Count on December

Posted on December 13, 2013 by nickduse

ID-100221020Yes, I know what you’re going to say, Christmas is already here, it’s too late to save for it.  OK, I’ll grant you that.  But if I had one Christmas wish for you (and for me), I would wish that in that realization, we would make the most of the situation we’ve got.  I wish we would all Count on December.

You might expect me to offer some sort of advice along the lines of spending less this holiday season, not using expensive gifts to make up for lack of creativity (or thoughtfulness) during the year, or other hints I gave out in a previous post, Christmas in March.

I’ll join you in a reality check – it’s two weeks before Christmas and your plans are probably set.  But all is not lost – my encouragement today would be to Count on December.  As with most catchy phrases, there is a double meaning to this directive:

1) Count on December – Whatever holiday you celebrate during this season, there are expenses that come along with it – gifts, travel, decorations.  Don’t let your checkbook pretend like this doesn’t happen every year.  Count on this happening every 365ish days.  As is said by wise people, “December comes around with alarming regularity”.  Don’t let it sneak up on you, which leads us to our second meaning:

2) Count on December – If in fact the holiday season has surprised you this year, see #1.  Then, make it a point to track faithfully what you’re spending on Christmas this year, including all the various categories (having people over for dinner, tips for garbagemen, etc.)  This total will give you a goal to shoot for next December.  Then take this amount, divide it by 12, and put that much money aside each month next year, starting in January.  You’ll step into next December with a Christmas fund, ready for action.

If you combine the above with the use some of the filters discussed in Christmas in March, you may find ways to give away some more of that money you’ve saved to those in need.  “Counting on December” will allow you to enter next year’s version of December less stressed, better prepared, and hopefully – more generous.

 

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Posted in Budgeting | Tagged , | 1 Comment

Give Your Savings a Name!

Posted on August 24, 2013 by nickduse

Coin Dropping Into Piggy BankA friend of mine was losing sleep the other week, concerned about his financial future.  Not the “it’s what I’m thinking about as I drift off” kind of losing sleep, but more like the “I wake up every two hours thinking about it” kind of losing sleep.  Suddenly, a few days later, he was sleeping like a baby.  The secret?  No, not the lottery, and inheritance, or a huge tax refund.  My friend had given his savings a name, or more accurately, several names.  And it made all the difference.

We’ve spoken here before about having financial goals – things that you’re planning and saving for that you know you’d like to make happen (or that might happen to you – we call that emergency savings for that very reason).  Saving money is great, but sometimes we have a tendency just to save, and never connect our saving to the goals we’re aiming for.  When we connect our goals with our savings, we can see how the buckets are (or aren’t) filling up – and, most importantly, when a bucket is full so we can get going on the next one.  I’ve seen some folks with more savings than financial goals (it would be nice, right?) who are worried they don’t have enough until they name their savings.

So, you don’t need much for this one, but here’s how to do it:

