Proverbs 31

I am thankful for the Biblical Example of the Proverbs 31 Woman.

Not that I have attained this rank, I fail daily, however I am thankful for the example that we have to follow. As Christian Wives & Mothers we have to continually seek the Word of God, for our job description. We can not look to the World for those examples of Biblical Womanhood.

We will never line up to the TV Mom, The model type Wife, The successful career Woman, who appears to have it all. It is like comparing apples to oranges. Both fruit, but very different.

I have never felt more fulfilled as a Woman as when I line my goals up with God's Word. We must feast on the teachings of God's Word. Our families are depending on it! 

Baby Step:4 Paying Off Credit Card Debt

We have covered budgeting over the last few posts.  Hopefully you all have a budget in place and are starting to reap the benefits of your money working with you and for you, instead of your money working you.

Today we are going to discuss the next area in baby steps...to big dreams, and that is paying off your debt. When your debt will be paid off completely depends on many factors, unique to your situation.One thing is sure, if you are persistent in paying down your debt and do not acquire new debt, in time you will be debt free. That is the goal you must keep in front of you.

 As We have talked in the past, it doesn't make a lot of financial sense to have a large savings account, if you are paying off high interest credit card debt every month. However, you should have an Emergency plan in place. Your Emergency fund is the first thing you should fund even before paying off your credit card debt. If you missed that post you can read it here. Your emergency fund allows you to stay on budget, when the unexpected happens.

Once your Emergency Fund is fully funded  (On average $1000), You can start your credit card payoff. First make a list of all your unsecured debt. Unsecured debt typically carries a much higher interest rate. An example of  Secured debt would be a mortgage.

Make a list of the balance on each card, the minimum payment due each month, and the interest rate you are being charged

Start with the highest interest rate,... say 19.9%

 Make your monthly payment & any extra money you receive is placed on the highest interest rate debt. Continue making all your other payments on time

When you get any extra money, overtime, birthday money, Income Tax.....

add it to the scheduled payment

Say your payment is $50, you made an extra $30 at work this  month, you now make an $80/payment

When the highest debt is paid off (this goes faster than you might think)

you now take the $50 you were paying on the first debt and add that to the second debt

Scenario looks like this:

Debt #1 paid off

 Apply payment from Debt #1 and add it to debt #2 Second Highest Interest Card

Debt #2 Paid off

Now you take what you were paying on Debt #1 & Debt #2 and apply to Debt #3

So lets say Debt #1 is $50.00/mo &; Debt #2 is $60.00/mo

The Scheduled payment for debt #3 is $80.00/mo

Your new payment for debt #3 after Debt 1&2 are paid, is

$190.00/mo

Or if you spend $500.00 per month in debt reduction you continue paying $500.00 until all debt is paid. The key here is when you start to pay down debt, that you do not take the freed up money and spend it, or worse yet acquire new debt. Just because you have paid some debt down does not mean you now have "extra" money, especially if you still have more debt.

This is known as the Snowball effect and it is very effective in helping you reduce your debt.

Remember all this debt did not happen overnight and will not go away overnight. Our goal is to stay focused and remember we are taking baby steps........to big dreams!!

Baby Step #3: Funding Your Emergency Fund

Over the past few weeks we have discussed preparing a Budget. Your Budget is your written plan to achieve Financial Freedom.

Today we are going to discuss the next very important step toward your financial freedom........
The Emergency Fund

The Emergency Fund is money set aside so that you do not have to take money from the designated areas in your budget, should some type of an emergency arise. Let's face it, life happens. You must be prepared for the unexpected expense.

Your Emergency Fund  is not vacation money. Hopefully if you are planning a vacation, you have prepared for that and have been setting money aside. However if you are up to your eyeballs in debt, you might consider allocating your vacation dollars to debt reduction. Once your debt is reduced or better yet eliminated, plan your dream vacation. Remember we are taking baby steps to BIG dreams. Once you set your goals on eliminating your debt, you will be amazed how quickly, your balances start to go down.The Emergency fund is just that. Cash put aside for unexpected emergency expenses. Some examples would be,  Car repairs, Furnace repairs, Emergency Travel.......

