Category Archives: Budget

How to Budget Using Mint.com: Spend, Click, Track

mintHow to Use Mint To Create and Follow a Budget

Preface: There are four ways design a budget and to track spending: 1. paper  2. Excel  3. YNAB and 4. Mint.com. You can use paper and pencil along with cash and envelopes. The Dave Ramsey way, you could say, and that works great. Often that’s the best way to start out. We did it by hand for several years, but now we use an app.  Free apps like Mint, or one you purchase like YouNeedaBudget.com, also known as YNAB, are easy ways to do it. Many people ask me should if they should use Mint for free or YNAB for a one-time fee? I think its personal preference.  Mint is free  but they sell your information to Big Data firms and for marketing you things. Like my son says, if it’s free, it is you that are being sold. YNAB on the other hand is private. Both offer downloads from your financial institution and have mobile applications.  Dave Ramsey’s organization has a new app, called Every Dollar. It’s advertised as free, but the only free version is free-standing, meaning without data downloads from your bank. If you want that, you’ll pay $99 each year (YNAB is $60 once). In this article I will describe how to use Mint. In later articles I’ll review YNAB and Every Dollar.

There are 5 things to do get up and running to use Mint.com:

  1. Design your budget first, but do not worry about the Mint.com app yet, that’s down the road
  2. After your budget is designed, then sign up for Mint.com
  3. Then familiarize yourself with the app on a laptop or desktop computer
  4. Customize your Mint.com account
  5. Use the app to track spending

The following are step-by-step instructions on to easily do this, along with a spreadsheet for first designing your budget:

Step 1: Cash Flow Plan – Design a Budget

Designing a budget before signing up to Mint is the first thing you need to do. If you sign up for Mint, like over 50% of people, you will not use it. That is because you didn’t first design a balanced budget. This means you have to account for almost every dollar and expense in an organized manner first. After you have done this then you are ready to create and modify a new account at Mint. To make this as easy as possible I’ve created an Excel spread sheet for you, it mirrors exactly the flow of Mint. I call it the Mint Designer, so download it, and design your budget before doing anything else. Then follow these next steps to do two things, first it will familiarize yourself how Mint is set up, and secondly to learn how to set yours up.

Step 2: Sign up for Mint (see image below)

  1. Go to Mint.com and register for a new account
  2. Use a desk top/laptop computer since a phone screen may be too small 
  3. If you have an old Mint account, that you have not used for quite some time, delete it and then in 24 – 48 hours create a new one
  4. Add all bank accounts that you use for spending to the app
  5. If you’re married and your doing this together and share accounts, add your spouse’s email to the settings, this way, both will be notified when spending goes over budget

mint1

Step 3: Familiarize yourself with Mint’s Budget section

  1. Select ‘Budget’ at the top of the page (#1)
  2. Find the ‘Create a Budget’, but don’t click it yet (#2)
  3. Find Spending section (#3)
  4. Find and click the Everything else section, this is where Mint puts expenses that don’t have a ‘Budget’ yet (#4)

mint2

Step 4: Familiarize yourself with Spending section of Mint

  1. Each section has a Category and Sub-category:  in this example ‘Auto & Transport’ is the main category, and ‘Gas & Fuel’ is the subcategory
  2. When you highlight a category, you will now see a little magnifying glass (#1) and a green ‘EDIT DETAILS’ (#2)

mint3

Step 5: Familiarize yourself with the Transactions section (magnifying glass) within a category

  1. This takes you to a list of all transactions (below) in a month for that category and subcategory (#1 arrow above), this is where you change/move an expense to the correct category
  2. You can even split between categories (Y)

mint4

Step 6: Familiarize yourself with ‘Edit Details’ of listed budget items

  1. Click the little green ‘Edit Details’ (#1)
  2. Enter the dollar amount for this expense number (#2)
  3. If the expenses is every month, check the first ‘Every Month’ (#3)
  4. If you want the expense to be cumulative, meaning some months you may have $0 expense, this will be an average (#4)
  5. If the expense is something like quarterly, select ‘Every few Months’ (#5)
  6. If you want to Delete the expense (#6), which starting out you might do for all categories if you want to have a clean page to start from scratch

mint7
Step 7: Familiarize yourself with the “Create a Budget’ section

  1. Select ‘Create a Budget’ (#1)
  2. Choose a Category with the up/down next to the blank (#2)
  3. A list of Categories and Sub-categories will come up, select one (#3)
  4. Complete the amount of the budget and click Save (#4)

mint9

Step 8: Familiarize yourself with the “Add or Edit  (sub) Categories’

