Before a budget, before a program, before you try that new personal finance system that only costs 7 easy payments of $19.95, you’re going to need to have:

GOALS

Personally, I don’t think there is anyway we, as a couple, would make this whole budget thing happen without them. Seriously.

The age old saying, “That money is burning a hole in your pocket!” is so true.

When money is in my hands, I just want to spend it. If it’s in my checking account, I want to spend it. When it’s in my savings account, I want to spend it.

And seriously, I can rationalize anything. Bryan’s even better than me. We so often connive against our budget and try to find ways to escape it’s difficult grasp.

Do you recognize the feeling? Spending money totally feels good. Retail therapy can totally be effective. There’s just that remorse later when you have to pay your rent and you can’t or you get your credit card bill and realize you can’t pay it off. That’s worse than the spending was good.

Our solution for this attitude of spending? Well, having a goal or two works just great for us!

Here’s how it works:

Step 1: What’s your goal?

• Make it challenging
• Make it reachable
• Make it wise

We think our goals last year fit all those categories. Pay off all of our debt in 7 months-challenging? [check] reachable? [check] wise? [check]

Maybe your goal will be completely out of necessity, as in, you have to change something or you’re not going to be able to eat. Maybe, you just want some discipline in your life and you’ve decided to reign in your spending habits as a result. Maybe you want to have more money lying around for a rainy day. I don’t know what you’re motivation is, I just know you need a challenging, reachable, wise goal to accomplish what you want.

Step 2: What’s your time line?

Again, maybe your time line will be based on necessity, as in, you’re going to have a baby, and it’s definitely going to come in 7 months, so that’s gotta be your time line. Otherwise, use the guidelines from above-is it challenging? is it do-able? is it wise?

A year is a nice amount of time to work with, but maybe it needs to be two years because there’s a lot to accomplish. Maybe you just want to go as fast as possible.

If you have no idea where to start, a helpful way to figure out your time line take your goal and divide it by how much you can afford to put towards that goal. We’ll talk more about this later, but think about making temporary sacrifices in order to reach your goals. If you make some sacrifices and live below your means, you’ll be able to reach your goal a lot quicker.

Example:
Goal (pay off vehicle): $5,000.00
Extra money to put towards that goal each month: $275.00
Time line: about 18 months

I like a bit more of a challenge, so a more challenging way to figure out a time line is to divide your goal by your time line.

Example:
Goal (pay off vehicle): $5,000.00
Time line (12 months): about $417.00

It pushes me to be a little more creative and figure out how I can come up with that extra money each month.

In Conclusion:
In my opinion, goals are even more important than a budget for this reason: there is no way that we would stick to our budget with out goals. If I don’t have a designated job for the money that magically gets direct deposited into our account every two weeks, my mind considers it discretionary. And if in my mind our money is discretionary it would be really easy for me to forget about the bills each month, especially when I would love to go shopping for clothes or decorations or that super-cute-must-have-item at Target.

On the contrary, we have set goals for our finances and those goals motivate us to actually spend less than what we can afford. Amazing, huh?

One of my favorite blogs, Money Saving Mom, also recently posted a great blog on setting goals, you can check it out here.

So set your goal(s) today! You could even post your goal in the comments so you have some accountability, here are our financial goals for 2010!

Next week: The Hardest Part about Managing your Money

Hi, I’m LisaGrace, and I love personal finance.

I wish you could see my face light up when it’s time to balance our checkbook. I love forming our budget. I love figuring and re-figuring, until everything is just right. Some may call it a chore, I call it a wonderful hobby.

God created this passion within me, and one of my goals for 2010 is to dialogue all the more about it.

Specifically, I wanted to blog about it because I find it incredibly inspirational to read other financial success stories. Real people, dealing with real money, in today’s “I want it now” world-when there is success, it’s a cause for celebration! It’s also encouraging to know that everyone has a different story and a different way of doing things. I love to be able to pick and choose different methods and try them out for myself-and it’s so helpful to have a real example and experience to follow.

