Discipline (Part 3): The Third Day Hump

Every few weeks I find myself in the position where it is time again to recommit to running. I actually do love to run. I love being in shape and just being able to go out for a run. However, after each pregnancy I have faced this enormous hurdle of having to get back in shape. For me at the end of every pregnancy when I am gi-normous, I don’t just dream of meeting my baby for the first time, I dream of running. I dream of gliding down the street with effortless grace and stamina… yes, it is a dream. No, my 40+ lb body after baby does not “glide”… but never the less, it is always my passion to get back to running. So as soon as the doctor lets me and I am physically able, I start running. And let me just tell you, the third day is always the hardest! The first day you are just so excited about getting to run, and you have great enthusiasm, and you are motivated. The second day, you are still excited, but more tired, but you do it anyway. The third day, the pain sets in, and your muscles ache and you have no idea why you dreamed of running, because running sucks. (Sorry if this offends any of you, I just couldn’t think of another way to say it)

But the mystery is, if you can make it past the third day, it actually does start to get easier. You stop being so sore, and you start to get strong. Eventually, it even starts being enjoyable and you start loving to run again. However, for the last few months I have been struggling to run consistently. I keep running and then stopping because for one thing, it has rained for the last three months in Tulsa. And I am not even joking. Everything is flooded. For another, I started blogging, and it is really difficult to get up at 6am to run when you have gone to bed after midnight. So as I keep recommitting, I keep getting to experience the glorious “third day” hump. All this to say: I have extensive experience with the “third day” hump, but I also know what lies on the other side.

So, this is where the rubber meets the road when it comes to discipline. We have talked about letting the Holy Spirit lead you and relying on His strength. We have talked about not letting money be your treasure and yet being purposeful with the seed that God has put into your hand. However, even as you feel your heart pulling you towards using wisdom in your finances, and the Holy Spirit leading you to budget, you will still face a “third day” hump when you start to budget. It may not happen on literally the third day, but it will be just a little way into budgeting that you will just feel tired of it, and lazy, and just not feel like budgeting anymore. It will be easy at this point to just say, “Well, I tried to budget, but I just don’t think it works for me.” This isn’t really true at all. The truth is, you just hit the “third day” wall and quit. So, even with the grace of the Holy Spirit on your side, and a purpose in your heart, you still have a choice. What do you do if it gets hard, and your flesh reacts and doesn’t want to do it anymore?

It is in these moments that you give your flesh a pep talk, or call a friend for a pep talk, or email me, I’ve got lots of “pep” for these moments. Yes, there are tough moments when you are creating a habit, where you will have to push through, but the benefits of this small push are for a lifetime! Budgeting is going to effect every area of your life in a positive and an enabling way. You will not be burdened with debt, or if you already have debt it won’t be for much longer. You will be able to reach your dreams. You will be able to quit living in fear and anxiety over your bills, and your “lack”. This is the start of a better life, and so this momentary discomfort as you adjust your spending habits and learn to stay within your income is all worth it for what God is going to bring into your life and for what is going to happen in your finances.

So if you find yourself questioning your lack of discipline or using it as an excuse, I hope this will make you reconsider. Ask yourself, are your eyes on your own strength or are they on the Holy Spirit? Is your heart treasuring things, or are you going after God’s purpose for your finances? And if your eyes are on Him, and your heart is set with His purpose, maybe consider that you are just facing the “third day” hump in budgeting. This is the moment for Galations 6:9, “Let's not get tired of doing what is good, for at the right time we will reap a harvest-if we do not give up.” So keep on going! Day 4 gets easier and you will only get stronger and the path will get easier. And at the end there is a harvest for all of your effort that is going to make you so very glad that you didn’t quit on the third day. So keep on going, and vacation permitting, I will see you tomorrow.

Vacation update

Just a quick note before I post my "real" blog. I am so excited to report that we are having a wonderful vacation! Matt and I are sitting here writing, with our three angelic children asleep in the room. They are so exhausted! They have played and been swimming and as Noah said, "Mommy, I am having the most wonderful vacation!" It has really been a wonderful trip so far. Thank you for your prayers for our trip. What an incredible gift it is to have children. It is really fun to just get to enjoy them like this. I think this is what is so important about vacation... you just get to spend so much quality time together, just enjoying each other. You develope family jokes, and share adventures. I love it. Anyway, on to finances... although there is a lot to be said about budgets and vacations, as they don't seem to work together too well :) Actually, it is not the vacation that is the problem. I think it is just making sure that you budget enough to be able to relax and to get to enjoy your vacation. Anyway, I am excited to get to finish my series on discipline, so here is the next installment. God bless, and hopefully I will get to blog again, but only if it is fun and we are not too tired. This is vacation after all :)

Going on vacation

Vacation! Yea for trips, and fun, and three kids in a mini-van... I am not sure what we are thinking, but I will be gone for the next few days. I might get a chance to blog while there, but just in case I don't. Have a wonderful weekend. God bless, and pray for our survival :) Actually, I know we will survive, I just really want it to be more than survival. I want it to be fun and full of memories. It is going to be an adventure trip, so it will be full and busy, and I think we might need a vacation when we come home. But this is the stuff of memories, the highlights of childhood, and it is worth every penny.
See you soon,
Tracy

Discipline (Part 2): Matters of the Heart

Matthew 6:21 says, “For where your treasure is, there your heart will be also.” This verse has so often been used by preachers to tell us that we are not supposed to have wealth on this earth, but we need to give it into their ministry or their church so that we can have treasure in heaven instead. I am sorry but I don’t think this verse has anything at all do with giving to the “church”... maybe a little more to do with BEING the church. And it definitely is not talking about just giving away all of your money. This entire chapter in Mathew is actually dealing with matters of the heart and not the externals. It deals with your giving in charity being a matter of “stealth” so that it truly is just unto the Lord and not for the accolades of men. It addresses prayer as a matter between you and the Lord and not for recognition (vs5-13) and forgiveness unlocking your heart (vs 14-15) and fasting as a secret thing between you and the Lord as a matter of your heart (vs 16-17). Really the key to me seems to be the attitude or position of your heart when you are doing these things. Not that the things are bad, but it is why and how you do them that is really important… what is in your heart.

So then verse 19-21 talking about not laying up treasure on earth is not saying don’t have money or even wealth, but rather, don’t let it be your treasure… don’t let your heart be set on just having stuff or accumulating wealth because if that is all you have a vision for then the stuff will have you, and it is temporary. You will never be able to have self-control or discipline with your finances if your only purpose for not spending your money is to have more stuff and accumulate more money. If that is your goal then why not spend it now?

This is why my second key to discipline is the position of your heart. Your treasure is not in having stuff, but in having the resources to do whatever God has put into your heart to do. Your heart is fixed toward Him and on His purposes, and in that shifting of your heart your treasure becomes about advancing His kingdom. Now this is all very “spiritual” lingo, but the truth is still truth. If you are struggling with discipline in your finances, you probably haven’t yet got a big enough vision for what God is calling you and your family to do. What you are wasting today in resources is still meaningless to you because it doesn’t yet have the weight of value that it will when it takes on purpose.

Have you ever saved to go on a mission trip? It’s amazing how every $20 that you earn washing cars or doing odd jobs takes on incredible meaning. You have a clear goal and deadline and that brings amazing value to the money that you are raising. Also, when you really feel that smile of God on what you are doing, it really makes everything easier. When you know He is in it, it gives you this amazing confidence that you will have the resources to go when it is time to go. Well, I don’t think that we are only supposed to walk in that place of joyful confidence when it is for a “spiritual” mission trip. Instead, I think the Lord lets us have those experiences so we can see His faithfulness in a very powerful way and then walk in that joyful confidence in our daily lives.

Why is it that it is so much easier for us to believe that God has a purpose for our lives, rather than God has a purpose for our money… and it’s not giving it all away. We think if we actually tap into “spiritual” purpose for our finances then we will end up with nothing. I know that there was a whole generation of people before mine who were raised believing that the only way to be truly spiritual was to be poor. They sacrificed and gave away everything, and now they have gotten close to the end of their lives and have nothing. There is no retirement option besides living with their children. There is no money to leave as an inheritance. They feel disillusioned at their sacrifice. Many of us get “religious” in these moments and say, “Well, God will take care of them, since they gave it all to Him.” And yes God will take care of them, but they didn’t have to suffer. And they didn’t give it all to Him.

The trouble comes when we scatter our seed and then we sow our bread as well. 2 Corinthians 9:10 says, “Now may He who supplies seed to the sower, and bread for food, supply and multiply the seed you have sown and increase the fruits of your righteousness.” God gives us the seed to sow and the bread for food. We need to figure out how to relax and eat the bread that God has given us to eat and to feed our families with. And we need to learn to sow the seed in such a purposeful way that it brings forth an abundant harvest so that we can then feed the nations. Many of us are scattering our seed by just giving it all away, but this is not the heart of God. Throwing your seed down on the ground just so that it is not in your hand and you don’t have responsibility for it, is NOT why He gave you seed. He entrusts us with seed so that we can find the best soil and cultivate it to bring forth the biggest harvests. So if your money is seed, you have to start asking, “How do I make my money grow so that I can be the best steward of what God has given me, and so that the impact of the harvest of this seed will reach so much further than just the seed itself.”

Now, I absolutely believe in giving and being a giver. It is one of the most powerful elements of your finances and I am going to be writing about it soon. But giving has to purposeful and it has to be led by the Holy Spirit. Giving is not scattering, it is a part of the purposeful planting of your resources and seed. So give with joy because there will be a bountiful harvest. But also plant your seed in your own field with joy because you will have even more to give out of your harvest and you will be able to impact so many more. And then also eat your bread with joy. Enjoy the fruit of your labors. It is OK to have money! It is OK to prosper. It’s just not OK for that to be where your treasure is.

There is a purpose for your money and resources that is bigger than just what you can buy today. When you get what is God’s true heart in you prospering then it will change your heart in turn. Budgeting won’t be a question of what you “can’t” buy or “can’t” do, but rather of what you GET to do with your life, your resources, and with the abundance that will flow out of being purposeful with your money. And trust me, there is nothing like glimpsing God’s heart for you to take any sting out of budgeting that you might perceive as a need for discipline. Instead of you having to control yourself and the impulses of your heart, your heart will be pulling you along. You will actually be excited to go down the path of budgeting because you will have already glimpsed His purpose and the incredible harvest waiting for you not just at the end of your journey like we are always told, but also for today.

Discipline (Part 1): Too Much You, Not Enough Him!

The other day a dear friend said to me, “Tracy, I really like your budget plan but it just takes so much discipline.” I honestly sat there a little speechless. I had really never thought of it that way, but as I thought about it and chewed on it a little I could really see where people might think that. There is a lot of structure to budgeting, and when you have lived without structure in your finances it can feel like it is going to take a tremendous amount of discipline to succeed. So for the next few days, I want to look at the subject of discipline: what is it and how do you get it? There are so many parts of our lives that seem to require discipline, like remembering to eat, or eating too much, or cleaning your home, or working out, or going to work on time, or prioritizing your family, or even going for your dreams. However, looking at any of those areas as a battle of your own discipline is a sure way to fail at all of them. It becomes easy to use the excuse, “I just don’t have enough discipline to exercise,” or “I just don’t have the discipline to get to work on time.” If you have found yourself making this excuse about budgeting, I would like to suggest that a) Your eyes are on the wrong place b) Your heart is in the wrong place, and c) Usually the third day is the hardest.

a) The first aspect that I would like to look at is your eyes. There is always a battle for your eyes in every area of your life. This has so many ramifications to your financial and spiritual walk. The television fights for your attention, billboards fight for your attention, magazines fight for your attention. It is just a constant barrage against your eyes. The marketing campaigns are continually trying to convince you that you need this, or can’t live without this item. Yet, though it is many of these attractions that woo our hearts away from our purpose, sometimes the biggest downfall comes when we get our eyes on ourselves and on our own strength. The truth is when many people say, “I don’t have the discipline,” what they are actually saying is, “I am not strong enough in myself.” I just want to tell you today, “No, You’re not.” And you were never meant to be. Discipline isn’t some magical force only for the strong, it is actually a fruit of the Holy Spirit being an integral part of your life. I have heard so many sermons on the “fruits of the spirit” that turn love, joy, and self-control into performance oriented “standards” to see if you are Godly. They were never meant to be measuring sticks of your own ability to change and live up to a certain standard. In fact, the passage in Galatians 5 which talks about the “fruits of the Spirit” starts out with these verses (16-17)
“I say then: Walk in the Spirit, and you shall not fulfill the lust of the flesh. For the flesh lusts against the Spirit, and the Spirit against the flesh; and these are contrary to one another, so that you do not do the things that you wish.”

Does that sound like an accurate description of a lack of “discipline” in your life? Your heart wants to do one thing and your flesh is pulling against your heart so that you end up not doing what you really want to do. Yet, the Bible doesn’t say that the answer to this is to be stronger, or to try harder, but rather it says to “walk in the Spirit and you shall not fulfill the lust of the flesh”! How can something so simplistic sounding be the answer to such a complex question? The answer lies in the next verse, “But if you are led by the Spirit, you are not under the law.” You see, it is law that twists our hearts from what is actually life for us. The law tells us we have to measure up, and we have to do things perfectly, and all it does is set us up for failure and condemnation. But when the Holy Spirit leads you, there is grace in the journey and instead of turning your eyes onto your own strength and ability to succeed or have “discipline”, your eyes are fixed on Him. The law says “Do this, and you had better do it right.” But the Holy Spirit says, “Here, let me show you the way of life, and let me give you grace for every step of the path.” So your prayer then becomes, “Holy Spirit, you are leading me on this path of budgeting, so please give me the grace for today. Let me hear your voice in what I spend or don’t spend. Thank you for a vision that is greater than just myself. My eyes are on You and what You have for me, and let every need and every desire line up behind that, behind Your calling and behind Your leading in my life.”

Living in the Spirit is what you were born into when you asked Jesus to come into your heart. The Bible says that your flesh with it’s passions was actually crucified with Jesus when He died for you (see vs. 24-25). It also says that as a result of what Jesus did, it is no longer you who live, but Jesus who lives in you. You see, Jesus took all of our sin, and our yuck, and everything that separated us from the Father. He took all of that upon himself when he died in innocence in our place. And in that amazing act of sacrifice, he made a way for us to be reconciled to God. Our sin and all of our yuck had separated us from God, but now when God looks at us He doesn’t see anything of our old flesh, but He only sees the amazing sacrifice of His son. “Old things have passed away, behold all things have become new.” It is in this transaction that our flesh looses its battle. It is no longer Lord over us, but Jesus is Lord over our flesh through what He did on the cross. And then He sent His Holy Spirit as a seal of His work in our lives. However, even though you now live in the Spirit as a position through what Jesus did, you walk in the Spirit as a choice. In other words, we have already been given the Holy Spirit through Jesus, but we don’t have to listen to Him. We don’t have to include Him. We don’t have to rely on His strength. And really that is the only question of “discipline” in your life: Are you choosing to walk by the Spirit or are you choosing to do it in your own strength?