  1. Select ’Create a Budget’ (#1)
  2. ‘Choose a Category’ with the up/down next to the blank (#2)
  3. A list of Categories and Sub-categories will come up, select the Main Category that you want the new Sub-Category to appear
  4. List of Sub-Categories appears already, if you don’t see one you want like a Motorcycle Payment, go to next step
  5. Click ‘Add/Edit Categories’ (#3), then ‘Manage your Categories’ comes up (#4), click ‘Add a Category’ (#5) , type ‘Motorcycle Payment’ or something from your budget (#6), click ‘Save it’. The list of your custom categories will appear under ‘Your Categories’

mint10

Step 9: Change the current budget: you are now familiar with the Mint’s set up, you will now input your new budget you will be following

  1. Gather your Mint designer budget spread sheet
  2. Login to Mint.com
  3. Compare your Mint designer budget to the budget items Mint already created for you, change the monthly amount to the amount in your new budget, by clicking the green ‘Edit Details’ (#1)
  4. If the expense is the same each month, you are done, click ‘Save’
  5. If the expense is every now and then see #3 and #4, if it is something like quarterly, see #5

mint11

Step 10: Add New Budget Items

  1. Click (#1) ‘Create a Budget’ the ‘Create a Budget’ screen will come up, select from the list of Categories AND Sub-categories that will come up (#2), select the one (#2) that you have in your Mint designer
  2. Enter the correct dollar amount (#3)
  3. If you don’t see the Subcategory that you want, go to the next page step

mint12

Step 11: Create New Custom Sub-categories

  1. Select create a budget (#1)
  2. Choose a Category with the up/down (#2) that you want the Subcategory to be in
  3. Click the little green, ‘Add/Edit Categories (#3)
  4. Click ‘Add a category’ (#5) blue box appears, type ‘Motorcycle Payment’ or something from your budget (#6), click ‘Save it,’ the list of your custom categories will appear under ‘Your Categories’
  5. Enter the dollar amount for that new budget item (#7)

mint134

Step 12: Clean Up unassigned expenses

  1. Go the bottom of your ‘Budget’
  2. Click ‘Everything Else’ (#1)
  3. This is a list of every expense that your bank has imported, but doesn’t have a Category assigned to this expense, this is because Mint didn’t intuitively know where to put it  –or–  you didn’t include this expense in your original Mint designer or ‘Create a Budget’
  4. Click one of the categories, such as ‘Fees & Charges’
  5. Assign that expense to the appropriate ‘Budget’ category IF you already have a budget for that item, if you don’t go back to ‘Create a Budget’ and create one. Then go back to everything else and choose the Category for the new budget amount. If it was cash (ATM) choose the correct category for it.

mint14

Summary: Key to any financial plan, whether just starting out, or retiring tomorrow is to have a cash flow plan and a way to track spending so that you stay within your spending limits. Your action plan is to design a budget and track spending. Next, if you don’t have a financial plan to help you track everything else, sign up for eFinPLAN.com, it’s an easy to use, comprehensive approach to reaching your financial goals.

Christmas and Stewardship

A quick blog article to help you spend less and focus on Jesus this Christmas

Christmas is a wonderful time of year and it’s only a week away. During this busy season of parties, shopping and eating, it’s easy to throw the budget out of the window. If you are like me at all, once you have made one mistake, then it’s the start of a multiple bad decisions. This especially applies to my eating. For example, I could really be closely watching what I eat, since my pant’s waist is getting pretty tight. However, during the Holidays, I’m surrounded by rich food wherever I go, it seems. So, just this once I’ll toss a goodie in my mouth. “Oh well, why not another one, the first one didn’t hurt, another one can’t matter that much,” and then on it goes, into a steady stream of sweets and rich food, that I don’t refuse myself to eat.

The same thing happens to me when I spend during the Holidays. More gifts, more eating out, I struggle with appearing generous or cheap. If I overspend a little here and there, then the floodgates open wider, and before you know it, I’ve totally blown my budget. What I do to avoid this is to discuss with my wife a budget amount we can afford for gifts, entertaining, fast food in-between busy activities, and any extras we want to gift ourself. We then purchase online to avoid impulse purchases, or go to the store with our lists, and buy only what is on them.

