this year’s goals

Thanks for the encouragement on the last blog post.

We don’t know what the next twelve months will hold. Adding another baby to our family will no doubt mean lots of fun new expenses which could make it difficult to meet this year’s goals. It’s even more difficult to meet goals if we don’t set them at all, though, so here are the major tenets of our personal financial goals for 2010:

1) Acquire $2000 in an emergency fund.

2) Contribute $1000 to our Roth IRA.

3) Pay off about $7300 in principal on our debts.

It is undetectable on the surface, but there is something different about this year’s goals as compared to the past four years. Perhaps I am learning the art of what Proverbs calls slow and steady plodding, or perhaps it is simply a matter of being content in our circumstances. Either way, my secret thought behind every previous financial goal has been this: “But really, I want to pay off EVERY CENT and I want to do it THIS YEAR.”

I feel now that such thinking has done more harm than good.

Not that it is wrong to desire to be out of debt, but setting unrealistic goals only sets me up for dissatisfaction, even as we make strides toward financial freedom. We have several major things taking place in the next six months which could either help us greatly or set us back greatly, and yet I am not worried about them. (Well, not most of them.) We will work hard toward these goals and trust the Lord to direct our steps in financial matters as in all others.

And if the end of 2010 doesn’t show the bottom-line number that we are hoping to see, we’ll still be okay.

last year’s goals

We’re now a full week into the new year, and I realize that I haven’t yet posted our year-end totals.

Part of the reason I’ve waited is that our finances are rather unstable now that Keith is out of work and not eligible for many weeks of unemployment. But if this blog is really to be one where I honestly chronicle our journey toward financial freedom, that will have to include the lean times too, right?

So here we go.

Our financial goals for 2009 were 1) to acquire $1000 in emergency savings, 2) to begin a Roth IRA, and 3) to pay off about $9250 in principal on our debts.

We achieved the first goal, but ended up dipping into it at the end of December. I believe we should be able to fill it back up this week, but that likely won’t last long, as our living expenses now exceed our income.

We achieved the second goal, hurray!

We didn’t achieve the third goal, instead paying off about $6515 in principal on our debts. I have to admit, that is pretty disappointing. But we know which choices we made that prevented us from reaching the number we had hoped to reach this year, and we don’t regret making them. And I will say that after a year like 2008 in which we saw our debt-load increase, it is satisfying to have come to the end of 2009 – a year in which three of us lived on one income in a down economy – and have at least made some headway on our long-term goal of paying off all debts.

finance blogs

Normally, the only two finance blogs I read are The Simple Dollar and Get Rich Slowly. But today I stumbled upon another one that I think is worth sharing. Here it is: http://www.wisebread.com/philip-brewer.

The article which has me hooked is titled “Living Cheaply for the Long Haul.” The list of strategies for doing this include buying stuff that lasts, buying stuff that reduces future expenses, stocking up when things are cheap, and taking care of your stuff. These seem obvious, but I have been frustrated by the lack of attention among frugality sites given to these kinds of choices. Buy an okay-looking $35 lamp that lasts a year, or buy a great-looking $50 lamp that lasts ten years… the choice is obvious, right? (Or better yet, buy it off Craigslist, but really I’ve never been able to find a decent lamp on Craigslist, so our preferred method is actually to wait until the $50 lamp goes on sale for $20.)

Somehow I just find it really satisfying to find a blog that thinks beyond a monthly budget to take the bigger picture into consideration.

free Christmas music, etc.

We’re still doing a lot of personal reflection on the whole “preparing to be out of work” thing, so I haven’t had the heart to write about preparing to move and preparing to have another baby. In lieu of those posts, then, here are a few freebies and one great contest.

Amazon has a new free Christmas song available each day this month (and you can download the already-revealed ones as well). They also have a free five-song classical Christmas sampler and a free seven-song Sampler Claus selection available, along with various individual free Christmas songs if you look around the site a bit. Additionally, Amazon has a good deal of free non-Christmas MP3s available all the time.

iTunes has a free twenty-song holiday sampler available. (I recommend deleting #14 – it’s an advertisement song and I found it rather annoying.)

Christianaudio.com has a different free audio book each month. This month it is The Brothers Karamazov by Fyodor Dostoevsky.

Also, make sure you stop by www.daveramsey.com. Dave Ramsey is giving away different prizes every day this month. Today it’s $1000 cash!

preparing to be out of work

The major financial thing on my mind right now is that Keith will be out of work after the middle of the month.

