{"id":414,"date":"2011-08-29T06:45:55","date_gmt":"2011-08-29T10:45:55","guid":{"rendered":"http:\/\/blog.beliefnet.com\/godonomics\/?p=414"},"modified":"2011-08-27T10:11:42","modified_gmt":"2011-08-27T14:11:42","slug":"budgeting-stop-the-bleeding-and-arm-the-photon-torpedoes","status":"publish","type":"post","link":"https:\/\/www.beliefnet.com\/columnists\/godonomics\/2011\/08\/budgeting-stop-the-bleeding-and-arm-the-photon-torpedoes.html","title":{"rendered":"Budgeting: Stop the Bleeding and Arm the Photon Torpedoes"},"content":{"rendered":"

How do you find economic and inner freedom? \u00a0 How do you get ahead? How do you wrastle (that’s wrastle<\/em>, not wrestle, if you say it with a southern accent it helps) the\u00a0squealing\u00a0pig of a budget and your spending. \u00a0Budgeting is not easy. It’s not usually fun… not initially! \u00a0However, when you learn how to work within a budget… when you begin to find the freedom it offers… you can’t imagine how you ever lived without it. \u00a0 A budget doesn’t make you less free, it makes you more free, more prosperous, and ultimately more generous.<\/p>\n

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Step 1: \u00a0Find Out Where You’ve Been.<\/strong><\/p>\n

I have counseled with couples for years (six figure, five figure, and less) and the first step to a new financial destination is knowing where you’ve been. Where has your money been going? Pull out a pen and paper and track your spending… every single penny for 30 days. \u00a0 \u00a0Most people (rich, middle class, poor) are shocked to see it on paper. If paper is too hard, buy a version of Quicken starter edition. It will sync up to most bank accounts. In about an hour of categorizing, you will have a bar graph displaying in rainbow colors where “it” is all going. \u00a0Many are shocked at how often they go out to eat. Others are shocked at how much is being funneled to debt (house, car, credit cards, college loans). Some are shocked at how much going to the movies twice a month looks like at the end of the month. \u00a0 \u00a0Bottom line: Until you know where you’ve been, you won’t know where you are going. \u00a0 I have tracked my finances with an envelope system since I was a kid, but was shocked when I uploaded Quicken for the first time. I was able to see -not where I thought I was spending it- but actually where it was ending up. Jesus instructed others to sit down and “count the cost” of where your money is going before you embark on a new project.<\/p>\n

Luke 14:28<\/sup> For which of you, intending to build a tower, does not sit down first and count the cost<\/span>, whether he has enough to finish\u00a0it\u2014\u00a029<\/sup> lest, after he has laid the foundation, and is not able to finish, all who see\u00a0it begin to mock him,\u00a030<\/sup> saying, \u2018This man began to build and was not able to finish\u2019?<\/em><\/p>\n

Step 2: Build up a “You’ve got to be kidding” Account<\/strong><\/p>\n

We are all shocked when tragedy strikes. It may come in the form of a broken muffler, a busted dishwasher, or an emergency doctor bill.\u00a0 But we all have those “you’ve got to be kidding” emergencies. \u00a0We need money set aside and put into a “you’ve got to be kidding” account to be ready for those moments. An account with at least $1,000.<\/p>\n

Jesus told us to be ready. \u00a0John 16:33 “In the world you will<\/strong> have tribulation”<\/em><\/p>\n

Peter told us not to be surprised when bad stuff happen. \u00a0 \u00a01 Peter 4:12<\/sup> Beloved, do not think it strange<\/strong> concerning the fiery trial <\/strong>which is to try you, as though some strange thing happened to you;<\/em><\/p>\n

Financially, a “You’ve Got to be Kidding” account is a very practical and Biblical way to put these warnings into practice. Peter tells us that we should stop kidding ourselves and wishing away tragedy. It will happen, so prepare for it.<\/p>\n

Step 3: Stop the Bleeding and Pick on the Little Guy<\/strong><\/p>\n

When you see all the debts and credit cards you’ve accumulated, you need to stop the bleeding. Tear up, cut up, and shred the credit cards. Stop the bleeding. Stop them from adding to the problem. \u00a0 I’ve taught my kids for years to call all credit cards, “A trap!” \u00a0Since they were 4 or 5, I’d hold up a credit card offer that came in the mail and ask, “What is this kids?” \u00a0They’d respond, “A TRAP!!” \u00a0While that may seem extreme in practice, I want them to be very very cautious of the trap credit often becomes.<\/p>\n

After you’ve stopped the bleeding, then pick on the little guy. Find the credit card with the smallest balance. \u00a0Stop eating out. Stop going to movies. Cancel the Cable TV. Have a Garage Sale. Cancel all vacations. Get a second job. Then take all that “new” money and pick on the little guy. Pay off the credit card with the\u00a0smallest balance\u00a0as fast as possible. \u00a0Why the little guy? Because it will be the easiest to pay off. Whether it takes 3 weeks, 3 months, or 3 years. The littlest will be the easiest to pick off first. \u00a0 That will give you both hope and the emotional taste of freedom.<\/p>\n

Step 4: Arm the Photon Torpedoes<\/strong><\/p>\n

Now with the little guy paid off, take on the newest little guy debt. Take all the money that was going to the previous card or bill and “arm the photon\u00a0torpedo” (Sorry for all you non Star Trek fans\u00a0who miss the allusion here). Fire all the money that was going to the previous bill at the second bill. You now have double the fire power to attack the debt monster, to wrestle this credit card cruncher. \u00a0 This will take diligence. This will take wisdom. Keep your eye on the target.<\/p>\n

Proverbs 24:3<\/sup> Through wisdom a house is built,\u00a0And by understanding it is established; <\/em> 4<\/sup> By knowledge the rooms are filled\u00a0With all precious and pleasant riches.<\/em><\/p>\n

There are many more steps to financial freedom, but these four are a mouth full. Work the steps!! They work, \u00a0IF<\/em><\/span><\/strong> you work them. \u00a0They don’t work, if they just mold in your head like leftovers in a\u00a0refrigerator.<\/p>\n

For a free 30 minute first session of Godonomics, check out:<\/p>\n

http:\/\/www.godonomics.com\/watch-session-1<\/a><\/p>\n