After taking a couple of days to relax and and enjoying some time with the family, I’m rested, rejuvenated, and ready to rock. They’ll be no more talk of ‘losing focus‘. Instead, I’m ready to move forward with renewed desire.

Step One: I had a long conversation with my wife - about our finances and my lack of focus. I also asked for her help with my weight loss issues, and she agreed to be supportive and help me when I’m tempted to ‘eat for the sake of eating’. My wife is awesome.

Step Two: I updated my No Credit Needed Network Chart. In the past, I’ve included every single dime that I had in my checking accounts, saving accounts, and brokerage accounts, when calculating my Non-Retirement Savings. From now on, I’m only going to count the money in my ING Direct Savings Account. I don’t want to feel like I’m padding my statistics. And, the NCN Network Mini-Chart has returned to my sidebar!

Step Three: I sat down and revisited my financial goals for 2008. So far, we have fully-funded my Roth IRA for 2008. We need to fully-fund my wife’s Roth IRA for 2008 and my daughter’s ESA and my son’s ESA. I am making monthly pre-tax contributions to my 403b account and my wife’s pension plan. It feels good to know that by the end of 2008, we will have contributed over $30,000 to various retirement and educations savings accounts.

Step Four: I obtained a copy of the latest and greatest version of the You Need A Budget budgeting software. For a long time, I’ve been using the earlier, spreadsheet based version. Now, I’ve upgraded to the YNAB Pro version and I’ll be using it from now on. By the way, Jesse, the creator of the software has asked me to participate in an online ‘webinar’ in August. I’ll have more information about the webinar in coming months - and a review of the Pro version next month.

Step Five: I logged into all of my accounts and updated my Financial Inventory. At first, I created this as a resource that my wife could use, if something were to happen to me. But, now I use it as a reference document for myself, when checking all of my accounts and moving money from one account to another.

Step Six: I spent quiet a bit of time, alone, in prayer, asking for guidance (in a lot of areas of my life). I tend to go through cycles of ‘being up’ and ‘being down’ - and it always feels good just to get away, close the door, and talk to Father.

Step Seven: I went through my Google Reader and unsubscribed to several feeds. I went through my email and deleted several old emails. I went through my bookmarks and deleted several old feeds. I went through the files on my computer and deleted several unnecessary files. In other words, I needed to get rid of a bunch of stuff that was cluttering up my life.

Step Eight: I called my Dad and had a long conversation about retirement, life, money, etc. He reminded me of all of the good things that I’ve done over the past 3+ years - and he encouraged me to continue to move forward. I’ve mentioned it several times before, but I have a super awesome Dad.

Step Nine: I spent several hours with my oldest daughter and my son, just hanging out. We went to the beach, we swam in the pool, we played putt putt. We had a great time. I was reminded, for the one millionth time, how much I love them, and how much I want to bless them. And, when I am being responsible with my finances, I’m setting a good example for them.

Step Ten: I wrote this blog post. I cannot express, adequately, how much this blog and my readers, mean to me. It always helps to have a group of people, in my case, my readers, with whom one can connect.

One side note: Recently, I signed up for FriendFeed. If you have a FriendFeed account, of if you decide to create one, feel free to add me as your friend: Friend Feed for NCN

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The Mirror -

The mirror serves two purposes. It reveals and it guides. As you look in a mirror, you see yourself, as you you really are. And, if you choose, you can use the mirror as a guide, to make changes to your appearance.

Have you taken a look in the ‘mirror’ lately? Are you dealing with your personal financial realities, or are you averting your eyes? I spent years, ignoring the reality of my financial situation. But, three years ago, I decided to take a good long look at myself, and my finances, and I really didn’t like what I saw. So, I decided to do something about ‘my look’. I decided to make some major changes. I decided to live on a budget, reduce my debt, invest in my future, and talk to my wife about money.

