2008: The Year That...

When Leah and I got really serious about getting out of debt, we looked at "the numbers" very closely. We added up our debts from Turner's birth and the debts we already had, and looked at our income and any other variables we could think of.

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!

A GREAT Month!

Usually, December is a hard month in which to really "pay down" debt. With Christmas shopping (which, for us, includes driving = $ for gas) and the electric bill starting to rise, this just usually isn't a very fun month.

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!

"The Automatic Millionaire" (Conclusion)

The last section of David Bach's book is brief, but, in my mind, it is a solid conclusion. Entitled "Your Journey Begins Today!" this section simply gives a "pep talk" to those who might have read the book and thought, "That works for some folks, but not for me."

Bach takes a moment to remind the reader of the most important step to any financial plan: "You just need to start" (226). How true that is! For the rest of this short section (it is only four pages), Bach reminds the reader of the different chapters and asks you to re-read whichever will get you going (or going again).

For me, the best part of this book is the opening story, about the McIntyres. It's one of those "if they can do it, I can, too" type of stories.

Buy or Don't Buy: My Recommendation

I have read Automatic Millionaire cover-to-cover on more than one occasion. I am glad I own the book and it is helpful.

My personal feeling is that someone just starting out needs to read Dave Ramsey's Total Money Makeover first. For my money, that book is more practical and helpful.

That being said, if you have read Ramsey's book and still need a little encouragement, The Automatic Millionaire can deliver. You will obviously find some differences in the books, but you will also find help in both.

So, my recommendation is to buy Dave's book first, but make sure you add Bach's book to your library eventually.

"The Automatic Millionaire" (Chapter 8)

If you have followed this series on David Bach's book, you have noticed that now, just about everything is "taken care of" financially. All debt payments, the mortgage, retirement--it's all being automatically drawn either directly from the paycheck or from the checking account.

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.

Eating Out? Where Does the Money Go?

My wife and I do not have a "blow" section of our budget. We just don't blow money right now (or we do our best not to!). However, we do have a couple of areas of our budget where we splurge every now and again. One is that we still have DirecTV, but we do not have a large package (and we renegotiated our bill down to less than $40/month, with two receivers).

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.

"The Automatic Millionaire" (Chapter Seven)

In this, the shortest "action" chapter of David Bach's book, the author simply gives some tips on how to use your new automatic system to get out of debt and then stay that way. Getting and/or staying out of debt is a major step in becoming a millionaire. As you know, if you don't have to pay Mastercard, Visa, and other cards, you have freed up money each month, and you are not paying interest.

How do I get out of debt? Bach offers five steps, but, before doing that, he reminds us all of how bad credit card debt really is. If you are like the typical American family, you have $8,400 in credit card debt (and only credit card debt!). If you pay just the minimum and never charge another thing, you will pay over $20,000, and you will be paying it off for over 30 years! (pages 195-196)

With those things, in mind, how do I pay off those cards quickly? Here are Bach's five steps:

1. Stop Digging. It's pretty simple when you think about it. If you don't have credit cards, you won't build up debt on them! Dave Ramsey recommends cutting up your cards (which I did a long time ago). Bach never makes a statement quite that bold, but he does recommend that you never go shopping with a credit card in your pocket.

2. Renegotiate the Interest on Your Debt. A lot of people don't even realize you can do this. Check the fine print to find out how much interest you are really paying, then simply call the company and ask for a lower rate. If they act like they won't do it, tell them you will be closing the account and moving (transferring) the money elsewhere. If they won't go lower, ask to speak to a supervisor. If that person won't go lower, transfer the money. Another way to accomplish this, is to move all your debt to one card (or account, since, hopefully you'll get rid of the actual card). Many companies will take a higher amount and give you a lower rate.

3. Pay for the Past; Pay for the Future. Here is where I disagree with Bach. He says that you should continue to put money into retirement and pay off the debt. He says that you will see progress in both areas and that will be a great motivating factor. I disagree. I would rather get rid of the debt as quickly as I possibly can. Either way works, as long as you stay focused.

4. DOLP Your Debt Our of Existence. "DOLP" stands for "Dead on Last Payment." This is basically the same idea as Ramsey's Debt Snowball, but is a much more math-intensive way of doing it. Here are the steps (quoted from page 206):

• 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.

"The Automatic Millionaire" (Chapter Six)

Poor people rent, while rich people own their home. In fact,

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)

No doubt you have been told that before. It is true, at least to a certain extent. Rich people aren't rich because they have a house payment for thirty years. They also didn't get rich with a massive mortgage on a huge house they really could not afford.

The next step in David Bach's plan is to automatically pay off your house. How do you do that? It's not as hard as it may sound, if you follow Bach's plan. There are really just two steps!

