Monday, March 31, 2008

Money Management

For a long time, almost 10 years I have been tracking my spending, my debt reduction and even how much I have in my model trains. That is right tracking... watching... observing... trending...

Budgeting is something different it is planning... managing... doing...

I was never firm in my tracking... I would know that I would spend about 100 dollars in food and if it was 110 that was OK because I was saving lots too I would take it out of there.

As I said in my last post I learned something new from listening to the Dave Ramsey Podcasts. I learned the easy way to change what we do from spending trending to budgeting. And it is a good time to learn it!

Here in India our support came in as 18k up front, plus we get an additional $660* each month. For the last 8 months we have spent on average 1,000 a month, plus some extras like our paper newsletters and our visa renewal trip. Well now our spending has caught up to us... our savings account is close to zero at the end of the month... we now need to spend only 660 or what ever comes in or we will be spending invisible money.

With credit to Dave here is what we are going to do.

1) Write down everything we want to spend and how much it will cost.

2) take that list and say What is the first thing I will do with my money. Put a 1 next to that.

3) Then a 2 next to #2

4) keep going down the list until we got them all prioritised.

5) Add a new column and total everything above it... ie 1=$1; 2=$2+$1; 3=$1+$2+$3...

6) Take the income for the month (what we were given last month to support us this month) and see that total. If that will allow us to do 1-93 on the list but not #94 to 1000 we don't do any of those.

7) If something comes up that did not make the list that must be paid then you put it on and cut out 90-93 to keep the total = income. If new item is below #94 in priority you don't do it.

It will take some work and a little more discipline but we have 3 more months here and prob a couple more in the states before we get our $avings rebuilt... plus we will keep doing it in general life from now on out.

*The truth is we need about 900 to 1500 to live and do our full list of conservative activities. As it stands Important things are being cut out of our spending to be at $660, our landlord is not charging us for electricity or Internet, our neighbor is cooking meals for us, we are not buying meat to put into the meals we make. We have not sent out a paper newsletter (the plan was to send it in time for Easter.) If you are reading this I ask you to pray about our financial support, and for some of you that also means the Lord will lead you to giving. -thank you in advance.

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