Six Ways to Gain Control Over Your Finances
- Monday, May 15, 2006
Frequently after a church has hosted one of my No Debt No Sweat! Christian Financial Management Seminars people are excited and ready to start their budgets (or, as I prefer to call it, their Personal Financial Freedom Plan).
But, remember, good things usually take time. And that is certainly the case when it comes to developing your PFFP. It may take three to six months before the various categories of your plan begin to work in harmony. You will have to put more in some categories, and take money out of others. Like a master craftsman you’ll gradually fine-tune your PFFP into a highly accurate, customized document. (Remember, as far as I’m concerned, it’s not a budget if it’s not in writing!) But if you stick to it, gradually you will develop an invaluable worksheet that serves as your financial map to a more predictable and secure future.
Six Tricks of the Trade
Let me share six ideas that will give you a real "leg up" as you develop and implement your family’s PFFP.
1) Devote your effort to God in prayer, and make at least a six-month commitment. It takes time and effort to change bad habits. As you launch into this new lifestyle realize that there is a spiritual battle going on. At present, the devil has you exactly where he wants you—frustrated, worried, at odds with your mate. Bring this new approach to controlling your money before God and give it to Him. Make up your mind not to become discouraged—not to turn back. Make a personal commitment to stay the course for at least six months. This will give you the needed time to get past the first few months of confusion. Also, it will give you time to begin enjoying the benefits of your new lifestyle.
2) Balance your checkbook every month! Nothing mucks up a financial management plan quicker than an out-of-balance checkbook. Developing a PFFP while your checkbook is out of balance is like trying to win a triathlon with an anchor tied to your waist.
3) Develop an "Agreement Purchase Amount" with your spouse. Happy marriages are marriages that have good communication. I have recently been working with a couple in a mid-western state whose finances are in terrible condition primarily because of the wife’s uncontrolled spending habits. Without her husband’s consent (and in some cases, even his knowledge), she has racked up over $30,000 in short-term debts—including a new car! I’m happy to tell you that, thanks to a lot of prayer, some good Christian counseling, and a lot of patience on the husband’s part, their marriage is on the mend. But the debt problems are probably going to require at least five years to repair.
I like to encourage couples to agree on a maximum amount of money that either partner can spend without the consent of the other. The amount will vary based on your age, maturity level, and financial capabilities. For instance, if you’re young newlyweds with very limited incomes, you might decide that any purchase over $20 requires mutual agreement. However, a wealthy, middle-aged couple might agree that it’s okay if one buys a car without notifying the other.
4) Avoid the "Impulse Market Mentality." It’s amazing how many budgets get blown out of the proverbial water because of what I call the "Impulse Market Mentality." This is the temptation to run into a quick market and grab a snack and a soft drink—or some other impulse item. This is a special temptation to folks who spend a lot of time in their cars, like salesmen. No, I’m not against snacks and soft drinks—but I am against throwing away $100-$200 monthly! Think about it. If you run into a quick market just two times a day—that’s sixty stops per month. And, if each time you buy a drink and a candy bar for $2.00—that totals $120 in the course of a month! That’s $1,440 per year!
5) Use ATM’s cautiously. ATM’s are great—I use them myself. But you need to remember at least three things: First, ATM usage makes record keeping more difficult. It’s easy to make an ATM withdrawal and forget to stub your checkbook. A few oversights like this can lead to an overdraft charge from the bank that resembles a payment on the national debt!
Second, avoid using your credit card at ATM’s because it is so easy to over-withdraw. One study showed that while the average ATM card withdrawal is $53, the average credit card withdrawal is over $120!
Third, when you do use your ATM card—try to use it at your own bank. When you use your card at another bank’s ATM, most of the time there will be additional charges.
6) Consider destroying any credit card that you don’t pay off in full each month. I know that carrying a credit card balance is almost an American institution. But if you are ever going to get out of debt and stop letting your money manage you, a good starting place is with your credit cards. I’ll have more to say about this later, but for now, suffice it to say that credit card debt has proven to be a real financial killer for many families.
For previous articles in this series:
A Budget that Could Change Your Life
Why We Hate Budgeting - But Shouldn't
Five Keys to Developing a Successful Budget
Avoid the 'Budget Busters' That Kill Us Financially
Steve Diggs presents the No Debt No Sweat! Christian Money Management Seminar at churches and other venues nationwide. Visit Steve on the Web at www.stevediggs.com or call 615-834-3063. The author of several books, today Steve serves as a minister for the Antioch Church of Christ in Nashville. For 25 years he was President of the Franklin Group, Inc. Steve and Bonnie have four children whom they have home schooled. The family lives in Brentwood, Tennessee.
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