Gather Little by Little

Sometimes you have to eat crow.

For the last three years, I promised myself and anyone else who would listen that our family would never buy a house again. This stance was mainly due to all of the trouble that we had selling our house after moving to Colorado. Well, it turns out that during our search to find a more affordable rental property, we stumbled upon a home that we intended to rent, until we crunched the numbers and realized that it was actually cheaper to buy. Okay, we are not buying exactly, but in the United States, renting-to-own from the bank is commonly called “buying” a house. We are just changing landlords, I guess, but hoping to build a little equity in the process.

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I was a little late in getting our 2011 family budget put together for this year, but better late than never, right? Well, it is up and running, but what I discovered is that since we have kept a budget for so long and because our budget has stayed relatively static for so long, we can function for a few months without looking at it daily or even weekly. I am in the middle of entering our information from January and February and even though I have not completely filled in all the numbers, I have a rough idea of where we stand simply by having a general idea of our “intake” and “outflow”.

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What is a budget?

A budget is a visual representation of your financial priorities. It is a plan for dealing with the money that flows into one’s household and a plan for how that money will flow out of one’s household. It is a systematic plan for the expenditure of a fixed resource, such as money or time, during a given period.

What purpose does a budget serve?

A budget sets financial goals.

A budget shows the small steps needed for a long journey.

A budget represents potential.

A budget will help you to organize family financial discussions.

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It is one thing to be put on The Rack for no fault of your own, but do not go there voluntarily!

I receive credit card offers for cash advances in the mail on a regular basis. The offers are almost always terrible – interest rates in excess of 20% and fees on top of the interest! I recently was sent an offer with a 23% APR and a fee of 8%, what a deal! The most significant aspect of the credit card cash advance offers is that they do not seem to be meant for a specific expense. The cash advance is simply that – the bank hands you money and you hand a whole lot back. These types of offers are not for a car or home loan, there is no asset or collateral attached to the cash advances, the money is just “emergency” or “fun” money at usurious interest rates.

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During the month of February, McDonald’s put on a “free coffee” promotion. Since I always start the day off with a little hot caffeine and since I am not all that picky about my coffee, I usually took advantage once or twice a week during the last month. Two bucks for a sandwich, hash brown and small coffee -no cream, no sugar- was too good a deal to pass up.

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