Tuesday, November 25, 2008

Thanksgiving prayer

Have a wonderful Thanksgiving! My dear brother and his wife and kids are in town for the holiday, and so I am out for the week. But I pray that you and your families have a wonderful time together and may the Lord remind you in this season of how much you have to be thankful for.

"The Pilgrims made seven times more graves than huts. No Americans have been more impoverished than these who, nevertheless, set aside a day of thanksgiving."
~H.U. Westermayer

"The unthankful heart... discovers no mercies; but let the thankful heart sweep through the day and, as the magnet finds the iron, so it will find, in every hour, some heavenly blessings!"
~Henry Ward Beecher

May your heart be a magnet for blessings today and have a wonderful week.
Tracy

Tuesday, November 18, 2008

The Thumbtack Theory

My Dad has this saying, “Stupidity is continually doing the same thing and expecting different results.”

We all have our moments of stupidity. I had another moment today as I attempted once again to hang my son’s wall decorations back on his wall. Somewhere in my life I became convinced that the best way to hang anything is with thumbtacks…. I know I should get the hammer and put a nail in the wall. It’s just easier to use tacks. And more forgiving if you accidently hang the picture 2 inches too low. However, tacks definitely have their down side like they don’t hold very much weight. Another down side is they can easily bend when going into the wall. The particular picture I was hanging now has about 14 tack holes in a little circle. For some reason, it just doesn’t want to stay :)

You may laugh at my “stupidity” (I definitely do) but many of us do the exact same thing with our finances. We know that we need to find a permanent solution but we just keep “jimmy-rigging” our finances with thumbtacks and expecting different results. So when it comes to making a major life change and adjusting your budget and your finances to fit, don’t try to do it in a makeshift, jimmy-rigged way. There is only one way to really succeed whether you are needing to down size your life, or pay off debt, or just overhaul the way you handle your finances: Throw out the thumbtacks, get out the measuring tape, a hammer and nails, and do it the right way.

And the right way to correct an out of control financial life is to get your budget in order. So if you have been “borrowing” from your 401K to make it through, or you are up to your eyeballs in credit card debt, or if you have resorted to selling plasma to make ends meet (my husband did this in college ~ they do pay $80 for it, but it really is a desperate measure :) … there has got to be a better way!) then may I suggest that your finances may be hanging precariously from thumbtacks. It is time to take a realistic look at your finances and sit down and evaluate your budget once again.

If you are new to Budgeting For a Better Life and have never taken the time to set up a budget, then this is a great day for your financial life. If you have already set up a budget and are just needing to make some adjustments, then pull out the thumbtacks and let’s do it right. Every dollar that you spend has to come from somewhere, so having a plan for the “somewhere” can really impact your financial situation.

Sometimes we get into that “jimmy-rigging” mode with our finances because we just don’t want to face the cost of what we are actually spending. For instance, there are many people who don’t want to know what they are actually spending on dining out. If they actually sat down and did the math of eating out at $30 a meal every night they would realize that they are actually spending over $900 a month on food… and that doesn’t even include other groceries. If you are living on a limited budget, this is one of the fastest slides into debt that you can devise. It seems so much easier to pull out the credit card so you “don’t have to face it,” but the truth is you are killing your financial future (and probably your arteries.)

If you really want to take back your financial life, you are going to need to look at those habits and put yourself on a budget. This is why I am such a firm advocator of using the cash/envelope system. When the money is gone, you are forced to either determine where more money is coming from (is that meal out worth some plasma? :) just kidding) or eat at home. It is hard to set boundaries when you aren’t used to them and so that physical boundary of your cash envelope being empty can be revolutionary in retraining your spending habits.

As for me, I am going to go get a hammer and a nail and hang the picture the right way. I’ve got to do something different if I want a different result. And if you want to see a different result in your finances in 2009, then it’s time for you to do something different as well. So get out the hammer (A Plan to Stop Juggling), bring out the nails (Finding Balance ), and a measuring tape (Directions for the Journey ), and get your budget in order. It takes a little more effort, but take it from the thumbtack master, I would much rather pick a picture off of the ground than have to try to pick my financial world up off of the ground. Even I realize that there are some things that thumbtacks just won’t hold.

