50 Financial Principles

This is an attempt to put in writing some bare-bones principles helpful for cutting down your budget. Keep in mind that they are bare bones, so some of the important, life-giving meat may be omitted. I do not claim to present you with even a full skeleton—some bones may be missing! As bare bones, you may end up filling them out with meat that looks a bit different from mine; that’s okay. We’re all here to be creative and springboard off of each other’s ideas as we try to follow Christ. Keep an open mind and proceed prayerfully. If you know you have a real weakness in a certain area, pray earnestly about whether it is an area to reduce gradually or whether you need to be ruthless and cut it off cold turkey. These ideas are presented very randomly!

1. The first step is to spend less than you earn. The other way just doesn’t work although tons of people are attempting it.
2. Make it your goal to be debt free. “The borrower is servant to the lender.”—Proverbs 22:7
3. If you have a debt with interest, pay the interest and always try to pay as much as you can against the principle. You may even want to pay more on the principle than what is due.
4. It helps to pay cash. If you don’t have it, don’t spend it.
5. Don’t write checks for money you don’t have in the bank. (It’s illegal!)
6. Don’t use a credit card unless you have the amount of the purchase in your bank account and it is not earmarked for another purpose.
7. Pay off the balance on your credit card each month. Do not let interest accrue on your credit cards! The interest is what kills people financially. Interest inflates our economy as well.
8. For at least six months, keep a budget. This may be as simple as continuing your current spending habits, but tracking every penny. Make a spreadsheet with different categories for your spending needs: food, other products from the grocery store, gasoline, various forms of insurance, eating out, entertainment, haircuts, health care, clothing, housewares, donations to church or charities, etc. Track every penny, and at the end of the month you will see where you money goes. Even if one person typically handles all the finances, the couple should work closely together so both people can see where the money goes. Don’t forget to keep receipts when you are out so you can record the expenses when you get home. At the end of each month you should be able to subtract your expenditures from your income and have the exact amount in your hand, pocket, or bank account. It sounds tedious and restrictive, but it is actually very freeing and interesting. You will probably learn a lot about yourself.
9. It does not matter how much you make—if you are willing to waste your money, you will.
10. A good deal is not a good deal unless you need it. Do you truly have a need for this item? If it is a want and not a need, is it something you are thrilled with and will continue to be thrilled with for a long time? Or are you
    1. looking for something to buy?
    2. feeling pressured to make a purchase?
    3. purchasing out of habit or tradition?
    4. just considering this purchase because it would be a really good deal if you were in need of such an item?
11. Live within your means, not at its limit. Give yourself some financial margin. You will be thankful for it when an emergency or special opportunity arrives.
12. Don’t invest beyond something’s value. Insurance companies understand this concept; that is why they “total” a car that may not be damaged too badly. It only has to be damaged beyond its worth.
13. Remember time is money. Where are you investing yours?
14. Don’t use coupons. What? Yes, don’t use coupons for the typical things advertised in the Sunday paper. This is not a hard and fast rule, but most of those products are the more expensive versions and have a perfectly good substitute that is less expensive than the advertised product—even with the coupon. If you have the time and inclination to track the sales closely and use coupons when they are doubled and tripled on an item that is also on sale, by all means go for it! Some people are able to juggle that system and come out very well. My husband has made an art of it, but he is very selective and purchases relatively few items with coupons.
15. When you do use coupons, take advantage of the opportunity. When he does find a very good one my husband goes on line and purchases clipped coupons from a clipping service and buys multiples of the same item. The coupons usually say to use “one per purchase.” This does not mean you may only buy one of the item. It means you may only use one coupon for each item you are purchasing. You can usually buy ten tubes of toothpaste if you have ten coupons. Occasionally, a store will issue a coupon at the same time the manufacturer issues a coupon. Usually, you can use both for a single item to increase your savings. Check the restrictions printed on the coupon.
16. If the item on sale is out of stock, get a rain check. Sometimes the rain checks do not expire. Hang onto these until you need to stock up.
17. Stock up! Buy in bulk. When items are on sale for a good price, buy a lot. “A lot” is going to be relative, but at the minimum think of buying a case of whatever it is. If you don’t think you have storage, get creative. Some people store canned goods under their beds. Others store extra items above their kitchen cabinets (if the cabinets are screwed on well). Closets, garages, laundry rooms, and crawl spaces are good storage spots for anything that is in pest-proof containers.
