Best of the week – August 30, 2014

Here are some articles that caught my eye this week….

Real Life Debt Busters: Bob Snyder

Josh and the folks at Faithworks Financial were kind enough to highlight our family’s debt free story this week.

Why Money Doesn’t Solve Money Problems

Personal finance usually doesn’t have nearly as much to do with math as it does with attitudes and behavior. More money just allows us to be even more of what we already are. Until we are able to adopt an attitude of gratitude and contentment, more money will not solve a thing.

7 ways to save money on your electronics

What tricks have you used get a good deal on electronics?

10 Chore Ideas for Toddlers

It is important to instill in children the importance of work. Even toddlers can perform small tasks.

5 BS Myths About Building Wealth Everyone Thinks Are True

Have you bought into any of these myths? They are prevalent in our society.

Smartphones, technology, and your career

Many of us carry a tremendous amount of computing power around with us each day in the form of our smart phones or tablets. The great thing is there are tons of great time-saving and money-saving resources that are available and many of them are free. Douglas Welch at Career Opportunities posted a great tutorial on some of these resources.

The two letter word that can change your finances forever

Definition of discipline: Making yourself do something you really don’t want to do, in order to get a result you really want to get. – Andy Andrews

A recent study  by the National Foundation for Credit Counseling found that 61% of people don’t have a budget. While there are many reasons why people don’t budget – too busy, think they don’t make enough, don’t know where to start – I think at the heart of many people’s failure to budget is the simple fear that if they had a budget, then they could not have what they want.

Let’s face it; our society isn’t exactly very good at telling ourselves no. The credit industry has made it so easy that there is very little need to think about denying yourself. Whether it is credit cards or 90 days same as cash deals, the message is buy what you want now and worry about paying for it later.vision

The power of “No”

That little word “no” though is one of the keys to financial success. But, (and this is very important!) saying no does not mean you can’t have what you want. In fact, by saying no to less important things, you make sure you will be able to say yes to what really matters. It is really about prioritizing your money. And that’s all a budget really is.

The key to being able to say no is understanding what you want to say yes to.

What helps give us the ability to say no is knowing what is at stake and having a vision of what could be. If you aren’t connected to the larger vision, then in a moment, you cave and say yes to something you really ought to say no to. Remember that when you say no you are saying yes to something bigger and more significant.

So what do you really want? What are your goals? What matters most to you?

Maybe it’s travel. Maybe you wish you had a bigger house or a house in a better neighborhood. Maybe it’s a hobby that you really love to pursue. Maybe you dream of being able to quit your job and stay home with the kids.

Maybe if things are really tight, you just really want to make sure you can continue to provide food and shelter for your family or perhaps you dream of what it would be like to be debt free.

Spend some time thinking about those dreams. What is really most important to you?

Write them down

Once you have decided on what your goals are, write them down. There is power in written goals. Goals that are not written down are just wishes.

Put them where you will see them

Once you have written them down, keep them somewhere that you will see them. Post them on the refrigerator or the bathroom mirror. Tack them on the wall at work. Attach then to the visor in the car. Maybe put them in your wallet next to that plastic.

By having it somewhere you will see it, when you are tempted to spend money, you have a reminder of what you really want most.

Create your budget with your goals in mind

Now create that budge,t but think about those goals as you decide how you will spend your money.

I can have the super-sized cable package with 546 channels, but if I do that I can’t save for that vacation I really want to enjoy with my family. Maybe I could downsize, as I never watch 90% of those channels anyway, or maybe I could do away with cable all together.

I can plan to eat out with my buddies at the office each day. But if on the other hand I saved that $100 a month I am spending on lunches, I could retire someday with more than a half a millon dollars in savings.

I could buy a new car like my neighbor just did, but if I have a $450 car payment then I won’t be able to pay any extra on my credit cards and I’ll be in debt for years. Or I could squeeze a couple more years out of my current car, buckle down, and knock out that debt.

Keeping the greater vision in mind

Andy Andrews defines discipline as making yourself do something you really don’t want to do, in order to get a result you really want to get. That’s really at the heart of successful budgeting. It would be nice if we all made so much money that we could have anything we wanted, but for almost all of us that isn’t the case. And so we must make choices.

Understand that every time you say yes to a purchase, you are also saying no to something else you could be doing with that money. That doesn’t mean you should feel guilty any time you buy something. But by having that bigger picture vision of what you really desire, you have a framework for making sure you say yes to what matters most.

Best of the week – August 23, 2014

Here are some articles that caught my eye this week…

Are Warranties Really Worth It?