Sunday, November 16, 2008

Suprises: Courtesy of India and Beyond

Have you ever been going through your bank statement and realized you forgot to enter a deposit or a debit? It doesn’t happen too often these days with automated downloads into your financial software… that is unless your financial software hates you. Yes, I know it’s a computer program that just does what it told, or at least that is what my mind tells me, but my heart knows the truth. “Quicken” hates me. I have upgraded, I have reinstalled, I have checked and double checked my account information, I have spent hours on the phone with their “support” team which I think are all located in India. There is nothing wrong with being from India, but it is very difficult to have confidence in your technical support when they have only just learned English. Does this man have any idea what I am saying? Nope. I decide to hang up and try again. And once again, fourty-five minutes to get to a human being wasted as I arrive once again in India.

All that being said, my current software will download a few choice selections from my financial world, but not my bank statement and information. It used to do it, but one day it just stopped. No, I did not do anything or change anything (as the man from India insisted over and over again). It just stopped and so now I manually enter all of my bills, checks and deposits…. And sometimes I miss one, or two, or… see, now I’m just getting mad at the man from India again.

But the bright side is, it forces me to stay on my toes with my finances. I check and double check to make sure that I have everything entered. Most of my bills are automatically debited so it is really important that I have the necessary funds in my account when they go through. I love the freedom from not worrying that your bill will be late that you get with automation. I love that I don’t ever need stamps. I love that I am protecting my credit by never being late on a payment. I love that I simply check the bill off on my budget and know that the rest will be automatically taken care of. I do NOT love miscalculating what is left in your bank account because you forgot to enter the check for the doctor’s visit last week.

But that is part of financial life. Sometimes we forget. We are not perfect (gasp!) We sometimes forget that we already spent the $20 in birthday money from our Great Aunt and “re-spend” it on something else. And sometimes we forget to write in a deposit… more rarely, but what a glorious surprise when that happens. And yes, after all of my grumbling about Quicken, I was wonderfully surprised on Friday that I had neglected to write in a deposit and we actually had $206 dollars more than we thought! Hallelujah. It truly seemed like a miracle to me, and I know that every good thing comes from God, so I believe that it was. It definitely was a great reminder that good things can even come from hateful computer programs…. Ok, considering Quicken that feels like a stretch… but I will definitely say that my wonderful God works all things for good on our behalf. He can even use Quicken… now if He could just teach me how to use it :)

Saturday, November 15, 2008

Still Alive :)

Have I fallen off the planet? No, just very full days and evenings lately. I'm still here, and still budgeting (of course), I just have needed a little time to focus on other things.

Matt and I have really been working to get our graphic design business off of the ground. We have called it jones house creative. Matt is still working part time for Liberated Living Ministries but we are actively trying to build our graphic design business. I think it has felt a little like trying to juggle two infants as I have struggled with giving my "free" night hours to either my book and blog, or our business. As you have guessed from my absence, the business is winning right now, and really needs to be a priority during this season.

But in the midst of all of this activity, I keep thinking budgeting and wondering how all of my "blog friends" are doing with their budgets leading into the Christmas season. In fact, as I pulled out my Finance Binder today and realized that I have been neglecting my paperwork, I wondered how many of you are doing the same thing. It is so easy to start letting things drop during this season. Tis the season to shop... or so stores hope, and it's easy to just start procrastinating as you begin the last leg of the year. It is way more fun to buy than to figure out how to pay for what you bought, and it's easy to just start to slide and figure you'll "re-commit" in the New Year.

However, this is actually the perfect time to get a hold of your spending, and look at your Christmas budget again. I did this the other night, and I am so thankful for the time I invested. I sat with my budget and my Christmas budget and figured out exactly where we are financially by reconciling my bank statement and paying my bills. And then I looked at what I had already bought as Christmas presents and how much further I had to go. At the end of the evening, I felt excited about the upcoming season again and felt so good about having a plan for gifts we are planning to give.

I don't know how it is in the rest of the world, but around here, shoppers just get so mean and grouchy during this season. I think part of this is because they are all spending money that they don't have for presents that they know will be returned. What is fun about that? But knowing your budget and sticking to it, as well as shopping early and catching the early sales can save you having to endure the world of the shopping grouches.

Anyway, just thoughts from my corner of the world tonight. Hopefully, this week will be a little less busy and I will get to blog more.... but did I say that last week as well? Oh well, it is what it is :) Have a wonderful Sunday... and if you have some time, catch up on your finances. I promise you will feel better. Even if there is less than you want, you will at least know what you have... and what you have to give. God bless.

