...because we all have our motley moments!

Tuesday, April 6, 2010

Financial Fun Part 4: Back to Basics--Why bother?

I'm leaving the grocery store for a week to give us a chance to examine our motives, but I would like to head back there next week. I can ramble for hours about grocery shopping, so let's tailor the next article to what you want to know! Send me your questions or leave them in the comments at the bottom of today's post, and I or one of my Motley money-saving friends will respond!

Back to High School--Long Term and Short Term Goals
I was always so frustrated when he had to write down our goals in school. Who had time to think about the future? There was too much to do now, right? Well, it turns out that writing goals is actually quite beneficial, especially when it comes to personal finance.

I think I can safely say that we all want to be financially independent, but why? Why bother with all of this budgeting and saving? What does financial independence really mean? What does it look like for you?

For me, I can't wait to be able to give away money without a second thought. Major earthquake? Here's a thousand bucks. No, thank you, I don't want any cookies, but here's a hundred bucks for your troop. Your whole soccer team needs cleats and can't afford to buy them? Send me the team's sizes. Wouldn't that be amazing? Of course, I would also love to be financially set so that if the car stops running we can just write a check for another one, or if the grass in the yard stops growing (which it has, by the way--gotta love that Florida sand), we could just re-sod the whole thing and stop thinking about it.

Those are our long-term goals. Before you get the wrong impression of me, though, you should hear my totally selfish short-term goals. I have been salivating for months over a digital SLR camera--you know, the big ones with the fancy lenses. I had the money in my hand this Christmas that was enough to buy one, but instead we put the money into our savings account to help our emergency fund project. It was so hard to do that. I've always just bought things, which is why I'm paying so much attention to our spending now, by the way, so putting off my camera purchase was agonizing. Once the emergency fund was complete, my DSLR and an iPod went to the top of my "saving for" list.

Get a Visual
And, yes, we do have a list. When we started the emergency fund project, I took a piece of note paper and wrote our goal amount at the top. I taped it to the door of the computer desk under the saving envelope (the place where I put the extra cash I don't spend each month so it can go into our savings account). Each time we made a deposit, I wrote the amount and subtracted it from the total. It was exciting to see that number go down, to be able to see how long it would be before we would finish, and then to see what we could do to accelerate the progress. The day we made the final deposit my husband printed our account summary from the computer and taped it to the tally sheet. It was an awesome day!

Now that we have accomplished that goal, we desperately need another to keep our momentum from waning. I created a list of short and long-term savings projects and added them as a second page to our MASP. Every time we make a deposit I add in the amounts so that we can see where we stand. It's exciting to see those numbers rise and fall! It's good to win those little saving battles, too. Every time we fill an account we are closer to our larger goals.

Live Like No One Else
One of Dave Ramsey's favorite statements is "Live like no one else so that later you can live like no one else." Once those goals are set and the lists are posted, this is the key to success. But, what does it mean? It's different for everyone.

For us it means that we only eat in a restaurant if we have a gift card, and even then only on special occasions. I pack a cooler when we'll be out of the house at mealtime. I no longer go shopping "just to look"--I only enter a store with a list in hand and enough money to cover what's on the list. I only go to the grocery store once a week, and if we run out of something before the next trip, that's too bad. We are actually rationing milk this morning for that very reason. It means that I get to be a ninja money-saver in the grocery store. It means learning how to do things ourselves so that we don't have to pay others to do them. It also means knowing our limits so that we don't have to pay someone to come fix a mess we've made.

I realized a little while ago that indeed, some people were noticing our frugality. I noticed it because they seemed worried about us. It hit me that some people misunderstood our thriftiness--they thought we were broke! We have more cash right now than we have ever had at one time, but it looks like we're scraping every cent we can find! (Actually, I am--I'm obsessed with rolling coins!)

So, I love hearing your comments and anecdotes, but this week I want to hear how you live like no one else. Also, don't forget to send me your questions for the grocery saving Q&A! Have a great week!


Bryssy said...

Rachel, I am thinking you should write your own book! These posts are great!

First, our long-term goal is to homeschool our children and the freedom & responsibility that comes with that. We would like a large family, so that is also one of our short-term/long-term goals.

So, how are we living like no one else so we can achieve our goals? Actually, I don't think we are so different than others who want what we want. We are willing to work hard for what we want - and that includes me keeping a part-time job and being willing to get other ones if it allows us to pursue our dreams. I am not proud. I can work at McDonalds or Starbucks or anywhere else that lets us keep our children home for school.

We don't do extras either. We don't eat out. We don't have extra phone services or fancy cell phones, cable tv (although that is more of a moral choice than a financial one), and we don't have extra technology (a computer at home is it.) I don't get my nails and hair 'done', we don't go on weekend getaways, and we don't hire babysitters.

We have a old house and we save the money we need to fix things (most of which I am blessed to have a very handy husband).

We purchase only the clothes and food that we need. I do plenty of mending on the clothes we do have to make them last longer.

