16 August, 2009

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we took this picture almost exactly a year ago. when i think of how much our life has changed since then, one of the biggest changes has to do with how we handle money now.

this talk by Elder Hales really hit home for me and has helped us refine our financial planning and spending. here are a few little pieces of wisdom from the talk.. enjoy :) 

budgeting

"Another important way we help our children learn to be provident providers is by establishing a family budget. We should regularly review our family income, savings, and spending plan in family council meetings. This will teach our children to recognize the difference between wants and needs and to plan ahead for meaningful use of family resources."

i've always been a budgeter, but this talk propelled me to a whole new level of budgeteering - one that is so specific to each dime that we make, that we find we're never short of what we planned. 

debt

" We must want more than anything else to change our lives so that we can break the cycle of debt and our uncontrolled wants."

my parents are the ultimate example to me in this area. they hate debt. a week or two after last general conference, steven and i used some extra money that we had been saving for a long time to pay off our credit card. it felt amazing. Elder Hales' comment about the "cycle of debt" really rang true to me, because we definitely were stuck in the cyclone of debt last summer. we'd put almost all of our income toward credit card debt, then end up having to use the credit card again for our basic needs, which put us even further in debt. very, very frustrating. 



appropriate spending

"Whenever we want to experience or possess something that will impact us and our resources, we may want to ask ourselves, “Is the benefit temporary, or will it have eternal value and significance?” Truthfully answering these questions may help us avoid excessive debt and other addictive behavior."

asking each other this question has saved us from making a lot of purchases that aren't necessary: ice cream, new cell phones, a bed frame, clothes, manicures, trips, a big tv, movies, going out to eat... and as a result has saved us a heck of a lot of money that would be spent on things that we definitely don't need. 

which isn't to say that we live like monks... obviously we don't - we definitely spoiled ourselves last weekend in utah, and are planning a big trip next summer (more to come when i have the details hammered out)... but living by the simple guidelines outlined in this talk and the personal revelation we've received about our finances, we have confidence in each other and our own abilities to only buy what we can afford, and to penny pinch so that we can afford to buy the necessities of life, and to fulfill our dreams at the appropriate times. 

this talk is absolutely excellent, whether you're LDS or not, it yield great advice for how to live frugally when the economy makes everything uncertain. 

hope you're having a great sunday! 

5 comments:

  1. I'm going to have to go back and re-read this talk. I liked that you kinda commented on each section. lol. We dont even have a tv. We use our computer for movies. Which obviously means we dont have cable. The little things we can SO live with out. Its amazing to me how many people have HUGE tv's. Just one example of the many that can get us into debt. Thanks for sharing. (if I even dont make ANY sense when I leave comments...sorry...I just type it how I think it and my brains kinda screwed up. lol)

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  2. Why not put EVERYTHING on your Credit Card? These companies are willing to pay us to use their plastic. If you are disciplined and dont go over your budget you'll come out even farther ahead. C.C points are amazing and add up over time. You can use them for the boring (using points to pay insurance) or for the fun (miles miles miles!). I've put everything on my Visa chase since '05, not only do I have tons of points but also never have paid a dime in interest. Ok Ok thats a lie one month I forgot and had to pay $10 but thats its I swear.

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  3. Amazing post. And AMAZING that Brandon is so disciplined! There is NO WAY that I could put everything on the credit card, then pay it off monthly. Credit cards are the scariest possession I've ever had. I hate them. For me, they are deceptive. In the past, when I've used a credit card my purchases have almost always been wants, and not needs. Without a credit card I am so much more careful with what I buy. Either I have the money for it, or I don't. With a CC it's not that way - it's like I always have the money. But then when it's time to pay the bill, there's nothing there to pay it with. Such has been my financial life.

    I can't even begin to tell you how freeing it is for me to live not only without debt, but without credit as well. SO, SO, SO freeing and peaceful!

    Thanks for this post. I'm going to re-read the entire talk and I think we'll use it for the next few FHEs.
    xoxoxox

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  4. Well like I said it's not for everyone. It is all mental though. I look at a C.Cs no different than I look at cash in my bank account. If it's there I can spend it, if it's not then I don't. I look at my account every single day to assess (only takes 1 min). I'd have to strongly disagree about the credit thing. Having good credit is very important to young people these days and it's only going more and more in that direction. It affects rates on you auto/home insurance, buying a cell phone, home, car, emergency funds, background checks for future jobs etc. Not to say you can't get things but it does affect peoples perception of you (justified or not) rates and how much you pay in the long term.

    C.C's can be very scary but applying principles that we've been taught growing up can really help. Big businesses including the church use leveraging why not us?

    All that said my favorite part of the C.C's is (like I said earlier) travel points!!! Why not get them to pay for your future vacations.

    Lastly, these companies don't want smart, disciplined people to use their cards, cause its money out of their pockets. Sooo this is just a way to stick it to the man! :)

    It does all come down to what you feel comfortable with. If you can handle it the payoff is fantastic, if not then don't even think about it.

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  5. Brandon, I agree that good credit is essential if you are not financially independent and want to own a house. However, you can purchase a car, education, clothing, food, gas, travel ... all without credit, good or bad. That being said, there are few people who will have enough money to purchase a house outright. So to own a house, most people will need good credit. One does NOT need a credit card to establish good credit. There are many safer ways: student loans, bank loans (when I was in college, I got a bank loan for $500 just to establish credit ... put it in the bank and made monthly payments) Interest on credit cards is ridiculous. PLUS, the more credit cards you have, and the more balances you carry on those credit cards, the lower your credit score. What creates a good credit score is getting a loan and paying it off, NOT charging things to your credit cards and elevating your balances.

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