Bible Money Matters

Drive Free Cars and Retire Rich!

2008-05-13T06:22:00.002-05:00

Drive Free Cars for life!

While taking part in Dave Ramsey's "Financial Peace University", we heard a great example of how you could turn traditional thinking around, and make your money work for you.

They started the lesson out by talking about how the average new car payment for 1/3 of car buyers is $475 with a loan term of 6 years (for a $26,000 car with 9.6% interest). Most people will just assume that they will always have a car payment, and that having a car loan and payment is just a part of life. It's something that you can never get away from!

According to Dave Ramsey, if you turn that thinking around, within that first six years you can get to the point where you'll never have a car payment again!

How it works

Let's say the car you're driving now is worth $1500, and instead of paying a dealer $475/month for a new car like most people do, you save that money for 10 months. At the end of 10 months you'll have $4750, along with another $1500 from the sale of your old car. With that money you can buy a new car worth $6250.

If you keep going along those lines for another 10 months, you'll have another $4750. At the same time you'll probably be able to sell your new $6250 car for just about what you paid for it. That means you'll have $11,000 to spend on another new car, just 20 months after you started with a $1500 car!

Let's say you decide to keep that new $11,000 car for the full six years it would have taken to pay off a new car with a loan. Continue paying yourself that $475 payment every month for the remaining 52 months, and put it into a good mutual fund. If you receive an average return of 12%, then you'll be sitting on over $32,000 dollars after the 6 years is up.

You're home free - free cars for life!

If you go now and buy a nice used car for $12,000, you'll still have 20 grand sitting in your "car replacement fund". If that fund continues gaining 12%, even if you never add more money to the fund, you'll be able to buy $14,000-18,000 cars every 5 years from now on! The interest you're gaining in that account will pay for your new cars for the rest of your life!

How do I retire rich?

Here's the fun part. Once you've established your car replacement fund, from then on you'll be ok to take that $475 you would have used to pay for your new car loan, and invest it in a mutual fund. If you gain 12% interest, here's how the numbers work out if you invest that amount for 10, 20, 30 and even 40 years:

10 years - $100,000
20 years - $470,000
30 years - $1,600,000
40 years - $5,588,385

So there you go, Dave Ramsey's plan to drive free cars and retire rich. While it does depend upon you earning a good amount of interest through your mutual fund, as well as some other assumptions about car values, it doesn't sound impossible to me. I know we would never pay $475/month for a car, but at the same time this example really brings home the idea that the returns of compounding interest are something we all need to strive towards gaining.

Let me know what you think about this plan in the comments!

Free Stuff: Revolution Money Exchange $25 signup bonus til May 15th

2008-05-12T23:43:00.000-05:00

Just a friendly reminder - from now until May 15th, if you sign up for a new account for Revolution Money Exchange, you'll also get a $25 sign up bonus. To sign up all you have to do is click on the button below, and you'll be taken to the first page in the sign up process. If you sign up through my link, I'll also get a $10 bonus.

I signed up for and received my $25 bonus almost instantly, as well as several referrals for friends. I transferred it directly to my local checking account. Free money - can't beat that! Don't miss out - sign up today!

LINKS:
Revolution Money Exchange

Unboxing Dave Ramsey: Opening the Financial Peace University Membership Kit

2008-05-12T08:06:00.000-05:00

Time to dig deeper

I've been blogging about personal finance now for several months. During that time one person I've heard about time and again is Dave Ramsey and his baby steps. I've gotten a basic understanding of his program through posts that other bloggers have had on their sites, but I always wanted to delve a little deeper.

A couple of weeks ago my wife and I got that chance. Some friends in our church small group decided that over the summer months they would be hosting a Dave Ramsey "Financial Peace University" class at their home every tuesday for 13 weeks. It sounded like a great chance to examine his ideas a little more in depth. We paid the $100 for the class and materials.

Opening the package - what's inside?

We got our package this past week, and today I decided to do an unboxing of all the things in the box, kind of like they do with new tech gadgets on a lot of the technology sites.

So when you sign up for "Financial Peace University", what do you get? First, you get this box:

Once you open the box, this is what you see that it is chocked full of stuff:

Inside you'll find audio CDs, CD-Roms, books, workbooks and more.

Although we'll be watching the lessons on DVD with our group, the lessons are also included on CD in a nice CD wallet.

The package also includes a nice faux-leather wallet to use with the enveloping system. This promises to be a challenging thing to do for my wife and I. We're used to just paying our bills, and then saving/spending whats left over without any kind of an organized budget. Looks like we'll have to use a bit more discipline now!

And finally, they give you a couple of credit card sleeves with a nice reminder printed on it:

Stay tuned

So there you have it, that is the unboxing of the Dave Ramsey "Financial Peace University" membership kit. Lots of great stuff, all of which we'll be getting into over the next 13 weeks.

During our 13 week journey I'll blog about our experience with "Financial Peace University", and update you on some of the tips that we get from the great mind of Dave Ramsey. Stay tuned for more!

Personal Finance Bible Verse of the Day: Never Enough

2008-05-12T08:00:00.000-05:00

Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless. Ecclesiastes 5:10

Personal Finance Bible Verse of the Day: Be Content

2008-05-10T12:10:00.002-05:00

Let your character be free from the love of money, being content with what you have; for He Himself said, "I will never desert you, nor will I ever forsake you. Hebrews 13:5

7 tips for a frugal wedding

2008-05-08T10:45:00.007-05:00

Our beautiful wedding, a spendy affair

My wife Maria and I got married about 6 years ago now, and our wedding was a beautiful affair. We had a reception held at a local country club, we had over 200 guests, and we spared no expense on catering, flowers, decorations, dresses, DJ and party favors. After all was said and done we ended up spending over $30,000. Luckily for my wife and I her parents were the ones footing the bill, and they really wanted to pay for it since my wife is their only daughter.

