’s nice to know exactly where all my money is going monthly!
I also use an excel spreadsheet. I have it divided into two sections, fixed expenses and variable expenses. For each expense I have the budget broken down into three columns (monthly, weekly, and yearly), to equate what any given section works out per x. This allows us to easily account for once a year expenses (e.g. Christmas, or a baby), or bi-annual payments (car insurance), making sure we have enough put aside for these longer term expenses when they come around.
One other thing I have in my budget which I find extremely useful is a misc expense category. I have it equal to 10% of my take-home-pay. This is not money that I account for in any other category, nor is it money to just “spend”. Its there to cover unexpected expenses and slight fluctuations in the budget, and it keeps me from dipping into savings when something outside of the budget comes up. I find the less I get used to going into savings the less it happens. I cringe anytime I make a transfer out, even if its just to float something for a few days.
:wub: Yeah, ain’t he clever?! :biggrin: I am so blessed to have such a thoughtful and well prepared husband!
Mrs. Meg Logan
Tracking your spending and living frugal are not one and the same. I have been tracking my spending for years (tend to live on about 100% of our income) it was only after a recent financial scare that I got serious about living frugal (all those blogs have been a great help as well). I’ve already cut my shopping budget in half. I try not to think about how much money my wife and I have wasted over the years.
Another point is tithing. We found a local English speaking church that we really like and are attending and have decided to start for the first time giving tithe. I was discussing it with a friend and he said you should do the 80-10-10 live on 80% save 10% and give 10% to charitable donations (usually church) and I said impossible! That’s a recipe for financial disaster. We’re struggling as it is to keep us a small week commitment and said he made a comment which really got me thinking. You sued to live on a 120% of your incomes now debt (payments) have forced you to live on 50-60 percent. If you lived on 80% you could have a very comfortable life style with no debt money for savings and money for God.
Never thought of it that way. The reason why people can give 10% is they manage their money very well.
Well, if someone has been practicing giving 10% to charity long enough it is almost like taxes– it never crosses their mind that the money is available. This does lead to an interesting discussion. If your giving becomes routine to the point that it doesn’t fee like it costs you anything, does it?
In any case, you’re right– it’s one thing to track spending and another thing to control it. Few people really take the time to plan what they are going to spend, and fewer use the budget to cut back where they don’t need to spend. The latter being the better practice.
“I said impossible! That’s a recipe for financial disaster.”
The mathematics of tithing do not always make sense. While we can practically look at the scenario and state, “If I tithe 10%, I will have 10% less to go around”, it has not been my experience that it has actually worked out that way. Somehow the money I have been entrusted with has always gone farther when I have been faithful to give as Christ has lead me. Typically this has been above and beyond the 10%, even at times when my family brought in very little money. There has not been a time where my family has not had enough food to eat, or has been incapable of paying our bills. The only explanation I have for this is the hand of God being on my life, and the promise given in Malachi 3:10.
There are some people who use this verse as a “Name it, claim it! Give to God and he will give back to you 1,000 fold”. I do not believe this. The bible is pretty clear that the majority of our rewards are in heaven, not on earth. We should also not be giving in order that we can “get rich quick”. I do not see any promise for riches in Malachi 3:10, but just a reminder of the faithfulness of God. As we step out to be obedient to Him in what we give, He will meet us in the middle to ease things along. Sometimes this means we have unexpected income, it might mean that we have less unexpected expenses. Its often really difficult to pinpoint exactly how we’re blessed when we’re in these times.
Really, its only in looking back that I can more clearly see how much God’s hand has been on my life at different points in time. To this day I do not understand how my wife and I lived on so little money the first year we were married and gave so much to the church. Looking at the numbers it really seems like a mathematical impossibility. I know the only way it was done was through Him.
Amen!
God is faithful no doubt!
