Cash Flow Planning - FPU #2

Last night was another successful Financial Peace Class. The topic was Cash Flow Planning. OK Budgeting. Wait. . . Don't go, this budget really works. My wife and I have been using it for more than 4 year know.

In a nut shell, You write down your take home pay and assign every dollar a home. At the bottom of the budget it must equal zero.

We have a "blow" category in our budget. This is for things that we forget or in most cases for when the kids come home from school and say "I need $XX for school tomorrow." Without a blow category in our budget, the budget would never work.

If you'd like more information on the zero based budget, click here.

Remember all a budget is, is you telling your money where to go. Try it! It works

I would walk 500 mile and I would walk 500 more. .

At lunch time today in the staff break room was full of staff members. As is often the case, there was leftover food and our staff hates to see food go to waste. I addition to this, a local baker brought in sweets for the staff to sample.

As we were all munching away, the conversation turned to why we couldn't loose weight and what the exercise of choice was for each staff member. There was the typical answers. (YMCA, Basketball, Treadmill in the basement)

The coolest comment came from one of our facilities team members. He is averaging over 20 miles walked each week. Just from doing his job. He wares a pedometer at work to track his steps. Taking into account two weeks vacation, He'll walk 1,000 miles in 12 months. Now that's exercise.

The new $1 coins are here.

The new $1 coins are here. They are being issued in the order that the presidents served our country. Quick? Who are the fist 4 presidents of the US?

1George Washington 1789-1797
2 John Adams 1797-1801
3 Thomas Jefferson 1801-1809
4 James Madison 1809-1817

These 4 are going to be issued in 2007.

These coins are going for more than face value on ebay right now.

They do have a cool look to them but are they practical? I hate carrying change in my pockets and I don't like carrying cash for that matter.

I'm wondering if our coke machines in the church will know what to do with these $1 coins when they show up? The machine will have to wait until 2010 for $1 Abe Lincoln and 2015 for Jon F Kennedy.

Let me know the fist time one of these coins show up in your pocket.

Name this Blog

I've been told by numbers of people that I need a better name for my blog. Just a few minutes ago around the staff lunch room table was the most recent request to put a name to my blog. They told me "Tcolucy" is boring and dry.

So, what do you think would be a good name for my blog? I'm open to suggestions.

Thanks

FPU class #1

Last night was our fist FPU class here in the new building. I was pumped with the way things went. We had some no shows and some walk ins. (It all works out) I do have a few kits remaining waiting for next falls class.

In all, we have 5 facilitators. (K, Larry, Ron, Mike, and me) Everyone did a great job last night! Thanks guys. We are all in for a life changing adventure.

My group is a nice mix of life stages. The youngest is just two years married, a couple in there 30's a few of us in our 40's and a few just short of retirement. We all have a story to tell and we all have different reasons for taking this class.

If appropriate, I'll share some life change stories from our class here over the next 13 weeks. For now, I'm off to check out the new section of FPU's web page for class participants.

Another reason to love Direct Deposit

As I type this, I'm sitting at my home computer instead of being at work because I'm iced and snowed in from this winter storm. The ice on top of the snow has has allowed our smaller dog to to walk on top of the snow. He's not quite sure about that.

This weather got me thinking about how great it is to have our staff using direct deposit for our paychecks. At midnight tonight, payroll will magically hit 30 employees bank account. (We still have 1 direct deposit hold out.) The winter storm has allowed me the time to schedule all of my bill payments (free from my bank) to be sent out on Friday. No stamps no hassle.

Jason asked me in through a previous comment if Direct Deposit was cost effective for the church. Jason, I've got to admit, I've never looked at it from a cost standpoint. In our case, we use Quickbooks and they charge the church for direct deposit. It's free to our employees. You can check with your church's bank as most banks now offer this service for free.

I look at the cost of direct deposit as an employee cost. Its now expected by employees more than being seen as a benefit. I love it and consider it a condition of employment myself. With the combination of direct deposit and online bill payment, I haven't set foot in my bank in years.

So, the snow and ice can keep coming. My check is in the bank. We'll as of midnight. . .

85 People signed up for FPU

85 People have committed to taking Financial Peace University at NewPointe. There are no words to describe what I'm feeling.

If you've read my blog before I'm sure you've seen some FPU references and posts before. According to Dave Ramsey and his team, the average person or couple pays off $5,300 in debt and puts $1,200 in savings during the 13 weeks of this class. That's one very large return on a $99 investment.

The 85 people taking the class make up 50 families. 50 x $6,500 in debt reduction and savings is $$325,000. Talk about life change. . . I can't wait. I know from prior FPU graduates, the class not only changes their lives but graduates help their family and friends make changes.

Say a prayer for our five table leaders. This is by far the largest group we've taken through at one time.

$15 Free to you from PayPal

If you use PayPal for any of your shopping including eBay, then this post is for you! Keep reading.

PayPal is offering a $15 rebate on a single purchase of $30 or more made after February 8, 2007 and before March 31, 2007 at any qualifying retailer that accepts PayPal including eBay. All you have to do to get the rebate is:

Register your email here
Make a single purchase of $30 or more
Make it at an eligible website
That’s it. Once finished, the $15.00 rebate will be deposited into your PayPal account by May 28, 2007.

