Gateway Church's Podcast
Obtaining God's Peace & Blessings in Finances - P2
Now, you're going to see that I gave you, I like to keep it different each week so you don't know what to expect, but we have a handout here that I gave you in the beginning, and on the first page is kind of an outline. Mark's got some at the back if anybody didn't get one. First page is an outline which hopefully you'll make some notes on this week or tonight as we go through here. The second page is 10 deadly sins for Christians and I think you'll enjoy that. We'll look at that a minute and then there's some budgeting information. Kind of as a review of last week's class, let's start out with the 10 deadly sins and see what these are. It'll kind of help you remember some of what we talked about last week. First one is thou shalt not rob God. Remember the sermon that we heard about robbing God and you know one of the ways to stay out of debt is to have your finances be blessed and one of the ways to have your finances be blessed is not to rob God of what's due to God. The second one is thou shalt not forget to budget, plan and set goals for your finances. That's something that we've just got to do and if you don't, I don't know if it's really a sin but it is something that's going to get you in trouble with your finances if you don't budget, plan and set goals in your finances. The third thing, thou shalt not be a slave to immediate gratification. None of us want to be a slave do we? And what this means is you spend money you don't have for things that are going to give you some temporary pleasure but that you're going to be paying the price for over and over and over for a long time. And then when you had the interest on all that fun that you had for a short time gets to where it's just overwhelmingly unfun. So we don't want to be a slave to immediate gratification. We don't have patience and be able to wait on things as the Lord gives us the timing. Fourth one, thou shalt not count on future earnings to pay present debts. You know that's, makes sense doesn't it? If you don't have the money you don't buy it. If I want a Coke and the Coke machine and I look in my pocket and I don't have any money I don't go buy anything. They don't take credit cards on the Coke machine. And it's a shame that we don't take all they do now. Well thank goodness the ones that I've been using don't. I guess they're getting so expensive they even need credit cards on those things right. Don't count on future earnings to pay present debts. That's a real fancy way of saying don't charge it. Thou shalt not forget to ask for help and accountability in your finances. You know a lot of times we get in trouble and what we do is we want to keep it to ourselves. And we want to put the show on as long as we can that we're in good shape and all we're doing is digging a bigger and bigger hole. You're going to get yourself in debt and get yourself in trouble if you don't ask for help and accountability in finances. Accountability means having someone that helps you know review it from time to time. Look at it and give you some help. Next one thou shalt not try to keep up with the Joneses. I know it's the American way you're not only supposed to keep up with them you're supposed to stay ahead of them but it'll get you in debt trouble if you try to do that. The next one thou shalt not be unthankful for whatever God has provided for you. We'll talk a little more about this this evening and I talked about it last night or last week but you know God has given us a provision. He has made us away and here in the United States the provision is great even when we don't have a lot by American standards we have an awful lot by most people standards. When I go on mission trips and I stay in places with no heat, places where the water is off for days, places where you can't take a bath, places where the only food available is just bread you know and I come home and I think you know the poorest person here is living better than many many people in the world so we need to be thankful for what God has provided for us and I'll tell you a little bit more about this later what happens when we're not thankful and we get discontented you'll see how this all gets us into debt and gets us into problems. The next one thou shalt not waste what God is provided for you. You know in most cases God has provided enough for us to live a very good life. We just choose to always want to waste and spend money in ways that we really shouldn't. There's times when you'll buy something whether it's a piece of clothing maybe and you get it home and the shoes don't fit right or the shirt didn't really go with the pants or you know you just really don't like it as well when you put it on at home and you may wear that thing one or two times. That's a waste of money. There's a lot of ways that we waste money and I think God's given us some provision we talked last week about being a steward of what God has given us and being a steward means that we wisely use what has been given to us. We looked at the scripture last week about the story of the two talents the one talent the five talents you know the various talents that are giving to each of us and we saw that when you don't use what God gives you you're going to be in for some