Thursday, January 17, 2013

Take control of your money!

Hey Everybody! 
Since Emily has been spending some time talking money with ya’ll, I thought I would give my two cents worth. No pun intended. ha.
Unless money grows on the trees in your backyard, and there are no trees in my backyard, then you need a budget. Rich, poor, beautiful, ugly....we all need a budget. It helps maintain sanity between husband and wife. There’s really no excuse not to have a budget. 
First plan of action: Invite your spouse for a “money” date. That’s right, a date where you talk money. This helps you and your spouse to both be mentally prepared for the topic of discussion. It’s been documented that most marital arguments have to do with money. Many times the topic completely blind-sides us. Have you been guilty of this? Using money as leverage? “You spent $$$$ on concert tickets, so I can spend $$$$ on clothes?” Fill in the blank. You know you’ve been guilty. So, instead of slapping each other in the face with money talk, set a date, and discuss the budget with clear heads.

Secondly, what are your financial goals? What are you trying to accomplish by having a budget? Is it time to pay off your student debt? Are credit card bills piling up after all the christmas shopping, traveling, partying? What about saving for retirement, or purchasing a new home? All of the above are reasons for budgeting. When you work out a budget and actually see where your money is going, it’s easier to see where you can “cut the fat” and save in certain areas. Also, when you determine a specific reason for saving, it’s very rewarding to watch as you pay off your debt or build towards that new car, home, vacation, etc.

Thirdly, yes, you CAN save money. After you’ve written out your budget for the first time, it may seem like there’s no “fat to cut” out. Did you think about all the Starbucks stops you make each week? That’s $5 right there that you could be saving. Each little bit adds up. In the book “Smart Women Finish Rich”, the author talks about the “latte factor”, which is what I just mentioned. If we cut out the $5 to Starbucks and the $1.50 Sonic drinks daily, the savings can really add up. Everyone can save and cut the fat somewhere, you just have to be honest with yourself and determined to make a difference in your budget.

Fourthly, if you don’t have the money...don’t spend it! The wallets of Americans are packed with credit cards. I admit that I have credit cards, but I’ve also learned how to use them wisely. Hard task. It’s so easy to see something you want, swipe your card, and it’s yours. Magic! But, after doing that a few times, it really adds up and can even become addicting. Dave Ramsey suggests cutting out credit cards entirely, which you may need to do. I had to do just that when my husband and I first got serious about budgeting. I needed to use cash, so that when it was gone, I was done. End of story. And folks, it worked. Was it easy? NOT. AT. ALL. Did I like it? NOPE. Was it painful? YES! But, I was determined, and had a clear goal in mind. I kept reminding myself of this quote from Dave Ramsey’s book “Live like no one else, so you can live like no one else.” I could do it. I would do it. It was 5 years ago that we decided to pay off our debt and save for the home we wanted to build. It was exciting to pay off our cars, pay off our credit card debt, pay for the land we wanted to build our home on, and then build up a down payment. We did it! We learned to budget and I learned to only spend the money we actually had. We became savers! We have now learned to use credit cards sensibly, and still with our budget in mind. We simply pay off the balance each month, because we budgeted to do so. By using our credit cards we are able to earn points towards travel, etc. But, we are not spending what we don’t have. VERY. IMPORTANT. CONCEPT. Mostly now, we use our debit card and keep all of our receipts. My husband creates a spreadsheet each month where we enter our budget, then record our spending as we go. This way we can see how much money we have left in each category, without having to withdraw cash at the beginning of each month. Because my husband makes the only income in our home, and he is completely commission based, we have a budget meeting each month to determine how much money will go into our allotted budget categories, and how much we will put towards savings, retirement, etc. 

I truly hope that this post will help someone out there who is reading! I certainly don’t feel like my way is the “only way” or even the “best way”. This is the way that worked for our family and because of that, I feel it could be beneficial to someone else. Maybe you can glean a couple of ideas from what I’ve listed here, or even just further motivation and determination to get your financial affairs in order. Sit down with your spouse and have a money date soon! Fix a chocolate pie to go along with it, everything’s more fun when chocolate is involved. 

~ Jennifer

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