Wednesday, September 14, 2016

That One Time I Downshifted, Took A Paycut, and Felt Pretty Good About It

So, it’s been awhile since I’ve written one of these things.  Much has changed in the last two years.  Life happened and it pulled me away from these type of extra-curricular activities.  However, recent events have caused many changes in the Wilkerson household.  One of the things that I believe is that “truth” is real and it’s objective.  Despite this reality, a person can still cover it up and pretend that it doesn’t exist.  When finally faced with this truth, decisions must be made to deal with it or sweep it under the rug.  I dealt with mine and this is a very short rendition of what has transpired.

Jumping in my time machine, almost 2 years ago, I aggressively followed my own personal desires/ego and took on a new job.  It was a management job, which was a stretch role for me at the time.  However, I knew that once I got in the door, I could learn quickly, figure things out, and perform what was required of me.  I had always been critical of leaders I’ve had in the past and this was an opportunity to try it myself and eat my own dog food.  When I started this job, I was given a team of 4 people.  After 3 months, 3 of them were gone, to no fault of my own.  There were bad decisions made before I joined and I had to play cleanup.  Soon after this exodus, I realized that I was given a pack of sticks and told to build a house.  So I spent the next year building that house of sticks and trying to fortifying it with real material.  And I did that.  I achieved many mini successes and was getting some good traction with my team and making great strides that were getting noticed around the company.

Despite the progress made in the workplace, my wife Mary told me back in January of this year that I should think about the job and how it was affecting our family.  I wasn’t being asked to quit, but I was being asked to evaluate the quality of life (or lack thereof) being offered by the job.  Being the typical guy that I am, I ignored what she asked me to think about.  I said, “Sure, I’ll consider what you’re saying....”  The hours were piling up, but I enjoyed what I was doing and I was getting life from it.  I was in charge of things, making progress, and getting some notoriety from my peers.  We even went to Disney in April for a week and I spent a couple hours each day working, trying to keep on top of things while I was gone.  In my job, I didn’t have the ability to disappear, I had to be available to make sure that things were progressing.  Let’s just say that Mary wasn’t to pleased with my Disney work schedule.

Then, July of this year came around and everything changed, including my outlook on things.  “You are not on top of your stuff.”  That was the phrase that changed everything for me.   A large project that was going on, let’s call it the “Ninja” project, wasn’t going too well.  Things were running behind schedule on the Ninja project and I wasn’t fully aware of all of the issues until later in the game.  My group was working on it and, because I’m the leader, it was on me to figure things out and get the ship back on course.  Also, it wasn’t just the Ninja project that was mentioned.  Previous projects were brought up that apparently weren’t up to expectations of my new immediate leadership who brought in around April.  Before then, I was being commended for handling things with a thin staff.  But now, I was being scolded all of a sudden.  I was pretty much told that if I was getting a rating, it wouldn’t even be a “meeting expectations” which is a basic rating.  My how things changed all of a sudden, huh?  In addition to this new criticism, there was no support or assistance offered.  It was just a stern talking to and a “shape up” style of tone.  Not sure how to classify this brand of leadership, but it’s not one that I react well to.

It was this comment and subsequent conversations afterwards, having a similar tone, that changed my perspective on things.  It cut me down and made me question my abilities.  It made me wonder if I was a bad/ineffective leader.  Among these questions, the biggest thing that it did was make me question my priorities.  I spent so much time at my job, trying to get things done, and focusing on my team that I was neglecting other things that were important.  It was then that I came to terms with and realized my own truths:

  1. I was being a crappy Catholic
  2. I was being a crappy husband
  3. I was being a crappy father

I was neglecting my very reason for working.  The people I were supporting by working were slowly slipping away.  So at that point, I made a decision.  I made a choice.  It wasn’t worth it anymore.  To meet the expectations of what I was being asked to do, I would need to pretty much arrive at the office at 7am and stay until 6pm….every day.  Also, with no end in sight.  So, I no longer had an interest in “being on top of my game.”  

One thing to note is that I’m not immune to hard work.  If the stress was only due to the Ninja project then I could easily hunker down and just get it done.  But I looked at the work coming in the future and the size of the team and something wasn’t adding up.  I asked about this basic math and was told that no more people would be coming my way.  So this puts a huge target on my chest regarding execution.  Sure, I could do that, but what would I be gaining?  In the end, would these extra hours, possible accolades (if any) be helping me personally in my faith journey?  No.  Would this be helping my marriage?  No.  Would this be helping how I raise my children?  No.  So then begs the question, what’s the point?  Not what’s the point of work, I have no hesitation about putting in hard work to support my family.  What’s the point of an endless cycle of work, with a lack of resources in perpetuity?  Is it money?  Sure, we can take a week trip to Disney but the work is still waiting for you when you return.  Also, if you calculate the pay including these hours, it’s not much.  If you look at bear necessities, we’re doing quite well.  We have a roof over our heads, working electricity, running water, clothes on our back, and food in our fridge.  One thing we didn’t have was an attentive and present father/husband. Also, during this difficult time, when I was questioning all these things, my wife sent me a picture of her and the kids at the zoo that was a great reminder that put things in perspective and navigate through this craziness.

