Making Ends Meet

Right now there is this talk of a payroll tax holiday. I generally support tax cuts to a point. But a payroll tax holiday has the potential to be super costly and have little impact on total employment. Then there is the full write off of equipment that Obama is proposing which, as a small business owner, would be nice but it’s not going to have a huge impact for the $50B a year it will cost.

I have a better idea.  I’ll call it The Enloe Plan.  It would either put people to work or not cost the government any money at all.

Here is how it works:
1. Only use the 7.65% employer portion of payroll taxes (Social Security and Medicare).  Employees still pay their share.
2. When an employer hires someone who is currently on unemployment they take their portion of the payroll tax and use that to pay the new employees.
3. It is a dollar for dollar trade- if you don’t hire someone you pay your normal payroll taxes. Every dollar you pay a new hire you don’t have to pay in payroll taxers. Part time employees would also be eligible.

The math:

• Any company regardless of salary can hire one new full time person for “free” for every 13 people they have on payroll.
• If every private employer did this for all of their payroll taxes it would put 8.2 million people to work “overnight”.
• It would cost $100 Billion over four months if everyone participated. (everyone won’t so $100B would probably last a year…)

There you have it– no danger of tax cuts that go to overseas manufacturers or “hoping” that people get hired.

Here’s a page with the spreadsheet on it: The Enloe Plan

Questions?  Comment or email  berry (at) makingendsmeet -dot- org

References:
http://www.bls.gov/news.release/empsit.t08.htm

Trust me- I may be LESS qualified to talk about biblical things than I am to talk about money.  But the Bible is the ultimate authority on money.  Have you ever wondered in amazement how you always have JUST enough money to make it to the next paycheck?

Even when you have an unexpected car repair you often find that you didn’t miss that $200 and some how or another you made it to the end of the month. Having just enough repeats itself over and over in our lives.

And frankly- that gets frustrating. You think, “Oh this month we won’t have this $300 expense that we had last month. So we should have money left over.’  Nope. Somehow it’s all gone.  It’s one of the phenomena that I am always looking at when it comes to money– why human nature works against us saving money.

But then I recalled that modern Americans are not the only tribe to face this. But when the Israelites faced having just enough it was by God’s design. And for a specific purpose– to see if they would listen to what God says.

Which makes me ask the question– “If I were more faithful would God provide more than just enough?”

Below is one book of the Bible that talks about manna.  The last line is the one that offers the most insight.   I’ve made some comments in Exodus 16 below– (They will be in this different color.)

Exodus 16

Manna and Quail

¹ The whole Israelite community set out from Elim and came to the Desert of Sin, which is between Elim and Sinai, on the fifteenth day of the second month after they had come out of Egypt. ² In the desert the whole community grumbled against Moses and Aaron. ³ The Israelites said to them, “If only we had died by the LORD’s hand in Egypt! There we sat around pots of meat and ate all the food we wanted, but you have brought us out into this desert to starve this entire assembly to death.”

(Note:  God took his people out of what looked like a comfortable situation and sent them into what, from everyone could tell, was a worse situation.  This alone shows us that God’s plans exist outside of our immediate physical lifestyle.)

⁴ Then the LORD said to Moses, “I will rain down bread from heaven for you. The people are to go out each day and gather enough for that day. In this way I will test them and see whether they will follow my instructions. ⁵ On the sixth day they are to prepare what they bring in, and that is to be twice as much as they gather on the other days.”

(Note: God was just seeing if people would listen to his instructions. What’s really interesting is that God said to keep the sabbath holy– and he even set up his program to make that happen.)

⁶ So Moses and Aaron said to all the Israelites, “In the evening you will know that it was the LORD who brought you out of Egypt, ⁷ and in the morning you will see the glory of the LORD, because he has heard your grumbling against him. Who are we, that you should grumble against us?” ⁸ Moses also said, “You will know that it was the LORD when he gives you meat to eat in the evening and all the bread you want in the morning, because he has heard your grumbling against him. Who are we? You are not grumbling against us, but against the LORD.”

⁹ Then Moses told Aaron, “Say to the entire Israelite community, ‘Come before the LORD, for he has heard your grumbling.’ ”

(Note: God listens. The people grumbled and God responded. That is super encouraging if you sit where I sit- know that he hears what we say.  Throughout the Bible god sent both famine and abundance. But he took care of his chosen people.)

¹⁰ While Aaron was speaking to the whole Israelite community, they looked toward the desert, and there was the glory of the LORD appearing in the cloud.

