Sustainable, Self Sufficiency - The Third Phase of the Revolution, Part 3

Let's Review:

In phase one, we began giving 10% of our income to God, became debt free and started saving 10% of our income in various investments like mutual funds through our 401k.  We also started an emergency fund.

Phase two has seen us start a process of raising our giving and saving to 20% of our income.  In addition to a 6 to 9 month emergency fund, we are storing up a minimum of 6 months supply of staple household goods, also in case of emergency.  The logic behind this is simple; if a time of long term income loss should strike, we will be able to survive and even thrive in those circumstances.  The formula behind phase two is built on Bible passages in Genesis and Leviticus. 

I freely admit, that phase two is easier for Brittan and me than it would be for some, because it is just the two of us.  Two people require less income and fewer stored goods than a larger family.  But it seems to my simple mind, that it is even more important for a larger family to think ahead.  I'm just sayin'.

Phase two was still in formulation when a perfect storm came together to create phase 3; sustainable, self sufficiency.  First, the economy was sitting on a 'bubble', which, as you are well aware, has burst.  Second, political direction of this country became quite unsettling to me as I heard about a future of higher taxes and increased Government control of all areas life.  I am not interested in any Government oversight of my life, aside from National Defense.  Third, I began resenting the ever increasing prices, and ever dropping quality of produce and other supplies available from supermarkets and big box stores.  Fourth, I started reading the labels on things I put in my grocery cart and grew disconcerted over the chemistry experiment that has become the American diet.  Fifth, I began thinking about factory farming, both in terms of row crop agriculture and that of livestock.  Sixth, my health was falling apart, including severe obesity and a variety of heart and nervous system disorders.

I looked at all these things and was not happy.  I am not the kind to take adversity lying down.  I'm a fighter.  I have taken my share of 'beatings' in life, but I won't stay on the mat.  It's not the way I'm wired. 

I'm also a control freak.  I need to be in control of my own circumstances, my own destiny (note:  I freely, willingly, totally know that ultimately, God is in control.  That fact comforts me.  But God's control should liberate me to act, rather than medicate me into complacency or resignation).  I have a few good years left before my 'sell by' date and I will not surrender the reigns to any man, organization or Government.  If I want a better life, better health, better environment, it is my responsibility, and no one else's, to take steps to ensure that.

Over time, a plan of action came together.  I'll describe it in part 4.

Sustainable, Self Sufficiency - The Third Phase of the Revolution, Part 2

During our last chat, more of a monologue, really, I described some of the thought processes that have been driving some of my decision making during the two years since the release of IOU NO MORE.  The fact is, I have changed a great deal since then.  The principles and outline for becoming debt free have not changed, my thoughts on "Life After Debt", have changed dramatically.  I will probably elaborate on that a little in my upcoming e-book, "Debt Beat Dads".  But I'll introduce the subject here, in hopes of stimulating some thought.  BTW, we always love it when you share your thoughts.

I finished the last entry, with the fact that it was my Bible reading that has changed my views of wealth building and preparing for the future.  Specifically, my new thinking comes from the first 5 books of the Old Testament.  Even more specifically, from the latter chapters of Genesis and from the book of Leviticus.

Before I go into any detail, I might as well address all my Christian friends who will say, "We're not under the Old Testament Law, anymore.  We're under Grace."  You are exactly right.  If you will stay with me long enough, you'll see that I'm not advocating a return to Mt. Sinai, but rather I'm adapting some PRINCIPLES gleaned from Joseph and Moses, that I believe give us insight into the heart of God and provide some COMMON SENSE approaches to our own times and finances.

Phase two of the Revolution most profoundly impacts the categories of 'Giving' and 'Saving'.  Ok, I'll backtrack.  In IOU NO MORE, I conclude that money is really only good for three things; Giving, Saving and Spending.  That's it.  That's the list.  You could maybe add, burning, but the coins don't do that well.  The 'Cruise Control' spending plan is divided into those three categories.  You can see the plan in the Appendix of the book and it's available as a part of our 'Complete Forms Library' in the store.

In 2007, when I released IOU NO MORE, I promoted the traditional concept of giving 10% (tithe) and saving 10% (to 15%) of income.  I still believe that's a great place to start. My Bible reading, however, has caused me to raise the bar. Note: If you are trying to get out of debt, I still recommend saving up a $1,000 emergency fund and putting all other saving on hold until after you're debt free.

As I was reading through the Old Testament last summer, as part of my daily devotional time, I was struck by the fact that the Israeli's gave much more than a 10th of all they had.  While it's true that the tithe was the starting point, by the time you add up all the various offerings and sacrifices, the Israeli people were giving a minimum of 20% of their resources to God.  How interesting.  Most of us are not aware of that, because we rarely read the book of Leviticus.  I freely admit, it's not a page turner, but it sure was an eye opener this time through.

Similarly, the same book, affected my views on savings.  In several places, Moses describes the "interest rate" for buying back property, etc. as being 20%.  That made me go, 'hmmmm....'  The real kicker, though, for upgrading my views on savings came from the story of Joseph.  In Genesis 41(first book of the Bible), Joseph, of 'Amazing Technicolor Dream Coat' fame, after a series of dramatic events, becomes a prominent leader in Egypt.  He advises Pharoah to 'tax' the people 20% of their harvest for 7 years to prepare for disaster.  When the disaster (famine) came, Egypt had enough for her people and surplus to sell to neighboring nations. 