  1. Start with your list of financial goals.  These are usually things you know you’re going to need money for (saving for a down payment on a house, an emergency fund, paying off debt, or for the next car or vacation).  Once you’ve got them listed, put them in order of priority.  If you need a nudge, put emergency savings (usually three months of living expenses) at the top of the list.  Knowing you have this set aside helps you sleep way better.
  2. Add up what you have in savings – money that you have set aside and can get to easily.  This does not include money that’s in your retirement plan at work or anything that costs money to get at.  It does, however, include, any buffer in your checking account and those US bonds Aunt Maple gave you 10 years ago that you have yet to take to the bank.
  3. Start assigning your savings to your goals.  Simply go down your list of prioritized financial goals, and use the money you’ve saved to fill each “bucket”.  If you find that you’ve run out of money before you’ve run out of goals, go to Step 4.  If you find that your money has made it all the way through your goals, congratulations!  You’ve got more than enough savings to meet your financial goals.  Now you get the fun of thinking through what else you could use that money for, or if you want to think generously, how you can give it away!
  4. Sometimes, it won’t seem like your money has stretched to meet all of your financial goals.  This should be some extra incentive to work your budget (see the two-parter on budgeting) so you can assign more of your money to saving toward these goals (and filling those buckets!)  Don’t get discouraged, but do get to work saving!  Also, take a step back from your goals and make sure they are reasonable.  There comes a point where we start saving for stuff at the expense of living and giving.  Previous examples I’ve seen: saving for the “second” next car after already fully saving for the next one, trying to save enough money to be unemployed for 10 years, and being 28 years old and saving for a 50th birthday bash.  At some point, we have to remember that over-saving will rob us of the ability to enjoy life as it comes and will also rob us of the opportunity to be generous – we’ll always convince ourselves there’s something else to save for.  Ask some close friends to help you think through this if you’re having trouble.
  5. Lastly, consider setting up one of your buckets for “generosity”.  It’s one thing to give money to our church or friends as small needs come up, but sometimes we may feel led to make a big dent in something really important – helping someone adopt a child, start an orphanage in a foreign country, or helping a family through a big loss.  If you’ve got some money set aside for these big circumstances, you can experience some really cool generosity!  It’s also a great stretch for your heart to save for something like this without knowing specifically what it is yet – give it a shot, I promise it will be worth it.

So name those savings!  Most of our worry and fret regarding our savings is because we don’t know when enough is enough.  So name each bucket and then at least you’ll know.  Even if you don’t seem to have enough saved, knowing what the situation is will help you focus and rest in the knowledge that you have a plan (we call that a budget).

As always, feel free to shoot us questions or other helpful tips!  Make yours a generous city!

Posted in Savings | 1 Comment

Just Say No

Posted on August 9, 2013 by nickduse

ID-10067200Debt can seem normal and needed (“everyone’s doing it”) until it starts to place demands on your life.  Debt loads us down with financial burdens that keep us from things like financial freedom, generosity, and saving for future needs.  We look to those who have money (and therefore who we borrow from) to provide for us what we can’t provide for ourselves…and what we won’t wait for God to provide for us.

With the typical college student leaving school weighed down with over $24,000 to repay, we get started off on the wrong track.

No one is contesting that your degree (if you have one) is a good thing, but it also can come with the reality of a heavy debt.  If it’s not student loans, it might be credit cards, personal loans, car loans, or other debts (we’ll leave houses out of the discussion – another blog for another day).

Whatever the debt, you have a few choices:

  • Compare yourself to others.  You can take comfort in the fact that some people leave their schooling with over $250,000.  Some people out there are millions of dollars in debt.  Don’t stay here too long, remember that they’re not you and you have debt to take care of.  And they certainly can’t help you out – they’ve got bigger problems, right?  Let’s skip this one.
  • You can duck, dodge, or try to throw a smokescreen.  This can include choices like not paying, debt consolidation, and even bankruptcy.  These are extreme measures that often have really significant consequences (despite the ads on TV and radio that make them sound like a trip to Disneyland).  These things are for when there is nothing else you can do.  Not a great choice either.
  • Ultimately, the reality is, by taking these loans (yes, even credit cards count) you have given your word that you would repay the debt you now have (insert guilt trip about integrity here.  Sorry about that.  Sort of).  Assuming you agree with that, you now have two other choices: pay it off slow, or pay it off fast.

The real cost of debt is not as much about interest charges or fees – the real cost of debt is our freedom.  Debt loads us down with financial burdens that keep us from things like financial freedom, generosity, and saving for future needs.  You can keep paying the minimum if you want, but get ready to drag that debt around with you for a few years, a decade, or more.

