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Get a Deal!

I found some new coupons off Hustler Money Blog for this month, check them out:

1. Circuit City $40 off $199 is good until Oct. 30th
2. Best Buy 12% off is good from Oct. 5 to 8th
3. Office Max $10 off 20 Coupon is good until Oct. 30th
4. Babies R Us 15% off coupon is good until Oct. 14th
5. Border’s 25% off is good until Oct. 8th
6. Staples 12% off is good from Oct. 14th to 20th
7. Jamba Juice Buy One Get One Free
8. Toys R Us 20% off Oct 8th
9. Home Depot 10% off coupon
10. Lowes 10% off

ING Direct Shout Out - Free $25 for Signing Up!

I have been banking with ING Direct for the past 3 years and have been a strong advocate of them all along the way.

I always recommend that people set aside money in an emergency fund that is 100% liquid. Usually I will direct them to ING Direct because of the 4.3% rate as opposed to the whopping 0.25% that local banks offer in their savings accounts.

I feel that when interest is paid TO YOU this is good. When you can get more that is BETTER!

I have talked many times about alternative income streams and this is a major component on what comes in (from me just sleeping).

Plus right now all ING Savings accounts are paying 4.30% and are FDIC insured up to $100,000. What this means is, it is not risky. ALSO, by following a link from an existing member, ING will IMMEDIATELY GIVE you $25 if you open your savings account right now with at least $250.

You can even set up your account to automatically draft your account on a set frequency (weekly, monthly, etc).

INTERESTED? Just click one of the following links below.

These links are one-time use only links so if you see this message:

"We're sorry, but the referral link within the email you received has expired and is no longer valid. We recommend that you contact the sender and ask them to re-send the referral email. Or click 'Continue' to proceed with the application process without the account opening bonus."

Then just go on to the next link.

Link #1

Link #2

Don't Make the Same Mistake Twice

I have heard a lot of people talk about "re-establishing" their credit after getting themselves into a mound of trouble through debt. I just read an article saying the best way to re-establish your credit after a bankruptcy is to get a low-limit credit card, make small purchases, then pay it off early each month.

I am sure it does help your FICO score, however, I have a problem with this advice for two reasons.

#1) Why should you care about increasing your FICO score anyway? All a FICO score is for is to allow you to borrow MORE money (even though that is the thing that got you in financial ruin in the first place.)

#2) This advice takes the "human" element out of the equation. If personal finance was 100% finance and 0% personal then my advice would be different, but it is inaccurate to say this.

When a person files for bankruptcy it is because they were so far in debt the could not get out of it. At this point isn't this something that that person should avoid rather than jump back into it?

I advise people to not be concerned with "re-establishing" their credit. There are steps that you can take that we talk about on this website that will enable you to eliminate debt completely from your life. The only thing that I consider "acceptable" debt is a home mortgage and getting a home mortgage is a different kind of beast when applying for it.

The lender is 100% concerned with probability of paying it back (not with FICO score). If they see your savings increase and you don't have any new entries on your credit report they will notice this (not just the FICO score). In fact, I don't know of any lenders out there who would even turn down somebody that drops a 20% down payment on their house.

Dave Ramsey says, "The definition of insanity is doing the same thing over and over and expecting different results." Getting back into what got you into a mess in the first place could be considered insane.

Extended Warranties: Are they a good idea?

I might not put this issue to bed but I can at least tell you my thoughts. I know many people swear by them and I know some people who say they usually get their money's worth out of them.

I am fine with people having that point of view. However, in my experience I have not gotten my money's worth out of them and I usually say that in most cases it isn't a good idea to get the extended warranty. Now before you get mad at me I can show my work behind how I came up to this reasoning.

An extended warranty is basically insurance. And the price/cost of insurance is driven by 4 factors: commissions, overhead expenses, the statistical probability of the event occurring, and profit. The cost of your warranty has to cover all of those things and I do not like the sound of that. What I actually would recommend is to set aside the amount of most extended warranties and I would be able to cover average repair costs and still come out ahead.

Generally, extended warranties are extremely profitable for those that are selling them and a bad idea for those buying them.

How much is too much house?

Earlier this week I mentioned that one of the most often ways people get themselves into a struggling financial situation is they allow their car payments or house payments to be larger than what they can afford.

If you did not read the post on Car Payments you can check it out here.

The stage of life that I am currently in (early to mid 20's) is extremely foundational. I find that a lot of financial (mis)behavior habits go into effect around this time in a person's life. Usually after graduation you will find yourself with more cash than you ever have had before. For the first year or two you are allowed much freedom and seem to spend money on whatever you want, whenever you want it.

However, this might work out for the first year or two but this develops a habit that is not easily broken. As you get into later years you begin to commit to more financial obligations, which leaves you strapped and in a tight situation. This is the turning point and usually people will resort to using unsecured debt as an option which puts them in bondage that they cannot break free of for many many years.

More times than not, this "financial obligation" that leaves you in a tight situation is usually caused by the house. Because your house payment might end up being too much for your take home pay, it leaves you extremely tight in all other areas of life. And if this is combined with a lack of adamant budget and preparation its seems like there is no other choice but to turn to debt.

Now on the flip side I want to offer a guardrail to guide your house buying decision that may come up in the near future. This is not scriptural this is just what I believe to be wise after listening to many financial "guru's" over the years.

House Rule #1: Do not have a house payment that is more than 25% of your household take home pay.

When I get opposition to this from people my age it is always because they want to have a standard of living that is comparable to what their parents have. The only problem with that is it took their parents 20+ years to obtain that, which should not be obtained within the first few years of working.

I want to provide an easy to understand grid that might help put some skin on this rule. The assumptions to this grid is 100% financing (which I do not recommend but will talk about later) and an interest rate at 6.5%.

