Wednesday, April 30, 2008
Tuesday, April 29, 2008
Today we begin the adventure of finding out exactly where your money is going. To me, budgeting is all about being purposeful with your money so that you don't just contine to throw all of your energy and money to the wind.
Your "hole finding" mission for today is to identify all of your bills. I want you to make a list of every place that your money is obligated to go. If you have already made your binder, or organized your filing, then this step is going to be easy for you. Your bills are going to be specific to your life, but here is a list of some general categories:
- Cable TV
- Car payment
- Car Insurance
- Credit Card Payment
- School loans
There are also other categories which have more flexibility, but actually tend to steal more air and I want you to make a list for these categories as well. Categories like:
- Baby Expenses (if you have one)
Try to be realistic and specific about what you spend your money on. If you go get your hair done every month then you need a hair category, etc... Try to be as specific as you can. This is where your money is going and it is imperative to identify every area. Don't worry about all of the "holes" in your balloon right now. A lot of that is just life and what it costs to live, but as we go along in this budgeting process, you will realise that by not being purposeful with your money, you have allowed some of those holes to sabotage your dreams. This is just the beginning, so hang in there with me, because I am confident that this plan is going to finally get your balloon off of the ground.
Monday, April 28, 2008
My dear friend Amy and her husband have found such a great solution to their differing strengths when it comes to finances. I want to share it with you today in the hope that it might also give you some ideas to finding creative solutions to coming together in your own finances. Amy is fantastic at organization, but the responsibility of paying the bills can be overwhelming to her. So she and her husband came up with a plan. They have a Finance binder and every month all during the month Amy opens the mail, sorts it and files it in the binder. In addition to the dividers for the different types of bills and statements, she has two other sections… bills due at the beginning of the month and bills due in the middle of the month. Twice a month, Nathan sits down with the binder and goes through the appropriate section and pays the bills. That way Nathan is fully aware of what is happening in their finances and carrying that responsibility and at the same time, Amy’s strength at organization is being completely utilized so that they are supporting each other. They are both aware of what is happening in their finances and have an open dialog about where their money is going.
This is a wonderful example of how to utilize a Finance Binder and of how to combine your strengths to soar. This obviously is not the answer to every situation, but if you are married, it is really important that both of you are aware of what is happening in your finances. You both spend money, and therefore in order to make a budget work, you have to both understand the purpose behind it. Even if you don’t think your spouse has any strength when it comes to finances, if you are in debt, or feel trapped by lack, or maybe just never seem to make any forward progress, may I just suggest that there may be more strength in your partner than you realize. And if you are both weak in this area, I have good news for you too. God loves to give strength to the weak and nothing welcomes His presence like being in agreement.
Using a Finance Binder and Budget can strengthen your financial life and help you to come into agreement together. And in that place of agreement you will discover, that only with the strength of both wings will you be able to soar.
Sunday, April 27, 2008
Saturday, April 26, 2008
As you sort through your paperwork today, or maybe just as you enjoy this wonderful day, I have a thought for you. It comes from Matthew 6:25-33 and starts out saying, “Do not worry about your life, what you will eat, what you will wear (finances)” and it goes on to say to consider the birds of the air and how your heavenly Father feeds them. “Are you not of more value than them?” and then it says, “consider the lilies of the field… Now if God so clothes the grass of the field, which today is, and tomorrow is gone, will He not much more clothe you?”
The thing about worry is it makes no place for God. Your heavenly Father knows what you need, and if you look to Him instead of your own wisdom and strength, you will find abundant provision for today. There is grace to climb your mountain today. Maybe that mountain isn’t your filing pile. Maybe it’s your marriage, or your job, or just your dishes… but there is grace for today. So receive God’s grace for your mountain right now, don’t worry about tomorrow, and if worry starts to creep in, can I just gently urge you to “consider the lilies…”
Friday, April 25, 2008
Thursday, April 24, 2008
The fun thing about his garage is that in doing a project at my Dad's house, you always know that he has the equipment to do it and exactly where to find it. As a child who loved to do projects, I used to constantly "borrow" hammers, scissors, tape, or whatever from my Dad and never returned it. As a parent of three small children who also never put anything back, I have so much empathy for my Dad in his struggle to keep his well stocked, well organized garage safe from being pillaged and the bounty disappearing into the abyss of my room. I laugh now, because I am sure I have well earned all the missing jewelry, chap stick, shoes, keys, and tape that seems to disappear in the hands of my own children. But the bottom line is, having a place for everything truly does make projects so much easier and even more fun, and not having tape when you are in the middle of wrapping a present and the tape has disappeared is no fun at all.