1. Buy a house, but buy a house you can afford. From pages 162-165, Bach lists 6 reasons to own a house. These six reasons are worth your time. Bach then takes the time to walk the reader through different kinds of loans and companies that can help you understand more about this massive purchase.

Also in this section, Bach discusses the question, "How much can I afford." While the numbers are a bit odd, he says that a person can afford to spend up to 29% of their income if they have debt (unless the debt is out of control), and up to 41% if there is no debt. Personally, I think both of these are a bit high. I am not comfortable paying more than 25% of my income for a house, because there will always be other costs!

Unlike Dave Ramsey, who recommends getting a 15-year fixed mortgage, Bach says it is okay to get a 30-year mortgage. BUT, only if...

2. Pay off the mortgage quickly and automatically. How do you accomplish that? There are three ways that Bach recommends, all of which equal about the same thing:

First, you can enroll in a bi-weekly payment plan. In other words, you will pay on your mortgage every two weeks instead of each month. How does that help? Run the math. There are 52 weeks in a year, so you make 26 payments. That equals thirteen months!

Second, if your company does not offer bi-weekly payment, you can just send in an extra payment at the end of the year, and ask the company to apply the entire payment to the principle amount of the mortgage.

Third, you can pay "extra" on your mortgage. If you do this, Bach recommends paying 10% extra each month.

No matter which of these you choose, Bach recommends you do them automatically if possible. Once you have paid a bit extra for 3 or 4 months, you will no longer "miss" the money.

Finally, how much of a difference does this make? A house, when purchased correctly, is a great investment, but keeping the mortgage for three decades greatly hinders that investment. Paying just a small bit extra can save you tens-of-thousands of dollars over time! By way of example, Bach uses a $250,000 mortgage. If you paid for 30 years at 8% you would pay $410,388.12 in interest alone! However, if you paid every 2 weeks and had the same terms on your mortgage (30 years at 8%), you would pay $119,000 LESS!

Owning a house, when you are financially ready, is a great decision, but having the mortgage around forever is a terrible idea. Follow these steps and you can greatly help yourself truly OWN your home more quickly.

"The Automatic Millionaire" (Chapter 5)

NOTE: I'm sorry it's been so long since our last update in this series. I really don't have any excuse for the delay, and I apologize.

Chapter five of David Bach's book is entitled "Automate for a Rainy Day." As you might expect, this chapter deals with building an emergency--or "rainy day"--fund. The chapter even contains a purpose statement: "This chapter answers two basic questions: How much money should you put aside in order to protect yourself from the proverbial 'rainy day,' and where should you put it?" (pages 135-136).

Nearly every financial planning book contains this step, because, no matter how much planning we do, things go wrong. There are emergencies. Sadly, these emergencies often sidetrack people's financial goals and lead them back into, or further into, debt. If we have a plan, though, we can avoid such a serious setback.

Bach, as Dave Ramsey does, uses "months" instead of "dollars" to figure out a rainy day fund. On page 136, he writes a short "sleep well at night" test. Here it is:

My monthly expenses currently total $_________.
I currently have $___________ saved in a money market or checking account.
This equals _______ [insert number] months' worth of expenses.

The numbers can be estimated, because most of us have a pretty good idea how much those are. Tragically, for many of us, the second number is $0!!!

The next step, after realizing that you need money to handle emergencies is to follow Bach's "Three Rules of Emergency Money."

1. Decide how big a cushion you need. Bach sets the minimum bar at 3 months' worth of expenses. He goes beyond Dave Ramsey by suggesting that some people may even need as much as two years' worth! The main thing is that it is enough (1) to cover a certain number of months, and (2) to help you sleep at night.

2. Don't touch it. Bach mentions that many people start saving their fund, only to have an "emergency" all the time! Notice what Bach says, which is worthy of reading and remembering:

What's a real emergency? Be honest with yourself. You know what a real emergency is. A real emergency is something that threatens your survival, not just your desire to be comfortable. (140)

3. Put it in the right place. While Bach doesn't think we should put the money in something like stocks or bonds (because it has to be liquid), he also points out (with a GREAT story, I might add) that we don't need to bury it in our backyard or stuff it under our mattress. You should earn at least some interest on this fund, because you need at least a small hedge against inflation.

Bach's suggestion is to "shop for a rate like you'd shop for a car" (143). His primary location for a rainy day fund is in a money market account, but some pay terrible interest and others have a lot of fees. If you are frugal, you will shop for a car very carefully, trying to get the best deal. The same should be true of a money market fund. Just a small percentage difference, over time, can pay off in a large way.

Over the next several pages, Bach walks the reader through the process of setting up an account and answers several important questions which are worthy of your reading. He even lists several places that have money market accounts that are fairly easy to use.