30 Year Fixed Loan

Annual Income	Monthly Income After Taxes	Monthly Payment	House Value
$30,000	$1,875	$468.75	$74,161.32
$35,000	$2,188	$546.88	$86,521.54
$40,000	$2,500	$625.00	$98,881.76
$45,000	$2,813	$703.13	$111,241.98
$50,000	$3,125	$781.25	$123,602.20
$55,000	$3,438	$859.38	$135,962.42
$60,000	$3,750	$937.50	$148,322.64
$65,000	$4,063	$1,015.63	$160,682.86
$70,000	$4,375	$1,093.75	$173,043.08
$75,000	$4,688	$1,171.88	$185,403.30
$80,000	$5,000	$1,250.00	$197,763.52
$85,000	$5,313	$1,328.13	$210,123.74
$90,000	$5,625	$1,406.25	$222,483.96
$95,000	$5,938	$1,484.38	$234,844.19
$100,000	$6,250	$1,562.50	$247,204.41

15 Year Fixed Loan

Annual Income	Monthly Income After Taxes	Monthly Payment	House Value
$30,000	$1,875	$468.75	$53,810.82
$35,000	$2,188	$546.88	$62,779.29
$40,000	$2,500	$625.00	$71,747.76
$45,000	$2,813	$703.13	$80,716.23
$50,000	$3,125	$781.25	$89,684.70
$55,000	$3,438	$859.38	$98,653.17
$60,000	$3,750	$937.50	$107,621.64
$65,000	$4,063	$1,015.63	$116,590.11
$70,000	$4,375	$1,093.75	$125,558.58
$75,000	$4,688	$1,171.88	$134,527.05
$80,000	$5,000	$1,250.00	$143,495.51
$85,000	$5,313	$1,328.13	$152,463.98
$90,000	$5,625	$1,406.25	$161,432.45
$95,000	$5,938	$1,484.38	$170,400.92
$100,000	$6,250	$1,562.50	$179,369.39

Use this grid as a guideline when deciding how much house too buy. I do not care how good of a deal you get on a $200,000 house. If you cannot afford it, it will end up put you into a financial mess. When this is the case you cannot even enjoy living in the awesome house because things are so tight financially.

The Planning Process

Having a plan is the most basic core principle that I try to teach. If you strip back all the practical application, all of the "theology of money," all stories or illustrations, I am basically saying to have a plan.

Tell your money where to go instead of wondering where it went.

Hopefully if you hear anything, you will hear this. Now, I am about to expand on logistical planning. Most people who know me will be surprised to hear me say this next statement but it is the truth and I don't really say it that often.

You can only plan so much.

I am serious.

There are 3 basic stages in personal finance planning:

1.) Short Term Planning
2.) Mid Range Planning
3.) Long Term

Long term planning is roughly anything over a year away. There are many things that we should be planning for that are a year away or over. An example of Long Term Planning is retirement. I think you should be planning from this and early on in fact. Another example is a new (to you) car. This will come up at some point, you might as well be prepared for it.

I also think there are things that come up within a year that you should plan for in advance; these are mid range planning items. Christmas, Birthdays, Vacations, Real Estate Taxes, etc. all fall under this. We know these things come up, we need to plan for them.

Next is short term planning. I do not want you to plan for monthly expenditures in advance. Each month is new. Each month things will change. For example my gas expense has now changed because it is football season and I go to all the Clemson games. This has increased my monthly gas expenditures a great deal, which effects my planning in other areas. Another example is you might know you need to get an oil change this next month, that changes your car maintenance category, which might change something else.

Let's say you had a friend who was about to play a game of chess. And let's say you are a chess expert and he came to you and ask for help. You would not give him step by step instructions on moves he should make. This is not a wise thing to do when playing chess because things change rapidly. The same is true with finances. You can have a basic goal/intent to take the queen or put the king in checkmate, but how you get there is a changing process.

It is a good thing to make goals and plans, but the details will be changing. It is important that we understand this so that we will not be frustrated with a process where change is inevitable.

Never Have a Car Payment

If you have a car payment, you need to get rid of it. As a philosophy of mine I try to avoid anything that requires a recurring monthly payment. I understand some things are inevitable but I want to stress that a car payment is not one of them.

From talking to financial counselors many times when people are struggling and broken in their financial life, it is often because they find themselves in a lousy car situation or buying too much house. I will talk about buying too much house later this week, but for now let me stick to the car.

What I mean by a lousy car situation is they bought a new car and have been paying huge payments on it rather than paying cash, and now that they are in trouble financially because there was no buffer for life to happen they find that their car is worth LESS than what they still owe on it.

This happens far too often.

My advice and philosophy on this is pretty simple. I have 2 basic "car rules."

Car Rule #1: Don't buy new. My suggestion and personal philosophy is to get a 2 year old car. The reason for this is strictly numerical. As soon as you drive a new car off the lot it is taking a huge chunk of value off. In fact a large percentage of the value gets taken off in the first 2 years. By buying a car after 2 years you have avoided taking a huge depreciation hit.

Car Rule #2: Make payments to yourself.

Right now I am driving a 99 Honda Accord that does not have payments. Yet I am paying a $350 car payment to myself. There is a reason for this. It is smart. I can either make payments later and have a lot of that going to interest and be making someone else money, or I can make payments to myself now in my money market account that earns 5.05% and have interest coming in. Then when it is time to buy my 2 year old car I will have the money to pay cash for it. Side note: If you have cash you can get a major deal on a car, especially when looking to buy from individuals. When you show them you have cash and can give it to them as soon as they agree that is extremely enticing.

If you are thinking: "But I need to buy a car now but have no money saved up. What do I do?"

I will answer your question by giving you 2 scenarios and you can decide for yourself which is better.

Normally we buy:

$18,000 car; 7 years at 10%; payments of $300; value after 7 years, $800

Or we could buy instead:

$6,000 car; 7 years at 10%; payments of $100; value after 7 years, $400.
The other $200 per month is saved at 10% (mutual fund) for 7 years = $24,190

Now who may the right choice:

At Year Seven
The car is fully depreciated, in either plan, but in the 2nd plan:

Savings $24,190
One year old car for cash <$16,000>
Left in savings $ 8,190

No Car Payments!

Another Seven Years
Saving $300 per month from year 7 to year 14
plus interest on $8,190 (10% return) the car is fully depreciated again.

Savings $52,245
One year old car for cash <$25,000>
Left in savings $27,245

No Car Payments!

Which scenario do you choose?

After 14 years you are in a position where you are set up to never have to make another car payment just because of a decision you made 14 years ago.

It is a shift of thinking from, "I will always have a car payment" to "I never want a car payment."

Use the compound interest factor for your advantage and not against you. It is powerful either way.

Signs your financial System are Working

I wanted to offer up some encouragement to all who I have not had the pleasure of speaking with in person or through e-mail. I have heard really AWESOME things about people making commitments to handle their money wiser.

This allows them to be better stewards, better givers, better providers, and have actual freedom to do what God calls them to rather than be stuck in a position where they HAVE to earn a paycheck from a job they are not passionate about.

I wanted to list some signs that your financial system is working so that you may encouraged and continue what you are working towards:

1.) Paying car insurance quarterly or biannually without a hitch

2.) Giving e an offering to your local church not longer HURTS to write that check.

3.) Presents are a joy to buy for people.

4.) Getting to see monthly interest incurred from your 4.3%+ Interest Rate saving account. (If you do not have one of these, please sign up with ING Direct immediately.)

5.) No longer have stress when bills come in.

6.) You know that you have a plan financially if "life" happens.

7.) You are actually choosing to be at your job, rather than stuck at it.