Our honeymoon on Maui

Looking back my wife cherishes the memory of our beautiful wedding, but if I had gotten my way we wouldn’t have spent quite so much money on the wedding. Wouldn’t it have been much nicer just to have her parents give us all that money, and have a smaller affair?

Ways we could have saved money

If we could do it over here are some places I think we could have saved some money on things we probably wouldn’t have even noticed.

Photographer: We spent a ton on a photographer for our wedding when we probably could have found someone cheaper. We have friends who for their weddings had family friends and acquaintances who were good photographers take wedding photos that looked just as nice or better than some that the professionals take. Of course you need to be careful when doing this, but if you find someone talented, it doesn’t need to be as expensive. You also can have access to the originals when you have an acquaintance do it, which is an option you don't have with professionals.
Reception location: Our reception was held at a local country club, very beautiful, exclusive and expensive. Friends of ours had receptions that were almost as nice at local VFW or Knights of Columbus halls that were substantially cheaper. Just make sure to check them out ahead of time to make sure they're not too small, smoky or dingy.
Keeping the wedding small: We basically invited everyone we knew to our wedding, and the more guests you have the more things cost. You need to take into account the costs of paying for dinners, party favors, valet parking, etc. It adds up quick. Keep the wedding smaller and it will be cheaper - I guarantee.
Make your own invitations: We spent a fortune on creating and mailing our custom printed invitations. Make your own invitations for a substantial savings.
Wedding cake: Our cake was beautiful, delicious and monstrously expensive. Have a family friend who bakes well to make cake for the reception. We have friends that did this and no one even knew the difference.
Don't rent a limo or fancy car: While it can be fun to rent a limo to ride to and from the reception, and home afterwards, remember that it can be pricey. A good way to save some money is to borrow a nice car from a family friend (we borrowed the in-laws Mercedes), or just use your own vehicle. Just make sure that if people are going to be decorating your car not to use anything that will damage the paint job.
Plan ahead: Try and make sure you're planning your wedding with plenty of advance time. If you have longer to plan, you'll have longer to research your options, and find the choices that give you the best value for your money.

Do your research and plan ahead

Those are a few areas where I think you can safely cut out some expenses when planning your wedding. Of course you need to be careful, and realize that sometimes you’ll get what you pay for. But as long as you plan ahead, and give yourself plenty of leeway for making some small mistakes - you’ll be fine.

When things get busy on your big day, don’t forget to enjoy the day and your new spouse! You only get married once and all the small details and things that seemed so important beforehand really won’t seem so important once you're looking into their eyes on that big day! Have fun!

Christian Carnival CCXXIII - Tabernacle Edition is up!

2008-05-08T00:43:00.002-05:00

Christian Carnival CCXXIII - Tabernacle Edition is up over at http://www.deepbiblestudy.net. This week's carnival uses the theme of the tabernacle of God to categorize the posts, and is quite an effective metaphor. Check it out for further explanation!

My article, Money and your prayer life: Do you pray about your finances? was chosen as one of the articles for this week's carnival. Please check it out, and the rest of the great articles. Here are a few of my favorites:

Rodney Olsen presents Keeping Pets in Perspective posted at RodneyOlsen.net. As Christians, what should our attitudes be towards pets?
Crystal Nichols presents 7 ways to live in harmony with your coworkers posted at Christian in the Corporate World.
Diane R presents Angry Young Christians? posted at Crossroads: Where Faith and Inquiry Meet. Why are there so many angry young adult Christians nowadays?

Don't forget to check out some of my top posts from this last month!

1. Paying for Pets: When is it too much?
2. Should parents pay for their kid's college expenses?
3. 5 ways to make some extra money
4. Money Hacks Carnival #6: Famous Hackers Edition
5. The bible and Tithing Series
6. Revolution Money Exchange - $25 signup bonus!
7. 3 weeks with Buxfer.com
8. 5 Budget Busters Challenge
9. How to make a million dollars at any age
10. 3 weeks with Mint.com

Enter our book review and giveaway contest! Enter by doing the following and leaving us a comment:

7 positive ways to use your Economic Stimulus Rebate

2008-05-07T09:42:00.018-05:00

Big money on the way

So now that you've got your rebate on the way, you may find yourself with an extra cash that you can use to buy that new TV, save for retirement or use to pay down debt. If you're not sure of when you'll be getting your payment, check out our post titled, "Economic Stimulus Rebate: When will you get your rebate?"

My wife just got out of the hospital after a 3 week stay for a blood clot in her left leg. It was a major health scare and we're just thankful that she made it through alive. Because of her long hospital stay, however, we will have to deplete part of our emergency fund to pay all the bills. Luckily we had good insurance and we'll only end up paying about $2000 of a total bill that will probably be in the hundreds of thousands of dollars. For us, finding a way to spend the $1200 economic stimulus rebate will be easy. We'll be just sending the check directly to the hospitals.

7 ways to use your economic stimulus rebate

Besides medical emergencies, what are some good positive ways to use your economic Stimulus rebate besides just spending it on a big flat screen TV?