While you no doubt can find the occasional story where an extended warranty paid off, by far the most common result is you lose out on the deal. Think about it:  The company selling the warranty has to come out ahead most of the time or else they would be out of business. In truth, extended warranties are often extremely profitable. Many times retailers make more off the warranties than they do on the item they are selling. A better solution is to have a fully funded emergency fund and self-insure.

Lack of household chores making children less responsible, claims survey

Interesting the difference in advice pre-1980′s and since. I believe household chores are a very good way to help children learn the responsibility of work. It is also a good way to help them begin to appreciate the value of money. Not that all chores should have a monetary reward. Some chores should be done just as a responsible member of the family. But having certain tasks that children can earn money for doing, helps them begin to understand that money comes from work, not from just swiping a card at that magic money machine called the ATM.

5 Household Budget Templates That Will Help If You Actually Stick With It

Having a budget  is one of the keys to financial success. Without a written plan you will always reach the end of the month and wonder where the money all went.

Tips for Negotiating a Better Deal

Negotiating is a bit of a lost art, but there is no harm is trying. Ideally, a negotiation should result in the seller getting the sale they want and the buyer getting a little better deal. The goal should be a win/win. And if they refuse to negotiate, the worst case is you buy the item for the same price that you’d have paid had you not tried.

10 Smart Ways to Make Yourself Love Saving Money

Make saving fun.

What to do if parents can’t help with college

If you are still a dependent of your parents, but they are unable or unwilling to help with paying your college, you might find yourself in a difficult place. Financial aid calculations assume a certain amount of parental contribution. Without that, you may find yourself at a disadvantage when it comes to qualifying for aid. If you find yourself in that situation, here are some considerations. The most important thing is to do everything you can to avoid large student loans. They will be an anchor around your life you will regret for years. Another option you have is to simply delay college. Many employers will pay part or all of continued education. That may mean not having much of a life for a few years with long days and evening classes, but that is easier than spending 20-30 years paying off student loans.

Using Checkout 51 to save money on your groceries

Probably one of the biggest variable categories and one of the areas with the most potential to save is food. Food can range from those who eat out almost every night to those with large gardens who may spend very little, with pretty much every data point between the extremes.

While we don’t do the extreme couponing that you see on TV, we do cut coupons for items we commonly buy. We shop a handful of stores for various items depending on where we typically get the best deal, and we try to stock up on items when we see a really good sale.

Recently, I came across one more way that you can save a few more bucks on your weekly grocery bill.

Checkout 51

Checkout 51 is an app that is available for both Android and iPhone. Here is how it works.checkout 51

Each week Checkout 51 posts a list of special deals. Usually there are 30-35 items with specific cash back offers. Most items offer cash back between $0.25 to 3 or 4 dollars, depending on the price of the item.

Simply do your normal shopping at your local grocery store but if you purchase one of the items on the list, save your receipt.

The app then works in conjunction with the phone on your smart phone. You simply tell it you want to upload the receipt. It launches your camera and allows you to easily take a picture of the receipt and preview the result. If your receipt is long it is very easy to piece together multiple pictures. Once you have a good picture of the receipt, you check off which cash back offers you are claiming and then upload the information.

When Checkout 51 receives the receipt, they send an e-mail promising to process your upload within 48 hours. In practice, I have found it rarely takes more than 3 or 4 hours. Once they have reviewed your receipt to verify the date and that it contains the items you claimed, they send another e-mail letting you know your claim has been processed and how much your account was credited.

Each Wednesday night at midnight they refresh the list of items with cash back available.

Once you have $20 accumulated in your account, Checkout 51 sends you a check with your savings.

That’s really all there is to it.

What I like about Checkout 51

It is easy. It probably takes me less than a minute to upload a new receipt. And I have never yet had an issue with the receipt being processed.

They usually have at least a couple generic produce cash back offers. I have seen offers for bananas, apples, tomatoes, and carrots in the time I have been using the service. Usually, coupons for fresh produce are rare, so it’s nice to find a way to save a little on these purchases.

There are no limitations on where you can shop. According to their website you can even use online purchases, though I haven’t tried that personally yet.

It is combined with other offers. On our most recent shopping trip, we had a 50 cents off coupon for a popular household cleaning product. Our store doubles coupons under a $1.00. Plus Checkout 51 had a $1.00 cash back offer. So the all in all we saved $2.00 on the purchase.

What I don’t like about Checkout 51

Really about the only negative I would site is that I wish they had a bigger selection of items. I am not sure how long they have been in business, but hopefully maybe their list of products will grow over time.