And so many more! Having freedom with your finances is exactly what it sounds like. Freedom. It allows us to live life differently; I know too many people that are in bondage in their financial life which causes them to not be able to devote their lives to the calling they are called to because our money and hearts really are connected.

The Unexpected

In everything in life we must account for the unexpected. I would call it foolish to not do this. Most times when we have an emergency it is a major life changing event. However, when we have not set ourselves up for success financially to get through these types of events not only do we have a major LIFE crisis, but we also have a MONEY crisis.

This adds tons of unnecessary stress that could have been avoided. The reason why I seem to be harping on the need of an Emergency Fund a lot is for a couple reasons:

1.) It is the 1st step the I advise people to do. So if you wanted to ask me what your first step to financial freedom is I would advise to save up $1,000 (basic) emergency fund or $500 if your income is under $20,000.

2.) The other reason is because I see scripture advising us in this direction. Proverbs 21:20 "In the house of the wise are stores of choice food and oil, but a foolish man devours all he has."

It is literally foolish to devour all you have. So if you are living paycheck to paycheck and all your money comes in, then all your money goes out, scripture calls this foolish. This is why my first step is to break the chain and develop an emergency fund.

Technical Difficulties

I apologize for the inconvenience but www.chriskakaras.com will be down this week due to a domain transfer. I have been meaning to do this for some time and unfortunately this wait time was inevitable. www.chriskakaras.com will be up and running (hopefully) no later than Monday, October 1.

For the immediate time being you can check daily blog updates at storingtreasures.blogspot.com. Thanks!

Sincerely,

Chris Kakaras

Budget Time

It is getting to be that time of month. About a week before the month is over I put my financial outlook together and start budgeting for next month. A basic process of what is do is:

1.) Update all transactions in Microsoft Money to date and look at a snapshot in a summary of my accounts.

2.) I plan out a detailed projection of expenses (for the next 7 or so days) and put them in as transactions. The date I use is the last day of the month and as the actual expense comes, I delete that "projected" transaction. The reason I do this projection is because it is my goal to always keep $1,000 in my main checking account. I do not want to keep more and do not want to keep less in there. Anything left above $1,000 goes to a different account (savings, money market, investment, etc.) but I usually will end up right at $1,000 anyway because that is what I plan for.

3.) Now I am ready to put a plan for next month down on paper. The first thing I do is put the amount of income coming in. This goes at the top of the page and I want to "spend" all that money on paper. And when I mean spend I do not mean buy stuff, I mean give all your money a name. A certain amount goes to food, a certain amount goes to investments, giving, college fund, etc.

4.) After you put the income on the top of the page you start putting down necessary expenses. (i.e. Food, Shelter, Car, Utilities, Clothing in this order)

5.) I then think of upcoming expenses that could possibly be a budget buster in the coming months. I think of my car, Christmas, girlfriend's birthday, etc. And I choose a target amount for it then divide it by the number of months between now and then. This is now included in my budget and I make a separate account for it for money to be transferred to.

5.) Now lastly I roll over my previous months budget for all other accounts. I make my tweaks and then move on.

This whole process might be time consuming your first couple months but after a while you will be able to knock this out in less than 15 minutes. The important thing is to get the ball rolling. If you have yet to make a budget, I encourage you to start with next month (October).

Associated Content

If you have never heard of this site it might be something worth checking out. www.associatedcontent.com is a online publication that buys articles that you write. I have submitted 4 and all have gotten me between $3 and $4, and they really did pay out.

Click Here if you want to be a content producer. If you have some spare time or have knowledge on a particular topic in might be worth it to check it out.

Link to Join

The Breakthrough Cont'd

If you did not read yesterdays post from Jim Collins' book "Good To Great" please check it out before you continue with this one.

In that illustration (known as the flywheel concept) you are using a ton of force and only moving it a little at a time however at some point the wheel begins to turn on its own and even goes faster with you doing little to no effort.

I think we all want to be there in our finances. I have stated as a goal of mine, I want my alternative income streams to be greater than my expenses. This to me is true financial freedom. How do I do this? First I MUST understand this concept because it changes strategy on what our plan is.

What would happen if you were pushing that flywheel and you got tired and took a break for just a second (or a month when it comes to personal finance). The momentum would be lost and we would be discouraged to have to start over. Not only that, we would not have as much energy as before. If that happens perpetually we would never get to be to the breakthrough point.

This "stopping factor" can come in many different shapes when it comes to personal finances. It could be that emergency that comes up that we didn't have an emergency fund in place to counteract so we could keep building momentum. It could be the realization that it is hard right now and we want it to be easier immediately, instead of looking to the breakthrough point. Or it might be that you are just focused on results right now and give up because you are not seeing any.

Just like with the flywheel when we start we will put in the most effort and get the least amount of results. But getting to the breakthrough point is worth it and in anything you do and this needs to kept in mind.

Practically for any goal you have with your finances this applies. If you are budgeting for the first time it will take the most effort and you will probably make the most mistakes or be the most frustrated than you ever will. It gets easier, I promise. After a little over a full year of actually living on a budget, I am able to accurately, efficiently, and effectively budget my money in a matter of minutes for the upcoming month.

All it takes is getting through the initial max effort min results stages and looking to the breakthrough point.

The Breakthrough

This illustration comes from Jim Collins' book Good to Great. I will connect this illustration to where I am going with it tomorrow.

Picture a huge, heavy flywheel – a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Now imagine that your task is to get the flywheel rotating on the axle as fast and long as possible.

Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn.

You keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction. Three turns…four…five…six…the flywheel builds up speed… seven…eight…you keep pushing…nine…ten…it builds momentum…eleven…twelve… moving faster with each turn…twenty…thirty…fifty…a hundred.

Then at some point – breakthrough! The momentum of the thing kicks in your favor, hurling the flywheel forward, turn after turn…whoosh!…its own heavy weight working for you. You’re pushing no harder than during the first rotation, but the flywheel goes faster and faster. Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. A thousand times faster, then ten thousand, then a hundred thousand. The huge heavy disk flies forward, with almost unstoppable momentum.

Now suppose someone came along and asked, “What was the one big push that caused this thing to go so fast?”

You wouldn’t be able to answer; it’s just a nonsensical question. Was it the first push? The second? The fifth? The hundredth? No! It was all of them added together in an overall accumulation of effort applied in a consistent direction. Some pushes may have been bigger than others, but any single heave – no matter how large – reflects a small fraction of the entire cumulative effect upon the flywheel.

Deals!!! College Student Edition

I know this might be a little late, but just in case there is someone reading that this might help out I wanted to post it anyway. I ran across some great deals on Hustler Money Blog.

