Crystal Paine and her husband, Jesse, have certainly had financial struggles during their marriage.  When they were first married, they vowed to stay out of debt even while Jesse made his way through law school.  Some months they earned as little as $650, and their rent was $500!  Still, Paine says that they tithed 10% every month and often prayed that their needs would be met, and by the grace of God, they were.

Leading by Example

Paine and her husband have been good stewards of their money.  Not only did they sacrifice so Jesse could graduate from law school debt free, but when Jesse began his law career and Crystal’s blog, Money Saving Mom, grew and brought in a nice monthly income, they continued to live a conservative lifestyle.  By doing so, they were able to save for 2.5 years and pay outright for their first home in cash.  Now, Paine shares her strategies for saving money in her new book, The Money Saving Mom’s Budget Book.

Not Your Typical Budgeting Book

This book is not your typical financial advice book.  In fact, Paine spends the first chapter talking about clutter, not money.  Why?  She feels that if your environment is cluttered, you are often stifled and likely to spend additional money because you can’t find the things you already have, you may not be organized enough to pay your bills on time, and you spend more time cleaning up because you have to constantly move the clutter.  She advocates taking an entire day to clear the clutter from your home.  In addition to clutter management, she advocates time management in the second chapter.

The third chapter explains in detail how to budget to meet your family’s needs including anticipating expenses you will need to pay throughout the year so you are never caught off guard and never have to dip into your emergency fund for a non-emergency.  She also advocates the use of cash only, which many Bible Money Matters readers already advocate.  Finally, she asks readers to take it slowly and get used to having a budget for three months before delving deeper into budgeting.  Paine seems to want to truly teach her readers habits that will stay with them for a lifetime.

The heart of the book focuses on how to save money at the grocery store from how to use coupons effectively to how to menu plan to feed your family meals for the lowest cost while not skimping on quality.  Paine offers practical advice on using coupons; she does not go to extreme measures and confesses to even taking a week or sometimes a month off from couponing to recharge.  However, she urges all consumers, even those who eat organic foods or have food intolerances, to use coupons because they could still be saving money.

The Money Saving Mom’s Budget Book is a basic primer to teach people how to manage their money and stay out of debt.  It is a terrific resource for those who are struggling with managing their money or meeting their monthly obligations.  If that is you, or if you know someone like that, this book could be very beneficial.

Manage Your Finances to Give Generously

As a devout Christian, donating is something that is very important to Paine.  At the end of the book, she advocates donating your time or groceries you can buy for nearly free when using coupons if you are struggling financially.  One of Crystal and Jesse’s main reasons for staying out of debt is so they can donate generously.  In fact, all profits from The Money Saving Mom’s Budget Book will be donated to Compassion International.  Paine’s final message is a simple one:  learn to control your finances so you can get ahead and also help others by donating your time and money.

The Giveaway

Paine has generously agreed to give five Bible Money Matter’s readers a copy of her book, due to be released on January 10, 2012.  To enter the giveaway, simply share your favorite money saving tip in the comments (mandatory). To earn extra entries just tweet the giveaway and follow us on Twitter. Once you’ve done each entry just click on the rafflecopter giveaway widget to let us know!

This giveaway will end on Wednesday, December 28, 2011 at 12am.

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While doing research for my project on credit I really wanted to figure out why so many 20-somethings were clueless when it came to building credit, paying off debt, and real estate.

I’m not exactly the typical finance person. I enjoy my drinks and I enjoy talking about the most random topics. I never preach to my friends and I rarely bring up the idea of money management. One thing that I do is I observe.  I observed that many of my friends were stuck in credit card debt and unable to get ahead of the game because their spending was just completely unrealistic.

Some personal finance bloggers promote budgets heavily. Other bloggers scoff at the idea of a budget and say it doesn’t work. Instead of debating about budgets and trying to figure out arbitrary numbers I wanted to share my simple spending strategy. I wanted to share how I decide on how I’ll spend my money.

What’s this simple spending strategy? You need to be realistic with how you spend your money.  What’s being realistic with your spending all about? I wanted to share what my take on realistic spending is…

Treat Yourself If You Can Afford It

If you can afford to buy something nice for yourself, then go for it. The key is to only do so if you can afford it. This is actually where the breakdown occurs. From an emotional perspective we don’t want to feel like we can’t have something because we work so hard for our money. From a logical point of view, we need to understand that we can always have everything that we want at the same time. This is why I love to treat myself when I know that I can afford for it.