The first goal is to pay all your bills on time, and eliminate late fees and extra charges. Once you have achieved that goal, (and that should be your very first goal) you need to set some money aside so that you can stay on budget.

If an emergency should arise, furnace breaks, car breaks down and you do not have allocated funds, you will use the money set aside for your bills, to fix the emergent problem. Most of us need our vehicles. If you live anywhere it is cold, you definitely need your furnace. The emergency fund stops the cycle of
 "Robbing Peter to pay Paul"

It is unwise to start paying down credit card debit, if you have nothing put away for a rainy day. Most experts say $1000.00 emergency fund is a good place to start. Any extra monies you get go directly into your emergency fund, until it is fully funded at $1000.00 For some that could be Tax Time. Say you are expecting a big tax refund (lots of theories on that.. hopefully we will cover in the weeks to come). That is when the majority of us receive a lump sum of money. That would be an excellent use of your tax return! For some it might bet an extra hour or two of overtime every week, or in my family's case an extra shift a week for me at the hospital. My husband works overtime every week, with the exception of vacation time.  Maybe taking bottles back could be the $5.00 that starts your fund. The theme throughout this series:
Is just start somewhere and start today!

Let's recap the last few Weeks:

Start A Spending Log

Create A Budget

Pay Bills On Time

Fund An Emergency Fund

The Spending Log definitely is the number one tool to help you create a budget. First, it will show you areas where you can curb your spending.. Secondly, it will show you what you spend your money on, thus identifying categories in your budget.  Make your budget personal to fit the needs of your family.  Don't forget categories such as Birthdays, Christmas, Pets, Insurance Premiums, etc.,  anything you spend your money on needs to be in a category.

Once you have the above steps in place, start funding the Emergency Fund
Place the goal on your fridge, anywhere you are inspired to keep on track
Get your whole Family involved
Help them to see the vision of debt free living
Remember every step gets you one step closer.....to your dreams!


Next Week
Paying Down Credit Cards

                                                                            

                                                                                













 



Baby Step #2: Make Cuts To The Budget

Hopefully you have all been working on your budgets and spending logs. You have been working hard and have found some areas where you can reduce your spending. You have reviewed your spending log and cut out unnecessary spending. You have put some type of budget plan in place. Remember start small. This budget will be revised and revised again. If you have not started your budget, I encourage you to read here and here.

Once you have your budget, hopefully you are working on a cash basis only for your groceries. Let me just say here that your grocery budget, for most people, is the easiest to trim of most categories in the House Hold budget. You can make meatless meals, drink H2o, cut & use coupons. Grow a garden. Shop lost leader sales. This is where the store actually takes a loss on some of their advertised sale items. Their goal is to get you into the store so you will spend more than you plan to. Shopping just lost leaders will save you money.

Next you need to find areas in your budget where you can reduce, cancel, or just plain do without. When you have a mountain of debt, can't pay your bills on time, and are living paycheck to paycheck, these are serious signs that your financial stability is in question. Our culture has the mind set that luxuries have now become the new necessities. You need to take a hard look at what you need versus what you think you need.

Two of the first areas that we cut out were Cable and Cell phones. We were fortunate that our Cell phone contract only had a few months to go, when we decided to cut them from our budget. The cell phone is a perfect example to share with you. When we first got the phones (We each had one) the bill was supposed to be 65.00/mo on the Family Talk Plan, with a 2 year contract. However the bill was never 65.00/mo. Some months it was over $100.00!! We couldn't afford the cell phones, but we kept them anyway. It would be embarrassing to say we didn't have cell phones. Or at least that's what we thought... We were without cell phones for three years. We now have a prepaid Tracfone which we got about 1 1/2 years ago. My Father In Law purchased the phone because He wanted to assure he could locate us if needed. At the time my Mother In Law was quite ill,... and has since passed away. We have kept the Tracfone, but if things got too tight , it would be the first to go. Cell phones are certainly convenient, and some may say a necessity in today's world, but we survived without them. The truth was We couldn't afford them.