• Gateway Notebook Intel Celeron M-Processor 520 at Best Buy for $350
  
• Ultimate Office 2007 for $60, valid only for students with .edu email address.
• Compaq Presario C508US 15.4″ Widescreen Notebook for $320 at Circuit City

If you have needed to get a computer; you can't find them much cheaper than this. And I am a strong advocate of Microsoft Office programming so when I find a good deal I want to share.

Ways to Cut Down Your Entertainment Budget

Entertainment can be very expensive if we are not careful. I wanted to offer some great ways to spend less on this category while still having fun.

Not so much Traveling
This one hurts me because I love driving and more than that, I love driving to Braves games. I am a huge fan and I try to find good deals on eBay for tickets. While I figure I am saving money on tickets that most people would spend, I am killing a ton of money on gas to get there and back. Traveling really is a sneaky way to creep up your expenses and then when you look at your bank account balance you wonder where your money went.

Find Alternative Sources of Entertainment
I know quite a few people who have joined an ultimate frisbee league which is a great way to be entertained while not spending a lot of money. I also have friends who have a basketball night where they all get together on a certain night of the week or on Saturday morning and play. When you find things to do with friends and loved ones like these options you will feel no need to go out and spend a large amount of money on ways to entertain yourself.

Cancel some Memberships
Lots of people have gym memberships or other types of revolving expenses that they hardly ever use. This is sucking a good amount of money up. Most of the time you have signed up for a lot of little monthly fee type things which add up when put all together. If you go to a gym, health club, country club, or other service only once a week, chances are you are not getting your money's worth out of it.

Lower your Cable Package
I know this is crazy talk but I am serious. Most cable companies will have a low end basic cable package that usually cost a significant amount less. I know we are living in a world of HD, DVR, and premium packages and everything has to be HD but it is worth a thought. I am not saying you are irresponsible if you have a big cable package; I am just throwing out an idea for it in case it sticks somewhere.

Newspaper/Magazine Subscriptions
I am guy that LOVES sports. And I love reading/watching/talking about sports all the time. Therefore, I used to have a subscription to Sports Illustrated, Sporting News, and ESPN the magazine. The problem is that I never really read them. I looked through them, read some blurbs here and there but I realized that I needed to cancel. This took a good shot to the pride because I am a man and men read Sports, but I am glad I am saving that $10-$15 a month now.

Use the Library
The library is freakin awesome. I love books (more like books on tape), I love movies, and I love free. Did you know the library has all 3? I suggest to use this amazing service that we are given by the state.

Anyway, there are tons of ways to keep our entertainment seeking hearts occupied without spending a ton of money. The key is to just make a little effort and it will go a long way. If you end up cutting down on movies and dining out you will more than likely save a LOT of money.

Yes, its all free!

Wanted to share with everyone some goodies. I love free money and free stuff, if you do too than some of these links might be of interest to you. I found these on Hustler Money Blog.

If you are looking to change banks or open up a new account, you might want to check out one of these promotions.

1. Bank of America $100 bonus: Open online with $100 minimum deposit using offer code AOU2609 and receive $100 bonus for Bank of America’s cardholders. Expires on Nov. 30th
2. Citibank $200 bonus: Call 1-866-810-9043 and mention offer code MGWE. Deposit $1500 to get first $100 bonus, then setup direct deposit to receive the second $100 bonus. Expires Dec. 30th
3. Wachovia $75 Academy Gift Card: Open a free Checking account with $100 in new funds and setup direct deposit within 90 days to receive a $75 gift card bonus from Wachovia.
4. HSBC $75 Bonus: Open a free Checking account and receive $75. Offer expires Sept. 30th

If you want some free stuff, check these out!

1. Free Stone Cold Ice Cream on your birthday
2. Get a Free $5 Obopay Prepaid MasterCard for Sign Up!
3. $10 Ebates bonus for first timer
4. Free Night at the Theatre
5. Walmart Free Samples

College Student Spotlight

Something came to my head today that saved me hundreds of dollars while I was in college. So, if you are a college student if you do what I am about to say you will literally save hundreds of dollars.

Most of you just bought textbooks for the upcoming semester. If you went to the on campus bookstore you ended up paying a pretty penny. However, I have a solution that will almost cut that bill in half. And the answer isn't just skipping out on buying half your books. My solution is to use www.half.com.

On there you can click on the textbooks link and type in your ISBN number. You will have to travel down to the bookstore and scout out what books you need and then write down the ISBN # (it literally takes 5 minutes).

Then just click and buy your textbooks through half.com which are normally half the price (you are buying them from other people in a secondary market). Normally shipping will take like 7-10 days so account for that when you order it (do not by it the night before you need it).

Once you get the books, if you bought the most recent version you can still sell it back to the bookstore at the end of the semester and usually the net cost is very small. Another thing that I started doing is I would by the previous version of the textbook than the current version. My senior year I literally spent like $40-$50 on my textbooks and they were the EXACT same thing as the current version. New versions might have minor changes but it was not worth spending $400-500 more on current versions of the book, I just cared about learning the material anyway.

I know school has already started so this post might be a little late, but keep this in mind for next semester.

Cash Can Cause...

CONFLICT

I was in wal-mart the other day and saw a kid melt down because he wanted to get something but his mom would not let him. At first I thought how embarrassing that looks and then how thankful I was that I never did that as a kid (...right).

I realized that this was a conflict that was caused by money. It causes conflicts across the board: teenagers and parents, married couples, little kids in toy stores...it is messing stuff up all over the place.

CONFUSION

Money also causes confusion. I think that 2 groups that have a major role in people's confusion is the local church and the educational system.

It is strange that a senior can graduate from high school and can dissect a frog, knows the Pythagorean theorem, and can tell you the symbol for Sodium but cannot balance a checkbook or recognize a good interest rate.

It is so funny that major outlets of teaching will ignore the most practical thing people need to know. And when I mean ignore it, I mean never bring it up period. Then when someone is faced with financial decisions they are hit flat in the face without any experience. Maybe that is the reason why more people will declare bankruptcy than graduate from college this year. It is because we’re confused.

Money is dangerous stuff, you better know how to handle it. Jesus talks a lot about money, but most of the time he is warning us from it. Put yourself in a position to win with money. It really does matter. Are you controlling your money or is your money controlling you?

Free Money!!!

If you like free money and have some time you can fill out surveys from these places. I usually do not do these surveys just because I don't have the time but I saw these on Hustler Money Blog and wanted to share.

Most of these places are pretty legit, I know the first one pays out a lot. Anyway, worth a shot if you find yourself with some free time and want a little spending cash.

