A Penny Saved

“He who is faithful in a very little thing is faithful also in much” (Bible, Luke 16:10). Faithfulness in finances begins with the little things. If we cannot control ourselves in the little spending areas, it will soon become evident in the bigger areas.

Some of us look at the debt or saving mountain ahead of us and we despair, we give up, it’s too big. These mountains are real, they are big, and they are hard. We feel like we have made too many mistakes, and have been too lax regarding spending or money decisions. But you do not have to conquer the mountain in a day, or week, or even a year. Start being faithful in little areas of your life, and build upon it. Not only will these little steps build upon each other, but your faitfulness financially will spill over into faithfulness in other areas of your life. And then one day you will look back and be amazed at how far you have come.

Sure, we love to save Penny’s, Invest wisely, etc. But at times we can forget how blessed we are. As a reminder, take a jump over to www.globalrichlist.com This is a site that will tell you how rich you are compared to the world. For example, I make a little less than $60,000 a year. I plug that number in and I discover that I am the 55,923,010 richest person in the world! It also shows me that I am in the top 0.93% richest people in the world. In other words, 99% of the rest of the world is poorer than I am.

So if you get down about reducing debt, or not able to save as much as you like, head over to the Global Rich List for a reminder of how much you really do have, and be thankful.

Happy Easter.

Yes, it is true. The sky is not falling and the world is not ending, although you wouldn’t be able to tell from the media. Yes it is rough out there financially, and I personally have friends who cannot get jobs or are possibly losing theirs. But it is not the end (as a Pastor, if you are so inclined, I would refer you to the book of Revelation for more info on the end).It is easy to get frustrated, even depressed when reading all the stuff that is out there -

• surviving the Recession
• worst since the depression
• gloom and doom on Wall Street
• Chaos in the Financial Markets
• When will we hit bottom

We need to remember that the job of the media (including some blogs!) is to make money, to sell. And bad news sells. For instance, my grandmother is 93 years old. She lived through the Great Depression - and this no Great Depression. It might be time to take a step back, take a deep breath, maybe even skip the news for a few days. Focus on your goals, readjust if necessary: cut back a little bit, save a little bit more, etc.

But don’t panic or go into a funk. And definitely don’t believe everything you read. And if you really want the scoop, go to my Grandmother, or go to a nursing home and visit - make their day by caring and listening, and get a little perspective on life as a bonus.

Yea! After over four years, the last of the adoptions is done. Our 7, 6, and 5 year old are now legally ours. As the judge said, the state is just acknowledging what is already a fact - that they are our children! The three girls are sisters (same mother, 3 different fathers). Now only 1 or 2 more lawyer bills to wipe out my emergency fund.

Our family is going away for the rest of the week - I took some vacation time and we are going to a local resort that has fabolous food, an indoor waterpark, etc. We will meet up with the grandparents and have a wonderful family time. In the spirit of the ocassion, I will probably break most of my  financial rules!

I received my Tax Refund yesterday - a whole $100! I try to keep my refund as low as possible. It’s part of my philosophy of not “lending” money to government or companies for free. I don’t like giving free loans. So at the beginning of the year I estimate my taxes, and then I have only what I think I will need taken out - I keep the rest. This allows me to have more income during the year, and allows me, if I am good, to put more into savings and earn interest. I do the same with companies - that is why I recently opened an online checking account - I was tired of my local bank having my money for free. At least now I get a little interest.

Not only do I try not to give “free loans”, but I try to get free loans for myself. For example, my cell phone provider allows me to put my bill on credit card. I pay it off every month, but I get a “float”. More importantly, I get cash back for paying a bill.

None of this will make me rich, but a penny saved…

There’s a lot of noise going on in the blogosphere, the news, and around the water cooler. Basically it can be summed up by - What do I do? Interest rates falling, Stocks on a wild ride, Congress and the President proposing tax rebates. Which leads to questions like…

• Do I buy or sell stocks now?
• Should I refinance my loans now?
• Is now a good time to buy or sell a home?
• What should I do with my rebate check?

And you can go just about anywhere for advice. But I’m not. Believe it or not, I actually learned something in business school! The basic premise that I was taught is that you develop your financial plan, then you apply it, then you make adjustments as needed. Or as I like to say - You plan your work (finances) and work your plan. And that is what I am doing.