bad trouble. Go back and read that story. Thou shalt not teach your kids that having and spending money is the answer to problems. You know I think that we really send some bad messages to our kids. We send the message to our kids well if I just had some money I'd buy that or well if I if daddy just would get a raise or if this would happen or that would happen then all our troubles would be okay and I can show you an awful lot of folks with an awful lot of money and they didn't okay. The truth is that's the excuse we use is that we don't have the money and if we had the money we'd be happy but I can tell you from the people that have the money the money's not what makes you happy. So quit believing that lie and quit believing that if you just had money it would be okay and quit passing it on to your kids. You know we let our kids think that if if we had enough money to buy them enough toys then we'd be making them happy and we'd be great parents. Just because you don't have enough money to buy and have a bunch of Christmas doesn't mean that it can't be a great Christmas doesn't mean that it can't be a great birthday doesn't mean that it can't be a great life. I know a lot of missionaries who live on a very small amount of money and they feel very blessed by what they have and they teach their kids to be thankful for what they have and that they're blessed to have what they have. So be careful about what you teach your kids about being the answer to problems. And the last one they'll shall not forget that your actions are a witness to others about God. Think about other people that you know maybe in your neighborhood that make a similar amount of money that you make. Think about what witness it would be to them if all of a sudden they saw that you were no longer with that long look on your face you no longer were stressed about money you no longer were really pressured when they saw you said everything's great our life is blessed we're wonderful. Did you get a big raise? No we didn't get a bit more money we're just using it more wisely according to God's principles. We've just had a better understanding about how to manage our finances from our church and from the Word of God. Well tell me more about this what kind of a witness would that be about the power of God the power of His Word because everybody wants that same peace in their life. And the answer isn't more money the answer is more wisely using what you have being careful about your purchases and all the things that God's word teaches. So think about when you speak to somebody about your finances or about what's going on in your life what that says about the power of God to work in your life and what He's doing and what a positive witness it could be for them to see you going from maybe a lot of financial debt to out of debt and doing well and doing it because of what you've learned in God's Word. Make them want to come read God's Word wouldn't it? It's a good witness. Okay that's kind of a review from last week. I want to talk for a minute about your special other someone in your life. If you're a single parent that may be your kids. If you're married that's your spouse. If you're single that may be a roommate or somebody that you're sharing things with it may be a future mate. But let's talk for a minute about about unity in the family. It's what I call the family unity their point number one. You realize that most people marry their personality opposite. Now I've always wondered why that was and I've started to get some insight into it over the years of why we do that. I think God takes and puts us with this person that has all these traits we don't have because we realize we don't have them and we realize that we may need those traits from time to time in our life. You also marry sometimes the person who is your financial opposite they're not only your personality opposite they're your financial opposite. Last week somebody came up after our meeting and said you know my husband is just going to love this seminar. He wasn't able to be here tonight but he has been telling me everything you said and I just now realize that it's right and he is going to be so excited because I'm the spender in the family I'm the one that never wants to stop buying things. I'm the one that has all the problems with all these areas and it's just going to be great because now I understand where he's coming from. I understand it being from God's Word. A lot of times we're married to a financial opposite. Now that's not always the case but sometimes it is the case. I thought it was funny to look at what Larry Burkett said in his, Larry Burkett's a guy who runs Christian financial concepts. You may have heard him on the radio and one time I heard him say it like this. If two people get married and they're just alike then one of them is unnecessary. Think about it. If you're just alike what good is it? You're not filling in any of the other things that you need to fill in in your life. An important part of getting along is also knowing and understanding what you're made is saying. Finances are one of the big problems in marriages but communication probably is the other one. One of the problems we have with communications is guys and gals don't really know what each other is saying. You've seen