Monday, February 11, 2013

Spending or Saving: Part 7 (4 More Habits to Cultivate)

Welcome! Thanks for joining in this series about financial literacy, finances, and our spending and saving habits.

If this is your first visit - wow, thanks for spending your time here.  Please stay awhile. I'd so enjoy getting to know you.

And, maybe you'll want to click here and check the bottom of the post to find the other parts of this series.

I'm stealing a few quiet moments away with a steamy, smoky, and spicy cup of coffee to keep pressing on keys and chronicle some habits we can cultivate to achieve both short and long term financial goals. Whether it's to have more money than month, take a special vacation, a kitchen remodel, or a great pair of shoes we all have things that we want to afford.  And, we all have things we need to afford.

I think this next set of habits will help.

Dave Ramsey  says, "Cash is King".
Really, is it any surprise that in general consumers show more restraint when using cash to make purchases?  There's something physical, visceral even, in drawing bills out against the sides of an envelope or billfold and using our senses to understand that there is such a thing as empty.

Talk to anyone who's used a zero based budget and a set of envelopes filled with cash for purchasing fuel, clothing, food, home goods- you get it, whatever, and they'll tell you it works.  They may no longer be using a cash envelope system, but I bet they'll tell you it was a valuable reset if not total revamp of their budget.  In a good way.

Weekend Farmer husband and I are slowly changing our practices to use more and more cash.  
Yes, it means more trips to the bank and more careful planning, but in our case that's exactly what we need.
Two changes in particular have been to purchase prepaid bank cards for specific events like Christmas or my occasional but important trips to IKEA.  And, as there is no particular incentive or savings to have Weekend Farmer Husband's paycheck direct deposited, we've elected to receive it in the mail (he works from a home office in one of our outbuildings), thus requiring us to bi-weekly at least pay attention to what's coming in, and you got it, what we're spending!

I feel like I risk insulting you when I write the next tip, but it seems like our culture has moved in such a way that this next habit is particularly challenging.  So at the risk of offending and or overstating.-

Save. (duh.) 
I'd venture to say eleventy billion words have already been written about this habit.  But, I cannot imagine what stress and suffering our family would have endured during Weekend Farmer Husband's season of unemployment if we had not had the sense to ask the question , "What will we do if we are suddenly without income?".  So, we were a little bit ready (if there is such a thing in relationship to trauma), and had a three to six month plan loosely formed for such an event.  It was messy and we disappointed ourselves, and our plans didn't cover our lifestyle and perceived needs as well as we anticipated.  But, phew, although we're set back a ways in saving for the future, we didn't incur debt.

If you read nothing else please read this:
God mercifully and abundantly provided for our needs, taught us gentle lessons about His character, exposed idols, ministered to our hearts, and gave generous gifts from family and friends.  
Although I would not choose it, I would not trade it.

This is pretty simple stuff actually.  There are expenses you can predict like insurance, taxes, gifts, monthly prescriptions, etc. that logically fall under the umbrella of savings.  Short term savings that is.  You know you're gonna spend the money, so put it aside or plan for the expenditure.  No surprises.

Sometimes surprises come.  I've lost track of the number of times I've had just enough savings stored up to purchase a new sofa, or a pretty light fixture, or a better set of pots and pan, and boom - time for a new transmission, or a hospital stay.  God's providence has always preceded us and we've often had just enough to meet the unanticipated.

But, that's not really what I'm advocating.  I'm storytelling.

What I want to make a better habit of is growing a small savings account that is specifically set aside for this type of surprise.  My understanding that this account should have about $1000 dollars available quickly, liquid.

Other savings include down payments for homes, vehicles, vacations, orthodontia - again, it's a spending plan that begins with saving.

I think I'd also categorize an emergency fund that covers approximately 3-6 months of living expenses as yet another savings plan.  When trauma comes, and it always does, this is intended for spending to meet needs and relieve at least a portion of the financial assault that loves to piggy back on trouble.