Pay down debt: This can be a great way to snowflake your way out of debt, although its more of a large snowball. Pay down your smallest debts and work your way up!
Bulk up your emergency fund: Take the money you've received and put it in a high-yield savings account to begin building (or continue growing) your emergency fund. In uncertain economic times like these it's a good idea to plan ahead and make sure you're ready in case you lose your job, have health issues (we know about this one) and
If you haven't already, start a Roth IRA: Use the money to purchase a long term investment. The earlier you start saving for retirement, the better!
Pay for a needed home upgrade or repair: Use the money to replace your old crumbling driveway or to update your kitchen countertops. Try to use the money on things where you'll see a return on your money when you sell, things that will improve your home's value.
Donate your rebate: We all have good intentions of donating to our favorite causes, or giving more to the church we attend. We have good intentions but rarely have the money to follow through. Take the rebate that you received and send it to your favorite good cause! Not only will you be helping out a good cause, but you'll get a great feeling from it as well!
Go on a mini-vacation: Everyone gets stressed out and sometimes a few days off is just what you need. Instead of spending your whole rebate on a vacation to Hawaii or a cruise in the Caribbean, take a mini-vacation for the weekend to a resort nearby, or stay in a fancy hotel for a couple of days. Take the rest of the money and save it, pay down debt or invest.
Make an extra mortgage payment: Make an extra payment on your mortgage and get it paid off sooner. The more of these you can make, the more years you can cut off the life of the loan.

What positive ways will you use your rebate?

So there are a few ideas of some positive things you can do with your economic stimulus rebate. Let me know in the comments what some of your ideas are as well and I'll update the post with your suggestions as the bottom. If you've posted about this topic on your own blog, let me know and I'll add you to the "related links" below as well!

Related links roundup
Economic Stimulus Rebate @ BeingFrugal.net
What to do with your economic stimulus payment @ Consumerism Commentary
IRS Economic Stimulus Check Promotions: 10% Bonus @ My Money Blog
15 Things To Do With Your Economic Stimulus Check @ freefrombroke.com

Calculate your rebate

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Cartoon Funny of the Week

2008-05-06T10:04:00.000-05:00

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Personal Finance Bible Verse of the Day: Needs

2008-05-06T08:42:00.003-05:00

my God will supply all your needs according to His riches in glory in Christ Jesus. Philippians 4:19

This verse is encouraging for us to know that all our needs will be supplied, even as we're going through hard times, and times where we know we'll be having lots of bills to be paid. Because we had followed the scriptures about planning ahead, we were able to get health insurance and save an emergency fund, and be supplied by God in advance.

Either way it is very calming and satisfying to know that with God we never need to worry, he will provide.

Bible Money Matters April 2008 Recap

2008-05-05T10:49:00.012-05:00

April was another great month for BibleMoneyMatters.com! We were able to keep the site growing, did a complete redesign, brought in some new visitors and made some new friends. Here's a recap of April 2008:

Top 10 Posts from April

1. Paying for Pets: When is it too much?
2. Should parents pay for their kid's college expenses?
3. 5 ways to make some extra money
4. Money Hacks Carnival #6: Famous Hackers Edition
5. The bible and Tithing Series
6. Revolution Money Exchange - $25 signup bonus!
7. 3 weeks with Buxfer.com
8. 5 Budget Busters Challenge
9. How to make a million dollars at any age
10. 3 weeks with Mint.com

Top 10 Referring Sites in April

We had a lot of great sites and blogs referring traffic our way this past month. Please return the favor and check out these great sites now as well!

1. stumbleupon.com
2. entrecard.com
3. google.com
4. gatherlittlebylittle.com
5. wisebread.com
6. moolanomy.com
7. frugalhacks.com
8. mrsmicah.com
9. beingfrugal.net
10. pfblogs.org

Other BibleMoneyMatters.com Stats

Subscribers - The site has seen a substantial increase in subscribers in the last month or two. We currently have 127 subscribers enjoying BibleMoneyMatters.com via the RSS feed, and another 17 receiving updates via email. If you haven't subscribed already, you can do so clicking here for RSS or here for email updates.

Traffic- The site had around 7,746 visits this past month, with 11,761 page views. That means we're showing a steady increase in users from the last couple months when we had 4,046 (Feb '08) and 6,651 (Mar '08) visits. Hopefully we can keep the growth going!

Google Page Rank Update - This site has been at a page rank of 0 since it launched a few months ago. After Google updated page rank this past week Biblemoneymatters.com now has a page rank of 4! Hopefully that will mean some increased exposure for the site.

Thanks are due..
A special thanks goes out to Lynnae of Beingfrugal.net for helping me keep BibleMoneyMatters.com updated during my wife's battle with a blood clot in her leg. She's still in the hospital today, but we're hoping that she'll be home sometime this week. Give Lynnae's site a visit, and thanks for stopping by!

Weekend Getaways That Won't Break Your Budget

2008-05-05T08:39:00.003-05:00

The following is a guest post by PT of Prime Time Money. If you like this post, consider subscribing to Prime Time Money via RSS or email.

Because most of us can't take a two week vacation to Hawaii every season, I present some frugal ideas for those quick weekend getaways. The biggest expenses of the weekend getaway are usually the airfare and hotel charges. These ideas focus on limiting or eliminating those big charges.

Friends Are Friends Forever

Some of my favorite vacations have been to places where an old friend is now living, like my recent trip to Calgary. Most of us have a friend from our past that lives in a different city now. Truth be told, if they're new to the city, they probably wouldn't mind some company. After all, you said you'd go visit them when they moved away. Now is the time to take them up on their offer.

