Smart Savings: What's my Motivation?

     A lot of people look at me and say “Heath, you talk about saving money for emergencies, purchases, wealth, and overall good financial health, but how exactly do you do that?”  Okay, so I’ve never actually been asked that exact question, but I should be sometime.  More realistically I get this one:  “It’s impossible for me to save money.”  Or “How can you guys afford to save so much cash?”  Or “You don’t understand how hard my life is.”  Or even worse: “My wife/husband spends all my money every month so I have nothing to save.”

     Let me be serious for a moment:  Okay, done.  Now let me be myself for a moment:  You can always come up with a thousand different reasons NOT to save money, but let me tell you I came up with nearly 10,000 reasons to save money.  Her name is Maggie Hudnall, my adorable and very expensive little girl.  You see, when my wife got pregnant a couple years ago we barely had any money saved up. 

     We also didn’t have the best health insurance at the time.  It wasn’t awful, but it wasn’t great either.  It had a $4500 maximum out of pocket per year, which isn’t horrible.  However, when you have a negative net worth, a car payment, a computer payment, and no discipline with your money, that’s a HUGE amount.  Now look at that number and DOUBLE IT.  You see, our daughter was conceived in one year and born in the next, so our max out of pocket had to be paid TWICE.  Couple that with the other expenses incurred and you wind up with a whopping $10 grand for a baby.  This was what I refer to as a WAKE UP CALL.

     My wife and I knew something had to change.  There was no way in the world we were going to be able to afford this baby and our other expenses without some kind of plan.  We knew that, and the money was disappearing fast.  We had to take action.  After a little research and some FANTASTIC timing on God’s part, we went to Dave Ramsey’s Financial Peace University class.  It was offered at our church, and we jumped on it and took advantage of it.

     That class showed us the potential power of savings.  We saw that paying yourself first was one of the most important things you can ever do.  And we tried it.  And it worked.  We got on a budget, first, and then we realized that we could intentionally decide to put away money every month for the purpose of paying for the baby and anything else that came along.  And we did.  We started piling away the money.  I started working overtime left and right to earn some extra cash.  We lived incredibly frugal, I’m talking no eating out, no movies, no new video games, and several months of no blow money.  At one point we were chucking over $1000 per month at our savings and baby bills.  We went crazy.

     And you know what?  It paid off.  No, literally, we paid off the baby bills in cash.  You want to know what feels amazing?  Not having hospital bills following us for months.  Because we paid them off.  You see, bills are afraid of money; the more money you have the faster the bills leave.  If you have enough money, the bills turn right around and leave the second they hit your door.  That’s the best feeling ever.  So we stayed in crazy mode a little longer.

     A few months after my daughter was born we went crazy on my wife’s car, paying the $8000 balance in about four months.  All the while we were still steadily throwing money into our emergency fund every month and it slowly began to grow.  We became debt free except for our house, we piled up thousands of dollars in the bank, and we learned to say “no.”  Guess what?  It worked.

     A lot of people tell me “well it must be nice to make that much money.”  Get over yourself.  My wife and I make just above the national average for a two income home.  And I mean just above.  We don’t make a ton of money but we use it wisely.  Ouch, that word, “wisely.”  Like, wisdom.  We intentionally chose to become wiser with our money, and let me tell you it worked.

     It doesn’t matter how much money you make.  I knew a guy who made nearly $100,000 per year (after taxes, mind you) and was having trouble taking care of his family due to his debts and bad spending habits.  I also know a guy who makes $1000 per month, does what he loves for a living, and is completely debt free.  It has nothing to do with how much you make and EVERYTHING to do with how you spend it.

     Listen, if you’ve been reading my stuff and doubting my words, stop it.  I’m living proof that it works and anyone can do it.  Buckle down, put your grown up pants on, and make it happen, otherwise you’ll always come up with some excuse as to why you can’t.  Make it an intentional goal.  Zig Ziglar says if you aim at nothing, you’ll hit it every single time.  Aim at a target of your own creation and shoot for it every day.  You’ll see tremendous results and your life will change.

     It’s no accident that God says in Proverbs 21:20 that a wise man has stores of food and oil (wealth in those days) but a fool consumes all he has.  It’s no wonder that in the same book of wisdom we’re told to look at the ants, how they harvest and work and store up for the winter.  That’s why Jesus said you can’t build a tower without first counting the costs, otherwise you’ll look like a fool when push comes to shove.

     Make yourself a plan and beat those excuses out of your mind.  People like to say they can’t afford to save money.  I’ll argue that you can’t afford NOT to.  That might be cliché but it’s still Common Cents.

-Heath

PS:  If you didn't get the memo, we've moved over to commoncentsnn.wordpress.com.  Check it out, it's much prettier than this version.  The move will be final on August 5th so don't miss out!. 

Smart Savings: How Money Saves Sanity

     Recently my wife and I went on vacation.  We had a blast and my year and a half old daughter had a blast too.  It was a great break from work and the “real” world.  But when we got back, we picked up my wife’s car from the airport and suddenly the AC had stopped working.  In the middle of July.

     Now, some of you may think “well just roll the windows down a hyuk hyuk” but you don’t seem to understand.  My wife and I are AC junkies.  We’re addicted to the AC in our cars.  Without the AC in our cars we start to feel the humidity slowly sapping away our sanity and selling it off to the highest bidder.  We feel the heat pierce through our very souls and no one wants a pierced soul.  My wife has associated the heat and humidity of tidewater Virginia with a plague of epic proportions. 

     I don’t know if you live in the tidewater area of Virginia, but humidity is the bane of our existence.  It can be 70 degrees out, which in any other area would be fantastic, but the Virginia humidity makes it feel like 100.  There are times when the humidity is actually visible.  You can actually SEE the water hanging in the air, waiting for you to come out and play.  Then it attacks.  It sticks to your skin and never lets go, making you feel disgusting.  If you wake up in the morning like me, you feel a little bleh and need a shower.  I shower and then walk outside and feel like I just woke up again.  The moisture just clings to you in an awful way that leaves you feeling like you need another shower.

     I say all that so I can say this: My wife and I are heat-and-humidity-aphobics.  So when her AC died, we needed to have it fixed ASAP.  The next day my wife took her car up to the dealer who said “I can fix it, but it’s gonna cost $1200.”  Turns out my wife’s evaporator coil had a hole in it leaking freon.  Yeah, that sucks.  And to get to the evaporator coil (don’t know if you knew this) you have to completely disassemble the car.  It’s one of those weird pieces that is buried so deep in the car that you have to pack a lunch to get there.  Trust me, we searched for alternative ways and methods of fixing the car, but this was the only way we could have a guaranteed service.  And we trust our mechanic, mostly because he knows if he crossed us my father-in-law would go all retired Navy on him.  Which would be awesome.

     We needed it fixed, so we took the money out of our emergency fund and fixed it.  Yeah…that’s the end of the story.  You may have been expecting me to lament in agony over how hard it was to save that money quickly or how we were forced to borrow money of some kind to pay it off.  Even after seeing how much it was and that we used saved up money, you may be expecting me to say “man it’s hard now because that wiped our savings out.”  But I told you that’s the end of the story.  The beginning of the story was over two years ago when we decided that one of the wisest things we could ever possibly do was start saving money for emergencies.  To start paying ourselves first.

     Over a two year period of time, we had built up enough savings in our emergency fund that paying for that AC fix was not only easy, but almost painless.  I don’t need to put the actual amount on here, but after we paid the $1200 fee to fix our car and appease our inner AC dependency, my wife and I still have several thousands of dollars saved up.  This isn’t to brag that somehow we’re better than you or that somehow we make more than you.  My wife and I make just barely above the national average for a two income home.  The kicker is that we intentionally decided to start saving money for emergencies long before an emergency occurred.  Granted, it was much smaller at the start, but we decided to aggressively save for the rainy days of life.

     I’ll go into more detail in later posts, but the point of this whole story was to get you to think.  How many times have you had car trouble that brought money trouble along with it?  How many times did you break your glasses and have to borrow or work your butt off (or both) to replace them?  Cars break.  Glasses get lost.  Trees fall on your porch.  Little Johnny goes to the doctor and needs crazy expensive medicine.  Someone loses a job.  Someone dies.  Life happens.

     Emergencies can pressure you to make poor financial decisions if you aren’t prepared for them.  Emergencies will happen because we’re all human and none of us are impervious to life.  But when you have $10 or $15 or $20 thousand sitting there for the express purpose of taking care of those moments, emergencies become little more than inconveniences.  That’s the power of a plan.  Not rocket science, just Common Cents.