Copy and Paste the link:

1. https://fun.mysurvey.com/join.cfm?r=2786801
2. http://www.acop.com/information.aspx
3. https://www.surveysavvy.com/ss/ss_index.php?action=join
4. http://www.greenfieldonline.com/TrafficUI/MSCUI/Page.aspx?pgtid=12&rsid=CD7265&amp;amp;amp;amp;rcid=2844&ptid=4&utcoffset=5
5. http://us.lightspeedpanel.com/index.html

Giving God Control Part 3

This is my last post on Giving God Control by following what He says through scripture. There are so many other verses we can talk about but I have narrowed down a few as they are fresh bread to me

Matthew 10:16 "I am sending you out like sheep among wolves. Therefore be as shrewd as snakes and as innocent as doves."

This sounds very un-Jesus like, but we can take it very practically and I believe it to be wisdom that we can take in our daily lives. The context of this passage is Jesus sending His disciples out to preach the Gospel. His advice was not to go where the wind takes you and THEN you will be provided for; he's saying "I have already provided with you what you need, don't get ripped of."

Practically speaking this means that we are called to read the fine print. It is wisdom to not put yourself in a position that you will be taken advantage of. I'm laughing right now because recently I did this and it was so obvious that it was my fault because I put myself in a position to be taken advantage of. Another practical example is debt: HAVE YOU READ THOSE CREDIT CARD CONTRACTS!! If you did you would see things like "We reserve the right to change the account terms for any reason" In other words, "Dear Customer - You have NO rights!"

Bottom line, Jesus says make every effort to not be taken advantage of, be shrewd as snakes. However, the verse also says be "innocent as doves." I was about to leave that last part out but I do not want anyone to misunderstand this passage of scripture. While we are making sure we are not taken advantage of, we are also called to NOT TAKE ADVANTAGE OF OTHERS. I know this is a no-brainer but it needs to be said because I know first hand of people who got the first part of that passage down but trample over people in the meantime.

Matthew 25:14-30 Parable of the Talents

Man I am not saying it is wrong to try to make money. In fact I say the opposite. What I really harp on is what you do with that money once you get it. Like my example yesterday, when you get stuff be missional with it. Our lives are 100% Jesus, not 98% Jesus and 2% HDTV.

I am an advocate of investments and in Matthew 25 the Parable of the Talents shows that Jesus is too. A talent in this example I believe is a days wages, maybe more. God gave us "talents," it is wisdom to turn them into more talents. It is simple. Do not bury them, this is what is known as hoarding. Live with an open hand. Yes it allows money to go out of your hands, but with an open hand it is also easier for money to go into your hands. When you are tight fisted neither is possible.

Along with that parable, the guy who sits on what God gave him is punished, the guy who multiplied his talents(money) is told he did good. And I honestly believe this is not supposed to be because we can have more "stuff" because after all you cannot take a u-haul with your hearse. But I believe that it WILL advance the Kingdom by doing so. Its as simple as living on mission in every area of your life and that includes your money.

Giving God Control Part 2

To compliment us talking about the heart yesterday, I wanted to point out a few things that scripture speaks on that is on the practical side.

Proverbs 21:20 "In the house of the wise there are stores of choice food and oil, but a foolish man devours all he has."

Scripture actually says saving for a rainy day is cool; and rainy days are coming. Let me also clarify; most of us are suffering from a disease in which we need more and more stuff for ourselves. That is not what scripture is saying is okay, in fact let me just clear it up, that is wrong. An example of this is when Joe gets a big screen tv. The issue isn't that he spent money on the big screen tv, the issue is why did he get the big screen tv.

Let me use a friend of mine as an example...they bought a big ole 55 inch HD TV. The reason why he got that is so that he would have a reason to invite people (ie co-workers, college students, and everyone else) to come over and watch a big football game or basketball game and use it as a ministry tool. God has been glorified through his TV and that is cool.

Another friend of mine has a sweet boat; the reason why he has that boat is for ministry. It is the heart behind this stuff that matters, it is not just an excuse to get more stuff. That is the difference. It is not a numbers issue, it is most definitely a heart issue.

More coming tomorrow on giving God control by practical application of Scripture.

Giving God Control

Giving God control of your money doesn't necessarily mean to give away all your money. It is very clear through scripture that the way we handle our money is an indicator of our hearts flat out.

If we are not giving to the poor but giving to Clemson football, we can fight it all we want but it is an indicator that you care more about Clemson football than you do homeless people. It's not me saying it so please do not be mad at me, but money is just an indicator.

Jesus wasn't lying when he said in Matthew 6, where your treasure there your heart is. Our hearts are connected to our money. When you invest in a stock and you see those 3 little ticker symbols go across the screen your heart jumps up and down with them. With giving your finances to God we are biblically mandated to give some away (in old testament after the harvests and tithing it comes to about 27.33%). But, usually a tithe in scripture is referred to as a minimum 10% of all your increase.

We are also biblically mandated to provide for your family (we won't really argue against that, it is what most people use to argue hoarding). But scripture doesn't stop there, it says lots of practical things about how we handle our money.

Tomorrow we will talk about basic practical steps that scripture teaches us about money. But I wanted to talk first about how our heart is connected to our money. And if we have an attitude of "I will do what I want cause its mine" this is the same rebellious heart that spawns other sin issues.

Two Column Budgets

I received an e-mail saying:

"I am trying to do my first budget but I am having trouble with it because I get paid in the 15th and the last day of each month. While my bills are due at different times during the month. Any advice?"

My suggestion is to have a two-column budget. The first column represents the first paycheck of the month and the other represents the second paycheck of the month. Place the amount that you are bringing in out the top of each column and spend (plan) every dollar on paper for that pay period.

If your power bill is due on the 5th that is the first column. But then cell phone is on the 19th that is the second column. Then adjust categories that have some flexibility (like clothes can be budgeted on whichever pay period has some room.)

I encourage you to keep it up. It takes practice and you will constantly be getting better at it. It is extremely hard at first but most things in life that are worth doing are like that.

Coupon Time

I got these from www.hustlermoneyblog.com

There are some pretty awesome coupons in this batch. If you had an upcoming purchase I recommend saving a little $ by printing one of these out.

Printable or Online:

1. Best Buy 10% or 12%
2. Ralph Lauren 20% off
3. Border’s 20% off
4. CVS $4 off 20
5. New Customers – Take 7% off Your Order at Overstock.com. Expires 9.30.07
6. Chuck E Cheese Coupons
7. Phillips 10% off
8. Office Depot Get $30 off Purchase of $150 or More!

Insurance: So easy a caveman can do it...

So in my young life I have not had the pleasure of dealing with medical insurance a great deal. But in such a short time I feel like I have learned the hard way.

I consider insurance (along with an emergency fund) to be a foundational block of your financial picture. However, now I realize that it is not only important to HAVE inusrance, but you have to UNDERSTAND your insurance.

