Wednesday, April 22, 2009

Creating a Spending Plan

In my last post I promised to explain how to create a spending plan, AKA a budget. I like to think of this as a spending plan, because this is something you (and your spouse if married) decide on. As you get more financially free, there should be more discretion in your spending plan.
To develop a spending plan review your checkbook for the last few months and list all your expenses. Try to put them in logical categories for you. If there are a lot of ATM withdrawals or things that you can't remember, you need to track all expenses for 30 days. Write down everything, including the dollar for the diet coke at noon and the 50cents for your child's extra lunch money. If you have ever done Weight Watchers, this is much like keeping track of all the food you eat. It is amazing how many little expenses we may "forget" without this tracking mechanism.
Once you have all of this information, you need to make your Spending Plan. List items by category and total. Make sure and include a monthly amount for those items you pay annually, such as car insurance, car taxes, or home owners insurance. OK, so my expenses are greater than my income? Now what? In the short term, you may need to go on a "beans and rice" diet, as Dave Ramsey calls it. In future posts, I will discuss strategies for reducing expenses. We LOVE finding ways to save money and reduce expenses in the Hudock household! Its fun.
Keep going and keep track of your expenses.

For further information on budgeting ideas, see the resources at www.crown.org. They have some good forms you can use, as well as some sample budgets for various family sizes and income levels that can be used as good guidelines.

Happy budgeting!

Tuesday, April 14, 2009

Credit Card Debt can Cost you in More ways than One

"The borrower is slave to the lender" according to Proverbs 22:7. The NBC Nightly news showed this truth extremely well on tonight's show. The story told haw many banks were doubling interest rates on credit card customers in good standing so that they could make more money. One man had always paid on time, and paid more than the minimums and Bank of America notified him that his rate would increase from 7% to over 12%. We don't have any credit card debt and I urge any of you that do to pay them off as quickly as you can. If you buy a $1200 computer with a credit card and make minimum payments, you will be paying for that computer many years after the computer has gone to the junkheap.

If you are committed to reducing this debt, but don't know how, watch for my next post where I will go though the basics of a spending plan, AKA a budget.

Monday, April 13, 2009

"Get Motivated"

Last Thursday I went to an all day seminar at USC Columbia's Colonial Center called "Get Motivated" I went with three others from USCA and we were there with 10,000 others who have decided not to participate in the recession. There were some very famous speakers including Earl Mendell, Dr. Robert Schuller, Zig Ziglar, Suze Orman and Major Rudy Giuliani among others. The seminar is produced by Peter and Tamara Lowe who seem to be strong Christians. Our group was pleasantly surprised at the positive references to God and faith that were included by most of the speakers. Of course we expected that from Robert Schuller, but it was very exciting to me to hear business speakers being open about their faith.

Zig Ziglar reminded us "that if you ever get discouraged, just remember that Moses was a basket case". He also encouraged us to be people who do not pay attention to the economy, but to instead thrive regardless of the outside world. We can do a lot about our personal economy, even though we can;t do a lot about the national economy.

Krish Dhanam told us to take ownership and that we are accountable for our own futures. He also told us to practice stewardship: GLOW Give more than you have. Leave more than you take. Offer praise. Whose applause matters? (God's)

I am not normally a huge Suze Orman fan, but she gave the most solid financial advice of the day. She had the audience stand if they had any debt at all. the vast majority of the audience did stand and it was very scary to me. The vast majority of Americans are living on little, if any, financial margin. That is why I am dedicated to writing and teaching about improving family finances. Many financial speakers advise that you should pay off credit card debt first. However, Suze advises making only minimum credit card payments until you have at least six months living expenses in the bank so that you can withstand a job layoff or other financial emergency. That makes a lot of sense given South Carolina's 11% unemployment rate. She also encouraged everyone to invest in their retirement plans, once their debts are paid off.

This seminar was well worth the time and it only cost $50 for five of us to go from USCA. An incredible bargain!

Sunday, April 12, 2009

Happy Easter

He is risen indeed! Today is my first day of blogging. I felt called to do this for a while, but was intimidated by the technology. Finally this week I saw Megan Everitt's blog and it got me motivated. thank you Megan!
In the sermon at church today our pastor was talking about Leah. She wanted Jacob's love, but he did not give it. Leah prayed to the Lord and was blessed with sons. Her fourth son was Judah whose name means "praise". She gave the Lord praise and her trust and He gave her the incredible blessing of being the direct great, great, great, great (and several more) grandmother of Jesus! We may never know in this life how God will use us. However, if we follow Jesus He has promised that he makes "all things work together for our good" (Romans 8:28). On this Easter Sunday, I am praising God for all the wonderful things in my life--the foremost being that He has called me to be His daughter-- and my precious husband Doug, and two smart and talented children Patrick and Kathryn.