Wednesday, October 31, 2007

"The Automatic Millionarie" (Introduction)

For our third book review on this blog, we turn to another best-seller. David Bach's The Automatic Millionaire is an intriguing book that I have read more than once.

At the outset, I will tell you my biases, both for and against this book. You will probably notice that they will come up several times in this brief series.

First, the negative. I don't fully agree with Bach's strategy. While some of what he has to say is wonderful, and I will praise a couple of his principles several times, I don't like his lack of focus. I follow Dave Ramsey on this one: do one thing with total focus until it's done. Bach likes to divide our focus into more than one thing at times, and I don't like that.

The positive--besides the principles I like--is that the book is extremely readable and brief. I have read it three times, and actually read over half of the book in one day (without even reading all day) last year. It is one of the few financial books I enjoy reading.


The book begins by promising to help in a practical way, and promises to do so in a short amount of time. Like many books, this volume does not give you "hot stock tips" or other such financial information. It, rather, changes our attitude about money.

After laying out some practical points ("You don't have to make a lot of money to be rich," for example--page 7), Bach gives is overriding theme, and the one for which the book is named:

If your financial plan is not automatic, you will fail! (7)

If you can remember that point, you will do well with this book. It comes up in every single chapter, and makes the book simple to understand.

The introduction is short, but it does grab the reader's attention. If you don't have a copy of The Automatic Millionaire, you may purchase it from the link below. While you may or may not agree with everything Bach says, the book is definitely worth the price of a used copy.

Tuesday, October 30, 2007

What I'm Thinking

As I continue to think about the car situation (scroll down to the last article if you don't know what's going on), I keep thinking about the decision my wife and I made quite a while ago.

We are paying for a car right now, and we really don't ever want to do that again. We know that there is a chance we might have to, but we really hate doing it.

I'm a guy. I get car fever every so often. Yeah, I'm one of those who likes to go to the lots after they close and look around; you know, when the sales persons aren't flocking to you like sharks to blood. I know I've bought my last new car (the car we are paying on is used, in fact), but I still enjoy looking.

So, what are we going to do about our car situation? We're still deciding, but I found a short presentation that makes it harder to even consider a payment. Here it is. Enjoy.

Let's with one car for a while and have over a million dollars, or go more deeply into debt...

We may decide to buy a car, but we are doing our best to avoid a payment.

Just as an update, my wife and I--yes, together--sat down last night with our budget, our bills, etc., and talked about this situation. We feel like Step One is complete: just getting "the numbers" in front of us will help us decide.

Monday, October 29, 2007

Is It an Emergency?

Part of having an emergency fund is knowing what is, and what is not, an emergency. For those who are following Dave Ramsey's "Baby Steps," you know that step #1 is to put $1000 (or $500 if you are single and living alone) in the bank as a "beginner emergency fund."

After you are debt free, the third step is to "finish" the emergency fund; fully funding it to have 3- to 6-months worth of household expenses.

The reason a solid financial plan includes an emergency fund is because there are rainy days. While we don't like to think about it, we will have an emergency at some point. Having the money available is such a help.

I am now faced with the family dilemma of whether we are really in an "emergency" or not. We have our $1000 fund (it's actually nearly $1100), and we are now working the debt snowball. While we have quite a way to go (almost $20000), we are really making good progress.

And then...

The engine blows on our second car.

Here is what makes this a dilemma: we already have one car, and it is really good. While we think we need two vehicles, we might be able to make it on one for awhile. And, we really don't want to go deeper into debt just to have a second car! Add to that the fact that $1000 would not buy much of a car, and we don't want to completely deplete our emergency fund for this purpose.

Such are the times that make our heads spin!

What would you suggest?