The implications of all those Bible passages was not lost on me.  Common sense, a rare commodity in the 21st century, said that 20% saving and giving was not in the Bible by accident.  God doesn't work that way.  To me, they have come to symbolize wisdom and generosity.  Wisdom, by saving 20% in order to be prepared for whatever comes our way, and to build wealth.  Generosity, by giving 20% to relieve the suffering of others and to advance the Kingdom of God.  I got very excited about it.

Here's how Brittan and I are working out phase 2 in our lives:  We began by increasing our giving.  We raised our weekly contributions to our local Church and we are giving to other causes, as well, mostly Christian Mission organizations.  Our goal is to raise our giving to 20% of our income.  We are at approx 15% now.

As for saving, we're doing that two ways.  1.  We are saving from our income via 401k and a money market account.  Our goal is to have at least 6 months living expenses in a money market account with easy access.  This is not an investment, it's insurance.  We're not trying to get rich off of the emergency fund, we're trying to make sure we have some security in time of crisis.

Additionally, we are storing up a minimum of 6 months (eventually, 1 year worth) of basic household supplies, like dried beans, rice, soap, toilet paper, etc.  We don't make a big deal about it.  We're not 'survivalists' or doomsayers.  We're trying to be wise.  We are not doing it all at once.  We buy a few items each time we go to the store.  We only buy things that have a long shelf life, and we buy basic or generic brands for our 'emergency store house'.  We also have a 'rotation' plan that uses up things that are getting close to shelf life and replacing them with fresh.  Again, our goal, through various methods of saving money and storing goods is to save 20% of our income.

I know it sounds crazy; give 20%, save 20% and live on 60%.  But you'd be surprised what you can do when you are DEBT FREE.  Can you imagine how the world would change if the debt free revolution really catches fire.  Just think about how much cash would flood the economy, how much money would be out there for charitable causes and how much less stress would be felt by the average family.  The pressure taken off of Government agencies would be enormous. I believe.  Oh, yes, I believe.  And I'm doing my best to live out my convictions. 

Coming up:  Phase 3, "The Road to Self Sufficiency".  Stay tuned.

Sustainable, Self Sufficiency - The Third Phase of the Revolution, Part 1

My financial journey has been a scenic one.  It has taken many twists and turns.  Some of the views have been breath taking.  Others have been rather terrifying.  But I have enjoyed every minute.  I love sharing my story and my vision for universal financial freedom with anyone who will stay still long enough to listen. 

Now that we are debt free (except mortgage, but that will be soon enough), I have turned my attention to what it means to live a 'debt free lifestyle'.  I thought I would move down a path of 'wealth building', but that one is well worn, having been travelled by many who are far more knowledgable than I.  Two of the great ones are: Dave Ramsey and David Bach.  I love their wealth building ideas.  Since they've already done the heavy lifting, and since my name isn't Dave, I took another path.  Fortunately for me, my bride has been willing to walk this new trail with me.  I am a lucky man.

As you might guess from the title of this weblog, I call it "Recession Proof Living".  The website will be, www.recessionproofworld.com.  The space is reserved, but not yet built.

If you read IOU NO MORE, you know I introduced the subject of putting your finances on 'Cruise Control'.  If you haven't read the book, get a copy right away.  If you can't afford a copy of your own, borrow one.  I'm serious.  The plan will change your life.

Turns out that for and ADD charged, Type A male, like me, 'Cruise Control' was boring.  Smart, but not satisfying.  So I began to investigate why I was feeling unsatisfied.  I came up with several answers. Some  were spiritual, some were political, some were personal.

Politically, I am very concerned about the direction of this country.  Both parties worry me.  I see Govt. getting bigger and the American wallet getting smaller.  My 401k hit the tank like everyone else's did.  I have no confidence in the future of Social Security nor in taxation.  I began to ask myself what would happen if this country had a total meltdown.  What would life look like?  Would a 3 to 6 month emergency fund be enough?  Were others wondering the same thing?

Personally, I am a control freak.  I need to be in control of my own destiny.  And I felt at the mercy of the Government, my employer and the big industries that dominate supply, demand and pricing of commodities and other necessary goods and services.  I look down the road and am bothered about what I see.

I'm not a Global Warming believer.  I hate fear mongering politics disguised as concern for the earth.  Bah.  Humbug!  But I do have some things in common with the environmentalist fringe.  I don't like the way we're mishandling resources.  Traditional farming methods are destroying the soil quality of our planet at an alarming rate.  We are washing tons of chemical fertilizer waste into rivers and streams, poisoning the water and the life dependent on those waters.  And whatever you do, don't get me started about commercial animal production....Oh, by the way, have you looked at the label on a can of pretty much anything we put in our shopping carts on a weekly basis.  We are pretty much ingesting the entire periodic table.  I'm thinking that might not be a good thing.  And we're paying for the privilege. 