And, I must tread lightly here- I have mixed feelings about long term savings.  I have to admit that there's a tremendous amount of common sense that accompanies retirement accounts, IRA's, 401k's, annuities, etc.
But, here again, I tip so easily over into false gods and the idol of perceived security.  Weekend Farmer Husband and I try our darndest here, and a healthy portion of each year's income is deposited into long term accounts, but speaking for myself, I am too often confident of what our portfolio should look like in 30 years (r-i-i-i-i-ght), than I am what my heart should look like.  Do I depend entirely on my gracious and generous God for every good thing?  Or, do I work a little harder, tighten my belt one more tug, and place my trust in my works or man made structures more than the God of the universe therefore "allowing" myself to dabble in excessive work (or not challenging Weekend Farmer Husband to moderate his work) in order to self righteously prepare for whatever the future is?

What's the line between responsibility and trusting in things that will pass away?

Am I alone in this?

Credit cards?  Best advice - avoid 'em.
Some of you probably do very well with using credit cards for targeted purchases, perhaps taking advantage of incentives, and pay your balance off monthly.  That was never us.

If you've read this far and stuck with me until now, I would advise you to ask hard questions about whether or not you really do have the capacity to avoid the easy pitfalls credit cards present.
Some folks suggest they keep them for emergencies.
Ok. I can relate to that, but to me they add the potential for more trouble.
I like to keep cash/liquid assets for emergencies.
Emergencies are trouble enough without adding debt.
Sometimes it is unavoidable, and I've signed on the debt line enough times myself to understand being between a rock and an empty bank account.
May I present this to you as a non judging habit to practice?
Unless you can not love brownies, baby bunnies, unicorns, and all manner of awesomeness this life presents, it's likely best to shred the plastic as we were made to love and worship, so something is always pulling on our hearts, and often our bank account.

Learn how to wait.
Make do.
Find a substitution - shop the house, barn, garage, or closet first to see what you already have that might fill the gap.
If you have to buy now, buy used.
Life without craigslist and rummage sales would be very bleak indeed.  And, I'd probably still be sitting on my father in law's favorite couch from 1965, generously donated to our home some years ago.  When springs and sticky out metal parts began to threaten our legs and send us running for band aids after every story time, it was time to replace it.
We waited until we had enough to purchase a new couch up front.  And we put band aids on the old couch's poky parts so it's couldn't grab us every time we got near.
In our nearly quarter decade of marriage I can find 5 furniture items in our house that we bought new aside from mattresses.
Most of our clothes are from swaps or thrift stores.
All but one of our vehicles was used when we purchased it.

Not only can you find a great deal if you're patient and wait for the right amount of finances and opportunity for making a purchase, you have opportunity to discern if what you're pursuing is truly a need, or might it fall into a want category thereby giving you opportunity to evaluate if this is where your limited resources are most desired and best channeled.

None of these are too hard for us are they?
They're hard, but not too hard.
I'll tell you what I tell  myself and my farm kids.

Laura, farm girls are tough.  You can do it.
Fairy princess farm girl, farm chicks are tough.  You can do it.
And so on.

Friend, you are tough.
You can do it.


  1. Great tips. We've heard dome before but we can never hear it too many times. We need to keep these always in the forefront of our minds. We try to use only cash. It makes it easier to not overspend. It's far too easy these days to get trapped in debt.

    1. Hello dear Ruth,
      Yes, we have heard them before...I'm preaching hard to myself sister! There are "new" temptations aplenty to forget what we've recently learned with no income, so I keep writing what I know in order to make sense for where we are now.
      And, I hope to serve others - of course that includes the farm kids, and perhaps them first of all. But then, readers - oh how I think of "them" when I write.
      And now, the grand irony, I must go a-spending. 10 days of illness having kept me away from grocery stores etc. have left us in dire need of some spending round these parts! :-0