A scripture comes to mind that can give us strength to not over eat or over spend:

You desire but do not have, so you kill. You covet but you cannot get what you want, so you quarrel and fight. You do not have because you do not ask God. When you ask, you do not receive, because you ask with wrong motives, that you may spend what you get on your pleasures. James 4:2-3

A friend of mine in her 70’s who has been serving Christ her whole life in signficant ways, reminded me of this verse. She said it was taught to her by her parent missionary organization early on, to help them manage a modest income. She said the verses’ key points were that our purchases can sometimes be categorized:  our desires to possess, indulge and impress. Modern western society celebrates these things, but God wants us to “live by faith, not by sight.” (Corinthians 5:7). Stewardship is a life based on Jesus, not many of the things we fill life with.

The Holidays can be enjoyed in the richness he blesses us, and giving him rich gratitude of that. Celebrating Jesus’ joy and hope, the wonderful people he has brought into your life, during this time of the extra abundance of his presence, is God’s plan. The verse from James mentioned we quarrel and fight, easy to do at family gatherings, but this year give the gift of joy and hope, faith and forgiveness to those surrounding you. Be generous in your giving of material gifts, celebrate with great food and parties, but stay within your boundaries. Spread the love he places in your heart, unconditionally to those around you, to friends, family, lonely, the poor and immigrant. Get strength from Jesus to resist the desires to possess, indulge and impress, but to bless instead.

What to do with Extra Paychecks

Many people are paid every two weeks, so August may be one of the two months this year you will get an additional paycheck. If you are married and your spouse works outside of the home and paid the same way, then that may mean 2 extra paychecks this month.  However, if you don’t plan, this money will just get absorbed by your spending. 

What to do with extra money: tax refunds, bonuses and extra paychecks: Here is your great opportunity to get ahead in life. This doesn’t happen often, so take serious advantage of it.

  1. Invest $100 in a financial class: Take a financial class; it will only cost you $100, such as Dave Ramsey Financial Peace University. Go to his website and search by your zip code for a class near you. I promise you, your investment of $100 will return you many thousands of dollars. I am not kidding you: you will get much more back than you will ever receive in tax refunds.
  2. Put the money in a savings account, all of it!  If you need to remove the temptation right away, open up a separate account at a bank where you don’t have any accounts; otherwise, you will spend it, maybe all at once, or slowly transfer it into checking and it will dwindle away.
  3. Plan for needs and not wants: Do not spend it on vacations, large screen TV’s or vacationing if you have debt and no savings. If you have been doing without for quite a while because finances have been tight, this extra money will make you feel a sense of elation. When we feel this way, we end up spending more money. Our emotions tell us that good times are back for good, even though it is a temporary thing.
  4. Make a list of all of your savings and debts.
  5. Make a list of the things you really need:  If your car’s tires are bald, or you need money for upcoming things for medical, children’s needs, savings for Christmas in 9 months–set it aside. Now prioritize your list. Don’t forget to include tithe (10%). If you do all of these things right, you will have more money every month in the future, not just once per year.
  6. Put $1,000 in savings, if you don’t have any. This is to be used if you have a real emergency, for example, the car is on fire or a family member is bleeding. I’m exaggerating of course, but this is not for the emergency pizza. You will have a car repair or other emergency need in the future; this is your ‘rainy day’ savings so that you don’t have to borrow to make it–you see, we are trying to avoid the trap of debt.
  7. Now look at your needs list again and  prioritize the really immediate needs and debts. See how many loan payments you get get rid of by paying off some debt, and use that freed up monthly payment that you don’t have anymore to pay off the other debt each month until you are debt free (this is called debt snowballing).
  8. Put 6 months of expenses in savings for big financial setbacks like job loss. This is if all non-mortgage debt is paid off, and your $1,000 emergency fund is established. Every financial planning book says to do this, and it is really smart.
  9. It is okay to use a small part of the windfall for fun, but instead of blowing $100′s, take a few bucks a buy some steak and a nice bottle of wine and have a home date and watch a video.
  10. If you have done all of these things, you are ready to plan for intermediate things, like car replacements, or long-term needs like retirement and college education.
  11. Give money to a charitable organization or tithe.  Regular tithers may not think to tithe on this extra paycheck, but it is a good idea to tithe all bonuses, monetary gifts, extra paychecks, or if you win a drawing.