On a final personal note, I was born to live in the country.  I need room to roam.  I need to work in the soil with my hands.  I need the fresh air, the livestock....the manure.  Green Acres is the place to be.  Living in the suburbs, spending hours of my day in commuter traffic, punching the clock, is not 'cruise control'.  It's torture.

But it was reading the Bible that changed my whole perspective.  God has a way of grabbing hold of me, shaking me like a rag doll and pointing out my obvious blindness.  What I discovered about saving and giving was life altering.  It was also liberating.  Phase two of the Revolution came directly as a result of my Bible study.  Phase three is, I believe, a natural consequence of phase 2.  I'll start explaining myself next time.

Budgeting 101 - Part 6, Transportation

So far, we've completed 3 sides of our perimeter; God, Food and Shelter.  The West wall will complete the circle.  The final side of our perimeter is, transportation.  You have to be able to get to work, school, church, grocery store, etc.  So figure it into the budget. Plan for it so you're not surprised:

• car payments (though, these will be temporary)
• gas and oil (including oil changes)
• insurance
• license and registration
  

Later on, we'll budget for maintenance and repairs, but for now, we're taking care of the basics.

As you can see, I'm only describing BASIC transportation.  I highly discourage automobile loans.  They are not necessary. If you've read IOU NO MORE, you know I've outlined a plan so that you'll never have to make a car payment again......ever.

On a side note, I can't even begin to describe how much I loathed the recent "Cash for Clunkers" program.  The memory of it, still makes my blood boil.  Millions of Americans now have new debt they can ill afford.... Ok, Sam, relax.  Have a coke and a smile.

There are still a few things we can do to save on transportation costs.

1. Sell your car and buy a 'cash car'.  It's the only kind I drive.  I rent nice ones on vacation, but I drive paid for older ones for every day.  It saves, by eliminating payments and reducing insurance
2. Increase your deductable on your insurance
3. Car Pool 
4. Whenever your job allows it, work from home one day a week
5. Walk, or ride a bicycle to things that are close enough to do so.  This saves money and improves health at the same time.  I love multi tasking.
6. Change your oil every 5k rather than 3k miles.  Many studies have shown that this is optimal.  But, DO change it.  Changing your oil costs a little at the time, but will save on costly repairs in the long run.
7. Put a little thought into your excursions so that you accomplish multiple tasks on a single trip, rather than taking multiple trips out.  
8. Use public transport whenever possible.  When I lived in the United Kingdom, I used bus and train services frequently.  There are places here in the States where this is still a valid option.  Take advantage of it.  It could save you a bucket full of cash.  

Saving money on transportation is not as easy, or as sexy as some of the other boundary items, but it's critical.  Transportation costs can be real budget busters, so plan carefully, write it down and stick to the budget.  Your wallet and your future will thank you. And remember, we'll happily provide you with a FREE Basic Spending Plan.  We're here to help.

Really Cool New Website

I want to thank Tim and Liz over at Nature's Harmony Farm for introducing me to Veggie Trader.

Veggie Trader is kind of like Craigslist for fruits and vegetables.  It's a buy, sell, swap site.  The site hasn't been out long and doesn't have many subscribers yet, but I hope it catches on.  It could be a fantastic way for those interested in supporting and enjoying local produce to communicate and do commerce.  I signed up right away.  Don't be surprised if you see ads from "Recession_Proof" (my user name) appearing in the near future.  Check it out.  I hope you enjoy it.

Interruption

We interrupt the current series Budgeting 101 series just to say that these are exciting times for the revolution.  We have two new websites under development as well as a bi-weekly newsletter.  The 'store' is receiving a total makeover and we are designing a line of organically grown products to be sold fresh at local farmers' markets, with jarred and dry ingredient options being available via the internet.

For example, let's suppose you go to your local farmers' market (which you should), and you see a 'kit' that has all the ingredients for a wonderful marinara sauce, beautiful Roma tomatoes, garlic bulb, onions, fresh italian herbs, already measured out and bundled together with a nice recipe.  How much better would that be than opening a jar of preservative laced junk food, or even than making something from the flavorless factory farmed vegetation sold at most supermarkets.  We're talking, fresh, local (if you're in Georgia), organic, chemical free, natural goodness.

Ok, so you can't make it to a Georgia Farmers' Market, what if you could buy that same kit online.  Even better, what if a marvellous cook like Mrs. B had already prepared the sauce and canned it just for you?  Mouth watering yet?

We're also considering a line of jams, jellies, spice rubs and curries.  Several books are in various stages of production.  I'm just so excited about the future.  It started out as a little paperback called, IOU NO MORE, and this revolution is about to introduce millions to a Recession Proof World!

We now return you to your regularly scheduled Budget.

Budgeting 101 - Part 5, Shelter

We have two walls of our budget perimeter in place, God and Food, so now we turn our attention to the East boundary, which we call, 'shelter'.

Again, without trying to become too repititve, the walls of our perimeter come before ANYTHING ELSE.  We budget and pay these things first, regardless of who screams, calls, threatens or postures.  We're going to pay ALL our debts, to be sure, but one of the fundamental behavior modifications in Recession Proof Living, is correcting our priorities and sticking to them.  It will be hard, sometimes, especially if others are hounding us for payments, but if we do the right things, and do the right things right, everything will turn out right. 