The Magnifying Glass -

Focus. Address. Buckle down. Concentrate. Dedicate. Direct. Condense. Boil Down. Center. Pay Attention. Notice.

The magnifying glass allows us to block out all other distractions, and focus our attention on the smallest of small details. If you are ready to get out of debt and change your financial future, you need to learn how to focus, to pay attention, to buckle down, and to concentrate on the small, important details associated with money management.

I learned to focus, every day, on the important decisions that can and do affect my family and our finances. By creating goals, I have learned to concentrate my efforts and pay attention to details. I cannot tell you how important it is to create a specific, achievable goal, and to focus all of your efforts towards achieving that goal.

The Mountain Top -

It only takes a few minutes, each day, of staring into the mirror, to get my hair combed and my tie straight. And, just a few more minutes to tie my shoes, check the lock on the door, and I’m ready for my day. As I get in my car, my mind isn’t on ‘how to turn the key’ or ‘how to shift the transmission’. No, my mind focuses on my destination - where I want to go.

The mountain top is our goal. We want financial independence - the ability to enjoy our retirement and to bless our children and others. So, while the mirror and the magnifying glass are important, they are simply tools, which help us plan for our ultimate destination, the mountain top.

I have big, big dreams. I dream of changing my entire family tree, for several generations to come. I dream of blessing my friends and family members, with financial blessings. I dream of helping others and giving my wife anything should could want. I dream of the mountain top. I know that I must deal with today’s reality and with today’s details, but I am always dreaming of tomorrow’s rewards. The work that I put in to day - the seeds I plant - will one day reap great rewards.

You are worth it. You are worth fifteen minutes in front of the ‘financial mirror’. You are worth two hours a week, taking the time to pour over your budget and your bills. You are worth the effort, because your effort will bring about a wonderful, blessed future - for yourself, your family, and for those about whom you care.

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I like to buy big-ticket items - new computers, new televisions, new lawn mowers.  My wife likes to buy small-ticket items - and lots of them.  We have two children (and a third on the way) and both of them like stuff - bubble gum, crayons, toys, dolls, video games, etc.  So, how do we, a family full of ’spenders’ - manage to reduce debt, save money, and live on a budget?

Me - Daddy, Husband, Budget Creator, Grocery Shopper, Planner

As I’m sure you can figure out, I’m our family’s ‘money nerd’.  I like to crunch numbers, create graphs, develop systems, pay bills, and balance checkbooks.  So, I handle the day-to-day management of our finances.  I make sure that my wife has money in her checking account and cash for monthly expenses.  I buy most of our groceries and I handle transfers to our savings and retirement accounts.  I’m the one who casts the vision  - and does the research - and reads the books.

My Wife - Mommy, Wife, Organizer, Social Planner, Household Manager

My wife is the best Mommy that I know - and a large portion of her time is spent managing our household and caring for our kids.  She has ‘budget veto power’.  I create the budget, but she has free reign to change it as she sees fit, based on the real-world needs of our family.  (In three years of living on a budget, she’s never actually exercised this ‘veto’ power.  We are pretty much on the same wavelength.  But, if she ever felt that I was being foolish or difficult, she has every right to make a change.  It’s not my money or her money, it’s our money.)

How we work well together -

Like I said, I’m good at creating plans - and creating a vision for our future.  My wife, on the other hand, is great at keeping things organized and running smoothly.  So, I spend my time thinking about the big things, those things that will help us one year, five years, ten years, and thirty years down the road - and I spend time, each day, working on the details of those plans.  But, I also struggle to focus on the little things that really help to save money - and that’s where my wife does a great job.  We’ve found a good balance between long-term planning and day-by-day living.  And, we’ve learned the power of the word ‘WE’.  We are debt free.  We are saving for our retirement.  We are buying a new lawnmower.  As I’ve mentioned many times before, when you read the word “I” on this blog, feel free to replace it with the word “We”.  Instead of arguing about our finances - we have have agreed to work together, living within the constraints of our budget.