Just because you got a nice chunk of change, it isn’t time to live big, but by being wise you can make great decisions, and maybe this year you will advance to a stage in life of living smarter with less stress. This is what the wealthy have learned to do, and if you want to accumulate wealth, this is what you will do. Poor people blow it and a few months from now wonder were it all went; they never seem to get ahead.   You may get ahead if you do these things.

The Whys and Hows of Budgeting

budgetIn this article I will answer these important cash flow planning questions: Why don’t people budget? Why should people want to budget? What will happen if they do? How to get started easily?

Why don’t people budget? It is because you (don’t fear, we have tips below to help you overcome your resistance):

  1. Don’t want to: You know it is going to take work to design a plan and track spending, and you would rather spend time doing something else.
  2. Don’t know how: You may be in the camp that just has no idea how to go about it, and has never looked into figuring it out.
  3. Takes too much time:  You have little spare time and the last thing you would rather do is math, when you could spend what extra time you have doing something relaxing, not stressful like managing money.
  4. Don’t want to change: You are afraid of reality, meaning if you really saw your numbers, you might have to change your lifestyle.
  5. They don’t like the word budget: People hear the word, and think it means shackles and chains, and no more freedom.
  6. Don’t want to know what is really going on: Ignorance is bliss. You can pretend that things will just work out magically in the end .

Why people should want to budget? Here are the reasons and motivation for doing it:

  1. Like everything else, money is a limited resource for you (unless you are a politician), and if you don’t have boundaries and limits–no plan–you might spend too much in one area and then be short somewhere else.
  2. You are willing to live like no one else, so that you can live like no one else (this is perhaps Dave Ramsey’s greatest quote), you are willing to do without things in the short run (like most people are not), so that you will have more in the future (most people will not have more).
  3. You are tired of the same old paycheck to paycheck, never have enough lifestyle–running out of money, borrowing, and stressful financial problems–you are going to do it and experience less stress.
  4. Budgeting is a adult behavior: budgeting is a grownup thing, just like getting up everyday, showering, and going to work. You will feel great when you do it.
  5. Budgeting helps you save more for the future: those that have plans for retirement and college can limit their savings today so that they will have money to set aside for future needs. You are going to budget because you have great goals.
  6. The Bible says it is wise to do it and foolish not to: Proverbs 27:23-27, and Luke 14:28-29.

What will happen if people budget? You will:

  • Have less stress: you will know where money is going, and that you will have enough.
  • Be able to cut back in the right areas when you discover you are over spending on some things.
  • Accumulate savings for emergencies and not panic next time.
  • Re-pay all of your debt and save instead of borrowing next time for something you need or want.
  • Accomplish future financial goals: because you are saving the right amount for them now.
  • Be more wise overall with your life because it will start a trend that will spread to other aspects of life.

How to get started easily? Just do it, that is…

  • Don’t call it budgeting, but instead refer to it as cash flow planning–it just sounds and feels better.
  • Do some simple math: 1.)  Add up what you are spending NOW in the categories of giving, housing, food, vacations, transportation, medical, debt, entertainment, miscellaneous, children related expenses, cell phones, eating out.  2.) If you have a deficit (expenses exceed income), go back and change your expenses in groceries, entertainment, cell phones, cable and other non-fixed items, until you have money left over.  3.) If you have debt, use all of your extra money to re-pay all of it.  4.) If you don’t have debt, make your goals for the future and begin saving for them.
  • Start tracking spending: Use paper and pencil to get started, or Excel if you are good at spreadsheets (email me–I have a good one I will give you), or a free one like Mint.com if you don’t mind them selling information about you, or buy YNAB at www.ynab.com if you want to keep your information private. Mint or YNAB will download values from your bank and work with your smart phone to track spending easily.

March Money Madness, Who Wins?

monAnd you thought March Madness was only about basketball! March is a mad month for money, particularly this March, because the month is full of extra money but also of extra challenges–more than most months. Jon White tweeted last week about #2 below and it got me thinking. Thank you, Jon, financial coach and blogger at J W Financial Coaching for the idea and the encouragement to write this.