In putting together this notebook (or filing cabinet/bin) I truly believe that your finances can begin to feel like my Dad's garage. Not everyone will be able to recognize it, but your finances will be a thing of beauty. Your taxes will be easy. Your bills will be easy to find, track, and to manage. This step is so crucial because it will be very difficult for you to budget, if you don't know what you are currently spending each month. In getting your bills and statements in order, you are setting yourself up for success in everything that we are going to be dealing with in the coming months. You are setting yourself up for success for the rest of your life.
So the next step is to take the first group of bills from the top of your stack. There are going to be two types of bills: a bill that fluctuates (like your water bill) and a bill that is fixed (like your mortgage). Let's take your water bill as an instance of a fluctuating bill. If a bill fluctuates, you are going to need the last year's worth of statements in order to get an accurate average for your budget. If you don't have the statements because you have thrown them away, or because you get email statements instead or for whatever reason, don't worry about it. We will be dealing with those contingencies later as we get into the detail of setting up your budget. Right now we are putting a plan in place for the paperwork that you do have, and hopefully most of the information will be easy to find when it is time to budget. So look at the dates on your statements and keep the last twelve months of statements and then archive (file in a box with cheap manila folders) the rest.
Even if you are using a filing system instead of the binder, you will only want to keep the last years worth of statements in the cabinet, because otherwise your filing cabinet/tub will become too cluttered and unmaneagable. Take this opportunity to de-clutter your filing cabinet and archive all of the rest because in doing so you are really de-cluttering your financial life. Also, it is miserable to try to stuff a file into a too full filing cabinet. So now back to the binder. Take the twelve most current statements, hole punch them, and put them behind the appropriate tab in your notebook.
If the bill is fixed (like your mortgage), you are only going to keep the statements from this year (2008) in your folder, so you will only need the statements dated from the beginning of the year. Take a manila folder and archive the rest of the statements. You will want to keep these archived statements until their tax liability has expired (which I think is either 3 or 7 years - I will check on this somewhere in the next 3 years and write a blog on it to let you know :) ). And that is the plan for today... lots of hole punching, but with a three-ring hole punch it will go very quickly.
Not every part of the journey to budgeting is fun, and you may not love this step, but I guarantee that you will love looking at that notebook once it is finished as compared to a frightful mound of disorganized bills, and you will love the freedom that is going to come into your financial life. So hang in there and see this step through. This is the end of the monster in the closet and is helping to guarantee that there will never be another monster in the closet. There will be a place for everything, you will be out from the cloud of fear and dread, and managing your finances is going to be so much easier and consequently a lot more fun... and that is a beautiful thing.
Wednesday, April 23, 2008
I have always loved this verse of scripture. To me it has always been such a comforting thought that the God who made me has a plan for my life. However, not just a plan, but a plan for good, a plan filled with hope and purpose.
When these words were originally written, they were written to a group of people in absolute poverty, hopelessness, and actual captivity. They had been forcibly taken into slavery to a place called Babylon. I can barely imagine the pain and anguish of being separated from everyone I love, living in poverty with nothing, and completely hopeless of any kind of restoration. Truly they were destitute and yet God was promising them hope.
Do you feel like this? Do you feel like you are living in a land of slavery when it comes to your finances? Do you feel like lack of resources and debt is constantly separating you from the people you love, or even what you would love to do? Are you hopeless of ever getting out of the bondage of debt?
Just as God had a plan of deliverance for the slaves in Babylon, God has a plan for your life. He is so much bigger than the mountain of finances, in fact, to Him it is just a pebble. His heart is for you to be free, and I truly believe that He is singing a song of deliverance over you. For today, the steps towards that freedom just may be as simple as the binder or filing tub that is now hopefully sitting in your home. It is not a mistake that you are reading this blog today. God is truly working everything for your good. His heart is for you, and there is a path to freedom. Now lets take the next step...