The other caution is one I would add with any kind of coupon. Make sure you are not tempted to buy items you wouldn’t have normally bought. If you buy a $5.00 item to get a $1.00 cash back, remember you didn’t “save” $1.00, you spend $4.00! It is great to save on things you would be buying anyway, just don’t fall into the trap of buying to get the extra “savings”.

Also Checkout 51 currently is only available for stores in the US and Canada. If you are elsewhere, you are out of luck.

A handy app

You aren’t going to get rich with Checkout 51. It isn’t likely to move the needle on your budget. But it really takes very little effort to upload the receipt and if I can save a few bucks here and there on things I would be buying anyway, then count me as a fan!

What savings apps do you find useful?

Understanding the difference between your credit report vs. your credit score

I have written previously about how you can go to http://www.annualcreditreport.com and get a free copy of your credit report from each of 3 major credit reporting agencies once per year. This is valuable and something you should be doing to make sure there are no errors or unexpected items.

This service only provides free access to your credit report. If you want to actually see your credit score, you must pay extra for that.

So what is the difference between your credit report and your credit score?

Your credit report vs. your credit score.

Be aware that your credit score and your credit report are two different things. Your credit report is a list of all of your reported creditors. This would include credit cards, mortgages, auto and personal loans, etc. Note it only includes items that are reported to the credit reporting agencies. So, if you have a line of credit at the local mom and pop hardware, it won’t appear there unless they report it. You credit report will include a list of accounts, your payment history, your current balances and credit limits, whether the account is in good standing or is delinquent, and personal information about you and your employment status.

Your credit score on the other hand is a number that is calculated based on the information on your credit report. It is an attempt to look at how you have used credit in the past along with your track record for repaying that credit and distilling that down to a numeric score.

Not a single score

What many people don’t realize though is you don’t really have a credit score. You have many credit scores. First, there are three credit reporting agencies: Equifax, Experian, and TransUnion. You might expect to see the same score generated from each, but in reality each will be a little different. If your credit reports are accurate across the three sites then those scores should be close but they won’t be identical. If one of them is significantly different from the others, then that probably means you have errors on your credit report.

But wait, it doesn’t stop there. The Fair Isaac Corporation (FICO) creates the formula that is used to distill that credit report down into a specific number. They update that formula from time to time. That formula is also available to mortgage and credit providers. Many banks do their own calculation based off the FICO formula. So if you apply for a mortgage or other credit, your lender may not go back to one of those three credit reporting agencies, they may be calculating their own score and that score could vary depending on which version of the FICO algorithm they use.

In addition to that, credit scores are often used by insurance companies to evaluate what rate you will be charged for things like auto insurance. Guess what? They have their own algorithms for evaluating your score, so that number will be slightly different too.

The bottom line is you don’t have a credit score. You have credit scores. However, if the information in your credit report is accurate, all of those scores should be similar. If most of your scores are in the good range, but you have one that is way out of whack and indicating poor credit, then there is probably an error somewhere that you should try to get corrected.

My disdain for the Great FICO

While I think it is important to understand credit reports and credit scores and how they can affect your financial picture, in truth I really hate the credit score and what it has become in our society.

Everything about your credit score is related to how successful you have been at borrowing money and paying it back. All of the factors considered relate to debt.

If I were evaluating whether or not to loan you money, looking at your current debts and your past track record of making payments would be relevant information. But a history of getting into and out of debt isn’t really a sign that you are financially healthy. In fact, it is probably more of an indication of financial instability.

And yet our society has come to accept that a high FICO score indicates you are doing great. I think that is just plain wrong. But because of the way debt has been normalized and thus the importance that has been placed on a credit score,  it is a factor that you must contend with as you navigate your financial world. As a result, knowing roughly your current credit score, and even more important, regularly reviewing your credit report are important parts of maintaining healthy finances. Just don’t make the mistake of borrowing money just so you can raise your credit score so you can later borrow more money.

Should I save for retirement or my children’s college?

As parents, sooner or later we are faced with the question, “should I be saving for retirement or my children’s college?”  This isn’t so bad if we are fortunate to have plenty of money, but what if things are a little tight? What if we have to choose between the two?should i save for retirement or my children's college

According to finaid.org, college tuition is increasing at a rate of about 8% per year and tuition is already incredibly expensive. We want our kids to have all they need to be successful in life which often includes a college degree. College loans, though, are an anchor around so many young people’s lives that we convince ourselves that we must save for our children’s education.

But on the flip side we see items on the news all the time warning that the days of 30 years and a gold watch and a pension are gone. Combine that with dire warnings about the future of Social Security and we are faced with the reality that we may be on our own to prepare and save for our retirement.