So where are your eyes? Are your eyes on yourself and your own strength and abilities, are your eyes on the media and what they are telling you to buy and what you should have, or are your eyes on the Holy Spirit and His direction in your life?

Part 2 – tomorrow :)

Between the Envelopes

I had a reader ask me, “Are you allowed to use money from one category for another if you have left over cash in an envelope?” She went on to say that her husband had put his foot down that there would be no stealing from the envelopes! If they were going to do the envelope system then the money had to be used for the purpose that they had designated. If they do not use it this month, then it has to be left in the envelope for next month. Now, I confess, I steal from my envelopes all the time. I do. I’m an envelope embezzler. If I’m $5 short on groceries, I have been known to “borrow” from my gas money. :) Or even embezzle some money out of grocery money for a coffee date with a girlfriend. Really I have been doing the cash/envelope system for so long now that I really know my categories. I know what I am sacrificing and what I will need to do to make up for my “embezzlement”. In other words, I’m an expert… don’t try this at home :)

It really is a great question though, because the issue isn’t really whether you can use left over funds for a different purpose. The answer is of course, “Yes.” But the real question is, “What is going to work the best for you and your family?” The whole reason you would do the envelope system is to get to relax and not have to track every single expense in a category. It gives you that flexibility, so if you are constantly overspending in a category then you do want to look at what you have budgeted and if it is livable. However, if your issue isn’t in running out in a category and “borrowing” from another, and it is instead having “left-over” in a category and what to do with it, then first of all, what a great problem! Yea for surplus money! In my house, we call that more “date money”. Yet the key is that Matt and I are in agreement. We are both comfortable with just having a little more fun money if we save in a category. Now if it is more than $20, we will usually redeposit that cash and put it into savings. We have a goal for our savings, so any money that we “save” towards that goal is fantastic. Yet, we very rarely will leave cash in the envelopes for the next month for the simple reason that we don’t need it. Our budget covers our needs pretty adequately, so an extra $50 in a category just isn’t really needed. Especially if we already didn’t use the amount from that category from the last pay cycle. In fact, I would look at adjusting your budget down in that category because you might just not need as much as you thought. You could then increase a category that you do need more in, and your husband would be happy because you are not “stealing” money.

Really, if you and your spouse are OK with a little leniency between the envelopes, then there really is no problem. But if one of you is an all or nothing person, then this might not be OK in your situation. You might need to be more strict about the designated cash only going to it’s intended purpose. The real key is to be in agreement and do it together. Discuss what you are comfortable with, or not comfortable with and then keep that discussion open. A budget is not meant to be a rigid rule book for your money. It is supposed to be a vision for your money to help you have purpose and to achieve that purpose. You have to keep talking about where your money is going, and make the necessary adjustments for what is and isn’t working for you. So borrow a little, or keep the money completely separate, but be in agreement and make sure you both know what is happening between the envelopes.

Debit Card Users? Anyone?

Does anyone use their Debit Card anymore? They were such a novelty when they first came out. I used to use mine all the time in college. It was as easy as a credit card, and without the hassle of a check. I just made sure to write everything into my bank account ledger, and balanced my account regularly. They truly seemed liked such a brilliant invention… until people started having their bank accounts wiped out because someone had stolen their debit card information. Scary. Very scary. So scary that I stopped using my card… for everything. Actually, I will go to an ATM occasionally, but usually that means something has gone wrong in our planning. The cash/envelope system means that you shouldn’t be drawing random cash from your account, since you have already drawn it. The credit card method means… what are you doing with cash? OK, so I realize that not every place takes cards and there are always those weird occurrences like stores like ALDI (a grocery store) who only take cash, or you decide to go to the State Fair on a spur of the moment and need cash, but other than that… I don’t really have a plan for debit cards. Except to say, don’t use them irresponsibly. They are dangerous. Don’t hand them to your waiter. EVER. Don’t ever let your debit card leave your site, because it is all of your money in your account walking away from your table. Some banks may cover the stolen funds if you prove that they are stolen.. but what a headache. And they may not cover everything that bounces in the meantime.

So use debit cards at your own risk if you are going to use them for your discretionary money. But before you do, check with your bank about their policy in case your account number is stolen and misused, or your card is stolen. You will be so glad to know in advance as that may really help you decide whether or not to use it. If it is insured by your bank and they will fully refund all funds that are proven stolen, then you can feel better about using your card but still be very cautious. A credit card number being stolen has far fewer ramifications than a bank card being stolen.

If you do use it, write your purchase into your ledger every time you use the card. Treat it just like a check because you do not want to overdraw your account because you forgot a purchase. In fact, the need for a “buffer” in your account is even more important if you are going to regularly use your debit card. In case you need a reminder, a “buffer” is an amount that you leave in your account at all times. It protects you incase you mess up on your math in your checking ledger, or forget to enter a purchase. Matt and I keep a buffer of $500 in our checking account at all times. We never ever use it or spend it. We just consider it our “zero”. Even if you only keep $100 as a buffer… you need a buffer. Just consider it a savings account imbedded in your checking account that is “saving” you the fees of ever bouncing a check. If you do decide to use debit cards or even checks and you are married, it is even more important that you and your spouse have regular conversations about where you are on your budget and what is left in your account. It is definitely a dance because with two of you spending it is even easier to overdraw your account. So just talk often, keep good track in entering every receipt, and have a buffer, and you should be OK.

So maybe, they are not that scary. But I am very serious about you not letting them out of your sight in any scenario. If they need to take your card to a machine in the back, ask to go with them. It is your right to do that. It doesn’t matter if nobody else around you does it… YOU are the one who will have to deal with the hassle if your card number gets stolen. I had my purse stolen last year, and it was such a horrendous, time consuming ordeal to get all of my information changed, and accounts redirected to the new account. I definitely do not want that for you. So feel free to use your debit card if you feel like it is the best choice for you, but please… debit responsibly :)

Books, Blogs, and Blessings

My husband and I actually got to go on a date on Friday night, and we had such a fun evening walking around a book store. Not super exciting to most people, but to us just being by ourselves together and getting to look at books was such a treat. I sat with a huge pile of finance books, and Matt had a huge stack of books of graphic design and other topics, researching and learning and having a wonderful time. And after a whole stack of books, I was just so struck at how complicated writers love to make finances! They just take the longest, hardest, most fear filled path to any financial topic. No wonder so many people feel so overwhelmed by finances that they don’t even know where to begin. I think it is also why so many people flock to writer’s like Susie Ormon and Dave Ramsey, because they are at least attempting to make finances user friendly. One of my dear friends always says to me, “Trac, you do the research and then just tell me the bottom line.” I always laugh because virtually every topic can be simplified down into the “cliff notes” version. It really is my heart to do that with finances on this blog. I hope that I can help to make what has felt overwhelming into something manageable, and even easy.

Anyway, I came away with lots of ideas and thoughts and I am just excited to keep going. I also came away with ideas on how to make this blog better and I am so excited to announce today that you can now subscribe to my blog through RSS, or through email. If you subscribe by email, an email will be sent to you each day when I update my blog. An "RSS Reader" lets you get notices when any of your favorite blogs have been updated. I spent my whole Saturday free moments working on this achievement, so I really hope it is a blessing to all of you. :) Actually, it is surprisingly complicated for such a small button. Really, I had to buy the book! Anyway, I learned a lot which will hopefully just make this blog better in the future. It is a whole new world for me, but it is enabling me to walk out a part of my passion which is helping people and writing about finances and also writing about our wonderful God, so I am really excited to learn more.

I have so enjoyed writing this blog in the past two plus months and I just want to say thank you to all of you who are leaving comments, and asking questions, and faithfully reading. It so encourages me to keep on going when I know that it is having an impact on other people’s lives! So I will be back on Monday with a little more on discretionary spending, answers to a few questions from readers, and also next week I am going to be tackling the question of “Where does the discipline come from?” Trust me, the answers will probably surprise you.

God bless and have a glorious, life filled Sunday… full of God’s presence, His healing, His freedom, His forgiveness, His abundance. Whatever you have need of today; God is the God of more than enough! So don't worry, rest in your Heavenly Father and enjoy your day. And I will see you tomorrow.

Corralling Your Credit Card

So I feel your heart torn… why give up the convenience of your credit card for all of that paper money? It is just so easy to swipe and go. It is also almost impossible to buy something online without one, or to rent a car. There are many reasons for having a credit card in our society. Credit cards also help your credit score in demonstrating your credit history. How old your card is, and if it has been kept in good standing are two variables that help to determine your credit score. You can keep your card in good standing by simply using it occasionally (like once every six months to keep it from going inactive) and paying your card balance on time. It is also a good idea to not have high balances if you are looking to get a loan in the near future as that will affect your debt to credit ratio, which also affects your credit score. And if you have read the entries in my blog on debt, it is also a good idea to not have high balances just because it is not a good idea. Period. But basically, credit cards are not all bad, and especially in business, they can definitely be an asset. The key to credit cards remaining an asset instead of a financial liability is in how they are managed, and that makes a world of difference.

If you are one of the people who hate cash and are determined to use a credit card then today’s blog is for you. If you are going to use credit cards then I want to set you up for success. Matt and I do a mainly cash system, but we also occasionally use credit cards. Mainly Matt uses it for convenience, for business purchases online, and we use it for large purchases. But here is the key to successfully managing your credit card: never make a purchase that is not backed by cash in hand. I have witnessed so many people making purchases on credit cards based on speculation of a check coming, or a bonus at the end of the year only to be very disappointed when the money didn’t come through or something else came up and left them in a hard financial position with credit card debt as a result. It is a dangerous gamble to buy on “spec”. I think it is safe to say that you will get burned the majority of the time, because things rarely go according to plan. Especially when your plan depends on other people coming through.

So from this foundation of a cash-in-hand mentality, it is possible to manage your credit card responsibly. The first thing to do is to start a ledger for your credit card. Just get a bank checkbook register and use that to track your credit purchases. It will take more “paperwork” time and management then the cash/envelope system, but it is easier in the checkout line. So every time that you use your credit card you would write in the purchase into your register and designate a category from your budget for that expense. So let’s say that you spent $60 at the gas station. You would write $60 into your ledger and then add it to your account balance in your credit card ledger. You would also write on your printed budget -$60 beside gas money and subtract it to track your spending. Then when you go to pay your credit card, the $60 would still be in your bank checking account because you are not using anything from that account that is not budgeted. So you would simply pay the $60 credit card bill and then write the payment into your credit card ledger as a -$60 bringing your balance in the ledger to $0. So you will never use your card without then taking the time to track how you are paying for your purchase. Just remember, it either is in your budget, has to be drawn from savings, or it will end up as debt.

Now if you have a program like Quicken, or Money, this whole process of tracking your purchases is a lot easier. It actually replaces the written Credit card ledger because you can simply download your purchases into the program’s ledger. However, sometimes it can take purchases days to show up on your credit card, even weeks if it is an online order, so I manually enter all of my credit card purchases to make sure that I do not forget a purchase and spend the cash that I have “backing” that purchase before it posts to my credit card and subsequently to my Quicken register. Also, as I manually enter it, it gives me pause to subtract it from the appropriate category in my budget to make sure that the funds are always there to cover my credit card balance in full. Because we mostly use cash, I will take the cash from the appropriate envelope and put it in a “To be deposited” envelope that I will then deposit back into my bank. Then twice a month when I sit and pay my bills I first go and pay my credit card bill with the funds that are waiting in my checking account for those purchases. I do not wait for my credit card statement because I have found that it is too easy to loose track of your spending when you wait an entire month to pay your card.

The reason that Matt and I use our credit card to make large purchases is that we have a card that pays us cash dividends on all the money we spend. So for us, getting 3% back in cash on a large purchase is a good deal. However, once again we never spend what we do not already have in hand. Many times large purchases will come from our savings account because we will have been planning and saving for them and so we will then immediately transfer from our INGsavings the necessary funds to cover those purchases and pay our credit card balance.

In fact, several years ago when we first got our dividend card we decided to try to start using our Credit card for all of our purchases. It pays up to %5 for gas and grocery purchases and we just felt like, “Why not try it?” We had always done the cash/envelope system but we were game for getting money back. So we started a credit card ledger (we didn’t yet have Quicken) and I tracked all of our purchases, just like I have detailed to you in this blog (with a couple of exceptions). However, what we found was that we had no real boundary for when to stop spending in a category. With each passing month it just became easier to say, “Just put it on the card, we’ll figure it out later.” So we would get to the end of the month and go to pay off our card and would be a couple hundred of dollars short! It is astounding how “miscellaneous” purchases add up so quickly. We would then find ourselves in a position where we were borrowing from the next paycheck and month to pay for last month and so we would then be even more short the next month. Then we would take money from savings to try to get even again. We finally realized that it was just too tempting for us to overspend without the definite boundaries that the cash system provided. So even though we were making money by using the dividend card, we stopped using our credit card for our discretionary spending and went back to the cash/envelope system.

However, even though it didn’t work well for our family, it may work for yours. There is not just one answer for every financial situation. I think if you have a program like Quicken or Money, this will give you a tremendous advantage in succeeding in staying on top of your credit card. In addition if you are frequently managing what is on your card and where the money is coming from and not just waiting until you get your statement, I think you will also have a better chance of succeeding than we did. Yet never forget that your credit card is a wild horse just waiting for a chance to run away from you. The only safe place for it is in the "corral" of your budget. And if you ever do find yourself starting to get frivolous with your credit card spending and feel like it's getting out of control, just remember, it’s never too late to try cash. :)

Change to Spare

What my children love most about my wallet is that I always have change. Like most kids they have a fascination with change and money and love to carry it around in their “purse” (for Ava) or piggy bank. And while your kids may love all your extra change too, if you do not find a way to utilize this change it really is like wasted money. The abundance of change is a definite side effect of the cash/envelope system. So what do you do with all that extra change? If you are a woman, it just makes your purse heavy, and if you are a man, it’s not that fun to jingle while you walk. You want to value your money, and that includes the change, but sometimes the abundance of change can make you frivolous with a “Just keep the change” attitude.

The plan that Matt and I have come up with is a change jar that we use as a saving jar for our anniversary. This gives all of our change purpose, and keeps us from being frivolous with our extra change. Every year before our anniversary we take the change jar and deposit it into our bank and then use that money towards a really nice dinner/ date or whatever we have planned for our anniversary. I have a friend who uses all of their change and divides it and puts it toward their children’s college savings plan each year. Whatever you choose to use your change toward, just give it a purpose and your change will all of a sudden have value to you and consequently you will be amazed at how it will grow.