March Money Madness is because of the 7 things listed. Will you be the winner of this financial tournament? You have the choice to avoid the traps and gain financial advantages the month holds, or to let yourself be caught in one of the many traps.

  1. Many people get 3 paychecks in March, so your income goes up by 50%. This may not be for you this month, but if you are paid every two weeks you will get two extra paychecks two months each year. If you don’t plan for this extra money, if you don’t closely watch spending, you may spend this money without realizing it.
  2. March has 5 weekends this year. I don’t know about you, but we do more fun things on the weekend such as eating out, and more mundane things like grocery shopping. If you are not careful you may end up spending more than you have budgeted and lose the advantage of the extra paycheck because of weekend spending.
  3. March is Tax Refund month. Many people who really rely on their tax refunds have submitted their tax return already; they may get it this month. Make smart plans now what to do with this money (see below), whether you receive it this month or later.
  4. Are you due a bonus? I never realized it before, but I have spoken to a number of people who have recently received a bonus or will get one this month (see below).
  5. Basketball Tournament Winners:  Okay, this one is a stretch. However, if you enter a basketball bracket contest with a few bucks and win, you might have extra cash to plan for. I’m not advocating gambling as a financial tip, far from it (check back with this blog in several days, for I will post an important article about this).
  6. March is Spring Fever Month.  Have you been cooped up all Winter? As soon as warm weather breaks, if you live in the north you will be outside washing the car in your shorts in 50 degree weather because it will feel warm. Many stores start seeing increased sales. The lawn and garden department at your local hardware store sees a lot of new sales. In addition, automotive dealers and boat and RV sales really get cranked up starting now.
  7. Tax Refund Advertisements start. Everywhere you will see advertisements on how to spend your tax return, everything from vacation planners and cars to furniture. For a small fee, they will even give you a short-term loan until the check arrives in the mail, but the interest on the loan will probably be some crazy figure like 100+% if computed annually.

How to win the March Madness Game? If you are in debt, have no emergency savings, or are always stressed about money, this is what you can do!

What to do with extra money: tax refunds, bonuses and extra paychecks: Here is your great opportunity to get ahead in life. This doesn’t happen often, so take serious advantage of it.

  1. Invest $100 in a financial class: Take a financial class; it will only cost you $100, such as Dave Ramsey Financial Peace University. Go to his website and search by your zip code for a class near you. I promise you, your investment of $100 will return you many thousands of dollars. I am not kidding you: you will get much more back than you will ever receive in tax refunds.
  2. Put the money in a savings account, all of it!  If you need to remove the temptation right away, open up a separate account at a bank where you don’t have any accounts; otherwise, you will spend it, maybe all at once, or slowly transfer it into checking and it will dwindle away.
  3. Plan for needs and not wants: Do not spend it on vacations, large screen TV’s or vacationing if you have debt and no savings. If you have been doing without for quite a while because finances have been tight, this extra money will make you feel a sense of elation. When we feel this way, we end up spending more money. Our emotions tell us that good times are back for good, even though it is a temporary thing.
  4. Make a list of all of your savings and debts.
  5. Make a list of the things you really need:  If your car’s tires are bald, or you need money for upcoming things for medical, children’s needs, savings for Christmas in 9 months–set it aside. Now prioritize your list. Don’t forget to include tithe (10%). If you do all of these things right, you will have more money every month in the future, not just once per year.
  6. Put $1,000 in savings, if you don’t have any. This is to be used if you have a real emergency, for example, the car is on fire or a family member is bleeding. I’m exaggerating of course, but this is not for the emergency pizza. You will have a car repair or other emergency need in the future; this is your ‘rainy day’ savings so that you don’t have to borrow to make it–you see, we are trying to avoid the trap of debt.
  7. Now look at your needs list again and  prioritize the really immediate needs and debts. See how many loan payments you get get rid of by paying off some debt, and use that freed up monthly payment that you don’t have anymore to pay off the other debt each month until you are debt free (this is called debt snowballing).
  8. Put 6 months of expenses in savings for big financial setbacks like job loss. This is if all non-mortgage debt is paid off, and your $1,000 emergency fund is established. Every financial planning book says to do this, and it is really smart.
  9. It is okay to use a small part of the windfall for fun, but instead of blowing $100’s, take a few bucks a buy some steak and a nice bottle of wine and have a home date and watch a video.
  10. If you have done all of these things, you are ready to plan for intermediate things, like car replacements, or long-term needs like retirement and college education.

