When I was in college, I simply had to have a new truck. It did not matter that I could not really afford it. It did not even matter that the $220 a month payment would be about 50% of my take home pay. Add in over-priced auto insurance, and I was a walking time bomb. It still amazes me to this day that the dealership would give me a loan at all, not to mention 100% financing to a 19-year old kid.

Last night I got to thinking about what that truck said about me as an individual. Sure, I could have bought some broken down beater that would get me to and from school just fine. My friends did not care what kind of vehicle I drove, so what was the motivation behind that purchase? I am not sure, but I felt really, really good behind the wheel of that truck. Looking back on it now, that truck wasn’t all that great. It wasn’t a particularly big truck. It did not even have large tires or custom rims. No. The more I think about it, the more I come to understand that was the selfish child in me screaming for attention.

When I look around society today, I see hundreds of adult children just like the old me. They can barely put food on the table, yet they drive, or even worse, lease a car that is entirely out of their income bracket. I am not saying that people should not have nice things, I am just saying that the things you choose to buy really speaks volumes as to what you truly value.

Where are you spending your money? What does that tell you about the things that you value most in life?

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Ecclesiastes 5:19 – To enjoy your work and to accept your lot in life – that is indeed a gift from God.

Do you receive an annual bonus from your company? Do you count on it to maintain your current lifestyle?

I do not receive an annual bonus from my company. I agreed to perform certain services in return for a consistent paycheck paid every two weeks. If my boss ever decided that I deserved a bonus, I would say ‘thanks a lot’ and continue to provide the same level of service that I currently provide. I truly do not expect to receive one so I cannot understand how so many people actually depend on one to survive.

nytimes.com published an article discussing how bonus cuts are hurting more than just the elite Wall Street money makers.

Millions of Americans, far removed from Lower Manhattan, count on receiving extra checks to help pay for cars, trips, home renovations, and school tuitions and summer camp for their children.

Now, in the 14th month of a deepening recession, smaller bonus checks are arriving, if they come at all, and are delivering diminished expectations.

Really? Millions of Americans expect to receive an annual bonus each year? I wonder if they include these expectations in their budgets, or simply spend it when they receive it. What happens if they do not get one, for whatever reason? What do they do then?

A bonus is intended to be exactly that – a bonus. If it isn’t, then it is compensation. Unless I could be guaranteed to receive a specific amount of money on a certain date, I would not spend it before then. Just because you received a $10,000 bonus last year, that does not mean you will receive the same amount this year. You may receive less, or nothing.

As I really dig into our finances, and plan for our future, I refuse to be normal. I refuse to believe that I am owed one penny more than I have earned. While I do hope to receive a raise this year, I did not create my budget based on any estimated increase. I base our budget on what actually hits my bank account every other week.

What about you? Do you receive an annual bonus? Do you include that amount in your budget, or deal with it if, and when, you receive it?

Popularity: 24% [?]

When my wife and I were attending Financial Peace University we consistently held weekly budget committee meetings. Due to the inherent differences   between my wife’s life experiences and my own, it was important for us to get on the same financial page. Each week, usually on Wednesday night (nothing good is on TV), we would sit down in front of our computer and go over our spending for the past week. We would also look forward to what we needed to spend during the next 3 to 7 days.

In our household, the budget meetings look something like this:
I would spend approximately 30 minutes preparing a zero-based budget for the current pay period based upon unrealistic expectations. My wife would then review it and laugh at my optimism. We would then spend the next 30 minutes discussing a realistic plan for the week. These weekly meetings really kept us focused.

Last night, we held our first budget committee meeting of the year. It was timely since we have had a few expenses sneak up on us, throwing our old budget out the window in the process. While most of our expenses are fixed in nature (i.e. mortgage, insurance, etc), there are a few variable expenses that needed to be addressed.

1. Cable TV/Internet/Phone – Currently we have a bundled package for our cable TV, internet and phone. High speed internet and the cable phone are worth a little extra in our household. For the past 2 years, our monthly bill has hovered around $100. Last month it shot up to $170. I guess we are no longer on the “promotional” plan period. When you un-bundle services, the price per service increases; but not by $70 per month. We elected to ditch our cable TV and purchase the new box that allows us to receive local channels for free. The box cost us $50 from Wal-mart and will pay for itself after only one month. Additionally, our un-bundled services will now cost approximately $70 each month. Doing some quick math, this entire process will save us $1,150 (or $96 per month).

2. Cell Phone – At one time in our lives, owning cell phones made sense. I traveled a ton and I was always on the road. The piece of mind it provided my wife was worth the $80 a month we spent. With my current job, I have absolutely no use for a cell phone at all. I sit at a desk for 10 hours each day, with a phone within arms reach. My house is 4 miles from the office and when I am not working, I am with my wife and son. As we were on month-to-month status with our carrier, I canceled my number. We elected to keep her number (they even gave her a new phone) and reduced the plan minutes accordingly. I like to know that if my wife needed me, she could call for help. Cutting this phone line will save us $480 (or $40 per month).

I must admit that this was a pretty effective budget committee meeting. In one hour, we managed to cut $136 a month from our expenses. I wish all meetings could be as effective!

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