Mention to your friend that you are thinking of visiting the city and would like to know the best place to stay. They'll likely offer up their pad for free. The weekend trip just got a few hundred dollars cheaper. Be sure to honor their generosity by picking up a few of the meals when you dine out.

Staying with a friend has plenty of non-economical advantages as well. You essentially have your own tour guide to the city. You'll know the best places to dine, what things are worth seeing, and you'll know the quickest way to get there.

A Camping We Will Go

Forget the long lines at the airport and the nickel and dime charges of the hotels. Break out the tent and go camping at your nearby State or National park. Some parks even have cabins, so you don't even need a tent.

State park fees are usually extremely reasonable and the parks themselves are very well maintained. Your tax dollars go to build and maintain these parks; you might as well get some use out of them. We do this once or twice a year and have a blast every time.

Close Only Counts...

If camping isn't your thing, then choose to stay at a hotel in either a city that you can drive to in a few hours or simply stay at a hotel in your own town. If you're just looking for one night away from the kids, this can be the best option.

Take this opportunity to explore the town you live in and to discover new dining and entertainment spots. If you're like me, there are hundred of places and attractions you haven't seen in your own town.

Your best bet on a hotel is to look for deals at the high-end business sector hotels near downtown. These often go vacant on the weekends and prices drop considerably. You can usually get a nice hotel room for a decent price.

Cheaper By the Dozen

Have some really cool friends? Take your next quick getaway with them. I remember doing this as a kid with my parents and their friends and loved it.

Weekend rental houses and cabins can be had at the fraction of the cost of hotel rates per person. Carpool to get there, group your meals and activities, and your savings really start to increase. Be sure you plan only a few group activities and meals though. Leave some time open for just your spouse and kids.

Have fun!

Can you think of other ways to create a more frugal weekend getaway? Share your ideas in the comments below...

Economic Stimulus Rebate: When will you get your rebate?

2008-05-04T22:06:00.005-05:00

If you're anything like me you're probably wondering when you'll be receiving your economic stimulus rebate check or direct deposit. After checking it out today I found that the IRS has setup a payment schedule based on people's social security number. My wife and I opted for the direct deposit, which means we will likely see our money by the 16th of May (based on my SSN). To get an idea of when to expect your own stimulus rebate, please see below.

DIRECT DEPOSIT

Last two SSN digits:	Payments will be transmitted no later than:
00 through 20	May 2
21 through 75	May 9
76 through 99	May 16

Paper checks will also go out based on Social Security number. For Social Security numbers ending in 00 through 09, the paper checks will be mailed starting May 9 and will continue through May 16. A similar process will be repeated in the following weeks.

PAPER CHECK

Last two SSN digits:	Payments will be mailed no later than:
00 through 09	May 16
10 through 18	May 23
19 through 25	May 30
26 through 38	June 6
39 through 51	June 13
52 through 63	June 20
64 through 75	June 27
76 through 87	July 4
88 through 99	July 11

Money and your prayer life: Do you pray about your finances?

2008-05-04T19:18:00.003-05:00

The past few weeks I've been reminded in a bunch of ways of just how woefully inadequate I've been when it comes to praying to God in all things. As Christians I feel we constantly need to be in relationship with Christ, seeking guidance, asking for things we need and praising him for all the blessings he has given us. This includes praying about our financial life.

Photo by greefus groinks

A couple of weeks ago at church our pastor talked about prayer in his message. He said that we need to approach God in prayer, and not just with generalities, but with specifics. A lot of times we don't see the need to be specific in our prayer because we figure that "God already knows what I need". But God likes specifics. Look at the story of the blind man that was healed by Jesus in Luke 18:

He called out, "Jesus, Son of David, have mercy on me!" Those who led the way rebuked him and told him to be quiet, but he shouted all the more, "Son of David, have mercy on me!" Jesus stopped and ordered the man to be brought to him. When he came near, Jesus asked him, "What do you want me to do for you?" "Lord, I want to see," he replied. Jesus said to him, "Receive your sight; your faith has healed you." Immediately he received his sight and followed Jesus, praising God. When all the people saw it, they also praised God.

The blind man asks Jesus to have mercy on him. While it may have been obvious that the blind man wanted his sight, Jesus asked him what he wanted - he wanted him to be specific in his prayer, and step out in faith and ask for what he needed. When he told Jesus what he wanted specifically, and had faith he would receive it, Jesus healed him.

In the same way, I think we need to step out in faith, and ask Jesus for what we need in our financial life - and be specific. Of course we need to make sure that what we are asking for fits within the will of God, but when it does, pray specifically about it.

Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. And the peace of God, which transcends all understanding, will guard your hearts and your minds in Christ Jesus. Philipians 4:6-7

So this is what I've been reminded of this week:

1. We need to be in prayer "in everything".
2. We need to present our requests to God, and be specific.
3. We need to be thankful for what he's already given us.
4. We need to praise him for who he is, and what he's done for us.

So there it is - pray about your financial life and God will hear your prayer. Whether or not your request is granted is up to Him, but Philipians says that when you pray to him, no matter the outcome, he will give you a peace that transcends all understanding. To me that's better than anything that money could buy.

For another complimentary viewpoint on this subject, please see:
Have you prayed about your money situation?

Enter our book review and giveaway contest! It may be taking longer than I had hoped to do the review and giveaway because of my wife's illness, but we're still doing it! Enter by doing the following and leaving us a comment:

Personal Finance Bible Verse of the Day: Problems ahead

2008-05-04T17:26:00.003-05:00

A sensible man watches for problems ahead and prepares to meet them. The simpleton never looks, and suffers the consequences. Proverbs 27:12

This verse really hits home for my wife and I this past couple of weeks as my wife has been in the hospital. Luckily we've saved up an emergency fund, and we had good insurance, so the medical bills will be manageable. Plan for problems, and when they come you'll be prepared.