Just because you got a nice chunk of change, it isn’t time to live big, but by being wise you can make great decisions, and maybe this year you will advance to a stage in life of living smarter with less stress. This is what the wealthy have learned to do, and if you want to accumulate wealth, this is what you will do. Poor people blow it and a few months from now wonder were it all went; they never seem to get ahead. March Money Madness–who wins?  You will if you do these things.

Costco Cost Savings and Warnings

Big Box retailers like Sam’s Club and Costco can sometimes save you a lot of money, but if you aren’t careful you can end up spending more money than you planned to. I suspect most people do go over budget at these places.

We are avid coupon clippers and deal shoppers, and often our receipt from the regular grocery store shows we saved 25 % – 45%, so I think we can tell when something is a good deal or not.

What I like about Costco: Take for example batteries. It is easy to buy an average size package of batteries at most places for $8; even if they are the smallest AAA you often get fewer than 10. Last time we bought double and triple A batteries at Costco we paid less than $15 for a huge package–I think it had about 40.  The savings is not unusual. We find good deals on hummus, some frozen and produce items, jeans, prescriptions and some health and beauty items, such as an unbelievable price on a Claritin generic. I also like the fact that some food products are organic and don’t have MSG added, and many of their deli meats don’t have nitrates. Don’t get me wrong, they are not anything close to an organic grocer. However, if you are like us and can’t afford to shop organic exclusively, you might like the fact that they make some effort, at a price you can manage, to avoid some of the things organic shoppers don’t want in their food. It is probably not good enough to satisfy those that shop organic exclusively, but it is good for those on a budget that like to be able to get some products that are more healthful.

A few other Costco savings examples: Last month they had top-brand windshield wipers, buy-one get-one free for $7.99. That was about 1/3 of the normal price. A friend of mine recently bought a new Honda Accord through Costco, and, after negotiating with several local dealers in the area, was still able to save money through Costco.

What I don’t like about Costco: I have noticed that almost every item in the store starts out at nearly $10, so it is easy for the things in your cart to add up to $100. Of course there are a lot of exceptions, but Costco is a masterful marketer, so you may be drawn impulsively to buy things you don’t need. I don’t like the fact that some of the containers are so big, such as canned goods. Americans throw away a lot of food, so you have to be careful to buy only what you will realistically consume. Emotionally our brains tell us that if the package is big, it must be cheaper. However, we find that some things, such as laundry detergent and some dry goods, are cheaper elsewhere, especially when we use our coupons and our organized system of  using sales and grocery cycles. Don’t be drawn to buy something that seems cheaper without doing some price checking.

Do people save money there? Sure they do, but I would venture to guess that most people end up spending more money. Generally observing what people are pulling off the shelf, we can see quickly the things people are overspending on. My wife teaches a class on couponing, which is actually more like home economics. She finds that most people lack proper knowledge about pricing and sales, buy out of habit, and don’t plan because they feel they are too busy. However, she estimates that for every hour she spends planning and cutting coupons she saves $50. For us this adds up to $200 in savings each month. Try asking your boss for a $200 monthly raise.

In summary, groceries are one of the biggest parts of monthly budgets; however, if we plan and shop smartly, we can prevent big box retailers from breaking our budgets.

Budgeting For Extra Charitable Donations

Here is a cool idea: consider adding a new category to your monthly budget for ‘special giving.’ While doing some budget planning with the program we use–YNAB, or You Need a Budget–I noticed that for some months throughout the year we gave to various causes. This was in addition to our regular giving.

This got me thinking. Wouldn’t it be really good if for every month we made a special donation to groups or people that we saw in need. Doing our regular 10% tithe each week, month and year sometimes seems mundane, from the standpoint that it is just a regular habit. Don’t get me wrong, I actually get excited to do it, because I feel it is an honor and privilege to be able to give, and I know it will go towards the kingdom and bless many people. But on the other hand, I don’t always get to see who it blesses, or to have a more direct effect on a single person or a special cause I like.

