Luxury Expenses

Yesterday we talked about what to do if your budget doesn’t balance…one thing to look at is what I call luxury expenses.  Here are some alternative ideas to cutting or reducing these expenses.  Some of these are not new ideas.  It all comes down to a person’s willingness to recognize their financial troubles or wanting a simpler life,  then having the courage and determination to change it.   

Cell Phone/Home Phone – Cancel one or keep both but cut all the extras on your home phone.  My family and closest friends have my cell number and call it if my home line is busy.  Most of my contacts know that we do not have call waiting.  If there are times when I am in the middle of something and don’t feel like answering the home phone, I let my answering machine pick up.  If it’s important enough, the person will leave a message.  I also registered on the site to reduce telemarketing calls.

Cable/Satelitte TV– You can purchase a $15-$20 antenna from Wal-Mart or Target that will pick up most channels.  Our antenna picks up NBC, CBS, FOX, PBS and about 4 other local channels.  Be sure and get the kind that plugs into an outlet also.  This extra feature provides much better reception and reduces the need to adjust the “rabbit ears”. 

Dining Out – This is one of my priority luxury expenses.  For my husband and I, we were willing to do without cable so we could continue to eat out on a regular basis.  We enjoy trying new restaurants so this was a priority for us.  If eating out is not a big deal to you but cable is, then keep the cable and cut back on the dining out.

Lawn Treatment – Many companies now offer no contract.  I have heard that the best time to fertilize and help with weed control is in the Winter and Spring.  Therefore, you could actually limit or cut out lawn treatments in the Summer and Fall.  Or you could research gardening sites and do your own weed control.  I know that some subdivisions now require yards to be weed free so make sure you know all the homeowner regulations before buying in a subdivision.  Lawn treatments could be an added expense you did not anticipate.

Manicures, Spa Treatments – If this is a priority on your list, instead of cutting it out completely, look at reducing the number of times you have it done or look for a less expensive place to visit.

Shopping – I have a friend who uses part of her day off to bargain shop.  She manages her shopping well by 1) doing most of it at thrift stores and consignment places, 2)  usually only paying with cash and a set amount, 3) doesn’t use shopping to fill a void and 4) although she may buy something decorative for her house, she also pays much less for school clothing, books or other needed things for her household.  If you love to shop but overspend, set an allowance for yourself and instead of heading to the mall, find a nifty consignment or thrift store.  I can’t tell you the number of name brand items (some with tags still attached) or barely used items she has found.   Just as I have a hobby of scrapbooking, some people have a hobby of bargain shopping.   

EVERYONE has things they feel they can’t live without…things that make our lives more comfortable or enjoyable.  I’m not suggesting you cut out all these things (except in extreme cases) but to really look at all the extra “stuff” your money is going towards.  You might find that by cutting a few things, you come up with an extra $200 a month that enables you to save more, pay debt off faster, have your spouse quit a second job or in some cases keep your home.  Think what luxury items you have and evaluate if their cost is really worth the burden they are placing on your finances.

Until next time…have a joyful week!   Dana


My budget didn’t balance?

It’s been over 30 days since I challenged you to start tracking your expenses.   Last month I did a post on creating a budget or spending plan.   If you created a budget and found that your expenses exceeded your income, then one thing you can do is evaluate what you can live without.  Here are some examples:

Cell Phone
Telephone Extras (call waiting, caller ID, voice mail)
Internet service
Dining Out
Lawn Care
Excessive Clothing or Accessories
Manicures, Spa Treatments
Shopping (how many times a week do you buy things that are not for basic needs?)
On-Line Subscriptions 
Gym Membership 
Monthly memberships for video rentals

I know you may think these items are necessary but if you are in a financial crisis, are they necessary?  If you have to charge groceries but sit down to watch a show on cable, is the show so important you are willing to acquire debt and interest to watch it? 

This is just one example. I’m not saying that these things are wrong or that people who have these expenses are not spending their money wisely.  I’m saying that if you have to charge monthly things, borrow from family, continue to accumulate debt or not pay your bills, then one of the places you should look at are luxury expenses.

List all your expenses that are not required to live on and/or could be cancelled without penalties. Then number the expenses in the order of importance. Think about getting rid of 2-6 expenses that end up at the bottom of your list.  Tomorrow I’ll give you some alternatives to these things.


