Financial Fundamentals To Adopt

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How Can We Improve Our Finances?

Each morning as I open my email this is a question I’m starting to see more and more of – “I read your site, here’s our situation, how can we improve up on it?”

Yesterday was no exception.  Wendi in NJ is a DFA reader, a wife, and a stay-at-home-mother – not necessarily in that order!

Wendi wrote:

I’ve read just about everything on your website.  It’s been a wonderful “kick in the butt” for me and ultimately for my husband and family.  So, thank you.

My question for you is one that we’ve struggled with for a very long time and will continue to struggle with until we can figure out something different. 🙂

My husband is self-employed.  Right now, I’m putting about $700/month away in savings.  I have an automatic withdraw into two Capital One 360 accounts.   Since March I’ve managed to save about $5000.  It’s been quite easy and unobtrusive in our lives.  No one really knows but me.

When my husband has a slow week or travels on business and doesn’t work, we don’t get paid, of course.  We struggle to be organized enough to not fall behind in our monthly payments.

I’m a SAHM and homeschool 4 of our 6 children with another on the way.  We do have quite a bit of credit card debt from a “flip house” gone wrong.  Lesson learned. 🙂  We’re working on all of that.

If you could pass along any advice to help us improve our financial situation it would be greatly appreciated.

Wendi in NJ

Steering Toward the Scriptures

Never fully knowing anyone’s situation, I will always point them to the bible.  My general and solid suggestion is to read Proverbs every day.

Here was my advice to Wendi:

Hi Wendi,

Thank you for the thoughtful message… I always love it when people take the time to write and say hi.  🙂

I would be remiss if my advice to you was anything other than encouragement to focus on Christ and his word.  Like Solomon said in the last 2 verses of Ecclesiastes:

“Let us hear the conclusion of the whole matter: Fear God, and keep his commandments: for this is the whole duty of man.  For God shall bring every work into judgment, with every secret thing, whether it be good, or whether it be evil.”

Most of the time we all focus on making money instead of focusing on why God put us on this earth.  We are all here for a reason, and we all have been given gifts, health, time, and resources – the question is – what are we doing with them?

So open your bible, make sure you and your husband are aware of each others spiritual gifts, then encourage each other to walk more closely with the Lord.  If you want SHEER wisdom, read 1 Proverb and 5 Psalms every morning.  If that is too much, just do 1 Proverb… you will not believe the sound financial wisdom you’ll find.

I hope this helps Wendi, and I hope that God blesses you and draws you closer to Himself.


What additional advice do you have for Wendi?

I will list a few specific and general steps people can take to improve their overall financial situation, but would REALLY like to see some DFA readers pipe up with some solid advice for Wendi that I may have overlooked.

Other Specific Ways to Improve Finances

The more of these financial fundamentals we use, the better off we stand to be.

  1. Read the bible – In and of myself I lack Godly understanding, knowledge, and wisdom.  The Lord promises us in his scriptures that if we obey his word and ask for his help, he will in no wise turn us away.  The bible says we should seek knowledge and wisdom more than fine silver and gold… so this is always the first place I point people.
  2. Get on the same page – If you have a spouse, this is paramount.  Most of the time one spouse will handle nearly all financial family matters – this is fine, but at the very least you need to be on the same page.  I highly recommend attending Dave Ramsey’s Financial Peace University together.  I eventually hope to have my own curriculum, but right now Dave’s is the one that I recommend.  You can also read finance books, but this step is about getting on the same page with your spouse, and Dave’s program will help you do that… it helped my wife and I.
  3. Budget your money – Your money is going to go somewhere, wouldn’t you rather tell it where to go?  I know I would.  This was a concept that escaped me much of my life, which is probably why I am on a debt free adventure today.  I will not lie, it is hard – but only at first!  Once you get your budget in place (it took us several months) it is one of the most peaceful places to be.
  4. Formulate financial goals – Again, you need to tell your money where to go.  Do you have savings goals?  Do you know what you are saving for?  Do you know how long it will take you to become financially free?  Do you want to be debt free?  These are all questions that you need to answer ASAP.  Sit down with your spouse and write down your answers.  Remember that these are living answers… you can – and should – tweak them as time goes by.
  5. Give more – I am a firm believer in giving and think we could all stand to give more.  It is important to give your time and to give financially.  Nearly all financially successful people are huge givers… I was very happy to read in a 2nd email from Wendi that her and her husband are involved in giving – way to go Wendi!  We all need to start doing the right things if we want to start seeing the right results.
  6. Read more – None of us know all that we could or should, and that is because we have become a society of TV watching couch potatoes instead of a society of learned readers.  That needs to change.  Remember… readers are leaders! If you have very little time for reading, then read the bible, but think about making more time for reading.  Turn off the TV, get yourself a few good personal finances books, and cozy up to them with a mug of hot cocoa!  Mmmm, doesn’t that sound good?  🙂
  7. Spend less than you earn – This is what having money boils down too.  It is really this simple, DO NOT over complicate the situation.  If you spend less than you earn then you will eventually be out of debt and saving for the future!