He then mentions using US Savings Bonds as a possibility. I disagree with him here. While buying bonds has become easier (you can do it online), they have a terrible rate of return and, in my mind, you are helping the government use debt!

Finally, Bach mentions the question, "What if I'm in debt?" In other words, if you aren't debt free, do you need to build up an emergency fund. Bach differs from Dave Ramsey here slightly, bu the principle is the same. Whereas Ramsey says you should start off with $1000 in your emergency fund, Bach says you should work toward building up one months' worth of expenses, then go back to paying off debt aggressively. To me, either is acceptable and both are reasonable.

Of course, Bach says over and over that you should automate the savings into this account. In other words, when you set up your rainy day account, make sure you set it up to automatically come out of your paycheck (or your checking account) at a specific time each month.

With these steps out of the way, Bach has you paying off your debt and building up your emergency fund at the same time. While that's not my favorite way of doing it, the benefits are there, if you can stick with the program.

It's THAT Time Again

Last week we had the greatest holiday of the year: Thanksgiving. For many, the day after Thanksgiving begins a frenzy that won't end until December 25, as shopping lists are filled to buy gifts for loved ones and friends.

However, when people are in debt (or saving for another financial goal) how does that family not get side-tracked during the buying frenzy of Christmas? Here are some suggestions.

1. Have a limit and stick with it. The best way to do this, in my mind, is to discuss ahead-of-time with your family how much you can spend on each member of the family. We have done this in my family and it is already helping us stick to our Christmas budget.

2. Look for sales, but don't get duped by every "sale." Just because Store A has a shirt for 25% off does not mean that the shirt is quality. Make sure that the price is good for the item you are purchasing. Some retailers truly believe in volume instead of quality this time of year. I would rather pay a couple of dollars more for a quality item. Also, make sure the "sale" is really a SALE. Sometimes prices are marked up, then marked a certain percentage "off," and you are right back at the original price!

3. Shop online before shopping in person. You can find great deals online, but you can also find out what things are really selling for. Many times, when you shop online, you end up paying more for the item because you have to pay for shipping. Factor that in! If the item is going to be more with shipping, go to the store, but make sure you know what you could have paid online. Sometimes, for bigger-ticket items, stores will bargain a bit.

4. If you find a deal, don't spend more just to reach your limit. For example, if you have $50 set aside for your sibling and you find "THE BLOUSE" that she has been wanting for $30, don't feel obligated to spend the other $20 on another gift. Take that money and pay down a debt, or use it for gasoline on your Christmas gift-giving. The people you are buying for already know you love them, and they will never know that you got a good deal.

5. Remember your goals. I can't overstate this. If getting out of debt is a high priority--truly a high priority--you will not overspend on Christmas. This is a time of year that will really test your dedication to your financial goals.

Enjoy Christmas shopping. Be kind to those in the stores. Don't ruin their experience. But make sure you don't lose focus of your goals when it comes to your finances.

WYTI Links: 11/21/2007

Here's a mid-week set of links to go around...have a great holiday week!

10 Easy Ways to Save Money Without Much Effort (via Consumerism Commentary) Thanks to Adam for submitting this link last week...

What If You Make Maximum Retirement Contributions For 20, 30, 40 Years? (Roth IRA, Traditional IRA, 401k, 403b) (via No Credit Needed)

Organization 101: A Visual Guide to How I Manage the Information in My Life (via The Simple Dollar) Trent uses a system very closely akin to David Allen's "Getting Things Done" philosophy. Here he spells it out...and includes pictures.

Would Jesus Have an Emergency Fund? (via ChristianPF) This addresses an interesting thought we probably have all considered about the balance of saving for the future and using our blessings for God's good.

MP3 Players for Nine Year Olds? Whatever Happened to Simple, Inexpensive Fun? (via Money, Matter, and More Musings) In the holiday shopping spirit...

Don't Pass Up Free Referral Money

We've all seen the DirecTV commercial with the play on 'Speed Dating.' "Do you want to make 50 bucks the easy way?" While the commercial was annoying long before the 100th time I saw it, the point should not be forgotten. When I signed up for DirecTV I knew at least 10 families who had DirecTV service. Many of them knew I was planning to get DirecTV. It was only after I was a customer that I found out about the referral program. Had I simply stated when signing up for service that I was referred by my friends with account #: xxxxxx, we both would have received a total of $50 in bill credits. Instead, since no one mentioned this to me, we all passed up on free referral money. It is really quite sad to see how many companies offer free referral money, and then to know how many times service is obtained without anyone getting a referral bonus.