Carnival of Ethics, Values, and Personal Finance - May Edition is up!

2008-05-01T12:01:00.002-05:00

The Carnival of Ethics, Values, and Personal Finance for May is now up over at Greener Pastures. Go check it out, the theme of this month’s carnival is“Shopping for a Better World.” !

My article Paying for pets: When is it too much? was chosen as one of the favorites this month as well, for which I am very honored. Please check out the carnival, and my article as well!

For all of those who are interested, my wife is still in the hospital, although she is now on the mend. She's got some hard days ahead of her, but we feel very blessed for the recovery she has had thus far. Please continue praying for us as she continues getting better.

I hope to start posting more regularly again soon!

Pay More Now, or Pay Even More Later

2008-05-01T09:02:00.003-05:00

The following is a guest post by Frugal Dad. If you like this post, consider subscribing to Frugal Dad via RSS or email.

I was perusing a magazine stand the other evening while waiting for a prescription at our local pharmacy. I picked up a copy of the latest Smart Money magazine and realized I had inadvertently let my subscription run out. There were a couple articles I found interesting and I immediately walked away with the copy to pick up my prescription. While standing in line one of those subscription cards fell out and as I bent down to pick it up I realized I was about to violate my own frugal rules. The subscription offer was 12 issues for $12, or $1 per issue! I was about to pay nearly 3.5 times that amount for one issue off the magazine stand; even more if you include the sales tax.

Pay Now, or Pay More Later

This experience got me to thinking - how many other expenses are more costly because I buy things in single quantities, or once a day, week, or month? I have a friend who smokes cigarettes and buys a pack a day, every day, instead of buying a carton. According to him, he cannot afford to buy a whole carton at one time. I don't keep up with the cost of a pack of smokes because I don't smoke, but let's assume a pack costs $4 with the added taxes. A pack-a-day smoker would pay $40 to purchase a pack of cigarettes each day for ten days. A carton of cigarettes costs about $28, $12 less than a pack-a-day purchase. Carry that out to yearly costs and the carton-buyers will save $430 a year!

I'm not just picking on smokers, the same argument could be made for vending machine soft drink consumers, or anyone who buys single items when it is cheaper to purchase in larger quantities. I've noticed many times in grocery stores I will pick up individually wrapped items because they are more convenient for throwing in kid's lunches, or to take on the road for a snack. Following my own advice, I would do better to purchase a bag full of the product and then divide individual servings into Ziploc bags or a similar container.

But I Can't Afford to Buy in Bulk

According to that same smoking friend I mentioned, they cannot afford the upfront costs of a carton of cigarettes because they never have $28 to spend up front. For them, it is easier to spend $4 at a time, even if the costs are significantly higher in the long run. One important thing to remember is that buying in bulk is not always cheaper. Occasionally retailers will use some deceptive pricing tactics to trick consumers into spending more per unit on bulk packaging. This is yet another reason why it is a good idea to take a calculator on shopping trips to calculate the unit price before automatically grabbing the larger container.

Why I Love Life Without Television

2008-04-29T07:30:00.004-05:00

The following is a guest post by Nicole Ouelette of Breaking Even, Inc. If you enjoy this post, be sure to check out the Breaking Even Blog.

“Did you watch American Idol?”

“Hey about that guy on the Today Show this morning?”

“When’s the game on tonight?”

When you start paying attention, it is amazing to find how many conversations rely on television. You only start noticing when you don’t have it.

I’ve only had cable television for two years of the last ten. I am now in a period sans television.

You wouldn’t know it talking to me. I follow enough news and celebrity gossip online to know what’s going on. I am only sometimes completely out of the loop.

“Why don’t you just get cable?” people have asked me.

I’ve found there are several reasons (some monetary but mostly personal health-related) to not have cable.

I save the money I would pay on a cable bill. The two years I did have cable, it was included in my rent. I find that I can find better ways to spend $60 or more a month. . . like high speed internet.
I save money on electricity to run the television. Sure there is a television that we have to watch movies but not running the television means one less electronic device is running.
If you do have a favorite show, there are plenty of ways to watch it without having cable. You can watch many shows online. You can also rent or buy the DVD of a season of your favorite program. You can borrow from you local library or a friend for free. You can have it all, without commercials, which brings me to…<
I’m not constantly seeing commercials that make me want to buy things. While I can’t prove this, I bet people who don’t watch commercials buy less.
Television leads to higher incidence of obesity and depression. When I had cable, I was headed towards both as I ended up watching hours of it every day.
I have more time to do other things. I walk the dog, I blog, I read… There are so many things in life that I do that not watching television seems like a very small thing to not do.
I have less negative energy in my life. I don’t know if it’s less electromagnetic waves or less reality television but I feel like I have less negativity in my life.

All this said, it is clear that I don’t have the willpower to turn off my television. If you can watch an hour or two a day and then turn it off, more power to you. If you can watch television and still do what you need and want to do, good for you. I am not disciplined in that way. And I think maybe at least a few other people aren’t either.

No matter what, I know that having at least one no television night is doable by everyone. As kids my family had it. We ate dinner and played games usually. It was kind of fun, since we were purposely not turning the television. My mom usually made a special snack. I highly recommend it for anyone. If you live alone, make it the night you have friends over for a potluck dinner. When I lived alone, having my friends over one night a week forced me to socialize initially but after a few weeks, I was looking forward to Wednesday nights and the happiness that only real people can provide.

