In God We Trust

Teaching You How to Get OUT of Debt and Live Debt-Free

Archive for the ‘Discipline & Habits’ Category


by Sandi

Actually, John was talking to me a few days ago and said, "Eventually, stuff becomes junk."  I’ve been giving a lot of thought to those words over the past few days, and it is such a true statement.  Not willing to just mull it over myself, I have speculated with others. and no matter what stuff you have, in the end it becomes junk.  My friend pointed out that things like family heirlooms, photographs, and great paintings never become junk.  The truth is, that even these precious items will eventually reach someone that sees no value in them and simply disposes of them. 

Think about when your great aunt somebody passed away, and her great nieces and nephews cleared away the accumulations of her life.  Photo albums, clothing, and an entire household of collectibles and possessions were offered up in an estate sale.  What was left was donated to charity and hauled to the dump.  Stuff becomes junk. 

I, myself, have a lot of stuff that is still brand new, and is already becoming junk.  I have a bolt of upholstery fabric that I purchased about 15 years ago to re-cover a favorite couch.  I didn’t get around to it right away.  Even though the fabric is brand new, and the highest quality I could afford, the couch it was intended for is long gone, and the fabric is so out of fashion.  My fabric is very close to becoming junk.  In fact, it already is, but I just haven’t admitted it yet.

I have other stuff rapidly turning to junk.  A pretty dress bought for a Christmas party years ago, and now a size too small.  Then there are some shoes that I loved, but they always hurt my feet, so I haven’t worn them in at least a year. 

I have craft supplies to make things that no one wants, and tubes of fabric paints that have dried out.  Clothes no longer in fashion.  Decorative pillows that are faded or the wrong color.  Yard and garden accessories and tools rusting away. 

Once, all these things were things I wanted so badly that I traded money for.  In some cases, I put the purchases on my credit card.  At the time it didn’t even cross my mind that I was just buying stuff.  What if I had just given a few minutes thought to all those things I purchased.  Looked forward a bit to try to figure out if that stuff was going to become junk before I even got a chance to enjoy it. 

What if you gave a bit of thought to your purchases.  You are purchasing stuff that eventually become junk.  Is this junk something you are willing to get into debt to own?  Try this for a few weeks or months.  Before you purchase something, try to figure out how long it will take before it becomes junk.  Then ask yourself if you really want it?  I’m betting that you will develop a whole new attitude about buying stuff.  And, if you buy less stuff, you will be able to accelerate getting yourself out of debt and saving for things that are really important.  Things like a college education for yourself or your children.  Things like donating money to help animals or people in need.  Things like a home for your family or a vacation that your children will never forget.

Stuff becomes junk.


It’s that time of year, again. Time to make Resolutions. No time to break them, but let’s make some good ones we can keep.

Organizing your Financial life is easier than you think. You don’t need fancy software or organizers (although having them is helpful), just some basic tools. In our counseling, disorganized financial lives are at the heart of our clients’ problems. They aren’t organized, so they don’t know where they stand, or where they are going.

Your 4 Organizing Tools are:

  1. Bill Place
  2. Checkbook Register
  3. List of Bills
  4. Financial Health Report

Bill Place

The FIRST organizing tool is a simple place to keep your bills. They can easily get lost with the associated late fees and hits to your Credit Scores. You need to designate a place where ALL your bills, and ONLY your bills go.

Every day, when your mail arrives, you take your bills and put them into your Bill Place. It’s also a good idea to sort your mail over a trashcan, too, so you can discard all those wonderful offers you get. (Trust me. They only want your money. Trash them.)

Your Bill Place can be an envelope, a drawer, a shelf… as long as it is exclusively devoted to your bills. Mt Bill Place for the past 20 years has been a plain manila file folder with “Bill Place” in big letters. I’ve taped up the edges and the seams, and it still holds all my bills. You can get started with a large envelope or folder.

Now that you have a Bill Place, go gather up every bill you can find. Get them from those drawers, shelves, cupboards, even the dirty laundry. (Yes, we’ve found them there.) Put them ALL into your Bill Place.

List of Bills

Now, you need a place to write down your bills so you can see them in the larger sense, instead of just one at a time. A cheap, spiral notebook is perfect. I get them every year during school supplies sales for less than a quarter. Any notebook will do for now.

Skip a couple of pages. (I’ll go into these pages in a later post.) Write today’s date at the top of the 3rd or 4th page.

I’d like you to sort your various bills into a few piles: Credit Cards and other debt, Utilities, and Misc. Open them all up. Find the latest one for each bill.

Write the Name of each Bill down the left side of the page.

For all your bills, write across the page for each one, the Total Due, this Month’s Minimum, this Month’s Interest and Penalties, the Due Date, and a Star if it is past due. You can find the Interest and Penalties as “Service Charge” or “Interest”. You’ll want to know the total amount your dis-organization,¬† credit cards and debt are costing you each month.

Now, you have a List of Bills you can use each time you sit down to pay your bills. You can use this to see your big picture, and make decisions about who to pay how much and when.

Scratch off the bills when paid.

Repeat each month.

Checkbook Register

You got one of these when you opened your checking account. It is that grid-looking thing that you are supposed to keep track of your checks and deposits. You probably do a lot of online banking, or use the ATM to check your balances periodically.

Without a running list of checks, withdrawals, charges, and deposits, you are bound to run into trouble sooner or later. Find it and get it out and put it back into action.