Get-Rich-Quick Schemes

Proverbs 23:5 Cast but a glance at riches and they are gone, for they will surely sprout wings and fly off to the sky like an eagle. NIV

I am thinking mostly of the lottery here.  Before I knew Christ, I played the lottery some, mostly in my college days in hopes to hit the jackpot.  Occasionally, I would take the last bit of money I had and go play.  I would sometimes win a small amount, but then I would use that to play again.  Once I played again I lost everything. Isn’t that pretty typical for most who play the lottery?  This was money that I desparately needed for food and rent.  What was I thinking?

There are so many more schemes out there now besides the lottery.  And the internet has really opened up avenues to get-rich schemes.  Buy this book and earn money quick!  Or sign up now and make thousands of dollars in a matter of a few of months. Guaranteed business opportunity: make up to eighty thousand dollars in a year!!  Have you seen these adverstisements before?

What does the Bible say about getting rich quickly?  Well riches will surely sprout wings and fly off to the sky.  There is a parable about the prodigal son that parallels this verse.  The prodigal son demanded his inheritance from his father and then, he wasted it all in a foreign land.  Finding himself among the pigs (literally), he came to his senses and went back home. The inheritance he had sprouted wings and flew off. 

During my college days, I received a call from a person representing a firm that sets up low cost vacations to well-known vacation spots around the country. The representative told me that I was selected to receive one of these low cost vacations.  I only needed to give them my credit card number.  The person on the line seemed so desparate to get my card number that I turned down such a wonderful opportunity.  The vacation really sounded great and wasn’t going to cost much.

It ended up being a scam targeting college students and many had fell for it.  So schemes seem appealling at first, but leave you without.

What if you came across an opportunity, but you are unsure if it is a good investment or just a scheme?

:: Seek the Lord’s guidance always with your financial affairs.

:: Ask the Lord for wisdom and ask Him to guide you through His Word.  Sometimes the Lord will show you certain verses that reveals His will about a certain situation.

:: Get godly counsel from other christian friends that you trust if you are not sure about the opportunity.

:: Wait!!!  Don’t be hasty with any financial decision.

:: If it sounds too good to be true, it probably is not worth the risk.


Credit Card Debt and College: My experience

I remember the first time I ever signed up for a credit card.  And yes it was in college.  I thought it would be so cool to get one.  I was totally oblivious to the terms of the credit card agreement.  I didn’t know how much interest I was charged nor did I understand how to calculate it.  All I knew is that I had a low monthly minimum payment. It didn’t change too much as the debt grew.

I also had a college friend that told me that I could simply go to the bank and take out cash.  I tested her idea and sure enough I was given $200 for a cash advance.  I was naive to what was happening. 

I called the credit card company to see if they would increase my the limit on my balance.  They did several times until finally I hit a plateau and could barely afford my monthly payments being a student.  Several times I was charged fees for going over that limit.  Plus my balance never seemed to go down because I couldn’t really afford larger payments.  So it was like a continuous cycle.  I would make the payment but then charge something.  Of course, at times I would go beyond the limit for my balance and get charged extra.  To me, I was in this crazy, never-ending cycle that felt like a monkey on your back. 

Yes, I did pay for one college class with my credit card. I think that it was on a separate credit card.  I was desparate to take the class.  To this day, I don’t even remember what the class was that I thought I had to charge hundreds of dollars.

This story is probably typical for what a lot of students have experienced.  Today, the credit cards that I had in college are completely closed out.  I remember calling the credit card companies and telling them that I wanted to close my accounts.  That is what I had to do at the time.  These old accounts were completely paid off.

My advice is ………

1) understand the terms of the credit card agreement. I as a college student had no clue what I had gotten myself entangled with.

2) know how to calculate interest. This is helpful for loans in general.

3) I know of some people who have credit cards and use them very wisely. They pay off the balance each month to avoid accruing debt. 

4) educate yourself on the traps of a credit card.  There is a reason why the credit card company only requires a low monthly minimum payment.  They are not interested in you paying off debt.  They are interested in keeping you in the debt cycle. I was also snared by the fact that the credit card company would honor my requests for a higher balance.  They wanted my debt to grow.


Ways to cut credit card DEBT!

CALL the credit card company directly!  I am not against third party interventions (consolidation companies or consumer credit counseling).  But before you go that route, try working with the credit card company yourself!  Many times by going through a third party, it can affect your credit score.  It’s not the company that helps you with consolidation or mediating an agreement, it’s the credit card company that reports to the credit bureaus that you had a third party intervention for your debt.

