Tag Archives: money

Values-Based Budgeting: Combining Values, Goals, and A Budget

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Values-Based Budgeting: Combining Values, Goals, and A Budget | Darling Magazine

This is continued from Values-Based Budgeting: Identifying and Defining Goals and Values…

Start with your values and goals. In a fresh new document, list your three values. Below each value, list 3 potential actionable goals. These can be a mix of things you already do, and things you’d like to do to further your values. Also try to create a mix of money-based goals (such as saving up for a trip) and life-based goals (such as visiting your parents outside of the city once a week—which will require extra gas money).

Now, combine these with your budget. You probably won’t be touching the Income and Fixed Expenses columns unless you get a promotion (congratulations!) or are able to talk the cable guy into a lower rate (good luck!). So for now we are dealing with the Discretionary Income.
A budget of $75 a week for groceries? Well, that’s boring, and doesn’t add anything to your life other than a number. But if you add the value that you want to buy as many locally grown vegetables each week, well, look at that! You’ve just directly added value to your life picture and your budget. Now, you can sew up a cute tote bag in 20 minutes, and enjoy your Saturday mornings at the farmer’s market. You’re killing a few birds with one stone—a fun sewing project, supporting farmers, eating healthy food, and entertainment for a Saturday morning! One of my favorite things to do!

An example of a goal would be, say, for instance, that last winter you really got the doldrums. Just like, really, really, got cabin fever/the blues/the mean reds and/or a stomach flu. All things that made you desperate to escape, but it wasn’t in the cards (and by that I mean, the budget). So start saving! Set a specific, measurable goal: I want to save $800 for a winter vacation next January. That means you have 10 months to save, so you need to shave off (or earn an extra) $80/month to achieve this goal.

Keep in mind that Discretionary Income is for saving and spending, so first things first: Create your savings goals before your spending goals.

Examples of Savings Goals

Emergency Fund: This is the cushion in case you lose your job, get sick, or need to make a major repair to the house immediately. Consider this a necessary savings goal.

  • Goal: Funnel a portion of your paycheck here automatically.
  • Value: Security

Paying Off Debt: This is technically spending money, but I consider it a savings goal because you aren’t spending the money for anything in the present; you are paying off the past.

  • Goal: To pay off debt sooner.
  • Value: Independence

Long-Term Savings: Setting goals for long-term savings such as a down payment on a house, a new car, college for your kids, etc.

  • Goal: Down payment on a house
  • Value: Family, Security, Independence

Short-Term Savings: Saving for things such as a new camera, a vacation to the Bahamas, a big birthday bash.

  • Goal: Save for Vacation
  • Value: Health, Happiness

Your own specifics will come into play here with actionable, measurable goals.

Examples of Spending Goals

Spending goals are not as easy to categorize, since they will usually involve spending more, spending less, or spending the same amount but juggling it between categories.

For instance: spend less on individual entertainment (use an actionable, measurable goal amount here) and spend more on community (for instance: taking old friends out to dinner once a month; purchasing books for and participating in a monthly book club).

Your value may be thrift, so clipping coupons in an effort to save money at the grocery store might be a great budgeting goal for you. Or perhaps one of your values is supporting local artists, so you decide to spend one evening a month going to the art gallery instead of the movie theatre.

Putting it All Together

Our values can inform our goals and budgets, and our goals and budgets can inform our values. We can tell the “GPS” of our budget that we want to spend less money on gas and ride our bikes more. We can tell it that we decide investing in microfinance is important to us, so we need to increase the payments on our debt so we can pay it off sooner and put that money towards our investment.

These are decisions we can see in our everyday life: every week when we pick up that CSA, or when we decide to take Friday afternoons off from work and use them volunteering at the after-school program. Most commitments and decisions in our lives affect both budget and values. Linking them makes budgeting easier and values and goals more prominent in your life.

Image via Wit + Delight

Values-Based Budgeting: Identifying and Defining Goals and Values

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Values-Based Budgeting: Identifying and Defining Goals and Values | Darling Magazine

This is continued from Values-Based Budgeting: Budgeting Basics…

You should have a pretty good idea of what you have spent for the past month. Don’t stress yet!

Now that we have the numbers, this is where we going gets a little bit tougher. Take a critical look at them. Do you notice that you spend a lot of money by not returning your Redbox movies on time? Or by paying for magazine subscriptions you never read? Library fines? ATM fees because you forget to go to the bank during the week? Make a list and then prioritize eliminating all of these wasted expenses. Do any of the numbers seem high to you? Try to whittle them down.