I asked my wife if she wanted to carve out an extra amount each month for special giving, either to organizations, or people that we want to help. She said yes–she was all for it. We are starting out with a pretty small amount that we can afford. We have only been doing this for a couple of months. It has helped with my electronic budgeting too, because now we have a place already in our program to track it. I’m kind of a nerd, and I like the numbers to match up. This helped us give to a group feeding the poor last month, and to make a special offering to help families that can’t afford Christmas for their children this month.

The YNAB software program is really easy-to-use, and I can add extra categories, or subcategories to accommodate this change to our budget. YNAB can be used on PC, Apple, iPhone or Android devices.

I’m not mentioning this to bring attention to myself, because I think that is a really bad thing to do, but to give you an idea to try. Giving this way is fun and freeing. It frees me from some money worries–strange how generosity does that. Givers usually are blessed more in return in the long run than they ever give, but that shouldn’t be the motivation; it is a cool thing that seems to happen.

Do you think this is a good idea? Also, if you already do something like this, or if you try it, let me know how it goes.

Austerity- Rarely Used, but Great Word

Merriam-Webster named Austerity as the word of the year in 2010, but these days it isn’t a word we use often. Dictionary.com defines it as 1. austere quality; severity of manner, life, etc.; sternness. 2. Usually, austerities.  ascetic practices: austerities of monastery life. 3. strict economy. I like the definition of Financial Austerity from Wikipedia: is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided.

JesusMoney.com’s definition:

Family austerity: change in fiscal policy of a family to substantially reduce spending in response to: 1. deficit spending (spending more than one earns), 2. excessive debt, 3. unfortunate circumstances (e.g., job loss, investment reduction), 4. negative economic factors (increase costs of food and gasoline), in an effort to ultimately avoid bankruptcy, lower financial stress, re-pay all non-mortgage debt, build wealth and give. The non-financial consequences of austerity are enjoying less wants, but enjoying maturity, more quality time with good friends and family and spiritual growth.

Unscientific numerical and graphical result I imagine would look something like the following, the percentages could be adjusted according to severity of deficit and mathematical proximity of bankruptcy:

75% Reduction in expenses

  • Entertainment such as eating out, movies and spectator events
  • Vacations and travel
  • Extra children’s activities
  • Regular new clothing
  • Gifts

75% Increase in investments

  • Debt reduction
  • Possible mortgage or car loan reduction through downsize or refinance
  • Savings

100% time increase for activities

  • Budgeting and expense tracking
  • Spousal financial meetings
  • No/low-cost family activities
  • Prayer about personal finances
  • Taking financial courses and reading financial books
  • Receiving counsel

100% increase in personal growth

  • Maturity
  • Spiritual growth
  • More joy, happiness and contentment
  • Closer family relationships
  • Financial skills passed on to children

If you charted this on graph it might look something like:

Micro Budgets for Christmas

Shopping for Christmas gifts can surely be a budget buster. If you go shopping and  do not have a list or calculated in advance how much you are going to spend on particular individuals, your emotions may get the best of you, and you will wake up with a massive debt hangover after the holidays. Also it is not uncommon for people to buy gifts for themselves too. So how do you go about staying on budget during the Christmas season? Send everyone on your list a card, telling them you made a donation in their name, but then don’t. Just kidding! The answer is a Christmas Micro Budget and a plan:

  1. Consult your budget, or your ledger of income and expenses to determine how much money you can spend total on Christmas gifts, for example let’s say you can afford $500
  2. Make a list of people who you are going to buy gifts for
  3. Divide the total number of people by your budget, so if you have 20 people then you can spend $25 per person
  4. If there are people who you are going to spend more than $25, then subtract. For example if you think you need to spend $100 for two people, then that leaves $300 to spread out among the remaining 18 people or 16.66 per person
  5. Get $500 of cash and put in into one envelope
  6. Leave all of your credit (keep store cards only if they give an additional discount plus a coupon) and debit cards, and checkbook at home
  7. Gather your shopping list
  8. Go the websites of the stores you shop, and dig through the ads for sales and coupons, cut/print coupons and take with you
  9. Go shopping, and keep track of each person you buy for and how much you spend

Savings a Good Investment?

An article that was recently sent to me Saving, Spending Wisely are Investments from the Washington Post has some excellent information. However to add to that, many people think “I’m not going to save into a savings account, that earns nothing, I’m going to live my life and when I have a lot of money I am going to invest in some really cool sophisticated investment that is going to earn a lot of money… someday!”