So, we’ll end it today with some tips:

  • Get together a list of all your debts and your monthly payments.  Stare at the list for a while.  Think about it.  Stare some more.  If you’re feeling kind of sad, skip that emotion and go straight to mad.  Don’t grieve something you can still do something about.  Get mad at the debt, wish it gone, get ready to make the changes so it can happen.
  • Go re-work that budget so that you’re cutting back on some things (caution: minor pain ahead.  It’s OK, it’s worth it), and add that extra money onto one of your debts until it’s paid off.  Then take what you had been paying toward that debt, and add it all to paying extra on the next debt, etc.  Call it a snowball, call it a debt ladder, whatever – just do it!
  • If you scratched your head when you got to the word “budget”, above, don’t stand around scratching your head – go back to the blogs about setting up your budget (a riveting two-parter if I do say so myself).
  • Slow your roll when it comes to your spending.  Only you can determine how extreme your debt problem is, but you’ve got to make sure you’re living on less than you’re making, or the debt will keep piling up while you’re trying to pay it off and you’ll feel like you’re stuck in neutral.
  • Be patient.  As the saying goes, if it took you some time to get into this, it’s going to take some time to get out of it.  Find a way to track your progress so you can see things getting better.

Got questions?  Need help?  Ask away.  My hope and prayer for you is that, if you find yourself burdened by debt from the past, you can say “no” and get unburdened sooner than you think, leaving you free to be to be more generous with your finances.

Posted in Debt | 5 Comments

Guaranteed Investment

Posted on May 10, 2012 by nickduse

Last Friday I had the tremendous opportunity to talk about personal finance with a group of recent college graduates for a few hours.  We had a great time (well, I did…hopefully they did as well).  They were engaged and asked great questions, mostly around planning for the future and wanting to invest their money wisely.  We also spent a while talking about giving and the impact it has on our own lives and on others.  Then I got the question I usually get, “what do you see happening next to our country’s economy” (Translation: “Can you please tell us the future?”).

Good question.

Why is this a good question?  Usually because people want to plan better for the future, either to protect what they have or to know where to put what they don’t have yet but hope to get in the future. If you want to know how I answered, I told them what I usually say when I get this question, “I don’t know the future, but I know the One who does”.

I’m sure I’ll spend time in future blogs getting down to some nitty-gritty detail about investing tips and such, but as I thought about the group’s questions driving home, it struck me that I’d been thinking about “investing” in a very narrow-minded way.  When I stacked it up with what I’ve learned in my walk in the Christian faith, I realized that even though we’re encouraged to save diligently for future needs and responsibilities, we are far more often reminded that everything around us will fade away, so we should  invest in things that last forever.

Jesus made this point better than I ever could in the Gospel of Matthew, “Do not lay up for yourselves treasure on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal.  For where your treasure is, there your heart will be also.” (Chapter 6, Verses 19-21)

And there it is.  Do we need to save for future needs?  Absolutely.  But even more so, our hearts should be focused on what really matters in life, and our money and our investments should follow.

I don’t know what this looks like for you – it could be giving to your church and the work they do, to clean water projects around the world, supporting orphans and their care, or even anonymously helping a single mom out as she tries to make ends meet.  I leave that up to you, but the point of all this is to remind us all that while our money on this earth will come and go, rise and fall, what we give with a generous heart lasts forever.

Guaranteed.

Posted in Giving | 1 Comment

The Two Sides of Every Tax Refund

Posted on March 28, 2012 by nickduse

Well, at this point, you’ve determined that you either:

1.) Owe something on your taxes,

2.) Are getting a tax refund, or

3.) Are starting to like the idea of an extension (bonus tip: if you’re going to owe money, you still have to pay the government what you think you owe them by April 15th, might as well hunker down and figure it out!)

Oh, all the numbers...

Oh, all the numbers...

Looking at that list of options, we’re all hoping that #2 applies to us.  While it’s great to see that refund check coming back to us in the mail (or directly into our bank account if we use direct deposit), I’m here to rain on your parade (but just a little bit).  If you want to know why that refund isn’t all good news, read on.  If ignorance is bliss, thanks for being here and we’ll see you next time.