(Malia, what are you looking at....and why are you so mad?)

Many times, I’ve heard about people taking breaks from careers.  Taking a “step back”, taking a pay cut, moving to something less hectic.  I didn’t understand it at the time but after some discernment I finally got it.  So I made the decision to look outside my company for another opportunity.  I was willing to take on less responsibility and less pay to get back what I had lost.  I became intentional about finding something else to do to support my family.  Luckily, things moved pretty quickly.  I took about 4 weeks from that point to have a formal offer in hand at a new company.  So I put in my notice and left after 2 weeks.  It was tough to leave behind something I helped build from the ground up.

When I told people I was leaving, many times I was asked about if I was taking on more money at a new job or a promotion.  My comment was, “neither”.  I didn’t take on more money, I’m actually taking a pay cut...a good size one.  I’m not taking on a promotion or more responsibilities, I’m actually taking on less.  I won’t have people to manage any longer, nor would I be in charge of high-level strategy.  This move is for my wife.  This move is for my children.  This is for me to figure out what’s most important.  At the end of the day, I’m just a dude.  I can be replaced.  If I disappeared, my company would still run without a hitch.  They’d still make products and ship them out everyday.  People would still show up.  Leaving was bittersweet.  There were tears, many people attended my lunch, received a gift.  I was told from many people in leadership positions that I did a good job considering the circumstances and wanted me to know that before I left.

So what comes next?  Looking forward to being more present and figuring out how to be a better Catholic, a better husband, and a better father.  Stay tuned….

Sunday, February 15, 2015

Lay Back and Put Your Finances on Auto-Pilot

Today, we're going to talk about a great way to keep you accountable to your budget.  It's something that I discovered years ago and leverage it anyway that I can because it makes me not have to remember certain dates.  AUTO-PAY....aka DIRECT-DEBIT.....aka Awesome Sauce

The beauty of Auto-Pay is that you get to take out the human element of paying bills.  So you don't have to worry about missing a payment, logging into all your online accounts to schedule a payment every month, and/or mail paper checks (what's a check?) to businesses and waiting for them to cash.

I'm going to go over some of the major categories of a budget and how we've used Auto-Pay to make the Budget Family's life easier.

Charitable Giving

Many churches that I've been to have it setup so that your monthly contributions can be taken out of your bank account instead of you having to put money in the basket every week.  This helps in the situation of forgetting to bring cash to church or losing envelopes so that you and the church can keep track of your giving.  You typically fill out a form and they take care of the rest.  Unfortunately, the church that the Budget Family attends doesn't have this so through my credit union, I have it automated so that a check is sent to the church from our credit union each month with our envelope number on it.

For donating to other non-profit entities, I'd suggest reaching out to see if they have any type of Auto-Pay type of program or if they are okay with mailing checks to them.

Retirement Saving/Kids College

I'm fortunate that my work offers a matching 401(k) program, so I contribute up to the contribution through payroll deductions.

I also have a Roth IRA which is after-tax dollars (the money I actually get in my paycheck).  So I contribute another 10% of my take-home pay to that retirement account.  I set that account up to also do an Auto-Pay type of arrangement so that money automatically leaves my account each month.

We also have a college savings plan for the kids and that also is setup via Auto-Pay to be paid monthly.


If you read my previous post, we recently refinanced our mortgage to a 10-year mortgage.  When we signed up for it, I set it up that the mortgage gets paid directly from my bank account on the 1st of the month when it's due.


This is where it gets interesting.  Our energy provider, DTE, does a "Budget Billing" type of program where it takes the previous year and averages the total energyt cost for that year over 12 months.  This allows us to pay the same amount each month, regardless of how much the actual bill is that much.  About twice a year, there's a reconciliation type of analysis done by the company to see if the budgeted monthly amount needs to increase or decrease.  This typically is a change of less than $10 so I've seen the amount from like $118 to $125 per month.  So while there are fluctuations in your energy needs based on the seasons, there are ways to average it out so you pay the same amount each month.