There are a lot of good tools online to help you with this. I especially love LearnVest’s online Money Center and Financial Bootcamps (these are amazing and free). You can also try Mint. Scour Crown Financial Ministries website (and books!) for some great strategies. Several of these connect with your phone so you can always keep an eye on your finances to decide if you really need a leopard print trench coat or not.

Now let’s get down to the heart of the issue. Why Budget?
A GPS is useless if it only knows where it is, and does not include maps and directions, just as a budget with only numbers is useless. When you combine a budget with your goals and values, you are telling the GPS where to go. You are punching in an address, you can add “Via Points,” you can change the setting from “Fastest Route” to “Most Direct Route” or you can avoid toll roads. In budget terms, you can save for college, or a trip. You can divert more money to your 401k right now or you might choose to invest some of your money. Now is the time to tell the GPS where to go…that is, to tailor the budget to your goals and values.

What are Values, Exactly?
Values are foundational principles that guide our lives and decision-making process. They can be things such as: Health, Happiness, Wealth, Thrift, Relationships, Love, Giving, etc. Values can change: when you’re young, you might value happiness and wealth (to pay off student loans!). As you grow and have a family, you may value health and thrift. It may be difficult at first to pinpoint your values, so take a look at your life as a whole and where you invest your time. Do you spend most of your time at work? You might highly value productivity, duty, or success. Do you spend a lot of time with friends? You might value community and relationships. There is no “right” amount of values to invest yourself in, but three is generally a good starting point.

What are Goals, Exactly?
Goals are actionable, measurable items that fit under your values; they are ways of manifesting your values in your daily life. A good goal should be actionable (one that has steps you can take to complete it), measurable (it has an end result that can tell you whether you completed it or not) and time-sensitive (based on a weekly, monthly, quarterly, or yearly result). For instance, if your value is community, volunteering at the soup kitchen one time a week is a good goal. There are steps you can take towards volunteering (find a local soup kitchen; contact them to set up a volunteer appointment, show up at the appointment and serve); and it is measurable (at the end of the month, did you go to the soup kitchen once a week?).

Stay tuned for Values-Based Budgeting: Combining Values, Goals, and A Budget…

Image via J.Crew and Cappuccinos

Values-Based Budgeting: Budgeting Basics

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Values-Based Budgeting: Budgeting Basics | Darling Magazine

Money can be easily spent and easily forgotten. A numbers-based budget does not give back to your life unless you are in need of some eye-glazing reading material to get you to sleep. Combining your budget with your life values and goals creates a budget becomes relevant to you. It speaks into your life and actually helps you accomplish not only your money-based goals, but also your life-based goals.

Budgeting can be rather black and white. What comes in, what goes out, blah blah blah. But when you introduce the concepts of values and goals, a budget suddenly comes alive! You can see how it works into your whole life picture. You can see how you can use it, mold it, and shape it to align with your values and goals.

Some people have been budgeting since they got their first tooth fairy quarters. Others have this vague notion of what the word means, but no real foundation. Most people probably cringe when they hear the word. Let’s break it down: What exactly IS a budget?

A budget is a “GPS” for your money. It tells you where your money is coming from and where it is going. It can also tell you how you can use your money, should use your money, what to do if you want to “detour” for a bit and do something else with your money. A budget is the big picture as well as the details of your income, your outflow, and what’s left at the end of the month (hopefully!).

Getting started is easier than you might think. Print out your monthly statements for any and all debit/credit cards, and gather up receipts, your checkbook, and a calculator. Write down any cash transactions you remember from the past month, including ATM debits. Then, make a spreadsheet in Excel. We’ll start by getting an accurate picture of one full month.

  • On one side, list all Income you get each month in a column, and total it at the bottom.

  • On the other side, list all of your “non-negotiable” expenses, or your Fixed Expenses in one column and total it. Take your time to think hard about every expense…life is expensive, and the small things add up. Do you have to pay for laundry? Parking at your job? Do you still “cover” your roommates half of the TV bill, or your little brother’s cell phone on your “Family plan”? Find your car insurance bills, and divide that by 12 to figure out how much you pay each month (even if you don’t pay it monthly). Same with health insurance, renter’s insurance (which you have if you are renting your living space, right?!), and anything else you pay quarterly or annually.

