iPad too pricey? Consider substituting a Kindle Fire

It wasn’t easy, but I figured out a way to talk about Christmas and economics in the same article.  A fundamental part of economics is the fact that substitutes can alter our decision to buy something.  If the price of what we want is too high or if scarcity causes the item to leave empty shelves at WalMart, we’re forced to choose a substitute.  If you’re in this boat, take a look at these substitutes for the most popular Christmas gifts this year.

1. iPad  Substitute: Kindle Fire

Since 2010, the iPad has been on almost everyone’s Christmas list.  At a price point of $450 or more depending on the model you want, it might be out of your price range.

But don’t get discouraged yet!  The Kindle Fire, which was released in November, is making its way to the top of the list and under the tree.  At $199 (about half the price of the iPad), we shouldn’t be surprised.

Here are some specs of the Kindle Fire

• 7″  multi-touch display
• 14.6 ounces
• 8 GB internal memory, with unlimited cloud storage.
• Dual core processor
• Between 7-8 hours battery life.
• Wi-Fi
• Amazon Silk web browser

2. Yankee Candle Substitute: Soy Candles or DIY

My wife loves Yankee Candles but they can get expensive!  If the person you’re shopping for doesn’t mind an alternative, you can try an eco-friendly soy candle which can be half the cost of a regular Yankee Candle.  You can also check out eBay or Amazon for deals on actual Yankee Candles.  Just try to stay away from the store in the mall unless they have a huge sale.  You can save a lot by ordering them online or making them yourself.

3. DVDs Substitute: Netflix Subscription

I’ve never been a fan of buying DVDs because they’re so expensive and you might watch them a few times then forget about them.  Instead of spending $30-50 DVDs for each person in your family, consider paying for a year’s worth of Netflix. At $8 a month, you’ll be paying $96 for a year of Netflix.  If you buy a DVD at $15, you’d be limited to 6 with your $100 budget.  With Netflix, you can watch thousands of movies for less than $100 a year!

4. Buckyballs Substitute: Neodymium Magnets from Amazon

I have no idea why Buckyballs are so popular, but kids (and adults) love them.  The downside is that real Buckyballs will set you back about $20 – $30.  Seems kind of high for magnets.  If you like the idea of these stackable magnets, you can do a search on Amazon for “Neodymium Magnets.”  It’s basically the same thing (Buckyball is just a brand for these ‘rare earth magnets’) and you can get a cool set of magnet cubes for $9.99.

5. Christmas Gifts Substitute: Vacation

Why not skip the gifts altogether and create memories instead?  That’s exactly what Joe and his family did this summer.  Rent a nice beach house and spend a week away from the cold.  Check out Joe’s Christmas in June post here.

Do you have any suggestions for Christmas gift substitutes?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

You’ve probably heard of the phrase “the 80/20 rule.”  The technical term for this common phrase is called the Pareto principle, named after…you guessed it, a man named Pareto.  In the early 1900s, Vilfredo Pareto noticed that 80% of Italy was owned by 20% of the population.  On a much smaller note, he observed that 20% of the pea pods in his garden produced 80% of the peas.  His observations developed into a general thought about the way things are distributed and the Pareto principle was formed.

The basic concept behind the 80/20 principle is that most of an effect comes from a small percentage of the cause.  Business consultants have used this principle to create dozens of books and suggestions as to how you should manage resources, approach sales, and handle customers.  You can almost apply the principle to any situation; so let’s see how it applies to money.

The 80/20 Rule For Side Income

I’m focusing on side income because I think it’s more applicable with this theory and because I have first hand experience with making money with side jobs.  If you’re the hustler type, you know that your time after work is limited.  By necessity, you trim down aspects of your side hustle to become more productive during your off hours.  When you do this, you’re living the 80/20 principle.  You realize that the majority of income comes from the focused work, so you ‘cut the fat’ in order to optimize the productive time.