that book about men are from Mars and women are for Venus and I'll give you an example of how sometimes we need to learn how to communicate. This is something that I read here I'm going to read to you. It says when a guy says can I help with dinner what he really means is why isn't dinner already on the table? When a woman says honey how is your day what she really means is tell me every detail that happened tell me what color outfit the person wore tell me how she or she looked tell me what it sounded like what it tasted like tell me how many people showed up and I really don't want an answer such as just oh fine. It's a little different than what we're wanting as if it goes the other way. When a guy says take a break honey you're working too hard. The proper translation is honey I can't hear the game over the vacuum cleaners. When a woman says of course I want your input about the color of the dining room curtains. What she really means is feel free to agree with me. When a man says you look terrific in that dress he's probably thinking please don't try on another outfit I want to go do something. When a woman says do you really want to wear that outfit what she really means is please go change your clothes. Some other differences between men and women women love to shop and find bargains men want to identify a target kill it and bring it home as soon as possible in most cases men go on a seven day trip and pack five days worth of clothes. Women go on the same trip and pack twenty one outfits. Men think that leaving dirty socks on the bathroom floor is just the same as leaving them in the hamper. Women never have anything to wear. As we think about the fact that God planned it this way God planned on men and women getting together. He obviously planned on us also to communicate and to figure each other out and to figure out what's going on and what we really mean when we say something. So we do have to work at that and it's important to build family unity. If we're talking about with our kids the same kind of communication things can go on with our kids. If you're a single parent your kids can say something and you'll think they're meaning something else or you can say something to your kids and they won't really understand where you're coming from. So it's important within the family to have a unity. It's important to talk before you buy. Before you go spend money we just should not do that without having permission from the other spouse. I don't care if there's one wage earner or two you should talk about the way you're going to spend all your money. One of the best ways to do that is to budget and you know ahead of time what you're going to spend. But if you don't have a budget and you don't know what you're spending you really don't have a right to spend that money without getting permission from your other partner. And that's whether you're the man or you're the woman whether you're the soul breadwinner. If you're the man and you make all the money you still don't have a right I don't believe to go spend that money because God has joined you together. As your join together is one that means you need to make those decisions as one. Let's look at Proverbs 22 7. I've got a couple of Proverbs. I gave you most of the background scripturally last week. We're not going to do much scripture work this week because a lot of it still applies to what applied last week. But I do want to look at a couple to kind of lay a groundwork. We did look at this scripture last week but I think we should look at it again. Proverbs 22 7 says that the rich rules over the poor and the borrower is servant to the lender. I don't think any of us want to be ruled over. I don't think any of us want to be a servant. A servant to a lender or a servant to anyone else. So it's important that we have a proper attitude about money. You need to figure out what you want out of life. Do you want to be in debt? Do you want to be a owing somebody else? Of course not. I don't think you really do. Well if you don't want that it's going to take a proper attitude about money. And what that means is that you're going to have to be willing to make some changes. If you're in a situation now where you've got debt you're going to have to be willing to make some changes in the way that you're doing things. Obviously the way you're doing it's not working. Wouldn't have such a big turn out here tonight if we already knew all of this. We're trying to figure out something new. Change is usually painful. I want to read you an interesting story about change in someone's life and the pain that they felt. Now it won't be apparent right away how this story applies to you but as I get through it that I think you'll see the application to you and you'll see how this can apply to your finances also. You were so happy. You were safe and secure. Life was wonderful. You were living in paradise laid back taking it easy. Floating comfortably on the warm gentle waves. You were cushioned from all the shocks insulated and isolated from the pressures of the outside world. Your every need was supplied by someone larger than yourself. You knew little of pain, disturbance or threats. Yours was a fine existence indeed. Then one day something happened. It shook your world to the foundations. It began