  • Subtract the Fixed Expenses from the Income. A positive number means you have money you can use for “Discretionary Spending” (unnecessary things). A negative number means you are accruing debt each month.

  • Below these, list your Discretionary Spending. It is often helpful to further categorize this into “Entertainment,” “Health & Beauty,” and other relevant categories for your lifestyle. List everything else here, such as: Netflix, lattes, gym memberships, haircuts, entertainment, eating out, gifts, postage, donations, magazine subscriptions, music download & app purchases on your phone, etc. Go through your statements, receipts, and check payments, and make sure you put ALL the numbers into this spreadsheet in the appropriate column. Don’t forget to include any tithing and charitable giving. This is not meant to be a judgment; it is meant to be an honest picture of where your money goes. At this point, you aren’t making any changes, just putting it all down in writing.

Stay tuned for part two of the series, Identifying and Defining Goals and Values…

Image via A Well Traveled Woman

Waste Not Want Not

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Darling believes in value, in appreciating and utilizing the small and big things that are given to us within our lives. We are to be faithful in the small things so as to practice for the larger opportunities in our future–taking care of the things that you already have and being wise in the ways you obtain the things you need and desire. A large part if living in this manner is choosing to do the little things that will save you and your surroundings daily. Join us in making right and clever choices, and please share if you have actions we can do with you. We first want to take a look at: water.

Water is a precious commodity that we can so often take for granted.  However, we all can take little actions all day long to conserve water for our community and for future generations. Here are some steps:

1. Turn of the water while you are brushing your teeth.

2. Turn off or turn down the water while you are shaving your legs.

3. Instead of just throwing out those half-full water bottles from social gathering, pour the remaining water in your tea kettle. Next time you have tea you will simply boil away the germs!

4. Save leftover water from steaming vegetables. Pour it into a small watering can and water your potted plants–the leftover nutrients from the veggies will supply your plants with nutrients and make them extra happy.

Please share with us the ways that you cherish your water. You can read about an amazing organization that is making a difference in lives all over the world by providing people with clean water  in our article on Charity Water .

Occupy Wall Street: Movement or Mayhem?

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The Economy. Many of us have heard and used these two words frequently during recent times. These words have now drawn our attention to the stock market–as it bounces up and down like a lotto ball–and caused us to pay special attention to our bank accounts, regimenting everything we purchase. “The Economy” has also caused some people to take to the streets and demand change on the face of Wall Street. This movement, called Occupy Wall Street, started on September 17th in the Manhattan Financial district, and has lasted over seventy days, spreading to over 100 cities in America.

It began as a peaceful movement intended to shock banks and large corporations into realizing citizens were against their corruption and greed. First started by the Canadian foundation called Adbusters, it has since branched into different divisions in the U.S., including the U.S. Day of Rage and the NYC GeneralAssembly. These organizations were founded by people reacting to the bailouts the government provided for the banks and companies, claiming that this lead to the downfall of the economy.

Occupy Wall Street protestors are calling for change in the face of corporate America, yet realize that this cannot be accomplished through political power in Washington D.C. It is a movement of believers who realize that they must let go of the side of the boat of political strategy, and swim across the lake to individual action and freedom–concentrating their attention on the rich in America, whom they believe are evading the economic downturn, and yet also benefiting from it. The words, “We are the 99%” has been the common chant of the participants as they hope to shed light on the gap between the rich and the poor.

Protestors are spreading the movement to cities across the nation, hoping to awaken the powers of Corporate America to finally see that there are citizens not willing to pass a blind eye to the joblessness in America. The groups of protestors are mainly comprised of younger citizens, from college grads to middle-aged full time employees. Most are educated, angry, and financially struggling as they rally in the streets, much like the activists in the late 1960s. They hope to inform others of the gross misappropriation of corporate powers and distribution of wealth in America, and want to tackle the issue of the government supporting corporate businesses, and benefiting from those partnerships.

However, as the movement spreads, it seems the goals have become diluted in the process. Most Occupy Wall Street activists hold to an idea of not having any leaders. Other than that, they only seem to agree that big businesses have dug too deep into the pockets of citizens, and that bankers should face the true consequences of their actions. Some activists want to march onto the White House steps with policy change, whereas others seek tax hikes for the rich and better accountability for tax breaks businesses receive. Their protests have been met with retaliation by local authorities, and some sit-ins have erupted into violence. Demonstrators have destructed public property and have caused business losses in revenue. Protestors are hoping that President Obama will begin to make policies that will aid the failing economy.