This was the last thing that I setup for Auto-Pay.  I wished for this for a long time for my city and repeatedly email the city to ask when it was coming.  Then the day came when I got the notice that the program finally arrived and I wept.  My city sends water bills every other month so Auto-Pay is only setup to take the money every other month.


We have AT&T for our internet, cable, and Mrs. Budget's iPhone.  So I pay one bill once a month and it's set for Auto-Pay.  One thing to note is that the amount can possible change because of cable.  So when we order movies or other "On Demand" videos for the 3 Little Budgets, the bill can go up.  Same thing goes for Mrs. Budget's iPhone when she uses too much data.

Car Insurance

We use AAA for auto insurance.  I used to pay monthly through Auto-Pay but now I just pay the 6-month premium all at once and I save a little money on the premium doing it this way.  So we only have to pay this in May and November.

Life Insurance

I have a 15-year term life insurance policy on me.  In case something happens to me, Mrs. Budget has already stated that she's going to Rome.  This was also setup for Auto-Pay because who wants to manually pay this?

Gym Membership

Mrs. Budget has a membership at LifeTime Fitness and has the 3 Little Budgets on her membership for daycare.  This also setup for Auto-Pay

Vacation/Christmas Savings

For savings that accumulate over the year, we have savings accounts setup.  So for example, to save up for Christmas, we have it setup so that a certain amount gets transferred automatically from our checking to savings account at the end of each month.  We do the same thing for our vacation savings.

Student Loans/Debt

Back when we were paying off our debt, we had all of our accounts setup for Auto-Pay for the minimum payments.  When we made extra payments to pay the debts off quicker, we'd make manual payments because the amount of extra payments typically varied month to month.  One thing that was cool was that for the student loans, the company we worked with had a .25% decrease in the interest rate if you signed up for Auto-Pay.  So this is something to look into if you have student loan debt.

Keeping Track Of It All

So this is an overview of how we've leveraged the beauty of Auto-Pay to benefit our lives.  It took some time to set all of these up but we've been doing it for a couple years now and I can say that it's awesome.  It sounds like a lot of effort, but trust me that it's worth it.  There's great peace in knowing that bills are being paid on time each month.  You don't have to worry about setting reminders and trying to remember which bills you did or didn't pay.  Just use the many tools at your disposal.  I typically only have to check one a week to see what bills were paid that week and checked to make sure that the big payments happened.  If you're worried about bills coming in at weird days during the month, one thing that I also did was make sure that the bills were paid at the end of the month once I got at least one paycheck in.  I did this either on a form or called the company directly and asked for it

Another thing to keep in mind is that when you setup Auto-Pay for your bills, it also forces you to control your spending.  So you can't just go out of control buying things because you have those bills that are automatically coming out of your bank account.  And it's not simple to just call the company the day that the payment is do and tell them to stop the payment.  You usually have to call a couple days in advance.  I also tend to keep some money floating in our checking account so that we don't bring the account down to $0 at the end of the month.  We have payments hitting our account at different times so it's good to have some money sitting there to protect us.

Question(s) of the Day:

How are you with paying bills?  Do you have a history of not paying bills on time?  Is it an issue of forgetting or just not having enough money?

Video/Song of the Day: 

(The Original 50 Shades of Grey)

Until next time........Happy Budget, Happy Life

Saturday, January 31, 2015

Pressing The Reset Button On Our House

Let's Go Back in Time

One of the biggest beefs that I still had after discovering my budget saviness, paying down debt, and changing the direction of my family's finances was my mortgage.    When I purchased our house back in 2010, I did what most "normal" people did and what most finance sites tell you to do.  I purchased our house for about $89k on a 30 year mortgage.  I knew something was wrong with this when I signed the forms and saw that if I waited 30 years to pay off the house, I'd be paying $80,000 in interest.  Interest!!!  So I'd be paying in total about $172,000 total after 30 years of payments.  Does that sound smart?  But I was a young man so I didn't know any better.

What Changed?

Now that I'm budgeting my money and have control over my spending, I have the flexibility to better understand and control what goes towards my house.  In my previous blog when I laid out typical percentages for what you should be spending towards housing, I put that a maximum of 25 - 35% of your take home pay should be going towards your house.  So if your making about $50,000 and bring home about $3,500 a month, you could handle a $875 a month mortgage payment easily.

I did the math and noticed that I could afford to put in my budget for housing much more than what I was spending.  My mortgage was only about $731, but it was over 30 years.  That's the draw of the 30 year mortgage to a lot of people, the payments seem really low.  But the interest you pay makes up for it.