If you do want to watch less television, 43Folders has some great tips. Actually, I’d recommend anyone who thinks television is too big a part in their lives to skim the article because it’s pretty interesting.

So here’s to more money in your pocket and a happier life being less controlled by a cathode ray box.

Do Not Worry About Tomorrow

2008-04-27T09:23:00.001-05:00

The following is a guest post by Lynnae of Being Frugal.net, a blog about frugality and getting out of debt. If you enjoy this post, consider subscribing to Being Frugal.net via RSS or email.

We're living in tough times these days. The news pundits are using the word "recession" freely. Even John McCain said it. The prices of milk, eggs, and gasoline are skyrocketing. And the latest news is that Costco and Sam's Club are rationing rice, because there may be a rice shortage.

With all the bad news, it's easy to panic. Will we be able to afford life's necessities? Is my job secure? Is my home's value going to tank?

As Christians, though, we are not to worry. One of my favorite passages of scripture is Matthew 6:25-27.

"Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Who of you by worrying can add a single hour to his life?

There are some things in life that are beyond our control. We can do what we can to prepare. If you feel your job is in jeopardy, start saving money for an emergency fund. If your budget is tight, pay off your debt, so you can free up some money for your monthly budget. Being prepared is important. But sometimes there isn't time to prepare.

Last year my husband lost his job twice. We were somewhat prepared for the first job loss. We had an emergency fund. By the second time he lost his job, we had used most of our emergency fund. Then thanks to an accountant's error, we ended up owing over $5000 in taxes this month. With all those financial hits in succession, there just wasn't time to prepare.

Still, the Lord tells us not to worry. He's got it under control, even if we don't, which seems to be most of the time in my life. Sometimes the road isn't easy. God never promised that it would be. But God does promise to provide for our needs. Food. Shelter. Clothing.

I can testify that we have never gone without life's necessities, despite being in dire financial straits many, many times. And through our recent trials, even though on paper it didn't look like we were going to make it, somehow we kept bringing in enough money to cover our emergencies.

Today, if you're worried about what the future holds, remember that God will never leave you nor forsake you. When times are tough, He is there. When it seems you're alone, He is there. You may not see it now, but when you're through this storm, you'll be able to look back and marvel at His provision.

Have you ever been in a situation where you've witnessed God's miraculous provision?

Gas Costs Getting You Down?

2008-04-25T12:46:00.002-05:00

This guest post was written by Mike from Quest For Four Pillars. Feel free to visit his site and subscribe to his feed.

One of the most common financial complaints that I hear is that the price of gasoline is too high. I agree that it's tough to see higher fill-up costs at the pump, but I sometimes wonder if some consumers doth protest way too much? Most people have bigger expenses than gasoline to worry about and gas costs are one of easiest expenses to reduce.

Gas prices are visible and frequent

If you own a car and use it regularly, then you will probably be familiar with market gas prices since you probably buy gas at least once or twice a month (or a lot more frequently). Because gas is a commodity and is sold in standard unit prices, it's very easy to compare the price with other gas stations and with the price you paid last week. For most other consumer goods, the unit costs are not as quite as transparent

How much of your budget goes towards gasoline costs?

This will vary widely for different people but in my case we spend about 2% of our net pay on gasoline. This is probably on the low side since we don't use our car everyday. Groceries, on the other hand, take up about 16% of our budget. Keep in mind that our grocery budget includes a lot of common household items such as diapers, kitty litter etc.

My point is that if I want to cut back on our expenses or even just complain about them, I should focus on what's important. Our gasoline bill could double and it wouldn't make a big impact to our budget. If our grocery bill doubled then we would be hurting. I suspect the average consumer has many other expenses which are much bigger than gasoline costs.

How to lower your gas costs

Here are a few ideas on how to lower your gas costs. There are many other lists on the internet which are a lot more comprehensive but I've tried to stick with a few solid ideas that if applicable, will make a significant difference.

Drive less - If you can reduce your driving then you will reduce your gas consumption by a proportional amount. This can accomplished by planning your trips better - if you drive to the grocery store seven times a week then do some planning and cut the trips down to twice a week. If you can carpool or take transit to work instead of driving then you will save money.

Drive slower - the faster and more aggressively you drive, the more gas you burn. No more racing!

If you can't beat 'em, join 'em

Consider investing in oil related companies. The stock prices won't be perfectly correlated to your gasoline costs but over the long run if the price of oil keeps rising then your stocks (I would look into buying an exchange traded fund) should perform well.

Guest Post: The Beauty of Sinking Funds

2008-04-21T00:57:00.007-05:00

This post was written by "Toblerone" at Simple Mom. Feel free to visit her site and subscribe to her feed.

Our family follows Dave Ramsey's baby steps, and in a recent post on my blog explaining Baby Step 3, I mentioned "sinking funds." It's a simple financial strategy, and it's not new, but it has enormously helped our family's finances. And I encourage you to start using sinking funds even while paying off debt via the debt snowball.

Simply put, sinking funds are a reserve of money set aside for some purpose. It's a commonly used business and government practice, and it should be part of a healthy personal budget as well. If you think of your family as a company that you've been assigned to manage, it would only make sense to make sure you have funds readily available for the many things that surface on any given year.