¹¹ The LORD said to Moses, ¹² “I have heard the grumbling of the Israelites. Tell them, ‘At twilight you will eat meat, and in the morning you will be filled with bread. Then you will know that I am the LORD your God.’ ”

¹³ That evening quail came and covered the camp, and in the morning there was a layer of dew around the camp. ¹⁴ When the dew was gone, thin flakes like frost on the ground appeared on the desert floor. ¹⁵ When the Israelites saw it, they said to each other, “What is it?” For they did not know what it was.

Moses said to them, “It is the bread the LORD has given you to eat. ¹⁶ This is what the LORD has commanded: ‘Each one is to gather as much as he needs. Take an omer for each person you have in your tent.’ ”

¹⁷ The Israelites did as they were told; some gathered much, some little. ¹⁸ And when they measured it by the omer, he who gathered much did not have too much, and he who gathered little did not have too little. Each one gathered as much as he needed.

(Note: God was specific in his instruction here- it gets a little confusing– he said get an Omer (about a gallon by the way) but then verse 17 goes on to say this– “some gathered much, some little…    But here is a political point I want to make–  EACH ONE GATHERED.  It didn’t say that people sat around and got it handed to them. God provided but the people still had to do work to be provided for.)

¹⁹ Then Moses said to them, “No one is to keep any of it until morning.”

²⁰ However, some of them paid no attention to Moses; they kept part of it until morning, but it was full of maggots and began to smell. So Moses was angry with them.

(Note: I think the concept of being provided for daily is the most important part of this chapter– and why I wrote this blog post.  God provided for his people then on a daily basis so they would not lose faith in him and would always remember where their life came from. So that makes me ask the question–  “If I, on a daily basis, were more aware of the fact that God is my provision, would I be able to move past only having just enough?”  This sounds like a “get rich gospel” which I very much despise.  I’m just saying. It is a balance-  the biblical principle laid out here is clearly that God intends to provide for His people only as they need it.  There are new testament examples of this too– where the disciples were to go out in pairs to different towns and to not take any supplies, money, etc–  God would provide that for them.)

²¹ Each morning everyone gathered as much as he needed, and when the sun grew hot, it melted away. ²² On the sixth day, they gathered twice as much—two omers ^[b] for each person—and the leaders of the community came and reported this to Moses. ²³ He said to them, “This is what the LORD commanded: ‘Tomorrow is to be a day of rest, a holy Sabbath to the LORD. So bake what you want to bake and boil what you want to boil. Save whatever is left and keep it until morning.’ ”

(Note: Boil bread! You mean they were having chicken and dumplings 4,000 years ago? yum yum!  (it was actually dove and dumplings- but close enough…)

²⁴ So they saved it until morning, as Moses commanded, and it did not stink or get maggots in it. ²⁵ “Eat it today,” Moses said, “because today is a Sabbath to the LORD. You will not find any of it on the ground today. ²⁶ Six days you are to gather it, but on the seventh day, the Sabbath, there will not be any.”

(Note: It is amazing how we can find ourselves in similar situations but have the result work out different.   For instance- 5 days a week manna was only good for one night. On day 6 it lasted twice as longs. Same stuff but different results. What was the difference?  God.)

²⁷ Nevertheless, some of the people went out on the seventh day to gather it, but they found none. ²⁸ Then the LORD said to Moses, “How long will you ^[c] refuse to keep my commands and my instructions? ²⁹ Bear in mind that the LORD has given you the Sabbath; that is why on the sixth day he gives you bread for two days. Everyone is to stay where he is on the seventh day; no one is to go out.” ³⁰ So the people rested on the seventh day.

³¹ The people of Israel called the bread manna. ^[d] It was white like coriander seed and tasted like wafers made with honey. ³² Moses said, “This is what the LORD has commanded: ‘Take an omer of manna and keep it for the generations to come, so they can see the bread I gave you to eat in the desert when I brought you out of Egypt.’ ”

³³ So Moses said to Aaron, “Take a jar and put an omer of manna in it. Then place it before the LORD to be kept for the generations to come.”

³⁴ As the LORD commanded Moses, Aaron put the manna in front of the Testimony, that it might be kept. ³⁵ The Israelites ate manna forty years, until they came to a land that was settled; they ate manna until they reached the border of Canaan.

(Note: It doesn’t say what came after– but it does say they lived day to day, by faith, for 40 years. I’m sure they got bored and tired of it. But it’s what God needed to do to get them to the Promised Land.  So if God is providing just enough for you– rejoice that God is providing.)