When we owe the government money on our tax return, it usually means that we didn’t ask to have enough set aside during the year (usually done through regular withholding from our paychecks), and we owe the government the difference.  That’s why they insist on getting that money from you as soon as possible – you’ve held onto it longer than you should have, and it’s money they want to have so they can save or spend it as they see fit (OK, let’s be honest, they mostly want to spend it…)

A refund works the same way, except that it means that you’ve asked the government to taken too much money out of your earnings during the year, and they’ve held onto it when it really should be yours to spend or save as you see fit.  Your tax refund, therefore, is essentially a request to the government for it to send your money back to you.  You may  see things coming together now, but essentially a tax refund is money that you lent the government all year, and they’re not going to pay you any interest on that.

So if you get a $3,000 refund, that’s great, but it also means you were $250 short every month on your income.  Therefore, the real goal with taxes is to neither owe anything nor get anything back.  Some people like getting refunds as a “forced savings plan”, but there’s better ways to save and budget than letting the government get all the interest you could be earning, not to mention the flexibility you could have.

So what if you’re getting large refund every year?  All you need to do is go to your employer and ask to fill out a new W-4.  This form lets the government know about your tax situation so they know how much to take out of your taxes.  Sometimes, as life situations change (and our W-4’s don’t), the gaps of what we owe and what we’ve paid start to widen, and we end up with large refunds.  You can change your W-4 anytime you want, so there’s no time like the present!  If you’re having trouble getting someone to give you a W-4, use this link (http://www.irs.gov/pub/irs-pdf/fw4.pdf) to get one downloaded from the IRS web site.  Most of the time, you’ll also want to find the same kind of form for your state taxes.

If you insist on continuing to get a large refund every year, please read the entire article again as punishment.  Then, use your refund to make sure your emergency savings are adequate, or to meet other financial goals.  Resist the temptation to spend it all on something you may not really need and then wish you had it when you have a financial emergency later in the year.

Good luck!  And we’re here if you have any questions…

Posted in Taxes | 2 Comments

Got a Plan…To Give?

Posted on March 13, 2012 by nickduse

Working with middle schoolers at my church on a trip to the beach years ago (in January, that’s important here), a group of them wanted to spontaneously jump into the ocean – something about a polar bear club. Although I was in all other ways considered an adult at this point, I was immediately transported back to all the peer pressure I thought I had left behind years ago. Having too much kid in me at that particular moment, I ran into the ocean with the rest of them, felt my heart almost stop, laughed with them, and ran out again. I remember at some point as I walked back to where we were staying that I couldn’t see as well as I could going into the water. Figuring I had gotten some water in my eyes, I reached up to wipe them and suddenly realized what I was now missing that I had before I ran into the Atlantic … my glasses.

We rarely make good decisions in the heat of the moment.

This morning, my tax refund arrived in my bank account. While the amount itself was nothing to write home about, I was tempted to start the day by thinking about which of my financial needs or goals could be moved along with that extra cash. Fortunately, my plan stepped in and saved the day.

Operating under some good advice from years ago, I had decided back then what to do with any “extra” money I receive. Most of us, from time to time, receive extra – it might be a gift, an inheritance,a bonus, or like me, a tax refund. Likewise, most of us also have things in our lives that are trying to “speak for” extra money when it comes in. If you need a visual, imagine a nest of baby birds the moment they see their mother return with breakfast.

And yet, as I wrestle with these thoughts on giving, I realize that the needs of those outside my own little world are not only much greater…they are also much quieter. If I don’t make it a point to be purposeful about thinking about them, the noise of everything in front of me will drown them out. So I made a decision a long time ago to give away part of any extra money that ever comes in. When I lack discipline in the moment, the plan reminds me of the decision I made in a clearer moment.

Having a plan to give with extra money is easy. Take a second to dream today (with your spouse, preferably, if you are married) about what you would do if you had a sudden windfall of extra money come in. The amount is not really important because it’s all relative to where you are financially. The real question is, how will you split it up? How much will you give away? How much will you save? How much will you spend?