I knew I had dental so I scheduled an appointment. My insurance covers 100% of reasonable costs. I ended up learning the hard way that my insurance didn't cover the whole amount from this dentist and I ended up having to shell out some major money that I wasn't expecting.

If you have some type of medical appointment make sure you request for them to pre-qualify their expenses with your insurance company in advance. This is a must, especially if this is a new dentist or doctor you are going to.

I do love Vanilla Coke

For those who haven't heard (and yes I know most do not care) Vanilla Coke is back!

I am pumped about this and even more pumped that they have commemorated the return with a buy 1 vanilla coke get 1 free coupon!

Vanilla Coke Coupon

If drinking a vanilla coke brings back fond memories, now you can do it for free!

Watch out for Identity Theft

I used to not really take this idea seriously because I thought that it would not happen to me. I did not go to questionable websites nor did I give out my information to anyone that I didn't have 100% certainty what it was used for.

However, it is getting trickier and tricker to protect yourself from Identity Theft. For instance, I use paypal on a monthly basis but not a ton. I got this email a week ago saying that my account was frozen due to inactivity and needed to unfreeze my account. The e-mail looked EXACTLY like the paypal e-mails. Then when I clicked the link it took me to a site that had a web address that looked legitimate and had "paypal" in it somewhere. The page even looked exactly like the paypal website.

It asked me for my ss#, bank card #, and other things that paypal might normally ask for. Then I questioned what I was doing because I wanted to think twice before I put this information in. I hovered my mouse over the page to see where the links on the page would take me and came to find out there were no links at all on the page. The entire page was just paypal graphics.

On the page before they had me "log in," so I decided to click back and log in again but this time use an incorrect password. I came to find out that it still let me through. It was a scam.

I notified paypal immediately and change my password. I am thankful that I did not click submit and give out all my information.

Be on your guard against identity theft because it would be easy to fall in a trap if you are not careful. Matthew 10:16 actually tells us to be shrewed as snakes. Jesus was telling his disciples when sending them out to not be taken advantage of. I think this is still very insightful in today's age.

Is Christmas time here yet?

No, it is not...but it will be.

I love Christmas time; not only is it a cool time to remember Jesus but just to be completely honest I get really excited about getting presents (and giving). Don't get me wrong the Lord and Savior of all creation should be #1 on the list and He is, but that is everyday. On Christmas the only thing that changes is I get presents and I am okay with that.

I think Michael Scott said it best "Christmas is awesome. First of all, you get to spend time with people you love. Secondly, you can get drunk and no one can say anything. Third, you give presents. What's better than giving presents? And fourth, getting presents. So, four things. Not bad for one day. It's really the greatest day of all time."

It quite possibly could be the greatest day of all time, Michael. If you are like me, you like to go all out. And afterwards you end up feeling a lot of pain in your bank account right afterwards. I never want to go through that and do not want you to go through that ever again. The simple solution is this:

Christmas is 129 days away. Right now figure out how much you are going to spend on presents...it's really easy to do just try it. Then put it in your monthly budget and plan for it, in fact if you put it in an www.ingdirect.com account you could get 4.5% interest until you spend it.

Christmas is not an EMERGENCY. It comes the same time every year. Can you imagine how great it would be to get to enjoy all the great things that come with Christmas AND to not have buyers remorse!

Learn the Magical Word

The great word that we as Americans need to tell ourselves is "NO!"

It may sound simple but it is so NECESSARY. It doesn't matter how much money you make you still need to tell yourself "NO." For whatever reason the trend is to always spend a little bit more than what your income is; it could be a $30,000 income, $300,000 income, or $3,000,000 income you still end up living paycheck to paycheck.

I was reading an article in ESPN the magazine I think like a year ago. And it had an article on John Daly and how he was in debt $4,000,000. He turned to casinos to try to keep his head above water and was running himself into the ground by trying to make it to so many appearances.

It doesn't matter how much your income is, you need to learn to tell yourself no. That is the toughest thing for me. If I want something (or talk myself into "needing" something) I want it right then; it is the mentality we all have in America. I want it right now, my way or I am pissed.

When I make a plan I need to stick to it, the next month I can make a new plan; I can figure into the new plan the thing I want (and it might take multiple months saving for it!!!!). It is so worth it; to be financially free allows you to live life the way Christ designed it (not in bondage). There is so many warnings throughout scripture; they are not there for show, its truth.

Free Chicken and a Coke!

http://www.freechickenandcoke.com/

By now you probably know that I love free stuff; what you might have no known is my extreme fondness of chick-fil-a chicken sandwiches. Every once in a while God allows us to get a glimpse of heaven by putting the two together.

If you go to that site and fill out your info they will mail you a coupon for a chicken sandwich and a coke. Enjoy!

Should I borrow from my parents?

I recently got an e-mail asking me if it was okay to accept a loan from this person's parents. This person believes it is okay and actually borrowed money on two occasions from family members and it worked out.

Check out my previous post to understand my point of view on borrowing money from family. Out of Bounds.

I thought he had a valid point that I wanted to address on the blog. I am glad that borrowing money from your family worked out. However, what I am still saying is truth and it's good advice. You can drive down the road 100 miles per hour and get where you are going in one peace; but that does not prove it was a good idea.

In most instances families can produce strain on those involved and usually will be followed by regret. The borrower is always slave to the lender (Proverbs 22:7) and Thanksgiving Dinner tastes different when you are eating with your master.

A Glimpse of Compound Interest

Have you ever thought about being a millionaire but then just laughed it off. I am going to show you the key to becoming a millionaire; compound interest.

$100 a month, that is all it takes. If you invest $100 a month for the next 40 years you will have invested $48,000 by the end of it. That is a lot of money.

But after 40 years of compound interest that $100 a month would be $1,176,477.25!!! (This calculation was done with the assumption of the market average over the last 75 years, 12%)

I think most people could plan to set aside $100 a month; but the problem is nobody is doing it.

Compound interest is your greatest friend or your greatest enemy. (By the way, that exponential growth works against you for your debt)

The Heart of Savings

What I am going to talk about is a tough issue to teach and explain. The reason why it is hard is because it is a balancing act.

Savings is important but not at the cost of replacing the hope we have in Christ with our "stuff."

Proverbs 21:20 "In the house of the wise are stores of choice food and oil, but a foolish man devours all he has."

This is saying save for a rainy day. This is where I got the concept of an Emergency Fund from.

However, there is a flipside to this that was brought up in my life group last Wednesday. When we put our hope in that to take care of us we now have a new issue to work on and some might even go as far to say they don't need God.

Matthew 6:19 "Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal."

I cannot stress this enough. You SHOULD do things like save money. Scripture is clear and calls that wisdom. But DO NOT put your trust and hope in that because our stuff on earth is so fragile. It can be given then taken away in a blink of an eye.