If I wanted to bore you with a longer title post I’d have titled this one

Red Box vs Netflix:  and Why I’m Not a Frugal

If I was smart I’d be using Netflix. I bet I would like it. I have never tried it.

Using NetFlix would also save me a few dollars a month.   You see, I am a movie freak and Red Box is my friend.  I go at least three times a week, get a movie or two and keep them a couple of days. So by the end of the month I could easily pay the $17 bucks for Netflix’s “3 at a time plan” and end up saving money.

But I like Red Box. I like it’s limited selection, long waits, and swiping my debit card at random locations across three different towns.  I don’t really like it’s limited selection- that was just a small joke.

So let’s say I spend an extra $8 a month at Red Box over what I would pay Netflix.  That’s about $100 a year.  And you know what, I’m glad to pay it.  I like getting  out and going to get a movie. I like thinking, “I want a movie tonight.”  And honestly sometimes I like not making it to get a movie.

I'm Addicted to Red Box

There are lots of things like this- things I could do cheaper some other way but I choose to do it my way because I like it.

It’s why I am not a frugal. We make money and we like to spend it– sometimes on things that are a bigger hassle and lower quality.

So, maybe I’ll see you at the Red Box soon.

Save Hundreds!
Save 25%!
Shop with us and Save!
Super Savings Sale!

Tired of spending too much on car insurance? We’ll help you save fifteen percent or more.

Well, guess what- you can’t save money if you are spending it.

Saving money means one thing- you save it. You know, in something like a SAVINGS account.

I think maybe the reason we, as an American population, does not save is that we have misused the word so much that we don’t know what it means.

It does not work like this-
“Do you save money?”
“Yeah, sure, I mean, uh, I saved two bucks today when I used a double coupon.”

Again, spending money is not saving money. Pop Quiz– You slip through the “only one coupon per item” system and use twelve double coupons and only paid thirty cents for a huge brisket that would normally have cost $22. How much money did you save? The answer is not $21.70. The answer is NOTHING! You saved no money, you SPENT thirty cents.

It’s just a mind trick that we play on ourselves, thinking that we are always saving money when in reality we are only spending money.

Never ask of money spent
Where the spender thinks it went.
Nobody was ever meant
To remember or invent
What he did with every cent.
Robert Frost, The Hardship of Accounting

I remember reading this years ago when I first came up with the Three Piece Plan. I got goosebumps realizing I was onto something- because if this was written decades ago it meant I had hit on a principle.

Indeed, Robert Frost nailed it on the head- and it’s why regular budgets don’t work- “No one was ever meant to remember or invent what he did with every cent.”

The real trick to getting your money under control is using mind tricks. Having Yoda around would help. Unfortunately we have no way to Dagobah.

It has been common belief among economists for decades that humans, given two financial choices, will always choose the choice that is best for them. If you ever “accidentally” bought a car you will understand just how overwhelmingly stupid that statement is.

Almost every day we make financial decisions that make less than good sense. For instance- you have two choices- spend $2.00 on 20 ounces of Coke or spend $1.00 on 67 ounces? Spend $1 a night for movies for 22 nights a month or pay $17 a month for 30 nights of movies?

The reasons we make silly financial decisions is actually a whole line of study in itself- it’s called Neuroeconomics or behavioral economics. And it boils down to this- choosing a cold 20oz Coke when you are thirsty at the gas station is not the same decision as getting a warm 2 liter from the grocery story later tonight.

In other words there are lots and lots of reasons we make the decisions to spend our money the way we do.

That brings us back to the ways of the Jedi.

Just being aware that your mind and emotions can lead you down financial paths you don’t like can help you make the right decisions.

The biggest mind trick is a key part of what I teach in the Three Piece Plan.

When using the Three Piece Plan you separate out your “Everyday” spending money. This is a mind trick. Actually it’s a reverse mind trick- when your money is all in one place you think you have more to spend than you actually do– that’s the trick. And it’s what gets you into debt.

So you pull a fast one- you pull out your spending money, put it in a separate account and suddenly you don’t spend more than you should. Simple trick. Super effective.

I found a good reason to use debit cards- they help when you have junk you need to return to the store.

A pair of Old Navy jeans ended up in my possession. They were the wrong color. That dark dark blue makes me legs itch.

So I went to return them. As it turns out my wife had used Ye Old Debit Card to buy them. My receipt was long ago sent overboard somewhere. Ah, but this is where I got a little education in “The Ways of the Modern Retailer”

If you pay for your jeans with plastique (plastic- for the less French of you) then Old Navy can track them, determine that indeed they are Old Navy Jeans- for some reason the “OLD NAVY” label is not proof enough. From there you can exchange your purchase.