The truth of the matter is, learning to spend less, budgeting and practicing smart financial management is an investment of your time, that will pay actual cash dividends. Learning to save hundreds of dollars each month, and actually depositing money into an ordinary savings account, money that you would normally not save is a 100% investment return. This is because you will have money that you wouldn’t have if you stayed in a freestyle, devil-may-care lifestyle. So saving, smart management and good spending are excellent investments, that will help you to accumulate money, that you can invest when you have accumulated more. Proverbs 6:6-8 Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.

Spender versus Saver or Free Spirits and Nerds; Why?

Are some people predisposed to spending instead of making logical financial decisions, or what Dave Ramsey calls “Nerds and Free Spirits”? Having counseled more than 500 financially struggling people over the past few years, I can see that this may indeed be true. From an early age, my oldest brother would save every penny and spend it wisely. Heck, even his Halloween candy would last until Easter. On the other hand, I would go through my candy quickly, and although I could save my paper route and grocery stock-boy income, demonstrated by buying a ’74 Camaro in ’79 for $2,700, I tend to want more quick gratification then he did. The other day I was talking to an accountant that always managed money well, and he just couldn’t understand people who spend more than they make, or live pay-check to pay-check; the tone of his comments sounded judgmental to me. Is my brother a better saver because he just ‘got it’ at an early age, or did my parents raise him differently, or maybe we are just wired differently?  I think that all of these could be true, but it seems that we sometimes under-emphasize that each person has natural unique strength areas. For example, some people are naturally better at managing money then others, and the same could be said about relationships, careers, and health. I’ve met few people who are good at all areas. A recent Newsweek article at the Daily Beast, about research that has been done on this topic, sheds light on how many of us may be predisposed to saving or spending. For me, this isn’t an excuse for being one way or the other; I still have to take adult responsibility for decisions. However, if this research has some validity, it helps address self loathing change barriers, and opens up doors for new ways of approaching challenges to change.

Grocery Shopping and Menu Planning Made Easy

At a recent Dave Ramsey class, one of the members, Brandy, introduced us to a new web service that she has been using: e-mealz. This is a really cool service that costs only $15 bucks per 3 months. It plans your meals for an entire week and provides a shopping list of items matched to a nutritious menu, recipes and specials. How great is that! Brandy said she is able to buy her groceries for about $65 for a week for a family of 5. This doesn’t include breakfast and lunch, as well as things like milk, eggs, butter, and other household supplies, but with smart use of coupons, I’ll bet she can keep her budget to under $100 bucks a week. This is very good! Great job Brandy, good stewardship, and thank you!

Can Budgets Survive the Weekend?

Weekends are the hardest on our family’s budgets. We are really good throughout the work week at not going over our entertainment budget. We take lunches, stay away from stores and other places of temptation. When we go online, it’s more for work than play. Come the weekend, sometimes the celebratory feeling hits, and we just want to have fun.

After a long work week, we just want a break from the action of preparing meals, so we are tempted to eat out or to order pizza. If there is a good movie in the theater that we want to see, and we have the time, we might be compelled to go. I detest going to the mall to shop, but as weather gets colder and restaurants are near shopping, we might wander into the bookstore or coffee shop, and… ka-ching! After church friends may want to go out to eat, which we love to do.  Emotions play a big role here for me. Can we still do all of these things, while still saving for the future, and paying off debt? Yes of course, but we must have a plan or our financial future dies by thousands of little impulse purchases.

What does a weekend plan look like? Well, it starts weeks and months before, when we plan. If it is movies and eating out, then we plan how much and consult our spending inventory for the month, or if using cash envelopes we look to see how much is left. To plan ahead for fun, it is going to Red Box or the library for cheap or no-cost DVDs. If running a lot of errands, it is remembering to pack a lunch instead of grabbing fast food. Do we always do all of this? No not always, but we have done a lot of it, and it has really helped us make ends meet. There are other things that we can do too, and you can think of what works for your family. Lastly, it just might be helpful to pray.  Sometimes I don’t get around to my morning devotions on the weekend, but writing this, I am compelled to not skip it and ask for wisdom and strength to spend as God intends me to, and to draw closer to Him, and I wonder too what effect this will have on joy and fun during the weekend.