quietly intermittently almost imperceptibly sort of a tugging feeling at the center of your being that quickly turned to a violent jolting earthquake. Suddenly the security you had started to collapse all around you. The walls seemed to be pressing in on you. Your body became bent over. Your arms and legs felt twisted and crushed. You sensed that you were falling head over heels upside down. Next came the pain, the heat, the pressure. It was almost too intense to bear. Your head felt as if it was being squeezed in a vise grip. You were pushed harder and harder into a dark, narrow chasm. Four rushed, a fear rushed through every fiber in your body. Then suddenly you saw it, the light at the end of the tunnel. Helplessly your body was thrust towards the light you thought, almost there. Keep going. In cold, clammy hams were grabbing at you. One reached for your head and pulled. Another latched onto your torso. Together they tore you away from the last vestige of safety and security. You felt as though you were going to die as a result of all this pressure, pain and change. But actually you were just born. That's what being born is like. It's a change. You were in a very comfortable place. Everything seemed real good. You thought, I don't want to change this. I'm going to stay here all my life, but you can't. You can't stay where you are. Your life is constantly going to be one of change. You're going to go through situations just like it was when you were born that look uncertain. They're painful. There's some turmoil that goes through it. Just as soon as you think you see the light at the end of the tunnel, then some cold clammy ham grabs a hold of you. Slaps you on the bottom and says, "Welcome." That's what life's like. Life does have some pain to it. But you know what? Pretty soon things get good again when you were born. And the same thing happens in life. Pretty soon God brings some good things along. And this is just a step that we go through going through life being ready to address change. You say, "How can I get used to it? It's so painful." Well, I'll tell you what will happen. There's two ways that you can go through life. One of them, you can wait till the pain in your life gets bigger than the pain of changing. That's what happens with a lot of people. They side, "I'm not going to change. I'm not going to change my finances. I'm not going to change the way I eat. I'm not going to change anything." And then all of a sudden, the pain of their life finally gets to a point where it is so great. Maybe they have a heart attack. Maybe they get into bankruptcy. Maybe they lose something very important to them because they weren't willing to work at it. And what happens is some of us have to get to that point where the pain in our life is so great, that's what's going to happen. And then we'll decide, "Okay, I'm going to go ahead and change now." Because I think even the pain that I'm going to go through changing will be less than this pain I'm in right now. But you know what? It doesn't have to be that way. We don't have to wait till the pain in our life is so great that we then become to change. If we will make the changes earlier before the pain comes and before the pain gets so great, you'll find that it's much easier, it's much shorter, and it's just worked so much better. I mean, I figured that out when I went to military school. I went to military school and I showed up and it was kind of like that pain experience. They're shaving your head. They're hollering and screaming at you. And life looked pretty lousy. But pretty soon I said, "You know, self, I don't like this." But I said, "You know what? I'm going to be here." So I better figure out one of two ways. I'm either going to experience a lot of pain or I'm going to figure out what I got to do to get out of the pain. Well, how I got out of the pain is I figured out I better be smarter, faster, quicker, better than the guy standing on each side of me. So I studied harder and knew what I needed to know and then everybody spent their time yelling at them and they'd just come by after a while. They came by and ignored me and never even talked to me because they knew I knew what I was doing. And I decided that the pain of studying, the pain of doing what they needed to do, they were going to beat it into me one way or the other. So get with it and get it over with and then it was a lot less painful. I didn't have to go through the pain all year. I'll never forget the guy standing on my right. He was a blonde California guy. Love to catch up with him now, but he fought it all year long and he would stay one page behind this book that we had to learn everything from how big cannons are to who's head of this and head of that. They'd give you so much to learn each week and I'd try to stay a couple of pages ahead. He'd always stay one page behind. Now the end of the year he learned the whole book. I learned the whole book. But by staying a couple of pages ahead I got no grief. By staying a page behind he spent the whole year in grief and it wasn't until they made so much pain that he'd go ahead and do what they needed him to do. You can decide the same thing. How much pain is it going to take? Do you want to really get in a lot of pain financially or do you want to go ahead