KEEP all your credit card solicitations from the mail for a few weeks! If you have debt on a high interest credit card and you receive an offer for a lower interest rate card from a different company, WAIT…don’t transfer your debt yet.  WAIT…don’t go and open another card account yet.  Call your current card and tell them you are looking at leaving their company because you have received an offer for a lower rate.  Many times your current card will match or at least drop their current rate for you.

BE honest with your credit card company!  Come on, don’t call your card and tell them the payment is in the mail, when it’s not.  God calls us to be honest and responsible for our debts.  If you or your spouse have lost their job or have an unexpected financial hardship, call your card and explain the situation.  Sometimes they may be willing to waive the late fee or lower your rate.  BUT talk to them in a respectful and nice manner.  It’s not their fault you are in this bind.

STOP viewing the credit card company as your enemy! You must take responsibility for your own actions of running up this debt.  Yes, the companies pursue people but you still have a choice in the matter.  I have experienced SEVERAL nice conversations with credit card companies over the years.  MOST of the time, they were willing to work with me.  Years ago, all but one of our cards dropped their interst rates for us.  In recent years, (we only have one personal credit card) I paid a bill late on-line and afterwards, when I called the company, they credited back the late fee since I was such a good customer of paying on time in the past.

CAN you handle a credit card? In today’s world, there are many occasions where a credit card is required or safer than using a debit card BUT if you do not budget nor manage your finances wisely, you should not have a credit card.  That may sound harsh but after experiencing credit card debt and taking 2 years to pay it off, I never want to be in that situation again…so we budget and stay strict with our ONE credit card.  When I did budget counseling with people, it broke my heart to see how many had worked so hard to pay off credit card debt only to run it back up again.  If a credit card will tempt you to buy something you can’t afford or to not live on a budget, then you should not have one. 

Lasting thoughts:

Pay your credit card off monthly.  Do not take cash advances on your credit card.  Do not charge something if you do not have the money in your bank account.  Pay your bill on time. 

Any other thoughts?  Please feel free to let us know!  Thanks and have a great week!  Dana

Credit Card Debt

My husband and I started our marriage off several years ago with 7 credit cards and $12,000 in credit card debt!  Several of the cards had a high interest rate of 14% to 21%.  Marriage is hard enough without the stress of debt so I went on a mission to cut this debt as fast as I could.  I had not heard of debt consolidation centers such as Consumer Credit Counseling so I started calling the credit card companies directly.  Out of the 7 credit cards, 5 of them lowered their rate for me and 1 gave me a 6 month 0% interest!  The last card company refused to lower my rate.  So after more phone calls, one of the lower rate cards offered to do a transfer balance from the high rate card.  Back then credit card companies did not charge a transaction fee for balance transfers but even if they had, it still would have been to my advantage to transfer from a 21% card to a 8% card.

Check back tomorrow and I’ll give you points on dealing with credit card companies directly rather than through third party companies.  DANA

Dealing with Financial Stress

Proverbs 14:26 In the fear of the Lord is strong confidence: and his children shall have a place of refuge.

We hear much about the present downturn in the US economy.  Some of the talk in the media sounds pretty gloom and doom.  But dear friends, the Lord has a different story.

If we would turn to Him in reverence that He owns everything… If we would call on Him knowing that he is in control……..If we would fear Him….. we will have strong confidence in the fact that the Lord will supply our every need and He will be our refuge from burdens whether financial or other. That is a promise in the Bible.   

Much has been said about the decline in the housing market and the rate of housing foreclosures across America.  Some of us are experiencing extreme financial stress.  But how do we deal with the financial stress?

:: Pray to the Lord and acknowledge Him in all that you have.  Ask the Lord to guide and direct your steps in your financial affairs. Take a step of faith and do what he tells you.

:: Meditate in God’s Word.  The Lord will lead you to a verse that will help give you peace.  Here’s one that I have read before. 

Psalm 37: 25 I have been young, and now am old; yet have I not seen the righteous forsaken, nor his seed begging bread.  Whatever the state of your financial affairs, the Lord will not forsake the righteous and he will not allow you or your children to beg for bread.

Here’s another. Psalm 12:24  consider the ravens: for they neither sow nor reap; which neither have storehouse nor barn; and God feedeth them; how much more are ye better than the fowls?

God will take care of you no matter the circumstances in your finances.  You are precious in His sight. Take heart and believe.