Thursday, October 25, 2007

WYTI Links: 10.25.07

Thursday links this week:
  • An Annoying Email I Got (via I Will Teach You to Be Rich) The end of this conversation is where this really gets interesting. Finances are no different from faith in this perspective: advice (even Biblical) is of no use unless we are willing to change.
  • Inexpensive Ways to Woo Your Wife (via Clever Dude) This is a guest post by Clever Dudette (Clever Dude's wife) about cheap ways to keep the spark lit with your wife. You've still got time this afternoon to implement some of these suggestions :).

Tuesday, October 23, 2007

Paying for Gas: Reader Reaction

No, this isn't an article dealing with the high price of gasoline (although we might get more interaction with such an article). We understand that gas prices are "up there," and that they are not coming down any time soon...despite all the emails of ways to "stick it to" the major companies.

This post is a way for you to share you ideas. When my wife and I plan our budget for each month, the hardest expense to figure out is gasoline. We always try to list any places we are going during the month (visiting family, speaking engagements, etc.). We also try to leave some "extra" room for just filling up the car normally (visiting around town, going to work, etc.).

However, at the end of the month, we are nearly always way off. Sometimes (although not often) we have planned too much money for gas. More often than not, though, we have not planned enough. It doesn't usually destroy our budget, it just means that we have less money to attack our debts with.

The two major factors are usually "hidden" trips and unknown gas prices. We always seem to make an extra trip shopping to Florence (round trip, about 120 miles) or we go visit family and gas where they are is 15 cents per gallon more expensive.

One of our first "series" on this blog was ways to save money on gasoline. Those tips still help me, but I need help in this area. How do you budget for gas? It is such an ever-changing amount of money, what are some of your better tips? Please leave comments and help all our readers--and this writer--with this area of their budget.

Friday, October 19, 2007

An Interesting Look

Before reading this brief article, please take a moment to read "A Guideline Budget: How Do You Compare?" on Gathering Little by Little.

If you do much reading on financial planning, or any reading on budgeting, you will probably find a similar breakdown of how to allocate your funds. I find the comparison in the article to be quite interesting.

I also find it eye-opening. Did you notice that nowhere in the "guideline" was there a line item for "Church" or even "charitable giving"? Even if you looked at the miscellaneous category as that kind of spending, it would only be 8% of the budget (at most).

Recently, Wes wrote an article on this blog that I hope you will go back and read. Sometimes faithful Christians really have a struggle with their attitude towards money. The reason is quite simple: we either give like we should and stay deeply in debt (or just waaaay behind the "Joneses"), or we live like everyone else without giving anything but a token to the Lord.

Christians need to remember that, in our "budget meetings," the Lord doesn't just come first. What? Isn't that what we always say? Write down what you make and put "Church" or "Giving" as the first item on the list? Yes, we should do that. God shouldn't get the leftovers, He should get our first "fruits."

However, that's not the only place God should be in our budget meetings. The Lord shouldn't just come first on the piece of paper or on the spreadsheet. He should be in charge of the meeting! Every decision, from the debt reduction to eating out, should have our spiritual lives in focus.

When we do that, we will adjust our "percentages" accordingly.

Thursday, October 18, 2007

WYTI Links: 10.19.2007 (Almost) The "Third Saturday in October" Edition

The "Third Saturday in October" is always a big day in the south...'Bama vs. Tennessee. Too bad it's been relegated to the 11:30 am slot on LFS. Here's Friday's links...
  • 10 Ways to Build the Habit of Saving Money (via Get Rich Slowly) It's subtle, but I love how the title says "Build the Habit of Saving Money." Becoming a responsible steward is a process. Hopefully, children are reared in this direction from an early age. If not, adults need to have the patience to change bad habits into healthy ones over time.
Have a great weekend...

Tuesday, October 16, 2007

Ramsey's First Show a Success

I love DVR! Our young people were involved in our Area-Wide Bible Bowl last night, so I was going to miss Dave Ramsey's first show on the new Fox Business Network. However, due to DVR, I was able to record the show and watch it later with my wife.