-Heath

PS:  Thanks again to all my readers.  I have a quick announcement, the drawing for Jon Acuff's book Quitter will take place on Aug. 1st.  Thanks to everyone who entered, and there are still a few days left to get in.  Share my blog on facebook or twitter and email me at commoncentsnn@gmail.com to enter.

Also, take note because starting August 5th Common Cents will make the move to Wordpress.  Wordpress has a much easier system to use and has many more customization options, so we're making the move Aug. 5th.  I'll be posting here and there until the move if final, but if you RSS'd my blog, please be sure to follow us on Wordpress.  Thanks!

Smart Savings: Introduction

Before I begin let me make a plug for my wife's blog over at Join Jen's Journey.  Click that link to follow her on her 60 day challenge to be healthier and feel better.  She claims I inspired her but she inspires me every day to be the best husband and father I can be!


Now that my vague form of advertising is over, let me begin.


     Saving money.  It's one of those weird things in life that everyone knows about, and everyone even knows it's a really good thing to do, but just about no one does it.  It's just like exercise, eating right, reading your Bible, prayer, and giving to charity.  They are all fantastic things that everyone knows are great for you and yet...people tend to forget about them.  I'm not going to speak to the other topics there in this post (though I did do a post on giving not long ago) but I am going to talk a little bit about savings.
     I'm going to do a series on savings this next couple weeks and really drive home some points, but not in a "I told you so" kinda way.  I'll be doing this in a way that says "I'm doing this, and this is my result.  If you do this, this will be your result," kinda way.  In short, My wife and I have done the things we're teaching.  And, shockingly, it works and has a tremendous positive effect on our life.  So that's what we're going to continue teaching.
     Overall, saving money (and I mean putting money aside every month for future use) is a great way to better yourself financially and should be on everyone's list of priorities.

Proverbs 21:20
     "There are stores of precious treasures and oils in the house of the wise, but a fool consumes all he has."

     Biblically is it wise to store up things you need for use later on.  Join me over the next couple weeks as we break this down in detail and see what God and some Common Cents have to say about savings money.

Until then,

-Heath

PS:  People are still entering to win Jon Acuff's book Quitter.  Share my blog on facebook or twitter and email me at commoncentsnn@gmail.com to enter!  Drawing will be August 1st.

Accomplishment: The Roller Coaster of Life

     I am not, and never have been, a skinny man.  The following is a list of words that have never been used to describe me:  Fit.  Lanky.  Scrawny.  Bean Pole. Tiny.  Lightweight.  With that being said, I’m also not necessarily a huge man.  I’ve never been considered morbidly obese but I have been considered overweight and very unhealthy.  The highest I ever hit was 240 something.  You see, the digit in the “ones” place in that number could have been 3 or 5 or 2, but it didn’t matter because the proceeding digit was 4.  240 something.  My actual reaction was “what the crap, Heath?”  At the time I was working in a restaurant part time and doing school full time.  And I actually slapped myself.  I had let myself go.

     I dropped some of that weight when school started back up, and I got into running and weight training and actually at one point got down to 200.  I lost 40 some pounds.  It felt great.  And then the “real world” came in an socked it to me again.  I graduated college and no longer had a free gym to go to nor a beautiful campus to run on.

     Over the next few years I found all that weight I lost.  I found it in some really odd places, I mean who would have thought I would have left it at McDonald’s?  I found some at Pizza Hut too, and I even found a good portion of it inside the soda cans I bought from the grocery store.  How did it get there?

     I went through “normal” life routines.  I got married, I got a better job, I became a father, all the while saying “I’m going to lose this weight, I’m going to drop back down, I’m going to be healthier” which was ironically always followed by “after things settle down.”  I got back up to 235.  That was as close to 240 something as I was going to allow myself to go.  That was right around October of last year.

     My wife and I went insane.  We started only eating healthy foods and working out and running and all kinds of crazy stuff.  And it worked.  She dropped weight (and still is) and I dropped back to 205!  Holy wow!  It was awesome, and we did that in just a few months!

     BUT.  That’s one of my least favorite words: but.  It always implies a counter to what someone just said.  Kinda like “you’re a great guy BUT I’m not going to date you.”  Or “you know, you’d probably do really well at this job BUT it’s going to go to this other guy’s son because we’re into nepotism.”  In this case, however, it’s “I’m losing weight and feeling great and doing it like a boss but I really really like cheeseburgers.  And ice cream.  And donuts.  Etc. ad infinitum.”  So over the past two months I packed back on 10 pounds (it really didn’t help that we went on a cruise, which isn’t an excuse it’s a reason) and got back up to where I am now, sitting at 215.

     “Heath, what’s the point of all this?”  The point is that discipline can be an emotional and physical roller coaster.  You go up when you have victory and down when you fail.  And you can go up and down several times very quickly and completely lose sight of your goals and progress.  But you have to remember a very important fact about roller coasters:  you only get hurt if you try to get off before the ride is finished.

     This is the same comment Dave Ramsey used to describe the rise and fall of mutual funds.  You invest long term and they go up and down and up and down but as long as you stay seated eventually the ride comes to a complete stop and you walk away with more money than you started.  The same idea goes for discipline.

     One morning I ran well over a mile, felt great and was incredibly proud.  Later on one morning I ran about half a mile and nearly died.  Is it because I’m failure?  No, it’s because discipline follows the natural ups and downs of life.  But the point isn’t the ups and downs, it’s staying on the ride until it’s done.  Getting off in the bad parts means you’ll never be able to experience the good parts and you’ll never see the end results.

     I’m writing this because I’m learning it myself.  You see, I’ve gone from 240 something down to 200 back to 235 and down to 205 and now back up to 215.  It would be incredibly easy to get discouraged and even depressed because I have failed and gained weight back.  But I have to be honest….215 still feels a heck of a lot better than 240 something.  And overall, the numbers are still going down.  I just need to stay on this ride until it comes to a complete stop on the other side of 200.  Then it won’t matter what the “ones” or the “tens’ digit is, because they’ll both be proceeded by a 1.

-Heath

PS:  Drawing for Jon Acuff's book Quitter is open until August 1st.  Share my blog on facebook or twitter and email me at commoncentsnn@gmail.com to let me know about it and I'll enter you into the drawing!  I'm probably going to start doing this regularly, so stay tuned and keep sharing!  Hint: sharing multiple posts puts your name in the drawing once for each share.

Honing your Hustle

     Before I get started let me make a small announcement.  My readership is picking up a little which is great!  I wanted to thank everyone who is following me on twitter (@commoncentsnn) and facebook (facebook.com/CommonCentsPersonalFinance).  Share my blog with your friends and let me know about it to be entered to win a free copy of Jon Acuff's book Quitter.  The drawing will be on August 1st.

Back to blogging!



Honing your Hustle

     Recently I finished a fantastic book, Quitter by Jon Acuff.  It is a great book that gives some insight into how to get to your dream job.  Through the book, Jon teaches that there is really only one way to move from your day job to your dream job:  Hustle.

     It’s a strange word, hustle.  It is defined as “rapid or energetic work” and “to be aggressive.”  Used negatively, though, it has a completely different meaning, usually conning people out of money and even related to being a “professional.”  I’ll leave that one alone.

     But Jon’s right.  The only way to get from your day job that you may or may not love to the job that you know you will love is to hustle.  It’s to really get down to it and work it out.  It’s honestly the same for any goal.  Goals don’t reach themselves, and a goal you can reach by being lazy is a pretty crappy goal.  Zig Ziglar says if you aim at nothing, you’ll hit it every time.

     Dream jobs are nice, but not everyone has one.  I’m working on mine right now (in fact if you’re reading this you’re supporting my dream, so thanks! Tell your friends!).  But I’m also learning to hustle on it.  In fact, as I’m writing this it is before 6 AM.  That’s when I write.  That’s why you probably see my posts first go up in the early morning and then again in the evenings.  I write in the mornings.  I also run in the mornings.  I’m talking early, like between 4 and 5 AM.

     Let me make something perfectly clear, I am NOT a morning person, and never have been.  I’m actually quite the night owl once you get to know me.  But waking up early has its benefits.  Like Jon Acuff says in his book, when you wake up early you get up before your excuses do.  Steven Covey, the author of 7 Habits of Highly Effective People, says that the number one quality of effective people is that they are proactive.  They happen to life, not the other way around.

     Every area of your life is the same.  If you make a goal and really hustle on it, you’ll catch your goal by surprise and Mr. Excuse won’t have time to react.  It’s easy to come up with a million excuses as to why you can’t lose weight, why you can't get on a budget, why you can’t write that book, why you can’t get that job, why you can’t save money, why you can’t be successful.  Because it’s so easy, everyone does it.  I constantly hear people making excuses for their lives, but rarely do I see a person making an effort to move forward and really hustle.  That’s hard and takes some real discipline.