Ok, back to the East boundary.  We want to keep a roof over our heads, we want to keep the lights, on, stay warm and dry, etc. so our third priority is, shelter.  Under shelter, I include, electricity, heat, house payment and basic phone service.

Let's take them one at a time:

Electricity:  We are fairly dependent on Ben Franklin's discovery these days, so paying the light bill is high up our priority list.  We use electricity for light, running appliances, powering our telephones (in most cases) and sometimes even for heating our residences.  Therefore, I recommend staying current on the electric bill.

I also recommend doing all we can, to keep the electricity bill as low as is reasonable.  There are many things we can do to save on electricity:

• as light bulbs burn out, replace them with the new energy saving flourescent kind.  They are more expensive to buy, but consume only a fraction of the power and last for years.  You will start saving the very first year
• turn lights off when you leave a room
• use window air conditioners rather than central air (where practical) and only cool the rooms you're in.
• set air conditioning at something like 78 rather than 68.
• open windows and use electric fans when weather permits.  It's much cheaper.  Besides, I'm sure you're mother told you, "Fresh air is good for you!"
• lower the thermostat on your water heater
• run dishwashers and clothes washers and dryers only with full loads.  Better still, air dry (when possible and practical)
• unplug computers, televisions, printers and other non essential appliances when not in use, to save on 'electricity leak'.  I don't recommend unplugging the refrigerator.  I'm just sayin'.....

Hopefully, these tips will get your creativity cranking and you'll think of other ways to save.

Now, let's look at heat.  The best way to save on heat is to set your thermostat lower.  Brittan and I are famous now, for setting ours at 62 degrees in the winter.  People think we're crazy.  We think we're crazy like a couple of foxes, when our heat bill is a fraction of those of family and friends.  We do turn it up when we have guests, because not everyone is acclimated to our world.

We stay warm with layers.  It's a little trick I learned living in Scotland, where frugality has reigned for centuries.  Americans want to be able to run around the house in our gym shorts in January and be comfortable.  And that's ok, if you have piles of cash somewhere, but most of us don't, so we shouldn't act like we do. 

I like to wear sweat pants, or similar, on winter evenings.  I complement those with comfortable slippers and a nice ankle length house coat that Brittan bought me some years ago.  And I promise you, I am never cold.  Brittan, dresses similarly.  She accessorizes with some nice throw blankets that we have on our sofa and chairs.  She usually has a dog or two sitting in her lap as well, which helps. 

The point is, we are comfortable and save a bunch of money.  Anyone can do it.  It's all about common sense and behavior change.

If you have a wood burning fire place, use it.  But don't buy wood.  Go out to the woods and pick up your own.  Spend some time in the summer splitting logs and letting them season.  You need the exercise, anyway.  You know you do.

We close the vents and doors in rooms we don't use, to avoid wasting heat on empty spaces.  Again, there are lots of ways to save on heat costs. 

House payments.  Really, the only way to save on these is to make sure you don't have 'too much house'.  If you're a home owner, your payment should not exceed 25% of your take home pay.  I know that some lending institutions will loan higher, but that's because they have their own best interests, rather than yours, at heart.  You should have a fixed rate mortgage.  Any other kind will do you more harm that good in the long run.  If you're renting, make sure you look around and get the best deal possible. 

Keep in mind, that being a home owner also means things like, property taxes, water bills and etc. that must also be budgeted.  I recommend using the same formula that we do for everything else.  Using property taxes, take the annual tax bill and divide it by your number of pay days.  In my case, that's 26.  By doing so, you'll know how much to set aside in each pay period.  Use a simple money market account or savings account for this.  It's not an investment.  It's merely a place to set the money aside to pay it when it's due.  I don't recommend wrapping your insurance into your mortgage payment.  All that does is loan the money to the mortgage company.  I'd rather pay......ME.  I don't get much interest from my little savings account, but at least I'm in control of it.

Next is, basic phone service.  We need to be able to stay in contact with family, friends and emergency services.  These days, most companies offer unlimited long distance in the basic service for a pretty low price.  In fact, telephone service is cheaper now than it was when I first got out of college many years ago.

Don't go crazy with a bunch of add on services that you don't need.  And you'll notice I said nothing about cell phones, unlimited text messaging or premium cable.  You don't NEED any of those while you're trying to save money.  That is poor stewardship of your resources.  The key word is BASIC.  Sometimes, often, in fact, cable companies have some great deals on 'all in one' serivces for phone, cable and internet.  Shop around.  Do the math.  Make good choices.  The best financial choice may be basic phone, no cable and dial up internet..... for a while.  When you need high speed, go the the public library.  It's only for a while.  I'm not talking forever.

In our case, we were able to maintain a great rate on an all in one package the whole time we were in our 'get out of debt' phase.  So you might not have to go too spartan.  But we were, and are, prepared to go that route to win.

We also got rid of some cell phones.  While you are trying to gain control of your finances, some cell phones and certainly premium services, need to go.  If you're on the road and need a phone, get a phone.  Not a hand held computer/social networking connectivity recepticle, a PHONE.  Consider a pay as you go phone.  Remember, you're trying to win.  Cool can come later.  Besides, I think winning is cool.