and make the changes before it gets that painful? Personally I like to go ahead and get motivated and make the change before it gets any tougher. Now let's look at the next scripture that I've got down there. I type this myself so I'll have to apologize. It's 21-20, not 21-30. You might make that change there. There's desirable treasure in oil in the dwelling of the wines. There's oil in the dwelling. In other words they've saved up. They've got extra oil in the dwelling of the wines. That person has saved and has oil. Well it's heating oil or whatever, the oil of light. But the foolish man squanders it. What happens if we're not a saver, if we're not careful there's not enough oil when we go to the bank account at the end of the month. And that's what the Bible is talking about. We can either be foolish and squander it or we can be wise and careful what we do to it. If you've got a bad situation financially it affects your whole outlook on life. It affects the way you wake up in the morning and think about your day. If your finances aren't right when you wake up you think, "Good Lord it's morning." Another day to fight the battles. If your relationship with God's right and your finances are right you think, "Good morning Lord." Same words. Good Lord morning. Good morning Lord. Depends on how your attitude is. I read in one of the books I was studying it says, "Just as people don't want to hang around a person with a bad attitude, money doesn't want to hang around a person with a bad financial attitude." I think what it really means that we've also got to give money enough respect and to spend some time with it to figure out how to use it. You need to spend time with anything that's important in your life and a lot of us don't spend time with our money other than spending it. That's not spending time with it. Spending time with it is analyzing it, planning for it, budgeting. Also I wanted to mention about failure. If you're in here and you've had some financial failures in your life, if you've had any kind of failures in your life you can take two attitudes on that. I had a coach that taught me a lot about this when I was young and I was getting knocked down a lot. I was a full back and I got tackled a lot and got knocked down a lot. He said it's not a failure unless you don't get back up again. Get back up and run harder next time. What I think we're really saying is do you see your financial failure or some of the other failures as a temporary setback that you're determined to overcome or do you see it? Have you settled into deciding, "Well, that's a permanent situation. I can't do anything about it." Don't do that. That's not true. That's the devil that's telling you that. Your situation isn't permanent. If you've had failure, that doesn't mean it needs to stay that way. Your failure is only your failure because you hadn't listened to God and you hadn't been in His principles. With God's help you can succeed. I'd also like to talk to you about your values. The next thing on the outline there is values. You've got to build your financial life, your life on a foundation of good values. I wrote down five things here that I consider to be very important values in life and it affects your financial life too. The first one is integrity. We've got to have integrity with our money. We've got to have integrity with everything we do. It's going to affect what we do. The next one is commitment. We've got to have a commitment. When we make a budget, when we make a plan, when we do something, commitment is very important to the success of that plan. The third one is loyalty. Loyalty to the Lord. Loyalty to our spouse. Loyalty to our friends. It's important. If we're loyal to the Lord and loyal to our spouse, it affects how we spend our money because out of loyalty we're not going to do something that's wrong to them. Compassion is the fourth one that I wrote down. Compassion is a very important value. It will help determine how we spend our money and whether our money will be blessed or not. The fifth one is responsibility. Fifth value is responsibility. I want to stop and talk about responsibility for a minute. We've got to take responsibility. Being responsible means taking responsibility. That means that we need to stop blaming God. We need to start blaming others. We need to stop blaming circumstances for our failures. We need to take responsibility. That's not popular in this country today. We all want to blame somebody else. It's the government's fault. It's because I'm a minority. It's because of this. It's because of that. I can show you examples in every situation where people overcame whatever it is that somebody else uses an excuse for why they're where they are. Take responsibility for your finances. Make the changes you need to make and you will enjoy the abundant life that God really intends for you and your family. Don't let fear keep you from dealing with your financial problems. A lot of you are scared. You're scared of how am I going to get out of this? How can I do this? Fear just creeps in. That's not from the Lord. Again, fear is a spirit that comes from the devil. Fear is not from God. Don't accept it. When fear comes on you, say, "Get away. The name of Jesus." I don't want to see that. Don't be scared because fear