So every few days, I just empty my wallet into the change jar. I usually keep 2 quarters, 2 dimes, a nickel and a few penny’s in there just in case. I don’t mind that it comes from my grocery money, because it’s not much to me right now and it is going to a great purpose. Matt keeps his change in a cubby in his car, or in a bowl on his nightstand and I just empty them into the change jar every few days (and yes he knows that I am doing this). Whatever plan works for you is wonderful, but the key is to give that money a purpose. That way the next time you are “jingling” while you walk, you won’t be thinking how irritating change is, you’ll be thinking what a great anniversary dinner you’re going to have with your wife!

Cash, Credit, or Bank Card: A Plan for Discretionary Spending

One of the questions I get so often is “How do you keep track of your grocery money?” It is probably about groceries because most of my friends are Moms and staying within a budget with groceries is a huge part of our world. Grocery money, Gas money, Entertainment, Gifts, Free money, and just whatever categories you have in your budget that you don’t automatically pay as a bill, are really the most challenging thing about budgeting and the areas that most people overspend the most on. I consider these categories as discretionary spending, because it is money that you spend all throughout the month at your discretion. So what is the best plan for staying in budget and handling this money?

Well, the truth is there is not one answer for all people in how to handle this money. Basically there are three methods for discretionary spending: cash, credit card, or bankcard. Or you can even use a combination of the methods. It really is about finding the system that works the best for you. For some people, carrying cash is scary and they would prefer to use a credit card. For others, spending on credit cards has gotten them into serious financial trouble and they absolutely need the boundaries of a cash system. And others prefer to use their bankcard for everything so that they only spend the money that they have, but don’t have to carry cash. Using a bankcard also forces them to keep a careful record of what they are spending so that they do not overdraw on their account. For me, the system that works the best is a combination of cash in envelopes (the envelope system) and credit cards. I am going to go into the envelope system in detail for you today, because even if it is not your method of choice, all of us need to pull the reigns in on our spending at some point and the envelope system is an excellent way to bring you back on budget.

So, you haven’t had cash in your wallet in years due to the magic of the plastic card… and your question is, “How does this paper money even work?” Well, you might love it and you might hate it, but it will definitely work to keep you on budget. It is also a great opportunity to really get a feel of what you are spending each month. If you will notice on my budgeting plan (click here to view it and here to download it), I have a space between bills and what I consider discretionary spending. This helps me to separate discretionary spending from the expenses and bills that I pay on bill paying day twice a month. For me, this is what I draw in cash when I make by bank deposit twice a month. I take $x.00 for groceries, entertainment, gifts, gas money, etc and then I have little bank envelopes that I have written groceries, entertainment, etc. on and I divide up the money into it’s designated categories. Those little bank envelopes fit easily into my wallet and they really make it so easy to track your spending. When the entertainment envelope is empty, we skip going out to the movie (for example). You can physically see what you are spending. I also tend to draw the money in large bills. It just seems a lot easier to wastefully spend $1, $5, $10 bills than it is to spend $100’s.

If you are nervous about carrying that much cash, then you might consider only carrying one week's worth of your budgeted funds at a time. Just leave the rest in a secure place in your home. It might also work for you to take all of the money out of your wallet and only carry what you will need for that day. Just take out the cash you might need before you leave home and put it into your wallet. However, if this is your plan, have two sets of envelopes, because if you just take a $20 bill out of grocery money and stick it into your wallet, it is so easy to forget where you got it from and then just feel like “Oh well” and just spend it. The whole idea is to track your spending. If you get caught out with no money, you can use your card to pay for it, but then write the amount on your printed budget that you carry in your wallet or put the receipt into the appropriate envelope and immediately when you get home, put the cash into a “to be deposited” envelope to pay for that purchase. That way when you go to pay your credit card, you simply deposit your cash from that envelope and it should be exactly what you need to pay for what is on your card. Remember, the money to pay your credit card has to come from somewhere and the envelope system just lets you know exactly where it is coming from.

What I love about the envelope system is that I don’t have to keep track of every single purchase. We just buy groceries and gas and even entertainment and we know what we have in the envelopes and we can just relax and not constantly worry if we are going over budget or where the money is coming from. To me, it allows us to live on a budget, but not have to constantly monitor and track our budget. The envelope system does it for us.
It also makes it really fun when I get a great deal on diapers and spend less in “baby money”, because the cash left at the next bill pay period can go to something fun, like a “day to buy something” for my kids, or an extra date night for my husband and I. However if you save a significant amount in a category, then I would suggest adjusting your budget and putting that extra money to a purpose like increasing your savings, or financing a dream, or putting extra toward debt. What you do with your money is up to you (and your spouse if you have one), but the key is just to be purposeful with that money. If you decide to just have fun with it, then go ahead and spend your $20 on a movie, because it will just motivate you for next month to come in under budget again.

Now if you are married, the envelope system needs to be negotiated. The way Matt and I handle it is we divide the money up. I keep the grocery money because I do the shopping, the gift giving money (again because I do the shopping), baby money, and my clothing money. Then he keeps the entertainment money in his wallet because we like to be together when we spend it. That way we are making memories, having dates, or eating out as a family. He also keeps a portion of the gas money that he needs for his car. However, Matt doesn’t like to have to go in to pay so he will take his cash and load a free gas card with his money, and then uses that to pay at the pump. He has to always go to the same kind of gas station, but he does that anyway so this works for him. So in his wallet he has his “free” money, his gas card, entertainment money, and his clothing money, which he can spend on clothes or whatever. What has worked for him is a version of the envelope system. He sometimes uses sticky notes as dividers, or he will just keep the money in separate sections of his wallet. For instance, he will fold his clothing money and put it behind a picture just because it helps him to purposeful with it and not to just spend it on a whim.

There is a way to make this work, and if you are trying to come out of a freefall of spending and bad financial habits, this may be exactly the reality check you need. It does take some self-control when your envelope is empty and a “desire” comes up, but this is actually really good for you to realize that it is giving in in these moments that has sabotaged you in the past and kept your finances in disarray and debt. Just submit that desire to the Holy Spirit and go on about your day. :) I can feel you smiling at me like, “Yeah right.” It is never fun to reign your flesh back in, but it is so worth it! I am going to do a series of blogs on this subject maybe next week, but trust me, it is not what you think.

In the mean time, give the cash/envelope system a try. Like I said earlier, you may hate it, you may love it, it will definitely challenge you, but it could also change your financial world around. It is a great “litmus test” to see if what you have allotted for groceries (for instance) is actually livable for you family. It really will reveal a lot about your spending habits, but if you actually let the cash/envelope system become the habit, it will also revolutionize and simplify your finances and help to change your spending habits. So give it a try, or wait for Saturday's blog on discretionary money and credit cards and you might decide that cash in your wallet sounds pretty good after all. Money is spent easily, it goes quickly and there is no simple solution to managing it except to manage it. And just like water in your hand that so easily flows between your fingers, the only way to keep money in your hand is to find a way to contain it. The envelope system is a system of containers for your resources, but it is also a great way to know that although you may be out of money in one particular envelope, you will never be empty handed in your finances again.

Time to Rest

Sometimes the best use of your resources is not to use them at all. I laughed the other day when a friend of mine said, “The best way to save money at the grocery store is not to go.” It sounds so simple, but it is so true. The more you go, the more you spend. I try to limit my grocery shopping trips to only once a week because it is the best use of my time and I also spend a lot less money then visiting the grocery store every other day. There is always “something extra” that you end up buying when you do those middle of the week trips. Usually, I send Matt for those, because somehow he has an easier time not buying the extras. I think it is because he doesn’t have the kids. :)

Another application of this simple lesson is that in each day, you only have a limited amount of resources: your energy that you have to give, your time in the day, what you have physical stamina for. Sometimes the best use of those resources is not to use them. I typically tend to fill my days as full as possible. Actually, my kids fill my days and then I try to get as much done in the evenings as I can, but sometimes I just end up wasting my resources and ending up with nothing. Tonight, rather than push myself and write the blog that I was going to, I am going to bed. I will do a much better job writing it tomorrow (or today if you are reading this in the morning). So have a wonderful day. May the Lord give you wisdom to know how best to manage the resources that you are given today. May you prosper in what you set your hand to, may you use your time with wisdom and efficiency, and may you also know when it is time to rest. I will see you tomorrow.

Practicing Your Payday Plan

Payday! Yea! For my husband and I, yesterday was payday and I thought it might be helpful to walk you through exactly how I use my budget. I realize that not everyone receives a salary or is paid on the 15th. There are a multitude of different pay cycles which I have written about and you can find here. However, all of us get to sit down and pay our bills, no matter when or how you get paid. So, I want to take you through that process using a budget. Some of the steps, I haven’t discussed yet, but I will get there. So If I just touch on something today that I haven’t dealt with, I will probably come back to it in the future.

The first thing that I do when I get our paycheck is I sit down with our Quicken program, my check register, my finance binder, and a printed copy of my budget. If you do not use a computer program to track your spending and accounts, then you should have written ledgers for your checking account and for each of your credit cards. In that credit card ledger is where you keep a running total of what you owe on each card. Remember, (see my blog on managing your credit cards) a credit card should never be used as money you don’t have. This is a sure way leading to debt and difficult times. Inevitably, something will come up that will make that payment hard to make. A credit card should only be used as an alternate means of payment when you already know where in your budget the funds are coming from.

Through the whole of my payday process, my printed budget is my road map. I first of all will look at what I have in my bank account and make sure that my bank account is balanced with the most current statement. If you have a program like Quicken, it will download your statement for you and is very helpful in balancing. I need to do and entire blog on how to balance your statement, because I know that would be really helpful for many of you who are just now coming out of hiding from your finances. The reason you balance your statement first is that sometimes there are fees or miscellaneous charges that you have forgotten to enter into your register. You want to be absolutely accurate with what you have in your account, because bouncing checks is an extremely frustrating waste of money! I had a friend who bounced an electronic check and the company resubmitted it twelve times before my friend realized what had happened. They ended up with over $300 in bounced check fees from their bank. Matt and I never wanted to even come close to this, so at the beginning of our marriage we decided that we would always keep a “buffer” in our account that we would consider our “zero”. Our particular bank charges fees for a checking account unless you keep a minimum balance of $500 in the account, so we keep a $500 buffer in our checking account at all times. We never even consider that money in any equation. It is just emergency protection that is saving us from fees. Even if your bank doesn’t charge you any fees for checking (Sorry, South Africa!), it is still a very good idea to keep a buffer in your account, so that you never experience the panic and waste of being overdrawn at the bank.

Your bank statement only comes once a month, so you can decide whether to balance it at the beginning or middle of the month according to when it comes. Once you have balanced your checking account you are ready to begin to work with your deposit. The first thing that I do is to take my account down to zero (or $500). If for instance, my utilities were lower than I expected and budgeted for, I will transfer out any surplus into my savings account. Basically, each bill period, I only keep the funds that I need in my checking account. If it is money without a purpose, I would rather have it earning interest in my savings account. I can always withdraw it if Matt and I decide there is something that we need or would like to do with that money. So I start from zero. Now part of starting from zero means that I look at my credit card and completely pay off my balance. Now this is not for those of you in credit card debt. Your debt payment is made as part of your budget, and you also should not be using these cards and accruing any more debt. This is for those of you who use your credit card as a part of your budgeting plan to pay for gas and groceries, etc. Everything that you put on this card must be payed off every month, and I actually pay it off every bill period (so twice a month). This way I am accountable to know exactly where the money is coming from.

So let’s say for this example, that my credit card is current, my account is balanced, and I am ready to do my bills. This is the part where you get to use your printed budget and implement your budgeting plan. I simply take our paycheck and subtract whatever cash that I am taking out for budgeted expenses and then write in the deposit amount. I will actually track all of that cash in Quicken and in my register. So I will write into my register: Deposit: Salary $X.00 Cash out $X.00 (groceries $X.00, gas $X.00, entertainment $X.00, etc). Matt and I actually do a combination of Credit card and cash for our bills and spending. Again, this needs an entire blog, so I promise I will come back to this topic. Anyway, I withdraw the cash amount and then write the total deposit into my ledger (enter it into Quicken). I also cross out on my written budget any category that I withdrew cash for, so groceries, gas, and entertainment, etc.

So now you have your bank account buffer (so $500.00 for us) and your salary deposit (minus the cash that you have taken out) total in your account. The next thing I do is, I start at the top of my bills for the bill period I am in and just write them in, so at the top of my sample budget for the bill period of the 15th is Electricity. So I will go into my finance binder where I hole punched and stored my electricity bill when it came and enter that amount into my ledger. If it is a paper bill, I will write the check and put a stamp on. If I can pay the account on line I will go online right then and pay the bill. The majority of my actual bills are automated which means they automatically debit from my bank or credit card on a day that I have set. However, that is not possible for every company and bill. Some of you may also pay your bills through bill pay with your bank, which is a wonderful option (if your bank offers it with no fees). You would just then sit with you written budget, your binder, ledger and billpay, and just enter your bill total and pay it from your bank account. I then cross off Electricity. And I just go down the list of bills that I have made, paying the bill, entering it into my bank ledger (or Quicken or whatever program you use). It usually only takes me 20-30 minutes to sit and pay all my bills because they are all in one place thanks to my binder. They are mostly automated so I only have to write a few checks, and it is just entering all of my bills into my ledger. I will also pay myself first in this process and transfer out savings to my ING account.

At the end of entering all of my bills, I might have some categories that I leave the funds in my bank account for, and these are the only categories that you need to track for the next two weeks. So lets say that you hate carrying cash and so you leave your grocery money in your account. It is imperative that you track this money as you spend it. Write it down on your printed budget or in a ledger, but do not count on yourself to remember. We always “think” we have spent less than we actually have, unless you track your spending. So with all of your bills entered, paid, and current, you are done with your bills until the next bill period. It may seem difficult just reading it, but it is going to be so simple as you actually do it, because you won’t be searching for bills. In fact, bills that don’t fluctuate like your mortgage, you can simply enter the amount from your printed budget. And at the end, you have all of your bills that are paid and current crossed off your printed budget and only the ones that you are still tracking will be unmarked. So then the total amount budgeted for the unmarked bills or expenses should total exactly what you have left in your account (minus your buffer amount).

So maybe 45 minutes of your time, twice a month and you will never have to worry about missing a payment or a bill, or if you are forgetting something. You can relax about your finances and get on with enjoying your life. Budgeting isn’t difficult or stressful. You just needed a plan. And now that you have one, it’s time to practice using it.