I purchase gifts for birthdays and holidays in advance (at yard sales and flea markets, mostly) so that we are prepared and we budget for those things. We don't go overboard on gift for our kids (and we don't really do gifts for each other). We don't allow a lot for wants, either. We have had a small vacation fund and it's probably not enough to do what we want this year - so, no biggie, we won't take a vacation.

At first, I found living like this to be hard. We live in a society that is largely based on wants. If you want something and can afford it, you should have it. Actually, even if you don't have the money - you should have it. It is a whole change in thinking. It's not popular - and even our parents don't think this way.

Basically, we believe that we don't really deserve anything. We are blessed first by salvation given by Christ. Everything else, is extra.

With that in mind, what we have (house, cars, jobs, clothes, food) are HUGE blessings. We don't really need or deserve more. Knowing this, the choices seem easy.

Occasionally, I get the twinge that I want to go on a cruise or buy an iPhone and that can be hard. I've said it before, I know it's jealousy. Especially seeing peers doing those things.

When I start to want some extras, I tell myself: "We could be living in a hut (or worse) in Africa facing genocide. Surrounded by disease, no education, possibly not living beyond our early years, watching our children die as infants and certainly no air conditioning. What the heck am I complaining about?" It makes my wants seem trivial.

Then I have to pray and ask for grace. It's what I want my children to have. I certainly don't have it by myself. I don't want them to value stuff for more than it is - just stuff. It doesn't make you happy. It doesn't make you rich. It doesn't make you smart. It's stuff.

And since we have begun to achieve more and more financial freedom - we are more and more happily satisfied with life. I think that alone makes us very, very rich.

Lindsay said...

One of our biggest reasons awhile ago to start saving money, was because we knew that we would be moving into a new house. We didn't want to move in and not be able to buy what we wanted for the house, and live using our old stuff, we wanted some nice new-to-us stuff for our nice new house. Even though we shopped sales, and IKEA :) to get those things. But we weren't going to go into debt to do it. So here we are finally and it's been GREAT. We were able to buy our new house and buy nice stuff to put in it, all while paying cash and still having money in the bank. We are at the end now of what we have set aside, but it's been so nice not stress about money during this process.

But to do all of that we cut out cable (we don't watch much TV anyway), I don't have a fancy cell plan (Nick does but it's covered through work), I cut my own hair, we wear hand me down or consignment store clothes, we only by used or sale items.... We do take a vacation every year, but I see this in the "need" catagory since I have brothers and aging grandparents in other parts of the country. But while on those vacations we fly free, stay with family, and take hikes instead of going to amusement parks ect....

We are back so saving all of our money to complete step 3. And we are already doing step 4 (long story).

Recentnly something has come up (and I'm not ready to share this with anyone yet, but could use some prayers), that is going to cost us quiet a bit of money every month for awhile, and we do have the money to cover it. Which means less of our money will be going to saving so cover this great and much needed expense. So we are really buckling down so that we can cover that cost and still work toward the completion of step 3 as fast as possible.

3 yrs ago before Dave Ramsey none of this would have been possible. It's taking a little longer since we bought a new house and had this unexpected (but needed) expense come up, but the fact that we can do it all and still have money is amazing to me. Plus we just saw our retirement statement this week and it was so awesome! Someday when we have no bills and we are retired we are trully going to "live like no one else".

One thing I have learned along the way is that you don't know other people's circumstances. Someone may be spending money on something that you wouldn't spend your money on, but you don't know why, where the money came from, how they did it ect... You just have to do what YOU need to do and not worry about other people's choices, because you don't know where they are coming from. And it can be easy to get a "I'm better than them" attitude sometime. But you aren't walking in their shoes.

Donna said...

Bryssy and Lindsay, you are both such smart women. I love everything you said here and it all makes good sense! Lindsay, I'll pray for you and your family as you deal with this unexpected expense. Being able to handle it without going into debt would be such a blessing.
Bryssy, it's easy to slip into the "but they have it - why can't I?" mentality, but keeping my personal goals in mind really helps. I want to be here for my kids. We want to make our single income work for us, not just now, but when we are ready for retirement as well. And realistically, these are the years that it's actually pretty easy to live slim. Kids don't really need many material things and don't feel the lack the way we do. They get inventive. If they don't have it, they imagine what they need or use what they have. Simple.

How I live like no one else:
I celebrate my cheap buys. Whenever someone compliments me on an item of clothing, I feel compelled to reveal how little I spent on it. It's a sickness, I know! My famous tag line is "I got it at the Care Center for three bucks!" I'm proud of the fact that my thriftiness is a big reason why I can be at home raising our kids instead of working a full-time job outside of our home. My goal is to stay home AND save money and I'm helping to make that happen!
I love reading about ways to save in specific areas of the budget. Groceries are a biggie, so the grocery series has been great, Rachel!
As far as groceries go, I think I'm doing all I can - without major couponing - to save money on that front. Paul and I are going to start making our own yogurt, I think. We just can't keep up with yogurt consumption around here. We buy the tubs and it's gone in no time between snacks and smoothies. Bread is another hot item here. I think I might go back to homemade bread this summer and see how it goes. Good bread is expensive when it's not BOGO!