will prevent you from doing what God's calling you to do. You can overcome your financial situation with God's principles. I want to look at Proverbs 21 5 now. It's just right there, the same chapter we were in. It says, "The plans of the diligent lead surely to plenty." But those of everyone who is hasty surely to poverty. I think what that saying is the plans of the diligent. It's saying, "We must plan. We must have budgets. We must be diligent with what we do." And what does it say there? This is the Bible. This isn't something that just somebody wrote. This is the Word of God. It says, "The plans of the diligent lead surely to plenty." It doesn't say, "The plans of the diligent sometimes might work out to plenty." It says, "Right here, it's a promise. The plans of the diligent lead surely to plenty." To me, what this means is we need to plan for our financial success. We should plan for a lot of things in our life, but we need to plan for our financial success. We do that by putting together a family budget. Most experts agree that putting together a family budget is not something that you look forward to. It's not something that anybody wants to do. We all try not to do it. But it only takes about four to six hours of time to put together a family budget if you've got your receipts and your things where you can pull it together. Some people say they can do it in the last time than that that they've been able to do it an hour or two. But I would pretty much say that it's not going to take over one afternoon if you'll sit down with your information to put together a family budget. So it's not something that's going to take you two weeks off work to put together. It just seems like it. It's important that you make a commitment that once you put this budget together, that you'll stick with it at least for 90 days. Stick with it for 90 days and see what God starts teaching you and showing you. I promise you, you'll be blessed. Let me tell you why you need a budget. Most people underestimate the amount that they spend. That doesn't surprise you, does it? Most of us underestimate how long it's going to take us to get somewhere. That's why we're late. We're all underestimators. We don't plan the little things that get in our way. We don't plan for that extra traffic. We don't plan for that extra phone call. We don't plan for the little things. Well guess what, in our finances, the same thing happens. We don't plan for the unexpected things and we get caught off guard. So everyone underestimates. Take a guess at how much they've run studies on all income groups. Take a guess at how much people typically underestimate their monthly expenses. If I said how much do you spend a month and you came up with an estimation, guess what that estimation typically is according to surveys? Two hundred. A thousand dollars a month. And it doesn't seem to matter whether you make seventy thousand a year or forty thousand. Everybody underestimates what they really spend a month by one thousand dollars a month. You don't know where it goes. That's why we've got to keep track of it in writing. You know why most small businesses fail? They've also run a lot of studies on this because small businesses, 80 percent of them, fail in the first year. Small businesses fail because of lack of good accounting and good procedures to know where your money is going, how you're spending it. It's accounting problems. It's not knowing where your money is going but small businesses fail. Guess what? A family is a small business. There's x amount of money coming in. We've got to spend it. We've got to spend it wisely. Same thing. And that's why 80 percent of the families also fail in their financial areas because they don't have good financial accounting. I'm not going to be able to go into enough detail in a class like this to teach you everything that you need to know. There's books. In fact, I've got one here that I want to recommend to you. It's called the budget kit. This is a book you can get up at Barnes and Noble. I think it runs 16.95. It's a little less on Amazon over the internet and if you've got a discount, you can get it less than that. It even Barnes and Noble. But it goes through step by step with worksheets and tells you the stuff you need to know, gives you examples. There's online help. It's a good way if you want to start doing a budget to put it together. What I've done tonight is I've got a sample that I'll put up in a minute on the overhead over there and I'll kind of take you through how to do this. So turn now to your sheet there on budgeting. It should be about your third page. No, the third page. Not the one on the back. The one on the third page. What happens? You're going to find out by budgeting that you can control your expenses. You can say you have power over the money that comes in and you're going to have less guilt spending it because every time you spend some money, you know you've already figured out to spend it and you'll feel okay about it. Whereas when you're in debt and when you don't have your money planned and budgeted, every time you spend money you're sitting there worrying, is this going to throw me over? Should I spend it? Should I not? You're feeling guilty? You can't really enjoy the money that you're spending. Well, the