While you’re contemplating, I would add that while there have been a good handful of times I have regretted spending money on myself, there has never been any time that I have truly regretted helping someone in need. This thought helped me stretch a little beyond where I felt “comfortable” in my giving plan. This would be my encouragement to you as you think through what you would do with extra money before it comes in.

Spontaneous giving, of course, also has its place. This doesn’t mean you have to decide exactly where you’re going to give the money, but set it aside for that need that shows up in your community, city, the country, or the world. You won’t have to wait too long – they’re everywhere!

Two mornings after I lost my glasses in the Atlantic Ocean, this amazing group of 150 middle schoolers approached me with an envelope holding $275 (including lots of crumpled, wet dollar bills) for new glasses. What a humbling reminder not only of the impact that our giving can have, but also that it doesn’t take much to make that difference.

As you make your plan to give, I pray that you will find the intangible benefits of generosity outweigh the real “cost” in the moment … many times over.

Posted in Giving | Tagged , , | 2 Comments

Christmas in March. Really.

Posted on March 4, 2012 by nickduse

Merry March! (Credit: Freefoto.com)

A walk outside today reminded me that it’s starting to get warm again. Remember when it started to get cold? When that happens, we usually start counting down the weeks and months until Christmas. And along with the Christmas decorations and advertisements comes that panicked feeling where we realize that our regular monthly budget will be called upon to purchase gifts, Christmas cards, and probably a feast here or there.

This past January I spoke with quite a few friends (and some strangers) who mentioned something along the lines of, “Yeah, I need to take it easy on spending for the next little while – still paying off Christmas.”  As I’ve reflected throughout the year, and as we feel the impact of many of those around us in debt (including ourselves and our nation as a whole), there may be given to us an opportunity, in a small way, to stop the cycle and try things differently.  Here are some Christmas thoughts that are applicable even 10 months away:

1.) Save throughout the year for Christmas. This one is #1 on the list for a reason – Christmas should not sneak up on us each year – it’s right there in the calendar every December. Figure out how much you normally spend for Christmas, determine if that’s too much or not (and revise downward if it is), divide by twelve, and there you go – that’s how much you should set aside each month of the year for Christmas. Lump it in with your other savings or ask your bank to let you start a “Christmas Fund” or savings account that you only use for Christmas money.  Banks love people who want to save money, so go get loved on.

2.) Try to think about Christmas (and birthdays) throughout the year as you walk through life – did someone mention they would really love “this”, or could really use “that”? Write these down in a place where you keep information about the people in your life. When we’re not sure what to get someone and we’re up against a deadline, we usually rush the process and usually make an expensive purchase of something we only hope they like. It’s almost like spending more money is our apology to them for not being more creative or paying attention to what they might need or want. Thinking ahead here also enables us to shop around for the item and make sure we’re getting a good price. And even better, when your friend or loved one knows that you listened to what they said back in March, that’s another gift all in itself.

3.) Remember that Christmas is about more than what we get crammed into our ears and eyes all of November and December. Tell the guilt monster to take a break and get creative. Don’t have much of a budget? Look around online or consult friends for good, less expensive gift suggestions. This may take some effort on your part, but it can help bring your spending down and the time spent on a meaningful gift won’t be lost on the person who receives it.

4.) At a loss about what to get someone, or just want to try something different? Make a donation to a charity in their name, and get creative by giving in a way or to a place that would really mean something to them. Maybe there’s a place they volunteer or serve that you know they love – a gift to that place in their name would surely mean much to them, not to mention the ultimate receivers of the gift. Now we’re getting a little closer to what Christmas is all about!

What would it be like if as Christmas approached this year, you knew you were ready, at least financially?

9 months, 20 days, 1 hour. Go!