So my mission is to encourage, to offer our methods of handling money and to record our successes and our failures. I plan on posting a finance post every Friday in February and March. Let me know if you have any questions, or want to know more details about how Bryan and I handle our finances-I’m an open book!

Next week: The most Important Step to Financial Success

Bryan and I have pretty simple financial goals for this year, much like last year. We were, by God’s grace, able to succeed in all of our financial endeavors in 2009! It’s especially fun for me to start the New Year with NEW goals, rather then continuing with the old.

Primary Goal: Fully fund our Emergency Fund
We’d love to have 6 months worth of living expenses in our savings account by the end of June 2010. Why June? Because we hope to move to Iowa City in July or August. We’ve decided to move regardless of whether we find jobs right away or not, so that cash will certainly come in handy if we are unemployed for any amount of time. Also, I really think we can do it in six months! I guess we’ll find out!

Side Goal: Pay Cash for College
I married an amazing man who has worked his way through college thus far. He’s never had a student loan. We’d like to keep it that way and that’s our goal for now. We have enough saved to pay for Bryan’s next semester at Iowa State! As a side note, God has really softened my heart towards student loan with regards to Iowa City. It’s very possible that the one expense we won’t be able to completely cover will be Tuition when we move. I’m asking God to provide and maybe He’ll provide enough to pay for tuition as well, or maybe not. We’ll see.

LisaGrace’s Personal Financial Goal: Saving the Money I’m Saving
I’m not a saver in the most conservative way. I like saving money so that I can spend it. As soon as humanly possible. While I love quickly spending that money, especially after I’ve worked hard to cut our costs down, it usually ends up being a little disappointing. Because we don’t have a huge income, my savings can seem very minimal at the end of the month. I may have been $20 below budget on groceries one month, but $20 flies out of my hands so fast I usually can’t remember what happened to it!

Just for fun, here are the ways I’m currently making or saving a tiny amount of money every month:

Coupons: I’m not a huge coupon cutter to be honest, but I take advantage of the sales and pay enough attention to get some great deals using coupons and store sales. I’ve been consistently under budget on my groceries for the last 3 months or so!

E-Bates: I really do love this website, it’s such a great idea! Before I order anything online, I go on E-Bates first. I find the website I’m looking at, click on the link that takes me directly to the exact same website and order as usual. I’ve received up to 8% back on my purchase less shipping. It’s a small amount, but it’s fun to see that account grow with completely free money. Click on the link below to sign up:

Surveys: I take surveys for a company called Pinecone Research. I get paid $3 for an approximate 15 minutes of my time reviewing different products. I take 4-8 surveys per month, which isn’t really a lot of cash, but it always adds up more quickly then I realize!

Swagbucks: Oh how I love swagbucks! Swagbucks is a search engine that gives you “bucks” for searching through them. I’ve received 1-4 swagbucks everyday that I’ve searched through them. It only take 45 swagbucks to get a $5 amazon.com giftcard, which is my prize of choice! Since June 2009, I cashed in for $25 worth of amazon.com giftcards! I’m going to save up all of my swagbucks in 2010, we’ll see how many I get! Click on the link below to sign up:

Rebates: Separate from the aforementioned E-bates, I love taking advantage of rebates! It is usually pretty easy for me to work the deals into our budget, making the rebate check feel like free money! But those great rebates deals don’t come around too often and in the meantime, we have an easy way to get cash back for our purchases: a rewards credit card. I’ve mentioned this before, but I continue to maintain it as a great tool. On our rewards card, we receive 5% back on all of our fuel expenses, 2% back on all travel/entertainment expenses, and 1% back on everything else. In 2009, we received over $175 back in cash!

The Change Jar: I want to fill this baby up!

Sales: I would love to be as stuff-less as possible before we move across the state and one way I’ve been doing that is by selling books on Half.com. It’s super easy! I also want to take more clothes to the consignment shop.

So, basically, my goal is to save up all those little odds and ends and see what my total is at the end of the year, my hope is to have around $300. We’ll see!