Preparing an Outline

I spent some time this past weekend looking through my blog. I have now been writing almost everyday for the last two months and I just felt like I needed to remember what I have said and what I haven’t said. Don’t get me wrong, there is still SOOO much more to say on the topic of finances and budgeting, but I really don’t want to miss something. Anyway, the organizational system on “blogger” is not fantastic, so I thought that I would do a blog just to lay out what I have written about. If this is your first time visiting my blog, then the outline is a fantastic place to start. There are links to each blog as you go and I think it will really help everyone to be able to find topics more easily within this site. I am going to place a link in my Recommended Resources to this page and I will continue to update this outline as I continue to write.

Most of my “free time” has gone into compiling this outline, so this is it for today, but I have so much to say this week. Today, for many of you, is payday and I am going to be looking more specifically at the budgeting process of payday (whenever it is for you), how to handle discretionary money, how to use your budget, and whatever else the Lord lays on my heart to share… which you just never know. God bless and have a very happy Monday, Payday, or just Day that the Lord has made.

Oh, and the picture at the top is from The Philbrook museum here in Oklahoma that we visited on Saturday. It was just a breathtaking mini-vacation for my little family and I wanted to share. For those of you here in Tulsa, every second Saturday of the month is free entry to the Philbrook and they have an activity day for the kids. It is really so much fun. God Bless and I really hope the Outline is helpful.
Tracy

An Outline to Help You Find Your Way

The Beginning of Budgeting and the Start of a Better Life
a. Where to Start - The Starting Point
** Fear vs. Faith – The Monster in the Closet

b. Dealing With Mail
** Mail, Mail, and More Mail – Surprises in the Mail

c. A Plan for Filing
** A Finance Binder - Binders, Files and the Battle of the Sexes

d. Setting Up Your Binder
** Labels - A Plan for Freedom
** Organizing Your Binder - A Place for Everything
** Finishing Your Filing - Finishing Things and All things considered...

Setting Up Your Budget
a. Expenses
**Expense Categories - Finding the Holes
**Average Spending – Learning for Life
**Managing Bills that Vary – Changing Seasons
**Infrequent Bills and Expenses – A Plan for the Infrequent

b. Income
**Salary - Simplicity
**Hourly Wage – By the Hour
**Weekly – By the Hour
**Bi-Weekly – Every Other Friday
**Monthly - Simplicity
**Commision – Feast or Famine and Finally Breathing
**Self-Employed – Your Business and The Power of Percentages
**Examples of varying income scenarios – Weekly, Salary and Commission

c. Discretionary Money
** Free Money – I Gotta Little Change in My Pocket
**Cash/Envelope System – Discretionary Spending: Cash, Credit, or Bankcard
**A plan for your extra change – Change to Spare
**Using Your Credit Card – Corralling Your Credit Card

d. Balancing Your Budget
**My Budgeting Plan – A Plan to Stop Juggling
**How to Balance – Finding Balance
**How to Use a Budget? – Directions for the Journey and Practicing Your Payday Plan

e. A Plan for Extra Money
**Side Jobs or other Income – Giving Your Money Purpose

Savings
a. The Importance of Savings
**What is a Store House? – The Storehouse Blessing

b. Getting Started with Savings
**What if I only have a little? – Small Beginnings
**A Dream for Savings – Our European Adventure
**Why Start Now? – Debt vs. Savings

Dealing With Debt and Credit Cards
a. Managing Your Credit Cards
** Minimum Payments – The Shovel and the Hole
**Using Credit Cards – Where Your Heart Is… and Managing Your Credit Cards

b. Managing Your Credit Card Debt
**“Snowballing” Your Debt – Managing Credit Card Debt
**Paying off Your CC Debt – Kill Your Giant

c. Debt
**Facing the Mountain – A Guide For the Mountain
**Having a Plan – Baby Steps
**Changing Your Habits – Doing Something Different
**Debt Consolidation and Credit Counseling – In Too Deep

Life on a Budget
a. Making Wise Choices
**How do you choose wisely – The Way of Life

b. Matters of Your Heart
**Gratitude – The Gift of Gratitude
**A Cure for Feeling Deprived – A Cure For Deprivation

c. The Power of Agreement
**Budgeting in Marriage – The Power of Agreement

A Vision for Your Resources
a. Giving Your Money Value
**How do you Stop Wasting Your Resources? – Worth vs. Waste
**A Purpose For Your Money - Decisions

Lessons From my Dad

All three of my children adore my Dad. He doesn't even have to pursue them, because they pursue him. It doesn't matter where he is, if they know Papa is around, they are looking for him, "helping" him, and climbing on him. My Mom is the outgoing lively one, and they love their Nana so much. But for some reason, especially for Luke, Papa is it. If Papa is around he just has eyes for him and wants to sit on him and to have his full attention. We are so blessed to get to live close to my parents so that my kids can know their Papa. This picture was taken just a few weeks ago of my Dad and my boys. They really love their Papa.

So as I am thinking about Father’s Day today, I just keep thinking of all of the things that I have learned from my Dad. Since this is a blog about budgeting, I will keep it mainly to things relating to the topic (although no promises), but I wanted to share with you some of the “nuggets” that I have grown up hearing and that have so influenced me in my life and finances.

The first thing I have learned from my Dad is the importance of hearing the Spirit. I don’t think there is a single other phrase that I can think of that I have heard more from my Dad than “hearing God.” If God hasn’t said it, my Dad will not go, but if God has said it… he will go anywhere and do anything. He has lived his entire life like this and as a result, we have gotten to walk an amazing journey and seen God do amazing things. We live in America today because God spoke to my Dad’s heart and called him to America. My Mom and Dad moved here from South Africa in 1982 with four suitcases, two small children, and a word from God. Talk about scary financial circumstances! Yet my Dad’s passion is to live his life like Jesus did as he describes in John 5:19, “the Son can do nothing of Himself, but what He sees the Father do; for whatever He does, the Son also does in like manner.” And just like my kids have a wonderful earthly Daddy and Papa, our heavenly Father does an even better job at taking care of His kiddos. We saw miracle after miracle in the years after we moved to the states, and in that place of simple childhood trust in my earthly Father, I learned to trust in my heavenly Father as well.

We never lacked food or shelter. And even though as an adult I can look back and realize how incredibly “poor” we were, I had no idea as a child. My parents never used the phrase, “we can’t afford it.” They would say, “Let’s ask our heavenly Father if He wants you to have this, because if He says ‘yes’ then He will provide.” So not only did they protect me from fear or worry, they taught me to hear from God and look to Him for my needs. The thing is, it wasn’t just a gimmick. It is as true in my adult life as it was in my childhood… if God says yes and is in it, then He will provide for whatever it is. But they didn’t just protect my brother and I from fear, THEY lived in faith… so fear wasn’t a part of our home life. Every bit of the peace and faith that was all over my family and my home growing up, came from my Dad’s unwavering conviction that God had called us and He would provide… and He was absolutely right.

The second thing I have learned from my Dad is a passion for truth. My Dad is one of the most upright and truthful men I know (well, with my husband of course, and my darling Noah who absolutely cannot stand injustice, misrepresentation, or anything else besides the whole truth.) This passion for truth has lead Him straight to the heart of Jesus, and when he preaches, you feel truth just radiating from him. It’s like the Bible comes alive when my Dad preaches. You see things so clearly. Whole chapters will suddenly have vibrant color in your heart and it just makes you want to read the Bible more. Anyone of you that have heard him preach knows exactly what I mean. But what I want to add is that that passion for the truth is in every area of his life. It makes him curious about his world, and always wanting to learn more. He reads all the time, he studies, he learns. At 62 years old, he is still growing and changing and just becoming more like Jesus and I think that that should just be a huge part of everyone’s retirement plan. Don’t just plan on going on vacation indefinitely at 65, plan on still learning, and growing and being creative and beginning things in the world, rather than just “closing up shop.”

A passion for truth is a beautiful thing in my Dad’s life, but it is also beautiful in anyone’s life, because it means that you are after the heart of God no matter what your circumstances. What it has challenge me to do is to always keep learning and growing. If I ever reach the place where I think I know it all, then please Jesus take me to heaven and get my head straight. :) We will never know it all until we see God face to face, so in the meantime, pursue truth and you will be a much richer, fuller, and happier person and everyone will want to be around you because you are always taking the opportunity to learn from whoever you are around.

So as I am writing this, I keep feeling that I am barely scratching the surface here. There is so much more to say that I have learned from my Dad about grace, and forgiveness, and the goodness of God. Maybe I should write a book instead of a blog! However, for today, I just want to say thank you Dad. Thank you for your faith which has moved mountains, your total commitment to hearing the voice of God, and thank you for your passion for truth. I am so glad that my kids have a Papa like you and I am so glad for the heritage that you have given me. This blog would not be here without you… although, neither would I, and on both counts thank you. I am so grateful to be your daughter. Your life has touched so many people, and even on your very rare Sunday off, your life is still preaching. So here is a great big hug from Luke and all of us, and have a really happy Father’s Day, Dad. You definitely deserve it.

A Cure for Deprivation

When my husband and I returned from our European adventure after having the most amazing month, we never really left the “vacation” mentality. We had pushed ourselves for so long to save what we needed for Europe, and when it was all over and we were back, we found ourselves without a purpose for our money and needing a financial rest from the pressure. But we didn’t just “rest” from extreme saving, we spent. We had been in deprivation mode for so long that, even though it had been our choice so that we could go to Europe, we felt like we could go no further. So, we went out to eat, we bought clothes, we bought books, we had lots of dates, and we also did some serious damage to any savings we had left over. Matt and I finally had to have a serious talk and put on the brakes and get back to budgeting… a little more relaxed budget than before Europe, but once again with a purpose for our money. That renewed purpose was to save to buy our first home.

So many people have lived in the place of extreme deprivation for so long, that if they are given any chance to spend money, that money is gone. Just like we did after Europe, they go into a freefall of spending, but usually there is no savings cushion and all of their freefall spending goes onto credit cards and just adds to their debt. It’s like watching one of the contestants on Survivor eat after having nothing for days. They scarf it down and are inevitably sick later. I always think to myself… pick the food that will last the longest and save some for later!! But something about severe deprivation makes you not care about later. All you care about is right now and this minute and your need. This is why poverty always begets more poverty. You can’t see past right now, so you consume everything that might have aided you in the future. Until you can get a vision for the future, even what you have will be squandered. It is a powerful cycle, but one that can be broken by vision. You hear stories of people living on teacher’s salaries (which is pathetically little in America) who retire as millionaires because they were able to think toward the future and not consume everything that they earned. It is possible to rise from anywhere to amazing heights, that is the American dream after all, but if you are rising from the feeling of deprivation, the first step is to change your view point.

So how do you change your view point? I think you have to quit looking at yourself and what you don’t have and begin to be grateful for what you do have. Part of the feeling of deprivation comes from comparing yourself to other people. Statements like, “I wish I could go get a manicure every week,” or “I wish we could afford to eat out whenever we wanted to,” just incite that feeling of deprivation. When your eyes are continually on what you don’t have, you will never be able to wisely manage what you do have. In fact, you will despise it for it’s smallness and so you will not value what you have and will waste it. You have to begin to value what you have and exactly where you are.

Matt and I only eat out about once a month. We maybe get a latte once a month on a date or something. Yet we don’t feel deprived. Our money is going to such a better place. We don’t feel sorry for ourselves because we can’t eat out more, we instead value our money so much that we don’t want to eat out more. We want it to go to a better purpose for our family than just food. Now food is wonderful and you have to eat, but you don’t have to waste your money on the most expensive foods or on eating out continually just so you don’t feel deprived. It’s NOT about “You can’t eat out because you are poor.” It IS about, “There is a way out of this financial place, but I will never reach it if I am not purposeful with my money, and for me being purposeful means I am going to eat at home tonight and put the $20 I would have spent into savings.” Or maybe just not adding another $20 onto your debt. Every choice you make is not because you can’t, but because you are choosing to do something better with your money.

You have to get free of that poverty mentality of deprivation. Take the power back from just feeding the bottomless pit of your “feelings” of deprivation. You are not deprived. You may be in a difficult place, but even in the most difficult of circumstances there is always opportunities to be a blessing to people around you in giving, to manage what resources you do have, and choose to lift your eyes to the future that God has for you and to begin to move towards that. In fact, nothing will get you out of feeling sorry for yourself like going on a mission trip, or volunteering at a soup kitchen feeding the homeless, or visiting an orphanage. We are blessed, whether we have little or we have much. Like Paul says in Philippians 4:11-13, “For I have learned in whatever state I am, to be content; I know how to be abased, and I know how to abound. Everywhere and in all things I have learned both to be full and to be hungry, both to abound and to suffer need. I can do all things through Christ who strengthens me.”

A heart that is content is an amazing thing. It means you will thrive wherever you find yourself, and you probably won’t be there for long. Do you notice how Paul says wherever he finds himself he is content, but his eyes are also on the vision which was Christ. So today, if this is you, quit looking at what you don’t have, stop spending out of a feeling of deprivation, let your heart be content and learn to manage what you have. You can do “all things through Christ who strengthens you.” Even live on a budget.

A Question: Salary and Commissions

A friend of mine emailed me this question concerning her budget that I wanted to share with you today. It goes back to the section I did on income, but I am sure that many have you have very unique pay cycles and I thought this might help you in your effort to set up a budget. This really gives a great example of how you can adjust a budget to fit your particular needs. A budget is not meant to control you, it is meant to assist you, so change it up until it fits the income cycle, bills, and needs of your family. Use my example budget just as a starting place and then adjust it until it fits. Her question was,

“My husband gets paid every Wednesday. He gets 2 different bonuses on the second Wednesday of the month: one bonus is a fixed amount, and the other bonus fluctuates, could be nothing could be lots, it's all based on if the company profits or not.

I am trying to figure out how to do the budget. Right now I have it divided into first half and second half like you said. Our mortgage comes out of his fixed bonus in the second week, according to them it's not late until after the 15th, but I would have to save a whole paycheck and then some of the next week paycheck to do that differently. I would love to do it like you said about using the last 2 weeks paychecks for the beginning of the next month, but I have no idea how to accomplish that except for having a lot of money up front to get ahead? Anyway, I would appreciate any thoughts you might have!”

OK, if you feel like you have just read a math question on the SAT’s, so did I. However, there is always a way through, so let’s just take it slow and I know this is going to help many of you who have a more complex pay scale. Basically my friend’s income is set up in two ways. Most of it is a fixed salary income, just paid weekly, and even the “fixed bonus” should just be considered to be part of her monthly salary total. The second part of her income is the varying commission check and should be considered as a commission based part of her income. So how do you budget when your income seems so varying and uncertain?