Real life example: When I was in college, I detailed cars for extra money.  As a way to speed things up, I had my friend help me.  He was a perfectionist, so I thought he’d be good at detailing cars.  Unfortunately, while I finished an entire half of a car, he was still working on the floor mats.  He was spending 80% of his time on 20% of the goal.  Lesson: don’t focus all your efforts on the things that don’t add much to the big picture.

The 80/20 Rule for Budgeted Expenses

Think about your budget – what categories do you break most often?  Eating out? Entertainment?  What about the uncategorized section?  You know, the gadgets that don’t always make their way into a budget category.

Real life example: A couple of months ago, I bought a guitar.  No, it wasn’t in the budget, so we used money that would have otherwise gone to savings to pay for the guitar.  The expense of a guitar was easily the biggest extra expense for that month and the next, but we allowed it to happen because we were paying way too much attention to the smaller budget items such as entertainment.   The 80/20 principle comes into play here because we were giving the small things 80% of the attention and leaving the big purchases out of the equation.  Lesson: Don’t spend all your time focusing on the small stuff if it means that you’ll let the big things slide.  Redirect your energy to keeping the big ticket expenses toned down and let the small items balance themselves.

What areas of your finances can you see the 80/20 rule show up?   Have you ever given much thought to this principle at work, home, or with your budget?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

Forging is the oldest known metalworking process.  It’s an ancient practice that involves heating metal in order to reshape it with a tool like a hammer and anvil.  For those gen-x and y readers, you might remember the anvil from Wile E. Coyote and Road Runner – aah, yes, the thing you drop from a cliff to terrorize cartoon birds.

While some metals can be cold forged, most hard metals (iron and steal) are forged with heat.   The blacksmith heats the metal in a furnace and waits until it reaches the appropriate color – usually a bright yellow-orange.  At this stage, it’s ready to be shaped.

As the blacksmith shapes the metal with a hammer, the grain of the metal aligns to take shape with the part.  This makes the grain continuous throughout the piece, which makes for a stronger end result.  Since most pieces of forged metal aren’t the end product itself, it’s even more important that it’s crafted in a way that adds to the strength of the assembled unit.

The process isn’t too complex, which is why I thought that forging metal is a lot like budgeting.  Here’s why:

Budgeting Isn’t New

Making a budget is something that has been around for generations.  If we want to look in the Bible, we can find verses that allude to budgeting your resources.

Luke 14:28-30

28 “But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it? 29 Otherwise, you might complete only the foundation before running out of money, and then everyone would laugh at you. 30 They would say, ‘There’s the person who started that building and couldn’t afford to finish it!’

Like forging metal, the theory of budgeting has held constant over the years, but the way it’s done has changed.  Today, we can use a wide range of online tools for budgeting including sites like Mint.com, mvelopes.com and YNAB.com.  The process has evolved just like technology has changed to make metalworking even more efficient.

Budgeting Strengthens Your Financial Condition

Budgeting gives you an awareness of your financial health and keeps you on track with your goals to eliminate debt and build savings.  Sure, you can make it through life without a budget, but if you stick to living on less than what you earn and make it a point to track where your money goes, it’ll help you to become a better steward of the resources God has given to us.

Budgets Can be Uncomfortable At Times

In all honesty, having a budget can feel like too much work for some people.  It won’t take shape right away, and that can be discouraging.  It takes work and may just be a part of the solution to your financial reformation, but it’s important to have some form of a budget established, no matter how simple it is.

It’s not rocket science and I know you’ve read a lot of articles about budgeting – but sometimes I think it’s good to look at things with a different perspective.

What are your views on budgeting?  Is it still applicable today?  If so, what does it look like to you?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

What are your life’s little luxuries?  You know, those things that you could go without, but really enjoy when you indulge in.  For some, it might be eating out.  Others may consider going to the movies every month a luxury they really enjoy.  For me, the first thing I can think of is a small frozen custard chain called Andy’s, which isn’t anywhere near cheap.  It’s hard to walk out of Andy’s with two sundaes and a bill under $10, but it’s worth it to us because we enjoy it a lot and we have room in our budget for it.