Why Sinking Funds are Needed

Think of all those non-monthly payments or purchases you face on a regular basis. For some people, auto insurance shows up once or twice a year. What about new school clothes for your kiddos? These aren't things you spend money on each month, but you still need to pay for them when they show up.

Nothing can screw up a debt-free plan quite like these irregular expenses. In fact, I'll bet that's how many people find themselves in debt.

"What? Christmas is only three weeks away? There's no money in the budget - I guess we'll have to whip out the Master Card."

"Why oh why did our insurance bill arrive just when we had to pay for Sally's recital costume? Looks like it's Visa to the rescue again."

If you know these irregular expenses are headed your way, it would only make sense to set aside a small portion of each budget towards them. This, in a nutshell, is sinking funds.

How Sinking Funds Work

Christmas is an easy example. Let's say you calculate a need of $500 for your Christmas holiday (gifts, decorations, cards, extra food - the whole shebang). It's now March 7, about nine months away until the next season. If you didn't start saving for Christmas 08 in January 08, that means you have nine months to complete your Christmas 08 fund - and 500 divided by 9 is $55.56. That's how much you should list in "Christmas" as part of your regular, monthly budget.

(A side note: some people prefer to budget according to their paycheck, not just by the month. If this is you, and if you get paid biweekly, then you'll calculate how many paychecks you anticipate from now until Christmas, and divide into that number, not the months.)

Sinking Funds For Our Family: an example

Sinking funds is an easy enough concept. But like many things in life, it's one thing to use this method on paper; it's quite another to put your money where your… idea… is. Sinking funds can get really fuzzy and confusing when they're all lumped together in one savings account. Even when you keep detailed monthly records of what dollar is assigned to what, all this can rapidly become overwhelming. At least it did for me.

That's why sinking funds didn't work for us… until recently. Thanks to ING, we can open as many savings accounts as we want, and it doesn't cost us a dime. We can even customize each account with a different name, and we can seamlessly automate transfers from our checking account to our various savings accounts.

We currently have five savings accounts, respectively named "Emergency Fund," "Giving," "Holidays & Gifts," "Vacation," and "Work Expenses." Each month when our paycheck arrives, we have ING automatically transfer a set amount from our checking account into each of these accounts. Most of the money stays parked in these accounts for months at a time, until expenses arise that fit these categories.

When we need funds for these categories, we simply transfer the needed amount back into our checking account and use the amount for that expense. Very easy.

The Takeaway

I should mention that during debt elimination, the type of sinking funds you have should be limited to the necessities. For the most part, you don't need to focus on a family vacation or a new couch when your overarching financial goal is debt freedom. So limit sinking funds for things like quarterly and annual bills and necessities. When you're debt-free, then you can start saving for the extra stuff.

And like I said, I think sinking funds are crucial especially during a season of debt reduction. The last thing you want to do is accrue more debt. With a Baby Emergency Fund of $1,000 and some basic sinking funds in place, it becomes so much easier to know exactly how much you can pile on your debt snowball.

Simple Mom is about simplicity and streamlining the chaotic job of MOM, with a bent towards stay-at-home moms or work-from-home moms. I am passionate about simplicity and balanced living, and am convinced that when Mom is doing well, the whole family thrives. Simple Mom highlights tools and resources that make this possible - it's life hacks for home managers.

Guest Post: Concentrate On Savings

2008-04-18T11:26:00.000-05:00

This guest post was written by Mike from Quest For Four Pillars. Feel free to visit his site and subscribe to his feed.

I was talking with my sister a while back about investing and she was asking about some of the types of investments that I own. I am a passive investor and own mostly exchange traded funds. Since she is moving to Asia later this year, she doesn't have access to the same exchange traded funds that I do and was worried about missing out or not having the best investments. My answer for her was - don't worry about the exact investments you own - the main thing is your savings. If you spend less than you earn, hopefully a lot less than you earn, then you will be fine. You don't need to have the absolute best investment plan to secure your financial future.

What are savings?

I define savings as using your earnings to increase your net worth. If you earn $1000 and pay off some debt then you have saved that money and your net worth has increased. Normal savings of course, is when you have the actual cash and can keep it in the bank or invest it. Ultimately your financial security depends on how much money you have - how you got there doesn't really matter. Whether you invested in bonds, stocks, expensive mutual funds - whatever - that is not as important as how much money you saved in the first place.

Some proof

I set up a little financial model to show the effects of investment return compared to rate of savings. Basically I want to compare one person who save a lot of money but gets a low rate of return with another person who is a much better investor and consequently gets a higher rate of return - but they don't save as much. The question is who ends up with the most money?

Scenario

Saver Bob saves $10,000 per year and invests in a tax-free account. Saver Bob is very conservative and can't stand the thought of his investments declining in value so he invests in government bonds which pay 4% per year.
Trader Tim saves $5000 per year and also invests in a tax-free account. Trader Tim is very aggressive with his money and invests only in equities which have a higher expected rate of return compared to bonds, but are also a lot riskier since he can lose money. Trader Tim is a pretty successful and get 8% per year which is double that of Saver Bob's 4% return.
After 20 years, who has the most money? The saver with the low rate of return or the not-so-good saver with a much better rate of return? The answer is that Saver Bob wins the race by quite a bit. Saver Bob ends up with $320,000 which is 27% more than Trader Tim's total of $252,000.

Summary

We saw from our example that the investor who saved twice as much but got only half the return, ended up with a lot more money. The point is that you should put more effort into saving money rather than how to invest it. I'm not suggesting that it doesn't matter how you invest - just that it shouldn't get the same priority as the saving. Once you have your costs under control and feel like you have maximized your savings, then worry more about things like asset allocation, investments etc.
If you liked this post then please check out Quest For Four Pillars for plenty more just like it!

