Friday, December 28, 2007
While things change and some numbers change, we are still focused on getting out of debt on our target date. That date?
December 31, 2008.
We are happy to say that, since April of this year, our debts have continued to go down. We have not added a penny to them. While we do not know if we will "hit" that target date, we are going to do our very best.
Hopefully we can keep you up-to-date on this blog as to how we are doing.
In other news...
Where Your Treasure Is has been added to pfblogs.org. This site is a reader--much like an RSS feed--of scores of personal finance blogs. However, to be added, a site has to be reviewed and approved. I am proud to announce that we were approved yesterday and added late yesterday. Check out the site for literally hundreds of great articles from dozens of blogs and watch for articles from Where Your Treasure Is!
Thursday, December 20, 2007
But December 2007 will go down as a great one in the Faughn house!
We budgeted for Christmas throughout the year and are going to be right at the budget. We still have a couple more gifts to purchase, but we still have money left, too. So that came in right on schedule. Our family helped very much. We all set a limit (that was equal for everyone) on what we would spend on Christmas presents. We set a limit where we could get each person something he/she wanted, without feeling the pressure to buy anything huge. It took some savvy shopping, and some online work, but we met that goal.
Also, our electric bill (for November; paid in early December) was low for this time of year. We have been staying around 50 degrees and have actually been up in the 70s for a few days in late November, so our heater didn't have to run all that much. Also, when we went out of town for Thanksgiving, we turned the unit way down, so it would hardly run. While our water bill was a bit high, it was more than covered by the lower electric bill.
We have had two negatives this month, though. First, we have had to travel a bit more than expected, so we are going to barely make our gasoline budget (if we make it). Gas prices have come down just a bit, which is helping, but we are still paying quite a bit (about $2.85 on average). Also, our DirecTV bill had a mistake on it and the mistake was ours. We had been paying it, but we had been unintentionally late a couple of times. We just did not realize that our payment was due on the 1st of the month, and we had been waiting until the 2nd week of the month, because we pay all our bills out of that one paycheck. We had to pay the extra money, but we also had DirecTV move our "due" date back so we can continue paying without the late charge. We also went ahead and paid January's bill early.
Now, for the big "upside" factor. For the past 3 months, I have been teaching a class for Faulkner University, one night each week, on the Book of Acts. I finished last week and quickly graded all papers and sent in the necessary paperwork on the night of the final. I was hoping to get my paycheck before Christmas (kind of a "special" holiday treat). They were good to me, and we got the paycheck yesterday.
Add all these up, and December became a banner month for us:
1. First, we got cash to pay for our entire trip to the Freed-Hardeman University lectures in February. The trip is already taken care of, which will be a big help in January's budget.
2. Second, we are up to date on all bills (since we got our mistake taken care of with DirecTV). We have never been behind before--and still haven't intentionally--so this is a great relief.
3. Finally, and most exciting for us, is the fact that we paid off...are you ready for this?...over $1100 in debt this month! We did that while going Christmas shopping and taking another 2 trips out of town! By sticking to out budget and using the extra money from my class, we were able to attack our debt.
When you have good news, you just have to share it. And this was great news to us. We're not debt free, yet. But we are working on it, and this month really pumped us up to work even harder in 2008 to finish our journey out of debt!
Tuesday, December 18, 2007
Thursday, December 13, 2007
However, in this last chapter, Bach addresses one more aspect of life that is a financial decision: giving back.
When I first saw the title for this chapter, I was a bit upset. It is "Make a Difference with Automatic Tithing." While this is another discussion, I don't believe in tithing. I believe in giving. I believe we are under New Testament obligation to give, but that we are not told to give a specific amount. Also, I had trouble with the idea of making my giving "automatic." Bach goes so far as to say that your tithe should be automatically deducted from your paycheck, just like the mortgage.
While I still don't agree with all the aspects of this chapter, after some consideration, I turned around a little. Why? Because Bach is writing a book "for the masses," and he still makes giving a priority.
Admittedly, he speaks of giving to a charitable organization or church (and he leans towards charities), but, still, Bach helps us understand that giving is an essential part of any financial plan. He ends the chapter by reminding the reader that some of the wealthiest people of all time gave, and did so before they could really afford to give!
