Money Management
The most frequent question I get asked from people wanting to stay home with their kids is "How do you make it financially?" I will not lie--it is an adjustment--we had to make some choices (We gave up almost 65% of our income--my full-time job plus some of Johnny's income). First of all, I-- like Dave Ramsey--don't think money problems are related to money. I think most money problems are behavior problems. So first things first...
1. We monitor our financial behavior. We know where we spend every $1. We preplan--using a budget every month. Most months we do well--other months we do terrible! Fortunately, the good months outweigh the bad months. Can you guess what happens on most of the months when we blow our budget? Nothing, we just buy more stuff and go more places... All behavior that can be modified! This budget stuff isn't just something discussed and written--it is a plan that requires discipline and commitment for it to work.
2. We pay for everything--we do not do credit cards or loans. If we want it--we make payments to ourselves until we can pay for it! And when we are ready to make purchases, we research, negotiate, wait, research, negotiate, wait... I think the key phrase in this part is WAIT... We had a payment mentality when we first married--"We could afford it if we could make the payment." That was such foolish thinking! We were on a path that would have probably maxed us out each week and it would have taken one unexpected financial event to get us behind and then in financial crisis.
3. I am constantly evaluating how we can do better. I read lots of books and blogs about financial management. This just helps me stay up to date and motivated. As a matter of fact--the things I plan to do better on this year--meal planning/food (I got really lazy with meal planning--which made us spend more on groceries, eat more junk, and eat out more), and we are looking at some different cell phone options (considering Republic Wireless). Most people that I hear complaining about money problems have chronic patterns of doing the same stuff (like eating out, making frivolous purchases, talking on smart phones, working one job--no part time jobs in addition--and lastly--they do not want you teaching them how to manage money). In the book Rich Dad, Poor Dad a point was made that people who are successful financially have a willingness to learn. They seek out help and want to be taught. Dave Ramsey was our teacher via book and the radio!
4. We have goals--things we want to do with our money that are fun. Like giving to others, traveling and having adventures with each other. We like traveling and unfortunately that takes money! So we plan for all of that and do it very cheaply. We stay in a tent in the spring, summer, and fall. We are not advance planners either so deciding to do something a day or two before is fine with us--and you can generally find some good deals if you are willing to be spontaneous!
5. I think it helps that neither Johnny and I are shoppers. We do not like it--I wear clothes until they are terrible--because I HATE SHOPPING FOR CLOTHES. The pants I currently have on have a bleach stain on them and the shirt is 6 years old...I am in desperate need of some winter clothing--I just do not want to go in stores and look for any! Online clothes shopping isn't enticing either! So, if you aren't browsing around stores or online, it keeps temptation and impulse purchasing to a minimum!
If you are like me, before we started getting on a path of better money management, when I read things like this--I always made excuses of why things would not work for me. I justified my behavior and believed that we were doing all we could. And then one day, we finally decided we would just give it a really good try for a few months. Oh, I am so glad we did! Every sacrifice was worth it! If we had not, I am sure I would not be able to be at home today!
Live a Meaningful Life!
1. We monitor our financial behavior. We know where we spend every $1. We preplan--using a budget every month. Most months we do well--other months we do terrible! Fortunately, the good months outweigh the bad months. Can you guess what happens on most of the months when we blow our budget? Nothing, we just buy more stuff and go more places... All behavior that can be modified! This budget stuff isn't just something discussed and written--it is a plan that requires discipline and commitment for it to work.
2. We pay for everything--we do not do credit cards or loans. If we want it--we make payments to ourselves until we can pay for it! And when we are ready to make purchases, we research, negotiate, wait, research, negotiate, wait... I think the key phrase in this part is WAIT... We had a payment mentality when we first married--"We could afford it if we could make the payment." That was such foolish thinking! We were on a path that would have probably maxed us out each week and it would have taken one unexpected financial event to get us behind and then in financial crisis.
3. I am constantly evaluating how we can do better. I read lots of books and blogs about financial management. This just helps me stay up to date and motivated. As a matter of fact--the things I plan to do better on this year--meal planning/food (I got really lazy with meal planning--which made us spend more on groceries, eat more junk, and eat out more), and we are looking at some different cell phone options (considering Republic Wireless). Most people that I hear complaining about money problems have chronic patterns of doing the same stuff (like eating out, making frivolous purchases, talking on smart phones, working one job--no part time jobs in addition--and lastly--they do not want you teaching them how to manage money). In the book Rich Dad, Poor Dad a point was made that people who are successful financially have a willingness to learn. They seek out help and want to be taught. Dave Ramsey was our teacher via book and the radio!
4. We have goals--things we want to do with our money that are fun. Like giving to others, traveling and having adventures with each other. We like traveling and unfortunately that takes money! So we plan for all of that and do it very cheaply. We stay in a tent in the spring, summer, and fall. We are not advance planners either so deciding to do something a day or two before is fine with us--and you can generally find some good deals if you are willing to be spontaneous!
5. I think it helps that neither Johnny and I are shoppers. We do not like it--I wear clothes until they are terrible--because I HATE SHOPPING FOR CLOTHES. The pants I currently have on have a bleach stain on them and the shirt is 6 years old...I am in desperate need of some winter clothing--I just do not want to go in stores and look for any! Online clothes shopping isn't enticing either! So, if you aren't browsing around stores or online, it keeps temptation and impulse purchasing to a minimum!
If you are like me, before we started getting on a path of better money management, when I read things like this--I always made excuses of why things would not work for me. I justified my behavior and believed that we were doing all we could. And then one day, we finally decided we would just give it a really good try for a few months. Oh, I am so glad we did! Every sacrifice was worth it! If we had not, I am sure I would not be able to be at home today!
Live a Meaningful Life!
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