Well, the truth is it is actually not that uncertain. The key is to basically live on your income without the “commission” check since it is the uncertain part. However, since it can be a really great part of your income on months that the business is doing well, you will want to put this check into a saving’s account and then disperse it throughout the year. This is going to require an “escrow” savings account where you pay into a savings account on the months when you do get a bonus and then draw from that account on the months when you don’t. This will help to stabilize that wildly varying 2nd bonus check. It might help to look back at your last 12 second bonus checks and add them together and divide by 12. This will give you an average of that check, and what you can kind of expect over the course of this year. So then you can work off of that number to determine what you have to supplement your salaried income each month. Now if you are in an economical place where you are not getting anything in that second check, you might need to wait until you get a check to begin this section of the plan. However, you are going to have to live without that money regardless right now because it just isn’t there, so this plan will just help you to not have to live at this low point again because through the “escrow” you will get to disperse the money and live on it throughout the year rather than just having a really good month one month.

Another factor to consider is that several times a year there are more than 4 Wednesdays in a month. You cannot base your budget on these months because they are not every month. You have to base your budget on the 4 Wednesday months. So what do you do with these “extra checks” to make them livable income that goes to a purpose rather than just “Oh, we have more money this month!”? The months with 5 Wednesdays in 2008 are January, April, July, October, and December. I think there is one extra “extra week” from my blog on being paid weekly because the year starts on a Tuesday and ends on a Wednesday. I would simply add these “extra checks” into my “escrow” account. For this year I would divide the total (so 5Xyour weekly salary) by 12 and then you could disperse this amount monthly to yourself to supplement your budgetable income. If you end up with a huge surplus each month, just increase what you are putting in savings and spend from your savings and not from your bonus check or extra check. This will keep you from spending what you do not have, and from spending like crazy on “good” months and then suffering in the not as good. It will help your income come to a place of balance as if you are paid a higher steady salary even though your actual income fluctuates.

The next issue is how to manage the “1st of the month” issue in a budget. I just want to say that just because I have put dates into my blank budget example, doesn’t mean this has to be when you pay your bills. Because your entire pay cycle is keyed to the second Wednesday of the month, I would just shift my entire budget from the first of the month, to the second Wednesday of the month (a date somewhere between the 8th of the month and the 14th for 2008) and then your second billing period to the 4th Wednesday of the month which would be the last Wednesday of the month or the second to last on the months with 5 Wednesdays (so that would put the date between the 22nd and the 28th of the month). In other words YOUR “1st” of the month would just start a week later. You have already been doing this successfully because you are already paying your bills, you are just making a plan to make it more successful. So you would then know that on the 2nd Wednesday is when you would sit and pay all of the bills that are going to come due before the 22-28th of the month. And on the 4th Wednesday, you would sit and pay all of the bills that are going to come due before the 8-14th of the month.

So let’s say that you are paid (totally made-up numbers) $800.00 each Wednesday, and then every second Wednesday of the month you get an additional $1000.00 in a fixed bonus amount. So your total “Salaried” monthly pay would be $800 X 4 = $3200 + $1000.00 bonus = $4200.00. In my budgeting plan that I have prepared for you (If you would like a workable downloadable copy of this, email me and I will send you a copy), you would put $1600 into the 1st and 2nd Wed income slot (I have filled it in for the example, but you can change it and put in your actual numbers) and then $1600 into the 3rd and 4th Wed income slot. You would input in your actual fixed bonus amount. Your budgetable income per bill paying period will be $2600 for the 2nd Wed period (because you get your $1000.00 check on the 2nd Wed and need it for your mortgage), and then $1600 for your 4th Wed period. However, once you get your escrow account set up and functioning, I have inputted what it would look like with the escrow. If you get 5 “extra” paychecks per year, you would take 5 X’s $800 =$4000.00/12 =$333.33 per month which your would draw from your “escrow” savings account each month. And then once you get your 2nd bonus check amount going into an escrow it would look like this: if you made $2400.00 annually through the 2nd bonus check, you would divide that by 12, so $200 a month which you would draw monthly from your “escrow” savings. You could either just draw from your escrow on the 4th Wed and put all of the supplemental income through escrow towards your 4th Wed bill period, or you could draw it on the 2nd Wed and divide the total by two to add to both bill periods. This is the way that it is set up in your example budget.

From there you would just plug in your bills and follow my guidelines for coming up with a budget under the sidebar title “Balancing Your Budget”. I sincerely hope that all of this has helped some of you to think creatively concerning your budget. There is a way to budget no matter what your income cycle. Sometimes it just takes a little bit of problem solving and I am so glad to be here to help you with that (if you would like me to). If anyone else has a question that they are having difficulty solving (concerning budgetingJ ), please comment or email me and let me know. I can’t promise I will know the answer, but when it comes to budgeting it is my belief that there is always a way through. God bless and I’ll see you tomorrow.

Amazing

This just totally blessed me today, and I thought I would share. Nothing to do with budgeting, but just incredible.

A Night Off :)

Hello budgeting friends, I took the night off last night! I'll be back tomorrow, but for today I'm not going to try to squeeze in a blog... I am just going to have enjoyed my night off.
Have a really wonderul day and I will be back tomorrow with a fantastic question from one of my friends which I think may really help some of you in your budget.
God bless,
Tracy

Decisions...

The other day, Noah was drawing pictures at our kitchen table. “What should I draw Mommy?”, he asked me. I made some suggestions like a car, or a house, or a transformer (he loves transformers). No, none of those were right for him. Finally he looks at me and gives a great big sigh, “Mommy, I am very good at doing lots of things, but I’m not very good at making decisions.” I just burst out laughing, because Noah and I have so many things in common, and once again I was reminded that he exactly my son. In one brief sentence he had insightfully summarized so much of me, and I just had to laugh. “That’s OK,” I said to him, “Mommy is exactly the same way and that is why we need Daddy and the Holy Spirit.”

I have always had a difficult time in making decisions. Choosing a shirt color in a store can be a painful event for anyone accompanying me. However, most often my choice is not which color to buy but really whether to buy it at all. I tend to keep things for a very long time because I buy what I love. But figuring out whether I really love something takes some time. Yet, if you really want to speed up the decision making process with me, then pick a favorite and give me your opinion. Somehow, when I am faced with the loss of the one I actually like, my decision becomes clear. I think somewhere a long time ago, my Mom finally figured out this process in me and will just pick whichever one when we are shopping together, not even caring that I will eventually pick the other one. She is just so happy that I finally made a decision… I did not get my indecision from my Mom.

So for me, decisions are careful, well thought out (to me), and a little bit stressful. They are stressful because time is a precious commodity when you are shopping with three children… you only have a very small window before someone gets hungry, fussy, or has to go to the bathroom. So out of necessity, my decision making process has gotten faster, yet I always welcome outside advice because it seems to speed up the process even more. Whatever you like, I will probably pick the other one. I don’t know why. It’s not on purpose, it’s just probably part of my passion for the underdog.

Some of you are laughing and thanking God you are not married to me, and others of you are completely relating. But whether your shopping decision making process is anything like mine or not (and for your sake I hope it is not), there is something in all of us that bulks at being told what to do, and what decision we should make. I call this “opposite world”. Whatever you say, it makes me want to do the opposite. In “spiritual terms” this is the influence of the law on the world. Without a law saying that I can only buy red shirts (for example), I would probably buy red shirts quite often because I love red. However, if you put a law in place that says that you have to buy only red shirts, all of a sudden I resent that I have to and it takes all the joy out of my red shirt. Eventually I will get to the place that I never want to buy a red shirt again. The law is powerful to expose your heart, but it is powerless to change your heart. Only grace can truly change your heart, and give you the desire and freedom to once again want to buy a red shirt. Grace comes along and says you don’t have to buy only red shirts any more, but just hear the voice of the Holy Spirit. And as you and the Holy Spirit are in the dressing room, amazingly enough in that atmosphere of freedom, it is the red shirt that looks the best on you and the one you want to buy in the end.

This “red shirt” illustration is the difference between being lead into truth and being told what to do. It also illustrates why so many people fail on a budget. If it is something that is externally imposed, all it will do is expose your heart, and many times you will rebel. But if a budget can be motivated from within, then it really can be a tool to empower you and to set you free. This is why I have spent so much time talking about the “why’s” of budgeting. It is why I have talked repeatedly about stirring up your dreams, and getting a vision for your financial future and for your family. When you get a dream in your heart, you will not rebel at a budget. Instead it will become simply a tool for managing your money in a way that will enable you to reach your dreams.

Consequently, it is never my heart to tell you what you should or shouldn’t do. I might have some strong opinions in areas, but I know if it doesn’t come from a sense of purpose inside of you, then any change that you make in your finances will be fleeting. I think this is why God doesn’t thunder from heaven saying, “Bob, DO THIS….” He knows that just like the children of Israel when they received the Ten Commandments, we will rebel even though its what we asked for in the first place. I think this is why the Holy Spirit “LEADS us into all truth”. He takes us gently down the path and speaks to our heart in such a gracious way, that we want to go with Him. Our hearts begin to change and to soften and instead of (for instance) budgeting being a heavy yolk and a burden, we begin to see God’s heart in wanting us to prosper and to be a blessing to all the families of the earth. Budgeting becomes just a joyful tool for enabling our destiny.

My husband is such a good example of this in my shopping analogy. He usually will turn the question of whether to buy it or which to buy right back around and instead of just telling me which to buy (although he also does this sometimes too), he will ask me if I am going to be sad if I don’t buy it and come back to the store and it is gone. This question goes right to the heart of the issue and the sense of purpose. Instead of any sort of rebellion, it just helps me to know what is in my heart and whether I really love it and have peace about it.

We are going to be talking more this week about how to use your budget and other aspects of budgeting and I just want to remind you that budgeting is not about telling you what you should or shouldn’t do with your money. Rather it is a tool to enable you to be purposeful with your money in order to reach your dreams. What is it that is really in your heart to do with your money? And don’t just think what you can buy… think enabling your future, think having the resources to go for your dreams, think being able to enable your children’s dreams, think being able to fund the dreams of people all over the world. Don’t despise the day of small beginnings. Get God’s heart and His dream for your finances in your heart and it will motivate you from the inside out. As you approach your budget, keep reminding yourself of the purpose in bringing your finances into order, and you will find that it will clarify the decision making process. You will more easily sacrifice the unimportant, and more quickly recognize what is truly a valuable use and even investment of your money.

The Way of Life

Deuteronomy 30:19-20 says this, “I have set before you life and death, blessing and cursing; therefore choose life, that both you and your descendants may live; that you may love the Lord your God, that you may obey His voice, and that you may cling to Him, for He is your life and the length of your days, and that you may dwell in the land which the Lord swore to your fathers, to Abraham, Isaac, and Jacob, to give them.”

So much of the reality that we currently live in has been determined by our choices. In fact, every day we are presented with choices in our lives and in our finances that either lead to life or to death, to blessing or cursing, to prosperity or poverty. So many of us have become so entangled by culture and so accustomed to the voice of materialism that we don’t even recognize the path to life anymore. As a child, we walked blindly into situations, our confidence emboldened by our knowledge that our parents were right there to save us if we got in over our heads. What makes us wiser as adults? How do we go about making wise choices with our finances? How do we find the path that leads to life? How do we choose life?

I think if you are really going to be free in your finances and begin to get God’s vision for your family and your life, you have got to answer that question. How do you determine what is life and what is death for you and your family. I struggled to write yesterday’s blog for this very reason. You can have all of the information about the paths before you, and your “options” but if there is not life in it, you don’t want to go down that road. I think the answer to choosing life and not death lies in four parts:

The very first thing is to seek wise and Godly counsel. I know so many people would say take it to God first, and in your heart you absolutely should. However, I truly feel in my own life, when I am faced with a choice, many times as I am first beginning to look at my choice, I really struggle to hear the voice of God. Sometimes it is because I am in fear. Sometimes it is ignorance. Mostly when I try to hear God’s voice in that valley of indecision, I just find myself paralyzed and not able to hear at all. So Matt and I will pray about the decision, but then we will get wise counsel from several sources and listen to what they have to say. When we were deciding what to do about starting a retirement plan, we had no clue what to even pray about, beyond direction. So we went to the most successful and wealthy men we knew and asked for their advise. We read books and researched as well, and in that process of seeking the way of life, we slowly began to identify what it would look like for our family. There is something about getting wise counsel that helps you sort out what is in your own heart and even hear the voice of God more clearly. Proverbs 11:14 says, “Where there is no counsel, the people fall; but in a multitude of counselors there is safety.” It’s not that you have to do exactly what your counselors say, in fact many times it might be a combination of what different voices of wisdom have spoken into your life, but when you try to do it all on your own without counsel, it is always a much more dangerous and slippery road to life. It is just much harder to hear the voice of God and determine the path of life in isolation, and that is why He has given us a family of believers around us. So get wise counsel.

The next thing is to start to get a plan. This is simply the process where you start to put together what feels right in your heart. For instance, begin to work out… "Do I have peace about this element? If no, why don't I have peace?. What do I feel good about? Where is the way of wise counsel? What is the Holy Spirit speaking to my heart?" As you begin to wrestle through your own heart, many times you will start to see where the way of life is, even if you don’t have all the details. Proverbs 16:9 says, “A man’s heart plans his way, but the Lord directs his steps.” It doesn’t say, “Don’t plan until you get direction.” The Bible seems to indicate, go ahead and start to plan and then see how God will direct you in that. Many times it is only as you start to move that you will feel that check in your heart that “No, this isn’t the way of life,” or that joy of feeling, “Wow, God is in this and has gone before me.” If you feel the check, it is never too late to stop and turn around. Don’t ever violate your heart and your Spirit. But if your heart is after His leading, you can trust that as you begin to move, He will lead you and direct your steps.

The third element is to be in agreement. If you and your spouse cannot come into agreement about which path is the way to life, you absolutely can not go any further along the path. As I have said earlier, the power of agreement is so vital in a marriage and such a gift. If one of you does not have peace, it is a great indicator that either the timing is wrong and you need to wait, or that it is not a path of life for your family. When you violate your spouse’s peace in order to push your way down a path, you are setting yourself up for death: death in trust in your relationship, death in the power of agreement, and really death in your finances. The worst financial decisions are made in isolation, in fact, the worst decisions are made in isolation. This is true if you are single as well. Ask someone you trust who really knows your heart to come along side you. It might be a parent or a pastor or just a dear friend, but don’t make huge decisions in isolation. God never intended you to walk alone. I Corinthians 12:26-27 says, “If one member suffers, all the members suffer with it; or if one member is honored, all the members rejoice with it. Now you are the body of Christ, and members individually.” The whole chapter in I Corinthians 12 is about our calling to walk in relationship with one another. You don’t have to choose life and death alone. If you have drawn away and become isolated, ask the Lord to show you who He has put into your life to speak into your life and to help you when you are at a crossroads.