For example, while traveling through Europe I spoiled myself a few times. The reason I did so was because the currency conversion in some places allowed me to do so. I got more bang for my buck than I ever could at home.

Don’t Hang Out With Big Spenders

Whether we want to admit it or not, our friends really determine our behavior. If you hang with big spenders you might become a big spender. I often don’t recommend hanging out with big spenders or those with different financial values because it can cause some discomfort. This doesn’t mean that you need to avoid your friends. It just means that you should try to hang out with friends that have similar financial values. You don’t want any awkward moments when trying to decide on where to go for dinner or on how to split the bill.

Save A Solid Percentage Of Your Income

I try to save a decent amount of my income. This percentage varies on what’s going on with life and the time of the year. I don’t like to throw out percentages, so I’ll just say that I want to save enough money so that I’m comfortable in case anything were to happen (emergency fund).

Once I set aside a set amount of cash that I’m happy with I don’t have to stress about spending money money when a random evening out pops up or if I want to buy something new.

Spend Frivolously Once In A While

Once in a while I take a set amount of money (usually minor) and I spend it foolishly. I get my frivolous spending out of my system for the next few weeks or months. It’s just not realistic for us to always be smart with our money. Sometimes we need to let loose and buy something stupid. Don’t act like you don’t being careless once in a while.

Think Of Value

I always try to think of the value that I’ll get out of every purchase. As I’m typing this I’m sitting in a cafe sipping on a coffee while I work on various blogging tasks. For some the idea of drinking a coffee in a cafe is waste of money. For me the value is that I can focus on my work while I consume a beverage that I enjoy. That’s the value for me. For others there might not be any value in this.

This is why I think of value. Cheap people often don’t understand value and it frustrates me. You won’t always get the best price when it comes to value. You will get the outcome that you’re looking for though.

At the end of the day I do what I can to be as realistic with my spending as possible. Sometimes I’m too cautious. At other times I’m a bit too careless. If you don’t watch your spending it’s going to be tough for you when you start a side business or if you ever want to quit your current job.

Are you realistic with your spending? What’s your strategy for smart spending?

Don’t forget to pick up your copy of Completely Conquer Credit

This was a guest post from Martin of Studenomics. Martin has just released a super-helpful guide that shows you how to completely conquer credit before you hit 30. You can’t have much fun in your 20s if you’re always in debt. Martin spent all summer researching credit so that YOU can save yourself a ton of money, time and stress.

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Many people have trouble getting started with their financial plans. And even after they get started, in can be extremely difficult to be consistent. That’s why it is important to take advantage of various ways to set up an automatic savings system.

You’ve read about the advantages of automatic savings on this site in the past, so now we are going to look at a few ways to make this happen. Let’s start with the basics and then move our way up to solid retirement planning.

Build An Emergency Fund Through Automatic Savings

In order to avoid having to rely on borrowing money if an unexpected expense comes up, you should be sure to establish an emergency fund. This is a special account (or allocation of money) that you are not to touch except in the case of an emergency.

When you plan to establish an emergency fund, it can seem like everything around you is fighting you. Many times, other things will pop up and cause you to either take money out of your savings, or divert your contributions elsewhere.

I have found that if you create your emergency fund using automatic savings, it is much easier to reach your goal. You can do this in one of two ways (of course, you can find other ways, but these are the most simple).

First, you can have a portion of your paycheck deposited directly into an online savings account. This way, the money never hits your primary checking account, and you are not tempted to spend it on other things. If something comes up that may not constitute a true “emergency”, you will try to think of other creative ways to handle it – rather than simply not make your periodic savings deposit.

The old saying, “out of sigh, out of mind”, is definitely true when it comes to money!

If your employer doesn’t allow you to deposit your paycheck into two separate accounts or banks, then you can set up automatic transfers from your checking account on payday. This is what I do, and it works very well. Once my transactions clear for that day, my check is deposited and my emergency fund contribution has been transferred. Again, the money isn’t in my primary account long enough for temptation to set in!