The first show, which Ramsey admitted was a little different from the way the format will regularly be, featured more of Dave giving his usual opening speech (middle-class roots, quickly became a millionaire, lost it all, learned more about how money really works, etc.). He also took one entire segment to outline the 7 Baby Steps that serve as the basis of his advice.

There were several phone calls and emails throughout the show, and these will form the major portion of the show on most nights. The only drawback, in my mind, is that the show is only one hour in length. The reason that is a drawback is because Ramsey seemed to hurry through the phone calls to cover more ground. Maybe that will change when the show is almost entirely phone calls and emails.

Overall, I enjoyed the show. If you like Ramsey's radio show, you will like the TV show. The graphics are well-done and easy to read, and the premise is simple: Dave behind a desk answering questions.

Catch the show each weekday at 8 Eastern/7 Central on Fox Business. If you are on DirecTV, the channel is 359.

ATM Blues

A couple weeks ago I was at school taking a Saturday class. My wife had come to town with me, and we were planning to meet some friends for lunch. So over my first break I called to see where they were planning to eat, and they had decided on Chinese food. Knowing that the Chinese restaurant in town didn't take any type of plastic or out of town checks, I went to the student center, and withdrew some cash. Usually I would have had enough cash for the meal, but it was near the end of a busy week. The ATM fee for withdrawing the $20 was $2...pretty steep, but I knew it would be that high. Yesterday as I checked my account balance, I noticed a ATM charge separate from the $22 ATM withdrawal for $1.75 for using a 'foreign' ATM. Since I rarely withdraw cash out of ATMs I had forgotten that our bank charges us if we don't use their ATMs, and of course the bank whose ATM I use charges us as well. So to get $20 in cash I paid fees of $3.75 - that's 18.75%!!! Those rates compare to cash advances on a credit card! Now in all fairness, if I had withdrawn $100 the fees would have been the same, working out to 3.75%, but all I needed was a $20. The lesson of frugality, of course, is to either carry enough cash to pay for the meal, skip a meal, or go where you can use the debit/credit card you intended to use in the first place. Oh, and after all of that....we ate at Subway where I could have used my card.

Just another example that shows frugality often requires planning ahead to avoid unnecessary fees and costs.

Monday, October 15, 2007

Debt: Sacrificially Speaking...

It is a simple fact that every single person (or family) lives off of a specific percentage of his or her (or their) total income. Some are able to live comfortably off 60-80% of their income, while many spend every dime--100%--just in time to get their next paycheck. Unfortunately, many Americans have begun living off more than 100% of their income. The ease of obtaining credit and the pressure to "have it now" have suckered us into buying what we want, even if we can't afford it...we can just swipe it and pay for it later (and for even more money because of outrageous interest).

Debt should be on the mind of Christians for many reasons. Notice just one as we think about living off of a certain percentage:

As Christians, we are expected to give regularly (1 Cor. 16:2) and proportionally (2 Cor. 8:3). Additionally, we should be willing to serve the Lord with our financial blessings (e.g., helping the needy, giving to reputable charities, etc.) (Mt. 25:31-46).

We must ask ourselves a tough question when we consider these financial responsibilities in light of debt (especially irresponsible debt like unpaid-off credit cards, payday loans, etc.): "Am I able to give sacrificially to the Lord if I'm living off more than 100% of my income?"

I don't think it's possible. Notice a little hypothetical math: If I make 10,000 dollars annually, and give $1,000 of it to the church (roughly $20 weekly), I technically give 10% of my income. If, over the course of the year, I put $1,000 on a high-interest credit card without paying it all off, I've just raised the ceiling of my living expenses without raising the level of income. Therefore, I've not really made any sacrifices in order to give that $20 a week to the local church. Theoretically, I could give $5,000 a year--and it would seem as though I was giving an amazing 50%--and turn to a credit card instead of adjusting my spending habits. I get almost anything I want and still give to the church. But that's not the point.

