12 Tips to LIVE a frugal LIFE
Part of the Wesleyan heritage is a healthy concern for frugality. In a sermon late in life, John Wesley advised:
1. Earn all you can;
2. Save all you can;
3. Give away all you can.
Being a minister working overseas was a great help in trying to live up to Wesley's maxim. Our church required us to be debt free before leaving. The reason for this was simple: the salary was too paltry to service any debt. Cross-cultural stresses are enough of a strain on a marriage without piling money problems on top.
Our thirteen years abroad are over, but the blessing of debt-free living continues. This is even more of a boon when you consider that the average American household has $ 9,200.00 in credit card debt alone, not even counting other debts, like vehicles payments or home mortgages.
Here are a few tips for getting out of debt and for the kind of frugal living that will keep you out:
1. Remember your tithe/offering - As a pastor, I was amazed to see time and again families who "couldn't afford to tithe" sink deeper and deeper into debt, while those who faithfully gave 10% of their income to the Church more than made ends meet. I can't explain why this happens, but Malachi 3 is a good place to start researching this dyamic. God blesses the generous heart. And while you're at it, don't forget to make a healthy annual contribution to world missions. Take it from someone who has "seen the other side." We don't know how good we have it.
2. Extra payments - You can decrease the amount of interest you pay on a car loan, for example, if you make small extra payments and apply them against principal. We did this with our '85 Chevy Nova, even if it was only $ 30.00 or $ 40.00 at a time.
3. Manage your credit cards well.
a) Pay off your full balance every month, if at all possible. Even here, be careful! Some cards are now charging interest on items from the day a purchase posts, meaning you'll get clobbered with interests charges even if you pay off the full amount each month. It's better to have a card with a true grace period on repayment in-full even if it doesn't have any "cash back" or toys that you can earn, than to have a card with lots of "goodies" but hidden charges.
b) Reduce your total credit available. If the sum of all your credit lines exceeds your annual income, you have too much credit, and too great a temptation to resort to credit cards during a job lay-off or other unforeseen problems. Call your credit card company and ask them to make this reduction. According to a real estate agent who deals with credit for potential homeowners, having too many credit cards open, even if they have a zero balance, can adversely affect your credit score, since lenders consider the sum of all credit lines available.
4. Become friends with your debit card. This is a great way to avoid the credit card trap altogether. Find a bank, though, that will not hold you responsible for fraudulent activity on your card, should it be lost.
5. Watch out for lemons - Nothing will set back your get out of debt strategy quicker than frequent car repairs. Before buying one, check out Consumer Reports to see if it passes the dependability test. I failed to do this with a Plymouth I owned, and regretted it as my credit card debt mounted, all spent on repairs I could have avoided by choosing another vehicle. Ignorance is definitely not bliss.
6. Discover thrift stores - My brother and his wife found a thrift store located in a tony neighborhood. They'll often find brand name clothes in great shape for a fraction of the price they would have paid at the original retailer.
7. Network - Make your needs known at your church. It's surprising how often someone has an older (but still very useable) couch, bed, or table stored in an attic or garage, just gathering dust. Today, they help you in your time of need. Tomorrow, you'll be in a position to pass along the favor. In recent days, we've been the blessed recipients of this kind of practical love, and are grateful to God and His Church for their incredible generosity. (See the end of Acts 2 for more information).
8. Aldis and Angelfood - Aldis has made its away across most of the country, and will save you big on groceries. Be careful! They sell a lot of fattening food, but with care, just your wallet will become fatter and not you. Also, check into the Angel Food ministry. This is open to all comers, regardless of income level, and gives you food for $ 25.00 monthly that you'd twice as much for in the stores.
9. Trade services - Rather than paying a babysitter the going rate for watching your kids for a night, why not trade child care services with another family in the church? You can watch their children on Friday night, and they watch yours on Saturday evening. For an added bonus, your kids get to play with other children their age.
10. There's no shame in renting - As a newlywed couple, do you really need to have your own place? If the apartment scene is unappealing, look into renting a home. While this is more common in the Midwest than in the Northeast, a free-standing home gives you the benefits of distance from neighbors, a real noise reducer. Meanwhile, renting at a lower cost gives you the chance to save up a larger downpayment, which in-turn might get you a better mortgage rate, when the time does come to buy a place of your own. Saving for the downpayment can be accelerated by saving at least 50% of the difference between the monthly rent charge and what you would have paid for a monthly mortgage payment. For example, if your mortgage payment would have been $ 850.00 monthly, and you're paying only $ 550.00 for rent, put $ 150.00 aside into a savings account earmarked for the downpayment. With the other $ 150.00 you can apply extra payments against you vehicle.
11. Buy a used bicycle - With gasoline now over $ 3.00 per gallon, we're all looking for ways to decrease the bite gasoline takes out of our budget. Check out a local swap sheet, to see if anyone is selling a good used bike for $ 30.00 or $ 40.00. For errands that are within 1-2 miles, such as drive through banking, why not pedal there? If you're an environmentalist, you'll be doing your part to fight global warming, not to mention the calorie burn.
12. Remember "mad money" - No matter how tight your budget, both you and your spouse should receive a small amount from each paycheck just to do something fun for yourself. For me, this would be a round of golf, or maybe an occasional new CD. This is the "spoonful of sugar" that helps the medicine go down.
Will these 12 tips solve all problems? Probably not, but talking about them together with your spouse then putting them into practice will get you started down a healthier fiscal path. Remember: for Christians, the goal is not to accumulate wealth. Rather, it's to liberate you from financial bondage, allowing you to be more generous with others when God says it's your turn to help others. There's no better way to live!