Our kids and money -

I’ve tried, on several occasions, to institute a system of ‘allowance’ or ‘payments’ for the work that our kids do around the house.  But, to be frank, at this point, our kids pretty much do what we ask, without expecting payment.  As the kids get older, I’m sure we’ll move towards a chores-list with payments, but, for now, we just don’t need it.  Our kids receive money from grandparents for their birthdays and various holidays, and they are free to spend that money on whatever they want, after setting aside a percentage for giving and saving.  Instead of focusing on money, we are focusing on responsibility - caring for our toys, turning off lights, being thankful for what we have, and honoring Mommy and Daddy when they say ‘no’ or ‘yes’.

We try to avoid fixed roles, but we do know what we are good at and where we need to improve.  I like to cook and shop for groceries, so I do those things for our family.  My wife does a great job of cleaning our house and keeping things in order.  My daughter is quiet, and she helps keep us focused on family things - playing games, drawing, watching movies.  My son, he’s Professor-Inquisitive, and he keeps us on our toes - constantly looking for inexpensive ways to learn more about the world around us.

Frankly, we spend a few minutes, each day, talking about our finances, and then we spend the majority of our time thinking about ‘important’ things - our family, our church, and our friends.  Once you take control and decide to manage your finances, you’ll be amazed by the number of issues that seem to disappear (or fix themselves).  Now, instead of borrowing our way into misery, we save for the things we want - and then we actually enjoy buying them.

I recently purchased a surround-sound system for our den.  I’ve been saving for it for several months, and when we recently took a trip out of town, I found the system that I wanted, and I bought it.  Instead of worrying about how we were going to afford it or feeling guilty because ‘we spent too much money’ - I’m sitting here watching the Final Four in brilliant high definition and blazing surround sound.  And, I don’t feel like I wasted any money, because I made a well thought out, researched, intentional purchase.   The same is true about EVERY purchase we make.  We have a budget.  We live by that budget.  We talk about what we are saving for and what we want to buy.  We sacrifice for our futures, and, together, we make purchases that we can enjoy, right now.

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As many of you know, I not only blog about personal finance, I also blog about health and fitness, over at No. Calories Needed.  I recently started a new eating plan and I’m down 8 pounds.  Not only has my diet affected my waistline, it’s beginning to affect my wallet.

Areas where I’m now saving money -

Lower food bills -

The eating plan calls for the slow, conscious consumption of food.  Now, instead of eating twenty bites quickly, I eat six bites slowly.  As a result, I eat less food.  The plan also allows for the consumption of foods that I actually enjoy - so I no longer feel the pressure to buy high-priced, packaged ‘diet foods’.

Lower restaurant bills -

I recently visited on of my favorite restaurants, where I would normally spend $20 to $30, and my total bill was $9.  While we rarely eat out, when we do, I like to eat what I want to eat.  But, due to the fact that I’m now eating far less food than I did in the past, I was able to order an appetizer and a baked potato, along with my beverage, and leave the restaurant satisfied.

Areas where I’m now spending more money -

Higher clothing costs -

I have begun to run, so I’ve ordered a new pair of correctly-fitted running shoes.  The shoes cost more than I would normally pay, but they are designed specifically for my feet.  Also, even though I’ve only lost 8 pounds (so far), I can tell that I’ll need a new pair of pants or two, in the next few months.  And, as anyone who has ever lost weight knows, once you shed a few pounds, there’s a desire to get rid of the ‘fat’ clothes and replace them with new, nicer items.  Of course, I have a closet full of clothes from my slightly thinner days, and I’ll begin to wear them, as I lose weight.  For now, the new clothing costs consist of the new pair of running shoes, two pairs of workout shorts, and some socks.

Areas where I will save money, in the future -

Life Insurance -

In October, my current term life policy expires.  I recently priced two new policies, one at my current weight and one at my goal weight.  The savings were rather significant, especially if you consider that I’ll be paying premiums for the next 20+ years.