The question is: are the voices of the many reaching the oak desks of the powers that be? As the protests spread to different cities across America, it seems that the shouts fall on the deaf ears of most citizens, even though they claim to represent the 99%.

Through this, some choose to stand with the movement, and others don’t. Yet, we ALL hope that this dip in financial stability will eventually rise. Are you part of the movement? Do you think that the protesting is making a difference in the political realm? Do you think things can change? How?

 

Photo Credit:

mnn.com

theatlantic.com

dailymail.co.uk and Getty Images

Living on Peanuts

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When my husband and I realized we were up to $10,000 in debt on our credit cards, we freaked. Why we hadn’t been upset at three or five thousand, I don’t know. Regardless, we felt like we were drowning. We owed. Lots. So we took the well-known Dave Ramsey course to get some advice. I have to tell you, my first reaction was: I hate this guy. He told us our debt was only our fault. Who says that kind of stuff? I thought in my naivety.

So, we went into budget lockdown. In fact, after I calculated our budget, I laid down my pencil and burst into tears.

“We’re never going to make it.” I moaned into the countertop where my head was resting. I thought, “Why would God make me live like this?”

All dramatics and whining aside, the fact of the matter was that we were spending more than we were making. We would have to spend less, and unfortunately for us, we were making peanuts.

Now in the thick of the “budget,” I think the hardest thing is simply telling myself “NO.” I don’t think I should have to! There will always be justifications for why I should pay money for such and such, but at the heart of the matter is the thought: I want it, therefore I deserve it, and I should have it. That thought is simply not true.

Living on a strict budget is hard. And it doesn’t start to feel good for even longer. I often go through several what I like to call, “emotional budget stages”: The noble woman taking on the world, then the dying martyr—giving up all I love for the sake of responsibility, then the angry woman—wondering why money is so mean, and then the despairing woman, thinking God has set this all up to torture me. Finally, I get to the determined woman who is going to see this thing through, which leads to…freedom. I’m serious! If I stick it out, I begin to feel freedom WITHIN the constraints.

I didn’t and don’t have a way to make budgeting painless, all I have is a choice of how I want to view my life. Instead of going out to dinner for a date night, I pack a picnic and we go for a motorcycle ride. Instead of despairing over my completely lame wardrobe, I buy some super cheap accessories and refashion them. Instead of driving, I walk—inhaling life and energy in each deep breath. It all begins to change. It’s not about what I give up; it’s about shifting the focus and seeing my life anew. I begin to see how much I DO have, and in all the important ways I see that I am actually rich. I let go of the need for my life to look and feel a certain way. It’s hard to see our assets clearly through the persistent buzz of “I want, I want, I want…”

On an ending note, I have a few suggestions for those of you going on a budget. Part of it is taking a break from the source of my discontent. If I am trying to be content in a house I dislike but can afford, I need to stop trolling real estate websites just to see “what’s out there.” If I am cutting down shoe or clothing expenses, I have got to cut myself off of the fashion magazines. If I am leaking small amounts of money from coffee, eating out, or drinks after work, then I need to think about how much money I am willing to give to those little pleasures. Lastly, the budget made me rethink my priorities. I often ask myself: what is truly important, and needful in my life? What things seem needful and actually aren’t? How long has it been since I saved up my money to buy something?

My family paid off our debt, by the way. I’m still using “cash-in-the envelope” system, and I am saving up for a leather couch. I clawed, scratched, and wept my way to a better financial place. It wasn’t pretty, but it was oh so worth it. And the view is pretty great from here.

 

Meet the Achiever

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She walks with a slight hop in her step, shoulder blades back, concentrated. A nutrition bar in her purse in the case of no lunch break, she truly, “has it all together.”

Some women stand out in grade school as future CEOs. You find them telling the other students “what the teacher said” and calling all to obedience. The Achiever sees the world as a place for potential, herself being an active participant, a valuable commodity, and an instrument in making the world turn. Business, systems, and entrepreneurial adventures excite her.

Darling believes every woman is a gift to this earth and here for a unique purpose. We want to put a spotlight on you and help you discover your personal “gifting,” informing you of best fits for careers, or how to grow in your current situation. After all, a job isn’t “just a job.” Yes, we should be entirely grateful we have work, but also not settle for less. If all you can muster to say about your job is, “It pays the bills,” Darling wants to challenge you to find something more. We want women to thrive in their work, and feel excited every morning because they get to go to work.