God loves his children and loves us enough to teach us what is best for us. Just like a father telling his daughter to not play on the roof. The daughter will say things like, "Why are you ruining my fun" or "You are so mean, why are you against me." Then the father will reply, "I know what is best for you even when you don't, I love you, and because of that you need to go sit in the corner."

It's discipline but it's love.

Proverbs 12:1 "Whoever loves discipline loves knowledge, but he who hates correction is stupid."

I want you to save money AND put your hope in Jesus and not on Earthly things. Look for discipline in this; our hearts will fight this and as a Christ Follower you should be constantly growing in this area.

Joe Sangl Day

Today I am meeting with Joe Sangl from Newspring for a Financial Counseling Roundtable with 7 or 8 other people who have a passion for helping people with their finances.

I could not be more excited and can't wait to post tomorrow on what God teaches me through this!

Am I against all debt?

I get this question a lot, and in order to answer let me explain the kinds of debt that I am specifically referring to.

Types of Debt

Credit Card
Student Loan
Home Mortgage
Car Loan

The answer: Yes, I am against ALL debt. I want to make every effort to have (zero) debt in my life. That is the ultimate form of financial freedom when I don't have to make payments to ANYBODY. I do not want to ever be STUCK at a job because I need the security of being able to make payments. This is not freedom, it is what I call bondage. You are literally bound to doing something you may not want to do. So my plead is to make every effort to stay out of ANY kind of Debt.

With that being said, those 4 types of debt are not created equal.

My stance on debt is, it is only acceptable debt when you can sell it and be debt free immediately. It has to retain monetary value.

Therefore out of the 4 types of debt I listed, a Home Mortgage is the only form of debt I consider acceptable.

Home Mortgage
At any point when things change in your financial situation you can sell your house and be out of debt immediately. Now we all know it might take a few bumps (like it may take your house a few months to be sold). But that is why I recommend a fully funded emergency fund of 3-6 months expenses. It is smart to have it for this very reason.

Car Loans
Car Loans are NOT acceptable. Your car depreciates in value so fast and it breaks my heart when people get stuck financially and need to sell their car but they can only sell it for like $15,000 when their loan is still outstanding for $25,000. You still have to sell it because $10,000 of debt is still better than $25,000 but it is just a bad situation...stay away.

What I personally do, and what I recommend is to find a beater car (couple thousand bucks) that is in good mechanical shape (ugly physical shape) and drive that while making a car payment to yourself. Put aside $300-350 a month but put it in a money market to buy your next car, in cash. Keep making payments to yourself and at some point put it in a mutual fund. After years of making payments to yourself, there will be a break even point where due to compound interest you will never have to make a car payment again!

Credit Cards
These are NEVER acceptable. They do not even come close to the rule that I have of being able to sell it immediately and be out of debt. I do not feel that I need to go real in depth but Credit Card companies are making MAJOR money; it is or will be coming from you if you play around these things.

Student Loan
I know that I am going to get push back on this. The common response is, "Education is important. Some people can't afford college, so are you saying they should not go to school just because they can't afford it." My response to this is no AND yes. First of all, education is SO IMPORTANT. But it is not valuable because you need a diploma, you need to actually learn and apply it there. And I do think that an education is VERY important, but like I said before the only acceptable form of debt is when you can sell what you went into debt for and be out of debt immediately; it needs to retain a monetary value (not sentimental value, not emotional value, not enjoyment value). Student Loans do not fall into the category of being able to sell it and be out of debt.

But I DO want kids to go to school. If asked, my advice would be to work, work, work your tail off. Work for a couple years and save up every penny you can, go to a state school. You will most definitely not take school for granted at that point. My buddy, Casey, worked his way through school and graduated from Clemson University in Engineering. He did not incur a penny of debt and graduated with a degree. It is never okay to use money that you do not have. That seems very basic to me but something that we rationalize so well. By the way, you know what we do when we rationalize, we tell rational-lies.

Yes I know that student loans generally have lower interest rates and yes I know they have things like you don't have to pay until you graduate. But it is still the emotional response of being in bondage and I will choose freedom 100% of the time.

So when you tell me the perks of debt (like in Student Loans) what I essentially hear is, "Come be in slavery, we have all types of perks like water, food, sheets, good hours, a nice master and it is much better than the other type of slavery." I will never be willing choose or say it is okay to be in this. I cannot make people's decisions for them, but there are too many Americans that have the walls closing in because of their money and we have to open our eyes that we are allowing it to happen. It is so important because it affects everything else in their life, to the point that they may not be able to do what God wants them to do because they have put them into a place of bondage.

Too many people are stuck in a trap and doing a job they don't want to be doing. Instead of doing something that makes them come alive and what God designed them to do.

In John Eldredge's book, Wild at Heart, there is a quote that holds very true.

"Don't ask yourself what the world needs. Ask yourself what makes you come alive, and go do that, because what the world needs is people who have come alive."

Coupons of the Week

Here are some coupons of the week from Hustler Money Blog that you might be interested in.

Printable:
Express $10 off 40 or $20 off 80
Kmart $5 off 50 **should work at Walmart too
Best Buy 10% off
Office Max $10 off 20
Pep Boys $10 off 50
Value City $20 off 50

Fear of Investing

I was talking with someone about a month ago about his financial situation. Just to paint a picture: he is married, does not own a home, is debt free, and him and his wife are in a situation where they are not incurring a lot of expenses. He makes a regular income; She does not. His regular income covers all expenses that they have. His wife has irregular income coming in due to things on the side she does. All money she brings in goes to savings.

He wants to invest the extra money they have coming in but says he is scared to do so. My advice to him is what I have heard from many financial guru's in the past. Knowledge Eliminates Fear.

Know this:

97% of the 5-year periods in the entire market history made money
100% of the 10-year periods in the entire market history made money

Just pick any random 5 or 10 year period in the market's history and you will find these statistics are true. By the way, this includes during September 11 and the Great Depression.

Your money will go up if you just leave it. Here is some knowledge to steer you away from short term investing.

Only 66% of the 3-year periods in the entire market history made money

That is a 1 in 3 chance that I will LOSE some of my money. I am not taking those chances; I would much rather stick with the 97% and 100% figures.

FICO Score Decoded

I had a friend ask me a really good question recently that I wanted to put on here to show my thoughts on it. He asked, "Which is better on a credit score - a credit card with zero balance, or no credit card at all?"

Before I answer this question I have to lead into it so you know where I am coming from. I am not a big fan of encouraging people to make efforts to make their credit score as high as possible. I do think it is important to make all payments you have so that your credit will be intact and in good shape because it is your electronic reputation. As long as you do that, you do not have to worry about your credit score.