Mortgage Reset Button

There's a lot of talk in the finance world about interest rates rising, falling, stagnant, etc...  But to us common folk, we need to break it down.  The interest rate is the rate at which you borrow money from the bank to purchase your home.  Similar to credit cards that have interest rates, mortgages also have interest rates.  The less the interest rate, the less that you owe back.  The interesting thing is that interest rates go up and down.  So the interest rate that you had when you purchased the house isn't the same one that you necessarily could have now.  So that's why we have mortgage refinancing.

Refinancing is the mortgage reset button.  It's saying to the bank, "Hey, I see that interest rates are smaller now, and I want that rate instead of the one that I have now"  This is typically done to reduce the amount of monthly payments for your mortgage or amount of interest that you will end up having to pay for your mortgage.  Thousands of people have done this in the recent years because after the housing crisis that caused the recession, interest rates on mortgages dropped drastically.  Many people used to have 7% interest rates and they were able to refinace to get around 3 - 4% rates.  That's a big difference.  Wouldn't you want to go back press reset on your mortgage and change it if you could?

Let's Get Weird

So Mrs. Budget and I considered moving to a bigger house.  We decided to stay in our current house for some time because I recently started a new job.  Also, we now have Budget Baby #4 coming, so it's better to have some consistency in the Budget Household.  So an opportunity appeared to fix that lingering pain in my finances: the mortgage.

So I decided that I don't want to make payments to the bank for 30 years and I don't want to pay $80,000 to the bank in interest.  I did some research and some math and decided to get really weird.  The Budget Family decided to change our mortgage from a 30 year mortgage to a 10 year mortgage and from a 5% interest rate to a 3.25% interest rate.  We signed the paperwork on Thursday so it's official now.  Do you know how much money this is going to save us?  If I don't pay extra on top of my mortgage to pay it off quicker, I just have to pay $15,000 in interest.  This is a savings of 20 years and $65,000 of interest.  I would gladly love to keep that $65,000 for myself and not give it to the bank.  Now it's true that my mortgage payment will be going up.  So instead of $731, my mortgage is now $1,056.  But remember the 25% of take home pay.  We're still within that number.  So budgeting allows me to understand that I can take the increase in payments.  Again, that's the beauty of budgeting, it allows you to make these types of decisions and know that you're in the position to afford it.

I know some will say that you can easily just make extra payments on top of your mortgage and treat it like a 10 year mortgage.  That sounds good in theory, but then life happens and most people don't do it.  They make other things their priority and they don't pay extra on their mortgage.  It's like when we talked about tithing, you have to be very intentional about it.  So to me refinancing our mortgage to a 10 year mortgage forces us to be intentional about paying it off quicker.  I'm even planning to make extra payments on top of what I'm supposed to do to get it paid off in under 10 years.  I don't know many people not over the age of 45 who have a paid off house.  30 year mortgages are "normal", maybe it's time for all of us to be "weird".

There's other options other than a 10 year or 30 year.  There's a 20 year mortgage and 15 year mortgage as well.  I recommend 15 year mortgages for people to buy houses with a decent size down payment

I'll have to write another blog post about how to refinance your house and the details around that.  But I at least wanted to give the high level view of what we did and why we did it.

Question of the Day:

How much longer do you have on your mortgage?  Do you have the chance to cut that down?  How about cut it down in half?

Video/Song of the Day:

Until next time........Happy Budget, Happy Life

Monday, January 19, 2015

#prayforpaul Shows Us How To Take Care of Each Other

About a week or so ago, I was asked about what my ideal economic system would look like.  The context was around taxes and my ideas about how our money is wasted by the Federal Government and we have all these programs that are supposed to be "helping people" but don't do that at all.  I shared my opinion regarding how I felt the Government shouldn't be who we look to for helping people.  The I was asked what my ideal economic system would be.  It was a great question that took a minute or two but I quickly had an answer.  It wasn't some new innovative idea, but it was a simple concept that comes straight out of the Catechism of the Catholic Church. and Jesus Christ himself.

What Are We Called To Do?

Socialization also presents dangers. Excessive intervention by the state can threaten personal freedom and initiative. The teaching of the Church has elaborated the principle of subsidiarity, according to which a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co- ordinate its activity with the activities of the rest of society, always with a view to the common good.

The principle of subsidiarity is opposed to all forms of collectivism. It sets limits for state intervention. It aims at harmonizing the relationships between individuals and societies. It tends toward the establishment of true international order.

In accordance with the principle of subsidiarity, neither the state nor any larger society should substitute itself for the initiative and responsibility of individuals and intermediary bodies.

