December 2007

Poor Richard's Almanac

In 1732, Benjamin Franklin founded and published Poor Richard's Almanac, an annual collection of practical information, humorous stories, and wise sayings. Many of these sayings encouraged readers to build habits of diligence and thriftiness.

"He that is rich need not live sparingly, and he that can live sparingly need not be rich."
"Drink water, put the money in your pocket."
"Early to bed, early to rise, makes a man healthy, wealthy, and wise."
"The way to wealth is as plain as the way to the market. It depends chiefly on two words, industry and frugality; that is, waste neither time nor money, but make the best use of both."

Spend Intentionally

Many individuals cringe at the idea, but a budget can help you develop the financial discipline to succeed.

Track Your Spending
Is your money consumed by impulse purchases, credit card bills, or banking fees? Use your credit card statements, receipts, and bills to keep track of every dollar you spend for two months. Calculate your monthly fixed and variable spending. Then calculate your monthly income, and compare numbers.

If your spending exceeds your income, look for places to cut spending. Identify non-essentials such as eating out, hobbies, name-brand coffee, and smoke breaks. Find less expensive alternatives, wait for sales, use coupons, or buy in bulk.

Make A Plan
Allocate money for each expense category. Save at least 10 percent of your income each month. Set aside additional money in order to prepare for unexpected circumstances. Put money aside for college tuition or other large expenses, and avoid heavy debt.

Pay your bills, then determine what you have left for other things. Pay extra on your credit cards until you pay them off; then pay the balance every month. Do not buy something unless you have the money to pay for it.

Cutting expenses does not mean cutting enjoyment. Go to the movies once instead of twice a week. Take advantage of free concerts, kids-eat-free deals, and free day at the zoo. Ride in one car instead of two when possible, and choose the one with better gas mileage.

Stick With It
Adjust your budget categories as necessary, but do not give up on cutting expenses or saving money. A little discipline now will eventually give you the freedom to go on that trip or buy that flat screen television.

Whatever stage of life you are in, using a spending plan now will give you the freedom to seize tomorrow's opportunities unhindered by financial worries.

Read more about Thriftiness in this month's bulletin

Think Percentages

Teach your children to think of spending in terms of percentages. If a gallon of milk costs $3.75 at one store and $3.25 at another, you save 50 cents by buying the cheaper milk. This might not sound like much, but imagine what would happen if you could cut 13 percent off your entire food budget.

Think about the percentages you can save, and weigh quality tradeoffs. Do not let the small amounts saved or the large amounts spent on big purchases blind you to the value of saving.

Character Council Orientation

Session Two of the Character Council Orientation Course is now viewable online. Steven Menzel, director of the International Association of Character Cities, shared the purpose and role a Character Council. He also explained how many successful Character Councils are structured.

Visit the Character Community Network to learn from others, share ideas, and receive useful training.