Tuesday, November 11, 2008

Down Sizing Part 2 - A Little Pruning

What would you do if all of a sudden your income was cut by more than half? This happened last week to a man named Henry who was completely blindsided by his company’s decision to start layoffs and downsize. He was called into a meeting and given the option to quit or to be demoted. The demotion meant that his salary would be decreased from around $140,000 to $50,000!! He has given so many years to the company and all of a sudden he’s back at the beginning. He chose to take the demotion and stay with the company, but he is going to face a very hard road ahead. Either he is going to need to down size his entire life, or he needs to start looking for a new job. But really, anywhere he goes he is going to be starting over. At this point, his only option is to down size.

So where do you start in the process of cutting back your expenses? It is such a difficult place to be in, and yet if you don’t act immediately, your next month’s expenses might land you under a landslide of debt. But the good news is, you don’t need nearly as much “stuff” as you have come to believe. It may seem radical to change your life, but remember you are saving your family’s future.

The first place you start is your budget. You should have every bill and every expense listed in your budget and this will make it very convenient to see how your numbers are adding up. So take your new salary, which for Henry is $50,000. He will want to take into account taxes and subtract them from his total and then divide that total by 12. His new monthly salary is probably around $3400 a month (I’m guessing because I don’t know his tax situation). So this is the number that he will want to work toward. Every number in his budget needs to be re-calculated to bring his monthly expenses under this number.

However there are some numbers that can’t immediately change like his house payment and related housing costs like gas and electricity and water. Automobile payments may be difficult to immediately change as well. Yet in this time of change, everything needs to be considered. If you can’t afford your car, then buy a second hand car and get out of that payment if you can. Re-evaluate your home. Yes, you may love your home, but at what cost? If you end up in bankruptcy, chances are you will lose your home long before then. It is so much better to be proactive and make the best choice for your family…

Which I have to interject and say that you absolutely need the understanding and support of your family in this endeavor. If you are married, your wife or husband needs to be right there with you to really make this succeed. The best way (in my opinion) to approach it is to be honest and hopeful with them. This is a challenging time, but you want to make the best decisions before the decisions are made for you. These decisions mean cutting back and being purposeful in many areas where you have had no previous limit. But the goal is a debt free life where you are free to be a blessing to your children and to many others while living within your means. The example that you will give your children in doing this will be an inheritance for the rest of their lives. There is honor in paying your bills, and there is honor in living within your means. If the “stuff” in your home is all built on a mountain of debt and pretense, then what is the message that you are giving to your children?

Now if you have little children, they obviously do not need to know too much. What they really need to know is that they are loved and that Mommy and Daddy and their Heavenly Father are taking care of them. You can involve them in praying for a new job or wisdom, but be so careful not to involve them in your fear. They are powerless in this situation and it is an unfair burden for them to carry that can really scar them if you place your fear on them. It is amazing how children adapt and they will be fine as long as they know that you are OK and that their family is OK.

I am going to stop here for now and continue this blog later, but I do just want to remind you that if you are in the process of down sizing your life that you are never alone in this. Ask the Lord for wisdom and don’t resent the process. It is all just stuff and there is a way through this, but it may take some ingenuity and also some tenacity to see it through. But don’t get discouraged. You are fighting against familiarity and sometimes against the culture, but you are still right in the middle of God’s hand and in the very center of His plan. And NO He did not plan evil or pain for you, but He always has a plan for our good and is always fighting to work the difficult things in our lives for good. Rest in the fact that God has a plan, and then yield to the fact that His amazing plan for good might just involve a little pruning.

Thursday, November 6, 2008

Down Sizing Your Life

The other day I had a conversation with a lady who is facing the decision of whether to leave her job and stay home with her children and whether her family can afford to live on just her husband’s salary. It is a very difficult decision to reduce your standard of living and learn to live on less, yet many people are facing this reality and for many it is not by their choice. There are so many companies that are cutting back and laying off people right now. But whether by choice or by necessity, the struggle to reduce the cost of living is the same.

It is actually very difficult to undo the financial tapestry we weave as our salary increases. We take on additional bills and payments, increase the size of our home, hire service people to mow the yard, clean the house, do our taxes. We buy bigger cars and houses with bigger payments and bigger insurance payments. Everything gets larger as our salary increases and it is really a challenge to extricate yourself from all of the things that you have come to deem “necessities”. But many times the challenge isn’t so much financial as it is emotional.

A friend of mine just went through a divorce and one of the biggest challenges that she faced as she has down sized her life was the resentment she felt in having to do it. Her sense of entitlement continually undermined the realities of her situation. She felt like she was being robbed that she couldn’t have the car she was used to. She resented the smaller home because her furniture wouldn’t fit. She HATED having to have a budget when she had been used to just buying whatever she wanted. And every bit of this emotional resistance made the process of down sizing so much more traumatic for her than it had to be.