Shelter is important.  Be wise about it.  Establish your perimeter.  Victory is in sight.

Budgeting 101 - Part 4

Establishing a perimeter, continued....

Millions of Americans (and millions more around the world) will tell you that money is not just tight, right now, it's scarce!  With unemployment growing and the dollar shrinking, it's more than difficult to make ends meet, it's difficult to get them to see each other.  That's why creating a household budget is more important than it's ever been.  This is war.

The first thing an invasion (or defense) force needs to do is, establish a perimeter.  A perimeter represents the boundaries of their operation.  Everything behind the line will be defended at all costs.  The forces' very lives and future depend on it.

In our last post, we established God as our North boundary.  The first thing we budget is our tithe to Him.  Now it's time to take a look at the South boundary, which is food.

Many people are nearly as incredulous about prioritizing the South boundry as they are the North.  For some odd reason, we think that food should be the last thing we budget.  To the contrary, food is second only to God in a wise budget.

You have to eat.  Your children, if you have them, have to eat.  That is a fundamental fact of life.  It is non negotiable.  Master Card can wait.  They might scream, but who cares?  If they do, just chew louder.

In order to have the strength to work and earn the money to pay your bills and debts, you need nourishment.  That comes from a little something I like to call.....food.  It is not noble to put debts ahead of nutrition.  It's foolish.  God wants us to be wise.

Frankly, women find that last paragraph harder to fathom than men.  I have known many women, including my own mother, who would go without food, but never be a day late on a VISA payment.  Rarely, though, do I meet men with such a sense of honor.  With us, it's "Feed me, Seymour, Feed me."  I assure you, if you take care of your basic nutritional needs, you will be in much better shape to master your finances.

When I talk about food being our number 2 priority, I'm not saying it has to be luxurious or expensive.  It has to be filling and nutritious.  Mac and Cheese may replace Wine and Cheese, and Beanie Weenies may replace Steak and Lobster.  You may very well have to give up eating out for a while.  And cooking may become a brand new hobby.  You might try checking out sites like Cheap Cooking for ideas to help you get started (in a fit of gratuitous self advertising, Brittan is currently compiling a "Recession Proof Cookbook" which we hope to have available early in 2010.  Keep your eyes out for that.)

One of the ways we found that helps save a ton of money at the grocery store, is planning our menu out before we go to the store.  By doing so, we know exactly what we need, how much of it and when we will need it.  Then, we make a shopping list to help minimize impulse buying.

Some other things that will help reduce the cost of food:

• use coupons
• buy store brands
• watch for 'day old' items on sale
• buy in bulk 
• shop in the 'club stores'
• use the internet to watch the grocery store sites
• study the circulars that come in the mail
• shop in the 'off peak' stores like Aldi and Sav - a - lot
• grow some of your own fruits and vegetables (more on that in a few weeks)
• buy fresh vegetables only when they are in season
• incorporate pasta, rice or potatoes into your dishes (in my day, we called foods with those things 'casseroles')

There are many other things you can do.  Hopefully, this list will get your creative juices flowing.

I also recommend going shopping at pretty much the same time each week, and don't go when you're hungry.  Make grocery shopping a game.  For Brittan and me, it's a fun time together.  It's just the two of us and acres of food stuffs to choose from.  It's great.

Remember, God comes first.  After Him, as the old T.V. commercial says, "You gotta eat!"

Budgeting 101 - Part 3

Now it's time to begin 'establishing a perimeter'.  You have your pencil, Basic Spending Plan, calculator and recent bank statements?  Good.  Let's get started.

One of the FAQs I receive is whether to budget weekly or monthly?  The answer is more complicated that I'd like.  The simple answer is; whatever works best for you.  Since most bills are monthly, that option is the one normally pursued.  But some, like car insurance or property taxes are quarterly or even annually.  That complicates things just a bit.  Here's what I recommend.  I recommend budgeting 'per paycheck'. I'll use house payments as the example.  Take the monthly payment and multiply it by 12 which will give you your total house payments for the year.  Then, divide that by the number of paychecks you receive in a year and you'll know how much to budget per paycheck.

I get paid every two weeks.  So, staying with our example, and making the numbers easy, we'll say my house payment is $1,000 per month.  I will multiply that by 12 and come up with $12,000.  Next I will divide that by the number of paychecks I receive, which is 26.  Many people assume that bi-weekly translates to 24, but there are always two months that get 3 checks.  I love those months.  Anyway, I take the $12,000 and divide by 26 and I get $461.54 (technically, it's a long decimal fraction, but rounds to to that.)  So I put that amount down in the Spending Plan as the amount I need to budget each paycheck.  Simple.  And easy if you have a calculator.

Now, back to our regularly scheduled perimeter:

The North Wall of your perimeter is "God".  On the Basic Spending Plan, I call it "Tithe".  There are still an amazing number of people who remain bewildered at this being the first item budgeted.  I, on the other hand, am bewildered that anyone would consider anything more important than God.