Please pray for my wife

2008-04-15T18:10:00.005-05:00

I just got off the phone with my wife a short while ago, and she is being admitted to St. Francis Hospital in Shakopee. she had been having some leg pain and back pain since the weekend that has gotten steadily worse. She went in today because she was just feeling awful, and couldn't stand it anymore.

After doing a CT Scan the doctors found that she has 2 blood clots in her groin area that are actually very serious. They say if she hadn't come in, that she might have died.

They've admitted her to get her on blood thinning medications/etc right away, and she may be in the hospital for a few days at least.

If you could all pray for her over the next few days, we would really appreciate it.

UPDATE: She's resting in her room now, and will be undergoing tests tomorrow. Thank you for your prayers.

UPDATE 4/16: Thank you all for your comments. Just a quick update, she's resting fine today, wednesday, and is on blood thinners. At this point it sounds like there is little chance of the clots moving to her lungs (which is what they were worried about), but all the same she'll be in the hospital for a couple of days at least.

UPDATE 4/17: Maria had a tough day yesterday, she was in quite a bit of pain, and things weren't progressing as we had hoped. Her leg was having quite a bit of swelling, and it was pretty painful. They were able to get that pain and swelling mostly under control last night.

We had another CT scan last night as well just to make sure the clots weren't moving up at all, which can be dangerous. It doesn't look like they have.

We had a ultrasound this morning that shows that the clot is actually longer/bigger than we originally thought. It sounds like it is from her groin area almost to her ankle. The treatment course remains the same for now as far as I know though - blood thinners. Once the blood thinners begin their work the body should naturally begin breaking down the clot somewhat - although that can take a while. And it sounds like there will probably always be some residue from this clot in her veins.

Please continue praying for Maria, she's got some tough days ahead of her still.

http://www.caringbridge.org/visit/mariaanderson

My "frugalist" and "dumbest" home improvement project ever

2008-04-15T11:03:00.009-05:00

Over at www.rather-be-shopping.com they're running a contest to give away a cordless drill to some lucky soul who has told about their "smartest, dumbest, hardest, or frugalist (is that even a word?) Home Improvement Project or Repair Job that you have undertaken".

The Project

My "frugalist" and "dumbest" home improvement project took place last summer.

We had just moved into our new house the previous fall, and it was late spring, early summer 2007. We decided that we'd like to spend a little more time outside, enjoying the weather while it lasted (here in Minnesota, you have to take advantage of the nice days while they're still here).

We decided to build a nice patio in our backyard so that we could sit outside and eat dinner, entertain or have a nice little campfire for those warm summer nights.

Then we looked into how much it was going to cost. For materials and labor it was going to cost us in excess of 1600-1700 dollars. Ouch! I decided that I would undertake this project on my own. By doing all the labor ourselves we would end up saving almost $1000 dollars on the patio because labor accounted for over half of the cost! Can you say frugal homeowner 101? I took a free class at our local Patio Town to make sure I understood how to build a patio. It was a bit more complicated than I anticipated. I thought it would just be me placing a bunch of bricks down on the ground next to each other. Boy was I wrong. You have to dig a deep pit, place aggregate rock, tamp it down, add sand, screed the sand, and the place bricks one by one. Its a job most people can do, but time consuming.

The Execution

We bought all of the materials that we would need to complete the job, and had them delivered on the Friday that we would begin work. As you can see in the picture our backyard was completely grassed over when we started. We would need to begin by digging an 8" pit by the house where we would be installing the patio.

Moving dirt is a lot harder than it looks. We spent the rest of the day Friday just digging out our 8" pit and moving the dirt to a construction site across the alley. End of day one.

On the beginning of day two we tamped down all the dirt in our big hole manually with a hand tamper. Most people are smart and get a mechanical tamper that does all the work for them. I went the frugal route and got the hand tamper figuring I could save the $30 rental charge. I would regret this later on because just about every muscle in my body was sore.

After tamping down the soil we had to put down aggregate rock/gravel to make a solid base for our brick patio. The aggregate came in large 50 pound bags. We dumped the bags into our pit, making a nice even base for our patio. Again, this took longer than expected, and by the end of the day we realized that we didn't have enough rock for our hole, we had dug it an inch or two too deep. We ran back to the home improvement store and bought another $200 worth of materials. My frugal job just became less frugal.

While we were loading all of our extra materials I felt something in my shoulder twinge and experienced a shooting pain. Although I didn't realize it at the time, it turns out I had torn something in my rotator cuff. I continued working through the pain.

After we returned to the job site, we put in the rest of the rock and finished tamping it down. End of day two.

On day three we began placing bricks. First, we poured sand over a small portion of rock aggregate, and screeded it (smoothed it out) using a straight piece of lumber. We carefully placed our bricks in the pattern that we had chosen, and by the end of the day, we had a new patio! After having some steps built for a couple hundred bucks a week or two later, we were done with our project! Total cost? Just over $1000 for a patio and stairs that normally would have cost over $2000.

Conclusion

So this was my most frugal home improvement project ever, but it was also my dumbest project ever. The reason it was the dumbest was because I pushed myself too hard to get the job finished in one weekend, and tore my rotator cuff. I ended up having to rehabilitate it for the next 6-7 months. Not fun!

So what's your "smartest, dumbest, hardest, or frugalist Home Improvement Project or Repair Job that you have undertaken"?

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