MML
What? No takers on my “does it really cost you anything if you have given it for a long time” is it really sacrificial? I thought I’d get Doug with that one for sure! 🙂
“What? No takers on my “does it really cost you anything if you have given it for a long time” is it really sacrificial? I thought I’d get Doug with that one for sure!”
LOL, its not about sacrifice, its about obedience. The bible is pretty clear that we should give “with a joyful heart” but there is nowhere where it says, “You must really miss every dollar you give to the Lord or you’re not really giving”. If you’re in the habit of giving regularly enough that you don’t even miss the money from your budget, you’re probably in the place you should be. Where your treasure is, your heart will be also. If you’re giving your treasure to Christ, your heart will be His… and you probably won’t think as much about this worldly wealth anyway. This is not saying you should just give your 10%, be done with it and never expand more. The Holy Ghost will very likely continue to work on you to find ways to put more money into the Kingdom. However, again, this is about obedience, not “how much it you give up to give the money to Christ”.
Since someone will likely bring it up, If you make $500 a week and you give $100, you are giving more money in God’s eyes that a guy who gives $1,000 and makes $1 million. However, if God only told you to give $50 and you gave $100, you are not in any better shape by doing so. Obedience is better than sacrifice.
Well said husband. Well said.
MML
Doug, I’ll agree with you that heart attitude is important. And that, in a round about way is my point. Remember the time that Jesus brought his disciples in to see the temple and the Pharisee gave out of his riches but the widow cast in her two mites? Jesus responded with the obvious “For all they did cast in of their abundance; but she of her want did cast in all that she had, even all her living.” but what is the point?
Obviously, in context, he was demonstrating further his previous points that the Pharisees and Scribes were out to serve themselves, to boast in themselves, etc. but if there wasn’t also the point that we need to give all, or give sacrificially then what is the point?
That aside, I grant you that we should give out of that which we purpose in our hearts, I’m just musing aloud that if we are not consciously thinking about how much we are giving, but are just giving a “default” are we really doing what we should?
“Obviously, in context, he was demonstrating further his previous points that the Pharisees and Scribes were out to serve themselves, to boast in themselves, etc. but if there wasn’t also the point that we need to give all, or give sacrificially then what is the point?”
I really take this passage at face value. From God’s perspective the widow put in more money.
Mar 12:43 “And he called [unto him] his disciples, and saith unto them, Verily I say unto you, That this poor widow hath cast more in, than all they which have cast into the treasury:”
Jesus pointed this out to show how different the way God sees things is from the way man sees things. Man is all about the way something looks. Who provides the largest amount of money and who “looks the best”. We can see from other passages that people were attaching quite a show to their giving,
Mathew 6:2 “Therefore when thou doest [thine] alms, do not sound a trumpet before thee, as the hypocrites do in the synagogues and in the streets, that they may have glory of men. Verily I say unto you, They have their reward.”
Can you imagine sounding a trumpet before you gave your tithe? That just sounds crazy to me… but I have heard some pretty crazy stories from pastors of the types of things that people have tried to do because “they tithe x amount per year, and should be considered more than this person who can only contribute y”. These type of influences throwing around “how much you give” as if it is somehow you are just as bad.
God on the other hand is concerned that we are faithful what we are given, whether it be small or large. (Mathew 25:14-30) . I think that the fact that the widow gave everything was just there to clearly illustrate that its not about the amount of money. God sees our giving in relation to what we’ve been entrusted with, not whether it is a big amount. The fact that such a small amount is “everything” for her just makes this more clear.
If there was more to be drawn from the fact it was everything I would expect Jesus to have expounded on this part of the parable. He did not, the focus of his point seems to be on the fact that she gave more than everyone in God’s eyes, not that she gave everything.
On the flip side of this, I do think Christ calls us to be fully submitted to Him. Giving all our money to Him can be used as a symbol of our dedication. However, this is only profitable to us if its something the Holy Ghost has asked us to do. A disobedient sacrifice is not pleasing to the Lord, nor are the works of our own hands. Only those things that Christ does through us are worth anything.