Let me explain my world view.  I'm glad this is a blog rather than Twitter, because I'm going to need more characters.

I am a Christian.  My relationship with God is the most important relationship in my life.  I love my wife, my children, my grandchildren, with every fiber of my being.  I have friends I hold very dear.  I love my country.  But nothing compares to my love for God and what He has done for me.

I won't bore you with the details of the triumphs and tragedies that are my life, but despite my numerous flaws and failures, Jesus loved me and spilled His blood on a cross, so that my sin could be forgiven and I could have a relationship with Him.  It is a remarkable love story.  And it has an extremely happy ending.  After three days, Jesus rose from the grave.  He conquered death itself. He is totally able to forgive my sin and give me a new life here on earth and eternal life later.  I intend to make the most of the opportunity.  The only thing that would make the end happier, is if you had a relationship with him, too.  He is waiting and eager to welcome you into the family.  You can read about it in the Bible.  If you don't have a Bible of your own, you can borrow mine.  Alternatively, you can read the love story of Jesus right HERE.

Brittan and I made a decision long ago, that God would receive the 'first of the best and the best of the first.'  It's like laying the foundation for a building.  If the foundation is good, the building has a chance at survival.  If the foundation is bad, 'Lucy, choo got problems."  So, if God is first, then He is first in our budget.  Frankly, I don't believe the IOU NO MORE plan would work any other way.  I'm certainly not going to test it.  My mamma didn't raise no fool.

Tithe literally meant 10%.  We give the first 10 percent of everything we make to God.  The first check I write each week is made out to our local Church.  If I get a bonus, or windfall, 10% of that goes to God right away.  Bonus money gets split between the local Church and a variety of ministries we support.  (Note:  if you stay tuned till the end of this series, you'll discover a plan to raise your giving to 20%.  Same thing with your saving.  And you'll still have more than enough to live on, quite comfortably.  But it's way too early for that.).

I don't want to get into a big, hairy debate about tithing on gross vs net.  Just start somewhere.  If you're afraid to start with 10%, start with 5% and plan to raise it to 10 when you see how amazing God is at honoring your faith.  If you have questions about tithing or about how to begin a relationship with Jesus, drop us a line.

One more side note:  Currently, the IRS allows Americans to take a tax deduction on our tithe.  How cool is that? Give money to God, and then get to write it off your taxes. You should take full advantage of that.  It's not unspiritual.  I don't recommend giving FOR the deduction, but I don't think we should reject the offer, either.

The day may come when giving to God is no longer a tax deduction.  My behavior will not change at that time.  I give because I love Him.  Everything I have ultimately comes from Him.  Jesus is Lord of all.  Even the tax code.

To summarize:  The very first thing to budget is your tithe.  Determine how much you will give.  Write it down. There, don't you feel better already?

Budget 101 - Part 2 - Establish a Perimeter

There are probably 3 keys to effective budgeting.  Yep, only 3.  This is not rocket science.

1. Create a Written budget
2. Create the budget in the right order.
3. Implement the budget

Of course, if you're married, there is a 4th key:  Create the budget together.

In our last post, we discussed the importance of Keys 1 and 4.  The next several installments will relate to Key 2, Create the budget in the right order.

Perhaps doing the budget in a certain order seems a bit silly, but I promise you, the whole process usually stands or falls on this step.

A typical budget process goes like this;  A motivated individual, or couple, grabs a sheet of paper and starts jotting down all the bills: house payment, car payment, credit cards, electric bill, etc.  Since the regular amount, or minimum payment is generally known, the numbers are fairly easy to come by.  After all these bills are added up, the sum is subtracted from the monthly income.  Finally, whatever is left over is written down, "for food".  Usually, that number is pretty small.  Already, the once motivated budgeter is a bit concerned.

Then its time to go to the grocery store.  Its amazing, how we budget food last, but go to grocery shopping the most.  Anyway, the once highly motivated, now somewhat concerned budgeter, goes to the store and buys groceries.  At the checkout, he/she is hit right between the eyes with a bill that totally blows their written budget out of the water.  Discouraged, the now disheartened, once highly motivated budgeter, pays for the groceries and trudges to the car.

As she/he loads the bags into the back of the car, the totally defeated, once highly motivated budgeter, says something like, "This is stupid.  Budgets don't work.  It can't be done.  It's all a lie.  Debt in inevitable.  I wish I'd never bought that stupid book."

I know it happens that way, because I talk to people almost every day who've done it that way.  Oh, and then there's the fact that I tried it that way..... several times.  Hey, I never said I was a quick learner.

The order in budgeting is crucial for morale.  But it also helps us align our spending with our priorities.  And most of us need to get our priorities in order.  Our spending patterns synch precisely with the order of what's most important to us.

I think of finances as a war.  It's a matter of survival and conquest.  And I'm determined to win.  My family and my own life are dependent on the outcome of this struggle.  So, just like a commander would be foolish to enter a battle without a plan, we would be equally foolish to expect to win the cash flow wars without a strategy.

The first step is to 'establish a perimeter'.  Most of us have seen movies where the invasion, or defense, force does just that to determine and protect their base of operations.  In the old westerns, it was, "Circle the wagons!"  But it's the same idea; form a boundry that protects what is most important.  Everything behind the perimeter line is mission critical and precious.