budget will allow you to spend your money and enjoy doing it. So let's go through kind of some ways that I suggest doing this. First step is to write down your immediate and short-range goals. We want to start with the goals. In other words, before we start trying to figure out how to budget, let's figure out why we're budgeting. Look at your short-range goals. Maybe your short-range goal is something like to pay off such and such credit card. It's been X number of months or something like that. Maybe it's to save enough money to buy a present for my daughter on her birthday. It could be anything that was a short-term goal. You may put down about 10 of these even and then kind of prioritize them on what's most important and what's not. Do some thinking into how you're going to spend your money, make some goals on what's going to happen with it. Then take and expand that in step 2 into putting some longer-term goals. Maybe a long-term goal would be to save enough money to retire early, to save enough money to go on a two-week vacation in five years, to save enough money to buy some special thing that you wanted. It could be anything you want. It's got to be your goals. But look at your short-term goals, some middle goals, and some long-term goals. Make some decisions again on your long-term goals and prioritizing them. What's the most important? Maybe it's to buy a new home. That's a goal. It's a five-year goal, a middle goal, or even a long-term goal in some people's mind. Then step 3 is to make a list of your family's needs and wants for the coming year. This is easy. This is all fun. We're writing down stuff we want, stuff we need, stuff we'd like to have. This budgeting deal is not too bad, is it? What happens is, these are needs and wants of things that you're going to like to spend your money on. You don't need them necessarily. Some of them may be needs, but some of them are just wants. If I had the money this year, here's what I'd like to spend it on. You make a list of wants, and you do this with your kids too. You teach your kids to establish priorities on things that they want. Make them think forwards a little bit about what they want and help them to learn to make choices and learn patience that they begin to think about these things, and then they wait, and then when the time's right, they're ready to buy them. I'm going to put a sample worksheet up here on the wall that will go with the next few steps that we're going through. You'll see on step 4, we begin the budgeting process by making a list of our general yearly, occasional, non-monthly expenses. Now, where those come in, you'll see on the very next to the bottom category over there on the left side it says occasional. I guess it's really the third area from the bottom or about the third area down. Those are occasional expenses. But it's better to start the process of thinking about that first. You'll see some of the things that are listed up there. We've got household items such as photos. How often do you go get photos? Those are things that don't happen every week. They don't happen every two weeks. They just happen from time to time. So how much do you think you spend in a typical month on going to get photos? This particular budget had $20. Then you think about some of the personal items that you do from occasion. We've got down a perm on this particular one. Maybe you get your haircut. Some people might get it every three weeks. Some people might get it every six weeks. Some people might not do it but once a year and they do it themselves. But you need to figure out what are occasional items and how much money do you spend on those occasional items. The next category in that occasional is clothes. We've got down dry cleaning in that particular deal. $75 there. Medical prescriptions. It's an occasional deal. This isn't something you do all the time. Think about those. Child expenses. Maybe at the beginning of each semester you have some expenses for your child to do something. Maybe to be on a team or something. Think about those occasional expenses that are regarding your kids. Think about recreational things that come up. Maybe you buy tickets once a year to be able to do something for a period of time. You need to think about those things and write those occasional things down. Counseling service. Books. CDs. Some of these things may not happen every month. They may only happen one month a year. They're just occasional things that happen. But you need to kind of get a handle on what they are and start thinking about those categories like that that are occasional things. I've put down a bunch of other examples there in your step four. These are non-monthly things. Car insurance, summer camp, music lessons, sports equipment, annual gym fees, home improvements, magazine renewals, dental work. These are yearly things that you can't really put into a particular month. So you look at over a year maybe how much do we spend on that. Then we'll try to break it down into figuring out how much a month we need to put aside for those things. Then the next step is to look at your monthly expenses. So we've looked at your non-monthly expenses. Now we're going to take our monthly expenses. Things that happen pretty much every month. We'll start that out by looking at