The big challenge in this emotional minefield is to get a vision for your life on the other side and continually remind yourself of where you are going. For the lady considering quitting her job to stay home with her children, her vision statement might be something like, “My children are worth it. I am investing this effort and my income into their lives so that I can be with them.” So anytime she faces a difficult financial decision when down sizing, she reminds herself, “I can do without this large home because my children are worth it, and I am investing my income into their lives so that I can be with them.

For the woman going through the divorce, her vision statement might be, “This is my chance at a new beginning and I am not going to hold onto anything that might keep me in the despair of my past. I am going to embrace my new life, and move forward. There is a way through this and this is only the beginning.” So when she faces getting rid of her expensive car for a payment she can afford she reminds herself of her vision statement. “This is only the beginning, and I am going to embrace my new life and move forward.”

And for the man who faces layoffs at work and has to take a job at a lower income his statement may be, “Whatever it takes to provide for my family. This isn’t going backwards, it’s just life. I am going to embrace where we are and make the most of what we have. We are healthy, we love each other, and this is just a small part of the journey.”

In each of these statements, there is no indication of self pity, or resentment. It is an acceptance of where you are so that you can build from here and move forward. If you spend all of your energy resenting your present circumstances, you will miss what God has for you today. It is absolutely critical to let go of that resentment, denial, and sense of entitlement that cripples so many when they come to a major life change. God has an amazing plan for your life, and whatever has happened in your life He can work it for good. But one thing that can prevent Him from working in your life today, and that is if you stop living in today and choose to stay in yesterday and what “should” be.

So don’t look at down sizing as going backward. Choose to see it as simplifying your life. In this process of down sizing you will have to question everything that you currently spend money and it is an emotional process. But don’t let your emotions sabotage your financial future. Keep the vision for what you are doing in front of you and remember that this is only for a season. It won’t always be this hard and the decisions that you are making to reduce your cost of living and live within your means are going to ensure that there are only better days ahead.

I am going to be talking about more practical steps to down sizing in the days ahead, but I felt it was critical to start here. You can resent the process, or you can embrace it and go for it. But whether you are choosing the process or are in it out of necessity, it will be a much easier journey if you are not carrying the baggage of “what was” and just accept “what is” today.

Tuesday, November 4, 2008

A Significant Time

It is a very significant time in America. I know tonight that whatever blog I write will be obsolete tomorrow. Tomorrow we will have voted for a new president and all of this nation and the world waits in anticipation tonight.

So, as I wait with the world, I honestly feel no desire to blog on the kingdoms of men, but rather to blog on the Kingdom of God. We live in this world, but we are not of this world. We vote, we raise our voices, we fight for what is good... but in the end, we belong to another kingdom. Our hearts are actually longing for His Kingdom to be established here on earth. And His Kingdom is a kingdom of love.

Our nation is torn in division and dissent on this night and has been for a long time. No matter who is elected, I do not see an end to this division. As men move further and further from any common ground, the darkness can only get darker. But it is in the darkest dark of night that the light will shine most brightly. As part of our constitution, the founding fathers of this nation wrote, "We hold these truths to be self evident..." But in this world today there is no longer any measure of agreement on what truth is.

But as always, I am again comforted that nations will rise and fall, and yet the Kingdom of God and His truth will remain. I am proud to be an American citizen, but my citizenship here is secondary to my citizenship in the Kingdom of God. And as an ambassador of His Kingdom I am called to be a minister of reconciliation.... not neccessarily to reconcile men to each other (although I dearly wish there was a way), but to reconcile men to God. We bear the good news that God is good, and has made a way for all men to come to Him and to know Him. The message of love and reconciliation is the anthem of His kingdom. And the really good news is you never have to vote for new leadership :)

Sunday, November 2, 2008

Christmas in November


We almost, almost watched a Christmas movie this weekend. Matt started to turn it on for the kids. “NOOOOOOO”, I pleaded. “Christmas is still 55 days away. I can’t do it.” Now, I love Christmas so much and I am usually the first one diving in. Our tree is up the day after Thanksgiving (Nov. 25th for my SA friends) and I just love the whole season. However, the season has come a month early this year. The stores are so desperately hoping that the Christmas season is going to save them that they just decided to go ahead and start early. But it just feels like we are skipping ahead and missing the now. I love anticipation and looking forward to things, but if you start the party too early… it starts feeling really long by the time you get there.