The next item to get cut in our early budget, was the cable. This was by far the hardest for my husband. He LOVES sports. He very much missed the games he could only get on the cable stations. But, we did the hard thing...... we cut cable from our budget. We were without cable for about 2 years. We now have basic cable because we have a bundle package with our Phone & Internet, for a much better rate than we could get separately.

As I have mentioned before, the Third tough thing we did was get rid of our second car. We did this a little backwards, though. We had a Jeep Cherokee that was paid for and a Chevy Venture Mini Van. We sold the paid for Jeep, and went down to the Mini Van. My husband works 1 hour from where we live and a reliable vehicle is a must. In retrospect, we should have gotten rid of the car payment vehicle, and put a few hundred dollars into the paid off vehicle. Oh well, I told you all this is a journey.........

Getting out of debt takes hard work and sacrifice. I cannot stress this point enough. There is no simple answer. No one exercise will immediately turn your financial picture around. It will take baby steps. Learning new strategies, building new skills, making do and doing without. I remember reading somewhere in our early journey towards becoming debt free, that a Snowman is built one snowflake at a time... I have never forgotten that. We paid our credit card debt off One At A Time. Today we have NO Credit Card Debit!!

I would be a miss not to mention the incredible mercy God showed to us. I am so thankful for His goodness to us. It has been a long road, but He has guided and sustained us every step of the way!

It is my prayer, for those reading, that you too are taking baby steps......to big dreams!

Stay tuned for next weeks Step 3: The Emergency Fund

Blessings,

~Michelle~

Baby Step # 1: The Budget: How Are You Doing?



In my last post I talked about the first step in becoming debt free, The Household Budget.


Tonight I will be starting the first class in my 12 week Coupon class. To learn more you can read about that here.

The first topic will be the Budget. You can't get to where you are going, without a plan. You would never dream of hopping in your car, to travel to say, Florida, without directions. Whether you have a physical map or turn on your GPS, you still have a plan. The Household Budget is your plan for debt free living.


I hope you all started your spending log. You should have a weeks worth of spending habits to review. Be patient and gentle with yourself. This may be the first time you have attempted a budget. Remember perseverance is key here. By perseverance the snail reached the ark. It is important to be moving in the right direction. Congratulations, that is progress!


Hopefully you have identified some areas where you could tighten your belt. Let's look at a Sample Scenario:


Maybe you identified you purchased 2 convenience coffee's (I call them convenience coffees because let's face it, it is a convenience to purchase the coffee versus making it a home) at say Dunkin Donuts. You paid over $2 for a medium coffee. That's $4.


You also identified that you purchased (3 extra items) without a coupon that weren't on sale, when you made a quick trip(AKA Budget buster) to the grocery store. For an average of about $7. Some say that average is much higher.


While reviewing your spending log for the week, you noted that you ate out once. Whether that was a breakfast, lunch, Chinese or a Pizza, for about $15.00 Depending on your circumstances that might be higher or lower.


We have just found $26.00 Now with a little sacrifice and planning you could find $26.00 a week to add to your debt. If you spent $26.00 extra dollars a week for one month that would be $104/month. Now that's some working capital.


Some of you buy a convenience coffee every single day. That's $10/week $40 bucks a month.


I am not trying to say you can never buy a convenience coffee. What I am trying to say is if you are in debt, and can't pay your bills, and you desire to get out of debt and pay your bills on time, that there are ways to do that. They require sacrifice, changing your spending habits and sometimes just plain hard work. But I am here to tell you that those sacrifices are every bit worth it to reduce your debt and pay your bills on time. Reducing your debt and paying your bills on time are key ingredients in the recipe of a debt free life!

Now that you have some good insight to your spending habits. Write Out A Budget.There is power in the written word. God choose to speak to us through His written word .The Bible is a living book. There is power in the written word.


You can tell some one you have a degree in brain surgery, but without proof of a written diploma I wouldn't suit up in OR Scrubs right sway. You should put your budget in writing. You should have a clear cut plan to become debt free. In the beginning of our debt journey we weren't even sure how much we owed. Pathetic I know, but true. Keeping a written budget keeps you informed. A written budget, keeps you honest. Numbers don't lie. You must know what is coming in and what is going out. No magic. Just knowledge.

