Sunday, January 11, 2009

All Is Safely Gathered In: Family Finances

I wanted to talk about budgeting, because budgeting can be tricky, especially when you find yourself already in a bind. Budgeting for me can just sometimes feel like an awful reminder of 'if I had only done this before, then I wouldn't be in this mess'.

About a month ago, my ward had a combined Priesthood and Relief Society meeting, that was really helpful and eye-opening for me when it comes to budgeting. We all got one of these pamphlets "All Is Safely Gathered In". My Bishop taught the lesson and one of the things that stuck out to me was when he was talking about the budget sheet on the back. He asked us to pay note to the order of the expenses on the budget sheet. I liked what he said, because I have certainly learned that if you pay your tithing first that Heavenly Father will bless you so much.

I want to share an experience that my family had with tithing. My husband and I had just had our little girl, and Hospital bills were piling up and on top of that we had a $700 car repair to take care of and on top of that we somehow put too many exemptions on our W2 and found out that we owed nearly $1000 in taxes. It was so much so sudden. We had no savings left and went ahead and used the credit cards that we had just consolidated all our debt so our credit cards were empty and we thought we would be okay to use them. A few month later we found ourselves with maxed out cards again and owing $600 in tithing. I was nearly ill over the fact that we were behind so much on our tithing and finally came to a breaking point. My husband and I prayerfully came to the decision to make a leap of faith and pay the full amount that we owed, knowing that we would be very behind on bills that month. We were so scared and really felt that there was no way for us to get out from under our situation. It turned out to be a miracle, because that very evening that we paid our tithing, someone called and was very interested in the car that we had put up for sale. They ended up buying it, and only for what we owed on it, but it eliminated one of our car payments and somehow we came out alright that month. I am not going to say that if you pay your tithing that magically all your debt will go away, but I do know that the Lord can help us find a way. We are still struggling every month, but we continue to pay our tithing and we continue to see the blessings flow in our family.

The next expense listed is Savings. My Husband and I suggest the 10, 10, 80 rule. (10% Tithing, 10% Savings, and 80% to Live on) If you can follow this rule that is great and probably ideal for most families, but I know for us it is not a reality yet, it is more of a goal. My Bishop in his lesson suggested saving even just $5 a month if that is really all you can do. My husband and I try to save $5 every check, and some times it gets used on the unexpected, but it is so important to get into the habit and try to increase that amount as much as you can afford, because it really is the unexpected things that seem to get us (at least with us it is).

The order for the rest of the expenses make sense, and notice how far down the list debt is. I wouldn't say to avoid paying your debt by any means, but when you find your self in such an unstable situation, take care of you needs first.

These are the steps that I would suggest to work towards the goal of having a good budget:

1. Asses you situation
  • Sit down every time you get paid and go over your budget goals and bills
  • For at least 2 weeks (a month would be better), write down everything you spend and figure out how much your family lives on and where all of your money is going.
  • Write down all your fixed expenses and a guess of you expenses that vary
2. Every time you get paid set up a plan on how to spend your money
  • First set aside tithing and savings (I like to withdraw my tithing and pay imediately, so that it never gets behind)
  • Next decide how much you need to live on (food, gas, etc.)
  • Last go over the bills (if you can't pay them all, prioritize them and do the best you can, but do not use your credit cards!)
3. Check up on yourselves and CUT BACK
  • Continue to asses where you are at and pay close attention to where you money is going.
  • As you see where your money is going, you will find that there are areas that you can save (I will give lots of suggestions on this blog, but the one that usually is the best to start with is food and eating out)
  • Cut Back where you can and put the extra money in savings or if you are behind on bills, put it toward that.

It isn't easy to get out of debt and I am not even close, but that is why this blog exists, I want to help others that find themselves in similar situations and it helps me stay motivated.


Angela said...

Thank you for your post! I am trying to get a handle on our finances--it constantly amazes me how much debt we have, and how we always live outside our means, even after raises. This is very helpful. I can't wait until your next post :-)

Mickelle said...

Great guidelines!

Momof3 said...

I enjoyed your comments and tips. One thing I suggest is getting rid of credit cards. If you can't go cold turkey, go down to one for emergencies. I do have a debt card that I use in place of credit cards if I need a credit card for one reason or another. It comes right out of my checking account and I never have to worry about how to pay the credit card at the end of the month. We have saved so much money by buying things with cash and saving for things we need. Also, check out freecycle, craigslist and free sections. There have been times we have needed things and have gotten them for free off of these sites.

Jen Morrison said...

thanks for advertising this blog on craigslist. I am really enjoying reading your posts. I love your honesty and insight.

J S said...

I think this blog is such a great idea!
On a different note, "asses" is not what you wanted to write. I am pretty sure you meant ASSESS (two s's at the end).