Debt Story, Goals

Creating My List Of Financial Priorities

I want to once again thank those of you who arrived here via this Money Magazine article about families who are living without credit cards.

If this is your first visit to my site, welcome.  I hope you will take a few minutes to read a bit more about me and about how and why I live without credit cards.  Now, today’s post:

Creating My List Of Financial Priorities:

It is vitaly important, to me, that I:

Live On A Budget – No matter how much money I have (or don’t have), I will always use a written budget to manage my finances.  Over the course of the last 3 years, I’ve used very complex and very simple budgeting techniques, but my goal has always been to crate a clear picture of how money flows into and out of my life.  My budget – which is my financial road-map – keeps me on track.  (I’ve written several articles on budgeting, including this popular one about budgeting when you have irregular income.)

Purchase Adequate Insurance – I have health, life, dental, disability, and property (renter’s) insurance.  Once a year (or more often, if the need arises), I reassess my financial situation and purchase insurance accordingly.  (For those new to my site, when you read the word “I”, feel free to insert the word “we”.  Whatever I do for myself, I do for my wife and our three kids.)

Maintain Adequate Cash Reserves (Emergency Fund) To Cover Six Months Worth Of Expenses – I keep enough money, in my savings account, to cover the cost of food, shelter, clothing, and utilities, for six months.  In the past, I was more willing than I am now to dip into my emergency fund.  But now, especially with the state of the economy, maintaining a fully-funded emergency fund has become a very high priority.  (If you haven’t done so, consider adding your input to this poll I’m conducting about emergency funds.  In a few days, I plan to summarize the feedback and write and article about the poll results.  It should be interesting.)

It is very important, to me, that I:

Fully-Fund Our Retirement Accounts – Currently, I am fully-funding my 403(b) and my Roth IRA.  My wife is fully-funding her Roth IRA and her pension plan.  We plan to fully-fund these accounts, year after year, until we retire.  By fully-funding my 403(b)  – (similar to a 401(k), but for non-profit organizations) – I reduce my annual tax bill and save for the future.  Roth IRAs provide an opportunity for tax-free growth.

Fully-Fund Three Education Savings Accounts – I have three small children, ages 8, 4 and 2 months.  I plan to fully-fund ESAs for each of them.  My goal is to assist them when it comes time for them to go to college.  I will expect for them to work, while in college, but I do plan to pay their tuition (and living) costs.

It is important, to me, that I:

Continue To Live Without Borrowing Money – So far, I have managed to live more than three years without borrowing money.  During that time, I’ve purchase a newer automobile and several furniture pieces for our house.  But, if I plan to continue to live without going into debt, I must be sure that I –

Save For Future, Major Purchases -  Currently, I live in a house provided by my employer (as part of my compensation).  In the future (near or distant), I plan to purchase a house.  I would love to be able to do so without borrowing any money.  This may, or may not, be possible, but I am going to try.  Even if I am unable to purchase a house without borrowing money, I do plan to save up for a substantial down-payment.

It is cool, to me, that I:

Live Without Using Credit Cards – While it might come as a shock for some to read, living without a credit card is pretty easy, once you get used to it.  When I want to purchase something online, I simply use a debit card (which is associated with a separate checking account, dedicated for debit card purchases).  I also use a debit card for groceries or gasoline.  For most other purchases, I carry cash.  But, No Credit Needed isn’t, primarily, an anti-credit cards site! While I do like to write about my life without credit cards, I realize that most people will use them.  I want my readers to know, my primary goals isn’t to convince you of the ‘evils’ of credit cards.  No.  My primary goal (for the site) – is to promote the idea that credit does not have to be the default option.  You can save up enough money to purchase an automobile.  You can pay cash for a new television set.  You can go to college without accumulating massive loads of debt.  You can live debt free.

I realize that most people will borrow money when they purchase an automobile or buy a house.  And, I realize that many people use their credit cards ‘responsibly’ – and pay them off at the end of the month.  But, there are millions and millions of people who are over-their-heads, who continue to borrow money, always putting of tomorrow what needs to be dealt with today.

Credit, like anything else, is just a tool, to be wielded by its owner’s hand.  For me, I choose not to use credit cards, because I just don’t like dealing with credit card companies.  But, credit isn’t’ the real issue -  personal responsibility is!  Each one of us must look inside ourselves and determine those things that really matter.  So, today, I’ve listed what matters (in the financial realm) to me.