Health Care Costs -

I have sleep apnea - a sleeping condition that requires that I wear a mask while I sleep.  The mask is uncomfortable and should be replaced every 6 to 12 months.  My goal is to lose a total of 80 pounds, at which point I might be able to get rid of the mask.  I’m not sure if I’ll ever be able to sleep without it, but if I could, the costs associated with the mask would disappear.  Also, due to the fact that sleep apnea can be fatal, my long-term disability insurance costs are sky high.  Getting rid of the mask - and taking a sleep test to verify that the sleep apnea is gone - would go a long ways towards reducing long-term disability insurance costs.

Areas where I will spend more money, in the future -

Running Event Fees -

As I mentioned, I’ve started running.  Inspired by my little sister, who ran in a 10k a few weeks ago, I’ve decided to sign up for a local 5k.  As I get more involved in the ’scene’, I’m sure that I’ll want to run in more events.  So, I’ll have to figure the cost to enter those events and the cost of gasoline to travel to and from those events.  Plus, I’m sure that I’ll want to buy more running gear.

I’m sure, as I lose weight, that I’ll find other areas of my budget that need to be tweaked.  If you have lost a significant amount of weight, I’d love to hear how it changed your financial life.

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A few nights ago, I couldn’t fall asleep.  So, I got out of bed and did a little ‘channel surfing’.

Between reruns of Sports Center and The Andy Griffith Show, I spent a few hours watching a couple of ‘television shopping networks’.

Now, I’m hooked.  Not on the products - but on the way that the products are presented and promoted.

Here’s what I have learned -

Every product was presented as a ’special value’ or ‘amazing deal’.

As each host introduced a new product, a little box, with product details, would appear on the left-hand side of the screen.  And, inevitably, the text would state - ’special value’ or ‘first time offer’ or something similar.

Each product was promoted by a product specific ‘host’ and a product-specific ‘guest’.

It was amazing.  As a new product was introduced, a special ‘guest’ would appear to talk about and promote the product.  The host and the guest would interact and exclaim how ’special’ or ‘nice’ or ‘breathtaking’ or ‘unique’ each product was.

Callers would call in - and want to talk to the host, like they were old friends.

Callers called in and spoke to either the host or the guest, or both.  And, inevitably, the caller would say something nice - really nice - about the PERSON to whom they were talking.  Yes, the caller would mention the product - and how they ‘loved it’ - but, the key to the whole ‘call in’ segment appeared to be the callers’ desires to talk to the various hosts.  It was amazing.

Products were always available ‘at a special price’ or ‘via flex pay’.

No matter what the product was - a set of pillow cases, a pair of earrings, a power tool - the host would mention that it was on ’sale’.  And, sure enough, on the graphic, the ‘original price’ would have a ’strike through’ and the ‘value price’ would be highlighted.  On top of that, most items were available on ‘flex pay’ - where they charge your credit card for 1/2 or 1/3 of the payment, two or three months in a row.  Again, callers ‘loved!” this feature - and many remarked how ‘easy this made it for me to purchase’.

The setting for each product was custom-designed to evoke a specific mood and reaction.

I noticed, for instance, that when they sold a particular toilet cleaning product, the entire ’stage’ became a well-lit, beautifully decorated bathroom.  When they were selling clothing, each item was shown on a different size model.  In fact, ‘plus size’ models were featured.  The entire production evoked a sense of ‘connection’ between the customer and the product.

Each host had her / his own way of promoting the product, but all of them knew how to steer the conversation back to the ‘wonderful product’.

Again, no matter what the ‘guest’ or ‘caller’ might say, the host had an uncanny ability to promote the product.  Over and over and over again, the product was ‘my favorite’ or ‘the third one I’ve owned’ or ‘my mom’s perfect gift’.  Not only did they sell the product, they sold their ‘love’ for the product.