You can read article after article telling you to cut back on the small things – and that can work if you want to transform your spending habits.  But, for those who have a good grip on their money, there’s no reason why you shouldn’t be able to enjoy the small luxuries without breaking your budget.

Here area  few practical ways to balance your budget as well as create room for the fun things you may consider to be luxuries.

Keep the Change

Bank of America coined the phrase ‘keep the change’ with a program that rounded up each transaction you made and put the change into your savings.  You can do something similar with your spending (especially if you use cash) and save for the next month’s luxuries with this month’s change.  I don’t know about you, but I enjoy turning things like this into a challenge to see how much I can save in the quickest amount of time.

Trade up

I’m not suggesting that you make it a habit to always feel the need to trade up or get the next best thing.  When I say trade up, I mean take and sell something that you don’t use in order to offset the cost of the luxury.  This does two things:  it keeps contentment in check and forces you to make a decision about what’s more valuable to you.  For example, if buying and reading new books is one of your luxuries, make it a point to sell an old book on Amazon before you buy a new one.  It’s simple, but it’s a powerful and wise money habit to keep.

Tie a Carrot to it

Everyone enjoys a reward every once in a while.  Set goals and reward yourself for achieving them.  This can work especially well if you make goals that encourage smart behavior like: working out, achieving certifications, balancing your budget, reaching savings goals.  Once you reach your goal, feel free to splurge within reason.  Make it a set amount, of course, and be on the lookout for new goals and incentives that you can create.

Make it Special

There’s nothing wrong with treating yourself, but when you do it so often that it loses its luster and becomes commonplace in your finances, you might need to step back and reaffirm that it’s a luxury, not a necessity.  If you enjoy dinner out with your spouse, make it a special thing, not just another day eating food.  The same is true about any other luxury that can easily become habitual.

So what is it for you?  Do you have a little luxury that you look forward to each month?  How do you budget or save for it?  Share with us in the comments!

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

Acting like a Millionaire may mean driving a Ford...a used one.

Are You Acting Like A Millionaire?

I hope you are.

Wait a minute.  That doesn’t sound right, does it?  Why would I say you should act like a millionaire?  Well, think about it for a second.  Millionaires are millionaires because they did something right with their money (most of them at least).  Imitating the success of others can be a great way to advance in whatever you’re trying to do.  The real danger isn’t acting like a millionaire – it’s acting like you have millions of dollars.  There’s a small difference in the wording, but a big difference in the results.

Acting like you have millions when you don’t is plain stupid.  It’s dangerous, misleading, deceitful, and a terrible example to those who are around you, especially to your children.   It puts status above actual net worth and that’s a recipe for disaster.

The world is full of pretend millionaires.  Don’t be one.  Instead, if you want to establish a millionaire goal, learn from actual millionaires who have worked hard to get to where they are today.

Millionaire Characteristics

Most of these notes come from the book The Millionaire Next Door by Thomas J. Stanley and William D. Danko.  It’s an older book, but if we allow the millionaire next door to be our millionaire teacher, we will discover that the principles are still  relevant to us today.

Live below your means

It’s the simple principle of spending less than we make.  Millionaires are frugal with their money – that’s how most got there in the first place!  They don’t go into consumer debt for the latest computers, cars, and other shiny things.  No, most of them aren’t living a lavish lifestyle; they’re living below their means and saving the rest.

Reshape Your View on Financial Independence

For millionaires, money is a way to gain financial independence, not purchase things as a status symbol.  You won’t find most millionaires driving the expensive foreign cars, upgrading year after year.  In fact, when the book was written in the 90’s, most millionaires were driving a Ford.  That’s not to say there weren’t millionaires with Mercedes Benzes or BMWs driving around – they were.  The difference is that the millionaires will buy and hold a quality product and avoid the trap of upgrades and add-ons that plague American ‘millionaire wannabes’ today.

