I’ve lost count of the number of budgeting plans, techniques, strategies, programs, apps, and so on that Shona and I have tried over 23 years to get our finances in order. Sometimes we’ve come close to mastering our money, but it just doesn’t seem to last. A few times we’ve just given up, but most of the time we’ve worked really really hard to plan, budget, keep accounts, and practice accountability. And yet, no matter how much income we have, savings never seem to rise, unexpected bills bomb our beautiful budgets, and we just about survive from month to month.

Dave Ramsey’s plan has brought us closest to getting a handle on our accounts over the last couple of years, but we kept finding the micro-categorization so complicated and time-consuming. Also, when we blew it on one category, we kind of lost heart in keeping the other categories under control. And it was always difficult to figure out exactly how well we were doing overall at any stage of the month. Usually we got to the end of the month and just about squared things away with savings in some categories compensating for over-spending in others. But neither of us felt much motivation to really try to save money in our daily expenditure as we didn’t see our decisions making any difference to the overall picture.

Until a few months ago, when we stumbled upon a modification of the Dave Ramsey system, let’s call it the Dave Murray system, that has absolutely revolutionized our finances.

The Dave Murray System

Step 1: Estimate how much income from all sources in the course of the month.

Step 2: Calculate how much fixed expenses for the month.

Fixed expenses are predictable amounts that come off every month and includes items like tithe, mortgage (including property tax and insurance), car insurance, cellphone, Internet, YMCA, College tuition, Covenant Eyes, utilities, pension, health insurance, and so on. We also include a small fixed amount every month that goes into savings.

Step 3: Calculate the difference between Step 1 and Step 2 (Total income minus Fixed expenses = Variable expenses budget)

The amount left here is what’s available for all the variable monthly expenses, amounts that go up and down each month depending on so many uncontrollable factors. We take this out of the bank in cash.

This is where I leave the Dave Ramsey plan and start the Dave Murray plan.

At this point, Dave Ramsey would have you start putting this money into multiple envelopes for numerous categories: gas, groceries, stationery, pharmacy, doctor/dentist, car repairs, clothes, house maintenance, furniture replacement, and on and on it goes.

Instead, my wife heads to Costco.

Step 4: Monthly Mega-shop

Shona takes a large chunk of the variable expenses budget calculated at Step 3 and does one mega-shop in Costco and Walmart at the beginning of the month to get best prices on items that cost so much more in a weekly shop at the local grocery store. This has been a huge game-changer for us, especially with a family of seven, and has greatly reduced our monthly expenditure on food and non-food items.

Step 5: Variable Expenses minus Monthly Mega-shop = What’s left to spend (divided by 30)

Here we subtract Step 4 (mega-shop) from Step 3 (variable expenses budget) to find out what we have left to spend in the month. We then divide that by 30 (or 31 depending on the month). This gives us a daily budget amount, a fixed sum that we work really hard to save from each day. We then put together a spreadsheet with 30 columns and enter this fixed daily amount at the top of each column. That’s what we have to spend each day on everything we need – gas, groceries, books, clothes, etc. This step has been the second and biggest game-changer for us.

Step 6: Daily Accountability

Every evening after our family meal, Shona and I get together and write in the spreadsheet how much she’s spent we’ve spent that day. Our aim is to have savings each day from our daily budget that will accumulate more and more momentum as the days and weeks pass. It’s been incredible how working with this limited daily amount has made us so much more conscious of every spending decision, motivating us to really ask if we need to buy this or that right now, with every saving making a visible and felt difference to the cash pile in our money box. If we go over budget a day or two, then we work extra hard to recover quickly. It’s so encouraging to see how quickly $30 saved one day and $20 another quickly mount up to hundreds of dollars each month.

With this method, unlike the Dave Ramsey method, you know exactly where you are each day of the month, either exceeding budget or saving from it. Also, it is so much quicker to do each day. When we were using the Dave Ramsey system we ended up spending up to 30 minutes a day getting all our categories sorted. That often put us off actually doing it for days at a time, making it difficult to remember, frequently leading us to give up.

With this scheme, there’s just one category (daily budget) and all daily expenditure is debited from that. Usually we’re done in 5 minutes. And for the first time in our lives, we feel in control of our finances, we’re saving as we’ve never saved before, and we’re even enjoying it!

I’m including this in my New Student Tip series because although my family circumstances are just a wee bit different to most students (you can probably skip the Costco mega-shop!), the basic framework of this system, especially the daily budget idea, can be used by anyone, including students.

UPDATE: You Need A Budget Is Offering their App free to students. More details here.

It’s extremely hard to manage money well, and it’s especially hard when you’re a student with so little earning capacity and so many huge expenses associated with further education. Let me give you some key biblical words to guide you. Then tomorrow I’ll share with you the two biggest game-changers in my own money-management.