When you are planning to sign up for new service with a company that a friend or family member already has service with, check to see if the company offers referral bonuses. Some that definitely do:

• DirecTV as mentioned offers $50 to the referring customer and the new referred friend.
• Dish Network offers $50 for the referring customer, though I'm not sure if the new customer gets a credit.
• Charter Communications offers $25 for each person on new phone service.
• AT&T offers a variety of $25-50 referral bonuses to the referring friend on new phone service, or new features on phone service (ie. adding long distance or high speed internet).
• Earthlink offers one month of free service or $25 cards for the referring friend on new internet or cable packages.
  
• AT&T Wireless (formerly Cingular) offers $25 for the referring customer and the new referred friend on new wireless plans.
• Many Credit Cards (at least Citi cards) frequently offer referral bonuses to the new card member and the referring card member.
  

I have personally taken advantage of the offers through DirecTV, Cingular (now AT&T wireless) and a Citi card. So, using this frugality tip may benefit you, or at least a friend. Don't pass up free referral money!

Oh, and by the way, if you need someone to refer you to DirecTV, AT&T residential, or AT&T Wireless let me know, I'd be glad to give you the referral info needed to get the credit!

Photo: Sufi Nawaz via stock.xchng.

WYTI Featured

James's article on Life with Pets was featured this week in the Carnival of Financial Planning.

Adam submitted the article, so they accidentally credited him with the writing.

Enjoy the entire carnival (James's article is 3rd) here.

"The Automatic Millionaire" (Chapter Four)

"Now make it automatic."

That's the overriding theme of this chapter, and the idea from which the book gets its name. David Bach is a firm believer in putting as many things on "autopilot" as possible. In fact, for the rest of the book, nearly every step includes the idea of making it automatic.

If you work for a company that will move money from your paycheck before you ever see it, get in touch with them and enroll in a 401(k) plan, but make it automatic! As we mentioned in the last chapter review, Bach also says that, whatever percentage you think you can put away, add one or two percent to it. After just a couple of weeks, you won't miss the money, anyway!

The chapter also contains a very easy-to-understand comparison of the traditional IRA (Individual Retirement Account) and the Roth IRA. As with most financial gurus, Bach teaches that, if at all possible, one should work in a Roth, but only after taking a company match in a 401(k) plan.

This quite lengthy chapter (it's 54 pages in length) also takes the time to show you the names and contact information for some companies that can help you get started with an IRA.

There is one major "plus" to this chapter. Bach takes quite a bit of time to share with the reader the importance of compound interest and of getting started as soon as possible. As you, no doubt, know, compound interest, over time can make thousands of dollars worth of difference if the same amount is invested. A chart on page 97 shows what investing just $100 per month will grow into. If you invested $100 at 10% for 20 years, you would have 76,570. However, if you invested that same $100 and only got 9%, but started 10 years earlier, you would have $184,447! That's almost twice as much, despite making less in interest!

I feel there is one major "minus" to the chapter, too. Bach is a firm believer in the "pyramid" way of investing. He says that, over time, one should move money from investment to investment, getting a little more "safe" (or conservative) as time goes by. For my money, I agree more with Dave Ramsey on this one. If you will take you time and do your research, you can keep your money in good stock mutual funds for your entire life and still be quite safe.

This chapter is long, but it is informative. While I feel that Bach gets off the subject just a bit (or, maybe, he just tries to explain too much about investing in one chapter) the overarching theme is still to pay for your retirement automatically. If you decide that you can write out checks every month, if you are like me, you will fail. "Something" (whatever that is) will "come up," and keep you from putting money away regularly. Save yourself from yourself and make it automatic.

"The Automatic Millionaire" (Chapter Three)

If you think the "Latte Factor" is used several times in David Bach's book, the principle introduced in chapter three is used even more. In many ways, this step in his "automatic" plan is the basis for everything else.

Now that you have found something (or several somethings) in your budget on which you "nickel and dime" yourself into the world of being broke, you can change that. Stop (or greatly curb) your spending on that item. Now you have freed up some money to pay down debt, and build wealth.

The key, according to Bach, though is not just to cut out those small expenditures, it's to make sure you "Pay Yourself First."

By "first," he means "first!" Even before the government. If you work for a company that will help you by putting money out of your paycheck where ever you tell them to, you can easily do this. Simply call or email those in charge of this and ask them to put a certain percentage of your check into a retirement account.

Notice that Bach recommends a percentage, not a specific amount. The reason is really quite simple. If you get a raise, the amount you are putting away for retirement goes up proportionately with that raise.

You may say, "I'm already in debt and living paycheck-to-paycheck! How can I possibly put even 1% into retirement." The answer is this: you have cut your spending by finding your latte factor. Now you can live on less. Also, after just a couple of weeks of doing this, you will be amazed at how you don't even miss the money.

Finally, Bach recommends putting away more than you think you can. Challenge yourself. If you think you can only put away 2%, make it 3 or 4. If you think you can do 5%, make it 7 or 8. Again, after a few weeks, you won't miss the money anyway. And you will be taking advantage of compound interest over time. Also, if your company matches your retirement, make sure you are putting at least the amount they match away. If you fail to do so, you will be missing out on "free" money!