The Frustrating Situation
Let’s just say, Bryan’s car better not break for a LONG time. I feel like we fixed everything that could have possibly gone wrong with the car. And yet, the brakes still need to be replaced and it needs at least two new tires.

Enter me: I’m a worrier, and a planner, and a control freak, lacking in faith and bearing my own burdens. Bryan’s car had been in the shop since Wednesday, September 30th and I’ve been freaking out for the last week and a half.

My mom thinks that I’m not trusting God. I told her, “I know! Of course I’m not trusting in God!”

It’s just that we’ve worked so hard to get so close to paying off ALL of our debt. We paid off my car in August, we paid off our wedding rings in September and by the end of September we had paid off over $5,300 of debt over the course of 4 short months! We only had $2,600 to go and we were going to have that gone by the middle of November. We had a PLAN, and I just don’t like it when my plans get messed with! My pain is understandable, right?

We got the bill today. And we charged $2,620.68 to our credit card today. Just saying that HUGE amount makes me squirm.

Provision from the Father
Maybe you’re even starting to see the way God is working in all of this. But it took me a little longer to realize just how perfectly this all works out…

The $2,600 I mentioned before is all that we owe Bryan’s parents for his car. No interest, no due dates, no decrease in credit score if we don’t pay it off right away. We’ve been blessed from the beginning by their generousity.

The bill? Yeah, only $20.68 over what we had already planned to have in our checking account by the middle of November. And guess when our credit card payment is due? Yep, you guessed it, November 16th.

How amazing is that? I’m almost in tears at the way God provides for us!

Sin Issue Revealed
I honestly never doubted that God would provide for us, after seeing over and over again his provision in our lives. It was more that I was and am struggling with anger that it can’t be done MY WAY. My way was to have zero debt by 2010. I hate debt! I really do. I wanted to be done with it and I, of course, did not want Bryan’s car to break.

But God desires to draw me closer to Him and make me more like Christ. That’s God’s way.

While I know I tend to struggle with control and carrying my own burden rather then laying them before the Lord, I didn’t really notice I was acting in the same way towards money.

I have been finding a lot of my security in money.

Lesson (in the process of being) Learned
I’m still struggling with putting my faith in a plan and finding security in our finances. We’ve been blessed. And it’s truly difficult for me to praise God in the midst of blessing. But I’m feeling a heavy flow of conviction at this point, and I’m ready to see God change my heart by the power of the Holy Spirit.

The New Plan
Ultimately, my plan is to trust God with our money.

I’m not going to look at our budget and bank account 3 times a day anymore. (You have NO idea how hard that’s going to be for me) I’m not going to obsess about having enough money in May 2010. I’m not going to try to plan each and every financial detail of our lives through the next 3.5 years.

I am going to look at our budget each month. I am going to pay our bills on time. I am going to take out the cash we need for the month and stay under our budgeted cash amounts. And I am going to remain responsible with our finances.

I don’t believe that trusting God with our finances means that I throw out our budget, do not watch what we spend, refuse to have a schedule to pay off our debt, and take out loans for school. King Solomon encouraged wisdom with money, and I’m still determined to be as wise as I can be regarding our finances.

So, in the mean time, we do have a plan so that we can stay wise and be responsible with the money God has entrusted to us:

In the following order, we plan to:

• Stick with our budget, cutting corners when possible and saving any extra.
• Fix the brakes and tires with an “extra paycheck” I’ll get in December.
• Refill our emergency fund back up to $1,000.00 as soon as possible
• By the end of this year, save up $1,200.00 for the first Iowa State Tuition payment to come out January 20th, 2010
• Slowly, but surely, re-pay the last $2,600.00 we owe to Bryan’s parents over the course of 2010.

While we’re committed to paying off our debt as soon as possible, we’re still going to pay cash for college so it’s going to go a lot slower then I’ve planned. And speaking of plans, I’m not going to have a schedule to pay off our debt. I really don’t want to make the same mistake twice by putting my hope in the date which we’ll be debt-free. We are going to work hard and whatever extra we have at the end of each month will immediately go to our debt.