Automate Your Debt Snowball

If you are using an online bill paying service – either through your bank, or as part of your credit card benefits – it can be very easy to automate your debt repayment plan.

Once you decide which creditor to pay off first, and how much extra you want to send to them, just go online and set up those additional payments as a recurring plan. This way, you don’t have to worry about writing out a check each month or pay period – you remove the chance of either forgetting to make some of the payments, or being tempted to spend the money on something else!

401k Contributions

Many people are worried about their retirement savings – especially after a couple of really bad days for the stock market. However, the worst thing you can do is to stop saving. It can be very easy to give in to fear and apprehension over investing for the future, which is why setting up automatic savings is so vital here.

If your employer offers a 401k, and you are not contributing, you are possibly throwing away free money. That is because most companies will offer a 401k employer match of up to 6% of your annual salary! The money will be automatically transferred out of your paychecks, up to the current 401k contributions limits ($16,500 or $22,000 if you’re 50 or older). You don’t have to worry about any type of temptation here, the money is taken out before you even get your pay!

This makes it extremely easy to put your retirement savings on auto pilot (at least the contributions), and helps you to fight the urge to take that money and spend it on a current indulgence.

Build Up Your IRA

If your job does not offer a 401k, or if you desire to save even more for retirement, all is not lost. You can also set up an automatic savings plan to fund an IRA. IRA contribution limits are up to $5,000 for those under the age of 50, and $6,000 for savers 50 years of age and older (if they take advantage of the $1,000 catch up contribution limit)!

You can go through most banks, credit unions, and even discount brokers to set up an Individual Retirement Arrangement. They will allow you to set up automatic transfers from your bank account at regular intervals, directly into your IRA.

This is another way that you can save for your retirement, without having to wrestle against all of the alternatives for your cash!

Conclusion

Many of us have great plans and intentions when it comes to handling our money. However, we can find it very difficult to implement those plans. By taking a few minutes, or even hours, to set up transfers to online savings accounts, split direct deposit, and saving for retirement, you’ll be able to reach your goals without even thinking about it.

It’s almost as if you become able to trick yourself into saving money!

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Many people know that I am a huge proponent of using automatic savings, and automatic bill paying to help manage my finances. There are many advantages to doing this – fighting temptation to spend “extra” money, saving time having to make these payments/transfers every period, and simplifying your finances, immediately come to mind.

However, there are also certain risks involved with putting your finances on auto-pilot. We will discuss several of them below.

Failing To Reconcile Accounts

To me, the biggest risk with automating your accounts is the fact that you may fail to reconcile your accounts. This can happen in one of two ways. First, if you are automatically paying your credit card bills when they come in, you may overlook the fact that you need to check the statement for errors.

What if there are charges on your bill that don’t belong to you, or are for more than they should be? You may go a few months without checking your statements and could end up missing fraudulent charges, interest rate increases, or other important information. By paying off the balance (or even just the minimum payment) automatically each month, you may miss all of these important notifications.

Also, if most or all of your transactions are automated, you may not stay up to date with your checking account. If your account is hit with any unexpected transactions, then you can easily be thrown into an overdraft situation! It might not even be errors which need to be detected and corrected, but it could be an infrequent expense (such as a subscription) that causes chaos in your checking account.

This is not to say that you will never take a look at your finances if you choose to set up automatic payments; but it does make it a lot easier to overlook certain things.

Disconnected From Your Financial Reality

One of the things that I have found is that by automating payments, I have become disconnected with my finances. Now, I try to go through my transactions and savings every two weeks (the Saturday after I get paid), but it’s still not the same.

By having everything automated, it can feel as though your finances are operating on a continuous cycle that doesn’t require your involvement. Because you do not have to look at your statements and review every charge in order to pay your bills, you may not be as inclined to look for ways to reduce your expenses or increase your income.

You may find yourself going a few weeks without looking at your bank account. Then that may grow to months. By having all of your bill payments and transfers to savings and retirement accounts happen automatically, managing your finances can easily fall into the background of your life.

Start To Lose Motivation

If you don’t have your goals constantly set before you, you may lose your motivation to push toward that goal. Whether that goal involves trying to pay off debt, building up an emergency fund, saving for retirement, or being in a position to increase your giving, it helps to visit that goal often.

