See, I'm Not Nuts!

I found this little nugget about saving and building wealth that I simply have to share. Read it HERE.

Disturbing Little Tidbit

I was reading an interesting article about consumer spending (read it HERE), and was feeling pretty good about the fact that consumer spending is remaining UP despite all the pressures from rising prices. Then I saw a little paragraph towards the bottom that saving in July dropped by more than a third from what it was in June. That made me sad. And it reinforces for me that Brittan and I share a similar struggle with most of the rest of America: Spending is a stronger force in our lives than saving. The concept of "delayed gratification" is good theory, but tough to implement.

Earlier this week, B and I sat and talked through our spending vs saving habits since we moved to Georgia. In many ways, it mirrors the results of the article. First, our expenses are considerably greater here than in Maine. But they are not outrageous. But when we took a spending audit, we discovered that we had cut way back on out saving and our "impulse" spending was three times what it was before we moved. All of the bright lights and shopping opportunities of the "big city" grabbed our attention and lured us in. We took the bait.

Secondly, because of our spending, our savings went down. We were more interested in shiny baubles than looking down the road. Shame, shame.

Fortunately, we've been through this before and were able to right the ship, before it started taking on water. We didn't do debt. We weren't even tempted to do debt. Not true, I really wanted an ATV, but my convictions about debt are stronger than "off road fever". We won't do debt.

What we decided to do, was go back to the "envelope system" for things like our dining out and grocery budget as well as our "mad money." If you don't know what the "envelope system" is you should read IOU NO MORE (shameless advertisement).

When I get paid, I go to the bank and withdraw the cash for the envelope categories, and once the money is gone, it's gone. It is a fantastic disciplinary teaching tool. It is much more difficult to part with cash than it is to pull out the debit card. Oh, yes, more difficult indeed.

Try it. But more importantly, saving for the future is just as important as spending for today. After all, you might just need to eat even after you retire.

Someone Sure Hasn't Heard About the Revolution

I just read the following bad advice on CNN MONEY.

Wouldn't you know it would come from a law professor? The premise of the argument is faulty. And it smells of left wing political leanings. The article says people are stupid. People won't change. Regular people can't handle or manage money. The government must step in and save the day with regulations.

I say............BALDERDASH.

People are smart, creative, industrious and created by God with great capacity for change. We see it every day. People not only can, but MUST learn to handle money. The Government represents the very worst of money management understanding. The last thing we need is Government meddling any more than they already do in our finances. Their place is to get the heck out of the way and let Free thinking, Free markets, Free people create successful futures for ourselves and our children.

The article just goes to show that having a law degree doesn't grant you good judgment. Brittan and I are classic examples of normal people who learned to manage our money. We're not rich, but we're working on it. It will take a couple of decades, but it's coming. It can for you, too.

Risk Management

I saw an article today dealing with the decisions recent college grads make on whether to pay off student loans or put their money towards a down payment for a house. Read the article HERE.

My advice would be somewhat different. First, don't do debt for college. If it's too late for that, then I would advise paying off the Student Loans first. From a common sense perspective it should be a no brainer. Just look at all the foreclosures that have resulted from people who got in over their heads. Here's how I hear the question: We have these big hairy college debts. Should we take on more debt and buy a house? Will our lives be better off if we increase our debt load?

I know its a buyers market out there. But there are always good deals to be had if you shop well. And the simple rule is, the more debt the greater the problem if something goes wrong financially.

I would not recommend buying the house until the school loans are paid off. Get radical and throw everything at the debt, get rid of it and put everything possible into saving for the Down Payment. You will sleep better at night and you'll also have money at the end of the month.

Time to Stock Up on Chocolate

Chocolate lovers of the world, BEWARE! Prices are going up. That's right, all our favorite chocolate bars are now victims of the ever rising cost of raw materials and energy. This may be yet another sign of the apocalypse. Or it may simply be another way to keep me on my diet.
Read about it HERE.

Two Fun Conversations Today

Today was a good day for the Revolution.

First, I went to pick up my suits from the Men's Warehouse and the salesman (with whom Brittan and I spoke about IOU NO MORE a couple of weeks ago) said, as I was leaving the store, "Mr. Burton. I haven't read you book yet. But I want you to know, I plan to. Seriously." I thanked him profusely.

Secondly, I got my eyes tested today. Turns out, I'm still near sighted. Go figure. But during the course of the conversation, debt and money management came up. My eye doctor got very excited and said, "I think that is so cool. What is that web site again? This practice will be debt free in less than two years. We are excited. We believe we can do so much more for God if we're debt free." And.........he gave me a 10% discount. It was still a gosh awful amount of money to have people poke around your eyes, but it was a great conversation.

Nearly every day now, the subject of money management and debt comes up in conversation with people who know nothing about the Revolution. I get very excited when that happens.

Student Loans Harder to Find

Check out this article.

Here's the IOU NO MORE take on the subject. Don't borrow money for college. I know it's counter to everything you know about getting through school. But while college is supposed to be about education, it's been a cash cow for the lending industry. Including the Govt. Until recently, that is. Now the house this country built on a foundation of debt is beginning to crumble.

I won't even get started on some of the so called, "technical" institutes that have tuitions as high as some fine universities, but have no accreditation. We looked into one of those many years ago, when Brittan was first considering going back to college. I was appalled. We'll save that for another day.

Whenever possible, go to a State College. Go to a Community College if necessary. But make it affordable. Pay as you go. One semester or one year at a time. Don't borrow. Same goes if you MUST go to a private college. One example is for people preparing for ministry. Even there, look around, find one that fits your statement of Faith and pay as you go. Apply for grants and scholarships. Get a job. Do whatever it takes to avoid debt. Yes, it might take longer. Yes, you might have to go to a second or third choice University. But in the long run, you'll be better off.

Student loan debt haunts many families for decades after college. Just think of how that money could be invested and how much it could earn if you were paying yourself rather than Sallie Mae or some other life sucking creditor. And think for a minute about all the people who have dropped out of college and have the loan debt but no degree. That hurts doubly.

If you are parents of young children, or even those in Jr. High or High School and you plan to pay or assist paying for your child's college education, you need to start saving today. It's far cheaper to pay ahead (and gain interest along the way) than to pay afterwards when you have to pay interest.

When you talk about college with your child, explain that if Daddy and/or Mommy are going to be footing the bill, Jr will go to a State School. Maybe even a community college. It might not be popular. Well, Waah! Then Jr. can go pay for his own school and Mommy and Daddy aren't going to bail him out. This is serious.

College education is very important. But if we don't manage it correctly, it can be a financial bane instead of boon. On the other hand, if we come out of college with a debt free degree, the world is our oyster from the very beginning.