God knows we could use the percentage we give for additional things at our disposal, yet he wants us to trust him (and our elders) to use it in much better ways than we would personally. What if we read that the widow gave all she had--those two mites--but then went and borrowed two more from a Pharisee so that she could buy some more clothes or living amenities? It wouldn't be giving all she had if she kept going back for more beyond her affluence.

May we always consider our financial decisions in light of our relationship to the Lord.

"Be not one of those who give pledges, who put up security for debts." Proverbs 22:26

WYTI Links: 10.16.2007

Some links for your Tuesday:
  • Do We Spend More When We Swipe Plastic? (via Poorer Than You) I've heard this claim over the past several years (of course, it hasn't exactly kept me from using our debit card instead of cash). PTY doesn't set out to disprove the claim, only to verify or validate its source. Officially, there is no firm conclusion. However, I tend to agree with PTY's assessment that it depends on personality rather than monetary medium.

Friday, October 12, 2007

WYTI Links: 10.12.2007

Finally, fall football Friday (weather) forecasts are upon us...

Here's some linkification:

Wednesday, October 10, 2007

5 Days Until Dave on TV

Dave Ramsey, whose "Baby Steps" have helped thousands get out of debt (and are helping many more--me included!)--will soon be on television.

For a long time, a local Nashville station has aired some of the Dave Ramsey radio show on its local market, but that failed to reach many people. So, in just five days, Dave will be on a new network, Fox Business Network, in a primetime slot.

It is worth checking with your local cable network to see if the network will be on in you area. GREAT NEWS: If you have DirecTV, you will be getting the network (channel 359). I enjoy hearing Ramsey's radio program, but don't get to hear it much (since I'm usually at work when he is on). A prime-time TV slot would let me see him (or record via DVR) the program and get a little "help" each day.

Click here for the link from Dave's website, which also features a short video about the move.

Here is the new network's website.

Monday, October 8, 2007

Quotables: Your Money or Your Life -- Prologue

I am currently reading Joe Dominguez & Vicki Robin's Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence and reading Trent's (The Simple Dollar) extensive reviews.

As I finish each chapter, I will post some of the quotes I find interesting and helpful. Think of it as letting the authors reviewing the book themselves.

Today, we flip through the Prologue:
  • What [most money] books have in common is that they assume that your financial life functions separately from the rest of your life. This book is about putting it all back together. It is about integration, a "whole systems" approach to life (xviii).
  • Even though we "won" the Industrial Revolution, the spoils of war are looking more and more spoiled...the old road map for money has us trapped in the very vehicle that was supposed to liberate us from toil (xx).
  • FI (financially independent) thinking is about cartography--making your own map, one that accurately depicts the terrain of your life as it actually is today (xxv).
  • FI (financially independent) thinking will lead naturally to Financial Intelligence, Financial Integrity and Financial Independence (xxv).
The authors make the point that much of our financial shortcomings today have resulted from using the "old road map"--born from the Industrial Revolution--in a time where a much different map is needed. I think it's a strong and plausible argument.

I also appreciate how their approach is designed for individuality. Too many people (especially the most famous ones) in personal finance try to give virtually the same advice no matter the situation.

Dealing with the Heat

After a sweltering Summer, we are now dealing with continued heat on into October. It is again 90+ degrees today in Alabama, as it was all weekend. While many negative things happen because of the heat, there were some lessons I learned this Summer. Some deal with finances and others with just general living.

1. The electric bill will be high; budget accordingly. We don't keep our house particularly cool, but when the temperature is constantly at 90 or more (or over 100 often as it was this Summer), the electric bill is going to spiral upward. Don't let that kill your budget. In many places, you can pay the electric bill in equal installments each month (usually called something like "budget billing"), then pay the difference in December. If you really struggle with budgeting, this may be of some help.

2. Find way to shave pennies off that high electric bill. If you don't have ceiling fans in your house, you are missing out. They can really save quite a bit of money off the bill by continually circulating air. If you have an electric water heater, don't use as much hot water when the temperature is sweltering. Leave comments on some other ways to save on the electric bill in the heat.

