Archive for the ‘living poor’ Category

Well, what are my blogging plans for the next month or so (at least the highlights)…

First, I will be writing three posts for StraighttotheBar.com.  [Click on the link now and see a video a guy bending a wrench].  Most likely the posts will be entitled:

“Eliminating the Lug Nuts: How to Find a Good Trainer.”

“The Power of the Negative.”

“Visualization: No Longer just for New Age Hippies.”

Much to my wife’s chagrin over at Musings, Rants, and Monologues I will be posting on my recent quest to build the perfect minority.  Trust me, it will be both offensive, sophomoric, and politically incorrect to the 1,000 degree.

And right here on this, my main blog, I will be posting on my recent struggles with food, our upcoming travels, getting a handle on credit card debt (our experience), and the kind of things you do to start a mental transformation that can keep pace with your physical transformation.  See you later!

As we near out first pay check in over two months (times have been tough but God provided) we are set to implement some money saving procedures and a much improved budget.   What have we done?  Well I will share with you three tips today to shrink your expenses and saved lots of money

First, perhaps the biggest change for us, we are limiting our grocery/all things Wal-Mart budget (excluding dog food) to $250 per month.  We are going to enforce this budget limit by taking out $250 cash at the beginning of the month and placing said cash in an envelope to be used each time we shop.  When the money runs out, no more groceries.  As an incentive to save more, 50% of the money left over at the end of the month can be used for ANYTHING we want.

Estimated Savings: $200-400/month

Second, we are going automatic.  We are signing up as many bills as possible for automatic bill pay.  We have been paying anywhere from $5 to $25 dollars in late fees each month.  The main offender is our water bill.  It is the only bill that comes without a return envelope and is therefore easy to forget about.  To make matters worse the local water department are known in our house as the water Nazi’s- if you are two weeks late with your bill they shut off the water and charge $20 bucks (plus late fee) to reconnect.  As if they weren’t selling the most abundant resource that only cost about $30 a month, and we were somehow going to run off without paying that hefty $35 dollar water bill….geesh.

Estimated Savings: $5-$25 dollars

Third, we will be paying down our lowest balance credit card in a month or two and using that card for gasoline- NOTHING else!  Well okay, emergencies, but only real emergencies.  The card will be paid off before the end of each month.  It will help us budget our gas money and allow for quick and easy gas purchases.  Tried buying gas without a credit card lately?  It isn’t fun.

Estimated Savings$10-$25/month on interest

OVERALL estimated servings:  $215-$450 dollars

Why don’t you make your savings automatic- that is after you finish paying off those high interest credit cards? Let me address the latter before tackling the former.

It makes no sense to put your savings in a bank account with less than 2% interest while your credit cards accumulate debt at 16-20% interest. Plus, if a true emergency occurs (i.e. your car breaks down) you can access that money on your credit card just as easily, if not more so, as if it were in your savings account.

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Our present financial condition is similar to my physical condition back in February. My wallet is horribly out of shape; my credit cards are stretched like me waist used to be; and cash flow is almost non-existent (much like my previously well concealed six pack). I think that is enough analogies for now, you get the point.

Where are we right now? Well, sad to say, we are burdened by about $15,000+ dollars in credit card debt. That debt costs us about $525/month just to stay on top on minimum payments. Crazy, isn’t it? It wasn’t always like this, when we got married we had three credit cards. It got this way because we (and most often me/I) got suckered into those credit card giveaways. We bought a new mattress and took advantage of the no interest, no payments for a year if you signed up for store credit card “special.” Of course we didn’t pay it off within the year, so we got charged the back interest. Same thing with a digital camera. We also had medical bills we couldn’t pay, so that ended up in a medical credit card. So right now we have about 9 credit cards. I could just smack myself for getting into this mess.

To make matters worse all those cards are maxed out. Why? Well, since my wife is a school teacher and I am a grad student we had two months each year with NO paycheck. We didn’t save/budget well so we ended up living off our credit cards.

So what now? I can’t go back and change this, but I can create an action plan to pay-off this debt. Chances are you could use an action plan too.

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If you’ve been reading this blog for a while you know I am big on promoting transformation and growth in ALL aspects of life. You should be concerned with transforming your body, but don’t forget about you mind, soul, and finances.

In some ways reigning in your spending can be harder than controlling your diet. As tasty as cookies and cupcakes can be, what about the thought of a new home entertainment system? But it isn’t only the big ticket items, what about that Starbucks coffee you buy each morning?

Try the “latte factor” calculator available at this link. I ran through the calculator the $3 dollars I spent almost daily while in college for the two slices and a drink special at the local pizza place. If I had put that money in an IRA account at 7.5% interest here is what could have happened:

2 years = $2,092

5 years = $5,855

10 years = $14,260

15 years = $26,327

20 years = $43,651

Wow. That pizza was good, but it wasn’t that good. Do you see how simple it is to save for retirement (or about anything else).

So now that you see how easy it can be to save, maybe it is time you take some control over your finances. My wife and I are starting this process August 1 (the day we become a two income family).

Below I have provided LOTS of links on getting your finances in order as well as tips on saving money. But for now (before the page break) I want to offer what has been the BIGGEST savings for our family thus far.

PAY ATTENTION! We used to use our debit/credit card to buy groceries at Kroger and Wal-mart. We had no food budget to speak of. So when I went into our on-line bank account and tallied all our trips to Wal-mart and Kroger together I found out that some months we spent as much as $750 bucks at those two stores (the average was about $600). That was insane!

So what did we do? We decided on a reasonable food budget ($250 bucks) and put $250 bucks cash in an envelope that we bring whenever we visit the grocery store. When that money runs out we stop buying groceries. As a result. We cut out about$350 to $450 dollars wasted each month on impulse items and other non-essentials.

Wanna go the extra mile? Make a list before you go and STICK TO IT! Between your list and the knowledge that you only have so much money to spend you will do wonders to cut back on that food budget.

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