Is Frugality Compatible With Abundance?
Over the past few days I’ve been thinking about frugality and abundance and that, in my experience, a sense of abundance can actually lead to frugality. In the process I thought about what abundance means to me, and then decided to look it up. One dictionary definition talks of “a more than plentiful quantity of something”, and then there is “a fullness of spirit that overflows”.
Then I also needed to look at what frugality means to me. For many people it seems to imply being penny-pinching and parsimony. But I feel it’s much more about thrift, as in “the sensible and cautious management of money and goods in order to waste as little as possible and obtain maximum value”, that leads to spending less money.
I love foraging. Usually I find myself surrounded by such abundance, that I can afford to take only the best, enough for my immediate needs, and perhaps a little bit extra for the freezer. It makes me feel very prosperous indeed.
Some people have the ability to see abundance and instil this sense in others. A friend of mine grew up in abject poverty in a rural community, yet throughout her childhood felt that her family was rich. She remembers being sent to a local farmer to buy one egg at a time when that was all her mother needed.
The key is an awareness of my real needs. And also a willingness to live according to those needs. Some time ago, I attended a weekend retreat where I was greeted by a luscious breakfast buffet. Once I had made my choice and sat down at a table, someone commented that my breakfast was very frugal, given the abundance and variety of food available. But it was exactly this abundance which meant that I didn’t need to eat loads of food just because it was there and I had already paid for it.
In the western world we are daily exposed to more than 1,000 commercial messages. Each one is designed to create a desire within us, and quite often in a way that suggest the desire is a need. How on earth do you actually identify what your real needs are against this onslaught?
This is especially true for those needs that go beyond the need for food, shelter and clothing. The need for an outward expression of our status within our peer group, for instance. Or the need for entertainment, rest and relaxation. The need to love and be loved, and to express that love; etc., etc.
Oddly enough seeing what we actually spend our money on can give us the most important clues. It is a fact finding mission. That’s why it is so important to keep meticulous records of where the money goes. And why it’s important not to change your spending habits when you first start keeping records.
You can find detailed instructions about creating and keeping records in my self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” (http://www.holisticmoneymanager.com/self-help/). And it will tell you exactly how to make use of that information to develop a sense of prosperity and abundance.
Sanni Kruger is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from http://www.holisticmoneymanager.com/self-help/
To tithe or not to tithe?
The word “tithe” comes from the Old English word “teogoþa “, and means “tenth”. Therefore it is a one-tenth part of something, paid as a contribution to a religious organisation or compulsory tax. It was practiced in England for many centuries. Giving is central to most religions as a principle of faith. For instance, various forms of tithing have been included in traditional Jewish law and practice since ancient times.
In modern day Christianity though, there is quite a debate whether the Bible commands tithing or not. Some interpretations rely on Old Testament texts which clearly say that tithing is a duty of the faithful. Others conclude that it was never practiced or taught within the first-century Church. They see the New Testament scriptures as teaching the concept of “freewill offerings” as a means of supporting the church. As St. Paul put it: “Each of you must give as you have made up your mind, not reluctantly or under compulsion, for God loves a cheerful giver.” (2Corinthians 9:7)
Some also feel that if we are committed to spend no more than 100% of our means, giving away 10% of our income makes us more disciplined with the remaining 90%.
I believe that giving out of our largesse to those less fortunate than we are increases our sense of prosperity. Even if it’s only a small amount, it still gives us the sense that we have enough money to give away.
For me the important point is how it fits in with your own needs and circumstances. If you tithe 10% but end up feeling deprived, you will feel worse, not better. Yet not tithing may make you feel guilty. It’s up to you to find the compromise that is most satisfactory for you.
And then there may be this burning question:
Unless you have negotiated definite amounts to repay each month, I recommend that my clients pay 1/3 of any surplus and windfalls to their creditor(s). (In my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” I give detailed instructions what to do with the other 2/3.) Perhaps you could donate 10% of any surplus and windfalls before doing the “three-way split”. Many of my clients actually adopt this method. This formula also makes the arithmetic easier because once you have deducted the 10% the remainder is always divisible by 3. For instance, say you have been given £250. Dividing it by 3 will give you £83.33, but if you deduct 10% (£25) you are left with £225, which, divided by 3, makes £75.
Sanni Kruger is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from http://www.holisticmoneymanager.com/self-help/
4 Good Reason to Make a Will
In a recent blog I wrote about financial transparency within the family and why it is important in the day-to-day management of your finances. Making a will is also part of the process. You may think that you have nothing much of value to pass on, or that you are way too young to think about such matters. Yet there are … good reasons why you should make a will.
1. Peace of Mind
With an up-to-date and legally valid will you have peace of mind, knowing that your money and assets will be used as you have decided, contributing to the people and causes which are closest to your heart and your executors will be helped by clear guidelines. If you die without a will, i.e. intestate, a legal formula is used to distribute your estate. This might mean that distant relatives could inherit while the people and charities you care about are ignored.