This isn’t the first run in I’ve had with the debit card trail.

But it is the one that got my head spinning on the age old question of what’s best- Cash or “Credit” (or debit- but Cash or Credit has a better ring to it.)

I work from a human behavior point of view and, right now, my gut tells me that human behavior works better when dealing with cash. It is easy to see– when it’s gone, it’s gone. And even better, you can easily see when funds are thinning up for the month.

So the debate continues- what works better- using cash for Everyday Money or using a debit card.

If you are a user of the Three Piece Plan you know we pull out a weekly amount of spending money (if you are not using the Plan click here and sign up to get started!) So I have two concerns with using a debit card for Everyday Money-

1. When you use a debit card you don’t know exactly how much money you have to spend.
2. You run the risk of incurring over draft fees.

So I am working on what I think the final answer is- let me know what you think…

Yum yum. Piles and piles of laundry, damp from your bath towels, piled higher than the cheese from a car salesman.

It’s a never ending struggle.  You think the laundry just may be all caught up- then you take your clothes off to go to bed and you’ve got another load to do!

If you are the sole laundry doer it can just get plain old. You can’t decide- go to the tool box, get a pair of pliers and pull a few teeth, or do some laundry.

There are basically two ways to go about keeping the duds in the suds.

1. Let them pile up, put on your snorkeling gear and dive in to get it mostly done. (see above- it can’t ever be ALL done.)

Number 2- which is worse than one– You decide what you want to wear and dig around like your digging for gold, find what you want and wash it all together.  Makes for some dingy clothes. Plus be careful, when you are digging around you may find a pet you didn’t know you have.

And after the act of putting the laundry in the washing machine there are myriad combinations of ways to end up with your laundry not all the way done.

The Piler-  you wash and dry the laundry, then leave it on the couch.
The Thrower- you wad things up and throw them where ever in your drawer looks convenient.
The Tumbler- everything stays in the dryer until you’ve picked enough out to wear. You put the rest away when the dryer needs to do it’s job again.

There is a third way to take care of your laundry.  One that will not leave you rushing around hoping things dry before the movie starts and won’t take up  your whole Saturday.

As a matter of fact- if you do it right you’ll barely notice that you have to do laundry at all.

This method works if you have a DVR- but may work better if you don’t!

Step 1: Your TV show is coming on in an 90 minutes. So it’s time to multi-task with a touch of laundry.   Go separate out your load and put it in to wash. As soon as it’s done dry it.

Your show comes on probably about 10 minutes before your laundry is done drying- so at the first commercial break go get hangars.  As soon as it’s all warm and dry bring it in and get to folding and hanging.

You can do this while you are watching TV and you won’t even realize that you are folding.

Then at each commercial break go put away a few pieces. By the end your one hour long TV show you are all done.

If you have two TV shows to watch do two loads.

At the end of the week you’ve done four or five loads of laundry. This works really well too if someone else is watching a show you don’t like so well. Then you can be productive instead of just bored.

If you don’t watch TV then put in some ear phones, take the laundry out on the porch, fold it on the kitchen table instead of the couch, or even take it outside.

The whole point is this:  Do one load of laundry every day. Then do the odds and ends when you feel like it. This means you’ll never again have whole days devoted to “catching up on the laundry.”    Things you want to wear will be clean, your life will be happy and you can  .

When a stunt man jumps off a building he doesn’t hit the air bag standing up. He sits down- it spreads out the force of the fall- it just hurts less. Houses, cars, and everything else are all designed to do the same thing… spread out the force of the weight on them.

So the question is this- would you rather go without food for 8 straight days or for 2 days at a time four times?  Going two days hurts your belly a lot less than going foodless for 8!  As a matter of fact, you would barely notice if you went two days- where eight would make for some crazy shaky legs and one grumpy family.

So here is where the Three Piece Plan comes in–  even if you get paid monthly- with the TPP you get money every week. So, if you pay yourself on Wednesday and run out of money on Monday- then you only have to scrimp for two days.

The old way of doing things was spending like crazy till you ran out of money. and 1. Suffering for a full week at the end of the month. or 2. Just put it on a credit card- or heck, just use your home equity to eat on. Oh wait, this ain’t 2006 anymore.

So this is just to make the case- if you pay yourself your “Everyday Money” every week then you spread out your scrimping days.

Look- I have been going about this all wrong–  I don’t want to be a blogger- per se.  I have a solid method that will get real results for people.   And I want to teach everyone who wants to learn- for free.