3. Drink tap water. While this is always a big savings over bottled water, it is especially true when you are drinking gallons of water. I try to drink at least 3 large glasses of water each day (about 16 ounces each). However, I found myself drinking 4-6 each day this Summer, and I have been drinking quite a bit over the last few days as well. If you are truly worried that tap water is unhealthy, invest in a small filter. It will still be much, much cheaper than bottled water.

4. Drink other liquids. Water is good, but if you get dehydrated (or are "on the verge"), you need something more. Gatorade (or similar drinks) really has helped me in the past, including when I did get dehydrated in the Summer of 2006. Lemonade is also a good help.

5. Learn to work outside in short bursts. While efficiency and frugality always seem to go hand-in-hand, it is never more evident than when the quicksilver is shooting up. When the temperature was over 100, and I had to weed-eat, it was amazing how efficient I got! This can carry over into saving time in the yard while still doing a good job year round.

6. As if I needed to remind you, don't forget to take care of the kids. If they are stuck in a car seat (like mine are), don't just leave them in the car, even with the engine running. Get them out of the car and into a building with air-conditioning. It is better for them to be out in the sun and heat with some air moving than in a car with "still" air.

I hope these help you. It's supposed to start cooling off later this week, and I hope it does. But, when the heat begins to rise again, we can all use these tips to help save some money...and maybe our own lives!

Tuesday, October 2, 2007

WYTI Links 10.03.2007

Some links for your Wednesday:

From (who might have commented on one of Wes's recent posts):

  • What is an IRA account? I know we've mentioned IRA's before, but this is another helpful summary about them. If you're a preacher or paid minister, opening an IRA of some sort is a very helpful thing...chances are, you have no other retirement, like a 401k. Some congregations will even match (either 100% or 50%) your donations to an IRA...thereby giving you free money.
  • How to Budget with ING Direct This highlights the usefulness of online accounts--specifically the ING Direct savings account, which allows for easy multiple accounts.

Monday, October 1, 2007

Giving Our Way to Prosperity (Lesson Thirteen)

This final lesson deals with giving throughout the Bible. As its purpose the chapter has, "to impress upon our minds that God through the ages has taught man to give of his means" (75). There is no way, in a brief review post, that every aspect of this chapter could be discussed. This final chapter deals with one subject, but goes deeply into that subject, making the student understand that giving is not some thing God "made up" to torment Christians.

Giving is good for us. Giving to God is even better. By sacrificing, we put our trust in God and we show our appreciation to Him. This chapter simply deals with how that has been done over the centuries.

Section one deals with 3 tithes that Old Testament Jews were required to make. The first is called The Priestly Tithe by Brother Black because the purpose was to aid the priests in their work (75-76). The other two tithes are not given specific names, but are listed to impress upon us that Jews were required to give a significant amount of their wealth often (76-77).

With that reminder in place, brother Black turns the student's attention to the New Testament law. What are we to give? As we have noted, there is no "set" amount listed in the New Testament, but Christians are still commanded to give. We are to be good stewards of our blessings and we are to give liberally to the cause of the Lord. How do we do that? Section two deals with the mental side of giving. It takes a mental recognition of the need for stewardship (77-78).

Finally, to close the book (79), Black helps us see the fallacy in giving only what is left over. David, in Second Samuel 24:24 understood that he needed to sacrifice in order to please God, not just give Him "something." David said that he would not give to God something that did not cost him anything. I need that same attitude! I need to learn the meaning of sacrifice, and I need to trust God to protect me.

After having read through this book again, and having written these posts, it is cemented in my mind that Christians (me included!) need more teaching on money, stewardship and sacrificial giving. This book may be somewhat hard to find, but it will be worth finding. Adult classes (and even youth classes) would benefit greatly from a study of this book. It is not long (just 80 pages), but it covers so much. If you are looking for material for a Bible class, find this book and teach it. Then, live it!