So what do we choose? Save for retirement and leave junior to fend for himself? Or save for college figuring we can worry about retirement later?

First things first

Before we even think about retirement or college savings, our first goal should be to get our finances on solid ground.

When you fly, the attendants always instruct you that in the event of an emergency to make sure your own oxygen mask is securely in place before you try to help someone else. In the same way, if we are drowning in debt and consistently spending more than we make, then we need to address those issues before worrying about college and retirement. Get on a budget. Get intense about paying off the debt. Use retirement and college as a motivation to sacrifice and get those debts knocked out as fast as possible. Then make sure you have a good emergency fund of at least 3-6 months of expenses or more.

Once you have that flow of oxygen established in your finances, you are then in a position to be able to think about other priorities.

 College or retirement?

While our children’s well-being pulls at our heart-strings and may make us feel guilty if we aren’t saving for college, the answer to this question is almost always, save for retirement first. You need to be saving about 15% of your income for retirement, then once that requirement is met you can save for college with what is left.

The only exception to this would be if you already have a large sum saved for retirement. If you feel you have sufficient retirement savings, then you might back off on the retirement savings some to save for college. If you feel you are in this category, I would highly recommend meeting with a good financial planner who can review your savings and your goals to make sure you are really on track.

What about paying for college?

So if the focus is on saving first for retirement then how will junior pay for college? The most important reason for saving for college only after your retirement is taken care of is that your children have options for paying for their schooling.

  • Go to a less expensive community college to get some general requirements out of the way.
  • Choose to attend a public in-state school as opposed to a much more expensive private institution.
  • Get a job. Some studies have shown that students who work part-time while in school actually get better grades than those who do not.
  • Apply for every scholarship you can find
  • Many companies pay part or all of the tuition expenses for employees seeking to gain a degree
  • Get a loan. I don’t recommend student loans. I think young people should do everything possible to avoid them, but it does remain true that there are loans available for college. You can’t take out a loan to fund your retirement.

Retirement savings must come first

While it is a noble goal to pay some or all of your children’s college expenses, the bottom line is that making sure you are able to support yourself in retirement has to take precedence.

You child has the option to work to pay for their degree. As you near retirement age you might not have that option. Health issues may prevent you from doing what you once did. While age discrimination is illegal, we know that it does still occur, and you may be limited in the jobs you can get when you are 70.

Finally, saving for retirement is so much easier if you get an early start.

Let’s say you start saving when you are 22 and have that first job out of college. Assuming only an 8% rate of return, by saving just $200 a month from age 22 to age 67 you’ll be able to retire with over a million dollars saved!!

Now let’s suppose you also got married at 22 and junior came along shortly thereafter. You want to be able to pay for college so you divert that $200 a month to a college savings program. If you waited until age 40 to start saving that $200 for retirement, you would only have $227,000 at retirement. To have that same million dollar retirement starting at age 40 you’d actually have to save $885 a month. The longer you wait to start the harder it is.

I believe in the value of a college education and I plan to help my son with his educational expenses. However, you must never allow guilt to shame you into prioritizing your child’s education over your long-term retirement savings. If you can do both, congratulations, but if you must choose, always err on the side of your retirement.

There are many options for paying for college. With the uncertain state of pensions and social security, it may be up to you to provide for your retirement years. Make sure you don’t short change yourself.

Are you tempted to prioritize saving for your children’s college over saving for retirement?

9 ways to make sure your budget is a failure (#9 might be the most common)

Tried budgeting but decided it might work for others but it just doesn’t work for you? Chances are you might have done one or more of these common mistakes that pretty well guarantee you will fail.budget failure

1. Don’t do one

OK, this one may be a little obvious, but the first way to ensure you will never successfully have a budget is to never even try.

A 2013 Gallup poll showed that more than 2/3′s of Americans do not live on a budget. I think if you asked most people, they would have at least a vague sense that they probably should be doing a budget. They probably would agree that a budget might help them achieve their financial goals faster. But the truth is most people don’t do it.

2. Don’t write it down

Some folks say they have a budget. Well sort of. I mean I kind of know in my head what my bills are each month. So that counts, right?

If you don’t have it written down, you don’t really have a budget. You’ll forget things and underestimate others. The only way to really take control of your financial situation is to have a written budget you follow each month. How you create it doesn’t matter. You can use software like Quicken, internet services like Mint or You Need A Budget, your own spreadsheet, or plain old paper and pencil.

3. Use the checkbook method

If there is still money available in my checking account, it must be ok to spend it. I am sorry to admit for many years this was my basic form of budget.

