The Bottom Line {February}

I've got to be honest, with being sick all last week and going back to work this week, I'm struggling to get this post written and keep it interesting, but it is what it is, and it's time for a financial review. How have you done with sticking to your budgets, keeping your shopping in check, paying for things with cash, or whatever you have been purposefully working towards in the financial arena? Feel free to share your updates or links in the comments so that we can encourage each other!

Towards the end of the month, I had the opportunity to read a preview copy of All the Money in the World: What the Happiest People Know About Getting and Spending by Laura Vanderkam. Laura's approach towards money and stewardship is a bit different than other financial guru's that you might have read or heard about (e.g. Dave Ramsey or Crystal Paine), but it was one that rang true to me. I wasn't even out of the book's introduction before I was nodding my head in agreement with Vanderkam's assessment of wealth and happiness:

I've come to believe that people who are the happiest about money operate under three premises of wealth, a word that has less to do with quantity than with outlook:

1. I have enough. There are some people in this world who have more, but also plenty with less.

2. If I want more than I have now to achieve big goals, I can figure out a way to get it.

3. Every dollar is a choice. How I earn it and spend it are up to me.

{All the Money in the World, pg. 7}

One of the issues that I have with a lot of financial plans is the idea that everyone is in the same boat, and therefore, we all need to handle our money in the same way. Vanderkam uses the example of percentages to illustrate this point (i.e. 5% on clothing, 10-15% on housing, 10-15% on food, etc.), and she goes on to say, "As often as we listen to the assumed expertise of the crowd, no one is forcing us to earn or spend our money in certain ways, and when we step back, we may realize that the resources we already have or can obtain do more for our happiness than we think." {pg. 5}

I believe that stewardship starts with discipline. You may recall that last year I shared about our stance on the use of credit cards. While I recognize that there are people who have gotten in over their heads with credit card use, I don't believe the blame should fall on a piece of plastic or the company who issued it. It comes back to the user and the issue of personal responsibility and having the discipline to not spend more than we make.

Along the same lines, you might remember that one of our financial goals for the month of February was to attempt cash-only for all grocery purchases. I have to say that this was a successful failure, in that I didn't use cash, but I stuck to a budget. Let me introduce you to my little green book...

Over the years I have tried just about every type of financial bookkeeping. I've used plain notebooks and financial ledgers, I've attempted to keep track of our financial standing using computer programs like Excel, and at a very minimum, I simply rely on our checkbook register to keep me up-to-date on our finances. However, with a new year, I decided I needed a new way of tracking our spending. The check register was all well and good, but when I see a payment of $467.28 go out to our credit card company, I'm not exactly sure where that money went...welcome the little green book.

It's nothing more exciting than a day planner, with months and weeks marked out, but it has been perfect for my financial record keeping. In the monthly calendar sections, I mark out what days we get paid (and the amounts) and what days our automatic payments come out. In the side bar, I keep a running tab of how much is in our Rainy Day Fund and how much we've got left in the grocery budget, this way I can see - at a glance - what our overall financial picture looks like. In the weekly/daily sections, I keep track of what we have spent that day (cash, credit, or debit payments). That way, when I see the amount go out to the credit card company, I know exactly how it was spent and there are no surprises.

Now, just as Vanderkam says in All the Money in the World, what works for me might not work for you, but the point is to find something that does. You may think that Excel or an online tracking tool is the greatest thing since sliced bread, while I'm happy with my old fashioned paper and pencil method. For years, my mother tried to teach me her method of budgeting; she's kept a ledger for the entire fifty-one years that she and my father have been married, but what works for her doesn't work for me, just as she won't even consider using online banking, while I love the convenience of it. As long as we work at keeping track of every dollar spent, saved, and earned, then it really doesn't matter how we do it, just as long as we do it.

Bottom Line 

{February}

1. We're only five weeks away from fully funding our Rainy Day Fund

2. We created and stuck to a grocery budget this month

3. We didn't skip eating out as much as we planned, but we stopped shopping and have seen the results

4. We have enough set aside to put a new roof on the PH

How have YOU done with YOUR financial goals?

Next Bottom Line Update: 3/27/12