In a lot of ways, it’s a good timing for a break. I have the two weeks after that all scheduled out for us: making goodies for Christmas, throwing a birthday party for Rilla, having the ultrasound to determine our baby’s gender, celebrating Rilla’s birthday, enjoying Christmas at home with the three of us, having Christmas celebrations with family, and then moving before the end of the year.

But after all of that… then what? I haven’t been concerned about it, mainly because a) God provided a place for us to move to that is nearer to Keith’s work, and I don’t think He would do that right now if there would not be work to follow it up; b) we have that little bit in savings; c) we can get a good tax return soon; and d) unemployment checks are a beautiful thing. But the most important part is that e) God always provides.

So really, how do you prepare to be out of work? 

For us, it has meant making sure all bills are up to date and the credit card we use for monthly expenses is at a $0 balance. It has meant making sure that the groceries I buy will go the distance if we can’t afford to buy more for a month or two. It has meant not spending anything extra, whether on needed clothes for Rilla or gifts for others or whatever else.

Unfortunately, I don’t think I’ve been doing the best job of it this time around. Normally we wouldn’t take a trip to Utah right as money gets tighter. It may be that I should have spent less on Christmas presents. And buying a few pieces of (used, of course) furniture for our new place was probably not the greatest idea, although I will be selling a few pieces as well to make up the cost. I have been stocking up goodies for our daughter’s first birthday party, and that in itself is probably not necessary; we could just not have treats there, and people would probably understand.

But in these matters, and in other ones, I think this is where it all comes back to grace in finances. I’m not a perfect steward of our finances any more than I am a perfect steward of the love, joy, peace, patience, kindness, and so on in my life that is also a gift from God. I’m not a perfect wife or a perfect mother or a perfect friend. I need daily grace in order to honor the Lord in what I do, and this applies to finances as well. Sometimes I mess up by accident, like spending $4.50 on aluminum-free baking powder at the health food store when I could have got it at Fred Meyer for $2.50. Sometimes I mess up on purpose, like buying organic bananas at 79 cents a pound when I know that the normal bananas at 49 cents a pound really don’t have enough pesticides on them to warrant me buying the organic variety. And yet the point of trying to be frugal and spend appropriately is not perfection. The point is to honor the God who has enabled me to live and move and have my being. When I mess up, He forgives me. It doesn’t mean that I shouldn’t try to do better, but it does mean that His love and grace toward me is not tied onto my ability to do better.

Now I don’t know how this fits into all of that, but here’s a little secret about my real mindset toward money: sooner or later, it goes away. Sometimes you can make it stretch longer. Sometimes I don’t think it’s worth worrying about, so I just buy what we need and throw in a few wants until it is all gone. Worrying about it doesn’t seem to make it last longer; instead, it only makes the spending of it less enjoyable. So when it looks like we are going to run out of money, here is the honest truth: I don’t usually try all that hard to be extra frugal. Partially that is because I think I am frugal enough as it is, but also because I just think… well, what  can you do? We’ve got to pay the bills, and we’ve got to buy food, so I’ll just do what I normally do and see how long it lasts. God will provide once it’s gone, so whether that happens in two months or two months and one week doesn’t seem to matter all that much.

Does anyone else have that kind of mindset, or am I the only one?

on buying presents

As our nation sinks deeper into this recession, I hear more and more talk about people not spending much money on Christmas presents. Frankly, I think that is a good thing. I might even go out on a limb here and say that the recession in general is a good thing. It is beautiful to see people take more responsibility for their financial actions and for our society to begin to esteem frugality again.

The personal issue I have with not spending money on Christmas presents, though, is that gifts are my love language. I absolutely love to give gifts to the people I care about! I have toned down the spending in recent years, but we still feel it is worthwhile to give gifts to those we love. Thus, gift-giving is a small but important part of our monthly budget.

Our budget for family birthdays and Christmas presents is $10 per person. Looking at both my birthday gift list and my just-finished Christmas list from this year, that means we’ve spent about $150 on birthday gifts and $120 on Christmas gifts (not including the amounts I spent on Keith and Rilla). Some people might think that is a lot; personally, I don’t think it is all that much for a lasting expression of endearment, and I think the cost is totally worth it. Maybe it would not be worth it for something lame that a person would toss aside and never use, but I think I usually manage to find gifts that are suited to the person, will last a while, and will be worth more to them than what I spent on it.