-Catechism of the Catholic Church

How awesome is that?  In a nutshell, the Church tells us that people should take care of each other.  Simple as that.  No appeals to the government at any level should be the first step.  The community is called to take care of each other, for the common good.  This is also supported in the scriptures:

“Teacher, which commandment in the law is the greatest?”  He said to him, “You shall love the Lord, your God, with all your heart, with all your soul, and with all your mind.  This is the greatest and the first commandment.  The second is like it: You shall love your neighbor as yourself.  The whole law and the prophets depend on these two commandments."
- Matthew 22:36-40

So Jesus directly and through the Church has instructed us that we should be encouraged to handles things at a basic level within our own communities and then go out farther for the needs that the community cannot handle.  The beauty of social media is that we can form new communities that are not solely based on geographic location.  So it makes it easier to love our neighbor when he/she lives hundreds of miles away.  We can also discover new neighbors in the community and tend to their needs.

How Do We Do This In Practice?

There's a large social movement going on right now as we speak around one man and his family.  Paul Coakley is a young man in his 30's that is currently battling a very aggressive cancer.  Because of the life that he's lived, he's impacted a large amount of people that he's met during his life in a large way.  These people who Paul know have come together to bring together a community of people to support Paul and his family in their time of need.  This community of people has greatly expanded and become a Facebook page with currently 5,995 likes.  I'm sure Paul doesn't know all of these people but this has occurred through intense prayer and the outpouring over social media channels about his situation.  People who have never even met Paul are discovering who he is and how much he's loved from the sharing of stories about him.

Because he and his wife have chosen a life of simplicity, there's been an outpouring of generosity to help his family with their medical expenses through donations.  There's also a large scale effort to help build his family a home in Tennessee.  From 390 people who've donated, $49,684 has been raised in under a month.  How awesome is that?  How much of a blessing will that money be to his family?  How much of a witness is that to the basic principle that we, the people, have an obligation and duty to take care of each other and have the means to do it.  Not only just through monetary donations, but the prayers keep coming in and are growing on a daily basis.  In my mind, I can picture God the Father and Jesus looking down at us with a great smile on their faces simply saying, "Good job, everyone".

Paul Coakley's Donation Site

The community that has emerged around this man and his family is so inspiring to me.  To imagine almost 6,000 people out there praying for this family as they go through this fight with cancer is a testament of our faith.  It's a great witness to those who don't believe in God, Jesus, faith, hope, charity, Christitanity, or the inherit goodness of people.  How can you see what's happening in this community and not believe that its stamped on our hearts by a higher power?

Paul Coakley gives us hope.  Paul Coakley shows us how we are called by God to love one another.  Paul Coakley gives us the blueprint of how it's supposed to be done.

Many times we look for ways to live out our faith.  Here's a simple way.  #prayforpaul.

No one is asking for the government to step in, we don't need it to.  We can take care of it ourselves and we are called to do it that way.

If you want to learn more about Paul, join the Facebook group and check out my wife's recent posts about him on her blog:

Team Paul and Anne Coakley Facebook Page

Paul Post 1

Paul Post 2

Paul Post 3

Question of the Day:

Have you prayed for Paul?

Video/Song of the Day:

Until next time........Happy Budget, Happy Life

Saturday, January 10, 2015

Our Budgets Can't Afford The President's Promises

So I'll just start with this if you haven't heard yet.....

The official name of this is the America's College Promise Proposal.  Yes, this is the "leader" of our country making a new promise.  This week, I posted an article about how because Obamacare was improperly laid out, many people are going to have to either owe more taxes or have a reduced refund.  This is because the subsidies that paid for the people to have lower premiums were too much.  So that means we gave people too much money.  Where did the subsidies come from?  Us, normal people who pay taxes.  So we have a large healthcare overhaul that's still not fully implemented yet and still getting figured out and now we just introduced a whole new large scale initiative.  I asked Denzel Washington what he thinks about it.  Here's what he had to say:

Breaking Down Our Current Finances

So the federal budget/deficit/debt conversation get's pretty confusion because the numbers are so large it's hard to comprehend.  So I'm going to take the real numbers and rations and bring it down to simple numbers.

Federal spending for 2014 was $3.5 trillion, but it's revenues are $3.02 trillion.  That results in a deficit of $480 billion.  So we had to borrow $480 billion dollars to pay our bills last year.  Our federal debt that we owe is $18 trillion.  So in the history of this country, we've borrowed $18 trillion dollars of money and that number steadily climbs.  To pay off our debt, every citizen in this country would individually have to pay $56,492 each.  That's you, your spouse, your kids, your parents, grand-parents, and every other living person in this country.