By automating your finances, you may miss the opportunity to check your progress often. For instance, if you have set up automatic transfers to establish an emergency fund, you probably won’t look at the balance of the account very often. However, if you have to log onto your bank’s website and set up a transfer every two weeks, it will help to set the goal before you. Of course, if you use personal finance software, you should be able to see all of your account balances at a glance – but you still need to look!

If you have long-term financial goals, you need to stay motivated in order to see them through. Automating your finances can help you to give those goals a place of priority in your finances, but it can also take away your motivation by allowing you to be less involved.

Reader Questions

1. Do you automate your finances?
2. Are there any bills/transfers which you choose not to automate? If so, why?
3. Have you found any other potential problems with setting up automatic payments?

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It feels like an oven outside, and it doesn’t seem to even matter where you are in the country.  This summer is just plain hot, and heat waves are happening all over the place.

I’ve heard the term ‘heat wave’ being used this summer and I’ve been wondering what exactly constitutes a heat wave? What’s interesting about the term ‘heat wave’ is that there’s no universal definition for the phrase; it’s really a matter of relativity.  Put simply, it’s just a long period of higher than normal temperatures.

Since my mind is always relating things to financial matters, I got to thinking about how our finances can experience ‘heat waves’ every now and then.  I guess a ‘financial heat wave’ would be a long period of higher than normal spending – which seems easier to do in the summer, at least from my experience.

As a way to beat the heat while keeping our spending under control, my wife and I have come up with a few activities that are pretty enjoyable to do when it’s scorching hot outside.

1.  Go To A Lake

Our new favorite place to go for a few hours is the lake near our new house.  We’ll take the dog and let her swim and they even rent out canoes and paddleboats for half price when you go in the morning.

2.  Basement Movie Night

Our basement stays cooler than the rest of the house, so it’s the perfect place to sit back and start a movie.  With the rise in Nexflix prices, you might just rent a Redbox movie and pop some popcorn for a cheap, cool night.  If you have kids, make it different by pitching some tents or having a theme for the night.

3.  Fire Up The Sprinklers!

Ditch the waterpark and create your own slip and slide.  Make some homemade popsicles and let your kids (or dog for us) run around in the sprinkler to stay cool.  If you have kids, get some water balloons going and have water fight.

4.  Check Out A Museum

If you’ve been cooped up in your house and want to get out and about, check out a museum, library, or mall. You can take advantage of their A/C and spend the day doing something enjoyable.

5.  Head To The Pool

If you’ve run out of things to do indoors, you can make your way to the local pool.  Make up a lunch for a picnic, bring a Frisbee or basketball, and enjoy the pool and park without spending more than you want this summer.

There are all sorts of things that you can do to enjoy the summer without breaking your budget.  Don’t let a little heat wave keep you from having fun!

What are some inexpensive summer activities that you and your family like to do?   

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Looking for ways to save money on groceries? Are you the type of person who’d rather skip the hassle of clipping coupons?

If so, I’ve discovered a few food-buying programs that will help you cut costs.

How These Programs Work

These programs buy quality food from first-rate suppliers at big discounts. Because of the discounts, they can pass some of the savings along to you. The food items may come fresh, frozen, or packaged.

Orders and distribution are handled by local host sites, which include churches, schools, and other community-action organizations. You can order as many units as you like, and there are no income restrictions.

The menu varies from month to month, so you can enjoy different foods.

How to Make a Purchase

Making a purchase is straightforward.

1. You search for a local pickup site and place an order.
2. The food gets delivered to the host site.
3. You pick up your order at the host site when ready.

Another great thing about these programs is that if you’re an organization that’s interested in offering these food items to your community, you can partner with these programs by applying to be a host site.

Lastly, check out each program and see if their menu items suit your taste and dietary needs before buying.

Okay, here are three food-buying programs.

Angel Food Ministries

site: angelfoodministries.com

This program is the most widely available, with locations in the U.S. and Canada. They have the largest selections of prepackaged food items, and they accept food stamps. They estimate that you can save $28 in grocery costs if you purchase their signature box.

Sample Menu

• Signature Box – $35 (feeds a family of four for a week)
• Golden Cuisine – $29 (ten convenience meals for people on the go)
• Allergen Free Food Box – $25
• Premium Box – $55

If you become a host site, Angel Food will donate $1 to your benevolence fund for every box distributed. It’s their way of giving back to you.

