We all got up ridiculously early this morning and took Bert to the airport. *sigh*. =( He's going to California, where at least he'll be able to spend some time with his parents, so that's good. =) But we'll miss him. He'll be back in time for me to wash his laundry so he can pack it again to go to England. =)
I came across this helpful article: 5 Strategies for Surviving Tough Times. The main points are these:
1. Don't Buy What You Can't Afford
2. If You Can't Pay Cash, You Probably Can't Afford It
3. Paying Interest on Anything Makes Somebody Else Rich
4. If You Are in Debt, stop Spending Money
5. Don't Count on Somebody Else to Save You
The article also gives an example of a country who continued to save, not "spend to feed the economy", and it resulted in a more financially healthy nation.
The final paragraph states:
"Live Now Like You Face Tough Times
These five strategies work equally well when times are good, so there is no need to wait until you are in trouble to start making smart decisions.Your lifestyle will be characterized by things you can actually afford, such as a house that won't get repossessed, a car that might not impress the neighbors but will still get you to work and back, and long, restful nights free from financial worries. It might not be the fairytale lifestyle of the rich and famous that corporate marketers having been trying sell you, but at least you won't have to worry about how to keep up on the payments for a lifestyle you can't afford."
My advice to couples starting out? Live on only one salary. If you can't afford what you want to buy with only that one salary, you want too much. Live frugally. I've heard of families that lived in a one-bedroom apartment - WITH THREE CHILDREN - because that's what they could afford. They put a curtain up in the middle of the room. Ideal living arrangement? No. Difficult? Of course? Worth it? You betcha!
Think of Dawn for example. Her family of eight live in a 1000 square foot house.
If you live on one salary at the beginning of your marriage, you can use the other salary for all kinds of awesome things. Get out of debt. Save like crazy for a modest house. Save for retirement. Save for when you have children so you can pay for your medical bills with cash. Save for your children's college. Just SAVE.
Remember the rule when buying a house. The NEW rule, not the OLD rule. Or rather, a return to what the rule USED to be way back when in our grandparent's or great-grandparent's time. Ready? It's important.
BUY THE SMALLEST HOUSE YOU CAN FIT IN....not, as the realtors tell you, the biggest house you can afford. The realtors, of course, want you to buy a bigger house because then they get a bigger paycheck. However, buy the smallest house you can fit in and then pay it off as fast as you can.
Don't, whatever you do, buy the biggest house you can afford. Because then you end up paying every extra bit of cash towards the mortgage and you end up having no college fund at all for your daughter who's taking college courses as dual credit in August (and you don't know where the money's going to come for that) and is going to college next year (and you don't know where the money's going to come for that either). And, furthermore, said daughter also needs orthodonture...and you don't know where the money's going to come for that either. And why? Because you bought the biggest house you could afford instead of buying a smaller house in a town a bit further away from work.
I've talked before about Crown Financial Ministries. They are very religious - their slogan being "God's way of handling money" - but although it's a different religion from mine, I don't find them offensive at all. Their obvious love and caring for others is heartwarming and uplifting.
Their main message is to follow something Chuck Bentley and Howard Dayton created called "The Money Map" This map has seven "destinations". Follow the money map step by step, and by destination seven, you'll be completely financially stable. Hooray!
Develop a spending plan by tracking your expenses for a full month and creating a budget around it.
Save $1000 for emergencies
Pay off all credit cards
Increase savings to one month's living expenses
Pay off all consumer debt (auto, furniture, student loans, etc. - everything except mortgage)
Increase savings to three month's living expenses
Begin saving for major purchases (home, auto, etc.)
Begin saving for retirement
Begin saving for children's education
If you want to start your own business, begin saving for it.
Buy affordable home
Begin prepaying home mortgage
Begin investing wisely
home mortgage paid off
Children's education funded
Confirm estate plan is in order
You are now free to be more generous with your time and money.
Important point: Don't think of retirement of a time to sit around doing nothing. Think instead of saving enough money so that you don't have to work to survive, but you can now afford to donate your time, talents and energy to good causes.