We want to build the 4 perimeter walls quickly and in this order (I'll explain the order later):

1.  North Wall:  God
2.  South Wall: Food
3:  East Wall:  Shelter
4:  West Wall:  Transportation

These are the 4 categories that we protect with our lives.  Once we have secured the perimeter, we can build a strong defense and later prepare for an invasion.  Yes, I said invasion.  Our long term goal is not survival, but conquest!

In our next post, we'll start building our perimeter walls.  If you just can't wait, you can get all the details right here.

Oh, don't forget you can always write to us with your questions.

Budget 101 - Yep It's That Time of Year Again (First in a Series)

Fall's here, footballs are flying, leaves soon will be, so it's time to start thinking about the Holidays and the New Year beyond.  It may come as surprise to you but 2009 is almost over and Christmas falls in December this year.

The Holiday Season (From Halloween through New Year), does amazing damage to the American pocket book.  We all know about Christmas and Thanksgiving, but it's quite impressive how much Halloween costs.  Besides mountains of candy, we spend a fortune on costumes and decorations.  Many communities are as extravagant in their Halloween decorations as they are with Christmas.  We are Americans.  We love lights.  We love opulance, we love gaudiness (Think Time Square or The Vegas Strip).  And apparently we love debt.

Well, it's time to kiss the whole debt thing goodbye.  Kick it out of the house and let it join the circus or something.  But we are through with it.  Right?  Right?......................

Ok, if you're still here, let's go over the basics of how we can accomplish all of our financial goals.  First, we have to have goals.  Let me suggest a few:  1.  Live on less than we earn, 2. Get out of debt, 3. Build a nest egg for the future, 4, Give to worthy causes, 5. Stop having to WORRY about money.

Those will do.  You might add some of your own related to vacations, education, buying a house, etc.  But the 5 above pretty much cover the core.

In this series, We're going to focus on #1, Live on less than we earn.  We'll touch on the other goals, but we won't stay long.  If you want a step by step plan on all 5 goals, you should check out IOU NO MORE.

I don't know many people who get excited about budgeting; at least not not at first.  But once we learn to do it right, budgeting is a lot of fun.  Ok, a little fun.  But, I guarantee you  that it's not a drudgery.

Think of it as "Fantasy Spending".  We all love to spend.  Back when I was a phone rep in a Call Center, as a part of our offer, we entered prospects and customers into a sweepstakes with a grand prize of $1,000,000.  We would ask people, "What would you do with ONE MILLION DOLLARS?"  I loved listening to the far away sound in their voices and customers spent that money in their imaginations. 

Think of a budget the same way.  It's spending the money on paper, before we spend it at the store.  Nerdy, detail oriented types love this part.  I've seen some people's budgets that rival a major coporation in their granularity. I don't recommend that.  Use something simple, but practical.  We've already done the outline work for you and if you like, you can get a basic budget plan for free right HERE.  Just tell us you want the free Basic Spending Plan and email it right out to you.

It's important to do a WRITTEN budget.  Doing it in your head just doesn't work.  As we say in the south, "That dog don't hunt."  Writing it down will help you focus and it will assist you in making sure you cover all areas.  If you are married, you should do this with your spouse.  It's ok if one of you does the heavy lifting.  But make sure you are both in agreement on the numbers and priorities.  Marriage is not about dominance or dictatorship, it's about teamwork and mutual submission.  You remember the ceremony right?  All that 'putting the other person first' stuff.  Well, budgeting TOGETHER is one way of actually doing what we promised.

Use a pencil rather than a pen.  I know, now I sound like the nerdy, detail oriented type (which everyone who knows me knows I'm not).  But I am practical.  There will be a great deal of erasing.  Pencils have erasers.  They are designed for work that has to be done over.  Ink pens..... not so much.  They are all about permenance.   Hey, what happened to my spell check.  It's missing..... bummer.  Ok, back to the subject.

You'll need a calculator and a copy of at least your most recent bank statement.  Good news, both are probably availble on the computer you're using to read this article.  You'll find the calculator under the 'accessories' tab in your start menu (if you are using a PC.  If you have a MAC, I have no idea.  I'm not cook enough for a MAC.  You'll have to find it yourself).  For the bank statements, go to your bank's website and log into 'online banking'.  If you haven't yet set up an online banking account, now is the time to do it.  If you already have one, you'll know that it's a great place to keep track of your spending patterns.  I check mine every day.  It's a safety thing.

Ok, you have a pencil, a budget form, some historical information and a calculator.  We're ready to begin.  In our next installment, we'll do just that.  We will look not only and the categories, but which order in which to budget them.  The order is mission critical.  But that will have to wait till next time.  I have to take a shower and go to work.

Things that make you go Hmmmmmm........

I thought we were in an economic downturn that would rival the apocalypse?  I thought credit was hard to come by?  I thought the sky was falling?  Then why the heck am I suddenly getting so many Credit Card Offers?