Treasure Box

site: thetreasurebox.org

Treasure Box isn’t as widely available as Angel Food Ministries. It’s only available in California, Arizona, and Nevada.

• The Treasure Box – $32 (over 20 pounds of food that can feed a family of four for a week)
• The Hearty Proteiin Box – $32 (about 12 pounds of protein items)
• Quick and Healthy Meal Box – $32 (10 packaged meals that are low in fat and cholesterol)
• Simply Enough – $24 (a smaller box for people with fewer needs)

Some locations accept food stamps. Treasure Box will also donate money to each host site for every box that’s ordered through that site.

Golden Share Foods

site: goldensharefoods.com

This program is most limited in scope, as it’s only available in Southern California. But if you live in San Diego, you’ll find many available pickup locations.

• Basic – $30
• Veggie – $20
• Mega Meat – $36

They seem to participate in SNAP, the Supplemental Nutrition Assistance Program.

I hope this helps you get groceries at much lower costs!

Darren loves to help people learn business skills that they can apply to better their lives. Check out his blog at Gain Business Skills and get free updates via his RSS feed.

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My wife and I love to take trips and usually go on a nice vacation every year or so.  We try to keep the costs low and have found a few ways to make the most of our vacation while keeping to our budget.

Every time we go on a trip, I like to set out an anticipated budget.  This usually includes food, gas, airfare, hotel, and fun.  It’s usually pretty easy to estimate these costs and with the total in mind, we have a better handle on what we should aim for cost-wise.

I’m sure you’ve heard some of these tips, but there may be a few that are new to you.  Hopefully you can use them to shave off a few dollars from your next trip.

1.  Leave After Lunch

I know it sounds simple and may not work for every trip you take, but when you leave after lunch, you only need to worry about eating dinner on the road.  Leaving in the morning means that you will be paying for lunch and dinner during the trip.  If you have a family, that lunch bill at McDonald’s can add up fast – even if you’re ordering from the dollar menu.  : )

When we eat at home before we leave, I know that it’s like saving $10 for the both of us.  While that’s really not a lot of money to brag about saving, it does count for something!  Just think of it as a $10 gas credit!

2.  Pack The Snacks

A pack of granola bars is $2.00 from the store, so pick up a box and keep it in the car during your trip.  If you’re flying somewhere, make sure your snacks don’t include drinks.  As a way to save with things to drink in the airport, you can bring an empty bottle and fill it with water once you get past security.  Then you can bring it on the plane with you.  Go ahead and multiply $3 by each person who bring a water bottle…there’s your savings.

Ok, ok… I know what you’re thinking.  Enough with the small savings, right?  If you’re looking to save in the big things, the following tips are for you (but I’d encourage you to try to save in the small things too).

3.  Use Reward Points

Most major hotel chains offer reward stays that can really add up.  I travel a lot for work and use the Hilton family chain of hotels.  Since I use a Hilton Honors credit card, my points add up quickly.  I usually get a free stay every two months just for using my credit card to pay for things I would buy normally.

Another hotel chain with great rewards is Choice Hotels.  They give you a free stay after two stays.  This can cut your lodging bill by a lot!  Check them out the next time you’re booking a hotel.

4.  Book Your Flight In Advance

There’s a really cool tool called the Bing Airfare Predictor.  It’s a tool that shows you if flight prices are expected to rise or fall during the period that you’re looking to fly.  With an accuracy rate of 75%, you can use this tool and end up saving quite a bit when flying somewhere.

5.  Sign Up For Credit Cards

Wait a minute here?  That sounds a little irresponsible, doesn’t it?  Before you go signing up for every credit card that offers you rewards or flight points, think twice.  I’m not recommending that you open a credit card every time you see rewards attached.  In fact, you want to make sure you’re not creating too many lines of credit out there.

If you are responsible with credit cards, look at a few of these options.

Citi Gold / AAdvantage Visa: 30,000 points after spending $750 on the card.  That’s enough for one roundtrip domestic flight.  (There is a $50 annual fee after the first year)

Delta Airlines Gold SkyMiles Card: 20,000 points after first purchase, 5,000 bonus points when you add two additional members.  Enough for a free flight.  ($95 Fee waived for first year)

Credit card rewards aren’t for everyone, and I would actually recommend that some people NOT go this route.  But, I wanted to include this as a way to save because we’ve saved hundreds of dollars by responsibly using rewards.