And finally and most importantly, ask the Holy Spirit. The Holy Spirit’s leading is so vital and yet I put it last because sometimes we “hear” through filters of our fear or ignorance. As you get informed and talk through things with people you trust, many times the answer will become more and more sure in your heart and you will see that the Holy Spirit has been leading you all along the process. However, sometimes when you are asking for an answer before you even know what to ask, you can become paralyzed by uncertainty and even fear and call it “waiting to hear from God”. It is so much easier to steer a car that is already in motion and I think that is many times true of our hearts in our journey. It just seems that it is so much easier to hear the voice of God when you are already in motion. His heart IS to speak to you.

Jesus said in John 10:27 that “My sheep hear My voice, and I know them, and they follow Me.” When you know how good He is as a shepherd and how you can trust His voice, it is so much easier to recognize His voice. His heart for you is only life. Jesus said, that when the Holy Spirit had come He would “guide you into all truth.” (John 16:13) You are never alone as you choose life or death. Thank God we have the Holy Spirit to lead us into truth. I believe that as you walk through this process of seeking wise counsel, starting to plan, getting agreement or even the lack of agreement, and really seeking to hear His voice, that the Holy Spirit is the one leading you every step of the way. It’s like your life is a dance and the Holy Spirit is the music. You still learn the steps and maybe get a teacher, but none of it makes sense without His orchestration behind it. Trust His heart for you, even if the answer is no. Sometimes the choice of life is just not to violate your peace (in other words, going ahead and doing something even though you have no peace, and just because you feel pressure to do it). There really is never a deadline if you don’t have peace.

In closing I want to go back to the verse I started with, ““I have set before you life and death, blessing and cursing; therefore choose life…” God will make it clear to you which one is life and which one is death, but even though the path might come clearly marked, and you may know exactly which path the Holy Spirit is leading you to choose, you still have to choose. It is up to you. And I just want to exhort you, don’t go stubbornly down the path of your own desires and even lusts of the flesh. It will only lead to death. If you have been choosing death, against counsel, against agreement, and against your Spirit, it is never too late to turn around. Jesus said, “ I have come that you may have life, and that you may have it more abundantly.” (John 10:10) Abundance doesn’t lie on the path of death, so turn today, open your heart again to God and choose life.

In Too Deep

Have you ever watched a child playing in a pool whose abilities didn’t quite match their confidence level. My darling Noah, when he was first learning to swim, he would always want to be in the pool without his floaties. He felt so confident swimming with them on that he was sure he could do it without them. Even now, he thinks he can do anything and so he will confidently march into a situation that I know he will quickly get in over his head in. I love his courage and his spirit and yet, as a Mom it is also a little scary. You have to walk the line between letting him learn and keeping him safe. However, I think one of the most valuable lessons that my husband and I have taught our kids is to ask for help. Noah loves to try to do things by himself, but he is quick to ask for help if he gets into any kind of trouble.

Like Noah in a pool, many people march into the pool of financial independence with no idea what they are doing. They are out of their parents home and on their own, ready to take on the world. Then they start getting the bills for school loans, and along comes credit card debt, and some unwise financial decisions, and a health crisis, or a job set-back. Now, they find themselves in a deep hole of debt, wondering what to do. Does this sound familiar at all?

It is at this point that many people turn to credit counseling, debt consolidation, or even bankruptcy to try to find a way out of the mess. I have been doing quite a bit of research on credit counseling and debt consolidation, and while they may provide an answer if you are in horrible trouble, they will not keep you from digging the same hole as soon as you are out. Many times it is the same muscles that you strengthen while climbing out of the hole through budgeting and saving and planning, that will keep you from ever going down that hole again.

Now there are benefits to debt consolidation and to credit counseling. Debt consolidation is where you take out a loan to pay off all of your debt so that you only have one payment at a fixed interest rate, rather than many payments at variable rates. It usually has to be secured by a home and is the most popular reason for a home equity line of credit. If you are not a home owner, most banks will not lend you money to pay off debt or if they do they will do it at a very high interest rate because they want to guarantee getting their money back. There are all kinds of advertisements out there that make it seem easy to get out of debt, just consolidate. Yet any “easy” answer to debt should be a huge red flag to you. Either you have to learn how to get out of debt, or you will end up paying a lender a lot of money to do it for you. Of course you will still have to pay all of that money back, it will just be more, and take you longer, but you might have a smaller payment right now. So, if you are a home owner and you have a lot of equity in your home, this might be an option. However, although it will relieve the immediate stress of multiple creditors calling, it will also wipe out your equity in your home. If you have not learned how to manage your finances and how to budget, you will not get a second chance to consolidate your debt and if you default on the loan, it could cost you your home.

Credit counseling is another avenue that you could look at if your debt is severe. My understanding of credit counseling is that they will work with you to come up with a realistic payment plan with your debt. Yet again, there are a LOT of scams out there when it comes to credit counseling, so be very wary if you choose to enter this process. Now if you are in over your head and drowning in your finances, I would absolutely recommend carefully researching a credit counseling service and going to see them. Sometimes desperate times call for desperate measures and if you just can’t see a way through, it is time to call for help. There is so much more to the process and there is a great article here that will give you more explanations and ideas when it comes to credit counseling. Credit counseling is a little like getting gastric bypass surgery for your finances. It seems like the easy fix, but it is still going to require a strict diet and lifestyle change. It will not be instant, but they will help you work out a plan for your debt. If you allow the credit counseling agency to negotiate with your creditors, they will also put a note on your credit history indicating that you are in credit counseling. However, if you are in severe debt, chances are that note on your credit score indicating that you are in credit counseling is going to look a lot better than missed payments and ever increasing debt. The truth is, if you are in severe debt you probably don't need the opportunity to make more debt through additional loans and credit cards anyway. Once your debt is paid off, the notes indicating that you are in credit counseling will be removed. But once you start the process, you are absolutely committed to the process until you are debt free.

So if you are drowning, yell for help, but the point is don’t just be thankful for the rescue. Instead, take this opportunity to learn to swim, so that next time, you won’t have to call for help. You can either see this debt as an opportunity to strengthen your financial skills by budgeting, by making a plan, and by exercising your faith, or you can look for the easier way out. I am definitely not against it being easier for you, however there is always a cost and sometimes the cost is worse than the initial problem. Furthermore, it can also be difficult to learn the lessons that you need to learn if you are always looking for a way out. The only way to learn to swim is to stay in the pool. You may still need floaties and a lot of help until you can swim successfully by yourself by staying on top of your finances. But the struggle to come out of the deep end could just strengthen your muscles and teach you the necessary skills so that you never find yourself in the place of drowning again.

The Whole Elephant

I had the opportunity to go to a Bible Study last Tuesday night led by my lovely friend, Scarlet Pepin. She has such a vibrant relationship with Jesus, and it is just refreshing to be around her. What she shared has so blessed me all week and I want to share it with you today.

A few years ago, Scarlet was working in her garage and just thanking God for her family. She just felt grateful that everyone was doing OK. Her kids weren’t on drugs and she still loved her husband, everyone was OK. In that moment, she saw a picture in her heart and it was of her holding onto the tail of an elephant, and so focused on the tail that she couldn’t see the elephant. She began to ask God what that meant and what she felt in her heart was that she had been content with just the tail of what God had for her and her family, when what He really wanted to give her was an elephant. Here she was just thanking God for the tail, when God had so much more, but she had to get the “more” into her heart. She began to ask the Lord, “OK Lord, all I see is the tail, but that just means that there is an elephant around here somewhere!”

She went on to say that she just didn’t want to get to the end of her life and realize that she had settled for the tail when what God actually had for her was an elephant. She wanted to press in to the Father God, and know His heart for her, so she would know what the elephant looked like and how to go for it. Scarlet and her family have so laid hold of the elephant in their lives, that they now ask in all kinds of situations, “OK, where is the elephant in this situation.” In other words, “I can only see the tail of circumstances right now, but God what is it that You are wanting to do?” So many times we totally miss out on the amazing purpose that God has for us because we are so focused on the tail of what we think is going on. And if you are on the tail end of the elephant, you are definitely on the wrong end of the elephant! You will be tolerating a lot of “yuck” in your life, until you finally realize that God has a lot more for you.

I loved this exhortation because every one of us have “elephant sized” promises in store for us. God has made you for a wonderful purpose and His heart is for you to go for that abundance and not just settle for the tail. On Tuesday night, Scarlet spoke to a group of mostly stay at home Moms and all of us felt such a resonance with what she was sharing. It is so easy to just get your eyes on the tail of what God has for you and think that that is all there is. We settle for just the tail when God wants us to lay hold of the “great and precious promises” (2 Peter 1:4) that he has for us.

Are you riding on the elephant of God’s purpose for you, or are you clinging to just the tail and thinking that that is all there is? Go for the whole elephant. If what God puts in your heart seems huge to you, then it is a good sign that you are seeing beyond the tail, and God is in it. His plans for your life are incredible; His heart for you is abundance.
“Behold what manner of love the Father has bestowed on us, that we should be called children of God!” (I John 3:1)
God loves you today, passionately and without reserve. So much so that he has brought you into His family through Jesus and calls you His child. His purpose for you and for your family is enormous. So lift your eyes from the tail that you have been content to live with, because God has an entire elephant in front of you.

Garage Sale (update)

OK, as in all business, adventures, and just life in general, there are great days and there are days that you probably should have done something different. I am so glad that the garage sale is done, and I am glad that I did it ~ kind of. But the wind blew like crazy all day. My dear friend Deana and I were chasing down baby clothes for most of the morning.

It turns out that several neighborhoods around us were having neighborhood garage sales and we only had us and one other garage sale in our entire neighborhood! At one point, when we hadn't seen anyone in 20 minutes I started wondering about the signs, so Deana went and drove around and all of them had been blown over by the horrendous winds! OK, I feel exclamation point happy, but I would much rather use them at the end of life inspiring sentences like... "And He has said to me, 'My grace is sufficient for you, for My power is perfected in weakness.' Most gladly, therefore, I will rather boast about my weaknesses, so that the power of Christ may dwell in me."!!! (2 Corinthians 12:9) ~Now that is stuff I get excited about. It is always suprising to me that the whole Bible isn't full of exclamation points. It just discreetly says the most incredible statements. I want to add an exclamation point to everything so everyone will realise what has just been said. Anyway, this is the stuff that is truly exclamation worthy, and not so much the wind in Oklahoma... although it did feel like it earned it today.

It is enough to say that we closed shop early for the day, and I might have just done my last garage sale. Hallelujah. I think it might have been Deana's first and last as well. Thank you for your prayers. I am so tired tonight, I hope I can get my post for tomorrow written, because it might be exactly what you need to hear, but I will have to see.

So for me today, more thorns than roses, but I did sell more stuff, got to hang out with a dear friend, and I will have an empty garage again, soon.. but not today. And at the end of the day, I am so thankful for God's sufficient grace that was and is here for me today and that the power of Christ is dwelling in me. When I am weak, He is so strong, and I am so thankful that even on the thorny days, that there is always the promise of roses.

Going for the roses

Well, when the roses start coming, there might be some thorns, and the thorns for me today mean I'm sitting in my garage again having a garage sale. I pulled in two more friends and we are doing it again. The rose at the end is the money that I will hopefully make from just a few hours of work, but truthfully... there are a lot of things I would rather be doing. But after today, everything else is going to charity and my garage will be empty again. So, keep me in your prayers and I will be back tomorrow. I actually have a wonderful blog for tomorrow and I know it will be a blessing to you just like it was to me.

Have a wonderful Saturday and God bless.

Kill Your Giant

I have a 5 year old, a 3 year old, and a 1 year old in my home. They are constantly in motion, dropping things as they go… particularly food. Consequently, vacuuming is a dire need in my house. However, since every second step you have to stop to pick up a toy, vacuuming is a monumental task. I’ve tried getting the whole house tidy and then vacuuming, but without Matt’s help, that rarely works. Now when Daddy is home, he occupies the culprits, and tidies and I vacuum and so we get it done. However, it always feels like this huge endeavor and so as I clean my home I always leave vacuuming for last. However, lately this has just meant that it has been way too long since I vacuumed. So yesterday, I began with vacuuming. I had a chunk of time, everyone was awake, so I just dived in there and vacuumed. It took me about 45 minutes, but I was so incredibly relieved to have done the monumental. The small stuff can be squeezed in, but the really time consuming tasks have to be done in blocks of time. How in the world does this relate to your credit cards? So glad you asked :)

If all you have is small amount of money to put towards your debt, then snowballing is absolutely the way to go. As you make your money work for you, you will get a tremendous feeling of success and accomplishment as you are able to cancel cards as they are paid off. However, if you are in a position to put a large amount of money towards your debt, which card should you pay off? Do you pay off the little ones, or the big one? Do you pay off the one with the highest interest rate, or does it matter? If you are in a position to put a chunk of money towards your debt, you need to look at two factors. First of all, what would make the largest impact on your mental attitude towards your debt? In other words, where will you feel the greatest sense of victory? The second factor is, where can you make your money work the most by paying the least amount of interest?

Your interest rate is important because if you have a card with a 28% interest rate vs a card with a 12% it could end up costing you hundreds of dollars more in interest if you wait to pay it off. It needs to be considered into the equation. If you have two cards with similar balances, you definitely need to pay the one with the highest interest rate off first. However, you cannot underestimate the power of accomplishment when it comes to debt. It lifts your heart, and helps you to keep pressing forward. That is why I say if you only have a little, put it towards your smallest amount, because for me, sometimes just getting my toilets cleaned can motivate me to keep going and clean my bathroom, my bedroom and my whole house. But if you have a large influx of resources, where do you start?

In my opinion, you need to kill the giant first. Whatever seems the hardest and the heaviest. If you have the ability to get rid of it, do it. It will make the journey seem so light. So for an example, let’s look at our illustration from yesterday. If you have debt of $4,000 and $2,000 and $1,200 and $500 all on different cards and you get a tax return back of say $4,700, what should you do? I would take into consideration which card has the highest interest rate, because interest is just the creditor gobbling up your money, but kill the giant. Most likely it will free up the largest amount of money, in terms of minimum payment, that you can then put towards paying off the smallest amount. But being free of the giant will make all of the other debts seem conquerable. Just like vacuuming for me, once I get it out of the way, the rest of the house seems so manageable and easy. However, if you can’t completely kill the giant with the lump sum, then go back to the snowballing plan. Let’s say you get a $2500 bonus at work and you decide to put it towards your debt. Well, first of all, always pay yourself first, so put $250 in savings, ask the Lord what to give, and then pay off the $500 card and the $1200 card and put the rest towards the $2,000 card. This will free up the minimum payments from two cards for you to put towards the principle of the third. You will still conquer your giant at the end, you are just doing it with a snowball, rather than with the “hail from heaven”

So just to recap, if you are starting with just what you have in your budget to put towards your debt, then snowballing is totally the way to go. Work towards paying off the smallest balance and go from there. However, if you can kill the giant in one big blow, then go for it. Unfortunately for me, my vacuuming giant resurrects itself each new day with the joyful mess of my children, but hopefully for you, when your giant dies you will never see it again. If you can embrace budgeting and savings and get a vision for your future, it is my belief that you will never face this mountain of debt again. I truly wish I could say the same thing about vacuuming.

