Budgeting and Being Boring

A friend of mine brought it to my attention recently that there is strong correlation between budgeting and living a boring, sequestered life devoid of entertainment and excitement. 

This observation does seem rather well founded.  So then the question is: which direction does the causality run?  Are we budgeters boring because we budget? Or do we have some other personality trait that causes us to be boring and also to budget? 

Hard to tell, which is unfortunate because the answer would probably shed some light on whether it is possible for someone to be a budgeter while not having a boring life and it would certainly lend some insight into how one approaches achieving such a state of being.

Money Doesn’t Buy Happiness

Whoever said “Money doesn’t buy happiness” was sorely mistaken.  They were simply buying the wrong things with it.

Debt Elimination Update

So I've already updated the Debt Elimination Calculator (and yes, I do realize it has only been a couple hours). The new version is version 2.2.1 and can be downloaded here or from the original post (the links in each point to the same file).

Features added for version 2.2.1:

• The spreadsheet now calculates the information (time required to pay off, interest paid, etc.) when paying at the minimum payments only, for comparison purposes. This functionality had been removed in version 2.0.0.
• The minimum payment calculators are more robust to inadequate minimum payments.
• Some slight formatting modifications have been made.
• Added functionality for sending feedback/asking questions via email.
  

Also, another interesting note on debt elimination. I was just told by a friend that you can make payments in advance. Let me explain. If your minimum payment is $50 and you pay $100, you have made a bigger dent in you balance, but the minimum payment of $50 still comes due next month. Alternatively, you can make two payments of $50: one labeled for this month and one for next month. Then you have still paid $100 dollars and have the same benefits of less interest accruing, but the next payment to come due is in two months instead of one.

When using debt elimination you usually are paying more than the minimum payment. If you use this method each month you have the added advantage of an ever increasing buffer between you and when your next payment is due. There is more bookkeeping required on your end, but you have an extra margin of safety in case something happens. (Though, if you stop paying because you aren't required to then you not only lose the advantage of the buffer, but also lose ground on your debt elimination. So if you're going to do this you have to be very disciplined.)

Special thanks to Dave for this insight.

Budgeting & Debt Elimination

I taught combined Priesthood and Relief Society a week ago on budgeting and debt elimination. I've had a number of requests for my budget template and debt elimination calculator. So I decided to put all of the materials here.

Here are the two handouts that were used in class. I wrote the first one and it goes over the debt elimination process and the steps for starting a budget. The second one is the pamphlet put out by the Church, One for the Money, talking about family finances.

(Click on the images to download)

Here is the debt elimination calculator I created. It has the capacity for 10 debts. You fill in the blue information for each debt in the order you want to prioritize them, along with the amount you can allot toward paying off your debts each month. It then calculates when you will pay off each, how much interest you will pay on each, and the payments that are required each month.

(Click on the image to download)

And finally, here is my budget template. It is the method that I use for budgeting. I've used it for years. Though it has undergone some fairly substantial revisions throughout the process, the principles have remained the same.

(Click on the image to download)

I hope to post some further explanation about how to use the two spreadsheets. I think that the budget spreadsheet especially needs explanation. It is not difficult once you get the idea, but to take advantage of all its coolness a little explanation is necessary. For now, feel free to let me know if you have questions—I'd be happy to explain it to you.

I will update and modify both of the spreadsheets above over time. In fact, both have been modified since I taught the class a week ago. As I revise them I will update these links, so the most up-to-date versions will always be found here. Also, for further updates click on the Budgeting category at the right to see all of my future posts about the topic (this one is the first).

Update: There seems to be some difficulty with the way that some versions of Internet Explorer behave when trying to download the above files. The files are Excel files (they are not zip files). If your computer tries to download it as a zip file then try the following: right click on the link, click Save Target As ..., and name the file <something>.xlsx somewhere you'll be able to find it. That should bypass the problem. As always, if you have trouble then let me know.