Wisely Allocate Your Resources

Millionaires efficiently allocate their time, earnings, work opportunities, and every other aspect of their life to make the most of the resources they’ve been given.  Simply put, millionaires aren’t wasteful.  They know how to budget their money, plan ahead for expenses (major and minor expenses included), and spend time thinking about their financial picture.  Do you spend more time each month looking at deals on eBay or thinking and planning on ways you can increase your retirement account?  Something to think about!

Most Millionaires are Self Employed

I’m not suggesting that you should quit your job and become self-employed.  The self-employed are four times more likely to become millionaires, a stat that is really impressive.  But when you think about why that’s true, I would say that it’s because self-employed individuals are generally self-starters, driven, motivated, and hard workers.  If the weren’t, they’d have a difficult time putting food on the table!  So although you may not be starting a business anytime soon, you can still imitate millionaires in their passion to work hard and self-starting attitude.

There’s no guarantee that you will become a millionaire if you apply these characteristics to your life.  But I am confident that is you do you’ll be on a better path to financial independence.  I’m even more confident that if you choose the path of acting like you have millions when you don’t, you won’t be a millionaire any time soon.

So start acting like a millionaire!

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

Home Plate: Setting Your Goals High

If you missed the first part of Stewardship Baseball, catch it here.

We covered the first two bases of the stewardship diamond (Sharing Your Story and Affirming Others) in the first part of the series and we’ll finish the last two bases today.

What good is an article on stewardship if we don’t address money!  Money is definitely one of the first things that come to mind when I think of being a ‘good steward’ but in reality, it just plays a basic role.  I don’t have a good baseball analogy for money except for calling it one of the nine starters on the team.  You can do a lot with eight players,  but you’ll be at a disadvantage without a full team.  In the same way, if you are a good steward at everything else but money, you’re at a disadvantage — so let’s look at the last two bases of stewardship.

3^rd Base – Building Your Budget

Yes, we know it’s important to budget our monetary resources, but don’t forget about all the other resources we have: time, knowledge, education, our internal drive and motivation. A good budget will incorporate all of these and emphasize the following three T’s:

Time – By far, time is your most valuable asset.  Without time, our money is worthless; time is the lifeline to building relationships.  We’re all given the same amount of time each day, and cannot go back or rollover minutes for tomorrow.

Truth Telling – Your budget is guaranteed to fail if you’re not honest with yourself.  This isn’t just about fudging numbers in your monthly budget or neglecting giving generously because you failed to budget your money.  It spans to include the first T: time and how you spend it with your family, growing spiritually and growing in knowledge through education.

Tenacity – If you’ve made it to third base in the game of baseball, you don’t get a reward.  It’s only when you reach home plate that you’ve completed the task.  Your budget doesn’t end when you think you have things under control – that’s when it’s just starting!  You need to be diligent and committed to using your time, money, and skills in a way that will foster better relationships around you.

Home Plate – Setting Your Goals High

If we don’t dream, we’ll become stagnant.  Setting goals with your finances is one of the best ways to finally get ahead and out of the ‘paycheck-to-paycheck’ lifestyle.  When we have a written goal to eliminate debt or build your emergency fund, we tend to focus on it more and have a much better chance of reaching financial freedom.
The same is true about managing your relationships.  Dreams can also fuel relationships because it hinges on trust.  If we can trust someone with our dream and lean on them for ideas and support, your relationships will naturally grow stronger.

This last base also hinges on accountability.  Goals and dreams can fall apart if you don’t have support.  Paul knew then when he wrote to the church in Philippi.  In verse nine, Paul writes, “And this is my prayer: that your love may abound more and more in knowledge and depth of insight, so that you may be able to discern what is best and may be pure and blameless for the day of Christ.”  Paul was their encouragement and support.   When we have someone (or are that someone) to support our dreams and goals, we can become the steward that God designed for us to be.

How do you view stewardship?  Is it just as much about relationships as it is about money?  What do you think?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

I was invited to be the $mart Money guest yesterday on our local Southern Illinois TV station, so I brought my envelopes along as props.

