Live Debt Free

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Save Money on Black Friday

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Marketers are brilliant, they have convinced us that spending less money is the same as saving money. If you’re like most American’s you believe you save money when you buy things at a discount – on sale. (Thank those brilliant marketers for that thought.)

Now let’s think critically about it.

Spending is not saving

Let’s be clear – spending money is NOT saving money. When you spend money on anything, even with discounts, you are not saving money… you’re spending it.

Saving money means you’re choosing not to spend it. If you buy something at a discount, you don’t save, you simply spend less.

Rather than spending this year, sleep in and save money by skipping Black Friday sales choosing instead to fund your savings account with the difference.

Needs vs. wants

Is there anything wrong with spending money on Black Friday? You’ll have to answer that for yourself, but let’s address a few distinctions.

  1. Do you need what you’re buying? If so, then waiting for Black Friday means you’re planning ahead so you can spend less than normal.
  2. Do you want what you’re buying? If so, make sure all your needs are met, you have previously saved for the item, and have discussed it with your spouse or accountability partner.

So is there anything wrong with spending money on Black Friday? Draw your own conclusion but mine is simple – you can shop Black Friday to get deals on things you need or want as long as you understand the above facts and meet the mentioned criteria.

Choose to save instead

With the vast majority of your media consumption encouraging your to spend I’m happy to give you a healthy opposing option.

Rather than spending, make the positive decision to save. You already know which banks I recommend for checking, saving, and debit card rewards… so open an account of your choosing or fund a savings account at your existing bank.

After all, do you really need what you think you need? Do you really want the responsibility that comes along with more possessions?

Less is more

Betsy and I never considered spending a dime this year. Not because we don’t want anything, it’s more accurate to say we’re learning more possessions means more responsibility. Less money spent on possessions means less maintenance and/or debt. That in turn means less time spent working to pay for the possessions and debt, and more time for other things.

What other things? For us it means more time for love ones, more time for passionate work, and more time for ministry.

How would you focus your time if you had less debt and fewer possessions to maintain?

Gifts and purpose

God gives each of us spiritual gifts to be used for His glory. He also gives us purpose (or calling).

What are your gifts? What is your calling? It’s okay if you don’t know, but it’s not okay if you have never pondered the thought.

“As every man hath received the gift, even so minister the same one to another, as good stewards of the manifold grace of God. If any man speak, let him speak as the oracles of God; if any man minister, let him do it as of the ability which God giveth: that God in all things may be glorified through Jesus Christ, to whom be praise and dominion for ever and ever. Amen.” I Peter 4:10-11

Rather than spending time pondering Black Friday purchases, think about how your time, money, resources, and gifts can be spent serving the Lord of glory. He’ll ask you about it one day, why not have an answer ready?

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How Much Should We Spend

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I get this question a lot because couples often wonder what is acceptable to spend on different purchases.  It’s natural for people to compare themselves to others, but the problem is you do not know everything going on in their lives.  They might make way more or way less income than you think.  Spending is not a sign of wealth!  Most people think a person driving a $60,000 vehicle with a $500,000 house is wealthy, but all it really shows is that they know how to spend money, not that they necessarily have money.  So, here are a few guidelines for knowing how much to spend:

First of all, spend less than you earn

I know this sounds really obvious, but most people (in the U.S. anyway) don’t actually put it into practice.  If they did, we wouldn’t have the debt problem we have today.  That is how debt happens.  You spend more than what you make and use credit cards, home equity loans, payday loans, etc. to pay for it.  So, the best way to determine if you should spend money or not is to ask yourselves if you have the money in the first place.  Not if you can afford the payment, but if you can afford it at all.

Spend less than you make by doing a budget

Unfortunately, many people do not have a clear picture of what they make.  If I asked you how much money you make, you could probably tell me $50,000 per year.  When I ask what your monthly  take-home pay is, that’s a different story.  It often amazes me how many deductions people have taken out of their paychecks when I work with them as clients.  The work cafeteria, short term disability insurance, double or triple the amount that should be taken out for federal income tax, and deferred compensation are just a few of the things being taken out of paychecks.  The crazy thing is, most people don’t even realize or know about these things until someone else points them out.  The point is to know exactly the amount of money you have coming in each month.   That way, you know what amount of money to budget so that you don’t overspend.