This journey is a process. A learning curve. Be patient, but start somewhere. Start today. Do something, even if the steps seem small. Remember these baby steps are the first steps.......... to big dreams!

I am praying for you,
~Michelle~

Baby Steps..........to big Dreams

When I decided to change my stethoscope for an apron, the ability to leave my full-time job did not happen overnight. We had debt and a lot of it. In the beginning it seemed overwhelming and hopeless. I had no idea how it would all work. But God did.



God loves the hopeless case, where His strength is made perfect in our weakness!

I want to encourage those of you with the same desire, to keep taking baby steps.............. to big dreams.



This blog may seem like a hodge podge to some. The content will run from posts on deep thoughts, (well as deep as my mind goes,... don't worry we won't be going far) to frugal tips, to store deals to homemaking tips. It is all part of the journey of "coming home"



I know as I have been on this journey , I have read everything I could get my hands on, in my quest for knowledge in any and all areas of frugal living. This hasn't been days or weeks, but months and years. Some of what I read seemed extreme, and not likely for my family to do. However much of what I have read has been very helpful. Many of those early frugal tips and ideas I learned early in this journey, I still do today.

It is now very hard for me to pay full price for anything. Please believe me when I say, that this was not always the case! I have learned contentment. I realize things don't bring me happiness, but relationships, people and financial freedom do. Being in debt was stealing my joy. I had become a servant to the lender. I am thrilled you are reading this blog, that means you have similar desires. You may even be in the same position I was. It all starts with baby steps.

Today I want to encourage you in the first baby step to financial freedom..........

Baby Step #1




Make a Budget


This truly is the first step in becoming debt free. This step is absolutely imperative!! You must realize where your money is going.!!


Early on I avoided this. In my heart I felt like if I knew the real numbers I would never have the courage to make the step to leave my job. We were just making the bills with me working full-time, let alone cutting my income in half. Remember I went from full-time to part-time to perdiem.







Keep A Spending Log For One Week


I encourage you to start a spending journal. Don't make it complicated. Remember your taking baby steps. Anything to complicated and you won't follow through. Keep it simple. Use a few sheets of paper stapled together, or a small notebook that fits in your purse. Label as follows:

Monday February 21st, 2011. Then write down everything you spend for that day. Everything. Every nickel. Do this for a week. You are doing this step to get a good idea where your money is going. If you are anything like me you will be quite surprised how many funds can be freed up by this simple exercise. This exercise is a powerful tool in helping you identify where and what you are spending your money on. That extra $2-/day spent on______________ you fill in the blank, turns into $14 dollars a week, which turns into $56 dollars a month, which turn into $672 dollars a year .If you applied that $672 to a high interest credit card debit, the savings would be much greater than that!!







When you get your weeks worth of information, this will allow you to sit down and be honest with yourself in your spending habits. The extra couple of bucks at the store you drop a couple times of week doesn't seem like much at the time, but three times a week and that's $6. If you get a take out coffee everyday that's at least $2/day so there's $14 we've all ready found $20bucks!!






Be patient with yourself.. but don't delay this exercise. Today is the first day toward your financial freedom..........I am praying for you.




Blessings,
~Michelle~

New Blog Site: The Coupon Engineer

Dear Friends I would like to invite you all over to my new blog site. I will be blogging on deals and frugal finds that pertain to our local area. I have started teaching Coupon Seminars and wanted an area where I could post deals and store finds, for those in my area. I am blogging
@ http://michelle-thecouponengineer.blogspot.com . I hope you will stop over and leave me a comment. I am planning on hosting a giveway , early next week.

I will still contine to blog here @byhisgraceandforhisglory.This blog's content will still continue to address how I was able to leave my full-time job as a Nurse to become a full-time Homemaker and a perdiem Nurse. It is also my prayer it will contiue to be an encouragement as we strive to be all we can be for Our Lord & Saviour and Our Families.

I am currently writing a series to encourage us all in the job description of the Proverbs 31 Woman. That series will start March 1st.

I hope you will all stop by my new site and say hello. Remember to stop by early next week for my first giveaway!!

Blessings,
~Michelle~