Here is the link: $mart Money at WSIL-TV

As you budget for the rising oil prices, you are likely considering only the extra money you will need for gasoline or heating your home. However, because the costs of other products and services are dictated by the price of oil, you will need to adjust accordingly.  Here are some examples:

Groceries

Anyone who has been to the grocery store in recent months is keenly aware of escalating prices.  Why?  Other than the plastic packaging (see “plastics” below), these groceries, which are trucked to your local store, will cost your grocer more because of the higher transportation costs.  You will be charged accordingly.

Tip 1: Grow your own vegetables.  You will enjoy the gardening process and save money at the same time.

Tip 2: Buy locally, if possible.  We have a “farmer’s market” in our community where local farmers bring their produce to town, set up their booths and compete with other local farmers.  We love not only the fresh veggies, but also helping support our local economy.  Besides…we save money!

Health care

Many of the medicines and medical products that we use daily consist of petroleum, and as oil prices rise, so will with prices of these medicines and medical care. Stethoscopes, operating gloves and syringes are all made from petroleum, which could raise the price of many medical services which use these items. Also, medications, such as aspirin, nasal decongestants, cough syrup, and vitamins, contain petroleum, so consumers can expect to see a rise in their price as well.

Tip 1: You have heard it before, but it bears repeating:  allow the prospect of rising health costs be your motivator to take care of yourself.  Don’t just talk about eating right and exercising…do it!  Find an accountability partner or partners and get started…today!

Tip 2: Maintain good health insurance.  You can’t afford to not have it.

Plastics

Plastic, one of the most widely used products in the world,  is a by-product of petroleum. As oil prices rise, the prices of plastics used in house items, such as milk and other bottle beverages, will increase. Many companies that distribute items, such as soft drinks and prepackaged food items, take an extra hit, since they must pay higher transportation prices and include higher packaging costs. Even toys, lenses for eyeglasses, and athletic shoes can expect to see a hike in prices as oil prices continue to rise, since they are all made from petroleum.

Tip: Monitor your spending.  Do you really need bottled water?  Could you buy fresh vegetables instead of prepackaged?

Clothing

“In addition to the rising cost of transportation, clothing items made from rayon, polyester, nylon, or artificial furs can all expect a rise in price, due to petroleum content,” said Charles Bulger from Currencies.com. Consumers should keep this in mind when budgeting for their next shopping excursion, whether it be the annual school shopping event or purchasing necessary seasonal clothing.

Tip: Consider shopping for your clothing at yard sales or consignment stores.  You will not only find some great bargains, but you will be “buying green” and often helping a charitable organization who operates the store … a true win-win.

Some Closing Tips

• Consider your investment strategies. Of course knowledge is key, so I recommend you work with an investment professional to maintain a balanced investment portfolio focused on meeting your goals.  But now may be a good time to invest in oil, pharmaceuticals, or commodities such as corn and soybeans.

• Monitor your budget. You know that gasoline, groceries, health care, plastic products and clothing are costing you more.  If you can’t change your spending habits to buy less of these items, you must adjust your budget accordingly.  You may need to eat out less, travel less or perhaps become a one car family.  Discuss these choices with your spouse and agree on where to cut.

Don’t allow yourself to be overwhelmed by events you can’t control; instead take control of your finances, adjust where you can and continue to enjoy life.  You can do it.

Readers: How do you cope with these rising costs?  Any tips we haven’t considered in this post?

If you follow Dave Ramsey, you are aware that your very first priority is to establish a $1,000 emergency fund for those unexpected life events.   The point of this “Baby Step One” emergency fund is to provide you a buffer or fall back while you’re paying down debt with “gazelle intensity”.

But once you have your emergency fund, the question that begs to be answered is: What qualifies as an emergency?

Before you invade your emergency fund, be certain that you can clearly answer this question.  These five tips will help:

1. Is there any slack in the budget?

Is it reasonable to adjust a few of your budgeted categories — or even put a few on freeze — as you save up to cover the unexpected expense?  If so, you’ve turned your emergency into a budgeted category – at least for the time being.