your monthly fixed expenses that occur. There's going to be things like your tie, your house payments, your car payment, loan payments, internet access, monthly dues, monthly daycare. You can see those fixed amounts up there on the very top of the sheet, fixed amount. You'll notice that utilities aren't up there because utilities change each month. In the cold months it's going to be different than it is in the warm months. So these are things that the exact same amount is every month. Maybe you have internet access and you pay $9.95 every month. Well that's a fixed amount. Then the next category down there is fixed variable. You'll see we've got electricity, gas, water garbage, telephone, cell phone, groceries, meals out, auto expense, license, church charity. You may give a certain amount to the church every month and put that up in the top category and then put a different amount down in the bottom of how much over a year maybe you give over and above that same amount that you give each year. So we're just trying to break these things down into different categories and it makes it easier for you to figure out all of them. If you're not careful you'll miss some of these things. Obviously if you're good enough you could just take and write every category down and have one category of everything. And if that works for you then that's fine. But this is a way that has been proven actually to be the easiest. Look at those categories again. You've got your fixed amount expenses. Think about the things that are the same every month. Put those down. The second category is fixed variable. You've got them every month but they vary in how much they are. Next category is occasional expenses. These are things that are not monthly. They're things that happen at odd intervals throughout the year. Think about those things that you do at odd intervals and then the bottom one down there is debt reduction. You'll see that you've got credit cards, Visa, MasterCard. I think on this chart they call it installment payments but I call it debt reduction. Then you'll look at the bottom there. You'll see how you total it up and you'll come up with your total income and your total expense. A lot of people will do that just for a whole family but it's better if you do it the way it's done up here. You'll notice those different categories. Those are the different people in the family. So this is a budget for four different people and then a total over there on the end and each person kind of has their own budgeting and they're teaching the kids how to budget their money to and how to put them in different categories. Why do we have to learn this when we're 40 years old? Is it okay if we teach our kids how to budget so when they get married? I mean how many young married people do you know that get into trouble right out of college and they say why didn't somebody teach me or tell me this? They don't teach you this at college. They don't teach you this in the real world. You have to wait until people get in trouble and then they have to go to somebody to teach them how to get out of trouble. That's a shame. Let's teach our kids, let's do this ourselves, show our kids how it works and then start helping them do some of the same things and plan for it. What a great witness that would be for our kids. As you do this you're going to be able to start making more intelligent spending decisions. When you get it down in writing it helps you a whole lot. It's amazing how simple it gets to be. It seems real hard when you think how can I save X amount of money a month? We're going in the hole so much money I don't know what I'm going to do. Well when you start putting it down in categories you start seeing what it is you'll see what to do. I had somebody last week ask me afterwards they said my house payment, time I take care of my, we'll call it that top two categories up there, the fixed amounts and the ones that are pretty much fixed. It's just a matter of exactly how much they are. By the time I get through with those two categories there is nothing left over. You say I need to save and you say I need to pay off my debt but there's no money left over. What do I need to do? Well you've got to find something up in those categories you're going to reduce don't you? And you start going down them category by category and figuring out which one you can reduce. In this particular situation the answer was 11 to expensive a home. Everything about the home are too much. You tell these are too much. All those categories up there are too much. He had a sizable amount of equity in that home but he was paying a lot bigger payments than he needed to pay. We did a little analyzation and figured out that if he would take and get out of the home that he was in and buy one about two thirds that expensive. Take half of his equity and pay it against his credit card debt, take the other half of his equity and put it against the home that his new home that he's buying. Now his debt is half of what it was and he's into an 80% mortgage on a much less expensive house. He's going to have extra money left over. He can knock the rest of that debt out in a year or two. It's really pretty simple. When you get it down and you see it you see what hard decisions you need to make. You can do that.