Gather Little by Little

The good news is you already know the first step to getting your finances under control. Recognizing your finances are out of control and choosing to take steps to solve the problem is the first and most critical step of fixing your financial situation.

The ability to effectively manage your finances has little to do with your ability to understand stocks, how to calculate interest rates, understand inflation etc. While these items are helpful, understanding yourself is the most important part. Financial problems are generally related to your behavior and your ability to control it.

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Not sure where I heard this one, but somewhere along the line I picked up the phrase “2×4 in the forehead”. For those that may not know, a 2×4 is a 1.5”x3.5” piece of wood that comes in varying lengths. Yes I know, it really isn’t 2” x 4” and I have no idea why but regardless it’s called a 2×4. 2×4’s are frequently used in the construction of homes and in particular the studs in walls.

Anyway, getting hit with a 2×4 in the forehead would be a highly painful and attention grabbing experience. Suffice it to say, this would not be something you would necessarily enjoy or want to occur, but it would certainly get your attention.

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Disposable Income is defined as the amount of income you have after taxes (i.e. federal income tax, state income tax, city income tax, social security and Medicare).

Disposable income is frequently confused with Discretionary income, which is your Disposable income minus any fixed expenditures such as housing, food, car payments, insurance, etc.

Be aware, these two terms are often used interchangeably, and you’ll really need to read the article to determine the true definition.

What I call Life Basics are the following:

• Housing or shelter
• Food
• Clothing
• Transportation

These are the items or expenses that above all others, must get paid first. Life Basics are used in the following scenarios:

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• When you have an income that varies from month to month. In your budget, you pay your Life Basic expenses first, then other expenses.
• When you are faced with a major financial crisis and can only pay some of your expenses and bills and not all of them.

If you are like millions of people in the US, you:

• Make $36,764/year
• Carry more than $8,000 in credit card debt
• Have 8 credit cards
• Owe at least one car payment, and most likely two each month
• Have a mortgage payment that is more than 25% of your income
• Have 1.3% of your Disposable Income in savings

With these kinds of numbers, chances are you’re living paycheck to paycheck and at the end of month wondering to yourself, where is my money going?

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As you may or may not have read on the About Us page, my family is going through some severe trials and tribulations. During this time, I decided to do three main things:

1. Get control of my finances and manage them as God wants us to
2. Read the bible cover to cover, something I have never done.
3. Share what I have learned

Proverbs and Psalms are two of my favorite books of the Bible. Proverbs contains an enormous amount of wisdom (hey it should, after all Solomon did pray for Wisdom and God gave it to him).

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One of the questions I get asked frequently here on Gather Little by Little is “What is RSS?”. To answer this question, I thought I would write up a very simple explanation.

What is RSS?

RSS stands for “Really Simple Syndication”. RSS is a web feed format used by blogs and websites to publish frequently updated content such as blog entries, news headlines or podcasts. RSS is basically a specialized format for blog posts that can be consumed and displayed by RSS readers. The main benefit of RSS for readers is that it allows you to aggregate all of your favorite websites and blogs to one place, keeping you from having to visit your favorite sites individually.

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