OK, open your package of dividers, and get out the labels. If you are setting up to file, the steps are the same, it will just look a little different. Now I want you to make labels for every kind of bill that you have. This is going to serve two purposes. First, you will easily be able to find any bill, which will be extremely helpful when we start talking about how to get estimates of your bills. Secondly, it is also going to help to identify some of the categories when we set about making your actual budget. So here are a few categories to consider. Obviously you will need to adjust the categories to fit your particular situation:Mortgage/Rent, Utilities, Phone/Cable/Internet, Banking, Savings, Insurance, Credit cards (have a separate divider for each), School Loans, Automobile, Business Costs (if you have a home business with extensive paperwork, you may need a filing cabinet - ours doesn't, so this works for us), Kids activities, Taxes, Medical, and whatever other categories that are specific to your family.
If you bought enough dividers/filing folders then definitely separate out the different utilities, phone/cable/Internet, and anything else that is combined. The more specific the label, the easier it will be to find. However, if you don't have enough and want to combine into categories, just make sure to divide the bills within those categories. For instance, keep all of your water bills together even if there is not a divider separating it from your gas bill and it is all under utilities.
So that is the step in the plan today. It is not a difficult one, but each step is so important to getting anywhere in the journey. And just remember today, that as you move towards freedom in your finances, you are not alone in the journey. God is right there with you. He has been all along, and He truly does have a wonderful plan for you... a plan for your good, a plan full of hope, a plan for your freedom.
Tuesday, April 22, 2008
Monday, April 21, 2008
Sunday, April 20, 2008
So my question is, "Is it possible to have faith when you are paralyzed by a fear of the unknown?" I don't think it is. I think what many people call "faith" is actually just denial and fear of the unknown cloaked in "...but I'm believing God." Can you actually trust God with your circumstances when you see your circumstances as bigger than Him? The only way to bring those circumstances into proper perspective is to quit seeing them through the magnifying glass of fear. You have to face them for what they are, and then see God for who He is, and then your heart can get into the right place. It's not just a pretty saying that, "the truth will set you free". When it comes to finances, it is absolutely foundational.
So, are you ready to really face what has been hiding in the neglected closet of your finances? It is time to get free, and I am so excited to help you on that journey. I guarantee you, that whatever lies behind that door, the relief of being free from the fear of the unknown will make it worth the journey. Whatever your income (fixed, commission, hourly...), a budget is going to help you to face the unknown "monsters" and to get a plan for your future that is going to bring hope and purpose to your finances.
And how is my neighbor? She had the surgical procedure, and it turned out it was something easily reparable with surgery and not cancer. She is so incredibly relieved that she faced her fears. The surgery was still difficult, but so much better than a lifetime of fear of the unknown and painful consequences for neglecting something that was never that big to begin with.
Saturday, April 19, 2008
Fear had absolutely controlled her approach to money for years. She was constantly afraid that there wouldn't be enough, so she felt like she would just rather not know and live however she wanted to. However, as a result, debt had crept in, and she never did the things she really wanted to because of the fear. The weight of finances had overwhelmed her to the point that she felt powerless and hopeless. As we sat and worked out her budget, for the first time she was able to face what it cost for her to live as compared to what she earned. At the end, she sat there so relieved and at peace. It didn't change her situation automatically, but she could finally begin to be purposeful with her money and working towards her dreams.
There is nothing quite as debilitating as fear... fear of the unknown, fear of failure, fear of poverty. When it comes to your finances, fear will continually work against your dreams, undermine your confidence and sabotage your good intentions. It is not a light thing to reckon with, but it has to be addressed from the very beginning or you will never know where to start or where you stand. I have heard so many people say that they don't want to budget because it is just too restrictive, and yet it seems that debt is their continual friend. Ironically, debt is actually more restrictive and oppressive than simply knowing exactly where you stand and spending purposefully. If you don't know exactly what you need to live each month, what your bills average, where your money is actually going, can I just suggest that you might be living in denial? The amazing thing about budgeting is that it actually can set you free from that continual denial and from fear. In knowing exactly what you are earning, what your current debt is, and where your money is going, you are able to face the reality of where you are... and that is the only point to start.