Parkinson’s Law says that work will expand to fill the amount of time you give it. The same principle holds true for your bank account. I couldn’t understand why I could never seem to make any progress on my goals, but my problem was when my budgetary decisions were based on how much money was left in my account there was always something that I needed to purchase.

By deciding at the beginning of the month exactly how you intend to spend every dollar that comes in for the month, you are really prioritizing your spending to make sure you are spending on what matters most to you. That doesn’t mean you can’t adjust as the month goes along. You will always have things come up that cause you to make adjustments, but by having that written plan you are able to make those adjustments based on your priorities and not by how much money you have left.

4. Try to create the perfect budget

Another mistake I made was trying to create a perfect budget for the entire year. There is no such thing as a perfect budget.

You have to do a new budget each month because each month is different. Sure somethings are constant like your mortgage or your phone bill perhaps, but every month has it’s quirks. School fees, birthdays,  magazine subscriptions, that new pair of shoes, you name it. Each month will be a little different. There is no one size fits all budget.

5. No emergency fund

You are doing good budgeting. You’ve made it through a couple months. Then one week the water heater fails, the alternator goes out in the car, and the dog needs some medicine from the vet. Suddenly your budget is shot and you give up.

Without an emergency fund, you will never have a successful budget. Life happens. Unexpected things occur (and usually at the worst possible time). An emergency fund allows you to smooth out those bumps in the road. Without it you will fail.

6. Don’t plan for irregular expenses

Irregular expenses can sink your budget. Items like real estate taxes, insurance, some utilities, Christmas, vacations, and the like can wreck your budget. This is another mistake that used to trip me up. I’d think I was doing well until I hit that month where the taxes or the home owner’s insurance were due and suddenly my budget was wrecked.

Irregular expenses shouldn’t come as a surprise. You know Christmas will be December 25th each year. You know when the real estate taxes or other bills come due. The key is to plan for it. If you plan to spend $1,200 on Christmas gifts, then set aside $100 each month and when December rolls around you’ll have the money you need. Same is true for all those other irregular pills.

7. Set unrealistic expectations

If you budgeted $100 to feed your family of 6 for the month, unless you have a really big garden, you are probably going to fail.

Budgets have to be about more than just making the numbers work. It has to be realistic. Sure you can save on coupons and shop sales, but you will spend a certain amount to put food on the table each month. If you don’t budget a realistic amount, your budget will always fail. This is true for many categories. Your budget needs to reflect what you will really spend. If your spending exceeds your income, you may need to make some adjustments, but the bottom line is what is written on the page needs to be realistic.

8. You and your spouse aren’t in agreement

If your spouse says “Sure dear, the budget looks great, now I’m just going to head over to Home Depot and spend all this week’s grocery money on that new tool I want”, your budget will never succeed.

If you are married, you and your spouse need to be in agreement about what you will spend. If you are pulling in opposite directions you will never succeed.

9. Don’t ever say no

Last, but perhaps most important, if you are unwilling to tell yourself “no” occasionally, you will always get to the end of the month and wonder where the money went.

Don’t misunderstand. I don’t mean to imply you can never have what you want if you live on a budget. In truth it is the opposite. A budget allows you to prioritize your spending so you can have what is most important to you. But unless you are Bill Gates or Donald Trump, you probably don’t have enough money to always get whatever you want. You have to learn to say no to the things that are less important, so that you can have the things that matter most to you.

What is keeping you from being able to budget your monthly income?

12 ideas to make some quick extra money

quick extra moneyFor some, the source of our financial difficulties is out of control spending. Whether it is stuff-itis or just a lack of organization, the answer to the problem is simply getting on a budget and cutting extra spending until we get things under control.

But for others, the problem isn’t really out of control spending. What do you do when you have trimmed the budget and there really isn’t enough left over to move the needle?

This was the case with us a few years ago. I was tired of us living paycheck to paycheck and yet we never could quite seem to get ahead. We were always just a little bit short. It was like when a flooded river gets dammed up by floating trees and debris. At some point, is necessary to dynamite the blocked area to get the stream flowing again.

If find yourself in this situation and you’ve done what you can to cut spending, then the answer to breaking the logjam is to do something to raise your income.

Here are 12 things you can do starting today to make a little quick extra money

Overtime

If you work in a job where overtime is an option, volunteer for as much as you can. I’m not saying working 80 hours a week should become a way of life. But there is nothing wrong with working your tail off for a short while to make progress on your financial goals. And if you show you are willing to work hard on the job, you might just get a promotion out of it.