MY TAKE: Obviously, this "order" of doing things is not the same that Dave Ramsey would recommend. We have not even starting getting out of debt (officially) yet. Bach believes in doing both at the same time so that you will see little victories in both categories. While I agree with Ramsey on this one, Bach does make an interesting argument.

Life with Pets

I've had a dog since I was in 4th grade. Charcoal is now about 15 years old, half blind, mostly deaf, seems to have arthritis, and gets bad skin allergies. The last problem means several visits to the vet each summer. The summer after Stacey and I were married, we decided to get a pet, and decided on getting a cat. Along comes Dora (pictured). Then this past summer, Stacey called with a pitiful plea. In a home visit (she's a social worker) she found a stray kitten that was rubbing all against her legs, and would probably die if someone didn't take it in. We now have our third pet, Buster. Poor little Buster has had a hard life. The morning after taking him in, we found him near death in the bathroom he was in for the night. He couldn't stand up, wouldn't open his eyes, and was hardly breathing. We had to take him to a vet other than our usual one, because he was closed. Buster had to go back to the vet a couple weeks later because he was constipated. We've now had both cat's declawed due to getting new furniture. So we've spent about $300 on Buster...and still have to get him fixed.

Along with adopting Buster we received hundreds of extra pets....fleas. We tried everything. Flea collars, flea shampoo baths, carpet treatments, the liquid stuff from Wal-Mart that goes on their backs, etc. Finally, on my most recent trip to the vet, we purchased some flea medication from him. I would have gone to him first, but I was trying to save some money by not buying the prescription medication. In all, we've probably spent nearly $50 at this point on flea medication things...the treatment from the vet was $9 per tube that treats them for one month. We gave it to them, and within days saw an immediate difference.

The frugality moral of this whole ramble is twofold. 1) Call around to different vets. Our normal vet charges much less for seeing animals than the vet we went to in an emergency, which is why we have spent so much on Buster. And we don't care for him as much even! All vets do NOT charge the same! and 2) If your pet has fleas or needs some kind of treatment...you can probably save money in the long run by taking them to the vet immediately.

That's life with pets in the Dalton home!

WYTI Links: 11.09.07 -- High School Playoffs Tonight!

My Alma Mater--Walker High School in Jasper, Alabama--hosts a state playoff game tonight for the first time since I was a Senior (2001). One of our fine young men at Midway is a starter on defense. It'll be chilly out at the stadium, but it should be a fun night of football. Hope your area's teams do well also!

Friday links:

• Behold the Miracle of Compound Interest (via Erin Burt, Kiplinger.com) Start young...start now...
  

• Trimming the Fat: Forty Ways to Reduce Your Monthly Required Spending (via The Simple Dollar) From back in June...some helpful suggestions here...

• 1 Year Ago Today -- 10 Things We've Done to Regain Financial Control (via Gather Little by Little)

• Lessons from the California Wildfires (via Kimberly Lankford, Kiplinger.com)

Quotables: Your Money or Your Life -- Chapter 1, Part 2

Here are some final quotes from the first chapter:

• We haven't just borrowed from "the bank." We've borrowed from future generations... (p11)

• And many of us are out there "making a dying" because we've bought the pervasive American myth that more is better. (p 12)

• Americans used to be "citizens." Now we are "consumers"--which means people who "use up, waste, destroy and squander." (p 15)

• Whoever dies with the most toys wins. Life, liberty and the pursuit of material possessions. (p 17)

The Automatic Millionaire (Chapter Two)

Most people believe that the secret to getting rich is all about finding new ways of increasing their income as quickly as possible. "If only I could make more money," they declare, "I'd be rich." (page 31)

Chapter two of David Bach's The Automatic Millionaire takes aim at our wallets; or, more precisely, how we spend what is in those wallets.

Maybe nothing from this book, or from Bach's entire system, is more famous than "The Latte Factor." Subtitled Becoming an Automatic Millionaire on Just a Few Dollars a Day, chapter two shows the reader how little decisions can cost us BIG when it comes to retirement.

Many times building wealth isn't about making more money; it's about avoiding spending what you already make. That's one of the reasons we have several articles on this blog about living a frugal life.

But, really, that $5 you spend on snacks every day isn't hurting you, is it?

To put it mildly, yes it is! If you saved $5 each day, instead of spending it on snacks (or cigarettes or coffee or whatever), and you invested it for 40 years, you would have around...

$1.2million!

Still enjoying that Starbucks latte?

The simple point is that, if we will make decisions about the small things in our lives, the big things will usually take care of themselves. If you find yourself thinking, "I don't have any money left over to pay off debts [or invest for retirement]," then you need to look at your budget and really think about your spending habits.