The only thing that a credit score gives you is the ability to borrow MORE money. So essentially what you are saying when you want to raise your credit score is, "I want the ability to borrow more money." I don't like the idea of borrowing money period so I usually advise people accordingly to not bend over backwards to get their credit score higher.

FICO scores are calculated based on your rating in five general categories.

Components of the FICO score are:
Payment history - 35%
Amounts owed - 30%
Length of credit history - 15%
New credit - 10%
Types of credit used - 10%

80% of your FICO score is to get in debt, stay in debt, and make payments for a long time. That is the way to improve your credit score, but also the way to be in slavery and have no freedom with your money. So I advise people don't even play that game. The only thing you need a credit score is for more debt anyways. Everyone in America is so worried about their credit score; yet most of America is living paycheck to paycheck. I want to steer people away from playing the credit score game because I really do think those two issues are connected.

But to conclude to an answer I say don't mess with it at all. If you are not planning on using the card, then don't get the card. It really doesn't affect your "credit score" that much if you had a card with zero balance as opposed to no credit card at all.

Realtor or No Realtor

I know several people in my life that are currently either selling their house or thinking of selling their house. The age old question in this is, "Do I NEED a realtor?"

The positive to not getting a realtor is you save on the commission that is rather sizable depending on how much your house will be sold for.

However, if you had to ask me I would say yes, I do recommend you have a realtor when you sell your house...BUT, I do not just want a realtor, I want you to get a high quality, highly motivated, won't slow down realtor with a great track record.

I have heard Dave Ramsey say to interview people when they are going to make money off you. So that is my suggestion. If you go in there and have questions ready for them and they don't want to oblige or are being a jerk, move on quickly and thank them for their time. If they don't feel that they are good enough to exceed all your expectations and know that they will stand up to a tough grader then you did not want them in the first place.

Interview Questions to ask:

1) Why should I list my home with you? (Find out what the agent will do to help your home stand out.)

2) What’s your company’s track record and reputation? (If one agent or company sells more than the rest, ask why and what they’re doing differently.)

3) Does your broker control the advertising or do you? (If your agent doesn’t control the advertising, your home may compete for ad space with listings from every other agent in the brokerage.)

4) On average, how close is the selling price to the asking price? (This information is available from your local Real Estate Board. The agent’s performance in this area can help predict how much you’ll get for your home.)

5) On average, how long does it take your listings to sell? (This information is also available from the Real Estate Board. It will help determine about how long your home will be on the market. )

6) Do you have a reference list of clients I could contact? (Make some phone calls. Ask them to describe their experiences with the agent.)

7) What if I’m not happy with the job you do? (See if the agent will cancel your contract without penalties if you’re not satisfied with the service they provide.)

Did I say free?

I found these offers on Hustler Money Blog.

If you have some free time and you like to drive, you can now get FREE stuff while doing it. Check out these offers:

$25 Best Buy Gift Card for Test Drive a Suzuki XL7
Two Tickets to the Bourne Ultimatum for Test Drive VW Touareg 2
$10 Starbucks Gift Card for Test Drive Smart Car USA Tour
Mercedes Test Drive for free food and parting gifts.
Support Susan G Komen to raise money for breast cancer research with BMW test drive
Request a brochure with Prepaid $50 Mastercard for Toyota Test Drive..ymmv.

"Above and Beyond" Cash Flow

At the risk of this post being "out there," I am going to talk about what I have termed "above and beyond" cash flow.

This is any money you have coming in that is unexpected. It is different than your alternative income stream where you are making money work for you without going into a "job" so to speak (that is a planned income stream). Above and Beyond Money is when you find $20 on the ground, when your annual tax return comes in, or when your Aunt gives you $50 for your birthday. It is irregular income that you know is coming someway, somehow, sometime; you just don't know how, from where, or when.

If you have a detailed cash flow plan and receive above and beyond money you know exactly where that money can be put to good use. If you do not have a plan there is a good chance that money will leave you quickly and this is never a good feeling.

A marketers job is to appeal to your senses and use our psychology against us. So if you suddenly have $1600 that you did not have a plan for, there is a good chance it will be gone and you will be left wondering where it went. I am not trying to tell you what to do with YOUR (cough, God's) money; but I am trying to tell you that whatever you spend it on, you need to do it on purpose.

I believe that if we receive Above and Beyond Money and there is no plan, then it is not going to be a financial help to us. I cannot stress the idea of a planning enough. I love talking about doing fun stuff with your money: investments, generosity, savings for cash purchases, etc. But you HAVE to have a foundation first and one of those foundational blocks is a PLAN.

Tips for Cash Flow Planning

These are all tips that have worked for me; if you have been frustrated with budgeting try some of these ideas.

1.) Use a computer. They are good for you. If you do it in excel you can make it calculate your total as you go. Not only that, if you forget something you can just insert a row instead of erasing everything like you would on a sheet of paper.

2.) Budget for upcoming expenses. If you know something is coming up a few months from now, start budgeting now. It makes things so much easier when it comes time to pay whenever that something comes.

3.) Do your budget monthly. Each month changes. I am single with a basically simple lifestyle and still things change for me on a monthly basis. You are not going to come down from the mountain with the stone tablet budget, you have to continue to tweak and change things depending on what life throws at you.

4.) Start your EMERGENCY FUND. I don't think anyone will argue with me that life throws curve balls. Why would we not plan for this? This is the FIRST thing recommend you to do, it is SO important. Save up $1,000 and set it aside. Then attack your debt. (See Attack that Debt) After that is completed I suggest you set aside 3-6 months income as your emergency fund. (See Emergency Fund)

5.) Keep copies of old budgets. I like looking back on things from a year or so ago and see how far God has brought me in life. Not only would it be neat to see this in our cash flow planning, it is also a good reference tool.

6.) Use envelopes to hedge overspending. If you plan for $200 for groceries one month, just put $200 in an envelope and have all your money come out of there. Dunn & Bradstreet did a study that says in our psychology we spend less money when we use cash. It is a fact and we can argue but because debit/credit cards are so convenient we end up spending more. If you set aside a few envelopes a month: food, groceries, fun money, etc. it will aid in your effort to not overspend.

Side Note: My friend Dean has a "five pocket wallet" that he uses to set aside his cash for each category, rather than having five envelopes . This idea intrigues me and I think I would like to try that in the near future.

7.) Do NOT turn to debt. If you can't fit everything into your budget that you want/need to spend money on do NOT turn to debt. You need to cut things out of your life, debt cannot be an option anymore.

8.) People with irregular income still have to budget. You do not have a round number each month and to planning for your budget will look a little different. You need to prioritize your spending. Rank your expenses. 1.) Food 2.) House 3.) Transportation 4.) Basic Utilities 5.) Clothing from there rank what you deem most important then next importance. It is a skill and will take time to develop.