18. Use common sense about expiration dates. Most canned and bottled items are good for a really long time. Most boxed items are good for quite a while past the expiration date. Some items are obviously more sensitive like milk and meat. Yogurt is good for quite a while past the expiration date. Condiments are typically fine for a long time. Use your senses instead of depending on the expiration. Does it look okay? Does it smell okay? Would it make sense that this item would expire... I have seen expiration dates on water and cotton balls. Does a cotton ball go bad? It is in large part a gimmick to prevent you from stocking up and to get you to waste what you have and repurchase more of the item.
19. Do not purchase anything with the first or main ingredient of water. If the first ingredient is water, there is probably a way you can make it and add your own water. Of course, you cannot make your own soda pop, but many people realize while budgeting that soda can be a large grocery expense. It doesn’t store well and it will eat through the cans, we know from personal experience. It’s not good for you anyway! The world wants to water things down or fluff things up with air.
20. On that note, order water when you go to a restaurant. I heard of a mom that would give a quarter to each child who ordered water instead of a drink. She came out ahead.
21. Don’t pay over $1.00 a pound for anything. The exception is spices and other dried ingredients, dried fruits, dried vegetables, but don’t buy those dried items at the grocery store. Find a local store that sells in bulk or purchase from a co-op, etc. Some fresh produce may also be an exception to this, but typically it works to buy the produce that is on sale.
22. Eat seasonal produce. It’s much less expensive.
23. Use your freezer! Purchase perishables on sale and freeze them. Things you might not think of that freeze well include cheese, chopped onions, chopped celery, squash, berries, eggs, butter, yogurt. I buy cream on sale and pour it into ice cube trays and once frozen transfer them to a storage bag so they are always on hand for cooking. Sour cream and eggplant are two things I have learned NOT to freeze.
24. Use whole foods. Buy them in bulk. By bulk, I mean more than you think you would use in the next year. I’m talking about buying fifty-pound bags of goods like wheat, dry beans, rice, sugar. All these things store well long-term in plastic air-tight buckets. (Read more on storing food.)
25. Fresh produce can be purchased in bulk from a produce supply company if you have a substantial order, are on their route, and act professional. You may even need to create a professional name for yourself or order under the name of an existing co-op or homeschool group. For instance, a large family like ours on a whole-food diet rich in fresh vegetables orders a case (24 heads) of romaine lettuce every week. This may be excessive for your family, but if two or three families you know participate together you could divide the cases of fresh produce and usually save a bundle off going to the grocery store. Also consider buying “seconds” (produce with slight blemishes), often available from produce companies and your local orchards.
26. Make your own...whatever it is. We make our own soap, not because it is cheaper than the bars at the grocery store, but because we like natural soap and it is much cheaper than the equivalent sold at the health food stores. We make our own bread from fresh-ground wheat. It is much less expensive than a loaf of store-bought bread, tastes better, and is much healthier. (Read our Wheat FAQ for more information on the proven health benefits of fresh-ground wheat.)
27. Plant a garden. I must admit we don’t garden because of poor soil, poor water supply, and lack of time it would take to keep up with our family’s needs at the moment, but we have gardened in the past and likely will again. I am amazed by the amount of produce some friends harvest.
28. Buy a few chickens. They seem to be relatively easy, and I’ve even seen attractive, mobile pens that can be put in a suburban yard. Check your zoning.
29. Look for products with lifetime warranties and create a file to store the paperwork for these. Look carefully! I have purchased products that claimed a lifetime warranty on the outer packaging or even just the webpage, but nothing else accompanying the product said this. So you may have to keep the part of the outer package stating the name of the product, the lifetime warranty claim, and contact information for the company. You may have to print a screenshot of the claim if you are purchasing online. It sounds like a pain, but it just takes a minute, and then it is all filed away for the day your product fails and you need a replacement—for free!