Do you insist on having name-brand clothes? Must you have the name brand food items from the grocery store on all items? Do you buy a soda and candy bar at break time? Do you have the largest "package" on your cable or satellite TV?

If you do any of these (or other similar things), you may be costing yourself a huge retirement.

Near the end of the chapter, the reader is taught to track his/her spending for a day (or a week). Track every penny. You may be surprised where your money actually goes. Even if you have a written budget, this is a worthwhile exercise. It helps you truly understand if you are sticking to that budget, or if the budget--or your spending--needs to be altered.

What is your latte factor? How can you change it, so you can pay off debts and retire comfortably?

Getting Things Done

On my personal blog, I reviewed the book Getting Things Done. Many of you are interested in working and doing your job as best you possibly can. I thought you might be interested in David Allen's book.

Click here to read the review of Getting Things Done.

After starting the system, you may want a simple way to do it. I don't own a PDA, so I am just using a notebook right now. However, 43 Folders provides a "Hipster PDA" plan that I may begin using.

"The Automatic Millionaire" (Chapter One)

What a fascinating way to start the book! We all like stories, and this one is interesting and told quite well. David Bach's first chapter, "Meeting the Automatic Millionaire," may not contain a lot of practical advice, but it is the best chapter in the book. While I have read the book 3 times, I have read chapter one probably 4 or 5 more.

The chapter is simply a story. It is the story about how David Bach got the ideas for his plan; and those ideas came from a couple that he never would have expected them from.

Mr. Bach was teaching financial classes, but was still living paycheck-to-paycheck. He was what Dave Ramsey calls, "A broke finance teacher." One afternoon, though, that all changed. Jim and Sue McIntyre came into his office--not for advice as he had thought--but, rather, to show David that if he would just apply what he taught, he'd be rich.

These two people, nearing retirement, didn't make a ton of money (combined around $50,000 average), but owned two six-figure homes free and clear and didn't owe a dime on anything. In fact, as David looked over their stuff, it came to his mind that these two normal Americans had a net worth of just under $2million!

The rest of the chapter simply tells what they did to achieve such amazing levels of financial success. I won't go into detail because it really principles became the ideas for each chapter of the book.

Suffice it to say, if these two normal folks can be wealthy on a regular salary, anyone can! As I said before, this chapter is my favorite, and it is so motivational. If you don't have the book, this chapter is worth the price of the book. It will help us "normal folks" want to do what the McIntyres did.

WYTI Links: 11.02.2007 -- Productivity Edition

Being a responsible steward of God's blessings goes much deeper than just how we handle and view money. We must be responsible for all of the blessings He sends our way.

When we stand on judgment, we will be held accountable for how we used the time we were given. There is only so much of it to go around. No one has any more or any less than anyone else. Therefore, how we use our time goes a long way determining our success in all areas of life.

Here are some "productivity" links for this week. Remember, I'm not necessarily the most productive guy out there, but I did read about it on the internet/play one on TV/stay at a Holiday Inn Express last night...

• David Seah. The subtitle for his blog is, "Better Living Through New Media." He has created many helpful applications for helping get things done more effectively and efficiently. Personally, I use the Compact Calendar for planning (right now, my 2008 version is covered in black, blue, and red ink) and the Desktop Flash version of the Emergent Task Timer (part of the Printable CEO Series).

• Skrbl. I haven't really used this site, but it looks like fun and sounds interesting if you work in a team setting. It's an internet-based whiteboard. All you do is share the URL to your specific board, and others can log in and edit the notes and information written there.

• Mozilla Firefox Cheat Sheet. If you're not using Mozilla's Firefox as your primary internet browser, you're missing out. Most importantly, it's more secure than IE. Additionally, it's far more customizable and efficient. Here's a comprehensive list of shortcuts and cheats for the browser.

• Classic Tie Knots (via Brooks Brothers). Here's a "how-to" guide for several different tie knots. Since many of us wear ties on a regular basis, this might be helpful.

• Building Strong and Memorable Passwords (via Corvus Consulting). You can't be too safe on the internet today. This is a helpful suggestion to creating unique--but memorable--passwords for each site you need login information. I've started using this technique for the various sites to which I login.

• How to Get Up Right Away When Your Alarm Goes Off (via Steve Pavlina). Helpful tip here. Boy do I need to implement it into my routine.

• Make a 12 Sided Calendar (via Lifehacker). This is a fun little project. Definitely needs to be printed on cardstock.
  

Quotables: Your Money or Your Life -- Chapter 1 (part 1)

I've not fallen down on my reading of Your Money or Your Life...I've just neglected the opportunity to post interesting and helpful quotes from the chapters.

