December Challenge�Fresh Ideas From the Editors
Susan Tiffany, CCUFC
When 2008 began, we didn't know how bad the economy would become by the end of the year. We launched the Financial Fitness Challenge, asking readers to share their favorite money management ideas. Dozens of you sent thoughtful suggestions, and we shared many of them here. Following even a handful of these suggestions will help you weather these tough times.
The Challenge continues through the end of December 2008, and we'll post the final five monthly $50 Visa gift card winners in early January. That's also when we'll open voting for one month and ask you to select your favorite idea for the year�and help us award $1,000 to one lucky winner.
Until then, we asked our colleagues to chime in with their smart money moves.
Use the library
Phil Heckman: Use "your public library�cornucopia of the latest books, magazines, games, DVDs, and free Internet access�tax dollar for tax dollar, the government service with the very best ROI (return on investment) for all members of your family."
His reminder underscores the message we heard from reader Kris, featured in the September Challenge, "Have Fun for Free." Most libraries also conduct numerous reading programs for your children, helping you to instill this thrifty and satisfying habit in the next generation of citizens.
Save half of every raise
Jim Hanson: "Every time you get a raise, commit to adding half of that amount to your savings or 401(k) plan."
Your public library is the government service with the very best ROI for your family.
Jim learned this wise advice from a long-retired co-worker, Archie Cameron. Archie was the head of our human resources department when Jim was hired, and he imparted this idea to new employees. Jim credits it with preparing him for his eventual retirement.
It's very easy�and very tempting�to let a raise be lost in routine family budget demands. Think about this, though: You have been living on the income you made before you got a raise. Yes, you want to enjoy some improvement in your standard of living�a raise is a reward, after all. But turn it also to productive use and save half for your short-term and long-term goals.
You can do the same thing when you pay off a debt. Convert half of that payment going forward to savings. Especially in times like these, you need a cushion, and your savings will shield you from the worst of a scary economy. And if you still have other debts, use the other half to continue paying them off. As you retire each one, again devote half of the payment to savings, the balance to paying off debts.
Get rid of a car
Joanne Sepich: "We have just one car in the family. When my husband Rob took a job near our home, we traded our second car in for a bicycle for him. The money he would spend just to park at work for one year is more than enough to buy a brand new commuter bike each year, but he usually goes three to four years on a model. On the few times we've needed a second car, we've rented a vehicle ...."
Think about this: You've been living on the income you made before you got a raise.
And if you're wondering, there is a teenage driver in the Sepich home.
Cars are expensive to buy, to run, to maintain, to park, and to insure. Not everyone can do without, or with only one, but don't just dismiss the idea. Think seriously if there are more cost-effective ways�using taxis and public transportation or an occasional rental�to meet your transportation needs.
Be a generous giver
Rena Crispin: "I used to have huge money issues because I love to spend money. I've done all the stuff people usually do, but here's the best tip of them all: I give 10% of my income, before I give it to anyone or anything, including taxes, to church. It's called "tithe," and I did it as a Buddhist and do it as a Christian�so it's nondenominational and this tip can be shared with everyone.
"Tithing is a most powerful way for me to get at the heart of money issues. It sets my priorities, and loosens the power of money. I always have what I need. Frees me from fear of not having enough. Makes me have a smile on my face and joy in my life no matter how much is in my credit union account. I feel wealthy beyond measure!"
My parents always tithed their income, quietly distributing their charity across all categories�church, family members and friends in need, community and research organizations. Whether or not you choose to tithe�and there is debate about that practice�or simply make giving a priority in your budget, generosity can help you count your blessings. You may find you have more than you realized. Not everyone can manage with only one car, but don't just dismiss the idea.
2008 Financial Fitness Challenge
Two things we hope you have learned from the 2008 Financial Fitness Challenge is that you are not helpless in the face of big financial problems, and you are not alone.
And if things are still bleak, ask the people at your credit union for more guidance. The credit union idea in a nutshell: We're all in this together.
ST
Susan Tiffany, CCUFC
[email protected]
Published December 1, 2008
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