My recommendation is to give, but don't "automate" the process. Take each week and think of how the Lord has prospered you. Give accordingly.
While I don't agree with the entire chapter, there is still quite a lot of worthy information if you are interested in giving money to a specific charity. Bach takes a brisk look at different ways to accomplish this worthwhile goal.
Monday, December 10, 2007
The other is that we still go out to eat sometimes. We don't go a lot, but we do like to "grab a burger" every couple of weeks. We also like to "dine" about once a month. We don't go to five-star restaurants, but we also don't go to Waffle House for our fine dining!
However, just because we set aside money for eating out does not mean we can just pile up a huge bill when we do so. Many people leave a restaurant and have no idea where all the money went. Here are some "little" things that really add up when you eat out:
1. Appetizers and desserts. At most national chains (think Applebee's, Olive Garden, etc.), these can be anywhere from $5-$10 each. Just adding one appetizer and/or dessert can make a bill get large quickly. Why do you think the wait staff asks you if you want them?
Two people: one gets an appetizer, the other dessert: add about $15 to your bill.
2. Not drinking water. I have to admit, I "add this" on my bill nearly every time I eat out. I drink a lot of water during the day, so, when I eat out, I want something else. This being a Christian blog, we're not even going to discuss the cost of alcohol. But just think of a soda, tea or lemonade. $1.50-$3.00 per person! And many restaurants are starting to offer "premium" drinks, like specialty sodas that are even more.
Two people: two "non-water" drinks: add about $4 to your bill.
3. Over-ordering. Some restaurants have smaller and larger versions of certain dishes. Many have half-portions if you will just ask, especially on large dishes. Often we are guilty of letting our eyes tell us we will eat a 12 ounce steak, when we only end up eating 6 or 8 ounces. If you constantly have food left over, ask about smaller portions, OR...
4. Not getting to-go boxes. When you have food left over and you can take it home, but fail to do so, you are leaving money on the table. If an entree costs $10 and you each 3/4 of it, but don't take the rest home, you, in essence, just left $2.50 on the table...and not as a tip. Sometimes you are travelling and cannot take food home, but you often can. Do so if possible.
Two people: don't eat (or take home) 1/4 of two $10 entrees: you just lost $5.
5. Tipping Too Much. I think tipping is a great thing. Many waiters are great and earn their money through kind service and quick response. Others, though, don't. They are just there and don't do well at all. There are some who think you should tip a certain percentage "no matter what, because it's just the right thing to do." I can't disagree more! While I always leave a tip, a waiter has to earn a larger tip.
Two people: overtip by $3.
Add all those things up. On a typical night at a typical restaurant, by just doing these five things, you have over-spent (or lost) $27. Now, do that once a month (which is way less than most people eat out), and you have just thrown away over $300 just in "extras" while eating out.
You can eat out and be frugal, but you have to think and plan ahead.
- Make a list of the current outstanding balances on each of your credit card accounts.
- Divide each balance by the minimum payments that particular card company wants from you. The result is that account's DOLP number. For example, say your outstanding Visa balance is $500 and the minimum payment is $50. Dividing the total debt ($500) by the minimum payment ($50) gives you a DOLP number of 10.
- Once you've figured out the DOLP number for each account, rank them in reverse order, putting the account with the lowest DOLP number first, the one with the second lowest number second, and so on. [Page 206 has a table that shows you small example; using three credit/charge cards.]
5. Now Make It Automatic! You knew this was coming, didn't you? Automatically pay your debts from your paycheck (or checking account) until the debt is gone. When it is gone, call that company and close the account completely, then automatically pay off the next debt, paying all you can each month to get it gone (including the money you were sending into the first debt).
Now, you are debt free, your house is being paid off quickly and you have money going into retirement. There is still one more step, though.
Tuesday, December 4, 2007
According to one survey of consumer finance published by the Federal Reserve in January 2000, the average net worth of renters was $4,200 vs. $132,000 for homeowners. In other words, homeowners were more than 31 times richer than renters! (page 160)