Today, let's begin looking at Chapter 1: The Money Trap the Old Road Map for Money.

• "Your money or your life." If someone thrust a gun in your ribs and said that sentence, what would you do? Most of us would turn over our wallets. The threat works because we value our lives more than we value our money. Or do we?

• Even the best of jobs have trade-offs. Midlife comes and we discover we've been living our parents' agenda. Or worse, we've been filling teeth for twenty years because some seventeen-year-old (was that really me?) decided that being a dentist would be the best of all possible worlds.

• And they call [the modern career path] making a living? Think about it. How many people have you seen who are more alive at the end of the work day that they were at the beginning? Do we come home from our "making a living" activity with more life? Do we bound through the door, refreshed and energized, ready for a great evening with the family? Where's all the life we supposedly made at work? For many of us, isn't the truth of it closer to "making a dying"? Aren't we killing ourselves--our health, our relationships, our sense of joy and wonder for our jobs? We are sacrificing our lives for money--but it's happening so slowly that we barely notice.

• Even if we aren't any happier, you'd think that we'd at least have the traditional symbol of success: money in the bank. Not so...The savings rate was 4.5 percent in 1990 [I have an older edition ;)]...The Japanese, by the way, save over 15 percent of their disposable income.

The book does an excellent job of living up to its subtitle, "Transforming Your Relationship with Money..." How we view money will determine how we treat money.

I'll post more quotables from chapter 1 later...

Check out the Prologue if you missed it last month...

"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.

Introduction

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.

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 see...live 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.

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?

WYTI Links: 10.25.07

Thursday links this week:

• How I Live Without Using Credit Cards - My Simple System for Living on a Budget (via No Credit Needed) Thanks to Adam for recommending this worthwhile write-up.
  

• Budgeting is Like Baking Cookies (via ChristianPF) I'm a big fan of analogy/comparison articles. These are some excellent points about budgeting.

• 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.

• Where To Stash Your Emergency Cash (via Michelle Singletary, Washington Post)
  

• 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 :).
  

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.

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.

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...

• Why Money Doesn't Buy Happiness (via Newsweek)

• How to Best Handle Old Credit Card Accounts (via Consumerism Commentary) Having "old" credit card accounts can be a good problem to have...here's some advice on what to do with them.

• 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.

• Thirteen Ways to Reduce the Effect of "Bad Luck" in Your Financial Life (via The Simple Dollar)

• Two for one: 5 Ways Paperless Personal Finance Saves You Money & Risks of Paperless Finance (both via Blueprint for Financial Prosperity)

Have a great weekend...

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.

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.

• What Is Your Status Symbol? (via ChristianPF)

• 8 Personal Finance Lessons I Learned from Monopoly (via Blueprint for Financial Prosperity)

• Getting to Now: How to Beat the Procrastination Habit (via Get Rich Slowly) I've had this stored away in my unposted links folder for almost a month now...never could get around to posting it ;)
  

WYTI Links: 10.12.2007

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

Here's some linkification:

• Six Online Shopping Scams (via SmartMoney)

• Widow Loses Credit History Along with Husband (via Consumerist) This highlights the importance of checking credit reports regularly. You can do it through annualcreditreport.com NOT the one with the catchy advertising jingle (it's not really free).

• 14 Children's Cold Meds Withdrawn from the Market (via Consumerist) If you have young children, take note of what's in your medicine cabinet.

• Planning Your Collegiate Finances (via We're In Debt) I've posted several links to advice for HS grads or college students before; the more those generations are encouraged to view and handle money responsibly, the better.
  

• Going Steady with Your Boss - 20 Reasons Your Job Is Like a High School Relationship (via Money $mart Life) This is rather humorous; I'm sure it's much more applicable for people in professions other than public ministry...just a slight bit of Friday humor for you.
  

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.

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!

WYTI Links 10.03.2007

Some links for your Wednesday:

• The Simple Dollar Book Club: Your Money or Your Life (via The Simple Dollar) I'm two chapters away from finishing my current reading material (Visioneering by Andy Stanley). When I finish (hopefully today), I plan to start Your Money or Your Life and read Trent's detailed reviews. He's previously published a review of the entire book.
• Top 50 Christian Business & Finance Blogs (via Bootstrapper)

From ChristianPF.com (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.

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!

Keep Reading...

I noticed some amazing words just today in Proverbs 3. Normally we turn to Proverbs 3:5-6 for inspiration and guidance--and rightfully so. I think it's a better reading to read through verse 8:

"Trust in the LORD with all your heart, and do not lean on your own understanding. In all your ways acknowledge him, and he will make straight your paths. Be not wise in your own eyes; fear the LORD, and turn away from evil. It will be healing to your flesh and refreshment to your bones."

Obviously that's good stuff. Now notice the very next two verses (9-10):

"Honor the LORD with your wealth and with the firstfruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine" (emphasis added, JS).