1. Study (Prov. 24:3,4)

If someone gave you $2 million today, you would probably buy a book on money management. Given that the average American family will earn $2 million in the course of a working life, why haven’t you bought the book yet? No one is born a George Soros or a Warren Buffet. Just as we need to study our math, biology, etc., we also need to study how to manage money wisely. I’d recommend Dave Ramsey’s Total Money Makeover or his Complete Guide to Money.

2. Budget (Prov. 24:3,4; Luke 14:28)

If you aim at nothing you’ll always hit it. The 3% of people who write out financial goals achieve more financially than the other 97% combined. Budgeting means working out exactly how much income you have each month from various sources, then estimating exactly how much money you will spend on various categories (tithe, saving, housing, gas, food, etc.) and ensuring that the income is greater than the expenses.

3. Save (Prov. 21:10; 22:3; Matt. 25: 14-30)

You should have a short-term savings fund for emergencies like car repairs (maybe about $500). If you can afford it, you should also consider a medium-term savings fund for things like replacing your car or computer. Next priority, if there’s anything left, is to build up a deposit on a house. And then, as early as possible you should start putting a little away for retirement. I know that sounds ridiculous but have a look at this graphic if you need further persuasion.

4. Give (Prov. 3:9,10; Luke 6:38; 1 Cor. 16:2)

What? I’m a student, people give to me! No, you should tithe any earned income no matter how small it may be and give to support your local church first and foremost. The earlier you start, the easier this will be later in life. Believe it or not, tithing does not get any easier the more you earn.

5. Insure (Prov. 22:3)

“Foresee the evil and hide (“cover”) yourself.” The number one cause of bankruptcy in the US is medical bills  (#2 is credit cards).

6. Wait (Heb. 13:5; 2 Cor. 6:10; 1 Tim. 6:6)

Be content with what God has given you and learn to patiently wait until you can buy with cash

• 19% of bankruptcies are filed by college students (usually caused by credit card debt)
• People spend 47% more when using credit cards than when using cash
• 88% of “Ninety days interest-free credit offers” are turned into high interest loans
• Avoid get-rich-quick schemes (Prov. 13:11)

7. Repay (Prov. 6:5; 22:7)

I agree with Dave Ramsey that, apart from your home, you should avoid loans as much as possible and if you must take one, then aim to repay it as fast as possible.

8. Work (Eccl. 9:10; 1 Tim. 5:8)

Don’t depend entirely on your parents or college to fund your lifestyle or your studies. Even if your parents support you to some extent, or you win a college scholarship, it’s unlikely this will cover all your costs. Far better to work now to cover the balance than to take a loan which you will end up working to repay eventually.

If you say, “But I need a loan to attend this college,” you should consider whether your lack of cash in hand may be part of God’s guidance of you away from that college or course to one you can afford. If you can’t work through semester time, then your aim should be to work through summer and winter vacations. Apart from the extra cash, you will also learn good discipline and work habits.

Previous Tips

New Student Tip #1: Dropbox
New Student Tip #2: Wunderlist
New Student Tip #3: Evernote
New Student Tip #4: Diigo
New Student Tip #5: Lastpass
New Student Tip #6: Calendar
New Student Tip #7: Feedly
New Student Tip #8: Covenant Eyes
New Student Tip #9: The Why of Note-taking
New Student Tip #10: The How Of Note-taking
New Student Tip #11: Time Management
New Student Tip #12: Memorizing

Books

Thriving at College by Alex Chediak (for students)
Preparing Your Teens For College by Alex Chediak (for parents of students)
Top 10 Books for Students

The people of Scotland have spoken and said, “No thanks!”

Thus ends the latest Scottish rebellion at least for another generation.

And for one of the very few times in my life, the side I supported, albeit with some reluctance, has won an election. Pity I couldn’t actually vote.

And a first, one of my prophecies came true. In A Scottish View on Scottish Independence, I predicted that Scotland would vote “No” by a narrow margin. I thought it would be 5-7%, but it’s turned out to be nearer 10%.

So what does it all mean? A few reflections:

1. This has been a largely peaceful process. The days of Braveheart and Culloden are thankfully long past for Scotland. Ukraine, Iraq, and many other places are not so fortunate, as separatist (and unionist) movements continue to use to military means to advance their cause. There are no tanks or claymores on the streets of Edinburgh or Glasgow this morning.