Start where you are now. Write down every check you write. Mark down every ATM cash withdrawal you make, every deposit you make, and, in an advanced move, every Credit Card charge you make. You don’t have to do the arithmetic each time you make an entry, but you should do it every few entries, at least.

With this running total, you will see another side of your financial life – your streams of cash-flow.

Financial Health Report

This is normally called a Net Worth Statement, but, for many, it could be a Net Worthless Statement instead.

What You Own

Use the next page in your list of bills to list all your assets at the top. By assets, I mean what you own. Your cash, bank accounts, savings, 401k’s, investments, house, cars – things worth something. I don’t mean your “stuff” because most of it isn’t worth nearly as much as you think it is. Leave off your clothing, furniture, collections, and other “stuff”.

Total it up.

What You Owe

Now, list all your debts. You can find that nymber from your List of Bills. Don’t bother to include utilities or any current bills like your last dentist visit.

Total all that up.

What’s Left

Now, subtract what you owe from what you own.

What’s left is what you leave to your kids if you die tonight… It is Your Net Worth, or a measure of your Financial Health. If it’s Negative, you are probably¬† in some trouble, and have some tough work ahead of you to get solvent. If it is positive, you aren’t necessarily in good shape, but you’re probably better off than you thought.

Do this Financial Health Report each month for a time to track how your financial life is progressing.

Next Steps

You are now well on your way to being Organized in your financial life. That is the first step. Your Next Strp is to set some financial goals and then make a Spending Plan for getting there.

See you next time.


Actually, saving money is much easier than making money, and the end results are even better. 

Consider this:  You are shopping and see a shirt on sale.  It’s not your best color, but you do have at least three pairs of pants it will go with, and the price is unbelievable.  It was normally a $40 shirt and is now just $10!  Even though you don’t have cash with you, you simply cannot pass on this deal, so you dig out the credit card and purchase the shirt immediately saving $30!  In actuality, you didn’t save anything.  You spent $10 on something you didn’t need.  Unless you pay your entire balance on your credit card purchases by the due date, you will also end up paying interest on that shirt for the next 15 to 25 years.  WOW!  What a bargain!  NOT!

Saving money starts with simply not spending it.  If you make an impulse purchase or need to rationalize your purchases, you are literally throwing money away.  You need to define the difference between needs and wants, and begin to eliminate the wants from your purchasing.


In order to survive everyone needs food, water and shelter.  Everything else falls into the want category.  This sounds a little harsh doesn’t it?  I’m not advocating that all of you eliminate everything else from your lives, but to begin recognizing the differences between needs and wants. 

Let’s look at the need for food.  You need a balanced diet to survive and stay healthy.  A family of four can purchase all the necessary items for a tasty and balanced diet from a moderately priced grocery store for $300 to $500 a month.  I’ve done it for far less during tough times, but let’s allow for big appetites.  If you are spending more than this, you are going well beyond needs and getting wants.  Drive through and take out restaurants are not usually healthy, and will take a disproportionate amount of your monthly food budget.  You may rationalize fast food… too tired to cook, don’t have anything in the house, kids want pizza, etc., but these are wants, not needs.

You need water… not bottled water which is expensive and bad for the environment, but you should drink lots of water all the same.  If your tap water is bad tasting or you are afraid of contaminates, purchase an inexpensive but efficient water filter for your home.  I keep tap water in pitchers and water bottles in my frig so I can have cold water handy.  Needs versus wants.

You need shelter.  Shelter can include your home, clothing, and your heating and cooling costs.  So many people live in houses or apartments that are far too big or deluxe for their income.  If you are spending more than 1/3 of your income on housing, you are satisfying wants, not needs.  The housing market problems and foreclosures happening all over the country right now are a result of too many people trying to purchase homes well beyond their ability to own or maintain.  Many of you have already been affected by this, and many more will be feeling the pain within the next couple years. 

You can save a huge amount on utilities with just a few simple changes.  Turn off lights when you leave the room.  Keep the thermostat down (or up) depending on the climate and time of year.  Add (or remove) layers of clothing.  Lower the thermostat on your hot water heater.  Take shorter showers, and don’t let the water run while you brush your teeth or shave.  There are so many more little things you can do, and almost every utility company has cost savings suggestions on their web sites. 

I included clothing in the shelter part, because we need clothing basics to cover and protect us from the elements.  Two or three basic outfits for each season of the year are necessary.  You probably need 2 pairs of shoes if you are employed.  One for work, and one for "play".  If your work place requires a suit or dress clothes, you need two or three basic outfits for work.  That’s it kids.  The rest of the clothing you buy or own is simply to satisfy your wants. 


This one is easy.  From that cup of "fourbucks" coffee you purchase on the way to work, to your stop for dinner on the way home fits into the want category.  Cell phones, cable TV, daily newspaper, books and magazines, almost everything you spend money on fits into the want category.  The only want that is hard to get is this:  I WANT to save money and get out of debt.

Knowing the difference between needs and wants

Only you can dissect your spending into needs and wants.  I can’t do it for you, and neither can your spouse or best friend.  You need to make a decision and then begin to track all of your spending for at least 1 month.  Write down everything you purchase or spend money on.  Include all payments on all debts as well.  At the end of each day, honestly examine your expenditures and write down whether it was a need or a want.  If you are completely honest with yourself, you will find that almost ALL of your purchases are satisfying wants, not needs.   Once you define the difference between wants and needs, you will begin to find it easier and easier to give up some of the wants.  This is the biggest and easiest way to begin saving money. 

If you are reading this, it must be because you recognize that you are having difficulty.  Take me up on this challenge.  It will make a difference.