The key to financial "peace" or "security" is realizing "peace" and "security" can never come from money or things we can buy with it. Only the Lord is capable of truly comforting us in this life and the next (Phil. 4:4-7). He will only bless financially those who will bless Him (and therefore others, Mt. 25) with those same blessings. Obviously, this goes a lot further than the collection plate.

WYTI Links: 09.28.2007

Just another dial-up week :) [But we're still extremely thankful for the internet we do have]

• Do Student Loans Affect a Mortgage Application? (via Kiplinger Personal Finance)

• Top High-Yield Savings Accounts: Interest Rates & Some Thoughts (via Money, Matter, and More Musings)

• 6 Places Where Precision Matters (via Dumb Little Man)

• Simple Tips to Organizing Your Vital Information - Are You Prepared? (via My Estate Planning Career Blog)

• Is the Value Menu Really a Value? Comparing the Homemade Double Cheeseburger to The McDonald's $1 Version (via The Simple Dollar) This is a classic post. The post itself is intriguing. I think Trent conducted his "experiment" pretty fairly and thoroughly...and in my opinion, the health factor trumps price anyway. It's also amazing to read the comments and see how many people almost seem "offended" that even the cheapest thing on a fast food menu isn't that great of a financial deal. I guess we're still not ready to accept that something we've been told is a good deal is not really as good as it is presented. BTW, advertising is the only difference between Mickey D's and Trent's experiment. Equipment is a moot point (because homes already have cooking equipment and McDonald's billions served have more than paid for their burger presser). My guess is that they're still making dough off that $1 Double Cheeseburger (and an even greater % on those fries and drink). James, you have anything to add from behind the scenes we might not be aware of?

Have a great weekend...

"Giving Our Way to Prosperity" (Lesson Twelve)

This next-to-last lesson in V.P. Black's book gives an interesting perspective to giving. It walks us through the story of the Magi (or wise men) to see their attitude and the gifts they brought to the child Jesus. This lesson is unlike others in the book in that it basically is a sermon. One could read this chapter straight through and it would read like a sermon or lecture on giving. There are no lists or long parentheticals as in other lessons.

To emphasize the giving of the wise men, brother Black mentions these four points about their giving:

1. "They made ready for the offering" (page 69). To emphasize the modern-day lesson, brother Black reminds us of Matthew 6:33 and also the Old Testament story of the widow of Zarephath.

2. "They guarded their offering" (70). While not stated in the text, it is obvious that these men had to guard the gifts they brought, simply because of the distance they traveled and the value of each gift. We often "lose" our gifts by robbers. Brother Black enumerates some of these "robbers" as "need," "carelessness" and "automobile!" (70-71)

3. "They presented their offerings to Christ" (71). They went directly to Jesus to offer these gifts. This shows the desire of their heart as much as the gift itself.

4. "They provided for Christ's needs in their offering" (72). Do we give with needs in mind, or do we just give because we "have to"? That's a question that only I can answer for myself, but that will teach me much about my heart.

The Greatness Of My Cause

Back in the early part of the twentieth century, Booker T. Washington was struggling to build a school for the education of black people in the South – in Tuskegee, Alabama. He had very meager beginnings. He was attempting the impossible. Anyway, Mr. Washington was granted an appointment with the great philanthropist Andrew Carnegie to ask for monetary help in the work. He went. He made his appeal. Mr. Carnegie reached down in his desk drawer for his checkbook and gave Mr. Washington a check in the amount of five thousand dollars. Of course, five thousand dollars was more than now, so it was nothing to be ungrateful for. However, Mr. Washington looked the check over and handed it back with the words, “Mr. Carnegie, it is obvious I have failed to impress you with the greatness of my cause.” And he asked for another appointment. He went home, did his homework a bit better and returned. This time Mr. Carnegie gave him a check for five hundred thousand dollars – one half million dollars! – and the Encyclopedia Britannica says he sent that amount every year for some years thereafter to the work of the Tuskegee Institute for the education of black people.

WYTI Links: 09.21.2007

Sorry for no links thus far this week...my internet has been even slower than normal. Maybe these will load...

• The Simple Dollar Guide to Eating Out (via The Simple Dollar) Look past his advice regarding alcohol; I'm intrigued by his philosophy. Plan to eat out big and expensive (just not very often). We love a meal done right, but we often settle for eating out at cheaper--but lower quality--places too often. We may try to implement a similar approach ourselves.

• Seven Pieces of Financial Advice for High School Students (via The Simple Dollar)
  

• Pre-Career Advice (via Wise Bread)

• Burger King to Offer Healthier Menu Options for Kids (via Consumerist)

• How to Clean Your Home in 19 Minutes (via CNN Living)