Did I Miss Anything?

Is there a solid concept that I forgot to mention, or do you have any specific advice for Wendi?  Please do not hesitate to help her and her family out by leaving a thoughtful comment… I know she will be immensely appreciative!

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1 Frugal Dad

In the past, something that worked well for us when we had irregular income, was we reversed the automated withdrawal process. We determined an amount that we could live on comfortably and had that amount transferred from ING savings account to our local checking account every two weeks (it felt like a salaried paycheck). Any earnings from self-employment activities went back into the ING account at the end of the month, after taxes and expenses were set aside separately.

On good months, our savings balance increased a bit. On bad months, our savings balance decreased some. Either way, our “living wage” never fluctuated, making budgeting for household bills much easier.

To pull this off, I recommend a solid savings balance specifically for this purpose. Think of it as a “business emergency fund.” You might continue what you are doing until you reach $10,000, for instance, and feel comfortable drawing down $4,000 of that a month (assuming $2k biweekly withdrawals) before replenishing.

2 Credit Card Chaser

Great advice! When I first started working for myself I had a very irregular income (aka “none” at first! 🙂 ) but now paying myself a salary makes the budgeting process much easier.

3 Matt Jabs

That is fantastic advice. It assumes a budget, which I think is paramount… especially for the self-employed.

4 Robert Espe

Frugal dad gives good advice, you need to decide how much you will live on each month, and stick to it no matter how much “extra” money comes in.

Keep a spending journal, and start using envelope budgeting (real envelopes or software like Crown Money map or Mvelopes).

You said you have $5k saved, that is excellent (but do tell your husband). Now decide how much of an emergency savings pad you need (I would recommend $3k while getting out of debt) and apply that surplus to your credit card principal.

Once that is gone, move on to the next debt. Once only your mortgage remains, increase emergency savings to $10k. This will keep you from ever having to go back into debt.

Finally, if you have been investing (retirement, college funds, etc.), stop adding to them until you are out of debt. Whether to invest before or after paying off the house is a personal decision, but it is extremely unlikely you will consistently make more than you pay in interest on any other debt.

Best of luck, keep up the good work.

5 Kevin@OutOfYourRut

The fact that she was able to accumulate $5000 in seven months is outstanding. She is a stay at home mom, and clearly has a strong money sense and the ability to budget and save. The foundation is in with this family.

She needs to tell her husband about her saving and get him on the same page. We can guess that all of the money was saved from her efforts; bringing her husband into the effort should only improve the results.

Since her husband is self-employed and the family’s only means of support, they should work to accumulate at least 3 months living expenses (6 is better) as soon as possible. They’re playing with fire otherwise.

Once there’s 3-6 of breathing room tucked away, then attack the debt without mercy.

On the cash flow side, I completely agree with Frugal Dad. I do contract work and get paid in lump sums, then have to budget withdrawls like a weekly salary. That forces you to be more careful when the windfall comes in.

6 Ann

agree that a substantial emergency fund needs to be in place because she is SAHM and husband is only income at this point. Then focus on paying off the debt as well as she was focused on saving.

7 Lydia aka Ms. MoneyChat

i agree with frugal dad. setting up a “salary” is a great idea.

8 James


I don’t know if this always gets covered, but one thing to do is consider starting a business on the side. There are some things dog walking, or plant leasing and delivery that don’t necessarily take a whole lot of time but do add a couple of hundred to the bottom line.

Another thing to consider is an investing strategy that results in passive income. For example there are several good bond funds that give a 4% yield, and one could also consider investing in canadian energy trusts that pay 7 to 8%.



9 Wendi

Hi. It’s Wendi.
Thanks for the advice. I did want to add that I have told my husband about the savings. 🙂 What I didn’t include in the original question was that if my husband knows how much I have saved, he expects me to use it when we really don’t need to. So, I tend to not remind him very often.