Check your withholdings

Do you get a big tax refund every year? That isn’t a good thing. It basically means you are giving the government a 0% loan for a year so they can give your money back to you. If you get a $2,400 refund, that’s $200 a month you could be using to pay debt or build savings. Either adjust your exemptions on your W-4 or work with your HR representative to adjust your withholdings so that you don’t get a huge refund. Be careful to not go overboard. You don’t want to end up owing taxes. But if you know you regularly get a large tax refund, you should be able to predict about how much extra you should have in your pay each period.

If you are still unsure, the IRS provides a Withholdings calculator that you can use to estimate how much you are likely to owe in taxes this year and how much of a refund you may be on course to receive. You can adjust the numbers until your tax paid is fairly close to your tax owed and you should then have a pretty good idea of how much should be withheld each pay.

Pause your retirement savings

OK. I know this one is a little controversial and many financial advisers may disagree. In the long-term you need to be saving at least 15% of your income toward retirement. But for a short period = a few months or maybe a year or two – you might want to consider stopping your retirement savings. This is one of the things I did when we were in that position and that extra money in the pay each month was just enough to get us over that hump where we could really start to make progress on paying down our debt. If you decide to do this, just make sure of two things: You use this as a temporary step only. And you must be fully committed to using that extra money to pay down that debt. If you use that money to buy pizza on Saturday night, you’ll never get out of debt and you’ll wake up someday when you are 65 wondering why you have no retirement savings.

Do something that others don’t want to do

Find a task that people don’t like to do and offer to do it.

  • Mow some yards
  • Clean gutters
  • Paint houses
  • Rake leaves
  • Shovel snow
  • Wash windows

These are just some of the jobs that people will often gladly pay someone else to do. Take a walk around town and go door to door offering your services.

Clean out the attic or the basement

Many of us have hundreds of dollars of stuff that has been sitting in boxes for years. We have probably forgotten that we even have some of it. Do some spring cleaning and start selling. Have a garage sale, list them on E-bay or Craigslist. Many areas have Facebook groups for local “online garage sales”. Or if you have a flea market in the area, pay for a spot, pack it up, and spend the day passing your “treasures” on to someone else.

Babysit

If you like children, offer to babysit. As a parent, having a reliable, responsible person that I can trust to watch my child is very valuable, and if you love children, you can get paid for doing something you love.

Tutoring

Have a special skill? Offer to tutor kids after work. Play the piano or other musical instrument? Start giving lessons.

Handyman

Are you one of those people that are blessed with the skills to fix practically anything? Start a handyman service. Print up some business cards and leave them at local businesses offering your services. Talk to local banks. They may have foreclosed homes that are in need of some repairs before it is resold. Talk to local real estate agents. They may be able to connect you with landlords or sellers that are looking for help fixing up properties to rent or sell.

Moonlight

Do you have a special skill? If you work in accounting, find a couple of small business that need help with their books. Computer skills? Do some programming or computer repairs. Graphic design skills? Writing skills? There are many ways you can reuse these skills on the side to make some extra income. Elance, Odesk, Fiverr, and Craigslist are great places to advertise your skills. Just make sure when you do this that you aren’t doing anything that might cause a problem with your primary employer.

Donate plasma

You can earn a few extra bucks by donating your plasma and along the way you might save a life. You can find more information at http://www.donatingplasma.org/

Deliver newspapers or pizzas

Get a part-time job. Deliver newspapers or pizzas. At holiday times retailers are often looking for extra help.

Help a farmer

Live in a rural community? Farmers often are looking for some extra hands during harvest times or for other needed chores.

What do you want to be when you grow up?

If you have a good job with a good income and your problem is simply too much debt, then following these suggestions to earn some extra money while you are paying that debt down may be all you need.

If, however, your problem is you simply aren’t making enough money to support yourself and your family these ideas may provide some temporary relief, but you also need to spend some time considering your future career. If you make $20,000 today, what could you do to be making $40,000 or more 5 years from now? What have you always enjoyed doing? What do people tell you that you do well? If you could go back and advise your 18-year-old self what career would you tell them to pursue?

Think about those questions and then do some research into what you need to do to pursue that career. Do you need some training? A degree? Need to work for a different company? Develop a plan and begin to work toward the career you always wanted. The suggestions above may help keep food on the table in the short-term, but in the long-term you want to move toward a career that will help you support your family and meet all your financial goals.

Break that logjam

If you find yourself in that position where you have cut the budget and there just isn’t enough money to make it each month, or if you are just really tired of being in debt and want to get out as quickly as possible, these are just some of the ways you can jump-start your income and kick that debt out of the house. If you feel like you are stuck, do something this week to start to break that logjam and get your finances flowing again.