I've signed up. How about you?

Invest your tax refund in your IRA the easy way

This year, in an effort to encourage you to save, the IRS is allowing taxpayers to have their refunds deposited in up to three accounts including IRAs. If this sounds appealing, you'll want to pay close attention to the rules that apply. As Forbes reports, while the government’s intent is good, there are a few kinks that could cause you some headaches:

• "The IRS must deposit your refund into your IRA by April 17, 2007--the tax-filing deadline this year--for it to count as a 2006 contribution. If the money doesn't get into the account by April 17 it will become a 2007 contribution instead...and you’ll miss out on the 2006 break"
  
  
• "Some people are eligible to deduct their IRA contributions for 2006 even though you make your IRA deposit in 2007. If you're one of them and the money gets into the account late, than you'll have to go back and amend your 2006 return.
  
  
• "You have to make sure you get the routing and account numbers correct. And you have to check off the appropriate box on the IRS form indicating whether the money is going into a checking or savings account. So which is an IRA? That depends. IRA accounts held at Fidelity are checking accounts, but other custodians consider their IRAs to be savings accounts. So you must call your bank, mutual fund, brokerage house or credit union and ask."
  
  
• "You as the taxpayer must tell the custodian by April 17 that you want that money counted as a 2006 contribution. Otherwise, the custodian will assume direct deposit is for the current (2007) tax year.
  
  
• "If your refund is changed because you made a math error or the government grabbed part of it (say to pay child support) that could change the amount going into your IRA."

It's Review Time

I know its the beginning of February and I should be looking ahead to spring. We'll not quite yet. I'm firmly focused on 2006. The year that just ended.

Tomorrow, our outside accounting firm will be in to conduct a review of our 2006 financial records. I very much look forward to this time for a few reasons

1. I'm sick. I just like this kid of stuff
2. I use to live / work in that world and it reminds me of how glad I am not to be doing that stuff for a live any more. My apologies to all those CPA's in public accounting
3. The most important, it puts a ribbon and bow on the year that just ended and brings credibility to our finances.

So, I'll be sending the next few days pulling together documentation to support or financial statements and answering lots of questions. I can't wait.

Commission vrs Allowance

This post is in response to a comment left here yesterday. Thanks for your question.

In years past, prior to me leading Financial Peace, my wife and I would pay our two kids a weekly allowance so our kids would have some of their own spending money. When kids are young the typical allowance is usually $1 for each year old your child is.

As our two kids started getting a little older, I began disliking the feeling I had each time I handed them their allowance money. I sensed an entitlement attitude coming from them and I wanted to teach them that money doesn't grow on trees. (Well technically the paper money is printed on comes from trees)

Fast forward to Financial Peace. In on of the classes, Dave Ramsey spends some time talking about parents teaching children how to handle money. During that time, the light bulb went on for me. Dave says that each member of the family must contribute to the household and that children should have some assigned work to do. Dave then paid his kids a "commission" for work done. No work, no money. (Just like in the real world.)

My wife and I adopted this method at our house and it has worked out wonderfully. Although my 13 year old doesn't like the name Dave Ramsey. There's no more asking for money from our kids when we are at a store. No on the rare occasion when our kids ask for money from Mon and Dad, we'd respond, how much commission do you have left? The kids usually respond "none". Then we say sorry, you'll have to save some next time. The typical question these days from our kids is,"What can I do around the house to earn $XX".

Here's how our commission process works. I post a chore list on our refrigerator each week. Our kids have 7 days to complete the items on the list. at 9 pm on the 7th day, I pay them the commission base on what has been completed and take away $2 for every item that hasn't been completed. And if there are three things on the list not completed, they are grounded for the weekend. Our kids can also earn bonus bucks for bringing home graded papers from school with A's on them. (Limit of 3 A's per week for bonus bucks. The A's week really adding up.)

If our kids complete all their chores, there weekly commission is $12. Then $1 for church, $1 into savings and they get to spend $10. They also get one additional dollar for each A that week up to 3 A's. (My 13 year old son is pushing for a larger commission. I'll need to revisit that soon.)

Anyway sorry for the long post but it was worth reading. If you go to commission route, please let me know how it goes. It's been a great learning process for our kids and has taken away the guild of Mom and me. No more asking for money from our kids and us telling them no.

My wife has drunk the Kool-Aid

It's no secrete in my family or anyone who knows me knows that I'm a huge Financial Peace & Dave Ramsey fan. My wife is much less enthusiastic about Dave but understands and agrees with our financial game plan. Our kids earn their commission but really dislike the name Dave Ramsey. That's another story for another time.

So what does this have to do with drinking Kool-Aid? Great Question. My wife drove into Dover for lunch today. (We each have our own bi-weekly commission) She went to the Wendy's drive-thru and ordered a plain chicken sandwich. When she got up to the window to pay, They told her it would be $3.39 for a plain chicken sandwich. My wife hesitated and then asked if she could cancel the order. The drive thru attendant said no one had ever cancelled an order at the payment window and then reluctantly agreed. My wife said thanks and then drove over to the golden arches and ordered a chicken sandwich off the value menu $0.99. Way to go baby!

She told me this story as soon as she returned to work. She said she could see me saying, "You paid how much for a plain chicken sandwich?"