Posted in Budgeting | 6 Comments

How to Set Up a Budget (part 2 of 2)

Posted on February 21, 2012 by nickduse
When we last left our heroes (that’s all of us), we had discussed the first step of a budget – figuring out where it’s all going so that you can get control of your finances and start meeting your financial goals more quickly by telling your money what to do instead of the other way around.
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So if you feel like you’ve got a good record of your spending over the last month (or months – even better), here’s the next steps.  I know there’s more than one, but take them one at a time and soon you’ll be at a place shared by few others – walking around with a working budget!  You can simply use a blank sheet of paper for this, but there are also budget worksheets (one of which I can send to you – e-mail me at nickduse@hotmail.com).  Either way, here you go – follow these to freedom!
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First, record your monthly income at the top of the paper.  For simplicity’s sake, let’s go with your take-home income (what actually gets deposited into your account or what you take home).  If you’re paid every two weeks, take one of those amounts and multiply it by two to get your monthly income.  For reasons we’ll discuss in a future post, it’s best to budget this way even though every six months those of you paid every two weeks get an extra check.  If you rely on that extra check to pay necessary expenses, leave it that way and make it your goal to live on two bi-weekly paychecks a month.  Once you’ve written this on the paper, take a quick second to give thanks for what you’ve got coming in!  Often we take this for granted.  Make sure to include not just employment income but any other income you receive (side jobs, alimony, rent income, etc.)
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Second, take some time to think (and/or pray, if you are part of a faith community) through your financial goals.  Look around your financial landscape and ask yourself what you’d like to change if you had the money to do so.  Examples might be: giving more money away,creating an emergency fund, saving for a future need, getting out of debt, being able to help someone else with a future need they will have, etc.  Come up with a list of these – it’s helpful to have some short-term goals (things that you can accomplish in two years or less), along with the items that will take longer (saving for college, retirement, etc.)
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Third, on the same sheet of paper that you recorded your income, transfer the amounts you’ve spent per month in your various expense categories (see part one of this blog).  If you were able to record several months of expenses, use the average expenses (not the total).  Make sure to think about expenses that don’t occur each month (property taxes, oil changes, vacation, etc.)  With these expenses, you’ll want to think about how much they cost you each year, divide by 12, and record that amount on the expense side of the sheet.  You should now have a one-page picture of what you’ve got “coming in” and “going out”.
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Fourth, the moment of truth.  Before you complete step four, go ahead an grab a seat and have some ice water or a paper bag nearby (if you’re prone to hyper-ventilating).  Step four is to add up both your income(s) and expenses and see how you’re doing, on average.  This is important: Do not panic!  You’ve obviously more prone to panic if you look and see that you’re in the negative, but the point of this exercise is not to duck reality but to greet it head on, shake its hand, and figure out where you go from here as you attempt to reach your financial goals.
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Fifth, whether you ended up in the positive (you have more coming in than is going out), or the negative (the opposite), you are still faced with the task of telling your money what to do so you can better meet your financial goals.  Whether you’re in good financial shape or are struggling, there are always places in your expenses that you can trim back (we’ll discuss these in future articles).  Some of these cutbacks involve some degree of sacrifice, and you’ll find that the speed with which you accomplish your financial goals is usually tied very closely to how much you are willing to sacrifice and how soon you are willing to do so.  Step five is to look at your bottom line and find ways to increase the income you have available after paying your expenses.  Usually this is done by trimming expenses, but there are instances where you could increase income as well, just be wise about it (for instance, it would likely be unwise to begin working 90 hours a week and ignore your family just to take them on a nice vacation – they’d probably rather have 50 more hours of you every week than a nice vacation).
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Lastly, once you have some extra money available after paying your expenses, assign that money to your financial goals and begin setting it aside (in a separate savings account, for instance).  One of my friends (who previously had no emergency savings but wanted to save $1,000) changed their phone plan and cut their home phone line and is taking the $100/month in and transferring it to her savings account.  After three months (and a $200 bonus from work that she applied to the same cause), she’s halfway there!  It is slow going, but you’ll see the change happen and the longer you stick with the plan, the more results you will see!  Try to focus on 2-3 financial goals at most at one time.  If you throw a little bit at 15 financial goals you’re trying to meet at once, you’ll usually get discouraged over lack of progress.  Many people find it helpful to get laser-focused and reach for one of their goals at a time, moving on to the next one when they’re done.
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Obviously, entire books have been written on how to set up a budget, but hopefully this was a helpful start.  We’ll discuss other aspects of this and some other helps in future articles, and I am (as always) available via e-mail for any questions you may have – nickduse@hotmail.com.  Happy budgeting – the discipline is worth the reward!
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If you’re missing the first part of this process, head over to https://generous-city.org/2012/01/23/how-to-set-up-a-budget-part-1-of-2/
Posted in Budgeting | 1 Comment