FACT: i needed some new slacks. as in: pants-that-are-not-jeans. as i only have one pair of such pants and they may or may not have a hole in the crotch.

FACT: i do love me a good deal.

gap is having a 40% fall sale on select items. i love gap sales:

1 pair of black straight fit pants
regular price: $54.50
on sale for: $24.99

1 pair of stone capris
regular price: $39.50
on sale for: $9.99

TOTAL BEFORE ANY DISCOUNTS: $94.00

total after sale price: $34.98
15% off for using my gap card: -$5.25
8% cash back via e-bates: -$2.38

MY TOTAL: $27.35
SAVINGS: $66.65/71%!

yeah, that’s right. i’m awesome.

bryan and i have started the decorating! we (well, i) really want our little apartment to feel like home for the next few years and decorating is key for me!

i don’t really like shopping, so going around to all the stores in ames and looking for that perfect piece of furniture does not really appeal to me. so i’ve been shopping online! i wanted to share with you a tool that i’ve been loving:

so, basically, i simply go to ebates.com, search for a store like overstock.com (i got a $26 duvet cover!), click on the store, and order as usual. it’s pretty simple stuff!
by adding this one step, i get cash back (typically 2-5%) for shopping as i normally would! sweet deal!
plus if you sign up, you get an automatic $5, so it’s no loss right?

i’m dubbing august the month of rebates!

sometime in september, i’ll receive around $38 dollars in rebates! that’s almost a weeks worth of groceries for us!

the best part? i haven’t gone over budget! usually i’m not so excited about rebates because you have to spend more money up front. since we’re on a budget, more money on something i don’t need is hard even if it’s free after rebate. but, due to a lot of the free stuff we’ve inherited and due to some GREAT sales these past few weeks, we’re stocked up on food for the rest of the month and still have some money leftover!

here’s something i highly recommend you take advantage of if you can:
in ames, cub foods is the only grocery store participating and right now, they have pretty decent sales on all of their kraft dairy products. here’s what i bought:

3 12oz. bags of kraft natural shredded cheese (3/$5)-$5.00
6 tubs of philidelphia cream cheese (3/$5)-$10.00
2 16oz. packages of kraft singles (2/$5)-$5.00
2 family size boxes of wheat thins ($3.79 each)-$7.58
TOTAL-$27.58
-$5.00 off my next purchase at cub foods
-$20.00 rebate
TOTAL-$2.58!

i love free things! and i love staying under budget! more details and a shopping list are here!

yesterday, i wrote a check.

it was for $742.31.

it will give me and my husband entire ownership of our 2006 ford focus!

hoorah!

by the blessing of His hand, we were able to pay off one of our cars 1 year and 9 months ahead of schedule. i’m not sure how much of a savings interest-wise that is, but we’re gash-darn excited anyway!

WOOT!

here’s another quick lesson, if something is offered to you for free…um, TAKE IT! guess who isn’t complaining about have mostly chicken based meals this month? the alsbury’s sure aren’t!

…getting so excited about the deals in target that you forget why you came there in the first place-priceless.

the alsbury’s needed packing tape because we’re moving into a new apartment on july 31st. so, we ventured to target…

i had a bunch of great coupons for some things, and i thought i’d multitask and check out some deals. boy, did i find them! i got everything pictured above for $16.32 with a savings of $56.32! i was so excited!

while we were shopping around for deals, bryan wanted to check out the tvs. we’ve been saving up for a new tv for a while now and we’ve had several fun little chunks of extra income come in so we had about 450 bucks saved up.

so, the tv we were looking at was reduced by another 50 bucks making it $450+tax. bryan then got 10% off by applying for a target credit card (which we’ll probably cancel right after we pay it off) after tax it was less then we had saved up: $435.62!

here’s bryan with his new toy:
we bought everything with such excitement that we forgot to buy the packing tape. so we went back into target and purchased what we came there for in the first place : )