     So if you want to accomplish your goals, which hopefully everyone does, here’s what you need to do:  DO IT.  Work on it.  Work harder than the next guy on your goals and you’ll reach them while he sits back and fails.  Really put some hustle behind your work and you’ll start seeing a real difference.  Proverbs 10:4 says that the slack hand makes one poor but the hand of the diligent makes one rich.  While not fully biblical, the phrase “God helps those who help themselves” isn’t entirely untrue.  He gives us the ability to move forward, we have to choose to move in His guidance.  And that normally takes a little hustle to get where you need to be.

     No one accidentally becomes successful.  It takes work and effort.  But man, reaching your goals is one of the best feelings you’ll ever have, I guarantee it.  It’s just Common Cents, after all.

-Heath

PS:  For my Hampton Roads readers, my next classes are scheduled!  They will be in October and January.  If you like what you’re reading stay tuned for more info on my classes and how you can learn some Common Cents the easier way from someone who had to learn a lot of it the hard way.

Biblical Budgeting: Your Harvest

     This year I recently started caring a lot more about my health.  At the beginning of the year my wife and I were very purposeful about what we ate and what kind of activities and exercise we were doing.  The whole thing came as a progressive movement in my family.

     My mother was a heavy smoker.  She would easily put away a pack and then some a day, though she would never admit it.  My dad was a smoker too, but not nearly as bad.  So the irony of the situation was that my dad was the one who was told that smoking was going to kill him.  Since my mother is the most stubborn woman on the planet (and I mean that in a good way, I definitely inherited that from her) she decided that she would quit too.  And she did.  My mother and father both quit smoking after decades of inhaling clouds of death and cancer.  And they quit cold turkey.  How did they do that?  I mean people seem to think that’s impossible, right?

     And it didn’t stop there.  You see, after my mom stopped smoking, she came across a common problem quitters face:  their taste buds go into overdrive.  So, suddenly, food became the most amazing thing ever.  Needless to say, my mom and dad both put on a few pounds rather quickly.  But my mother (again, incredibly stubborn and strong willed) said that wasn’t going to happen any longer.  My mother, my 50+ mother (she’d shoot me if I put her real age) started to exercise and eat right.

     Mom had never really been big, but not exactly healthy.  I’m sure there were several times my mom wanted to quit and go back to her old lifestyle.  But four years later she is still smoke free and just finisher her first half-marathon.  That’s 13.1 miles, people.  My mother is a shining example of discipline.

Hebrews 12:11

     “No discipline seems pleasant at the time, but painful.  However it produces a harvest of righteousness and peace to those who have been trained by it.”

     The greater context of this scripture is the discipline of God, how God works in our lives to make us stronger and remove sin.  But the truth is wide-spread.  All discipline, whether from God or ourselves, is painful.  That’s the point of discipline.  It is a process of correcting the areas in our lives that need it.  It is knowing where we are lacking and improving it.  But discipline always comes at a cost.

     My mother gave up smoking, started eating right, and started exercising.  It was hard, I heard her say it many times.  It was difficult and took a lot of sacrifice.  She had to give up things she wanted and things she was used to.  It was painful!  But at the end of it, she took in a serious harvest:  good health and a much more physically fit body.

     My sister went through a similar process after her kids were born.  She put on a little baby weight, but wasn’t having any of that.  She worked her butt off, quite literally, and now is incredibly fit.  She actually used her experience to help other people and is now a personal trainer who runs marathons.  So, I guess I said that to make it known that I don’t really have a choice, I have to get in shape too because it’s now a family thing.  And I am.

     I’m just starting my discipline.  I’m running in the mornings, eating healthier, and consciously making healthier choices.  I am in the hard, painful part.  But it certainly helps that I can see the harvest on the other side.  Eventually, I’ll develop my discipline and the pain will go away.  Not only will it become easier, it will actually become pleasant.  That’s the harvest.

     “Heath, what in the heck does this have to do with biblical budgeting?”

     I’m glad you asked, random no-named person.  Budgeting is hard when you first start.  Don’t let anyone tell you otherwise.  Like I’ve said before, you are probably going to fail when you first start.  I say that not to discourage you, but to actually encourage you.  When you know that it’s hard and you know that you are likely to fail when you first try, you will fail and say “oh yeah, Heath said I would likely fail the first time.”  That way, you’ll know in your heart that you may not fail the second time, the third time, and so on.  Eventually you develop discipline and over time you stop failing.  Then, not only does it become easy, but it becomes pleasant.  That’s your harvest.

     Zig Ziglar once said that you don’t pay the price of success, you pay the price of failure.  Success pays you.  It’s true for both physical health and financial health.  If you put in the work and develop discipline, success will pay you with a healthy body and a hefty net worth.  However, if you fail, you’ll pay the price of failure.  For your body, that’s medical bills and feeling awful.  For your money, that’s paying more debts and not being able to retire when you want.

     So get out there and start running the race.  You certainly can’t finish it if you don’t start.  That’s Common Cents.

-Heath

Putting the Cat to Bed: How "No" can Change Your Life

     My daughter is incredibly smart.  She’s actually kinda scary smart.  At the ripe age of 17 months, just shy of a year and a half, she already understand 90% of what we tell her.  Just the other day she was walking around our living room chasing the cats with a blanket.  She would go up to them and put a blanket on them, saying “Night night” as she did.  It was so cute I think I actually puked a little bit of rainbow afterwards.

     Blown away by her ability to understand that putting a blanket on a creature that is laying down means “night night,” we told her to put the blanket on specific cats to see if she knew their names yet.  We told her, “Maggie, put the blanket on Finnigan!” and she would walk over to our fat orange tabby and drop the blanket on him.  Amazed, we tried it with the new kitten.  “Maggie, put the blanket on Flora!”  Sure enough, she understood and went over to our new little black kitten Flora and put the blanket on her.  “Night night!”

     At this point we were rolling.  It was funny and cute, and honestly I should have videotaped this experience and put it on YouTube.  It would have gone viral in about six seconds and I would be collecting advertising checks from YouTube currently.  Gotta remember to have that camera ready.  But the best part was yet to come.

     After my daughter put the blanket on Flora, the little kitten wriggled out from under the blanket and moved away.  My daughter, being the offspring of two incredibly stubborn people, grabbed the blanket and threw it on top of the cat again, this time shouting “NO!  Night night!”  At this point we couldn’t stop laughing as she began to chase the cat around the room insisting that it was time for her to take a nap. 

     The obvious cuteness and humor here is still levels beyond most of daytime television.  But the incredibly interesting part is that my daughter had heard us say “no” enough times to not only repeat it but completely understand its meaning and purpose as a word.  “NO” is a wonderful word that we all need to learn again and completely understand its use.  Just like my 17 month old daughter, we need to learn how to say “No.”  Especially when it comes to our money.

     When we are making financial decisions (which by the way has a very broad scope, from buying a new house all the way down to buying a Buck Double from McDonald’s), we need to always consider the consequences.  Here are three reasons we should say “no” to a financial decision.

     1.       It doesn’t line up with your budget

     This is the easiest and the hardest reason to say “no.”  It should, of course, be the easiest because if you and your spouse didn’t agree to spend money on something you don’t spend money on it.  This seems like a simple idea and should be easy to follow.  But why is it also the hardest?  Because we are tempted by our old system of doing things.

     If you’re like me, then before you had a budget you were stupid.  And I don’t mean like slack-jawed, drool coming out and unintelligible speech stupid.  I mean “WOO HOO I’LL SPEND ALL THE MONEY” stupid.  That was me.  I spent and spent, because I had just gotten a job that overnight had doubled my measly retail manager income.  I was making (at least in my mind) BANK.  So I just kept spending and spending, and when my cash on hand ran out, I’d go get some more.

     This was an incredibly hard area in my life to learn “no” in until we made our budget.  You see, when you use a budget, some people think it’s a strait jacket that keeps you from having fun.  Ironically, a strait jacket is probably the best analogy for a budget, because the true purpose of a strait jacket is to keep a crazy person from hurting themselves or other people.  That’s what a budget really does for you.  It becomes a tool that helps you to not hurt yourself or your family by making dumb decisions.  When the money in a certain area runs out, you stop spending.

