Credit Card Magic

Having a credit card can be a valuable asset in times of emergency. It also allows you to rent cars and hotel rooms. If used properly you can be rewarded in other ways.
First, don't use credit cards to borrow money, which is essentially what you do when you buy things you cannot pay for on that billing cycle (borrow money from a bank when absolutely necessary and pay far less interest). Use your card only for purchases you can pay for in full when the bill comes due. Never allow yourself to pay interest or late fees on a credit card.
When we were first married thirty years ago we decided we would reap the rewards of having a credit card without paying the penalties. When we use our credit card we record the transaction as though we had written a check. Consequently our bank balance shows our true balance. Instead of recording a check number place a CC in the space. Then when the bill comes, compare it with your checkbook registry to ensure you have recorded everything, checking off each transaction as cleared, and write a check for the entire amount. You won't need to subtract that check from your balance because you have done so throughout the month.
Following this plan you can build good credit and enjoy the added benefits offered from banks, i.e. cash back or airline miles (our favorite).
We do have a $50 fee each year for our credit card but we earn an airline ticket about every five months. Two airline tickets for $50 is quite a bargain.

Never late!

If you don't have your bills set up for automatic payment (which I highly recommend), then sit down and write a check the very day you get the bill in the mail. Mail it out that very day, or the next. You will never forget to pay a bill and will never pay unnecessary late fees.

Recipe for debt

When your yearnings exceed your earnings.

The Gift

The following is a story I read on www.foxnews.com today.

There are some really nice people in the world.

DALLAS —

A Texas woman went to a housing auction distraught about the prospect of watching strangers bid on her foreclosed home.

Then one of those strangers bought it back for her.

Now Tracy Orr can return to her Pottsboro home, making payments to the woman who unexpectedly and impulsively bought it for her.

"It means so much to all of us," Orr told Dallas television station WFAA. "It's not just a house."

Marilyn Mock said she was acting on instinct on Saturday when she decided to buy a house she had never seen for a woman she had never met. Mock was at the foreclosure auction to help her 27-year-old son bid on a house when she struck up a conversation with Orr, who was crying about losing her home.

Orr had bought the house for $80,000 in 2004 but fell behind on the payments. She lost her job a month after taking out the loan, and earlier this year she lost the house. On the spot, Mock decided to buy it, eventually bidding $30,000.

"She didn't even know if I had a job or was a nut case," Orr said in a story for Wednesday's online edition of The Dallas Morning News. "She didn't even see a picture of the house."

Mock told a crying Orr she could stay in the house, making payments to her instead of a bank.

"She needed help. That was it," Mock told the newspaper. "I just happened to be there and anybody else would have done the same thing."

Orr said she hopes others will do as Mock did.

"More than my house, she gave me something inside, and that's more important than material or financial things," she said.

Level payments

I have found the best thing for my budget is to apply for the "level payment" or "average payment" plans through my utility companies. I am better able to anticipate how much money I should budget for a particular utility. Check your utility bills or call to see if this option is available for you. What they usually do is average the past twelve months. Your bill is usually within a few dollars every month. My electric bill is around $130/mo., and my natural gas is around $122/mo.. The other thing you can do is during the lowest bills of the year (natural gas in summer, electric in winter) look at the past twelve months and do your own averaging and set aside that amount every month for the future. This takes more discipline so I prefer to pay the company.
The other thing I do is set up payment directly so I'm never late. Some people worry about the company messing up someday when you want to stop. We have moved several times and changed long distance service several times and I've never had a problem. For me, it's worth it, especially if you are forgetful and often pay late which is bad for your credit score.

Budget

A business would never operate without a budget and neither should a family.
At the beginning of each new month I sit down and estimate income and outflow.
There are lots of budgets to be found online or make up your own like I did.
Some items are fixed amounts like the mortgage payment, car payment, insurance payments, etc.. Some items are not fixed like groceries, meals out, even some utility bills.
If you have never budgeted before you may want to start out by tracking your spending for a month and see where your money goes. From that point you can figure out what amounts are prudent for a particular category.
Only when you know where your money goes can you make good decisions are budgeting your money. The important thing is to start today and be consistent.

Wants and Needs

When setting your financial priorities, always ask the question -- "Is this a want or a need?" Getting something you "want" is NOT a bad thing IF you have the CASH to spare.
NEVER GO INTO DEBT FOR WANTS!! Only go into debt for needs when necessary. Try to anticipate what your future needs will be.
When your budget is tight (and whose isn't?) your priority should be on those things that you NEED. Please don't rationalize what your needs are. Maybe you NEED a computer, but you might be able to get by with a less-than-the-greatest model. Maybe you NEED a washing machine, but you might be better off buying one without all the latest "bells and whistles". Maybe you need a new pair of shoes, but shouldn't look at the pair that's $100!! If you have the means, by all means go ahead if you wish, but beware, that extra $600 for the nicer washing machine could go a long way to buying that new computer AND the new shoes.
Word to the wise: JUST THINK BEFORE YOU SPEND!

Financial Priorities

Sit down together as a couple and set your financial priorities. When you are tempted to purchase something (anything), ask yourself if this purchase falls into the perimeters of your family plan. You can waste alot of money buying things you really don't need and you will look back and ask "What did we spend all that money on?"

Food

See the blog "What to store and how to eat what you store" for tips on acquiring and using your food storage.

Parable of the Talents

This morning I was reading in the New Testament, Matt. 25, the Parable of the Talents. Knowing it is from the Lord that we are blessed with all things (talents), I wonder what he is thinking now that through our greed and glutonous living, our economy is failing. What would the parable look like?
Comment on how you think it would read?

Credit

Establishing credit is a good practice. However, living on credit is an unwise practice.
When we married 30 years ago, we made a commitment to NOT live on credit. Although we own a credit card, we treat the use of our credit card like a paper check or a debit card. Upon using the credit card, we record the transaction in our account as if we had written a check or used our debit card. Then when we receive the credit card bill we write a check out for the entire amount of the bill, yet do not have to deduct any funds from our records because we have done so all along.
We never have to worry that we don't have the funds to pay our credit card bill, never have to pay interest or late fees.
We've established good credit by showing we can be responsible with our money and with the money of others.