As you read my blog, please don’t get hung up on the ‘He doesn’t use credit cards” bit.  That’s such a small part of what I’m trying to do.  I’m trying to shape my financial destiny, and the destiny of my children and their grandchildren.  My ultimate, long term goal (for my life), is to be a blessing to other people – financially, emotionally, and spiritually.  Not using credit cards is just one ‘small tree’ in the very ‘big forest’ that is my financial life.

Thanks again for stopping by, and if you have not already done so, please consider subscribing to No Credit Needed via RSS or via Daily Email.

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15 thoughts on “Creating My List Of Financial Priorities

  1. I know what you mean about credit card non-use being a non-issue. Once you stop using them and build a debt-free mentality, and save for the future, the lack of credit cars seems so minor. The important things are saving and spending wisely.

  2. Great information. I have a question for you. I will be renting a couple rooms in a house living with the landlord. Should I purchase renter’s insurance or would that be covered by my landlords home insurance?



  3. @GM.. I’m not an insurance specialist, but I believe that the landlords insurance would cover the structure, but you would need renter’s insurance to cover your possessions… Renter’s insurance is pretty inexpensive…

  4. First of all I have to say you are on the money with this one. There are so many people that have no plan of how they are going to stabilize themselves financially. There is something that this has taught me and that is that Health insurance as you mentioned is so much needed especially when you get in a bind. I know tons of friends who are young and say they don’t care about health insurance. All I can say is you will when something bad happens.

  5. You’ve written that you live in the countryside quite a few times, but I never realized you were from Soperton. I used to drive through there all the time from Atlanta to get to Brewton Parker. I guess it’s pretty “country” compared to Atlanta, but it’s not that bad.. Vidalia’s not too far away. Anyway, keep up the good work on the blog; you’re inspiring many “normal” people to create and stick to a budget!

  6. Great post on priorities. I need to sit down and re-commit to mine. Thanks for the inspiration!

    I love how you started the sentences and then finished them with your priorities. This will help make a great conversation with my wife.

  7. As a roving marketer on these frugal blogs ( & a frugalite)…how about a thank you to those of us who visit you regularly & weren’t referred by Money magazine?

  8. @GM: Yes, you need to purchase renter’s insurance if you want your possessions insured. I have personal experience being the uninsured renter, and I didn’t get jack – the landlord’s insurance is indeed only for the structure.

  9. @Amanda June… Of course, I’m thankful for my regular readers! But, I felt that random clickers from Money might be interested in a few ‘getting to know NCN’ posts…

  10. Great advice! These are things that everyone needs to be doing, but it continually amazes (and horrifies) me how many people don’t understand them.

  11. Wow, I categorize things very differently in my head. Here’s my list.

    Vital: eat and drink daily, take care of health issues, don’t spend money on stuff I don’t want, don’t steal

    Very important: live indoors, have fun

    Important: live within my means, don’t depend on others (borrow), save for big goals (such as my next car, my next computer, vacations, the annual insurance bills, future health issues, etc.), help others

    Cool: own fancy toys I don’t need (e.g., car, computer, cheese grater), eat yummier food than I need, wear prettier clothes than I need, retire early

  12. I wouldn’t get hung up on not using credit cards, I use credit cards when travelling abroad because they reduce risk and are the most convenient way to pay. What I dont ever do is allow any debt to roll over, so I always pay the debt off before any interest is due using a direct debit from my current account.

    However I agree completely with the drive to live debt free – good luck.

    PS.The landlord insurance will cover the buildings but not the tenants belongings which would need to be covered under a seperate tenants insurance policy.

  13. Good stuff here! My wife & I have what we call a WSA (Working Savings Account). We figure 200.00 a month to buy a car in the future, 100.00 for car insurance that will come due, 100.00 a month for maintenance on each vehicle, 100.00 a month for plane tickets to visit family, etc). The account goes up & down, but actually slowly is going up. What we’ve found is that many times there is actually money left over in the checkbook at the end of the month so that if we need 100.00 for some car maintenance we don’t actully have to take it out of savings. We paid off our final credit card July 1st which is a GREAT GREAT feeling. We never ever ever what to do the “borrower slave to the lender” thing again.

    Blessings, Darin

  14. One reason why you may do well with or without using a credit card, is because of your previous priority – to live within a budget. That means that you are paying attention to what you spend money on and won’t spend extra simply because you are using plastic.

    Most people spend more money when they are using plastic. I have read studies which show that people spend an average of 18% more when they use debit cards, and 28% more when they use credit cards. Any form of plastic creates an emotional detachment from the spending.

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