     But the temptation is there.  You’ll be three days from the end of the month and the eating out money has long dried up but you still really want Chinese.  Or the clothing fund ran out last week but you still “need” a new pair of running shoes.  Or the soda machine at work (that takes plastic) is just calling your name and your brain is screaming “come on!  It’s just a dollar!”  It’s moments like these that you need to learn that ancient and powerful word, “no.”

     Understand what I’m about to tell you, because it will help you tremendously.  If you made a budget with your spouse (or had someone you trust review it if you’re single) then you made what is commonly called a “written agreement.”  You put down limitations on paper and said you would follow them.  If you don’t go by what is written on that paper, it is no longer just a financial problem.  It has now become an integrity issue.  Keep that in mind, and suddenly saying “no” becomes a lot easier.

     2.       It doesn’t line up with your goals

     Maybe you’re doing well on not overspending on your budgeted areas.  That’s great.  I struggled with it a lot for a while but over time I built up my “no” muscles.  So what’s next after not breaching your agreements?  Making sure you have goals.

     Let’s say you and your spouse made a goal of reaching $10,000 in the bank.  A very admirable goal indeed, and honestly not nearly as hard as you think it is.  Let’s fast forward to the end of the year when you’re sitting at $9500.  You’re so close you can smell it.  You come to the end of your month and you have an extra $300 sitting in your hands.  Do you use that money to come closer to your goal?  Or do you use that money to upgrade your PC’s video card?

     This might be a bit of an easy example, because obviously upgrading your PC’s video card could wait because you’re so stinking close to your goal.  But what if instead of being “so close” at $9500 you were still struggling at $2000?  Buying that video card upgrade might not seem like such a crazy idea, especially if everyone involves agrees on it.  Even budgeted items can be detrimental to your goals if not kept in check.  At the beginning of the month you budgeted to have the money for a video card upgrade, but if not buying that card could help you reach your goal a lot faster, then this is a perfect instance where telling yourself “no” is important. 

     You have to understand that there’s nothing wrong with buying a video card upgrade for your computer.  But doing so will delay reaching your goal.  Decide ahead of time what is more important: the security your family will have with a five-digit savings account, or being able to play Skyrim on ultra-high settings.  Remember, after you flush out your savings you can always go back and buy that upgrade later.  GASP!  Delaying pleasure now to fulfill your goals?  Yeah, that’s what adults do.  They say “no.”

     3.       It doesn’t benefit you

     Overall, looking at your budget every month, you should start to see patterns.  You should really start to see what is important to you.  If this is how you want to live your life, you have to be consistent.  But also, look at your budget again.  Is everything on there really good for you?  Are you budgeting $300 for eating out each month and blowing it at fast food that’s bad for you?  Are you budgeting $200 for your shoe-shopping addiction?  Are you budgeting $500 per month for video games? 

     Yes, by budgeting you get your spending in shape and really learn to control your money, but look deeper than that.  Your budget every month reflects your life.  Every item on that list reflects your values, your hopes, your dreams, your vices, and your faults.  Use your budget as a divining rod to show you the areas of your life that need work. 

     Maybe if you dropped that eating out budget from $300 to $100, took a fifty out of that extra $200 and bought a gym membership, you could lose some weight and save $150.  Perhaps if you cut back on your shoe shopping you could afford that vacation this summer.  Perhaps (and this one hits home pretty hard) if you cut back on video games every month you would have more time to spend working on that book you’ve been telling everyone you want to write.  By lowering your video game budget, you lower its value in your life and increase the value of other things.

     This is why budgeting is so important.  It helps you to control you.  Come on, people, it’s time to put the cat to bed even if it doesn’t want to go.  Learn to say “no” and it will open so many other “yes” opportunities in your life.  Not rocket science, just Common Cents.  Night night.

-Heath

Biblical Budgeting part 3: Family Matters

     One of the most common things I have heard about in studying budgeting and debts are the sad stories of people who get to the point where they can't feed themselves or their children.  This is always a sad thing to hear and it breaks my heart.  I try to help people as best I can and when we can give, my wife and I give.
     All of that was a little mushy, but it's true.  It also is true that it actually angers me when I see people who claim they can't feed their kids but they have incredibly nice cars, the newest iPhone, and can afford to go buy a new pair of designer boots.  I knew a man who "helped" his daughter by taking out student loans for her every year of her college.  This man also "helped" himself to taking out more than was needed for tuition and pocketing some money for his own use.  He kept his finances separate from the rest of the family, and after his daughter graduated he stuck her with the bill.  That is someone who has their financial priorities WAY out of whack.
     So what does the Bible say about our financial priorities?  If you remember my last post, I said that giving should always be our first priority.  Next on the list, however, is taking care of your FAMILY FIRST.

     I Timothy 5:8
"But if anyone does not provide for his own, especially for those of his household, he has denied the faith and is worse than an unbeliever."

Prioritizing Family
     This statement made by the apostle Paul has a very strong point to it: your family should be priority.  This entire passage is about how the church is to take care of true widows and children, but the church has no business taking care of someone that their family can take care of.  That is why it says that is someone doesn't take care of their own they have denied the faith.  Because as much as the church should be engaging in benevolence, we are to take care of our families.  Biblically, if someone in your family is on welfare and you haven't at least attempted to help them, you are disobeying scripture.  Now, if the person leaves your family and decides to reject your help, that is on them.  But we are to take care of our families.  I know too many people that the children have moved out and are struggling financially but the parents are sitting on massive nest eggs.  That is not good prioritizing.
     If someone in your family, be it immediate or extended, is struggling financially, it is not the church's job to care for them.  It is yours.  So help them as best you are able.  If you are able to help financially, do so.  If you are able to help them by giving them a book on finances, do so.  If you want to share my blog with them, do so.  But do something.  Sitting idle and saying "well they got themselves in this mess they can get themselves out of it" is a sinful attitude.  Again, if they reject your help, that's their deal.
     But look at the story of the prodigal son in Luke 15.  That son blows his inheritance on stupid decisions.  Because I'm sure he was a good father (though Scripture doesn't specifically say this) I believe he would have tried to help his son man wise decisions with his money.  But the son refused and wasted it.  How did the father treat the son when he came back, broken and destitute?  He loved him.  Our family members may make poor decisions, but we are to help them, forgive them if they have hurt us, and love them no matter what.

Prioritizing Bills
     Another thing that bothers me is when I hear about people who can pay their bills but pay them in the wrong order.  Listen, if your credit card payments are up do date but you're behind on your mortgage...you have some priorities out of order.  If your car payments are current but your lights are about to be cut off, your priorities are backwards.  If your student loans are current but your kids are going to the neighbor's for dinner every night because you don't have any food, your financial priorities are a little off.
     Now I want you to get out of debt, don't misunderstand.  But I'd rather your credit score plummet than your children go hungry.  I'd rather you lose your car than you lose your house.  If you are in a situation where you have to make these kind of decisions, you need to speak with someone who can help you as soon as you are able.  It's a sad story when this happens, but it happens and so it needs to be dealt with.
     You, your spouse, and your children are more important than any collector calling you, any bill that arrives in the mail, and any person trying to sell you something.  With that in mind, I like what Dave Ramsey teaches:  the four walls.
     When you're building your house, you first have to lay a firm foundation with a budget.  Then you need to make sure you're taking care of your family by putting walls around your house.  These four walls are (in order):

FOOD     SHELTER     TRANSPORTATION     UTILITIES

     You need to eat, then make sure you have a house, then make sure you can get to work, and then make sure your lights and water still work when you get home.  If anything else on your budget takes higher precedence than these things, you need to re-evaluate your budget.  Entertainment is not more important than food.  Credit card payments are not more important than your mortgage.
     "But Heath, my credit card payments are less than my mortgage and I can't afford to pay both!"  If this is your situation, you are in what is commonly referred to as a CRISIS.  You need to do some serious planning on how you can decrease your spending and increase your income.  But when it is all said and done, I would rather you have a horrible credit score and have the credit card company sue you than you lose your house.  And I think your family would agree.
     I'll address more debt related topics in my series on debts, but for now I'll just say that debt is dumb and if you don't want to have situations like the one I just described (which happens a heck of a lot more often than people want to believe) then avoid debt as best you can.
     So keep your family fed and warm first, and then you can have a life afterwards.  This is called being a mature, responsible adult, AKA Common Cents.

-Heath

Biblical Budgeting Part 2: Tithes

     Investments, insurances, groceries, housing, entertainment, schooling…each one of these and dozens of other areas of our lives constantly fight for first place in our hearts.  So how do we know what how to prioritize these things?  What does this has to do with our personal finances?  C. I. Scofield, an American Theologian in the early 1900’s, had this answer:  “Show me a man’s checkbook and I’ll show you where his priorities are.”