1. Earn all you can;
2. Save all you can;
3. Give away all you can.
Being a minister working overseas was a great help in trying to live up to Wesley's maxim. Our church required us to be debt free before leaving. The reason for this was simple: the salary was too paltry to service any debt. Cross-cultural stresses are enough of a strain on a marriage without piling money problems on top.
Our thirteen years abroad are over, but the blessing of debt-free living continues. This is even more of a boon when you consider that the average American household has $ 9,200.00 in credit card debt alone, not even counting other debts, like vehicles payments or home mortgages.
Here are a few tips for getting out of debt and for the kind of frugal living that will keep you out:
1. Remember your tithe/offering - As a pastor, I was amazed to see time and again families who "couldn't afford to tithe" sink deeper and deeper into debt, while those who faithfully gave 10% of their income to the Church more than made ends meet. I can't explain why this happens, but Malachi 3 is a good place to start researching this dyamic. God blesses the generous heart. And while you're at it, don't forget to make a healthy annual contribution to world missions. Take it from someone who has "seen the other side." We don't know how good we have it.
2. Extra payments - You can decrease the amount of interest you pay on a car loan, for example, if you make small extra payments and apply them against principal. We did this with our '85 Chevy Nova, even if it was only $ 30.00 or $ 40.00 at a time.
3. Manage your credit cards well.
a) Pay off your full balance every month, if at all possible. Even here, be careful! Some cards are now charging interest on items from the day a purchase posts, meaning you'll get clobbered with interests charges even if you pay off the full amount each month. It's better to have a card with a true grace period on repayment in-full even if it doesn't have any "cash back" or toys that you can earn, than to have a card with lots of "goodies" but hidden charges.
b) Reduce your total credit available. If the sum of all your credit lines exceeds your annual income, you have too much credit, and too great a temptation to resort to credit cards during a job lay-off or other unforeseen problems. Call your credit card company and ask them to make this reduction. According to a real estate agent who deals with credit for potential homeowners, having too many credit cards open, even if they have a zero balance, can adversely affect your credit score, since lenders consider the sum of all credit lines available.
4. Become friends with your debit card. This is a great way to avoid the credit card trap altogether. Find a bank, though, that will not hold you responsible for fraudulent activity on your card, should it be lost.
5. Watch out for lemons - Nothing will set back your get out of debt strategy quicker than frequent car repairs. Before buying one, check out Consumer Reports to see if it passes the dependability test. I failed to do this with a Plymouth I owned, and regretted it as my credit card debt mounted, all spent on repairs I could have avoided by choosing another vehicle. Ignorance is definitely not bliss.
6. Discover thrift stores - My brother and his wife found a thrift store located in a tony neighborhood. They'll often find brand name clothes in great shape for a fraction of the price they would have paid at the original retailer.
7. Network - Make your needs known at your church. It's surprising how often someone has an older (but still very useable) couch, bed, or table stored in an attic or garage, just gathering dust. Today, they help you in your time of need. Tomorrow, you'll be in a position to pass along the favor. In recent days, we've been the blessed recipients of this kind of practical love, and are grateful to God and His Church for their incredible generosity. (See the end of Acts 2 for more information).
8. Aldis and Angelfood - Aldis has made its away across most of the country, and will save you big on groceries. Be careful! They sell a lot of fattening food, but with care, just your wallet will become fatter and not you. Also, check into the Angel Food ministry. This is open to all comers, regardless of income level, and gives you food for $ 25.00 monthly that you'd twice as much for in the stores.
9. Trade services - Rather than paying a babysitter the going rate for watching your kids for a night, why not trade child care services with another family in the church? You can watch their children on Friday night, and they watch yours on Saturday evening. For an added bonus, your kids get to play with other children their age.
10. There's no shame in renting - As a newlywed couple, do you really need to have your own place? If the apartment scene is unappealing, look into renting a home. While this is more common in the Midwest than in the Northeast, a free-standing home gives you the benefits of distance from neighbors, a real noise reducer. Meanwhile, renting at a lower cost gives you the chance to save up a larger downpayment, which in-turn might get you a better mortgage rate, when the time does come to buy a place of your own. Saving for the downpayment can be accelerated by saving at least 50% of the difference between the monthly rent charge and what you would have paid for a monthly mortgage payment. For example, if your mortgage payment would have been $ 850.00 monthly, and you're paying only $ 550.00 for rent, put $ 150.00 aside into a savings account earmarked for the downpayment. With the other $ 150.00 you can apply extra payments against you vehicle.
11. Buy a used bicycle - With gasoline now over $ 3.00 per gallon, we're all looking for ways to decrease the bite gasoline takes out of our budget. Check out a local swap sheet, to see if anyone is selling a good used bike for $ 30.00 or $ 40.00. For errands that are within 1-2 miles, such as drive through banking, why not pedal there? If you're an environmentalist, you'll be doing your part to fight global warming, not to mention the calorie burn.
12. Remember "mad money" - No matter how tight your budget, both you and your spouse should receive a small amount from each paycheck just to do something fun for yourself. For me, this would be a round of golf, or maybe an occasional new CD. This is the "spoonful of sugar" that helps the medicine go down.
Will these 12 tips solve all problems? Probably not, but talking about them together with your spouse then putting them into practice will get you started down a healthier fiscal path. Remember: for Christians, the goal is not to accumulate wealth. Rather, it's to liberate you from financial bondage, allowing you to be more generous with others when God says it's your turn to help others. There's no better way to live!
posted by paogeh at 10:37 PM
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