MANAGING HOUSEHOLD FINANCES

January through April are prime times for filing taxes. It is a time that many look forward to and others dread. Personal finances and debt go hand in hand. In this article we will examine the discipline of personal finances. What are the choices necessary for debt relief and freedom? We will not be looking at income schemes or anything of the sort. We, as human beings, have linked our personal portfolio of wealth with happiness and success. Happiness is a part of our design and given this truth what does it take to make our way out of debt?

Credit in the modern era is easily obtained and just as quick to be over spent. We want the secure feeling of having a line of credit, yes, even a credit card and justify it as for “emergencies”. The temptation in the phantom security of line of credit is that we visualize objects and things contained in that credit. Ah, that new washer and dryer to make our home happy! Yes, maybe getting new carpeting for the living room! We have a leak and therefore need a new roof! All these are legitimate wants and needs but is borrowing from a line of credit really the best avenue of obtaining these things? It is common knowledge that a credit card, although nice to have, can normally carry anywhere from as low as 15% interest to as much as 30% on your balance. A credit card is like a flaxen cord. Once around the neck and stretched it just gets tighter with every wiggle. However, it's just a small monthly payment – right? Other lines of credit include a bank loan, second or third mortgage. Although these usually carry a much lower finance interest rate as compared to a credit card they can still be appetizing avenues for quick funds. Again, may the question be posed: Is it worth the credit to suffer the unending “minimal” monthly payment and the overall excess payout in exchange for the products and services rendered for that credit? Do you want to put yourself and/or family into years of servitude simply because you cannot afford more than the minimum payment on a line of credit? Although difficult may we all resound with one accord, “NO”!

We must learn the basics in the modern era. Much can be learned from our ancestors and even the elder generation yet living. Learn the craft and skill of self reliance. Learn how the people survived during the Great Depression years. Learn what had to be done to get by as a struggling family on the prairie in the 1800's. Now is as good a time as any and if not more important to learn self reliance. With our wonderful technological advancements we have quickly succumbed to a certain state of apathy. This apathy is dangerous and a main ingredient for disaster. As humans, we all go through varying degrees of emergencies and if not prepared for such, we will quickly find ourselves at the mercy of friends, family and even the government. Nothing soothes and uplifts the heart of man more than the skilled knowledge of self reliance. This wisdom will keep you free and independent.

Debts are often inevitable. Whether it be a home mortgage or a vehicle most of us do not have the funds available to us to pay for such items outright. First and foremost develop discipline with your income. Budget and forecast expenditures. Create a goal of paying something off. Key words to function your life by are, “Live Within Your Means”. If you don't have a secure job making $100,000 a year than don't buy a home that will make a big dent in your overall monthly income. There is nothing wrong with starting small and working your way up according to your means. The same doctrine applies to vehicles. We, as a people, like new and shiny things and are drawn to them. We, at first, are willing, because of that temptation, to suffer the consequences for such thoughtless actions with our finances only to find ourselves later to be indebted into servitude for it. It is a great rule of thumb for any young person to start your life off with a broader outlook than the “here and now”. Always plan for future security and you will find happiness along the way.

However, there are a vast number of people out there who have made incorrect choices regarding their finances. They are now in debt. Many have gone through bankruptcy and still have not established the discipline of finance within their lives. For this group first and foremost establish a budget as well. Identify, on paper, all your household income. Identify all critical expenses whether it be utilities, rent/mortgage, vehicle payment, credit cards and any other expenses that you make on a monthly basis. If you are putting this in column form you may want to make your third column the expected number of months, at the current rate, till the debt is paid off. Now is where discipline comes in. Happiness requires hard choices in life even if it hurts just as our forebears did in the Great Depression or surviving on the plains in the 1800's. You must study this graph and identify what will be paid off first and relieve that income earmarked for that debt. Focus all your energies and resources into paying that particular debt off. Suffer your candy, movies and any leisure pleasures you may have in order to free up any petty income you use. Make that hard choice to pay off that debt.

When that debt is paid take time to sit and really soak in, relish and feel grateful for the liberating feeling of being out from under that debt. Gain strength from that experience to now use that exact same amount of income used to pay the monthly bill of that debt to focus on the next debt. Now, in addition to your regular payment on your next debt you are placing the exact amount from the prior debt to the principle on the current debt. Through this discipline you should now be seeing the compound acceleration of debt relief. By the time you are on your last debt your monthly bill should be large enough to pay off your remaining debt in an exponentially smaller amount of time than if you were still at ground zero making your minimum payments on all your debts.

Lump incomes and income taxes. Very interesting and tempting this income taxes can be. Many people look forward to the refund. Often times they anticipate using those funds for purposes of debt relief but when the funds get to them, their original desires fall short and they wind up falling into the trap of unnecessary purchases and services. This, in turn, will result in compounded misery and self loathing as the feeling of bondage overwhelms the soul and creates unhappiness. Exercise self financial discipline and use those return funds that you have been blessed with to pay off a debt or two to put into action the plan stated above. Once you are on the track you will quickly gain a testimony of the benefit and uplifting nature of this simple plan of debt relief.

Now, an essential part of your little budget graph plan is identifying what is essential to sustaining your life and not your lifestyle. Place all things of a lifestyle in a separate column or category. In this particular category also place on there the monthly required funds earmarked for that service or product. As much as it hurts items in this category would be television, both cable or satellite, magazine subscriptions, catalog subscriptions, dues for groups and foundations, cell phones and yes, even internet. These are there to serve a lifestyle and not a life and should therefore be subject to termination in support of eventual happiness through debt relief.

There is a doctrine, also, of living without if the means are not there. If you suffer your immediate appetites for pleasure, now, for the sake of greater happiness down the road the grandeur of such happiness will be monumental and of a spiritually liberating magnitude. Part of living without, is those practices that will support financial stability. Exercise food storage and canning techniques. This can be done cheaply and will prepare you for financial emergencies in the future. It may just also keep you free from government aid. Food storage can be as simple as purchasing an extra can of food at each trip to the store and placing it in a cool and dry environment earmarked for emergencies. This is an inexpensive step toward food storage and self reliance and will make minimal if not negligible impact on your debt relief plan. If, you gain the mindset of preserving your life rather than your lifestyle you will find the will to live without the excess items in your life like unhealthy foods and the services listed above.

All the things examined in this article are of life saving importance and an essential part to your overall happiness. It is one of the prize quotes of all time contained in the sacred documents of the United States of America – “Life, Liberty and the Pursuit of Happiness”. There is much doctrine to be pondered in these words. However, it takes discipline and the will to reach a goal that is further than arm's reach. You have the power within, just as your ancestors did and triumphed in mastering. Financial freedom from debt is of paramount importance and is possible for all in these economic hard times. Plan for the future by preparing now, and you will obtain self reliance in the months and years to come.