     What we spend our money on has a lot to do with what we prize in our hearts.  Even Jesus says this in Matthew 6:21 “Where your treasure is, there your heart will be also.”  Pay attention to Matthew 6, because Jesus gives a lot of really good money advice there.

     So what should our first priority be when we budget our money?  Proverbs 3:9 makes a pretty good case for tithing: “Honor the Lord from your possessions, and from the first fruits of all your increase.”

     Our income is often referred to as the “fruits of our labors.”  This is for a good reason, because as I already said last time, wealth in Biblical times often had little to do with actual money.  Whatever a man produced were his “fruits.”  As this Proverb (as well as MANY other places in Scripture) says, we are to give our first fruits to the Lord.  This is what’s known as the tithe, and Biblically, a tithe is a tenth of our increase.

     Malachi 3:10

“Bring the whole tithe into the storehouse, so that there may be food in My house, and test Me now in this,” says the Lord of hosts, “if I will not open for you the windows of heaven and pour out for you a blessing until it overflows.”

     This is the most common passage quoted to support the tithe in the Bible.  The fact that the person speaking is God Himself gives is that extra “umph” to show us it’s serious.  God tells us to bring our tithe (again, a tenth) into His storehouses.  In Jewish times that would have been for the Levites and their families (those who’s occupation was to minister to their community).  This is the same function that a Pastor serves in modern churches.

     I need to take a minute here and speak my mind on tithing.  If you claim to be a Christian and you regularly attend a local church and you are not tithing, you are in sin.  Completely disregard this if you are not a Christian.  But to those who are, you need to be giving to your local church or else you are disobeying instructions God has given.  I know that I just rubbed a whole lot of you the wrong way, and honestly it’s a gift I have so I’m glad.  Biblically, those who claim to have God in their lives and claim to serve Him need to be supporting those who occupationally serve God.

     The church is not a for-profit organization, but it IS a business.  And it is a business that ministers to the needs of those both in the ranks of its members and out in the surrounding community.  Churches provide fellowship, counseling, teaching, activities, mediation, advising, financial aid, physical labor, training, food, shelter, and the list keeps going on.  Churches don’t get government money to spend on those services, and on top of that the pastors and various other staff have to feed and take care of their families too.  The average senior pastor in America today makes between $70k and $90k per year (http://www1.salary.com/Pastor-Salary.html), and that is not much when considering that the average pastor in America today works between 55 and 60 hours per week every week and rarely take vacations (http://www.churchleaders.com/pastors/pastor-articles/152641-pastors-hours-of-work-studied.html).  Honestly, most pastors could take their skillsets, go to a secular company and make twice their current salary or more.  So support your local ministers and keep them encouraged.  Only 5% of American Christians are giving a full tithe (http://www.church-development.com/Quick-Stats-The%2095-Who-Dont-Tithe) and 30% give nothing at all!

     Read that verse from Malachi again.  It says to test God.  God promises that if you tithe He will bless you.  If you aren’t tithing you need to start now.  Stop saying “I don’t know if we can afford to.”  Listen to me, you can’t afford NOT to, which is evident by the fact that the majority of Christians DON’T tithe and feel like they don’t have enough to do so.  Christians who DO regularly tithe will tell you that it is a source of blessing in their life, both financially and otherwise.  So get to it!  Make that budget and put tithing at the TOP of your list so it doesn’t get overwhelmed by the other needs in life.  

     Remember what Jesus said in the latter part of Matthew 6?  Let’s read it together:

“Therefore do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. But seek first the kingdom of God and His righteousness, and all these things shall be added to you.”

     Another note and then I’m done for now:  Tithes and offerings are two completely different things.  Tithes are the instructed 10% we are to give to our local church.  Offerings are anything above and beyond that and do not necessarily need to go to our local churches.  These are only to come out of abundance and are not to be given if it means you can’t take care of your family.  Family is the second priority for budgeting behind tithing.  I’ll jump on that one when I come back next time.

     Hope you guys learned something today and were encouraged to start using a little Common Cents.

-Heath

PS:  To my Hampton Roads readers, our class in the Denbigh Community Center still has open seats!  Jump over to class registration to sign up today!  Couples can sign up together for a discount!  Follow me on twitter (@commoncentsnn) for updates on our classes.

Biblical Budgeting Part 1: Sheep and Towers

     For those of us who claim to be Christians (and even for those who don’t), it’s important to understand something about the Bible:  It has a LOT to say about money.  I am blown away by the amount of people that are surprised – shocked even – when I show them that the financial principles I follow and teach come out of the Bible.  I normally get this odd head-tilt with eyes that say “Really…that’s in the Bible?” 

     I guess what most people think about the Bible is that it’s just a bunch of flowery words about loving people and God being a cool guy.  The reality is this:  the Bible is a book written by the CREATOR OF THE UNIVERSE.  Guess what?  If He designed how this world works, don’t you think He would know exactly how to run it?  Likewise, if God invented the very concept of money, wouldn't you think He would be the person to ask for help using it?

     Throughout this blog I’ll be sharing a lot of information on what the Bible says about money.  And trust me, it has a LOT to say.  But let’s start small so you don’t feel like you’re drinking from a fire house.  Here’s the first sip, ready?

Know the state of your flocks.

     So what does the Bible have to say about budgeting?  How could a book over 2000 years old have any relevance in the world of contemporary finance?  Get ready to tilt your head, because being intentional with your money was God’s idea all along.

     Proverbs 27:23-27
Be diligent to know the state of your flocks,
And attend to your herds;
For riches are not forever,
Nor does a crown endure to all generations.
When the hay is removed, and the tender grass shows itself,
And the herbs of the mountains are gathered in,
The lambs will provide your clothing,
And the goats the price of a field;
You shall have enough goats’ milk for your food,
For the food of your household,
And the nourishment of your maidservants.

     “Heath…buddy…it’s 2013…we don’t have flocks of sheep and goats…”

     I know that.  But let’s take a minute to unpack what we have here, because it’s intense.  First, you have to understand something:  This was written in the days of King Solomon.  During that time, people didn’t have investment portfolios and tax-sheltered real estate.  Instead, their wealth and livelihood was based on what they possessed, and in the majority of cases that was your “flocks.”  This is why cattle, sheep, etc. are called livestock.  They were a stock of possessions that defined how you lived.

     For a person in this day to not keep track of their livestock would have been stupid.  You needed to know how many you had in order to be aware of your current financial situation.  Livestock was used for EVERYTHING.  Wool for clothing, meat, milk, plowing the fields, trading, payment for services, you name it and livestock was good for it.  So when the proverbs told people to keep track of their flocks, it meant “Keep track of your financial state.”  Let me give you the Heath Hudnall contemporary version:

“Make sure you control the money you have coming in and out now, because you never know what is coming around the corner.  When the markets go down and your income isn't as stable, your kids won’t go hungry because you took care of everything in advance.”

Now, THAT sounds like a financial plan.  Budgeting is the tool that accomplishes that task.  There’s more too.

Count the costs before you build

     Luke 14:28-30
“For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it— lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’ “?

     This is Jesus speaking.  The greater context of this passage is the intense cost of being a Christian, but this simple analogy bears significant weight in our budgeting discussion.  Jesus asks a simple question:  “Who makes a building without a plan?”  If you wanted to build a $500,000 house, you wouldn’t just point to an empty field and say “House, come forth!”  No!  You would carefully select the area you wanted your house.  You would carefully plan out how many rooms the house would have, how many bathrooms, what kind of layout, the roof style, do you want a garage or a carport, how much space in the front and back yard, etc.  You would have a PLAN, otherwise your house wouldn’t come together very well or someone else would make your decisions for you.

     It’s the same with finances.  The average American household makes between $40k and $50k a year, so in any given ten year period it would be completely reasonable to say that the average American family goes through HALF A MILLION DOLLARS.  If you just let it all slip through your hands and don’t make a solid plan, you’ll have no idea where it’s going!  Your house won’t come together correctly!  Jesus is saying that you HAVE TO HAVE A PLAN.  Otherwise, your goals will never be accomplished and people will mock you for your mistakes.  I didn’t say it, Jesus did.  The Bible’s ways aren’t rocket science, but hopefully I just showed you how they are Common Cents.

     That’s all for now, but I’ll be back with Biblical Budgeting part 2 soon.  In the meantime, what are some other good verses out of the Bible on money you guys know?  Share some in the comments!