30. This is random, but I warned you. The other day on a whim, my honey offered to stop at DQ on our date night. He knows that one of my favorites is a plain vanilla cone from DQ. I haven’t had one for a long time. We started off ordering a “regular vanilla cone” forgetting that in the fast food industry “regular” means “medium.” So, my close to $2 cone became a close to $3 cone. I did enjoy that cone, and it’s fine to splurge ONCE IN A WHILE, but here we are in summer and ice cream sales abound. Had I gone to the grocery store I could have purchased a half gallon of ice cream for $2.50. So the next time the kids are asking to stop and get DQ, why not just offer to go buy them each a half gallon of their favorite flavor and see what they say? Okay, bad idea, but you get my point.
31. To quote my husband, “Don’t feed a twenty chicken alligator.” Don’t keep pouring money into something with an endless need. This is often applied to hobbies or supposed investments, but it isn’t limited to that. Where are you pouring in money continually that isn’t giving back? Better to have a friend with a boat or a pool than to own one yourself. The same is true with horses. Not to say that you use your friend for their boat, pool, or horse. You certainly can, and should, invest in your friend in return for their hospitality in letting you benefit from these, but think long and hard and prayerfully before you decide to make the full time investment yourself.
32. Save for seven, own for life. It sounds extreme, but it’s the way things used to be done generations ago. If you can manage to pay your current living expenses and in addition put aside a “house payment” to yourself, in seven years you can pay cash for a house. It may be a starter house, but it will be YOUR starter house and not the bank’s. In doing it this way, you avoid paying all that interest (In fact, you will be earning interest!), which is the bulk of your house payments for the first many, many years. It sounds unbelievable, but it is true. Those bank buildings are big and beautiful because you are making the payments for them. Why not invest in your own home?
33. Watch your gasoline usage! Combine trips whenever you can.
34. Don’t buy a new car from the dealer. It depreciates significantly the moment you drive it off the lot. Two of our best purchases were automobiles we purchased as repairables from a salvage lot. Both were the current model with low mileage and clear titles even though they had been damaged. We had them professionally repaired by a local body shop, and the owner gave us a bit of a discount on the work since we told him we weren’t in a rush to have them done.
35. Buy a Haynes manual for your automobile and do your own service, troubleshooting, and repairs. Take advantage of the services and advice offered by the chain auto superstores.
36. If you buy something because it has a rebate, don’t forget to submit it and follow up on it. Make a file of rebates you have submitted and flag the date you should be receiving them, usually 6-8 weeks. My husband is an extreme rebater, and it is very common for him to hear nothing from the company until he calls them. It seems some have a policy of not sending out the rebate until they receive an inquiry from the customer. Follow up!
37. Yard sales and garage sales. You don’t have to go every summer Saturday, but it is a great place to find like-new clothing and other items. I can’t tell you how many times we have realized a need and within a couple weeks or even the next day found the perfect item at a yard sale where we purchased it for a fraction of the retail price. We purchase items new in the cellophane or with tags still on all the time. Children outgrow clothing and shoes often before they have much wear on them at all. This is really noticeable when it comes to shoes. They are so expensive in the store. I keep a chart of our family’s sizes and look for upcoming needs as I am shopping. I have plastic bins (cardboard boxes work) full of good clothing and shoes waiting to be worn by my family. I have an attractively decorated home furnished extensively by yard sales. We even purchased brand new fixtures for our bathroom and a brand new kitchen sink at a yard sale while building our house. (My husband says, “Think Proverbs 31 woman.”)
38. Set an agreed-upon amount above which you will check with your spouse before spending. Depending on your financial situation it may be $15, $50, or $100. It doesn’t matter as long as you both agree that you will get the other person’s input before spending above that amount. We did this when we got married over 20 years ago and have always stuck to it. It has never been an issue and we have never had a conflict or disagreement over it. Usually the other person just says, “Yeah, that sounds fine.” The thing that has been most helpful is when one of us is considering a purchase over that amount, but isn’t certain about it. It brings in another perspective to help make the decision or find an even better bargain or investment and that has been helpful a number of times.
39. Give. Whether you believe Christians should tithe 10% or whether you believe that is optional now, giving is something that God seems to bless. Not that people should give to get, but it seems often when people are having financial trouble and are neglecting giving back to the Lord and they in faith decide to give generously to His work, He blesses it, maybe not even financially, but the blessing comes. In regard to the principle of tithing, all we have is given to us from the Lord’s hand, so more than 10% belongs to Him any way you look at it. It’s really 100% His. Give—and give prayerfully.
