Ann Arbor, Michigan is planning to install LEDs in its streetlights to save money on lighting costs. Apparently this investment is going to pay for itself in four years. There seems to be a bit of a mini-green revolution right now, as just about every finance blog or personal improvement blog talks about replacing your own light bulbs with CFLs or LEDs. We got a pack of them from Wal-Mart to replace some 60-watt bulbs, and we’re pretty sure that the “60-watt equivalent” is brighter than the regular incandescent bulb after it warms up. Wal-Mart even has their own brand of CFLs, and that’s what we’re using now. It’s a bit of an investment, but we’re planning on replacing a few more bulbs each month to try to cut down on our utilities bill.
As I’ve said recently, we’ve started learning about finances as a family. One of our favorite talks is Elder Marvin J. Ashton’s Guide to Family Finance, which was given to us by Julia’s bishop just before we got married. Another great resource is a handout from Education Week at BYU (pdf). These resources break it down financial basics very well. The principles in here are simple and easy to understand, but they take some personal conviction to implement.
The great part about these ideas is that they’re based on proven principles and common sense. Here are some of the basics
- Start a budget
- Set money aside for emergencies
- Get out of debt
- Save money for the future
These items all start with action words. If you want more information, a professor at BYU has set up a great financial website to help you learn about financial basics. It’s set up like a class, but all of the information is free and very rewarding. Although religion is deeply rooted in these resources, they certainly ring true for people of all faiths.
Learning about personal finance has become a recent hobby of mine. As my dad says, I’m still in “school mode”, so in some ways I feel weird if I’m not studying something. I’ll be honest with you. I began studying personal finance out of fear. My wife and I are both recent college graduates, and having money to spend became something very fun. Now that’s okay, but the problem was that we had no idea how much we were spending. That’s not okay, especially since we were spending about what we were making.
Sometime around August of last year, reality hit. (For those of you following along, that’s when our little girl was born). After a traumatic experience at birth, we faced some rather large doctor’s bills. For someone who is used to only paying rent, seeing commas on bills is very scary. My wife and I realized that we needed to cut back a bit, and especially to take a look at our finances.
In these eight months since August, our family has matured greatly. We’ve truly come a long way. Our lives have really changed, and not just because there’s another member of our family. One major change is because we have set up a family budget. Our budget is in the form of an online spreadsheet, but that’s not what’s important about it. What is important is that we track everything we spend so that we know where all our money is going. It helps relieve one of the major stresses in our marriage, too, since we don’t have to worry about where our money is going or wondering if we’re spending too much on frivolous things because now we know what we’re spending.
What’s the most surprising thing about having a family budget and learning about personal finance? It’s actually fun! Ever since I was a kid, I’ve been obsessed with statistics. With my spending cash back then, I bought baseball cards and memorized the backs. We incorporated a statistics page into our budget which I stare at daily, imagining where we could trim back a bit so that we can reach our goals more easily.
An important part of our budget is (and a lot of the fun) is that we each have a personal category that’s only for fun things for us. That way I can buy a video game every so often and Julia can buy some fun cooking utensils or something (and after a getting used to the budget, I’m still getting used to what she defines as “fun”).
We’ve learned a lot in our months of financial training. We’ve also realized that we’ve both been prepared pretty well by our own parents. Personal finance definitely falls in the category of “the more you know, the more you know you don’t know”. Just remember, though, try to keep things simple and do what works for you. As Dave Ramsey says, “it’s not a trick, it’s just common sense”.