-Heath

How to Look Forward to the End of Each Month (Budgeting For Dummies Part 4)

     You made your budget, you agreed on set amounts for each expense, and you did your best to live on it. You ROCK!  Good work!  But don't pat yourself on the back just yet, you're only half way done.
     Don't get discouraged, though, because reconciling your budget is not nearly as hard as you think.  It takes some time and some practice, but with diligence it can become the most exciting part of your month instead of a dreaded tedious task.  Here's five steps to successfully reconciling a budget:

1.  Get your bank account summary/receipts/envelopes
   
     If you used a debit card to pay for your expenses or you wrote a check, the information will be posted to your online banking account.  We highly recommend online banking, by the way.  Print your bank account summaries from the first day of the month until the last day, this will show you exactly what has been taken out for that particular month.  Use this information to help you add up your total expenses.
     Take your envelopes (if you used the envelope system) and see if you have any money left in them.  If you do, congrats!  You went under budget!  Don't freak out if you don't, though, because that's what the money was put there for, to be SPENT.  You should also be keeping your receipts in these envelopes, which will help you know what you spent your money on specifically.  (It's a good idea to keep your receipts even if you don't use an envelope system, that way if you go to a multi-purpose store like Walmart and you buy groceries and clothes you can break them out to make sure your totals come up correct.)

2.  Categorize, categorize, categorize!

     Now is the hard part (and if this is the hardest part, you should be fine).  You will need to separate your expenses by the categories you used to make your budget.  This means you go down the list of expenses from your receipts and account summaries and mark everything that was a grocery expense as a grocery expense.  All your gas expenses are marked as a gas expenses.  All your eating out expenses are categorized (shockingly) as eating out expenses.  You may need to take a brief break in between highlighter colors to make sure you don't lose your cool.  Seriously folks, this is like first grader stuff.
     This is a great time to define what may have been "gray areas" of spending.  Was that bag of chips you bought on the way to the beach last weekend a grocery expense or an eating out expense?  Does your friend's birthday present come out of the gift fund, the blow money, or the giving fund?  Does that oil for your car come out of the car fund or the grocery store fund?

3.  DO THE MATH

     Get your calculator, your abacus, and take off your socks and shoes, it's time to do some math!
     Add up each category for a total.  This is easy!  Make sure to double check your math if you need to.  Take each category's total and put it on your budget next to your expected expense.  I.e. if you put that you were planning on spending $300 on groceries, and you actually spent $289, you make your budget reflect that (and you went under).  Add up your total expenses to see if it matches up to what you budgeted!
     The obvious goal is to have spent less than or equal to your budget.  If you spent less than you budgeted, you need to decide (as a couple if married) what to do with the excess money (here's a hint: SAVINGS).  Remember, we're doing a ZERO-BASED budget, which means if you have money left over you still have to decide where to put it.  If you break even, you did a great job and have learned some great discipline.
     PRO TIP:  Try not to go over!

4.  Compare your Outgo to your Income

     Take a quick look at how much you actually pulled in for income this month.  Compare that number to your total actual expenses.  If you have more income than expenses, you have extra money to put into savings, throw at debt, or spend however you deem fit.  However, if you earned less than your total expenses, you have a small problem and need to figure out where that money came from.  If you have to pull from savings in order to make the budget balance, don't beat yourself up.  Learn from this mistake and do better the next month.
     This can be the most exciting part of your month.  This is the moment every month where you get solid feedback on how you're doing with your money.  At this point in time, if you are doing what we teach and you're gaining discipline, you will start to see your debts go down and your savings go up.  This can be exciting!  Use that momentum to keep yourself going for the next month's budget, which is of course Step 5.

Step 5:  Do it all over again for the next month.

     Get yourself into the habit of making your next month's budget after you reconcile this months.  This will help you see where you need to put some immediate focus and keep your mind on the task.  Remember, it takes about 3 months to really get the hang of this budget thing, so give it time and keep at it.

     Another piece of advice:  Once you get used to this process, it can be beneficial to do it every two weeks instead of just the end of the month.  If you really want to be on top of things, you can do this every week.  With practice, this should only take you fifteen minutes per week.  If you can just spare a quarter of an hour each week, you will win financially.  My wife and I have been doing this for long enough that we mostly only do it at the end of the month, but we have also been known to go through the bank account summaries and receipts multiple times in the month (especially if unexpected expenses happen).
     This is not a quick fix to money problems, it's a new way of life that will change you forever.  As you've just read: it isn't rocket science, just Common Cents.

-Heath

PS:  Let me know if you guys have any questions on any of the stuff I'm writing, because I want to make sure I'm not confusing anyone.  Drop me some questions in the

Budgeting for Dummies part 3

     Now you've made a list of expenses, and you've set aside specific amounts for things like groceries, eating out, gas, clothing, and other expenses.  You've lined your bills up and decided when they will be paid. Good work!  You're on your way!
     Let me take a minute to discuss static expenses versus variable expenses.

STATIC EXPENSES
     Static expenses are those that do not change from month to month (or only change very slightly).  These expenses are things like your mortgage payment.  That's not going to really change from month to month.  Your car insurance payment, your life insurance payment, the cost of your home security system, your Netflix payment, gym membership, etc., those are all things that don't change month to month.  For things like these, sometimes it is best to have automatic drafts as your payment style.  That way, since they're the same every month and they generally come out at the same time every month, you can just have them done and over with.
     However, that doesn't mean that you should do that with everything.  It's going to depend greatly on your personality.  My wife (she handles the actual paying of the bills mostly) prefers to have some things with either a written check or a manual online payment.  She likes having control that way, which is fine.  We have several of both, autodrafts and manual payments for static bills.  Find what works best for you and your spouse (or just you if you're single).
   
VARIABLE EXPENSES
     Variable expenses are things that can and likely will be different every month, especially since you have direct control over them.  These include groceries, eating out, gas (this may seem like a static expense but trust me, it's not), entertainment, blow money (which will have it's own paragraph in a minute), clothing, cleaning supplies, etc.  These are all things that you directly control.  Variable expenses are often the source of the most conflict because it can be hard to agree how much needs to be in each category.
     Since you have the power to limit these expenses, you also have the power to overspend in these categories as well.  If you (as a couple) decide that you're going to spend $350 this month on groceries, you need to stick with that or else you've blown your budget.  A lot of variable expenses are best paid for in cash.  Let me repeat that, in cash.  We do this by using an envelope system.

The Envelope System
     The envelope system is a very old, very effective way to keep your expenses within your budget.  If you and your spouse agreed to $350 for groceries, then at the beginning of the month you take out $350 from the bank, put it into an envelope marked "groceries."  With that done, you need to make sure that only groceries are bought using that money and that no groceries are bought without that money.  Yes, that means if you get all the way to the grocery store and you forgot the envelope you need to turn around and go get it.  The reason is this:  You can't overspend with cash.  If at the end of the month there is no money left in the grocery envelope, you eat leftovers or canned goods (because we ALL have canned goods sitting in our cupboards we're not eating, don't lie to yourself).
     This is GREAT for groceries, eating out, blow money, entertainment, clothing, birthday presents, and more.  My wife and I use this system for many things.  Gas is a tricky one, though, because we have a baby girl who sits in the car seat.  We don't use cash for gas for that reason, because we're too lazy to get the baby out of the car (especially if she fell asleep) and go inside to pay cash.  We use a debit card for that.
     In fact, for anything you don't use cash for, you should be using your debit card.  This means the item will show up on your bank statement soon enough and you can keep track of how much you've spent.  At the end of every month, you should be reconciling your budget, and I'll have another blog post for that one.

Blow Money
     Let me talk just for a minute on something near and dear to my heart: blow money.  Also known as burn money, mad money, fun money, etc.  If you are on a serious diet, you have to have a meal each week that lets you eat something bad for you, otherwise you'll go insane.  It's the same with money.  You have to have a little bit of crazy in your budget to maintain sanity.  Dave Ramsey says blow money is in the budget "in memory of your former plan."  It's to give you some money to spend on impulse buying or on snacks/extra food or on that new book you saw on Kindle or whatever.  If you set aside this money every month (not too much, mind you) for the specific purpose of blowing it, then you give yourself some freedom to be a human being.  You cannot get mad at your spouse for spending her blow money on whatever she wants, because that's what it's for.  Your spouse can't get mad at you for the same reason.  It was an agreed on item in your budget.
   
     That's it for now, friends, but look for my next post to talk about reconciling your budget and a future post to deal with the Biblical rules for budgeting.  Leave me some comments below to let me know what you think and ask any questions you might want answered!
     In the mean time, just remember that this isn't rocket science, folks, just Common Cents.