40. One for consideration: Homeschool! I am sure we have saved some money not paying for lunches and activity fees, but the biggest financial benefit I think we have received from homeschooling is contented children. They have not expressed an attitude of keeping up with their peers, following fads and trends, or desiring the latest gizmo. It is such a blessing. (And homeschool curriculum does not have to be expensive, BTW.)
41. Take responsibility for your health care. Learn about true nutrition. Learn to do the check-up for well childcare visits and determine when your child truly needs to see a doctor. Dr. George Wootan has good information on this. Learn to use herbs. Garlic is a strong antibiotic we use for everything. As a result, most of my children have never had a prescription antibiotic. If you are overweight or Type 2 diabetic, please check out Eat to Live by Dr. Joel Fuhrman and protect your health, get off prescriptions and insulin. People I know personally have eliminated prescription medicines and insulin by following this dietary lifestyle. I eliminated my hypoglycemic problems in just days by eating this way, without the need of doctor visits.
42. Learn to cut your family’s hair. Find a friend to teach you some basics. Check out a book. Clipper cuts for boys are easy and they don’t have to look military.
43. Keep gift-giving simple. Keep children’s birthday parties simple, especially when they are very young. Often the fancy parties are more for the parents’ pride than the little one’s enjoyment.
44. Don’t spend more than $1 for a greeting card. Several companies have a section of low-priced cards. I was shocked to see Mother’s Day greeting cards this year for as much as $8! Instead of a greeting card, write a letter. It’s more personal anyway, and you can always buy a box of cute cards that are blank inside for much less than $8 for the whole box.
45. Invest in some good, fun games instead of going to movies. You’ll get multiple uses out of the game and the fun of interacting. We pick up new games at yard sales all the time for $1 or less.
46. If you do go to the movies, wait until the movie you want to see is at the discount theater. I found out the Cinemark nearest me is cheaper on Monday nights. In fact, they have a group rate, and it was cheaper per person to buy three tickets instead of just two, so we bought an extra and gave it to another patron.
47. Dining out. The best thing I can say about dining out is that if you are struggling financially you really have NO business dining out. It sounds harsh, but it is so true. A meal cooked at home costs a fraction of one at a restaurant. This includes fast food—paying the same price without the quality and ambiance. If you want to treat your family to a dinner out, pack a picnic and go somewhere quaint or fun. My family loves eating on the back deck for a change. We enjoy eating out occasionally, but we do look for deals, buffets, all you can eat specials, etc. Go out for lunch when prices are lower instead of dinner. Think ahead and pack a meal if you will be gone over mealtime. Keep canned food in your car. Many canned product come with a pop-top lid now. You may end up eating a can of beans for lunch, but you will get full and save a bundle. And, yes, this also applies to $4 cups of coffee.
48. Take your budget with you on the road. Some people abandon their common sense and their budgets when they go on vacation. A good principle is to determine ahead of time your vacation priorities. You may want to invest in the location, using your money to stay in a hotel or resort, but then you may need to cut back by bringing your own food. (Many hotels offer nice breakfasts. Shop around!) Or you may choose to cut back on lodging expenses by staying with friends, family, or camping, leaving more money available for activities and dining out. When my husband and I went on our honeymoon cruise, we booked a very basic cabin, because we didn’t plan to spend much time there. We did the same when we travelled through Europe ten years later. I booked all our hotels in advance online and it worked out very well.
49. Vacations are a fun time, but so often people squander money on silly (and expensive) souvenirs that are quickly broken or discarded. My grandparents had picture albums of interesting places and things. They decided when they started travelling that rather than spend money on souvenirs they would capture the trips on film and take them home to share with us.
50. Finally, a note on ethics and morals—The Bible says “The wicked borroweth, and payeth not again.”—Psalm 37:21. If you are in debt, every cent you make really belongs to your creditors. Every cent you make should go toward paying off your debt with the exclusion of purchasing basic necessities. I have known people who are in debt and yet do not cut back on expenses, but instead spend money that belongs to their creditors on a new purse, a new book, dining out, putting it in the gas tank for a trip to see friends out of town, or even buying a birthday gift for the person who loaned them the money! This is stealing from the person who invested in you.