Make Room to Tithe

Free Money Finance just made a post that has me thinking about how my readers can free up room to tithe.

I won't go into the biblical reasons for tithing in this post, but I will try to cover some different strategies I've seen used to get people to the 10% mark.

Strategy 1: The BIG CHECK

This method is probably the least Biblical since you are not giving of your firstfruits. Rather, when you do your direct deposit you have 10% go into a separate account that you don't normally look at. At the end of the year you write a check for the account balance, and you've tithed your 10%. This one is the easiest to adjust your lifestyle to though, since you don't see the money ever.

Strategy 2: Month By Month

If you have a budget that tracks spending, this method is fairly easy. At the end of the month move the decimal on your total income to the left one space, that is how much you write the check for. EASY!

Strategy 3: Every Week

Same as month by month, but this time you do it with each paycheck.

Strategy 4: Help I'm in a debt crisis! I can barely afford 1%!

Now would be a great time to reevaluate your budget or spending habits. Remember, what is more important, God or eating out one more night a week?

Tithing is actually very simple, and it puzzles me why people find it so hard. If you just simplify your life, it should become easy to live off a smaller and smaller percentage of income, even now.

Learn to do without.

One of the best ways I’ve found to get an edge on finances is keeping myself consistently under budget. I do this by learning to do without. For example, there was a time when I would drink 3 fancy shmancy coffee drinks a day. Each one would cost me $2.00 so I was spending $6.00 a day just on coffee. That’s $42 a week, $128 a month.

And that’s just a cup of coffee.

Do you go out to eat with your spouse once a week? Going out every other week could save you $60 a month.

Do you buy name brand groceries? Trying some generic products could save you $10-$40 a week on shopping.

One big expense that saves people when they go without is alcohol. Depending on what you drink, you could save anywhere from $14-$200 a month by not buying alcoholic drinks, or even cutting consumption in half.

So how does one find out what they can cut?

This goes back to Knowing what you Spend. Save your receipts and really take a count of what you buy, what you use, and what just sits there. Does someone buy a magazine from the supermarket counter every month? It may be cheaper to get a subscription. I personally buy tools I don’t need and probably won’t use, but by making a rule that all tool purchases are a two-party decision, my wife and I save money by doing without.

I am interested in learning what other people have been able to do without, reuse, save money on, etc. If you have a good tip, post it in the comments below.

Crisis?

This post doesn't follow the series, but recent events have made me want to share it with you.

My wife had an asthma attack last night.

For a family budget, expenses associated with this would fall somewhere between recurring bills and emergency fund. Most people are good at the recurring bills, you pay the same (or similar) amount every month and forget about it.

The Emergency Fund is different.

First let's get a definition: The emergency fund is an area of liquid assets that is used only for unexpected expenses in regards to health, property damage, loss of income, or other similar emergencies.

The Emergency fund should be one of your first steps towards a sound financial picture for your family. Set aside quite a bit every month until you have roughly 3-6 months income put away. Then put that money to work in a money market account where the interest is higher than a savings, and where penalties for too many withdrawals will help you to think twice about accessing those funds.

The emergency fund is also helpful during times of family transition, for example: Say a new father wants to take some time off to spend with his wife and new baby, but his company only provides leave for women. The couple could access the emergency fund to provide that extra income for a few weeks and to help with the countless new expenses associated with baby. What if they didn't have an emergency fund? Those expenses tend to make it onto credit cards, which leads to more bills, and paying later for something you no longer have (ie. food).

As far as paying down debt, some people say to pay off the credit cards and unsecured loans first, others say build the fund first. It really doesn't matter, just make sure your plan will work for you. If you have a habit of paying only minimum balances, then you should pay the cards off first. If you always pay the full amount on your card and never even have to pay interest, you don't have to worry since you don't have that kind of debt. Consolidating that debt is another option which could bear fruit for you by letting you pay off the cards completely (hide or destroy the cards for a while after this or you'll run them up again). Then you are back in the easy recurring bills part where you pay the same amount every month.

So how do we cover an emergency like asthma? We use the emergency fund!