Taking the same ratios, let's take the median household income of the average American family which is around $50,000.  Imagine that this family's budget is $57,497.  So they have to borrow $7,497 in the year just to make their budget work.  Also, they have family debt of $257,142.  One thing to keep in mind is that their family debt steadily increases everyday because they keep borrowing money and interest accrues on that as well.

So looking at these numbers, the President is asking for another $595 dollars to spend on top of the $7,497 of extra spending that's causing him to have to borrow money.  So the broke are getting broker.  But it's all for a good cause, right?

It's Okay If It's For the Right Reasons

If you've ever watched the show. "The Office", you may remember an episode called, "Scott's Tots".   One of characters, Michael Scott (played by Steve Carell), promises college tuition to a classroom of third graders.  Then, the day comes, 10 years later, when they're all ready to graduate high school and he doesn't have the money to pay for it.  But he had good intentions, right?  Guess who the Government is?

What's the Problem?

1.) We must realize that the Government isn't a business.  It doesn't earn the money that it receives.  It takes our money, directly from our paychecks.  It also has the authority to take even more whenever it wishes.  We don't get to decide to not pay taxes.  So it's all of our collective money that gets used for these programs.

2.)  As I said above, we're broke.  We have a spending problem.  However, many have come to look to the Government to be an advocate for the people,  They think that as long as it's done for a nice reason, it's okay for the Government to do certain things.  This is totally hypocritical.  The last blog I posted was about tithing and how we can all be better at it.  I mentioned that if you asked someone why they don't give a full tithe (10% of their income), they'd probably say, "I can't afford it".  Guess what, this country can't afford more any more of these "good intention" programs.  For some reason, it's okay for the Government to borrow money to pay for programs that "help people" but none of us would dare do that.  So we can't afford to be "generous" but they can?

3.) Talking about other countries having free tuition doesn't build the case.  Many of those countries also have much higher income taxes which gives their government the extra money to pay for college for their citizens.  So it's not "free tuition" in Slovenia, Finland, Brazil, etc...  No thanks, I don't want to pay more in taxes than I already have to.

4.) The numbers from the White House state that reasonable community college is $3800 per year for a two year degree.  That equates to $317 per month.  Even if you split that over four years to have more time to save, that's $158.50 per month.  It's not impossible to pay for community college.  There's hard decisions to be made.  Maybe you have to pick up a part time job or maybe you have to take an extra shift at work.  You may have to go to your spouse and/or kids and say, "Hey, I need to make some extra money to pay for school so I'm going to have a few less hours to spend with you over the next year or two."  It's a sacrifice, I know.  But it's not impossible and it's not permanent.

5.) If the President said, "we're going to do this through cutting some funding from existing programs" then that would soften the blow.  If he even mentioned entitlement reform, I would jump for joy.  However, I haven't seen that type of proactive approach from the White House.  Either this will get paid for by just adding more spending to the budget or eliminating more "evil rich people tax loopholes" which he's done before.  I hope he proves me wrong.

I'm Not Mean

Some may think I'm negative, but I think it's more like using critical thinking skills.  It's tough to have these opinions because people will label you as an "Obama hater", but I would have the same criticism of any person regardless of political party.  As I stated above, few of us would go and borrow $3,800 per year and go and hand it to someone to pay for their school.  If you did, you'd definitely be looking for higher than a 2.5 GPA.  However we're okay if the Government does it.  Part of the problem is that many tend to forget where the Government's money comes from.  I'm a huge fan of fiscal responsibility and buying things that you can afford.  Yes, everyone has a right to education.  However, I don't feel that I need to borrow money to pay for it.  Is that so wrong?

Question of the Day:

What does generosity mean to you and at what point does it become unaffordable?

Video/Song of the Day:

Until next time.....Happy Budget, Happy Life

Monday, December 29, 2014

How To Create Your Budget and Actually Follow It (Pt. 3) (The Secrets of Tithing)

In the past two posts of the how to budget series, we've talked about some of the initial work to be done to create your family's budget.  Here's the link for part 1.  Here's the link for part 2.  Today, I'm going to address one of the big things that the

Most of us love giving.  It makes us feel better about ourselves and give us that warm fuzzy feeling inside when we do good deeds.  I've been involved with going to church on a regular basis for the past 6 years or so.  In that time, I've found that there's a particular form of Christian giving that throws off a lot of people: Tithing.  I've found that tithing is the golden unicorn in terms of Christian personal finance.  Everyone wants to do it, but most people can't figure it out.  In my opinion, if you ask the average Christian if they would like to tithe, they'd probably say, "Yes, sure".  But, if you ask if they do it and why, you typically hear, "Well, I can't afford that."  So today, I'm going to share my thoughts on the subject.

