Friday’s Finance Tip

This week I continue my series of financial advice for people who are really bad with their money.

As of five minutes ago, we are officially credit card debt free.  (I love online banking.)

Hallelujah!

And I don’t just mean that in the colloquial sense. The real change in our financial health came from our pursuit of right living, including the following of biblical financial principles.

I don’t like to get all churchy here, but I like to give the credit where credit is due.

That said, here is some secular money advice that anyone can follow.

Once I linked to a post called, To Make Good Financial Decisions, Think Like Mr. Spock but Act Like Captain Kirk.

If you missed it, the gist is, to make good financial decisions, you need to know the numbers (logical, Spock) and know yourself (emotional, Kirk).

As I said in my last Friday’s Finance Tip, once we made the choice to stop using our credit card, it was hard to get ahead and save money.

One way we accomplished this was by using the IRS to help us save, when we were too undisciplined to do it ourselves.

I know that most financial advice says to adjust your withholding so that you are keeping as much of your money as you can, and save or invest it. The government does not pay you interest for holding your money all year. (The Spock: knowing the numbers)

But, I submit, if you are not saving because you are not disciplined with your money, or keep dipping into your savings account, adjusting your withholding so the IRS is taking more money each pay period can be a good way to start that savings. (The Kirk: knowing yourself)

Just make sure you do not go out and blow the money when you get your tax refund.

When we were lousy at saving, had all but maxed out our credit card spending, and needed that large sum once a year for big purchases or paying off debts, this came in handy.

This year, my husband was able to finally adjust his withholding because we keep to our budget, do not use credit, and have a savings. We put the difference in his pay into our savings account.

Even though it is not the best way to use your money (because it does not earn interest), allowing the IRS to keep more of your paycheck is one way to force yourself to start that emergency fund, or save for a big purchase that you would otherwise put on your credit card, when you lack the discipline to save.