Monday, July 27, 2009

Money is amoral. This means it has no morals. It is not good or evil in and of itself. How it is used is good or evil, and an unhealthy love of money, making getting money your major goal, greed, those are evil. The money itself is not the problem, the attitude toward it is.

We all have our money attitudes, set down from watching our parents. We also all have two keys to our money "personality style".

Some people are spenders and some are savers. That is one key to our money personality. The other is that all of us are either, to use the Dave Ramsey terms, free spirits or nerds. The free spirits are like my Sweetie and break out in hives at the sight of a spreadsheet. The nerds love it when the numbers sit nicely in rows and columns and balance and behave themselves.

Every married couple has a free spirit and a nerd. Every married couple has a spender and a saver. Neither goes by gender. It is all mix and match.

Why is this? Well, to quote Larry Burkett again, "If two people just alike get married, one of you is unnecessary." Add to that the Dave Ramsey reasoning that "Spenders have savers in their lives so they don't wake up at retirement broke, and savers have spenders in their lives so they will have a life."

What does it all mean to the average couple? It means one of you will love getting the budget to balance and won't mind paying the online bills. The one who loves it, male or female, should go ahead and do it. That does not mean he or she is the boss in the relationship, it just means that person is the mechanic who carries out the plan the two of you put together for your money.

To apply all of this to your everyday life is pretty straightforward. At the beginning of every month, the two of you, together, sit down with the budget and have a budget committee meeting. At the meeting, you both have a say, both of your votes count.

The budget needs to be a zero based budget. This means you spend every penny on paper, on purpose, every penny has a "name". You begin with your income at the top, subtract out money for each category, and at the bottom it should say "0".

What categories? Well, which ones you choose will reflect your core values as a couple, what you want your money to do for you.

Suggestions for categories:
1 Start with saving. If you leave this till last, you won't have enough for it.
2 Saving means a rainy day fund and saving up for something special.
3 Giving to charities is very important. Shows that you acknowledge God as your provider and you can give some away, more will be provided.
4 Build the 4 walls of the house -- shelter, food, transportation and clothing. None of these have to be lavish, until you have the money to make them more lavish.
5 Entertainment and "fun money". Unless you are deeply in debt, try to put some money in for these two things. It can be a good idea to have a small, separate "fun money" fund for each of you to spend as you wish. That money can go for your favorite little purchases or be saved by you month to month to get yourself something you want.

Do yourself a huge favor and never go into debt. Ever. For any reason. Live very frugally if you have to so you can save up and pay cash for bigger items. Keep a rainy day fund, and try to build it up so that if you had to, you could live off of that rainy day fund for 6 months.

After you have enough in the savings to live on for 6 months (like for if you should lose your job or something), start saving for retirement.

If you ever have kids come along, start saving to pay for their education.

It is often easier if the nerd writes out a draft of the budget and brings it to the budget committee meeting. Then the free spirit looks it over and says things like, "Yes, dear, I know this category means a lot to you, but I do believe we need a bit more for this one over here." Adjust the budget until you are both satisfied that the needs of both of you will be met.

After this, the budget is the boss. You bossed it, now it bosses you. You stick totally to the budget, and if there is an emergency that requires a change in the budget, have an emergency budget committee meeting and take money from one category to cover the emergency. If it is a big emergency, use the rainy day fund. Remember the definition of emergency is not a leather couch on sale. It is the only car you have broke down and you can't get to work without it.

It is a good idea to start an envelope system for the things that you will spend money on throughout the month. Rent and utilities and such that are paid once a month, just write a check or pay online. The groceries, the fun money, maybe even clothing money (if you will have some every month), put cash in and envelope at the beginning of every month, and every penny for that category comes out of that envelope. When you run out of food money, you have to quit buying food. Makes you rethink whether you need that expensive brand or not when you look in the envelope and see you only have so much to work with.

Another thing to remember is that every item you buy needs to go in a category. Sound simple? Depends, really, because one of you may want cigarettes in the food category because to you it is a staple as important as food. The spouse may want you to put it in your own "fun money" category.

Decide on some long term and short terms goals for the money you save beyond your rainy day and retirement money. Vacations, a new, better washing machine, whatever, what you save for and how you spend money reflects your values as a couple.

See, that wasn't so painful after all. :)

Today is:

Barbie-in-a-Blender Day (Great idea!)

Caravan of Pilgrims, Cairo

Cross-Atlantic Communication Day (Why is the Atlantic cross, and what does it want to communicate anyway? Sorry, couldn't help myself.)

Festival of the Seven Sleepers (The patrons of insomniacs, maybe?)

Garlic Festival (Yes! The more, the better!)

International Lumberjack Tournament

National Blunt Object Day (Relatives, you can't live with them, and if you use your blunt objects on them you run out of places to hide the bodies.)

National Korean War Veterans Day

National Scotch Day (Good stuff, in moderation.)

National Sleepy Head Day, Finland (Where the legend of the Seven Sleepers comes from.)

St. Pantaleon's Day

Take Your Houseplants for a Walk Day (Some websites just list it as "Take Your Plants for a Walk Day, and a couple of them have mistaken that for "Take Your Pants for a Walk Day"!)

Talk Like a Mad Scientist Day (Please don't tell my husband!)

Walk on Stilts Day (Who are they kidding? High heels already give me nosebleeds.)

UFO Days begin in Elmwood, Wisconsin

Birthdays Today:

Triple H, 1969
Maureen McGovern, 1949
Peggy Fleming, 1948
Bobbie Gentry, 1944
Jerry Van Dyke, 1931

Today in History:

Francis Xavier, SJ, reaches Japan, 1549
Sir Walter Raleigh brings tobacco to England from Virginia, 1586
Department of Foreign Affairs (State Department) is established by Congress, 1798
Flooding of the Yangtzee and Hoangh Rivers kill 200,000, 1935
Bugs Bunny makes his debut in "Wild Hare", 1940
Insulin first isolated by F Banting & C Best in Toronto, 1953

No comments:

Post a Comment