-Heath

Budgeting for Dummies part 2

     So you've decided you need a budget but you have no idea where to start.  First, congratulations!  You've taken the first step on the road to financial success.  Second, let me encourage you to KEEP AT IT.
     Making your first budget can be frustrating.  Honestly, making your first few budgets can and will be frustrating.  If you're married, budget making will cause conflict.  If I warn you now, you'll know to expect it and it won't catch you off guard.
     Budgeting with a spouse will cause conflict, but you need to understand that conflict isn't always bad.  This kind of conflict can be very good for your relationship, because you're both finally opening your eyes to your spending habits.  Some of your spending habits are going to be very, very ugly.  If you've never been on a budget and you've never really taken into account where your money goes, it's highly likely you're going to find an incredibly high amount of wasted money.
     STOP.  If you find that you have been wasting money, you need to immediately do the following:
     DO NOT SHAME YOURSELF OR YOUR SPOUSE.  While neither of you "knew" that the money was going down the drain, you both also knew it.  If your spouse is spending money without your knowledge or vice-versa, this is the time when that information comes to a head.  Don't shame them or yourself.  It took lots of guts to bring that information to the table and even to make the decision to attempt control.  Be proud of your spouse or yourself for bringing that to light.
     DON'T FREAK OUT.  You may have been wasting hundreds of dollars on things like shoes, your spouse may have been wasting hundreds on fishing equipment.  Your wife may have been wasting money on expensive haircuts or magazines.  Your husband may have been wasting money on car parts or model planes.  I don't know what the situation is, but one or both of you have been throwing money away.  And you did it because you didn't have a plan.  When it comes down to it, it's both parties' fault, and it is also both parties' chance to improve it.
     RE-FRAME THE SITUATION.  Instead of looking at the unneeded expenses as a waste, look at them as an opportunity.  Now you know the areas you both need to cut back in order to win.  This helps you to find "extra ammo" in your budget every month that you can throw at things like savings and debts!  These expenses may have been hurting you for a while, but the knowledge of them helps you to control them!
     MAKE COMPROMISES.  "But honey, I need my hair cut at that salon!"  "But dear, I needed that GPS fish finder!"  "I needed those cook books to keep my other 30 company!"  "I needed a vente-caramel double blended mochiata supreme with extra foam every day for the past month!"  These are the things you're going to say.  I obviously embellished them just a little bit to show you how silly you'll sound to your spouse when you make that argument.  Listen, if you're married, your budget is a joint agreement.  You BOTH make decisions on it.  If you "need" a professional stylist to do your hair for $130 every month, then you and your spouse need to agree on that and budget accordingly.  If you "need" an expensive gourmet coffee every morning on your way to work, then you and your spouse need to agree on it.  If you can't agree on it, then you need a compromise.  "Honey, I'll try to find a less expensive haircut."  Or "Babe, I'll try to suffer through the coffee that's free at my office a couple times a week to save money."  You have to work together!
     It's only when you work together that together you can achieve your goals.  Remember, this isn't rocket science, just Common Cents.

-Heath

Budgeting For Dummies part 1

     So, if you're not on a budget, I'm not trying to call you a dummy.  I'm just trying to imply here it's much much smarter to have one.
     Many people have the completely wrong idea as to what a budget is.  Let's look at the definition: "an estimate, often itemized, of expected income and expenses in a given period of time." (Dictionary.com)  That's all a budget is.  It's literally a list of what you make and what you spend.
     There is a hand-cuff connotation that comes with budgeting.  Many people hear "budget" and think "Oh man, I have to give up all my fun!"  That's ridiculous.  Nothing in that definition says that.  But people who don't live on a budget see it that way, because they see it as something that will limit their abilities to spend money how they want.
     On the contrary, a budget gives you POWER over your money.  John Maxwell says "a budget is telling your money where to go instead of wondering where it went."  By deciding in advance what your money will be doing, you completely control it.  It's your money, after all, if you don't control it, it will control you.
     We teach that there are four major types of budgets:

     The Spray and Pray:  You spend all your money and hope to God that it all works out.
     The Hermit Method:  Spend nothing and shove it all in a mason jar you bury in the back yard.
     The Government Approach:  You actually make a very pretty budget, agree on it, and spend it all...then keep spending...and spending...and spending.
     The Effective Budget:  You control every dollar you make by putting it down on paper before you actually spend it.  This is a type of zero-based budget, where every month your income minus your expenses equal ZERO.

     "But Heath, if we spend everything so that it equals zero, we won't have any money left for fun!"
     You aren't listening and you have a misunderstanding of the word "spend."  When you know you make $X per month, you decide at the beginning of the month how much you're going to give, how much you're going to save, how much you're going to eat, how much goes into the gas tank, etc.  All of those are in the category of "spending."  You spend money when you put it into the offering plate at your church or send a check to that charity or give some to your neighbor.  You spend money when you put it into a savings account, when you invest it (hopefully wisely), and when you put it aside for future purchases.  That's what I'm talking about.  YOU decide how much money goes into each category of your budget.  As long as you put every dollar you make somewhere intentionally, your budget will zero out and you have complete control over every dollar you make.
     If you want to have $200 for food this month and eat really cheap food only, that's your decision.  If you want to spend $1000 this month on food, that's your decision.  Budget doesn't automatically mean that you drop all your expenses to the lowest possible amount.  Just because some people mean that when they say "living on a budget" doesn't make it true.  It's just a list of your incomes and expenses.  We really need to take the word back and help people see that the context is NOT negative but positive.
     Now, if you KNOW that you need to save more money and you KNOW that you need to pay off debts, with a budget you can see how much you're spending on certain areas (like entertainment, eating out, hobbies, etc.) and be intentional about lowering some of those areas to increase your savings or debt payments.  This is part of the control you get from a budget.  You make the decision, not someone else.
     Once you've got the budget written out, you have to LIVE ON IT.  You can't just make it and throw it to the side like it's just a theory.  If you live on what you say you're going to live on, you succeed and learn discipline.  I promise you 100% that if you do this you will begin to see results.  Tons of people including my wife and I say the same thing when they finally make a budget and live on it: "It's like we got a raise!"
     It's like a raise because you stop losing track of your expenses and gain complete control.  It's not rocket science, people.  Just Common Cents.

-Heath
   

Budgeting is like Cleaning House

     I used to work in foreclosed homes.  My mother's business would receive contracts on foreclosed homes to do repairs and cleanings so the house could go back on the market.  It was quite...the adventure.
     Sometimes when people would get foreclosed on, they would own up to it and move either all or almost all of their stuff from their home before we came on the scene.  Other times, however, people would just leave EVERYTHING.  More often than not, the people who left everything were chronic hoarders.  Have you seen that show on TV?  Wall to wall filth, trash, clothes, etc.?  Yeah.  Imagine having to clean that out.
     There are a few things we would almost ALWAYS see in the foreclosed homes.  It got to the point where I would make a mental note of these items, because they were always one of the saddest parts of the job.
     First, you would always (and I'm talking always) see old holiday decorations.  When you lose your house, I guess you're just not in the mood to celebrate anymore.
     Second, we would almost always see family photos left behind.  Usually about 9 out of 10 houses would have this.  These photos were always of smiling people enjoying their lives, which was sad because I knew that the circumstances that led to my being there was a long journey of pain and loss.
     Third, the one thing you would almost always see was the leftover bills, lawsuits, and notice of foreclosure.  When these were left behind, you could almost feel the tears shed on the papers.  It always made me sad.
     When people's lives get out of control, especially their finances, it can lead to devastating consequences.  Bankruptcy, divorce, and foreclosure are all brothers who often like to come to the same house at the same time.  This is why it's so crucial to get your life and money under control, because otherwise you'll end up with nothing.
     In a way, budgeting is like cleaning your house.  If you keep your house clean, keep it orderly, take regular time to care for it, then it won't become a hoarded house.  If you let the mess get too big, however, you can start to panic about how much work it will take to clean it, and it will just sit there.  Then the piles get bigger and bigger until finally you are surrounded by junk and have no idea what to do about it or how you got to that point.
     Money is the same.  If you keep your money in check, manage it wisely, and take regular time to care for it, you won't become a slave to your debts.  Financial problems are just like filth, because left alone they tend to get bigger and bigger until they completely surround your life.  You'll be scared, frustrated, and have no idea what to do or how you got there.
     When your house is full of junk, there are two options:  burn the house down (extreme and not advisable), or put the gloves on and get to work.
     When your life is full of financial problems, there are two similar options:  bankruptcy (extreme and not advisable), or putting on your gloves and getting to work.
     All that junk didn't get there by itself and it won't leave by itself either.  Get on a budget and keep the junk out of your house.  Not rocket science, just Common Cents.