Donna said...

How we live like no one else, continued:
Other bills: Paul and I are going to scale back to just one car again. We did it for so long, we just don't use the second car at all. We walk everywhere that we can or we ride our bikes. Now that we have the van, the Camry is just an extra insurance expense every month. It's outta here!
If you feel you have found THE CHEAPEST cell phone scheme - I mean, plan - I want to hear about that. I know Teresa feels pretty good about her cell phone bill. We need two phones, but we really only need the basics with good coverage (at least on the East Coast).
We don't have cable and we "rent" our movies from the library unless we know it's something we'll want to watch again and again. There is only one TV in our house and it's in our bedroom. I do love watching my favorite shows in the comfort of my cozy bed. More often than not, I'm reading or searching online for homeschool stuff or playing on facebook. Like Brystal, we have a computer and cell phones. That's it for technology around here.
I don't shop just to go shopping anymore. This is hard because my mom and sisters love to shop and it's what we all do when we get together. I've had to start saying no, which means I'm missing out on some fun girl time, but I know if I go, I'll wind up spending something. Also, I find myself feeling rather repulsed by all the junk on display in most stores. I never come away from a shopping experience feeling refreshed or especially happy. So, like Rachel, no more "listless" shopping for me.
Our big indulgence is Silver Bay, our summer home away from home. The great thing about our situation is that we can shut down our house here in FL for the summer and save on gas, electric, and phone (if you are a robber who is stalking Motley Moms, be warned: we are taking our computer with us. There is nothing else of value in our home. The one TV we have is a huge box dinosaur...you don't want that. I'm pretty sure you can get one for a song at the Care Center. Also, you'll need two people to get it out of here.)

That's just a few of the ways we live like no one else!

Lindsay said...

I'm curious. Do those of you who only have TV's in your bedroom or small TV's not watch TV/movies with other people?

We got a big TV when we moved. It's funny we are not big TV watchers at all. It's rarely on during the day and we read at night, so it's not on then either. However we several friends from our church who we get together with and watch movies. We also do a lot of group bible studies via DVD at our church. Our pastor does the "message" on DVD and then we discuss it with our group. So the reason we got a big TV was so that we could do those 2 things. We didn't get it for daily TV watching, and we could never get away with having it in our room.

Fawnda said...

Rachel- these posts are AWESOME! Each week I am inspired! :)

Our long term goals: Save for Kid#2. As I posted earlier we are starting the adoption process for Kid#2 (A daughter!) and we are excited but it is VERY expensive. So with every buy we ask ourselves "do we want _____ or a daughter?" It is an easy answer!

I have been repurposing clothes for myself, buying clothes from consignment stores for the Little King.

We save a lot on groceries at Aldi and by buying what we need and now what we want (like chips and cookies)

We will not be taking a big family vacation this year.

We do not have cable.

I make a lot of my gifts for birthdays and such.

We do not drink pop at home (we save about $500 a year by not buying pop!) we drink more juice and water, which is better for us anyway!

We reduced out cell phone minutes. and we don't have a landline anymore.

We only budget going out to eat 1 time a week (After church)

We divide up our paychecks so that most of it goes directly into savings and only what we need goes into our checking. We found that if we had the money in our checking we would find a way to spend it, but by having it go to savings it is safer! :)

Donna said...

Lindsay, we do family movie night with our kids every Friday night. That's it. They only watch TV/movies when they are invited in and we have set the movie or show for them. We don't do movies for any other guests anymore. We used to, but we so rarely have people over, we decided it made more sense for us to set it up the way it worked best for us. Also, in our 1928 house there is no place for a TV to go in the living room. It would either have to go against windows or the fireplace...not so good! We decided it just wasn't important enough to worry about it. Our kids watch WAY less TV now (almost none) and family movie night is an anticipated event.

Bryssy said...

We have a tv in our living room. Most of the time I have a big book or chart paper set up against it. I can't remember the last time I needed it because we had guests. It has a VCR hooked to it so that I can show a movie for the kids. But, normally, because the tv is covered - we just don't watch it. We have a little tv in our bedroom that is the same way. Actually, I'm not sure if it even still works - I haven't tried it in months! I really only used it for static noise when KOTJ was a baby.

Rachel said...

Ladies, you are leaving awesome comments as always! I am so inspired by what you do in your own homes--thank you!

When we moved in to our new house last summer (pre-saving obsession) we signed up for a bundle deal from our phone company that includes tv, phone, and internet. We are counting the days until the contract is done and we can cancel the whole darn thing, start over with a magic jack, digital converter box and antenna, and get internet some other way. Once the house is paid for, we may go wild and get cable again, but until then, it's just not necessary!

Bryssy, I love your perspective. Being financially "fit" is a mind game to say the least. It is so difficult to ignore the excesses we see so often in society, but that's the only way to succeed. The fun thing is that while we're training ourselves to be savers and not spenders, when we do accumulate our first million we will probably still be as frugal as ever! One of these days our kiddos will thank us for sure!

If you don't have any grocery questions, do you have any suggestions for what you would like to discuss next Tuesday?