How to Set Up a Budget (Part 1 of 2)

Posted on January 23, 2012 by nickduse

Get the New Year started off right.  Right now.

In case you’re still wondering how to put that resolution about getting your money issues straightened out into action, we’re here to help.  Well, I say that like we’re going to step and do it for you.  One of my resolutions was to be more up-front with people, so I’ll be up front with you.  We are here to help, but you’re going to have to put in some work (which will of course be worth it), and we’re going to need … wait for it … a budget.
Oh, the dreaded b-word.  It’s enough to make you want to poke your eyes out.  If we can’t look to our local, city, and state governments to balance theirs, why should we worry about balancing ours?
Well, mostly because yours is the budget you have the most control over, and a life on a balanced budget is a life with less stress, more control, and more generosity.  When we let our money control us (life without a budget), we often cling very tightly to money out of uncertainty which over time can make us more selfish people, whereas when we tell our money what to do (life with a budget), we know that we have a plan .  We can live with less fear of the unknown and a greater chance to be in a place to save for the future or help those in need.
A budget is a plan of how you’re going to spend your money.  Many times it’s written out on paper, but some people use computer programs like Excel or even special software like Quicken or Money to develop theirs.  Don’t worry about getting special software at this point, let’s keep it simple.
Balancing your budget starts with a simple goal: have no more going out than is coming in.  In other words, make sure your expenses match your income.  If, during a month, you can meet all your expenses (without using a credit card or going into debt), you’ve got a balanced budget.
A budget, however, is only as good as the numbers that make it up.  It does no good to plan on spending $50/month on gas if you live 25 miles from work and drive one of those cars that gets 8 gallons to the mile (yes, you read that right).  We have to start with finding out what we’re actually spending.  This will let us see how we’re doing now so we can get start making steps to get our budget into balance.  This means doing some work.
If you’re still with me, good – that means you’re serious enough about this to actually make a change, so congratulations!  The best way to see where your money is going is to track it – again,  you can use pen and paper, computer programs, whatever, just do it in a way where you track every dollar going out.  Many people I work with will put a sheet of paper with columns for their various categories of spending (groceries, medical, eating out, gas, etc.) somewhere they spend time every day – a computer desk, bedside table, kitchen, etc.  They take 2 minutes a day (yes, just two is all it takes) to write down where they spent money that day.  And if they can’t remember well or don’t keep receipts, they carry a small notebook and pencil with them during the day and transfer that information to their sheet at the end of the day.
Some people also simply refer to their online bank statements containing their debit and credit card spending.  This is a fine way to do it also, but in this case I would suggest sitting down once a week and transferring your information onto your record sheet.  Waiting longer will mean you can forget what you went to Target or Wal-Mart for (“was that for groceries, or was it that pet turtle for cousin Andy’s birthday?”).  Although, in theory, you’d certainly remember buying a turtle.  You get the point.  Also, if you use cash, your bank statement won’t help you remember where you spent the cash.  You can combine approaches here and use your bank statement for your debit card transactions and a small notebook to help you with your cash spending – just make sure it all ends up on your spending sheet!
Record all your spending into those categories for a month, and presto – you’ve got a solid start on a budget.  Two months of information is better, and three months is the best because it captures things that don’t happen every month, like oil changes and buying clothes (women, you may feel differently about that one – my apologies)
You won’t need to record monthly items that are the same amount (like rent or mortgage), but if you would feel better about doing so, add it to your sheet.  Here are some categories you’ll want to include on your sheet – you can make as many as you want, but don’t overwhelm yourself – the point is to keep it simple and keep good records:
Utilities, transportation (gas, car servicing, etc.), insurance, groceries, dining out (keep these last two separate), pets, personal care (medical, health club, dry cleaning), entertainment, loans/credit cards, savings, gifts to people, gifts to charity, clothing, and miscellaneous (leave room to write when you record a miscellaneous item so you remember what it was).
I know it’s some work, but it is the whole foundation of your budget, which is the foundation of your financial plan – it’s the most important thing you can do right now to get your finances under control.  So don’t be afraid of what you might find out, and don’t wait for the start of the month – get going!  If you would like a sample budget sheet, feel free to e-mail me and I’ll send one along.  I’ll also provide a link below where you can find out more about a budget.  Or, tune in next time for how to turn your spending record into a budget!
You can do it!
Posted in Budgeting | 2 Comments

