What if you had nothing?

A week or two ago, something happened in our extended family that caused us to pause and ask this question:  What would we do if we had nothing?  


We live on one income with two cars and a roof over our head.  I am able to homeschool and stay home with our children.  We help support both of our mothers.  We are thankful to the Lord for all of these things. 


But, what would we do of things changed?  Unexpected expenses?  Job change?  A lower income?  Would we cope?


When one's income changes, hard decisions have to be made.  I had a roommate once who never adjusted her spending level downward when her income level changed downward.  She began to live deeply in debt, paying the minimum on her credit cards each month.  Her experience made a deep impression on me.


So, if in such a position, what would we change?  No cable.  No internet.  What we ate would change.  One car, not two.  Change the coverage on our car insurance.  No extras.  Plant wildflowers in the lawn so as not to have to mow more grass and use more gas for the lawnmower.  Raise the thermostat in the summer and lower it in winter.  We already have prepaid cell phones, but if we hadn't already switched, we would.  Use the library for internet access and more for curriculum use than purchasing books for homeschooling.  I could work part time.  Cheaper coffee.  Sticking to our budget.  


At what point, would one make such changes?  Or should we always be mindful of such things?  I remember a good piece of advice I read in a book once.  Consider your time and what you can do with your time that will save you the most money.  We already do budget, which I think is extremely important.  If we don't budget, it would be very difficult to know if our efforts in saving money and spending less were effective or not.


We are expecting my husband's income to drop in a few years.  So, should I tighten our belts now or in a few years?  I think it would be easier to do what we can now and live wisely and carefully so that we don't have to make drastic adjustments all at once.  


In the end, it all comes down to two basic questions.  What are our needs? and What are our wants?  I'll never forget when my mom asked me when I was in 4th grade if I needed a sweatshirt that I really wanted.  She asked me if I needed it.  I had to admit that I didn't.  This morning my daughter told me that she wanted to get some bath crayons.  I explained to her that it wasn't a need.  We have plenty of toys and fun things to play with.  I realize that I can tell her this, but I hope that someday soon she will be able to think through this question, "Do you need it?" and answer the question truthfully about something she wants.  It will be a moment that profoundly changes her life, I hope, as it did mine.

Grocery Prices

It's one of those interesting things in these times.  On Sunday, the article on the front page of the Baltimore Sun's business section was about the expected inflation estimates for food this year.

My first thought was, "Okay.  Tighten the belt a little more before I have to."

But, what really goes?

When you go to the grocery store, how do you cut?  I learned this strategy from my mom.  It's okay to put something in your cart that you're considering, but before you check out ask yourself if it's a need or a want.  It's okay to hand something to the checker if you decide that you don't want it or can't afford to get it.  Even if something is on sale or on clearance, if it's not in your budget, it's wiser not to get it.  At least that's what I've come to believe.

This week, I reminded myself of this when I was at Kohl's this week.  I bought three sets of sheets for my kids.  Eli really needed two sets.  But, I bought one.  That was what was in the budget.  His birthday is coming up and I can buy a second fun set then as a birthday gift.

The girls got new bunk beds in January that I posted about.  I would love to get them matching comforters, but I haven't.  I've decided to save that idea for their birthdays in the fall.  A few weeks ago, I saw the perfect sheets for them, but they were $25 for one set, which would have been $50 for two sets plus tax.  I told myself not to get them.  They aren't a need.

The reason I bought the sheets at Kohls, because though they technically weren't a need (they each have one set of sheets), I had $30 Kohls cash which almost covered the cost of all three sets.

But, back to groceries...
How can we cut if we need to this year?

This is my plan:
1) I'm going to start a file of especially inexpensive meals.  This week I made minestrone soup and my whole family loved it.  Minestrone is very inexpensive.  Soup and bread--vegetables, protein, and the bread group in  and easy, quick meal.
2) Stick with the milk one meal, water one meal, and juice one meal with the kids.  And water for all three for the adults.
3) Sweets are my weakness.  Make Izzes really a treat.  Sometimes I have them more often.  Keep frozen cookies and treats around instead of buying Ghiradelli as a treat.
4) Use my allowance to buy gum (always using coupons) rather than the grocery budget.  I don't spend much on it, but if I really would like to have it, I should spend my allowance on it.
5) Cut in other places...
If it came down to it, Molly's grooming every three months can go to twice a year or once a year with more frequent brushings.
Get better at cutting my husband's hair.
6) Work on letting less produce go to waste and only buy the produce I really need--even if it means shopping a little more often at first.