Managing Your Credit Card Debt

There are many different strategies for climbing the mountain of debt. Honestly, I think it is a little like dieting… I’m not sure there is an easy answer or a “right” answer, I think it’s just picking the method that works for you and then sticking with it. The important thing is to get a plan in place that works the best for you and your family and then go for it. God is with you. His heart is for you to be free, and I believe as you step out and begin, you will find His grace and strength are right there with you. I am going to be presenting a strategy today for managing and conquering your debt. It is not the only plan that will work, but if you will just go for it and implement it, I believe that it could be the “weight-loss miracle” for debt that you have been praying for.

If you have been following this blog, you are now at a place where you have a budget in place for your income, so you should not be incurring any more debt. You have started your savings plan for emergencies and other dreams, and now you are ready to strategize concerning your debt. So let’s say that you have 4 credit cards that are maxed-out (you have spent up to your credit limit on the cards) and are ready to begin to pay down your debt. Where do you start? Well for starters, you begin by at least making the minimum payment on all of your cards. Not making the minimum payment can wreak havoc on your credit, your credit score, and compound your debt with penalties and fees. This is not an option. Making the minimum payment on all of your cards is absolutely necessary, however it will not move you any closer to freedom.

You have to pay towards the principle as well. I want to talk to you about the really ingenious concept of “snowballing.” The gist of it is, you are going to take your card with the lowest balance and begin to aggressively pay it off first. Instead of paying a little more than the minimum payment on all of your cards, you are going to pool all of your resources towards getting that first card paid off as quickly as possible. Once that card is paid off, you are going to take everything that you were paying towards the first card (minimum payment and additional principle) and put that towards the card with the next lowest balance. As each debt is paid off, the money that you were paying towards the last card is added to what you are able to pay to the next card. Eventually as you face your card with the largest balance, you will be able to put all of your resources towards paying that card down as quickly as possible! Thus your payments “snowball” (they gather snow and get bigger as they go) until they are going to have a formidable impact on your debt. I love this strategy, and if you are facing balances on multiple credit cards, this is your starting point.

Well actually, your starting point was in my blog a few days ago when I talked about determining exactly what you owe and calling your creditors to negotiate the lowest interest rate possible (click here to read it). I am assuming that you did this (or are doing it) and are now paying the lowest rate possible on debt that is not continuing to grow. So if you have 4 credit cards with a $500 balance, a $1200 balance, a $2000 balance, and a $4000 balance, you would first negotiate the lowest interest rate for the cards, then determine the sum of your debt (which would be $7700). You will need to add up the minimum payments for each card.. so lets just say that is $500 a month, and then look at your budget and determine how much you can afford to put towards your debt each month. You squeeze and purpose and come up with an additional $200 towards your debt. You would then put all of this $200 towards the card with the lowest balance. So if your card has a minimum payment of $50, you would be paying $250 towards your lowest balance card, and also paying the other $450 towards your other minimum payments. Then as you pay off the lowest balance, you would take that $250 and add it to the minimum deductible that you are paying towards your next lowest balance card. And so on...

Now, you may not be able to put an additional $200 towards your debt, but there is always something that you can put towards your debt. Let me just tell you, the answer to this can never be “nothing”. God’s heart is for you to come out of this debt, so there is always a way through. It’s amazing to me that as I look at people’s finances they will say things like, “well, I’m not willing to give that up, or I have to have that”, and I sometimes feel like my jaw just wants to hang open! I am not saying that you have to give up everything in order to get out of debt, but I think you do need to be WILLING to give up everything. You have to set your heart, that whatever it takes, I am going over this mountain. This is where the vision of what waits for you on the other side is going to carry you: a life without financial bondage, a future for your children, provision for your dreams, a place where anything is possible, rather than a land shadowed by debt where everything seems impossible. A time line for debt will also help you because the journey is NOT forever! This is just for a season and it is for an incredible purpose. Have your “latte” on the other side of the mountain, but for now, just get your tail over the mountain!

Now strategies vary on which credit cards to pay first. Some people will tell you to pay the card with the highest interest rate, but I personally believe that success is an excellent motivator. As you pay off the lower balance cards, you are going to get so excited as your debt load simplifies and you begin to see results. I strongly recommend making a chart of all of your creditors names / interest rate / amount owed / minimum payment / additional principle. I saw this a few years ago on a TV show. Several financial advisors were helping people conquer their debt and they had them write their debts out on a huge poster board and then hang it in their home. As they conquered each debt they would cross it off the chart and have a celebration. They also tracked the time line until they were out of debt on the chart… so “14 more months until we are debt free!” It is so important to keep the vision in front of you and with debt this is especially true. Each of your debts and your payment plan should be included on your printed budget, so you can track it there. But sometimes it helps to see the plan a little bigger when you are facing a mountain. There is a great debt calculator here that will help you to get an idea of how long it will take you to get out of debt based on your minimum payment, interest rate, and extra principle. It will also help you come up with a plan.

And for the rest of the strategy, I am going to for once say, “to be continued.” There is just a lot of information and I don’t want to overwhelm you and I don’t want to leave out anything strategic. So please come back tomorrow for strategy on topics like “credit counseling”, whether to consolidate your debts, transferring your balances, and “I’m getting a huge tax return. Which card do I pay off first?” But for today, I just want to leave you with this,

"The Lord bless you and keep you; The Lord make His face to shine upon you, and be gracious to you; The Lord lift up His countenance upon you, and give you peace." Numbers 6: 24-26

You are in my prayers today as you begin to climb your mountain of debt, that the Lord would shine on you with his favor and grace and make your journey easy and light. What a celebration party you are going to have on the other side of this mountain, and I just hope I'm invited :) I’ll see you tomorrow.

Managing Your Credit Cards

So how do you manage your credit cards? We live in a world where it is difficult to travel, impossible to rent a car, and just extremely challenging to do a lot of things without a credit card. However, how do you protect yourself from debt, when financial hardship is never more than a few swipes of the credit card away? The problem with credit cards is you don’t have any tangible sense of what you are spending. With cash in your wallet, you know when you are reaching the end of your budget in an area. With credit cards, you can go on spending indefinitely, or at least until you get your statement! And then you find yourself wondering, “How did it add up so quickly and how did I spend so much?” So, how do you reign in this extremely dangerous and temptingly accessible animal that is your credit card?

In tomorrow’s blog I am going to be talking about how to manage credit card debt, but I wanted to start with how to manage your credit cards. Many financial advisors will tell you to get rid of your credit cards all together. Now if you have extreme debt and have difficulty with abusing your credit cards, this may be exactly what you need to do. But for most people, the answer lies in educating yourself as to how to use and manage a credit card. If you are going to live debt free and still use a credit card, you have got to have a plan.

The first step to managing your credit cards is to only carry one card. Put the rest of your cards in a safe place in your home and simplify your wallet and your finances. Now, you don’t want to have a “knee jerk” reaction and cancel all of your cards, because you can actually hurt your credit score by doing that. Your credit score is important because it is what a mortgage company will look at before they give you a loan to buy a house. It determines the interest rates that are available to you when you go to buy a car and can help or hurt you in so many areas of your financial world. Your credit score is based on a lot of factors like debt ratio (how much you owe vs. how much you are worth), and whether you pay your bills on time. It looks at how much revolving credit (the total amount of credit available to you through your credit cards) that you do have, which is why you don’t want to have too many cards open because this can hurt your score. You want to keep the credit cards that you have had the longest account with in terms of time and use. So your oldest cards are the most valuable to your credit score. Yet, for instance, my oldest card is safely filed away. Matt and I only carry two credit cards in our wallets, and we only use one. We don’t use our oldest card because the card we do use has the best benefits (it pays great cash dividends on everything we buy). So essentially, they pay us to use our credit cards, and we pay ourselves by never carrying a balance and paying it off every single month.

The reason you only carry one card is so that it is very easy to track what you are spending, and it also make it very easy to know exactly what to pay off at the end of the month. So this is the next step towards wise credit card management… you must track your spending. You can do this through a program like Quicken or Microsoft Money, or there is even a free online finance tracking program at http://www.mint.com/ These programs will automatically download your spending from your credit card so that you can see exactly where your balance is. Now there are many of you that are already using one of these programs, but you still are going into credit card debt. This is because you are leaving out the next step…

You have to have a plan for every dollar that you spend on credit cards. When my husband or I use our credit card we immediately figure out in our budget where the money is coming from. Credit cards should never be an escape route because you have used up all of the money in your budget. If you are going to use credit cards responsibly, you need to treat them like you are writing a check, only without the possibility of bouncing the check. So whenever we use our card, we immediately go into our bank ledger for our checking account and transfer out the money to cover that purchase on the card. So, in quicken and in my written ledger (again, I do not think it is necessary to keep both, I just like to have a written ledger with me and it is habit) I will write out the purchases as a payment to the credit card. My card only allows me a certain number of payments a month so I will not always make the actual payment right then.., but the important thing is for me to know that that money is gone. You can also track your spending on your printed budget sheet. I am going to do a blog on the best way to do this but basically you want to be able to know when you are done with "entertainment money" even if it is on a credit card waiting to be paid.

Before I started using Quicken, I actually kept a credit card ledger, just like a checking ledger. Every purchase that I made I would write into the ledger and add it up so I constantly knew what my balance was on my credit card. I would write into the ledger where the money was coming from out of our budget to pay for it as well. Then when I made a payment I would write that in and subtract the amount. It may seem like a hassle, but if you do not keep some kind of ledger or tracking program on your credit card spending, you are guaranteeing yourself credit card debt and a very difficult financial journey.

You can look at it this way… either you learn to use your credit cards responsibly by paying them off every single month or you need to stop using them all together. It is very, very easy to get into debt, and so very difficult to get out of. And if you are in debt, you have to take the accessibility out of your debt equation. You have to treat the choice to incur more debt as a serious contract on your freedom, and not just the casual swipe of a plastic card. Credit cards don’t give you freedom, they give you an illusion of freedom that actually just leads to a prison cell. Give up the illusion. If you are in extreme debt, you cannot afford to go any further down this path. You have to get serious about your spending, your finances, and even your addiction to spending. It is possible to use credit cards wisely, but it takes management and you do that through:
1) Only carrying and using one card
2) Tracking your spending
3) Always knowing where in your budget the money is coming from
4) and Never carrying a balance. Pay that card off every single month!

I know somewhere other “financial advisors” would be yelling at me for tolerating credit cards at all. However, I feel like a budgeting plan has to be livable if you are really going to succeed with it. Many of my friends hate carrying cash, and feel like giving out their debit card is dangerous. So to me, not equipping you to succeed and wisely use credit cards is setting you up to fail on a budget. Credit cards in themselves are not the enemy, they just provide a very quick and slippery path to your enemy. Consequently, if they are going to be a part of your financial life you have to be very purposeful in how you use credit cards. And if you aren’t willing to do the work to manage them, then leave your credit cards at home, and save yourself from another shovel load onto your mountain of debt.

Doing Something Different

Have you ever seen a movie or TV show (usually a comedy) where the main character is trying to bail out a boat that is filling with water, but he never stops to plug the holes? My little Noah loves “Tom and Jerry” and they seem to have this scenario regularly. It is terribly funny to my kids, because no matter how hard Tom bails, the boat always sinks, and there is usually a very funny shark waiting. Many of you are in a boat just like Tom’s when it comes to debt. You are bailing like crazy and seem to be getting nowhere, when the real answer is that if you are ever going to keep your boat from sinking, you are first going to have to plug the holes. You just can’t keep doing what you have been doing and expect different results. Your boat will sink. It’s not enough to just have a plan for bailing the water out if you haven’t yet stopped the leaks that are still letting the water in. I want to deal with one of those leaks today.

I was talking to one of my dear friends the other day about my climbing the mountain of debt analogy (click here to see the blog) and she very profoundly said, “Tracy, the thing is, you can only start to climb the mountain of debt if you’ve stopped making more debt. Otherwise you are not dealing with a mountain you can climb, you are dealing with an addiction.” I just pointed at her and said, “That is what I have to write about, and why I have to keep writing!” Many of us do not equate our spending habits and impulse buying with addiction and yet many times that is what is actually triggering our spending. There is a certain satisfaction and even sometimes an endorphin rush that can come from shopping. It’s like in that moment you don’t feel poor, or deprived, you feel happy and you don’t even think about the consequences of your actions (your debt). This can be a very difficult cycle to break, and one in which you definitely need God’s strength and His perspective on what is actually motivating your spending.

Anything that you turn to fill a need in your heart, that isn’t God, is going to end up stealing from you instead of adding to you. In fact, my Dad often defines “Sin” as this: filling a legitimate need in an illegitimate way. It is not your need that is wrong, it is what you do with your need and how you fill it. So what is it that is really going on in your heart when you go and treat yourself to a new outfit when you know it is going to go straight onto your debt pile? It’s not that God doesn’t want you to have the outfit. He truly does want you to be provided for and even to have beautiful things, He just doesn’t want those things to have your heart. Not because they are evil, but because He knows that they are empty and will only stir your appetite for more, which will again leave you empty and only lead you further and further into bondage and debt. Whatever spending you turn to in order to meet the needs of your heart and your emotions is going to end up as waste and costing you more than you even paid. That is not God’s heart for you. Jesus said in John 10:10, “I have come that you might have life and that you may have it more abundantly.” He is the source of life and everything else is just an empty substitute, with a huge price tag in terms of debt and bondage.

I remember watching Oprah Winfrey a few years ago and hearing her talk about the struggles she has had with weight. It was her conviction that until you deal with why you are eating and why you are fat in the first place, it will be difficult to ever lose the weight and keep it off. I think this is so true for debt as well. If you do not look at the “why” to your spending, your heart will just rebel from any type of budgeting “diet” and you will end up worse than you started. For her own reasons for eating she said, “I've used food to relieve stress, for comfort, and to momentarily stand in for joy.” I think many of us have done the exact same thing with spending money. But whether it is spending, or food, or alcohol, or gambling, or any other addiction, the real answer that you need is the presence of God in your life. You need His comfort, His Spirit guiding you when it comes to shopping and spending, and your heart truly infused with His purpose for your life and your finances. As we looked at yesterday, the answer to waste is to bring purpose into the equation. I believe that as you get a purpose for your resources that is bigger than just your needs, your desires will change and you will actually want to stop wasting your money. Furthermore, as you begin to recognize what is triggering your impulse buying, you can begin to take those very legitimate needs of maybe loneliness, or stress, or hopelessness, or sadness, and take them to the only one who truly knows your heart and what you need and who will not just temporarily placate the need, but actually satisfy it.