2. Your Children
If you have young children you need to think about who you would like to appoint as legal guardians to look after their interests.
3. Tax
Tax is another good reason for making a Will. Supposing, for instance, you own your own home and have paid off the mortgage your Estate may be liable for Inheritance Tax. Gifts to charity are deducted before the tax liability is calculated and can offer a way of bringing the value of your Estate within the tax-free limit.
4. Support for Your Loved Ones
My colleague Kevin Mercadante wrote in one of his recent blogs that “grief and financial management are not compatible”. Appointing a person that you trust to help settle your affairs can be one of the best gifts you can leave your loved ones. Your executor will help your family in dealing with banks, creditors, courts and tax authorities in the months that follow, giving them more time and space to grieve.
I have prepared a short guide to help you make or change your will. If you would like a copy go to http://www.holisticmoneymanager.com/contact/ and write WILL in the box.
Sanni Kruger helps people become competent and confident money managers who live within their means without stressful money concerns. She supports her clients in creating systems that enable them to reduce their debt whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. What makes her approach “holistic” and different from other budgeting advice is that it is needs, and to a certain extent, conscience led rather than money led. Sanni has written a book on the subject, “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich”. The full-colour illustrated workbook is available from http://www.holisticmoneymanager.com/self-help/.
Finances – A Family Affair?
A few years ago a member in my Quaker community told the story of how she was approached by a friend who wanted to ask her an “intimate” question. The friend was terribly embarrassed and had difficulties getting the words out. So my Quaker friend braced herself for what might come, only to hear: “Do you …? Do you and John …? – I mean, do you and John have joint bank accounts?”
This blog is not about whether or not you should have joint bank accounts. But it is about financial transparency. In the Bible it says: “Whoever conceals their sins does not prosper, but the one who confesses and renounces them finds mercy.” (Prov. 29:13 NIV)
It might be tempting to conceal the real state of our finances from our spouse, especially if they are in disarray. I remember a lady whose husband had been present at the birth of all their 5 children, yet found herself unable to share with him how she managed the household money. But what will that do to your marriage in the long term?
I advocate that couples and families (with the children who are old enough) actually meet regularly to discuss finances. That it becomes part of the family routine. For instance, it might be a family tradition to go to church together on a Sunday, or have a carvery lunch and then go for a walk afterwards. In the same way having a “finance summit” once a week or once a month could become such a fixture. I make detailed suggestions how this might work and how to establish the vital ground rules in my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich”.
Why would you want to discuss your finances with your family? It’s about doing it together, sharing the burden and the joys. There is a German proverb, which translates roughly to: “A sorrow shared, is a sorrow halved – and a joy shared doubles the delight.” The family summit can be used to brain storm and bounce ideas and strategies around. Sometimes you might also want to involve someone outside the family. If you are in a financial crisis you might find it difficult to think straight. Here advice from a debt counselling service might be invaluable. Or you may need help from an Independent Financial Adviser. Or you might want to use a finance coach, who is completely neutral and has no vested interest is the final outcome.
The family summit can also be used to talk about and share visions and goals. And about which actions you need to take which might get there. Therefore, financial transparency is also about accountability. It can help you actually take whatever actions you said you would. Thus it will bring you closer to achieving your goals and making your visions become reality.
Sanni Kruger is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from http://www.holisticmoneymanager.com/self-help/
How to avoid the Festive Financial Hangover
I have just come across some very sobering research: According to Michael Ossei, personal finance expert at uSwitch.com 62% of people in Britain struggled to pay for this Christmas, and almost three in ten (28%) ended up in the red. Apparently, 42% had Christmas on credit this year – 4% even took out new credit especially for it. On average it will take almost six months to clear the debt. However, 8% will still be in debt next Christmas. That’s almost one in ten people.
So what can you do that it won’t happen to you next Christmas? The best thing is to start planning now. I have a friend who started shopping for Christmas 2012 even before New Year. This is someone with a large family who is very organized about the whole thing: everything will be labeled immediately and put away. Christmas cards and wrapping bought at knock down prices. Over the course of the year my friend will add to the stash.
How on earth does she have the cash to do that? She keeps a special “Christmas Fund” to which she adds a bit of money every month. How? You can find detailed instructions in my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich”. (You can get it from http://www.holisticmoneymanager.com/self-help/) The book also shows you how to apply the same principles to other regularly occurring events, such as your summer holidays and birthdays.
Other things you can do to have a good Christmas despite a tough economic climate is save up reward points and shopping vouchers. Savvy use of credit cards can also help. I advocate paying the balance in full every month anyway to avoid getting into the debt spiral (my book explains what that is). It also gives you a good credit rating and you can then opt for a card which offers cash back or rewards. They can then be saved towards next Christmas.
But what if you’re one of those people who ended up in debt after this Christmas? My advice is, don’t worry about it. “Making Friends with Money” will give you step-by-step directions how to pay it all back quite painlessly while making sure at the same time that you won’t wake up to another financial hangover after next Christmas.