How have you saved on travel this year?

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When I see the word ‘quick’ in an article title, I generally think that it’s going to uncover a magical blueprint for making money fast.  Quick money and instant savings are popular article topics today, but the one you’re about to read isn’t quite so popular.

In fact, I’d say this topic gets ignored online and in our personal lives.  No one likes to dwell on mistakes, and going overboard with your spending can feel like an error that can’t be undone.

The truth is that you can recover from a spending spree, but the action steps to recover might be painful.  No pain, no gain right?  Even if you aren’t personally trying to recover from a spending spree, you might help someone else with a few of these suggestions.

1. Sell The Stuff

Groundbreaking, I know.  But if you didn’t have the money in the first place, you shouldn’t be buying stuff.  Sell it! It’s the basic principle of spending less than what we earn.

But I won’t get what I paid for it, so it’s a bad idea to sell it!

That’s not a good reason.  If you’re trying to break the habit of buying things you cannot afford, then you need to make the tough decisions, which can mean you take a small loss on the item.  It’s better to get $15 for a $20 shirt that you bought on impulse.  The $5 loss might be the nudge you need to stop buying things you can’t afford.

2. Cut Discretionary Spending

You might not be able to sell everything that you purchased on your spending spree, but you can do something to help correct it.  Look at your discretionary income for next month and earmark it for savings or for paying down debt.  If you have a fun account or entertainment budget, put it on hold for a month or two to help cover the expenses you incurred this month.

3. Work a Side Job

Can you pick up an extra shift or work a little overtime?  If your spending spree only set you back a couple hundred dollars, this might cover it within a paycheck or so.  If your spree put you in debt close to a thousand dollars or more, you might consider a seasonal job or weekend work.  It’s not an attractive option, but you could work evenings in a restaurant or take an evening shift cleaning office buildings.

There’s nothing wrong with spending money on yourself and getting things that you’ve been saving for.  The problem is buying stuff when you don’t have a plan.  That’s why setting aside extra money each month in your budget for those spending sprees or shopping trips is the best way to manage those purchases.  To control our ‘extras’ category in our budget, we like to set out the money in cash so that when we do go on a spending spree, there’s no way we can go over.

How do you keep from overspending?  What ways have you used to correct an occasional spending spree?

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Life is full of opportunities where we have the choice to take one road, or another.  We can make wise decisions or unwise ones, and far too often we take the wrong road.   We say the wrong thing to our spouse, we buy the wrong product, or we don’t give enough to those in need.   Unfortunately we can’t go back and changes things, because life doesn’t have a reset button.  But what if our financial lives could?

Over the past month or so my wife and I have realized that our spending has started to get out of whack, and we’re spending far too much money on things we don’t need.  We’ve been overspending on things like eating out, entertainment and home furnishings.  We’ve also realized that we’re spending far too much on our 10 month old son, for toys, clothing and other things that he could care less about. The thing is, most of the time he’s either out-grown the clothing before he’s even worn it, or he’s disinterested in the toys before he’s even played with them for a day or two.  We could be spending a lot less, and we knew it was time to take a fresh look at our family budget.  We needed to hit our financial reset button.

Life Gets Busy And The Budget Gets Lost

For quite a while after we had taken Dave Ramsey’s Financial Peace University we were using the cash envelope system, along with a zero based budget in order to keep our spending in line.  That worked pretty well for a while, until life started getting in the way.  When a variety of health issues came along, and then my wife got pregnant, we slowly got away from keeping a close budget.  As soon as we stopped keeping close track, things started to drift.

While we knew to some degree that things were drifting, I don’t think we really realized just how far they had drifted.  Having had an increase in my income over the past couple of years due to the income for this site, I think that rise in income allowed us to mask just how much we were spending.  Along with our rise in income, we’d also had a case of lifestyle inflation.   But since the income was higher, even though we were spending more than before, we were able to pretend like things were the same.