Often, women in our generation complain about not being educated about “real life;” namely, the “advice that no one ever tells you in school” on balancing priorities, time management, and how to manage money well. We want to share etiquette, tips, and strategies about frugality, budgeting, saving, investing, stocks, taxes, and more. After all, there is freedom in living a disciplined and intentional life.

It’s so important to recognize that we are all incredibly unique, created to fill a place and need in this world that no one else can. Some of us are organized, some messy, introvert or extrovert, leaders or followers, yet we believe an “achiever spirit” needs to be kindled in all of us. Whether you’re already a powerful achiever, or one who needs to re-ignite their dormant fire, let’s each embark on a meaningful journey—start a revolution, a business, or join a team…be a part of something bigger than ourselves. Let’s use our power and influence for the good of others, not selfish ends. Sweetness coupled with power is the mark of a true leader that everyone wants to follow.

The Cash System: Key to Budgeting

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I’ve always had an easy time making a budget that looks amazing on paper, but always fails time and again. Making a budget work in the real world is harder than it seems. This has been my story for years: high hopes, low results. I’ve had jobs where I’ve made very little and jobs where I’ve made a lot, yet I have never been able to manage my money easily, or well. So, after reading some writing by the highly respectable and wise Dave Ramsey, I developed a simple system that made sense to me based on some of his principles. I call it the Cash Budget. I now have a success story in managing and budgeting my money wisely, every week. I have had so many friends ask me about it that I’ve decided to put it into writing so that more people can benefit from it and become total millionaires…or at least not bounce rent checks.

Here are the lies I believed that were important to dispel:
-that you spend more money faster using cash than if you use cards
-that credit cards are for emergencies
-that cards are good for spending because you can budget, categorize, and track your spending easily online

So here is the famous Cash Budget:

1. Expenses: think through all your monthly fixed expenses and write them down or put into a simple spreadsheet.

fixed expenses are things like: rent, insurance, monthly donations, gym membership, credit card payment
fixed expenses are not: gas, groceries, entertainment and etc.
these expenses should be paid online linked to ur checking account or with checks, not cash, not credit cards

2. Math: Total all of those items. Subtract that figure from your monthly income.

Example:
$2000 (monthly income)
-$1500 (fixed expenses)
$500 (flexible expenses)

3. The Hard Truth: The amount that is remaining is ALL you have to spend on EVERYTHING ELSE. Do you hear me? EVERYTHING so if that’s not enough, you have to find a way to increase your monthly income or cut out a fixed expense.

4. The Magic: Take that amount (say $500) and divide by 4. That leaves you $125 per week to spend on all your “flexible spending”.

Flexible expenses are things like: shopping, gas, dining, entertainment, groceries, and miscellaneous.
If necessary you can categorize your flexible spending. ex. $125/week ($25 dining, $50 groceries, $25 misc, $25 gas).

5. Allowance: Now that you know your weekly allowance, you MUST get in the habit of taking this out in Cash every Friday.

Why Friday? Because you will always spend the most on the weekend and Monday morning you will realize that you need to find a way to make that $20 in your wallet last the whole week. Even if you think that it’s OK to get it on Saturday it is NOT, because you will go out Friday night, buy some stuff you don’t need and mentally try and keep track till you take your allowance out and it won’t work….I speak from experience.
Why cash? Because it is way too hard to keep track of your flexible spending if you use a card. Also you get better deals when bartering with cash, you avoid ATM fee’s, and credit card minimums at bars and other establishments.

6. Freeze your Credit Card: Stop using your Credit Card asap…literally don’t even carry it with you. Here’s a good tip: take your credit card and freeze it in a Tupperware container full of water. That way when you think you have to use it…you’ll have to wait. Oh and you don’t need a Credit Card to build good credit.

7. Emergency Fund: Try as hard as you can to add an expense line in Step 1 called “Emergency Savings.”

8. Be Tough: This is the last and maybe hardest step. This whole plan really does work, and certainly will help you to have more financial sanity. It worked for me and for my friends. But you need to be disciplined. Take out cash every Friday, don’t use your Debit or Credit Cards, stick to your budget and save that $1000. To paraphrase Dave Ramsey: “tell your money where to go instead of watching where it went.”