I view finding the right present for the right price like a never-ending treasure hunt. My grandma taught me to look for birthday and Christmas presents all year long at retail store sales and yard sales, and I have learned to do that especially with online sales. It is so satisfying to find gifts ahead of time this way! One treasure that I enjoyed finding and giving this year was a neat old picture frame purchased at a garage sale for $2. I outfitted it with pictures of my dad, myself, and my baby for less than fifty cents and presented it to my father for his birthday. Having the whole thing planned out months in advance just made the anticipation that much sweeter. When we only buy one or two birthday gifts a month, it is fun to think about them ahead of time. And there is something especially satisfying about getting a great deal on a fantastic gift.

Because I do most of my shopping online, let me just share these sites that tend to have the best deals. There are others which I have referenced now and then, but these are my favorites and have proven to be the most useful to me over time. In particular, I check Cool Mom Picks and Slick Deals almost every day. I may go a month between finding relevant deals, but the ones I do find are so worth the thirty-second daily time investment.

For finding gift ideas…

• Cool Mom Picks (www.coolmompicks.com)
• Etsy (www.etsy.com)
• Fat Brain Toys (www.fatbraintoys.com)
• Slick Deals (www.slickdeals.net)

For finding a good deal…

• Amazon (www.amazon.com)
• eBay (www.ebay.com)
• Half.com (www.half.ebay.com)
• Retail Me Not (www.retailmenot.com)

Do you have any other favorites?

on going to weddings

Our family of three took a trip to Utah over Thanksgiving weekend. It was our first time returning there since we moved away more than two years ago, and so it was largely a visit to see old friends. The big impetus for us to go, though, was the wedding of a dear lady who is very much due for a beautiful new season in her life. We had the privilege of seeing her glow as only a bride can. We had the honor of witnessing the joining of two hearts and two families. It is not something we will soon forget.

Weddings are one of those unnecessary expenses and time-consuming activities that Keith and I believe are worth it. On our first full day of marriage, we were driving to Oregon for our honeymoon and talking about our own wedding when we decided that as a married couple, we would go to the weddings of our friends whenever we possibly could. We were so blessed by those who had traveled, set aside studying for finals week, and so on to be with us as we pledged our lives to one another that we just felt it was one of the most important decisions we could make to be there for others in the same way. Looking back on the 25+ weddings we have attended since that time, there were definitely seasons when it has been inconvenient or literally took all of our money to get there and back. But we have never regretted going to the weddings of our friends.

So why does it matter so much? We go to weddings not just for the free food – although that is always nice – but because we believe that marriage is an institution created by God and worthy to be honored. It is a privilege to be invited to witness two people enter into a lifelong covenant relationship. Marriage is greatly undervalued in our culture, and we feel that it is a beautiful thing to be able to support our friends not only on their wedding day, but also in the years ahead to be able to pray for them and encourage them to live by their wedding vows.

This blog is about finances, of course, but there are so many things in life that are more important than finances. It is easy for me to fall into the trap of thinking money is the important thing, but it’s not. It’s what we do with it that matters. It is given to us as a tool and a blessing. Going to weddings when it is not the most convenient timing continues to be an encouragement to me, both about what really matters in life and as a reminder of all the other times God has provided for the details in situations. Many times we have taken off work and spent money that we couldn’t afford so that we could go to the weddings of our friends, and look! Nothing disastrous happened. Maybe we’d have a little more debt paid off if we hadn’t gone, but who cares, what good is having provision if we don’t use it to build relationships?

this and that

Since one of my four loyal readers pointed out that I haven’t written on here in a while, I’m taking a few moments while Rilla is napping to catch up a little bit. I don’t want to be disappointing 25% of my readership, you know!

Actually, one of my friend’s comments really got me to thinking about the way I view debt. She is mired in it too, yet she said that it is her responsibility and she wants to pay it all back. You know what? I don’t think like that. My thoughts are more along the lines of it being unfair that I ever had to go into debt to begin with, and thus the world owes me something and my debt should just magically disappear. Really, when I stop to admit it, I actually think like that.

And that is why I think that rather than God granting us some huge windfall that makes it all go away, Keith and I are going to have to continue to plod through payment after payment until it is all gone. I have felt like that ever since we graduated from college. We know plenty of people who have supernaturally had their loans forgiven or instantly paid for in one way for another. But I feel like God wants to teach me something in the slow and steady plodding that comes from the long-term commitment to pay off debt. There is definitely a discipline and a patience being cultivated through all of this.

Lately we have had several things come up which seem to have slowed us down a bit in the debt-paying-off process, specifically Christmas presents, a trip to visit friends in Utah, the realization that Keith will likely be out of work in two weeks, preparing to move again, and beginning to prepare for Rilla’s sibling who is due in May.

