Don't count your chickens before they hatch

We have all heard this saying as we grew up, and even through out adult lives. However, did you know it is an intricate part of personal finance. How? Well set back, as I tell you.

How many times have you made plans to use some expected income. Perhaps a tax refund. Perhaps it was just your paycheck. Yet, if you think about it, you don't know what the future will happen. If you write that check before you actually have the money in the bank, then you are playing with fire. You as the saying goes, are counting your chickens before they hatch.

Let's say the delivery of your companies checks were delayed for some reason. Maybe the delivery truck, delivering them from headquarters has a wreck. Maybe the boss has a heart attack and there is no one else who can get the checks out of the safe. Or a host of other things that could happen to prevent you from getting your paycheck on time. Now you have checks out there, that are going to bounce. What do you do?

If you had waited until the money was in the bank, you wouldn't have to worry about the mess you made yourself. My suggestion, and the advice competent personal finance guru's like Dave Ramsey or John Cummuta is to Never spend what you don't don't currently have in the bank.



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The first step is always the hardest

I was talking with a couple of people at work about my effort to become debt free. One of them laughed me off (just like Dave Ramsey {1440 AM - 7 pm} says people will) like I was stupid. She seems to do this a lot, however the other guy made the comment that being on a fixed income you have have to use credit to survive.

What he failed to understand, was that being on a fixed income is the very reason you need to live on cash, rather then credit. I agree once you have been living on credit rather then cash, it will be hard to cut the credit strings.

That is what I tried to explain to him. It is as the saying says, "the first step is always the hardest." The first step to getting debt free, much like alcohol to an alcoholic, is to get rid of the credit cards and other forms of borrowing. Once you can manage to cut the credit strings and get a handle on your money, then budgeting will be all downhill from there.

Personally, I don't feel I have control of my budget yet, however, I can see the light as some of debts are actually nearing payoff. Once that happens, I can begin to build my savings and thus have control of my money.




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A penny saved is a penny earned

Ok so the other day, I posted an article on 33 lessons from mom regarding finances. Today, I will make my second post as I go through the list 1 by 1.

Rich M. said,

Why did your mom place so much importance on your piggybank as you were growing up? Because money saved does grow, due to this magic fertilizer called compound interest. Mom’s recommendation - when your paycheck comes in, set up an automatic withdrawal from your checking account so that 10 percent is saved immediately. While the pinch may be felt for a few months, pretty soon it will be replaced by the bulge of the fattening savings account.

I have heard some say that saving a penny now days isn't worth the effort. Wel I disagree. You can save a penny a day doubled everyday and be a millionaire in 30 days. Of course, eventually it isn't practical,unless you already have the million dollars. However, if you save a penny a day at age 15. Then the next year save 2 pennies a day and the next year 4 and so on, along with the compounded interest over the years, you could be a millionaire by the time you are 45 or 50. That is provided that you never dipped into that savings and you always continued to ad more to that savings account. A penny is still worth saving. Perhaps thats why so many aren't wealthy. Well besides all the overspending so many of us do.

Neither a Borrower Nor a Lender Be

"Neither a Borrower Nor a Lender Be" - Shakespeare


Have you ever stopped to consider what that famous line from Shakespeare's Hamlet means. I know, I for one had heard that phrase numerous times, but never gave it much thought, until now. Now that I am working to get debt free, that phrase has come to mean so much more then I had ever thought it would.
Rich McIver of CreditCardLowDown.com

Credit cards were just making an appearance in mom's day, but to see the way plastic has replaced cold cash today, one would think they've been around forever.

Nowadays, borrowing to buy a home is considered by even the most conservative financial experts to be a good move, but spending is a big problem, as evidenced by the millions of Americans who are in debt over their heads. Nowadays Shakespeare might be more likely to advise us to "neither a borrower nor a spender be."

It's spending, not low income, that is at the root of most financial problems. Sometimes events beyond our control can propel us into debt, like the loss of a job, the death of a spouse, or large medical bills, but let's face it: for most of us, spending is what gets us into trouble. In fact, I believe that the key to having money is learning not to spend it. Notice that I didn't say "learning how to spend it," but rather, "learning not to spend it.

The more money most people make, the more they spend. If they get a raise in salary--they buy a newer car, or a bigger home, or a bigger, better whatever. But it's not just the big things they buy, it's all the little things they now feel they can easily afford, and those things add up amazingly quickly.

When you borrow, you end up paying more for everything, then you would have if you had paid cash. When it comes to lending to family and friends, it just becomes a barrier between the two of you, especially if they thought it was a gift (and you thought it was a loan) or are slow to pay you back.

As Dave Ramsey, John Cummuta and so many others have said over and over, it's better to pay cash for everything. You end up paying less, and in the long run the tortoise always wins.

I recently came accross a blog article written by Rich McIver. In it, he easily debunks my naysayers who want to argue with me over the use of credit. How does he do it? He pulls an old well known saying that mom, grandma and everyone before them used to say for generattions. I am sure everyone has heard it, but like me had forgotten about it, not even realizing what it meant until now. Neither a borrower nor a lender be. That's right folks. A saying that was very popular before credit cards surfaced less then a hundred years ago, and since has been heard by everyone us, goes right in line with Dave Ramsey has been teaching. How we need to take a lesson from good old mom.
He actually listed 33 different "old-time" sayings that we should be applying to spending and saving lives today. I encourage you to read his full comments, but below are the 33 phrases and ideas.

1. A penny saved is a penny earned

2. It's wise to save for a rainy day

3. The first step is always the hardest

4. Don't count your chickens before they hatch

5. A rolling stone gathers no moss

6. There's no place like home (and no food like home-cooked)

7. Charity begins at home

8. Penny wise and pound foolish

9. It's hard to teach an old dog new tricks

10. Don't put off till tomorrow what you can do today

11. An idle mind (and body) is the devil's workshop

12.Phone Talk is NOT cheap

13. A bird in the hand is worth two in the bush

14. Neither a borrower nor a lender be

15. Planning makes perfect

16. A fool and his money are soon parted

17. Share and share alike

18. Hands Many hands make light work

19. Two is better than one

20. Water, water everywhere, but not one drop being drunk

21. Laugh and the whole world laughs with you, cry and you cry alone

22.What's in a name? A rose by any other name would still smell as sweet

23. A walk a day keeps the doctor (and medical expenses) away

24. Waste not, want not

25. Don't try to keep up with the Joneses

26. A chain is as strong as its weakest link

27. Don't raid the cookie jar

28. Big is beautiful

29. Read the fine print before you sign the dotted line

30. Time is money

31. Watch and weigh your purchases

32. Small drops of water make up the mighty ocean

33. If at first you don't succeed, try, try again

I see 33 potential articles here.