Set limits and stick to them

Once you know the amount of money you have to work with, you and your spouse must determine how much is reasonable to spend on each category.  Is $50 each per month enough for blow money to spend on whatever you want?  Maybe $100 each per month is more reasonable.  The same goes for other categories.  Your income and your fixed expenses (mortgage, taxes, etc.) will help determine the amounts.  The most important part is to set those limits and then stick to them.  A budget on paper is worthless unless you actually live by it!

In case I haven’t mentioned it yet, don’t spend more than you make.  It really is that simple.  Is it easy to do in our culture?  Absolutely not.  But it is simple.  Follow the above guidelines and you won’t have to guess on what you should spend, but rather you will know.  Tell your money where to go instead of wondering where it went!

Break Out of Your Personal Finance Slump

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This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide. Follow them on Twitter at @gobankingrates.

Personal finance can be very exciting. Unlike most things in life, the results of your efforts are crystal clear. If you’re working hard to battle your debt, you see the little increments of every dollar you pay down in the short-term. Over the long-term, you see the giant leaps you’ve made since you started your plan. The same goes for saving money. The experience of knowing that you have your finances in control can be very rewarding.

Yet, even the best of us sometimes lose track of our budgets and indulge in a little overspending. That’s usually not a big problem, but if you start cutting yourself too much slack too often, you run the risk of negating all the time and hard work you put into getting yourself fiscally fit.

Motivate Yourself Again

If you feel you’re suffering from personal finance burnout, set some time aside to regain your motivation. Whether you’re trying to pay down debt or save money, the key to personal finance is all in your desire and discipline. Once you lose sight of that, it’s very easy to fall back into bad habits that leave your debt spiraling out of control and you living paycheck-to-paycheck.

Matt’s note: Remember… those in the midst of financial slip ups need not be the only readers taking this to heart, others who can benefit greatly are those like myself, who have reached a financial plateau but could take things to the next level.

Ask yourself these questions again. Maybe your motivation has waned because you don’t remember the answers to them:

  • Why are you saving money/paying down debt? Maybe you’re saving for retirement or a house. Or maybe you’re paying down debt to build your credit score or so you won’t have to worry about interest piling up.
  • Why is it important to you? Only you can answer this question and that’s what makes it more special. The reasons are for no one else but yourself.
  • What are your goals to help you get there? Be realistic. If you set the bar too high, you can easily get discouraged when you don’t clear it. Aim low and accomplishing your goals won’t feel very significant.
  • How do you plan to accomplish these goals? This will serve as your guideline to follow as you execute your plan.
  • When do you want to accomplish them? Give yourself a deadline so you won’t put it off too much. Stay disciplined.

Use your answers to these questions to refocus your strategy and regain your motivation. The most important part to personal finance success is to want to succeed. As long as the want is there, the rest should fall in place.

Take Control of Your Money

Just like the way you can see your personal financial successes, you can also see your mistakes. It’s clearly listed for you in your bank statements and credit card transactions. Take these steps to get back into the driver seat:

  • Own your mistakes: It’s never easy to have to look back at your spending binges. It’s easier to just forget them, but you need to face them head on and identify what you did wrong and how you will prevent that from happening again. Analyze your spending habits.
  • Talk to someone: The buddy system works. Find a friend who’s also trying to get their money right and talk about your challenges and ideas. You can try seeking professional help like debtors anonymous meetings or a debt relief specialist if you feel the need. There are many non-profit organizations out there that can help as well.
  • Celebrate your wins: Fighting debt or saving money is about fighting a bunch of small battles that add up to a greater result. Take joy in those little wins and carry that momentum into the next one. It all adds up in the end.

So whether you’re saving cash for a big purchase or trying to pay off debt because of one, remember that money is only a means to getting what you really want. Don’t think about it as little green sheets of paper or just a number you have to monitor. Think of it as one step closer or farther away from your real goal.