My previous approach looked like I was trying to sell something.  But I’m not- I don’t know what I would sell.

But I do have the Three Piece Plan- It will help you get your money under control and it is really easy to use.   If you contact me I will teach you how to use it.

I am also going to go public with it– so you can see it and then ask questions.   So stay tuned!

The old saying is wrong. Or at least from an emotional point of view it is mis-leading.

The old saying goes, “It all adds up.”

It would have more impact if the saying went, “It all multiplies out.”  The only problem is- that saying is lousy…”It all adds up” is much catchier!

Now look, everyone is sick of the same old story, “If you just cut out that $4 cup of coffee you could save twenty million dollars a year.” Can anyone come up with an original magazine article? Besides how many people do you know who actually get a $4 cup of coffee everyday?

It’s not the small habits that necessarily make the difference. It’s just the pesky math.  If you take the family out to eat twice a week and it costs $30 each time then you spend about $260 bucks a month- over $3,000 a year.  You can eat at home for a third or less of that amount.

Now the problem is that I think that you probably need to go out and eat- at least as our society is now. It gets you out of the house. It is fun. The food tastes good. You can’t just never eat out again. This is not about that. It’s about the principle.

Every time you spend money the effects of that multiply. Do you play golf every week? $50 a weekend for 40 weeks a year is $2,000. Have a shopping habit? $100 here, $20 there, a fabulous $9 pair of shoes over here. And pretty soon you are spending $300 a month.

Keep it in mind– “It all multiplies out”   Not in and of itself as a behavior modification tool- but as an awareness tool.

“Wow, I notice that I go to Red Box 3 times a week. That’s $156 a year.”
“I go to Sonic every night after work. Wow, that’s $27 a month.”
“My mobile phone plan costs $150 a month. My goodness- that’s $1,800 a year!”

Then if you are married you take both of your habits and expenses together and it really adds up.

The consequences and the solution:
The solution is not elimination, it is modification. Really, if you like Red Box then go to Red Box- but maybe you only do it twice a week- savings: $52 a year.
And say you go to Sonic three times a week instead of 5- savings: $156 a year.
Then you take a look at your cell phone bill and you realize you have a feature you don’t use- your bill is reduced by $30 a month or $360 a year.
Just these three little items and you have spent  $568 less.

Have you ever wanted to take a Caribbean cruise? That’s the consequence part. You can take a 5 day Caribbean cruise for around $600.  So by doing all these small things over and over and over you multiply your spending.  Instead you could almost pay for a cruise!

The important thing to remember is this- don’t try to cut all this stuff out. Obviously you “need” a mobile phone these days and going to Sonic is a ritual you cherish and a good movie is how you unwind.  So keep all these things around- just do them a bit less often so you can do big stuff more.

(Notes- Sonic- $1.50 a day, 5 days a week, 4.33 weeks a month.  Red Box- $1 a movie.)

Each of these “Ten Reasons” needs their own blog post. But if I want to get them in here for you site visitors to be able to see.

Ask me questions about them-  then once you read them you should fill out the form below to get started with your own Three Piece Plan.

1. It requires no continuous work- no entering categories, dividing up receipts, etc-   who has time for that?

2. You get paid every week. Or at least that is the way you will feel when you are on the Three Piece Plan.

3. You are doing SOMETHING.  Doing nothing won’t work. So having a simple system helps you keep your mind focused on getting out of debt and not overspending.

4. The Three Piece Plan decreases consumption. Because now you feel like you run out of money more often. So every week you find yourself eating at home, not shopping, etc. And the best part is that you don’t mind it!  You know you have money in the bank and that “pay day” is just a few days away.

5. You build an emergency fund almost automatically. Enough said!

6. You KNOW, instead of guessing and overshooting, exactly how much money you have to spend. This keeps you from bouncing checks, etc.  No more, “Whoops, I thought that check had cleared!”

7. You enjoy your money so it motivates you to spend it right. It is an UPWARD spiral. You spend less, you stress less, you worry less, you take care of things faster, etc.

8.  It is easy to adjust. If you get extra income you are not inclined to spend it so fast. If your income goes down it is easy to look at where you are and adjust accordingly.

9. Communication. It gets much easier on the Three Piece Plan. You look at how much cash you have, or how much you have in your “Today’s Money” account and know exactly what you have to spend. So it is easier to tell your spouse, “Uh, honey, we only have $25 to last two days, can you wait until Wednesday to get your hair cut?”

10. The Three Piece Plan family budget system is sooooo easy to set up. I can literally set up the basis for one in less than five minutes. It also works well for budgeting on a variable income.