However, while I may be boycotting Christmas movies in October or even early November, I have already budgeted for Christmas and have even started buying presents. It may be too early to start celebrating, but it is never too early to make a plan and to save money. If you haven’t yet done it, I would like to encourage you to sit down and make a budget for yourself for Christmas. I do a simple spreadsheet in a program like Excel. I make a list of everyone that I am going to buy presents for in the first column. Then in the second column I set a budget for each person’s present. I note present ideas in the third column and then in the fourth column I track how much I actually spend.

Excel has a great feature that if you highlight the column of your spending and then go to the tool bar at the top and click on the Sigma letter (looks like a funny shaped E) it will add everything together in the column for you. It will put the sum of your numbers in the next box in the column. This lets you know exactly what you are looking at as your total spending for Christmas.

After you have worked out a feasible budget for Christmas presents, it is important to also make a budget for Christmas travel and entertaining. If you are going to be traveling to family over Christmas, you will want to make a detailed budget for your trip which should include food, lodging, gas, air fare, snacks, entertainment while there, etc. However, what many people fail to budget for when planning for Christmas is the cost of having family come to you. While it is much cheaper than traveling, it can actually eat up your budget so quickly when you don’t plan for it. Just in the cost of extra food, you will be spending quite a bit more than usual. There are also family activities and extra gas. It is difficult to gage how much to budget for the cost of hosting your family, but be generous. It is better to have money left over that you can put into savings, or take your wife out to dinner with because she survived her in-laws, or just finally have a year where you leave the holidays with no regrets and no debt.

Planning ahead will help you to not resent your company, and will help you to start the new year on great financial footing. So here are a few more tips for making your holiday a very happy and budget friendly time:
1) Don’t forget about the tree ~ if you buy a real Christmas tree each year, don’t forget to include that cost into your Christmas budget. If you have an artificial tree, try to think ahead to what you might need to purchase this year, like did you break the angel last year?
2) Remember the trimmings ~ When Matt and I first were married we realized that we had no Christmas ornaments. All the memories from our childhood were still at our parent’s house and we were starting a life together. So we decided to buy each other an ornament each year. We decorated the rest of our tree with inexpensive ribbon and balls. It wasn’t glamorous but that was perfect and just made the memory sweeter. When the kids came along we included them in the tradition. Our tree is now so full of precious memories that we only buy one for our family. If you are just starting out, this is a great idea for cutting down the cost. You don’t have to buy everything all at once. Just buy one Christmas decoration this year and one ornament. Let those decorations be meaningful to you and pretty soon you will have a Christmas full of meaningful memories rather than just the clutter of Christmas stuff…. But just remember to include it in the budget. Those ornaments can get pricey, even just for one.

3) Plan your Christmas meal ~ So much of the trimmings for Christmas and Thanksgiving are on sale right now. There are coupons in this week’s Sunday paper for all kinds of baking goods and supplies for Christmas cooking. If you plan ahead and start buying your Christmas meal a little each week, then it will not be such a huge blow at the end. Try to catch sales on items that you will need. You have 8 or so weeks to watch for discounts, and every dollar that you save on Christmas groceries is more that you will have to give to your friends and family.

4) Don’t forget the stocking stuffers ~ For a few years in the beginning of our marriage, I forgot to fill the stockings. In fact, I have only gotten good at it in the past couple of years. But one thing I have learned is that it can be just a stocking full of budget blowing stuff, or it can be meaningful. On years when I would forget, I would sometimes remember on Christmas Eve day and be out shopping just for the stocking! And you always spend more money when you are buying on a time crunch. In recent years I have started budgeting for the stocking fillers and then buying little things as I think of them or see them on sale in the stores. I keep all of the stocking fillers in the their own bag and then I know exactly what I have. I have been able to cut down the cost and make each person’s stocking more meaningful. Also, a great tip if your husband consistently forgets your stocking is to let him off the hook and find a friend whose husband is also “Christmas challenged” and fill each other’s stockings. It is no fun to fill your own stocking and it is also not fun to make your husband feel guilty on Christmas morning. This is a great solution to be a blessing to a friend and to actually be surprised yourself.

So, I hope these little tips helped, or at least were interesting. I know I will be writing more on this topic come December. But in the mean time, make a plan!! Christmas doesn’t have to kill your budget, but it is guaranteed to do just that if you don’t have a plan.
God bless~