Budgets

Budgets are tricky things to me.  On one hand, they can be stressful to have, but not having one is also stressful.  My husband and I had another conversation about our budget today.  Not necessarily fun, but it was good.  In the end, we cancelled our date and the expensive dinner we had planned out.  It's a little sad, but the right thing to do.

The sentence from Growing Grateful Kids by Susie Larson is ringing in my head.  "Just because we can afford something doesn't mean we should."

Could we have done dinner tonight?  Yes.   But was it the wise choice?  No.

I've been considering putting the girls in gymnastics this year.  I had already settled on only ballet instead of ballet and jazz.  I think that I'm going to tell Sami that we'll do gymnastics next summer.  I know she and Autumn would love it, but it comes back to our budget.  Homeschooling isn't cheap =)  There are ways to save money, but there are always ways to spend it, too!

Making good choices and saying no to ourselves and our kids isn't easy, but it is being good stewards.  I know I'm not the only one to have to make these choices.  And if you're making choices like these, please know that you're not alone--I'm right there with you!

Dave Ramsey

I have been curious about Dave Ramsey and his financial advice for a long time.  I have a very dear friend who has enjoyed the seminar her church put on with his materials.  So, when I got the chance to review this book, I was very excited to see what he had to say.

This book is called The Money Answer Book.  It is a collection of short answers to questions.  None of the answers are more than 2 pages.  And the pages are small.  It is only the size of maybe a 4 x 6 or a 5 x 7 picture.  This is the third book I've received from publishers that is being printed smaller than books used to be.  (I assume it is a cost cutting measure in the publishing world.)

But, back to the book's contents.  The questions are organized by topics such as real estate and mortgage, insurance, budgeting, etc.  The entire book can be read in less than an hour.

Here are some things I learned about Dave Ramsey's financial philosophy:
1) He advocates paying everything you can in cash.
2) No credit cards.
3) Pay off small debts first and then move on to bigger ones.
4) Buy used unless you're rich.
5) Get out of debt (except for your mortgage) and stay out of debt.

I pondered first the paying for things in cash idea.  I brought it to my husband to ask what he thought.  He brought up several points that I hadn't considered.  First, we use our credit cards to save us marital conflict.  He doesn't have to save all his receipts and hand them to me.  I look them up and write them down.  We pay off our credit card every month.  Second, he told me that it is far easier for him to whittle away a $20 bill than to use his credit card.  If he has a $20, he'll spend it and have no idea what it was spent on.  I shared this with a friend and she said the same is true of her.  So, for people that don't pay off their credit cards each month this can be a great idea--to pay in cash.  But, for some people using cash can be a greater source of temptation.   Third, at Target, Lowe's, Toys R Us, Home Depot and several other stores, the clerks can look up your returns using your credit card.  This is a great thing for people like me who have 3 kids and can't keep track of receipts very well.  It's also great because I can return something for my husband and he doesn't have to save the receipts for me. (Costco can also look up your purchases using your membership card.)

So, the cash idea won't work for us.  But, it has worked for a lot of my friends and I think it's a great idea.  It just isn't a one size fits all solution, though.

I did learn something that scared me in this book.  I discovered that credit card companies can pull your credit report without your permission and then they send you a prescreened/preapproved credit card application.  Thankfully, there is something you can do about it.  Call 888-567-8688 to put a 5 year ban on unsolicited credit inquiries.  To make it permanent, you have to write a letter.  When you make the call, it will associate your name and address with your phone number, so call from your primary home phone.  If it is not your name that comes up, spell your name and say it.  I had to spell my name and the phone picked it up perfectly.

Because this is just a Q&A book, the answers are very short and that works well for some of the questions, but for others, it is very inadequate.  The section on real estate and mortgages was extremely short.  I think this is an area that our culture struggles with immensely.  We hear and see everywhere that we should have huge homes--bigger than we can afford.  I wish there had been more discussion of the consequences of such actions.  I am glad, though, that he said an Arm is never wise--rather that choosing a fixed rate loan is the wise road.

This is a great gift book to help people get their feet wet and begin thinking about their finances.  It isn't a comprehensive financial guide.  Still, I have two people in mind already that I would like to give this book to.  I think Dave Ramsey has some great advice.  The thing I most agree with about his financial advice is something he states on page 1, "...be responsible to God and family, sacrifice the unnecessary to gain the necessary, get rid of debt, and build a financially peaceful future."

Please note that I was given a complimentary copy of this book for review.