What other ideas have you used to make some extra money when you needed it?

If you died today, would your spouse be able to carry on tomorrow?

There is an old saying that nothing is certain except for death and taxes. Neither of those are topics that we get very excited about. But the truth is all of us someday are going to breathe our last here on earth.

I hope that day for me is years down the road. I think most of us feel that way. But we also know we have no guarantees. Even if we are young and very healthy, accidents or unexpected illnesses happen.

Here is my question for you today, particularly if you are married. If you died tomorrow, would your spouse know what he or she needs to know to carry on?

This is especially important if you are the one who primarily handles the finances in our family.legacy

Monthly bills

Does your spouse know what bills come in each month and when you pay them? If you pay bills on-line does your spouse know the needed passwords to the sites where you pay bills?

If you were suddenly gone tomorrow would your spouse know what was needed to easily carry on with the day to day finances? Or in addition to the grief of your loss would your spouse feel lost in keeping the household afloat?

Insurance

Do you have enough life insurance so that your spouse’s financial needs would be taken care of if you were gone?

While no amount of money could ever replace a loved one, in cold terms, life insurance is basically there to replace economic value that you bring to the family.

For example, did you know that if you are a 30-year-old male in good health, you could get a million dollars in 20 year term life insurance for just a little more than a dollar a day?

If something tragic happened to you, would knowing that their financial needs were covered make handling the grief just a little easier for your spouse? Again, no amount of money can replace a loved one, but if I at least know the bills will be paid and there will be food on the table, then I don’t have that stress added on top of my grief.

Secondly, if you have been responsible about getting sufficient life insurance, does your spouse know what policies you have and what companies/agents they are with? Does your spouse have easy access to the phone numbers they would need to call if something happened to you today?

Investments

The same questions apply here. Does your spouse know what investments you have? Do they know what funds you are invested in and why? Would they be able to carry on your investment plan after you are gone?

If you have an investment adviser, do they have the appropriate contact numbers? Does your investment adviser have a heart of compassion and the heart of a teacher such that they would be able to help your spouse make wise decisions if you were gone?

Have you double checked your beneficiaries lately? Will your money go to the right person? This is really important if you have recently had any significant life events like a marriage or divorce or the birth of a child.

Take time to create a legacy drawer

There are many names for this, but I like the term legacy drawer. Do you have one place where you have a record of all of your important financial documents? The idea of creating a “legacy drawer” is having one central place where you have defined all of your important financial records.

It doesn’t have to be a literal drawer. It could be a folder you keep in a safe somewhere. It could be physical or electronic. It doesn’t really matter as long as it is secure, yet your spouse could easily access it in the event you were no longer here.

This is the place to document bank accounts, investment accounts, debts, insurance details, phone numbers and passwords, location of wills, and any other information that your spouse would need if you were to suddenly pass away.

An act of love

Making sure your loved ones have the information they need to carry on is one wonderful way you can show your love.

I remember several years ago listening to a popular financial talk show. One caller called in to say her very young husband had just passed away and left no insurance and no savings. She was grief stricken and in a panic about how she would even be able to survive financially. Within the same hour another lady called in with almost the same situation with one important difference. He husband had a million dollar life insurance policy. She was calling to see what she should do with the money to invest it wisely so her financial needs would be taken care of. Both women were grief stricken and devastated.  One woman was also wondering how she would eat tomorrow; the other had the comfort of knowing financially she was well cared for. Both were very young and never expected that they might be widows at that stage of life.

I don’t wish to be morbid, but the truth is none of us are guaranteed tomorrow. If we are a Christian, we have the comfort of knowing when that day comes we will be welcomed into our Father’s loving arms. And while that may be a comfort too for those we leave behind, that doesn’t alleviate the day to day needs to put food on the table and a roof over our head. Love your family well by making sure that no matter when that day comes, financially they will be well taken care of.

If you died today, does your spouse have everything they need to carry on financially?

3 Dangerous reasons to save money

There are not many topics upon which you could get all financial advisers to agree. One such topic though would be that it is good to save. There might be disagreements about how to save or where to put those savings, but almost everyone would agree that having savings is a good thing. Even the Bible clearly indicates we should save.

The wise man saves for the future, but the foolish man spends whatever he gets. Proverbs 21:20 TLB

But is there a time when saving may not be such a good thing? Could there actually be dangerous reasons to save money?

Pridedangerous reasons to save

Do you have a family member or acquaintance who, every time you get together, very quickly turns the topic of conversation to the latest big financial success they had, or the newest big-ticket toy they bought, or how they are raking in the dough at work, etc? I think most of us have known someone like that.