-Heath

Getting Started

     Just had a fascinating conversation with my pastor.  I'm a member of Poquoson Baptist Church in Poquoson, VA.  Our pastor, John Pouchot, is an honorable man of God whose honest desire is to see the people in the church get closer and deeper with God.

     As I said before, I'm a Christian, and unashamedly so.  My wife and I base all our financial teaching on biblical principles.  Our pastor knows that, and has asked us to offer our class at our church!

     So now that you know that I'm teaching a class, it would probably be a good idea to let people in on what the class will cover.  It's broken into five/six lessons.  They all alliterate, because I'm a good Southern Baptist, after all.  The classes are Budgeting Basics, Smart Saving, Debt Destruction, Family Finances, Cost Cutting, and the optional (but highly recommended) Generous Giving.  

     These six classes are based on my foundation philosophy (which kinda alliterates).  That philosophy is that you start with budgeting.  Once you're budgeting properly, you can begin really saving.  Once saving becomes a discipline, debt elimination becomes possible.  Debt elimination allows for better wealth building.  The underlying motivation for the entire process (and therefore both the top and bottom of the foundations) is giving.

     Let me break that down for your piece by piece.  Budgeting, for most people, is a nightmare.  It feels like shackles on your life that takes away all your fun.  But you're missing an important aspect of budgeting if you fear it:  YOU are in charge of your budget.  It will only limit your life if you make it do so.  A properly balanced budget will not only allow you to enjoy your life more but it will actually feel like a raise!  We'll be teaching a zero-based budget in our class, and soon I'll have another post all about what that is and what it entails.

     Saving is a need, because when you have money in the bank, breathing gets a little easier.  Unexpected events are not really unexpected, because they happen to everyone.  So having an emergency fund is a necessity.  Whether small or large, the amount you have in savings is directly proportionate to the level of relaxation your life can have.  We will also teach people to save for purchases, and ultimately save for wealth.  Look for an all out savings post in the future.

     Debt is a serious problem in our culture, so we want to help people break through the myths associated with debt and see the freedom of living without it.  This is a HUGE topic and will likely be the source of the majority of my posts, tweets, and the like.  We teach a simple idea:  DEBT IS DUMB.  My wife and I paid off our debts other than our house, and our next major goal is to live in a paid off house.  Just imagine what you could do if you didn't have any payments.  The average american household pays almost $2,000 to debts each month.  That's an extra $2,000 that could go towards investments, giving, and purchases.

     Your family is something you should want to keep.  Money affects all your family relationships.  When you're married, it's not "my money" and "her money," it's "OUR money."  That being said, if you don't learn to work together you will have a hard time winning with money.  People who tend to win with money tend to win with relationships too.  We'll also be giving tips on how to teach money handling to your kids.

     Cost cutting is a fun way to save money.  We'll teach proper couponing, where to find good deals, how to buy good used stuff, and how to negotiate prices with integrity.

     Lastly, giving is the most fun you'll have with money.  It's the most important thing we can do with money. Getting to the point where you really understand that your money isn't yours will free you to give generously and bless those around you.  We are just asset managers for God.  It's all His, after all.

     Come back soon for expanded posts on all these topics and even more.  I'll try to keep things short and to the point, I know you have a busy life just like I do.
     *EDIT*
     If you're in the Newport News area and want to attend my class done through the City of Newport News, visit the registration site at https://activenet009.active.com/nnparksrectourism/

Remember, I'm not teaching rocket science, I'm just teaching Common Cents.  (Yeah...I know it's cheesy but I have to have a tagline of some kind...give me suggestions if you have any!)

-Heath

PS:  You can now follow me on twitter @commoncentsnn!  Look for a facebook page soon too!

A New Journey

     Good evening everyone who happens to come across this blog.  I hope you enjoy yourself as I drag you along on my blogging adventure.  I've never written a blog before, but I figure I've got plenty of opinion to go around and even some research and fact to back it up.
     One of my passions in life (and what I know God put me on this planet to do) is helping people learn.  I know that I've been given the gift of teaching, and using it to help those around me is the most rewarding thing I do.  I try my best to have the heart of teacher in all things, and though sometimes I may fail I will press on and continue doing my best to help.
     The last two years of my life have been, without a doubt, two of the most amazing years of my life.  But they have also been hard.  Let me give you a little background on me.
     I was raised in Gloucester county, just north of Newport News.  At the age of 16 I became a Christian.  That changed my life, for sure, but that's just the beginning of my story.  I attended college and began studying the art of public speaking.  College was fun, and I successfully managed to squeeze 4 years into 7.  Before I graduated with my degree in Speech Communications, I met and married my wonderful wife, Jennifer.  Now the story starts getting good.
     After a year of wonderful marriage, my wife became pregnant.  It was at this point in time that we realized that we had a problem.  Our spending was out of control.  I blame mostly myself.  Having never really learned much about money, I went on spending sprees just because I wanted to and I "deserved it" for working hard.  I treated our bank account like my personal piggy bank and ATM'd us to death.
     My wife wasn't perfect, either, but at least she had a good head on her shoulders and forced us to save a little money here and there.  But neither of us truly knew what it meant to have discipline in our finances.
     That all changed when our church put on a finance class by Dave Ramsey.  Now, if you haven't heard of Dave Ramsey, you really need to look the man up sometime.  He's got some great books and a really good finance program.  But this blog isn't about Dave Ramsey.  It's about how my wife and I took control of our money and changed our life together.
     And change we did.  The biggest thing Mr. Ramsey's class did for me personally was give me a wake up call.  The message my wife had been trying to get through my thick skull finally started to sink in, and I immediately owned up to my immaturity.  Remember, at the time my wife was pregnant.  We had a car payment, a computer payment, a mortgage, and some pretty hefty baby bills to pay.  Our insurance wasn't horrible but it wasn't the best either, and since our daughter was conceived in one year and born in the next we had to pay our deductible and out of pocket max twice.  Yeah...that sucked.
     And I was ATMing us to death with my spending sprees.  We had no plan, no drive, and no real knowledge of what it took to fix our mess.  So we took the advice given to us and sat down and did something that makes the average American shudder: we made ourselves a b u d g e t.
     Budget...the word doesn't come out of your mouth easily.  It hangs on your tongue and tries to go back down your throat.  But despite the negative attitude most people have towards budgeting, Jen and I found that having a plan for your money is actually the most freeing feeling you can get when it comes to money.
     Over the next two years, my wife and I put our noses to the grind stone and dramatically changed the way we handle money.  Our change in discipline allowed us to pay the baby bills in cash.  Remember when I said we paid our deductible and out of pocket twice?  It came up to just shy of $9,000!!!  We owed about $7500 on the car, and paid it off about six months later.  We sold stuff, worked overtime, worked extra days/jobs, and busted our tails in order to pay it all off.  I worked so hard that my manager took notice and actually promoted me to a permanent position, meaning I got all my company's benefits (including health insurance and a matching 401k).  But we weren't done yet.
     Over the next year we learned TONS of information on saving money, cutting costs, proper budgeting, and even investing.  What started as just a spark from the Dave Ramsey Financial Peace class because a hobby and ultimately a passion.  My wife and I now strive to help as many as we can learn how to control their money.
     This led me full circle back to my passion of teaching.  I just got approved to teach a class through the Newport News Parks and Rec department on personal finance.  When asked what we wanted to teach on, we said we want to teach the stuff that your grandmother tried to teach you, money handling rules and techniques that have been taught for hundreds (and some even thousands) of years.  This stuff is supposed to be common knowledge, but in our current culture it this information has become scarce.
     Therefore I submit to you the topic of my blog and the name of our class:  Common Cents. (See what I did there?)
     I hope you choose to join me on my journey.  I'm going to be talking a LOT about budgeting, saving money, working together as a family, cutting costs, and getting debt out of your life completely.  Expect a lot of fact and research to back up my opinion.  I'm not the first person to teach this, and hopefully won't be the last.  But I know that so many people need this information, even if they don't know it yet.
     So many people are wandering around without a plan and it shows in our society when the average American household is $15k in credit card debt according to the Federal Reserve.  A lot of people want to pound on the government about how much their spending is out of control.  And it's true, our government is now approaching $17 TRILLION.  But did you know that American consumer debt is over $11 TRILLION?  Seriously, Google it.
     This is the kinda info that needs to be taught, and I'm going to be joining several others on the path to teaching our communities that info.  Thanks for reading, and I hope you enjoy the ride as much as I will.

TL;DR:  My name is Heath and I want to teach people how to not be poor.  Read up for lots of info and tips.

-Heath