For example, my current plan is to invest in a 403-B plan at work (similar to a 401-K). My employer takes x amount every month and sends it to my stock fund of choice. I invest it in Vanguard Index funds. Since I believe one of the best ways to invest is by not timing the market, but by regular and systematic investments, in the short run I do not care what the stock market does - if it goes up - I buy fewer stocks with my fixed amount. If the market goes down - I buy more stocks. Either way I am following my plan (buy fewer stocks when the price is high, buy more stocks when it is a good value). I do not let the hysteria and foolishness of others affect my plan.

Likewise, if I get a “rebate” from the government, I will follow my plan - which is to put any extra available money towards Home Equity Debt reduction. That has been my plan for the past year, which I have done whether money comes along from expected or unexpected ways.

The bottom line is that if you have taken the time to plan, really plan, then outside events like these are opportunities. Obviously as new information or significant events happen you may have to realign or adjust your plan, but that is a lot better than just being tossed about in a sea of change without a compass.

I have been thinking about getting an on-line checking account for some time. Well, I have finally taken the plunge. I decided to go with ING’s Electric Orange account. It’s different than others, with no actual checks - in fact everything is done on-line. It also doesn’t have the highest interest rate. But I think for what I will be using it for it will work nicely. I will still have my brick and mortar checking account. Being in a more rural area I still need to write checks, also my internet connection isn’t always the most reliable (like when I lost an on-line connection for almost two days for no reason this weekend!).

I don’t expect to make a lot of interest - most of the money will be flowing in and out within the month. But if I can make a “few pennies” over the course of the year, then it will be worth it.

I have been busy doing my year end financial routine:

• Reviewing my net worth compared to previous years. Up 5% this year despite lawyer bills and an uneasy stock market. I had hoped for more, but not bad.
• Rebalancing my retirement portfolio to keep it in line with my goals. Didn’t have to do much rebalancing this year.
• Going through my filing system and discarding what is no longer necessary. Haven’t finished yet. It is unbelievable how much paper, especially financial paper comes through in a year. Whatever happened to the paperless society?
• Prepare for tax season. I set up a tax folder so that when all the forms come I have one place to file everything. Also, when I am going through the filing system, when I come across something for taxes (giving statements, extra income, etc.) I put it in the folder. Then when I am ready to do my taxes, I am not sorting through tons of stuff.
• I review my budgets and make any changes. I tend to do this quarterly, but the end of the year is the time I focus the most on it (if I get raises, I know about it in December and it starts in January - calendar year budget at church).
• Finally, I go through our safe to see if there is anything that needs to be shredded, and if I need to add any documents for safe keeping.

Because I use budgeting software, and I have an organized filing system, it takes only part of a day to get everything done - usually a Saturday afternoon. Not a bad investment of time - I get a complete picture of what is going on, I know what I have on file and where it is, and I am ready for the New Year.

My wife and I just finished writing a Christmas letter with pictures of the girls at the bottom. I was able to take the letter to work and make 400 copies for a cost of only $40. As employees, we get to use the color copier for personal use and are only charged 10 cents a copy. That’s a great perk! It got me to thinking, what other perks do I get at work? Here are a few off the top of my head:

• Free food. Often there are activities at the church and food is left over. Yahoo! Helps the budget, but not necessarily my waist.
• Flexible hours. Being a pastor is not 8 to 5. Sometimes that means working evenings and Saturdays (and of course Sunday!). But it also means I can be flexible when I take a day off - like taking 1/2 day today so we could celebrate my youngest daughter’s fifth birthday.
• Church Mailbox’s. Our church has mailboxes for most of the families in the church. We use it for church business, but can also use it for personal correspondence. So those 400 letters - we didn’t have to mail 350 of them! That’s a savings of $143.50.
• High speed Internet. Where we live, cable is not available, but the church has it. So when I need to do some serious surfing, I head to the church.
• Babysitting. Being a pastor, my family gets many offers for free babysitting! And since our church does criminal background checks and some training, i know the children are in good hands.

I am sure I am missing some. What about your workplace? What perks do you get? I would love to hear from you.

In this week’s U.S. News & World Report, I read through an article on the U.S. Economy by James Pethokoukis entitled “Gloom and Doom, or Zoom.” Most of the article was about whoever wins the Democratic Nomination will be a shoe-in for the Presidency based upon the economy (with a little back-tracking at the end). But what really interested me was this statement he made near the very end of the article: “As it is, with wages up 7 percent the past year and consumption up 6 percent, consumers seem to be crying all the way to the mall.”

Two things bothered me about this statement. First, wages up 7 percent? I have not read that anywhere else. If true, that would be good news (at least for everyone else - I didn’t get that this year!). Second, that spending rose almost as much as wages. Can’t we Americans ever save anything?