Response to Penny Maxwell's Blog

Recently, I read the blog of an acquaintance who was talking about saving money. She made some great points... but, if you're talking about how to save money, I've gotta put in my two-cents (pun intended). Here's my response:

Hi Penny,
Here are some points & responses to points:
1. Eat at home. This is not only good savings, it's also healthier. usually. A goode twist: Team up with friends and family and make larger meals together. You'll share the work, share the time, share the food. It's easier, more fun and less expensive. Once, in college, we had 25 people over at one house and everyone ate steak and multiple sides. we had more than enough left-overs for less than $5 / person.

2. Brown bag your lunch. This is healthy and a time saver. Get lunch over in 15 minutes and see if you can clock in early and get some overtime.

3. Buy staples in bulk. Be clear, this does NOT mean go buy 6 pairs of shoes. Nor does it mean going to buy 15 of something just because it's on sale. But when you buy Windex or Rice, buy them in larger containers. It'll save time and money.

4. Look for free stuff. CRAIG'S LIST! Freecycle!

5. Look for coupons. There are two ladies in north Charlotte (Mandy Devine & Renee Lewis) who actually do workshops on how to maximize coupons. These ladies have olympic type savings. the kind where you pay $12.00 for $120 worth of groceries. Penny, if you'll get in touch with rebekah goode, she has Mandy's phone #. I'm CERTAIN Mandy would be willing to put on a workshop for folks at FHC!

6. Free shipping. Definitely. Especially on my new iPad 2.

7. Rent movies. Or hulu! or Netflix. or go to someone elses house and team up on the movie renting.

10. Use the library. While you're their, pick up Dave Ramsey's Total Money Makeover. I have an extra copy on audio book. I'll happily give it to anyone who wants it.

11. Slash the incidentals. I have a better idea. Cut up your credit cards. Yes. Cut them up. Get rid of them.

12. Cancel the land line. While you're at it, cancel cable TV and rediscover the art of "conversation." Cancel that subscription you haven't used in 15 months.

Now for the hard part: (what, first my TV. now what?)
Each person reading this blog should consider going through Dave Ramsey's Financial Peace University. I know, I know. "but, our church does crown." Don't get me wrong, Crown is a great bible study on financial topics. (and the folks at crown will admit this) But Crown does not teach you the step-by-step HOW-TO's in saving money, getting out of debt & financial literacy. Unless you're in crown AND an insurance agent, you likely have NO IDEA what your insurance really covers. so here's my top 10 list of things to do:

1. Enroll in Financial Peace University (13 week course costs about $100) See daveramsey.com/fpu

2. Do a written budget. WITH YOUR SPOUSE! Both votes count and you give every dollar a name. On paper. On purpose. Each month for THAT month before the month begins. Which of you would begin to build a house without first doing the budget unless you get done framing it and you run out of money. and all your friends mock you, "look at this moron. started building a house and got half way done and run out of money."

3. Cancel your credit cards and stop using debt. It's not intelligent to pay $140 for a $85 outfit. so why do you?

4. Don't buy anything unless you have the CASH ON HAND to buy it.

5. Speaking of cash, use the envelope system for groceries, restaurants & clothing. Put cash in an envelope (yes, paper cash in a paper envelope) and begin purchasing with real cash. You'll be amazed. It's not possible to go over budget when you only use cash. Oh, no intermingling of the envelopes. Once the money goes in an envelope, it's in and can ONLY be spent on that category. HINT: over-fund groceries the first few months.

6. Stop using your plastic (debit & credit) at the grocery store. A Dunn & Bradstreet study shows that most people spend 15-25% more when using plastic than cash. And don't get fooled by gimmick points and rewards by CC companies. If you're spending 15% more and get 3% cash back, they still win. Stop thinking you're winning. their buildings are bigger than your house for a reason: they have a plan for your money when you don't!

7. Investigate and shop around your insurances. If you have whole life, consider getting 20-30 year level term in place BEFORE canceling your Whole-Life garbage insurance. Whole Life insurance is a rip-off. The only people who say otherwise are the people who sell it. NOTE: Only cancel whole life AFTER you have term in place.

8. When making big purchases, learn to negotiate. Negotiate on color, quantity, last-year's model. etc. Purchase with cash and ask the question: "What is the least you're willing to accept for." then SHUT UP. Let them talk.

9. Unless you have a million-dollar net worth, do NOT buy a brand new car. Dr. Thomas J. Stanley's research on millionaires and deca-millionaires shows most wealthy typically purchase used 1-2 year old vehicles with low mileage at a discount. Don't worry, I know all your excuses for why you think you "need" a brand new car, and they're wrong. Your total value of automobiles (cars, trucks, boats, motorcycles, seadoos, etc. if it's got an engine) should be less than 1/2 of your yearly income. and far less if you have a significant income.

10. Stop making excuses. Every single one of these line items represent a level of discipline most people are not willing to undertake. If you found yourself arguing with a line item, it's probably because you're unwilling to discipline yourself in that area. Is your car where you get your identity? Your clothing? The brand of bottled water? Your jeans? Isn't your existence more than these things?

Bonus: Consider there are only 3 things you can do with money. 1. Give. 2. Spend. 3. Save (investing fits here). You need to learn to do ALL THREE extremely well. But most adults are too pompous to admit they need to learn to handle money differently. But, if you did. could you possibly honor your Father more with it? And not just with giving. but in your spending and savings too?

You can read the entire discussion at: Penny Maxwell's Blog: Quick Tips for Savings.