Time To Hit The Financial Reset Button

I finally realized that things were starting to get too far out of whack this past month when I started entering all of our income and expenses into the budgeting software called You Need A Budget in order to do a review of the software (which I now highly recommend by the way).  I realized that we were spending 25-50% more than I thought on some pretty big categories like our grocery budget, spending on our son and on home furnishings.  I realized that this was a problem, especially if we wanted to reach our financial goals.

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

After getting all of our financial accounts entered, and a new budget laid out, I decided that it was time to hit the financial reset button and start fresh with our finances.

Have A Budget Meeting

I called a family budget meeting with my wife, and we sat down to talk about where we were, and where we wanted to go.  Having done a budget in the past we had some pretty decent numbers laid out of what we have coming in, and what should be spending.  I based our new budget off of those old numbers.  We then talked about some of our new goals now that our son has been born.  Things like saving for our retirement while also saving some for our son’s education.

We also talked about how my wife felt to a certain degree that she was out of the loop when it came to all of our financial accounts and insurance coverages, something I hadn’t realized before.  That lead me to create the “Total Financial Picture Spreadsheet” that I talked about last week, to give her a better idea of where our accounts were, how she could access them in case I passed, and how she could carry on in the event that something happened to me. If you haven’t done something similar, I highly recommend doing it.  It will give you both more peace of mind.

A Budget Meeting Can Be Your Reset Button

Now that we’ve had our budget meeting, we’ve still got a ways to go before we’re completely back on track. Having that first meeting, however, was like hitting that reset button and re-starting our financial plan. We feel like we’re now back on the right road, even if we haven’t reached our destination.

Life has a way of getting busy and hectic.  If you allow all the pressures of daily life to get in the way it can quickly take over your financial life, and ruin even the best laid plans. Just remember that you can always hit that reset button, re-do your budget and start fresh. It’s never too late.

Have you ever had times where your budget just fell by the wayside?  Were you able to get back into it, and if so, how did you hit your own reset button?

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I don’t have a million dollars just yet; in fact, I’m far from it!  If I’m diligent with my savings, my retirement account will reach the big M, but what does that really mean in 30 years?

The number itself doesn’t mean anything – the purchasing power of those dollars is what counts.

I know you realize how inflation eats away at the purchasing power of our dollars year after year, but when we put it into perspective it becomes really apparent how one million dollars may not be as big of deal in 40 years.

Rewind 30 Years… Average Costs Then, Now And In The Future

I have no idea what things will cost in 2041, but what I do know is how to research what things cost 30 years ago.  There’s no guarantee that inflation will be the same in the next 30 years, but to put things into perspective, I’ll forecast each projected cost with a reasonable average of 3% inflation per year.

• Average Cost of a New Home in 1980: $86,400
• Average Cost of a New Home in 2011: $246,000
• Projected Cost of New Home in 2041: $597,000

That just sounds scary… over a half million dollars for a home on average!  I would hope that home prices don’t bubble like they did these last few decades, but for consistency we’ll use the same rates.

• Average Cost of a New Car in 1980: $5,413
• Average Cost of a New Car in 2011: $28,400
• Projected Cost of New Car in 2041: $68,934

Almost $70,000 for an average car?  That sounds crazy.  If a new car increased in price by five times in thirty years, who’s to say it couldn’t double in the next thirty.

• Cost of a Stamp in 1980: $0.19
• Cost of a Stamp in 2011: $0.44
• Projected Stamp cost in 2041: $1.07

Who knows if stamps will even be around in 30 years!

• Average Cost of a Gallon of Milk in 1980: $2.16
• Average Cost of a Gallon of Milk in 2011: $3.78
• Projected Cost of a Gallon of Milk in 2041: $9.18

• Average Income in 1980: $11,321
• Average Income in 2011: $46,323
• Projected Income in 2041: $112,438

With a quick glance at all of these common expenses, it’s easy to see how one million dollars may go by quicker than we expect.  I know that 30 years might seem far away, but ask someone who is age 50+ about the 80’s and 90’s and they’ll probably say it seemed like yesterday.  Even if prices aren’t this high in 30 years, the idea of a million dollars will probably continue to get smaller and smaller as people see an increase in income (and expenses!).

I’m still hopeful to have saved a million dollars one day, but if I’m spending $10 for a gallon of milk, I might feel better if my account had $2 million.

Are you shocked by these figures?  What other items are you curious about? Mention them in the comments and I’ll run a similar projection.

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