I appreciate the compliments and encouragement. I have had businesses on the side, in fact, that’s one of my hobbies. I stopped working as hard because I’ve had some complications with this baby we’re expecting. But, I come from a entrepreneuring family and I agree that small at-home businesses are a great addition to any family and teach children how to work and think for themselves.

I appreciate also the thought about having a large savings since my husband is the only source of income at the moment. That was something I had never thought of.

Frugal Dad–great idea. We just need to build a bigger savings, but I’m loving the idea. Thanks so much.

Y’all are really great and I do appreciate the support.

10 Matt Jabs

Hey Wendi, thanks for popping in. Yeah, what FD said was solid advice – is this something that you think you will be able to implement? Do you have a working budget?

11 Wendi

I’ve been talking to my husband about FD’s idea. He really likes it. At this point, $5K in savings is about 1 month’s worth of expenses for us.

We do not have a working budget. I’ve been working on a priority list budget as per Dave Ramsey’s advice, which has helped tremendously to stay on top of the mortgage and vital utilities. I’m happy with my progress with that and my husband is also completely on board.

I’ve chatted with him about us sitting down together with both our laptops open and pencil and paper at least once a week to see what the other expects in regards to expenses. He has business expenses and taxes that he must pay and often forgets. I need to know what is on his mind and shoulders so that I can be more supportive and if necessary tighten up the bootstraps during a rougher patch for him.

So, my feeling is that the priority list has helped me put the most important expenses up front and easier to pay even. The savings is about $700/month which represents more than 10% of our monthly expenses. That’s automated through ING right now. That’s a good thing. Credit cards are out of control. We’re not using them, just trying to find an organized way to make sure we’re paying them. Yes, there are that many. I know it can be done, just trying to figure it out. Most are on an auto-pay feature, some are not and those are the ones confusing me.

I appreciate the comments about turning to the Lord to help with fear. I’m really grateful for this forum. Y’all have been great with suggestions and encouragement. So, much to think and pray about. It’s real world advice. I’ve been searching in so many places for real world answers and it’s just so great to have other suggestions and experiences to draw from. Thanks again!!!

12 Financial Samurai

Some good advice from FD. I guess it’s all about smoothing out your income stream. Take the average monthly income of your husband over the past 36 months. Every month when income is over that, bank it. Then draw down that income when income is below that.

A simple spreadsheet calculation should suffice! Good luck!

13 David @ Inexpensive Gifts for Men

The first two suggestion (which in my opinion are THE most important if you’re married) are where my wife and I went wrong when we first got married. Firstly, we were/are both Christian, but we weren’t nearly as mature as we are now, so our focus would waver from God. This leads directly to your second point of being on the same page. This starts with both of you focusing on God. With this as your foundation, it’s easier for both of you to make every decision together including budgeting.

I have degrees in economics and finance, but we got behind on bills and had bad credit in the beginning, because we weren’t on the same page!

14 Mrs. White

It sounds like she has a good amount of savings right now. I’d start working on paying off the debts.

I would also make sure both husband and wife were aware of financial decisions. It sounds like her husband doesn’t know about the savings? Or maybe I misread that part….

I would also stop worrying about trying to earn money (in risky situations) and just slowly and methodically work on getting rid of debt in order to be financially free of that kind of slavery.

15 Matt Jabs

I really appreciate how you mention a focus on getting out of debt.

This year alone we were able to make a $30,000 swing – and that is NOT including the earnings from my side hustle!

I call it, “Giving Yourself A Raise.” Click that link if you want to listen to Flexo interview me about the concept.


I also must say that Frugal Dad’s advice is excellent.

And the fact that she’s saved the $5k is also a very important and positive sign.

Matt listed some great resources too and I especially like his focus on G-d. When I forget about this , I just get wrapped up in the wrong energy. When I get down on my knees and pray for guidance and to be of service, the direction seems clear.

As long as I remember it’s not about ME and MY FEAR, I can take good direct action – like the ideas presented before me.

17 Olivia

Since my husband and I are exact opposites tempermentally, we’ve found praying about our finances together as we work through the budgeting process brings us closer to one mind. He is a spender, I’m super tightwaddy. Over the years, his ability to enjoy his earnings has rubbed off on me a bit, and my write-it-all-down and save-for-it-first budgeting ways has influenced him. A side benefit is we’ve grown to appreciate each other’s perspective and enjoy the differences more. His insistance on each of us having a small bit of personal spending money ($10 a month) has been a real blessing even in super tight times. A bit of mental space. So he can buy a book or sodas if he likes, and I can save for something bigger, and the kids can put it towards a couple hot lunches at school, or add to their clothing budget to get something trendy .

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