Each of these expenses (and the choices we have made that led to creating each expense) carry with them all kinds of implications, so maybe I’ll just delve into a few via a short little blog series. Look for it over the next few days…

missions accomplished

Since meeting our last financial goal, we have chosen to take a break from paying extra toward our debts. Instead, we have met three other goals. They may not seem huge to all of you responsible types, but for the three of us who are relying on one income (and that income was gone for two months this year, remember?), each one is a pretty big deal.

Goal #1: Have $1000 in savings. This is, of course, one of the first steps toward financial responsibility, because it means having a cushion to fall back on in case of emergencies. It’s been a tight year, and it’s so good to have that cushion there again.

Goal #2: Have the money for next month’s expenses before the month begins. It is amazing what a relief it is to not be living paycheck-to-paycheck or even two weeks out. Today I am able to look November square in the face and have no qualms about the expenses it will bring.

Goal #3: Open a Roth IRA. This one is the most exciting for us. We have met the other goals before, but this one has been hovering beyond our grasp for years. Almost a decade! I can even remember talking about it together just after we finished high school. But there is always some other way to spend that nice plump chunk of money that it takes to open a retirement account. It was actually quite hard for me to resist putting the extra money toward my student loan during these last few months of saving! But we did it. Tonight we opened a Roth IRA. Hurray!!

saving on vehicle expenses (part two)

Beyond driving reliable older-model cars and keeping them in good condition, we have found a few other ways to save money on our vehicles in the month-to-month expenses. One large expense is vehicle insurance. This is worth shopping around for, and we do that periodically to make sure we are still receiving the best rate. For us, that has meant insuring with GEICO. If you’ve never shopped around for insurance rates, I highly recommend it. The amount you save is well worth the time you spend.

A note on insurance rates: you can save a lot by going with higher deductibles. When I insured my first vehicle (an ‘86 Jeep, which we still own and which is now our secondary vehicle), I paid an extra $30 or so each month to have a $250 deductible. This was on a rattly, dented old Jeep, mind you! There is no need for a deductible that low unless you have a brand-new vehicle and are obsessive about each tiny scratch. We don’t and we’re not, so we save money by sticking to a $1000 deductible. And with a different insurance company and perfect driving records, we pay much less per month now for two vehicles than I initially did for one.

Another basic way to save on vehicle expense is by doing all our own maintenance. Or by Keith doing all our own maintenance, as the case may be. Keith washes the car, changes the oil, changes the air filter, and does whatever other maintenance work that may need done. When our ignition stopped working last year, he found the part we needed from a junkyard for something like $25 (versus the $150 or whatever that would be charged at a parts store) and then did the labor himself. He has worked on our muffler and other little things here and there. When our car stopped running a few months ago, he found a $2 part for the battery connection that did the trick.

Some of these maintenance matters are ones that I couldn’t do without Keith, but many of them are things anyone could do. It doesn’t take long to learn how to be able to do the basics on your car. If you don’t know how, ask someone to show you, or find a tutorial online.

In the areas where we can’t do our own maintenance, we shop around. Having bought tires from Les Schwab, they always switch our tires for free when we need to transfer to winter tires or back again. When we needed our windshield replaced, we ended up getting one for half the price that most places charge. Don’t assume that just because three places charge a high rate, there won’t be a fourth or fifth with a lower cost. An extra ten minutes getting quotes on the phone can save you a few hundred dollars or more on repair work.

We’ve learned a few things about saving on gas, too. We use an American Express card for gas purchases, so we get 4% back. (We still use our credit card for non-optional expenses like gas.) We go to the cheapest gas station, either Costco or Fred Meyer. And last but not least, we drive the speed limit. Or less. Shocking, I know.

Driving the speed limit didn’t begin as a money-saving venture. For me, it was a conviction about obeying the law. But I now find it incredibly satisfying to set my cruise control at 65 and watch the other cars cruise by, knowing that I am getting better gas mileage and am at absolutely no risk of getting a speeding ticket.

In addition, I recently read an excellent article which explained the financial benefit of driving the speed limit. I won’t go into it all here, but here’s one excerpt: Your hourly earnings from driving 65 instead of 66 is $36.50. Not even factoring in the possibility of increased insurance rates for getting a speeding ticket, it is just plain expensive to speed.

These are all the ways I can think of  in which we try to save money on vehicle expenses. Do you have any other suggestions?