If you are still spending beyond what you are making and incurring more debt, you have got to take the time to examine what is going on in your heart. Ask God to show you, because until you recognize your need and begin to fill it in a legitimate way, you will continue to have difficulty breaking the spending cycle and ever getting your boat above water. Are you in rebellion from any form of restraint? Are you despondent about your situation and spending just to feel better and get that mini shopping “high”? Are you in denial of your debt and spending anyway because you just don’t want to think about it? Or are you like Oprah and spending to “relieve stress, for comfort, and to momentarily stand in for joy.” Spending money is not an answer to a spiritual or emotional need… in fact, it is just an illusion of what you are truly seeking and needing and it comes with a terrible price tag of debt and stealing from your future. For instance, if you have used impulse spending as a way to relieve stress in your life, it is so important to recognize this so that you can ask the Lord for creative ideas to manage your stress which are not financially destructive.

So, if you are in debt today, are you still currently making more debt? If the answer is “yes” to this question, I want to ask you “Why?” Especially if you have followed my plan and set a budgeting plan in place for your income, why are you still spending money beyond what you earn as income? Are you trying to fill a legitimate need in an illegitimate way? God’s heart for you is freedom, but the first step toward your freedom is repairing the holes in the bottom of the boat. Budgeting will absolutely lead you to a better life, and keep you from drowning in debt, but first you need to quit spending what you don’t have. You can’t keep hitting your thumb with a hammer and praying that God will heal your thumb at the same time, and you can’t keep spending on credit and expect to be free from your debt. It is time to do something different. It is time to plug the holes in the bottom of the boat.

Baby Steps...

When Matt and I were first praying about having a baby, we felt very much that it was the right time to start our family, but we didn’t know what to do about insurance. Neither of us were on insurance, and for me to get on insurance meant that we would need to wait a year to get pregnant before insurance would cover any of the costs. We prayed about it a great deal and both felt complete peace that the Lord was going to provide for us and that we could go ahead and get pregnant. So, from that time and then for the nine months after we got pregnant, we began to aggressively save for the birth of our baby. I called the hospital and priced the cost of a delivery. I called the doctor’s office and figured in that amount. By the time we gave birth, we had saved about $7,000 for the birth of our baby! That was so much money to us, but God’s grace was on us to really be purposeful and save. We felt ready and excited and so grateful that God had helped us to prepare for Noah’s birth.

Well, Noah made his dramatic entrance into the world after 24 hours of labor and then… an emergency c-section that was not at all a part of the plan. So, exhausted, in shock, and in total pain, we were all of a sudden faced with an additional $4,000.00 in medical bills! I have to be honest with you though, after the trauma that we had gone through, Matt and I were both just so thankful that Noah and I were both alive and healthy. The finances of it truly didn’t faze us because we both felt this overriding and really supernatural peace. The Bible talks in Philippians 4:7 about “the peace of God, which surpasses all understanding, will guard your hearts and minds through Christ Jesus.” We truly experienced that peace in that moment and concerning the finances of Noah’s birth.

But there we were with a new baby, having wiped out our savings and now $4,000 in debt. We could have questioned God in that moment. Why would He lead us into this? But in our hearts, we knew that He had led us. I remember looking at Matt in the hospital and just saying, “God led us here, so this is His bill. His grace is sufficient for this.” The amazing thing was, even with this enormous bill, I never for a second felt like we were in debt! I have thought about this a great deal and about how we were able to face what we owed for Noah’s birth and never take it into our hearts as debt. It’s amazing because, even as I think back, it is difficult for me to think of it as debt; yet that is what it was. I want to share with you today the steps that we took after Noah’s birth because within a year we had completely paid off what we owed for the c-section. I truly believe that if you will take these steps to heart, they could be the answer to your liberation from debt as well.

1) We had a promise. I can’t even begin to tell you how that anchored our hearts in the storm of Noah’s birth. God had said we would never lack and it just gave us such peace that He was going to provide for us and take care of us. That promise was the hope that anchored our purpose as we worked for the next year to pay off what we owed. I want to challenge you that you need a promise for your debt. If you don’t have one in your heart, let me give you one…

Philippians 4:19 - “And my God shall supply all your need according to His riches in glory by Christ Jesus.”
Matthew 7:8 - “For everyone who asks receives, he who seeks finds, and to him who knocks it will be opened.”
Matthew 7:11 - “If you then, being evil know how to give good gifts to your children, how much more will your Father who is in heaven give good things to those who ask Him.”
Psalms 37:25 - “I have never seen the righteous forsaken, nor his descendants begging for bread.”
Psalms 97:5&10 - “The mountains melt like wax at the presence of the Lord. He preserves the souls of His saints; He delivers them out of the hand of the wicked.”

Maybe you need some “mountain melting” when it comes to your debt. You have to get a promise in your heart because it will anchor you when it is difficult to keep going. His Word is powerful and it will give hope and bring His power to your situation, and trust me you NEED His power! His strength is so much better than yours when it comes to mountain climbing.

2) The next thing we did was we got our debt into the best possible place to pay as little interest as possible so that we could pay it off as quickly as possible. Many of you have debt that is on credit cards at horrible percentage rates! If you haven’t called your credit card company to ask for a lower rate, you must do it today! Otherwise you are just throwing your money away. Yes you owe them money, but your interest rate is completely negotiable. Just keep asking for a manager until you get to someone who has the authority to adjust your rate. You have absolutely nothing to lose here. They are never going to increase your rate for you asking for a lower one, and you may just find favor and get your interest rate reduced and end up paying a lot less in the long term! Now, there is so much more to managing credit card debt (like transferring balances, which card to pay first, whether to consolidate your debt and a lot more) and I am going to do an entire blog on the topic later this week, but for today I want you to think about how you can get your debt into the best possible place. Matt and I negotiated with the hospital. We got a huge discount for paying the entire bill up front before we left the hospital. Our bill would have been almost DOUBLE if we had set up a payment plan with the hospital instead of setting up a payment plan with ourselves! We then transferred the debt to a 0% interest credit card (I realize these are rare these days) so that we paid no interest on what we owed. There may not be a 0% option for you in your debt, but I guarantee you, if you will begin to actively manage your debt and your interest rate, there is always a way to reduce your interest!

3) We determined what the total amount of debt was that we were facing. Some of you have no idea what your total debt even is! You need to sit down with every debt, credit card, outstanding bill (not those in your budget, so not your regular monthly bills) and figure out the total that you are facing to get out of debt. Until this number becomes a fixed number that you can work toward reducing, your debt will continue to be unassailable to you and you will just continue to make more debt. If you see the total debt in front of you and have a fixed number, you are much less likely to just keep throwing more debt on the pile. Furthermore, if you don’t know the total that you are facing then you will have a very hard time doing the next step.

4) We set a time line and a goal for completely paying off our debt. We took the total amount that we owed, which was $4000 (and some change :) ) and we set a goal of one year (because for us, that was when our 0% interest rate would expire) and then divided our total debt by 12 (which was about $334 a month) and then we worked that amount into our budget. So every month we paid $334 towards our debt. It wasn’t easy. We stopped eating out (at all), we cut out our clothing budget, we scaled back our grocery budget and just cut out as much as we could find to cut and within a year we were completely out of debt! If you have interest on your debt you will need to take that into account in your monthly payments, but it is so important to set a time line so that your debt doesn’t just drag on forever before you with no end in sight. A time line will give you a goal and an end and it will help you to strategize a payment plan that will actually bring you to the point of freedom

It really is amazing what you can accomplish when you have a promise from God to sustain you, a purpose for what you are doing, and a plan to walk it out! What was even more amazing in our story was that it actually took us less than a year to get out of debt! Because as we were walking out our plan, God also added His incredible provision and delightful surprises in terms of random gifts of money in the mail, and even more side jobs for Matt than usual. Yes, we walked with wisdom and restraint, but it was His favor and grace all over us that truly makes that year shine in my memories. That is why it is hard to think back and think of our year after Noah’s birth as “being in debt”… it’s more like we were “in a position for a miracle” and boy did we get them. I really believe as you take these steps you are going to see the hand of God in your life, and you are also going to find your feet when it comes to your finances. God is for you and whether He helps you climb the mountain of debt, or He just melts it before you, this journey doesn’t have to be heavy and hard. In fact, it might just turn out to be a testimony that you build your financial walk on for the rest of your life.

“Bless the Lord, O my soul, and forget not all His benefits;
who forgives all your iniquities,
who heals all your diseases,
who redeems your life from destruction,
who crowns you with loving kindness and tender mercies,
who satisfies your mouth with good things, so that your youth is renewed like the eagle’s…
He has not dealt with us according to our sins,
Nor punished us according to our iniquities.
For as the heavens are high above the earth, so great is His mercy towards us.”

Psalm 103:2-5 &10-11

Worth vs. Waste

There is a really beautiful story in the Bible that I want to share with you today. It is the story of Mary and her amazing gift. John 12:3-7 says,
“Then Mary took a pound of very costly oil of spikenard, anointed the feet of Jesus and wiped His feet with her hair. And the house was filled with the fragrance of the oil. But one of His disciples, Judas Iscariot, Simon’s son, who would betray Him, said, ‘Why was this fragrant oil not sold for three hundred denarii and given to the poor?’ This he said, not that he cared for the poor, but because he was a thief, and had the money box; and he used to take what was put in it. But Jesus said, ‘Let her alone; she has kept this for the day of My burial. For the poor you have with you always, but Me you do not have always’.”

I love this story because of Mary’s extravagance, and yet as a budget conscious person, I think I might have had a response similar to Judas… There are so many other, better things we could have done with the money. It seems so wasteful, and yet Jesus didn’t rebuke her for wastefulness. In fact He honors her for her gift. The Bible clearly exposes Judas’s motives in questioning Mary’s gift, but many times our motives are not that easy to discern. Sometimes it’s difficult for us to see value because of our own poverty or needs, or because of our backgrounds, or because of our fear of being deprived. How was what Judas considered so wasteful, actually so valuable in it’s offering? What determines waste?

Judas looked at the situation and saw only the value of the perfume. Mary looked and saw only the value of Jesus and wanted to honor His value. To her it was not waste, it was the very best she could give to honor who was sitting in her kitchen. To Mary it wasn’t wasteful because of the purpose it was going to. The perfume had tremendous value, because if it hadn’t, it wouldn’t of been worthy of the purpose. So how do we determine what is wasteful and what is worthy in our own lives? A few years ago, God said this to my Dad in answer to this question, “Waste is determined by value and value is determined by purpose.” In other words, if you want to stop being wasteful with your money, your focus can’t be just stopping the waste because sometimes, what looks like waste can actually have great value. Your focus has to be finding the purpose for your money.

If you find yourself continually wasting your money, not ever knowing what it is going to, or being frivolous with your money in the face of huge debt, it is probably because you do not value your money. I have had friends say to me, “But what does it matter, it’s only four dollars,” or “Why bother saving myself a dollar when it’s only a dollar.” To me that is an instant red flag that they do not value money. If you do not value money, you will waste money, and if you continually waste money, then you will be continually in debt. It will not matter how many times you get out of debt, if you do not learn to value your money, you will always go right back into it.

Then how do you give your money value? This is the critical part. I also feel like it is the question that most financial advisors miss. Why get out of debt? Is it just so that you can spend more?… because you can do that while you are in debt. There is no motivation there. Why save? Why not buy that new electronic toy? Why not take that giant vacation when you are in debt? If you don’t have a purpose for your money, your money will hold no value to you and you will waste it. There is no lasting motivation for saving, for budgeting, for getting out of debt without having a purpose for money beyond just having more money to spend.

Up until a few years ago, I never really had any concept of purpose in my money besides just meeting the immediate needs of my family. Matt’s income, and my income were simply there to meet our needs. We saved to have money in case we had needs. We budgeted to make sure we always had enough for our needs. It wasn’t until I read “The Richest Man in Babylon” that the light bulb finally came on for me. My whole life I had never had any desire for “wealth” because I had no vision for it. I had a vision for my family being fed today, but not anything beyond that. In reading that book I realized how selfish that vision is. If my husband and I always just have enough, how will we ever be free to pursue the dreams in our hearts? How will we keep our children from being saddled with the hideous burden of college loans if we always just have enough? The Bible says in Proverbs “A good man leaves an inheritance for His children’s children.” How will we leave an inheritance if we have no vision except for meeting our immediate needs and wants? Now I believe that inheritance is more than just money, and yet just in the practical side, there is great honor and relief when a man dies and leaves an inheritance for his family, and great burden and stress when he dies and does not. How will we be a blessing to all of the families of the earth like the Bible calls us, if we are always in lack or with just enough. If you live only for the needs and wants of today, you will continually waste your money. But as you lift your eyes from your immediate needs and situation and begin to get a vision for your money that goes beyond yourself, your money will become so valuable, and as you value your money, your heart will turn away from wasting it.

God wants you to get a bigger vision for the resources that He has given to you, beyond just yourself. He wants to be able to pour His abundance through you, but if all you are able to see is just your needs, you will squander whatever He gives you. I started on Friday to write the first steps on how to get out of debt, but I had to take the blog down because I realized that trying to take steps to stop spending money when money has no value to you is pointless and it will feel like an enormous burden. I am going to repost my blog on stopping building the mountain later this week, but first you have to get a purpose in your heart for your money that is not just buying more stuff.

My Dad always says that, “Poverty is the most selfish thing because all you are focused on is just having enough to meet your own needs and not on having more than enough to be a blessing.” If you are continually needy and in debt, it is time to get a bigger vision. Just focusing on the mountain of debt, and even on stopping spending is not enough to get you over that mountain. In fact, the more you focus on your debt, the more despondent and hopeless you will become. It is your vision for the other side of the mountain that will carry you over, and will make your journey seem light. Sacrifice does not feel like sacrifice if it is joyfully given for a wonderful purpose. Without a purpose and without learning to value your money, every step you take will feel hard and restrictive and you will feel like it is a “waste” of time. Like Mary, it is only in seeing the amazing purpose before you, that your heart can be turned from what is actually wasteful, to what is valuable. If you never learn to value money by giving it a greater purpose, then why bother getting out of debt? What is your purpose in having money? If you can get the answer to that into your heart then budgeting will take on a whole new meaning, you will have joy in conquering your mountain of debt, and it will be easy for you to determine what is wasteful and what is truly valuable.