To be sure, these are financially tight times.  I don't want to downplay the seriousness of things, especially for those who've recently lost jobs.  But I find it weird that the credit card industry is cutting back with one hand and spreading their seed with the other.  I have had two Discover and two Chase credit card offers in the last 4 days or so and it has really caused me to raise my eyebrows. 

I know 4 doesn't sound like much, but considering we're on the 'do not solicit' list of all the major cc companies, 4 is a mountain.  My assumption is that at least some of the companies are on a major push to get credit cards out in time for the Holidays.  Not good.  Not good at all.

I Don't Hate Banks......Really, I Don't

Many readers of IOU NO MORE somehow come away thinking I hate banks.  I'm not sure why and it couldn't be further from the truth.  I don't hate banks at all.  I hate debt! 

I don't even hate bank fees.  At least not all of them.  For example, it doesn't bother me that banks have overdraft fees.  Common sense dictates that if you spend more money than you have, there should be a price to be paid.  Technically, it's stealing.  The over spender has taken money that is not his/hers.  The bank converts the theft into a loan, saving the (over)consumer embarrassment and making a little money on the service.  It's called, Capitalism. It is not the bank's fault when we overspend.

Having said all that, I think that consumers should be very careful when we choose our banks.  They are not all created equal.  Many banking institutions really are reputable and sound.  Others, are, shall we say, less so.

One change in at least some bank practices that really burns me up has to do with how they process transactions at the end of the day.  Once upon a time, most, if not all, banks added your daily deposits before they subtracted your withdrawls and checks.  It was thoughtful and customer focused.  It was almost as if the institutions really did have hearts.  Now, many banks do it the other way around.  The reasons are fairly obvious, primarily the chance to find a fee charging opportunity.  That's just not cricket! It makes a bank look like  Snidely Whiplash from the old Penelope Pitstop cartoons.  And it's just the kind of thing that will cause me to look for a new banking partner.

Banks are great places to store your cash flow.  Brittan and I have a checking account in a bank.  We use a bank for our mortgage.  We use an online bank for our savings because rates are better.  Since we don't do debt, we don't have to worry about fees or cards or minimum payments or much of anything else, really.  It's a great relationship.  We store our money in their computers.  They use it for investments, loans etc.  In return, they let me use their cash machines, provide checks and statements for us and let us have it back whenever we want it.  As a result, we have a peaceful alliance.  In the event our bank changes the game on us, we will find another home for our nickels.  It's just business.  I don't hate banks.  But I'm not married to one, either.

Coping With Rising Unemployment

Unemployment is set to hit 9.7% nationally.  Many places are already in double digits.  There are no signs of imminent turnaround in those numbers which means stress levels on millions of American families is going to remain at code red levels for a while.  I know how it feels.  I have experienced two long stretches of unemployment in my life.  I remember the frustration, the hopelessness, the helplessness and the bewilderment.  It's difficult to describe the attack on one's self esteem. 

Here are some coping tips for those facing or experiencing unemployment:

• Trust.  First, trust in God.  He has you in the palm of His hand, even when it feels like you're free falling.  Secondly, trust in yourself.  You have skills.  You matter. You have strengths.  You offer value.  Far from worthless, you are a priceless treasure, created in the image of almighty God.  But you may have to remind yourself of that from time to time. 
• Abandon Credit Cards.  Statistically, many people use credit cards in times of unemployment for many basics like groceries and utilities.  In the end, it makes the financial hole bigger.  Credit Cards are not for emergencies.  They create them.
• Get on a written budget.  Desperate times call for desperate measures.  Now more than ever, you need to make every dime count.  For budget help www.iounomore.com.
• Create a routine.  The despair from unemployment can easily turn even the most stout hearted individual into a couch potato.  Face each day with a plan.  Write it down just like you would if you were creating your task list at work.  Formalize your schedule with set times for job hunting, resume work, exercise (I treated exercise like a part time job and got very fit. My only regret was not keeping that up after I found employment), yard work, house work, prayer time.  Don't let life happen to you.  Make life happen FOR you.
• Get creative.  Look at your skills and talents rather than just your resume as you seek the next phase in your career path.  There are multiple options for you to pursue outside of 'what you've always done'.  You can find some great tips, tools and resources at www.48days.com.
• Make a game out of bargain hunting and finding ways to cut costs.  Even after all this time, I still get a thrill out of finding a way to save a buck on anything, especially things like utility bills.
• Stay focused.  You will have times of great hope and times of deep hopelessness. Make sure you work your plan rather than allow yourself to be carried along by your emotions.  
• Help others.  Nothing will help you take your mind off your own problems better than assisting another person with his/hers.  Volunteer at a nursing home.  Help out at Habitat for Humanity.  Help out at your Church office.  The opportunities are endless.

You will find work.  Maybe it will take a while, maybe it won't.  And you may find out that the next job is better than the last one, so don't assume that you will have to settle for less.  That's exactly what happened for me.  After a long period of unemployment, I found a job that put me on a career path that has been fruitful in more ways than I can count.  It ain't over till it's over.  You can win!

Introducing................................

................... a brand new logo.  IOU NO MORE and Recession Proof Living are a part of a larger world we call, "Sam Burton Presents...."  Today we unveil our logo.  Keep your eyes open, you may soon be seeing it everywhere.