Wednesday, August 29, 2007

Our "Needs" Are Killing Us

It's almost time to post my monthly review of how our budget went last month. Let me just tell you, it was Bad. Yes, I meant to use the capital B.

Our plan is to spend less than what we make each month. Our paychecks go into our checking account, we transfer $500 of that to our savings account, and the rest is to be used for expenses. Anything left over is extra money applied toward the debt.

There will be no extra money left for the debt this month, folks. In fact, I'm down to $174 left from this month's paychecks. I know there is one more check of about $135.00 to go through the bank, and my car is out of gas. Green also is going to an overnighter birthday party on Friday night, so there will be a gift for that. But I'm going to do whatever I can to not touch the $500 transferred to savings because I've made a promise to Pool Boy that I will not touch that. This budget plan requires honesty and trust, so I won't do it.

Pool Boy claims there's no way around this. He thinks all of these expenses are justified. Well, I know a heck of a lot of people who make way less than we do and are living just fine. We can certainly live on less than what we are making. We just need to be more focused.

I was listening to a Dave Ramsey podcast on my way to work this morning. A lady called in to get advice on their situation. She and her husband brought in over $200,000 per year, but they were in debt up to their eyeballs - like a million dollars in debt. The next caller made approximately $30,000 and they were $150,000 dollars in debt. Both felt completely hopeless. So it really doesn't matter how much you make. You get in the habit of borrowing money to buy the stuff you think you need to live the lifestyle you "think" you can afford.

Most of America lives well above their means. We've certainly been there - recently. "Need" a new computer? Use the Best Buy credit card. "Need" a new mower? Use the mower company's credit plan. "Need" new carpet? Use the carpet company's credit plan. "Need" a new leather furniture set? Use the company's financing. These examples are all interest-free, but it's still putting us into debt. The craziest thing is, we had the cash to pay for it. Still do! But we've always kept a certain balance in our savings account and it was hard to spend that money. I suppose that's what it's all about. It's easier to spend it if you don't physically have to hand over any money. If I had to hand the guy $2000 cash for the mower, I never would have done it. But sign my name on the line and I can walk out of here with a new mower? No problem. It seems so stupid when I actually type it here.

I'm sick and tired of it. I'm sick and tired of not using the money to better our family, rather than just trying to keep up. I just need to get Pool Boy sick and tired of it too.