Every item was ‘almost sold out’ or ‘available in limited supply’.

No matter the item, the color, the size, or the quantity - Near the end of each segment, it would be ‘nearly sold out’.  And, as the host talked to the ‘producer’ - she’d be informed that those who ‘called right now’ could be assured that the product would be available, but they needed to call ‘right now’.

Some thoughts -

I have never purchased anything from a ‘home shopping network’.

I find it fascinating (perplexing, and a bit sad) that the callers seemed to consider the hosts to be their ‘friends’.

I wish that I could promote ‘debt reduction’ with the same fervor that these folks promote ‘products’.

I find it odd that after years of selling products via television, these networks still ‘run out’ of items to sell.

Surely, they really are running out?  Right?  They wouldn’t, you know, lie to us?  Would they?

Put the card away, be thankful for the stuff you already own, and call your real friends -

Tell THEM how wonderful THEY are.

You’ll save money, you won’t have to make payments, and you’ll be talking to someone who really wants to hear from YOU!

And, late at night, when you can’t sleep, come back here and read through the No Credit Needed archives!

But, hurry!

Supplies are limited!

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For the first fifteen years of my adult life, I borrowed money for every major purchase. Three years ago, I decided to stop borrowing money and get out of debt. As you can imagine, going from a ‘borrower’ to a ‘non-borrower’ (Is that a word?) can be a difficult process. Here’s how I did it -

1. I created two lists. List A was a list of my monthly expenses - by priority. List B was a list of monthly income. I realized, after making the lists, that I could live without using a credit card or borrowing money, but only if I reduced the number of items in list A.

2. After establishing the fact that I COULD live without borrowing money, I then created a plan to insure that I WOULD live without borrowing money. So, I took the numbers from List A and List B and created a monthly budget.

3. Once the budget had been created, I began to look for additional ways to reduce debt and increase savings. I quickly established an emergency fund of $1000. Throughout the ensuing debt reduction process, I always maintained an emergency fund balance between $800 and $2000. The emergency fund served as my new ‘credit card’. When an unexpected expense reared its ugly head - I would dip into my emergency fund, deal with the expense, and move forward.

4. After creating the budget and establishing the emergency fund, I began to attack my debts. I used the debt snowball and in less than 10 months, I was debt free.

Now, if you’ve made it this far, you’ll note that these four steps cover the ‘financial side’ of the process. But, what about the ‘personal side’? What changes took place, internally? How did a compulsive borrower become a competent saver?

1. I began to consider the longterm ramifications of my spending/borrowing habits. I found a few online calculators and calculated how much money I was paying in interest - and how much money I was ‘losing’ by not contributing to my retirement accounts. Seeing these calculations had a profound effect - emotionally and psychologically.

2. After realizing that ’something’ had to be done - I sat down with my wife and we talked about what we wanted out of life. We both realized that we had ‘everything’ we wanted - except for financial security. We dedicated ourselves to a life of saving and frugality.

3. I did not cut-up my credit cards or freeze them in the freezer or hide them in a sock drawer. I simply left them in my wallet - and refused to use them. I made up my mind that I would be different. Instead of ‘removing’ the temptation, I faced it head-on. Also, I made a promise to myself (and my readers) that I would do my level best to live without borrowing money. Making this promise ‘changed’ me.

4. Instead of hiding my struggles, I began to seek the advice and council of money-smart folks. I asked questions and I listened to answers. Admitting my failures allowed me the freedom to accept constructive criticism. By the way - Most successful people are happy to share their methods, opinions, and time. All I really had to do was ask.

Getting out of debt feels great. Living debt free feels even better. But, the entire process started when I made some ‘financial’ AND ‘personal’ changes. Instead of continuing the same behaviors - and foolishly anticipating different results - I radically changed my lifestyle - and enthusiastically anticipated progress.

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