Particularly for guys, or at least for those with type A personalities, money can sometimes represent a score card.

  • Saving and building wealth.
  • Not just keeping up with the Jones’s but staying a few steps ahead.

These things can come to represent winning on that score card of life. Our self-worth starts to be defined by the size of our bank account. This is a very dangerous place to be.

The problem is when we take pride in what we have accomplished, we start to forget who is responsible for our success. It is easy to forget that we could do nothing, earn nothing if it weren’t for the skills and talents that God has blessed us with.

Yours, O Lord, is the greatness, the power, the glory, the victory, and the majesty. Everything in the heavens and on earth is yours, O Lord, and this is your kingdom. We adore you as the one who is over all things. Wealth and honor come from you alone, for you rule over everything. Power and might are in your hand, and at your discretion people are made great and given strength. 1 Chronicles 29:11-12 NLT (my emphasis added)

When our savings start to become a source for pride, it is a clear sign we have forgotten who is the real source of our success.

Greed

A close cousin of pride is greed. Another danger of saving is it may start to feed a desire to have more and more and more. I think we see this in one of the parables of Jesus:

Then he told them a story: “A rich man had a fertile farm that produced fine crops. He said to himself, ‘What should I do? I don’t have room for all my crops.’ Then he said, ‘I know! I’ll tear down my barns and build bigger ones. Then I’ll have room enough to store all my wheat and other goods. And I’ll sit back and say to myself, “My friend, you have enough stored away for years to come. Now take it easy! Eat, drink, and be merry!”’

“But God said to him, ‘You fool! You will die this very night. Then who will get everything you worked for?’

“Yes, a person is a fool to store up earthly wealth but not have a rich relationship with God.”  Luke 12:16-21 NLT

The rich fool’s response to his blessings was not one of thankfulness to the God who gave him a great harvest. It was not to consider who he could help with those blessings. His response was greed. He was going to build bigger barns so he could keep it all for himself.

Fear

The third and I think perhaps most important reason not to save is fear.

A reasonable amount of fear is not necessarily a bad thing. In fact it may be the product of some God-given common sense. If I have absolutely zero savings such that if the battery died in my car I would have no way to get it replaced aside from going into debt, then the fear I feel may simply be the Spirit prompting me that I need to get a little better control of my finances.

But sometimes fear goes beyond simple wisdom. When we have some emergency savings and we are making at least some progress in savings for long-term goals like retirement, and yet we are still motivated by fear, then there may be a deeper problem with our saving.

Sometimes fear is a sign we don’t really trust that God will take care of us. “I’m not sure I can count on God to provide if I had a serious financial issue, so I better just take it into my own hands.” “If I have a big enough bank account then I can trust it for my well-being, because in my heart I’m just not sure I can rely on God.”

I think this is the reason that Jesus spent more time talking about money than he did about heaven and hell combined. Money is one of the main things that can easily take the place of God in our lives. When my bank account starts to become my trusted source of provision and protection, I have turned money into my god.

Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. 1 Timothy 6:17 NIV

The Great Recession should be a reminder to us all that wealth can be fleeting. It is foolish to put our hope in earthly wealth that can disappear in a heartbeat, instead of trusting our Heavenly Father who loves us and is eternal. But sometimes fear can lead us to place our trust in that tangible dollar in our hand instead of the God that we do not see.

So why you should save?

I believe there are two valid reasons to save.

To provide for ourselves and our family.

Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever. 1 Timothy 5:8 NIV

God tells us to take care of our family. That includes providing basic necessities of food and shelter. I think God also smiles when we are able to provide some wants beyond our needs within reason. I also think part of providing for our family is saving for long-term goals like retirement.  All of these things within reason are good and even commanded.

To help those who are in need

In that Timothy scripture I quoted earlier, Paul tells Timothy to command those that are wealthy to not put their trust in their wealth. But if that is the case, what should they do with it? He goes on to say in the following verses:

Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life. 1 Timothy 6:18-19

If God has blessed you with savings that exceed what you need to provide for your family, be generous. I have often heard financial teacher, Dave Ramsey, say “Broke people can’t feed starving children.” I think there is much truth in this. When we are barely surviving ourselves, it is pretty hard to meet the needs of those around us.

But when we gain control of our finances, live on less than we make, and save and invest the difference, at some point our focus changes. We reach a point where we can meet the needs of our families, and we begin to see those who are hurting around us. When we have done a good job saving, we are in a position to generously make a difference in our world.

That is a very different place to find ourselves than the places where pride, greed, and fear lead us.

If you examine your motives very honestly, what is your motivation for saving?