What If Everyone Tithed?

This is the fun question that I think about all of the time.  What if everyone tithed?  Think about how much money we the people could pour into our churches and non-profit charities.  Imagine a parish of 500 families and the average income was $60,000.  Taking our assumptions.  The average take home pay for that parish is $48,000.  So if every family tithed $4,800 per year then that parish would be bringing in $2.4 million.  Let me say that again, $2.4 million.  Imagine a larger parish with 1,000 active families and an average income of $70,000.  That would be $5.6 million.  What could a church do with that?

1.) Pay staff a wage to allow church workers to only be a 1-income home.

2.) Allows churches to subsidize schools so that private schools are more affordable for families.

3.) Gives churches more money to use for it's outreach ministries and include more charities.  Think about how many local food banks we could stock full for families in need.

This Is the Generation to Do It

I think tithing is especially important for the Generation X/GenerationY/Millenials (born 1974 - 1992) who are in the work force, have steady income, and potential/new/existing families.  The Church is going through some big changes in terms of how it's supported.  I think that the future of churches and their solvency depends on the young people of the Church and how we support her. If you've been following the Church locally, you've seen that there's been major restructuring at the diocesan level and at a local parish level.  Parishes are merging, schools are closing, and it's harder to find affordable religious education.  Some of this is related to parish finances and how churches are losing money because people aren't giving as much anymore.  If we want the Church to continue to grow then these generations need to begin to lead the charge to bring back intentional charitable giving at a large level that will bring about significant change.

What is a Tithe?

A tithe literally means "one-tenth" of something.  If you paid attention in math class, one-tenth is also 10% of something.  In the "olden days" it would refer to agriculture and in modern times we usually mean a one-tenth or 10% of income to be given to charity.

Are We Mandated to Tithe?

We are obligated to offer some type of material support to aid the Church.  However, there's no mandatory fixed amount that people have to give.  In the Old testament, tithing was mandated to the Jews under the Law of Moses.  However, Christians are not obligated to these same laws but we are obligated to give something.

Then Why Do It?

Here's a quote from Pope Francis that really resonates with me:

To the Pope's point, tithing bruises a budget.  Tithing makes you give until it hurts.  10% is a lot of money, let's not lie.  However, it's an incredible witness of being stewards of God's gifts.

I Want to Do It, But I Don't Know How

Ok, so let's get to the secrets of how to tithe.  You recognize that it's important and you want to do it.  So how do you do it?  What's the secret?  Ok, let's get into that.
1.)  It has to be intentional
In order to tithe regularly, you have to have it in your budget.  You can't just continue to reach in your pocket and get a couple bucks out and put it in the offertory basket.  Reaching for a couple bucks doesn't hurt and reaching for a couple bucks doesn't bruise.  It has to become a part of your family and things that you just do every month.
2.)  It has to be the first thing you budget for
In part 1 of my how to budget series, I showed some categories for how to allocate your money every month.  There's no secret that Charity was the first category.  In order to tithe, you have to just put in that 10% of your pay first and then figure out the rest of it.  Think of it as, "The first 10% belongs to God and I'm living off the remaining 90%"  Most people spend all their money on paper first and then figure out and the end that there's no more money for charitable giving.  You have to strike it and reverse it.  Tithing has to be the first thing that's in your budget and then you figure out what to do with the rest.
3.)  Make it automatic.
Also with the budgeting suggestion, many churches now have direct debit capabilities.  So they can make it so that the money comes automatically from your bank account each month.  I love doing this.  It makes tithing a regular thing you just do, like paying your cable bill.  It also has the "out of sight, out of mind" aspect so that you don't have to cringe every month.

Do I Give My Tithe to Just the Church?

In terms of where to allocate the 10%, I've typically seen it broken up into a 5%-4%-1% breakdown.  So 5% goes to charity of your family's choosing, 4% goes to your local church, and 1% goes to the Catholic Social Appeal (CSA) if you belong to the Catholic Church.  The CSA goes to funding the Archdiocesan Central Services offices that support parishes.  If you're not Catholic then it's an even 5%-5% split.

So looking at the math, if I have a family income of $50,000, then take home pay is about $40,000 a year if we do the assumption of 20% of our income going to federal/state taxes and benefits.

$40,000 ends up being about $3,333 a monthly.  So a tithe would be $333 monthly.  Breaking that up into our percentages, it would be $166 for a charity, $133 for the local church, and $34 for CSA.

What If I Have Debt?