We give because it was first given to us

Posted on January 23, 2012 by nickduse

We are most likely meeting for the first time as you read this, so I’m not going to jump in and tell you why you’re here (either at this blog or on this earth). But because you are here, it might be good to get to know each other some, which hopefully affords me the ability to tell you why I think I’m here and what that has to do with the idea of giving.

A long time ago, I felt that the life was hopeless and without purpose. A little less than a long time ago, someone helped me to discover just why that is. I had spent my life, up to that point, looking for hope and purpose in what I could see and hear around me, in the people and the places that I walked with and through each day. Unfortunately, people let you down sometimes and if the places around us don’t change, we usually end up changing places.

What that person so long ago helped me discover is that I am actually a guest here on this earth – my permanent residence, at the end of this life, is elsewhere. With credit to the band Switchfoot, “This skin and bones is a rental”, is a line well spoken not to mention well heeded. This body has been given to me as a gift. These possessions around me, these experiences I have, these places I get to see…they are all gifts. Yet, if I get away from the noise I realize I am frustrated by the fact that they all have expiration dates. Most alarmingly, I realize this body has an expiration date. I will not be here forever.

Since you’ve been kind enough to read this far, I hope I’m not out of order to share with you that what I also realized those years ago is that not everything around us is temporal. The me inside of me and the you inside of you – those last forever. Instead of being and temporal thing in a temporal world, you and I are eternal beings in a temporal world.

I know, I know, it sounds a little extreme and maybe even a little “out there”, but dream with me as I make this transition. If it were true, if things really worked like that (which I believe that they do) – how would it change how you think about how you spend your time … your money … your energy?

I believe the lives we live were given to us by a giver … The Giver. I believe He set an example for us of how we are to give when He sent His son, Jesus Christ, to take the punishment for the wrong we’ve done in our lives and will do in our lives. He is The Giver because He did this asking for nothing in return but to accept the gift. His most important gift sits in front of you for you to receive or walk away from.

But I also believe the Giver gave for another reason … to bring meaning to this life. You are made for more than going through the motions in the life you are living, and giving is one of the keys to bringing forth that purpose and potential. There is something amazing that happens in the process of giving. When we give, we not only help others, but we also “lose” that much more control and have to trust that things will work out OK despite our giving. It is the only way to be free of the god of money – to show it that you don’t need everything it offers to you.

Regardless of what you may or may not believe in when it comes to Jesus, the title of the blog is a reference to the hope and prayer that we all have that our cities and those around us would live generously. Things are very different when we choose this route. The title, when said quickly, also gives us “generosity”. Not an original idea on my part, but I’ve always liked it.

What follows in these posts will be a combination of ways to be wiser with our money and our spending. Some of you may use that information so you can stretch your dollars and do more with your money. That’s not a bad thing at all, and it can reap some very good dividends. Mixed in with these posts will be other posts focused on generosity, mostly because I constantly need to challenge myself with reminders to live generously, and I would be greatly humbled if any of these posts were able to help you in your journey as a giver.

Posted in Mission | 6 Comments