2. This has been a surprising process. Surprising that the passionate Scottish nationalist movement came so close, but even more surprising perhaps was the passion and feeling stirred in the hearts of the Unionists. Many Scots were stunned at how much latent love for being British surfaced in our hearts. Scots who’d never waved a British flag in their lives found themselves wrapped in Union flags and singing “Land of Hope and Glory” and “Rule Britannia, Britannia rules the waves” with all the gusto of the English! We’ve shed surprising tears as we discovered deep strains of patriotism and came to value and treasure our shared and God-given history and heritage.

3. This has been a divisive process. With the whole referendum being about division, in some ways we should have expected polarization. But few expected such extreme polarization. Americans who have got so used to extreme partisan politics might be puzzled that this is a problem. “It’s politics, of course we hate the other side.” But that’s not the norm in the UK. Oh, sure the main party leaders feign hatred of each other, as here. But the general population usually just lets them get on with it, as they get on with their lives. Not this time. Families, neighbors, colleagues, Christians have turned against one another with a rarely seen enmity, that may take years to recover from.

4. This has been a heartbreaking process. The vote is over but hundreds of thousands of Scots are deeply depressed this morning with painful hearts that will take a long time to heal. The stunning 85% electoral participation was exceeded only by the unparalleled emotional investment that will be causing many emotional hangovers this morning. This was no ordinary election that people forget in a day or two; many staked their whole beings and many pounds and hours in this campaign. And today, as I look at photos and film of rain-soaked Scottish flags and Lion Rampants, and at the tear-stained faces of multitudes of heart-broken Yes-Scots, my eyes begin to water too. “Maybe they were right. Maybe we missed a golden opportunity.”

5. This has been an economic process. For all the passion and emotion of these weeks and months, the primary consideration has been money. Judging by most of the arguments, the vote really came down to which side would put a few more pounds in Scottish pockets. Spiritual considerations were ignored or belittled. Saddest of all, perhaps, was that neither side needed to take the church’s views or the Christian vote into account at all – too small, too insignificant. Thus Scotland’s headlong plunge into secularism, even intolerant persecuting secularism, continues apace, though probably slightly slower than if Scotland had voted for Independence.

6. This has been an entertaining process. There have been many moments of high-drama and many barn-storming speeches. Political reputations were made and destroyed. Some politicians rose to the occasion and others collapsed under the glare of TV lights and public scrutiny. Although election results usually disappoint me, I must say I just love watching the human drama play out as men and women strive to sway hearts and minds, as leaders are made and others are broken, as journalists skewer slippery interviewees, and as ordinary people rise up and speak. 

7. This is a continuing process. One of the factors that swung the vote in the last few days was the UK leaders’ panic-induced promises of far greater powers to the Scottish parliament. That may have saved their skins, and the Union, but it’s also guaranteed continued political, constitutional, and economic upheaval for years to come. In his concession statement, the nationalist leader, Alex Salmond, has already called for these promises to be honored.

UPDATE: Let me add an eighth thought. This has been a world-watching moment. Scotland is rarely in the news, but has fairly enjoyed the world’s media spotlight the past week or so, especially as the opinion polls narrowed and the break-up of the United Kingdom seemed imminent. Many European nations looked on with alarm as separatist movements in various European countries recognized the momentum a Scottish “yes” vote would produce. Americans, including the President, weighed in on the eve of the vote, horrified at the potential impact on our “special relationship,” NATO, and world stability. Although I’m no fan of Gordon Brown, I think he was right to say that the UK is a good example to an increasingly divided and unstable world of how different nations and peoples can unite and work together for the common good. But it’s also an example of flexibility in devolving more powers in response to the democratic process.

These are the thoughts that come tumbling out of my heart and head this morning. Whether we are rejoicing or mourning this morning, surely this prayer for the revival of religion in Scotland is something all Christians can unite around.

As you can imagine, I’m rather happy to introduce my new book to you today!

I wrote The Happy Christian mainly because there don’t seem to be many of them around today. There’s a serious joy deficit dragging down God’s people and undermining our message of good news for the world.

The book is partly a critique of unbiblical versions of happiness; but it’s mainly a positive presentation of the Christian life in an increasingly negative culture.

I identify the causes and consequences of this widespread and demoralizing plague of negativity, and I propose ten biblical and practical methods to re-balance our attitude, outlook, words, and actions in a way that will lift the spirits of Christians, compel attention for the Christian faith, draw people to Jesus, and make the church a beacon of hope in a world of despair.

Although I make frequent reference to the current fascinating surge of scientific research into happiness, the book’s analysis and prescription is built upon biblical truth, truth that honestly faces the realities of sin and suffering, but that also transforms even these negatives into positives.

Once again, I’m very grateful to Joel Miller and the wonderful team at Thomas Nelson for all their help in getting the book to this stage. It won’t be available until February 2015, but as pre-publication copies are beginning to circulate, I thought it was time to make it official.