2. Can it wait?

I know some things which seem like emergencies are actually only  inconvenient setbacks.  Are you needing a new TV, computer, or phone?  Will your old phone hold you off for a while?  I just spoke with a lady whose response to a computer crash was to charge $1,800 to get a new mac.  That decision added up to 1/3 of the consumer debt she held and it just added to the mess of debt.

3. How serious is it?

This is where it can be a little tough to decide if it really is an emergency.  Ultimately you’ll need to use your discretion and you might benefit from asking someone’s opinion.

In my opinion…

• Broken bone…emergency
• Sore back (paying for a massage)…nope
• Front door broke….yes, emergency
• Couch cushion ripped…I don’t think so

4. Do you have a plan to replenish it?

If you absolutely have to use the emergency fund, don’t get upset.  (It’s there for emergencies, right?) Your goal should be to replenish it as quickly as possible.  How you do it will involve some creativity – side jobs, budget category freezes, and garage sales are just a few ideas of how to rebuild that fund.

5. How can you avoid it in the future?

This final question is just as important as the first.  If you’ve built up your emergency fund and don’t want to experience the pain of dipping into it again, try to plan for the unexpected.  If you’re able to set aside funds into a separate emergency fund for auto, home, or health expenses, go for it!

Everyone’s financial situation is different and emergencies won’t be the same for everyone.  If there’s one thing that is the same, it’s that taking the time to ask these questions will help you to think through all of your options before you make the decision to touch your emergency fund.

Have you ever had to dip into your emergency fund?  What was it for?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.

If you’ve already set a budget, kudos to you!  You’re already ahead of the game.  The real challenge comes with keeping it and knowing which areas you should give some flexibility to and which ones are non-negotiable.

My wife and I try to stick to our budget as closely as possible.  When we decided to plan for a vacation this summer, we realized that our savings for the vacation was a bit weak and that our budget had little room for adjustments.  Our strategy was to use extra income and our tax return to cover the remaining $900 of the trip.  Fortunately, we were able to slide by without compromising our budget, but this process made me think about how I would adjust our monthly spending if we hadn’t come across the extra income.

Here’s What We Would Cut From The Budget

We’ve trimmed our budget down pretty well, but there is still room in case we need to cut back  in some areas.  We’ve done it before, so I know it’s possible to cut the following:

Entertainment – Currently we spend about $50 a month on entertainment which includes movies, eating out, sporting events, or other activities.  This would be the first to get cut because we could improvise and watch movies online or play board games for a couple of months.

Groceries – At about $275 each month, this would be a tough area to cut, but we could if we absolutely needed a few extra dollars.  Granted, it wouldn’t be much more than $25 — and that would be tough — but it could be done.

Cell Phone Plan – We have a $10 texting plan for each of our phones that we could cut back for a month if things were tight.

Fuel (Second Car) – Having two cars means spending twice as much on gas.  With a few sacrifices, I know we could make one car work for a little while.  It wouldn’t be a huge savings, but we might save $25-$50 a month in gas costs – a cost we’re OK with paying because of the difficulty it would be in sharing a car.

Here’s What We Would NOT Cut From The Budget

Giving – We believe in tithing a portion of our income and that means we give whether we are making $1,000,000 a year or $10,000.  This is something I wouldn’t cut from the budget and would encourage you to keep it as well.

Insurance – I’m all about lowering payments on insurance policies if you’re able to get better rates, but dropping the insurance isn’t something I would cut.  The risks of not having health, car, home, or life insurance is something I don’t want to live with.

Long term savings (retirement) – I think saving for the future is a habit that needs to be shaped and strengthened over time.  This means saving even when times are tough.  Now, the amount might vary slightly, but I don’t like the idea of not saving anything for retirement.

At the end of the day, it comes down to what you think is a priority.  No on likes to be forced to go without, but if you’re able to make small changes as needed, it’ll help make your budget even more effective.

What are some areas that you’d recommend cutting?  What are some areas that you wouldn’t think about cutting?

Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook and subscribe to the Faith and Finance RSS feed.