Great question.  For us, we didn't give a full tithe until we got out of debt.  We were focused on getting out of debt as soon as possible because we had a $86k of debt and only 2.5 years to do it in in order for Mrs. Budget to be a stay at home mom.  But even then, we still gave 5% of our income and the full 10% was always the end goal.  Even our 5% was still more than most.  I've seen most websites say that only one-third to one-half of Christian families give and those that do only give 1 - 2%.  So even if you're working through debt, you can still have the 10% as the end result to aim towards while you're getting out of debt.  But the goals should always be getting to a full tithe at some point.

Whew, that's a lot of thoughts in one blog post.  To be honest, one of the reasons I started budget was to be able to put us in a position to be able to tithe because it was something that I always wanted to be able to do.  It's not an easy thing to do, but once you get into the habit of regular giving, you'll feel great about it.  I've heard it said that giving is like a muscle.  Initially it's not developed but you have to continue to work on it over time if you want it to grow and develop into a powerful habit.

Question of the Day: 

Is tithing something that you would like to start doing regularly?  What will it take for you to get there?

Song/Video of the Day:


Sunday, December 28, 2014

How To Create Your Budget and Actually Follow It (Pt. 2) (The Budget Meeting)

Yesterday, we started a new series of posts around how to create a budget that you can actually use.  We're going to take the theory away and make it a practical living document that will be part of your family's financial plan.  Click here if you missed the first post from yesterday.

Budgeting Involves Lifestyle Choices

So at this point, we've taken some percentages as a guide to determine what you're monthly income is and how we are spending every dollar that you're bringing in.  So monthly income = monthly expenses.  After we applied the percentages, the next part is doing adjustments based on your family's lifestyle.  This means that you will be increasing/decreasing dollar amounts in each category.  For example, our family yesterday was bringing in $4,667 a month.  We had their recreation budget at $250.  However, they like their Lifetime Fitness membership which is $176 per month for the 5 of them.  Also, they like taking family trips which is around $250 per month.  So they're lifestyle is more like $426.  Unless they find ways to bring in more income by $176 to make up this difference, sacrifices will have to be made.  So they will have to take money from another category to afford their recreation expenses.  There's no special magic involved, just hard decision making.  This has to be done for all of the other types of adjustments that you need to make to the initial budget to make it apply to your lifestyle.  However, remember that the total expenses has to equal the income.  So any budget adjustment increases have to have an equal budget adjustment decrease somewhere else.

The Budget Meeting

Also, with this process at this point, I would suggest having one person create the 1st draft of the family budget.  In my family, it's usually me who crafts a draft of a new budget if we foresee an increase in income or some large expense that is coming.  After I put together my draft of the budget, it has to be brought to Mrs. Budget for approval.  So, in order to make your budget a practical living budget to be followed, both parties have to agree on it.  That means both husband and wife.  This is referred to as the family budget meeting.  If you don't do this then this is what I call a "budget buster".  You end up with two people with different views of the family's expenses who end up doing their own things.

Here's some helpful tips to successfully negotiate a family budget meeting.

1.) Warn the other person that the conversation is coming.  Don't just be sitting on the couch watching Charles in Charge and say, "Oh yeah, here's the budget so you look at it if you want (throws budget at other person)."

2.) Start the meeting when the kids are asleep and the TV is off.  Trust me, you want no distractions.

3.) Both parties need to be prepared to compromise.  If you created the budget, you have to be prepared that some changes will be made.

4.) The person who created the budget needs to be completely quiet after giving it to the other person to review.  Only speak when answering questions.

5.) The person who didn't create the budget will most likely have some changes so listen to them all and then discuss them all in a positive way.  Avoid, "yeah, that's a stupid idea" type of responses.

6.) Do not attack each other and bring up other issues.  Ex.."We wouldn't have all this debt, Mary, if you didn't go to Kohls all the time."  Leave the past in the past.

7.)  Unless you know something that I don't, remember that money doesn't grow on trees.  Your income is most likely fixed.  So what you make is what you make, unless you get another job.  So the person can suggest adding money to the budget in certain categories but that means taking money out of another category.  Usually, that goes like, "Ok, so we can add more money in recreation like you suggested but we need to figure out where to take that money from."  The budget has to stay balanced.

The first meeting or two isn't going to be easy.  Having conversations about money isn't always easy, but it's very necessary.  After a couple times, you'll learn how to communicate with each other about money and the talks will get easier and easier.  But, you have to start somewhere.

Question of the Day: 

Are you in a position to review your budget with your spouse/significant other?

Song/Video of the Day:

Until next time............Happy Budget, Happy Life