Monday, September 6, 2010

Monday's musings - Being a wise steward of money

I'm one of these people who thinks about money, a lot. I've seen the hold it can have over people, me included, and the stress it can cause in marriage.

I think the apostle Paul was onto something when he wrote to Timothy:

"For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows." 1 Timothy 6:10.

Fortunately I'm married to a generous man who doesn't seem to worry about money at all. If my husband Paul hears that someone is in financial need, he will be the first to jump in and offer monetary support. I've learned that if I see a need, I don't have to discuss it with Paul before offering help too, even though he's technically the one earning all our money. He's never once asked, "Are you sure we can afford it?" He's more likely to say, "Good on you!"

Being someone who thinks about money, these are some of the decisions we've made around it to try to use it for good and not for evil, as it were. (Note: these are just some of the things we've decided to do, but this is in no way me telling you that this is what you should do as well. I think the way we steward our money is between us and God.)

Until three months' ago, we didn't have a fixed budget. When I was working and we were earning more this didn't matter too much. We simply saved all of my income and lived off Paul's, which was an easy way to save without thinking too hard about it. Now that I'm a stay-at-home mum, our income has reduced and we have to make more of an effort to save.

So three months ago we set up an overall budget. We looked at what money we had coming in, listed out all our fixed expenses, plus other spending, giving and saving we wanted to do and allocated every dollar with a job. Having it all written out meant we were able to look at where money was going and tweak things to send more into our savings. For example, we decided to sell my car, so we would only have one set of car expenses to keep up with, and I changed cell phone companies to one with cheaper charges. 

I then set up a simple spreadsheet to track all our monthly spending so I can ensure it matches what Paul and I have budgeted for. 

We give 10% of our income to various charities and relief funds. I think we have something like six sponsored children in various parts of the world, as well as other programmes we support.

Avoid debt
I don't like the idea of spending money that isn't ours. We've just signed up for debit cards, which will work like credit cards when we need them to, eg. shopping online, but take that money from our cheque account rather than borrowing it from the bank.

We're also trying to save a whopping great house deposit, so we can get the smallest mortgage possible when it comes time to buy a house. When we do buy that house, we'll look for a modest one at a good price, so we're not stretching ourselves further than we need to.

We've found it's a lot easier to avoid debt when we save first. As well as our house savings fund, we have a rainy day savings fund which is there for emergencies and those big-ticket items that need replacing every so often, like cars and household appliances. This emergency fund was a God-send when Paul's long-term contract came to a sudden end and we had a six-month break before he started working again.

We are now also working towards getting a one-month buffer in our cheque account, so that each month we spend last month's earnings rather than this month's. This buffer will be the stepping stone we need to get rid of our credit card completely. It means that if Paul was to suddenly find himself out of work, we would have a one-month grace period before needing to delve into our emergency fund.

I'm a bit too scaredy-cat to do heavy duty investments, but I do have a managed retirement fund that is ticking over and earning interest until I retire. If I ever jump back into the workforce, I will be able to make contributions to it again.

Spend money ethically
I'm not perfect at this, but I do try to think about where I spend my money and who or what it's supporting. Since spending is where the greatest portion of our income goes, I think it's important to spend wisely.

Groceries: I keep my grocery bill deliberately high, so that I can focus on buying local, fair trade, free range, organic and eco-friendly goods where I can, rather than just looking for the cheapest options. By doing this I'm ensuring:

  • food hasn't had to travel ridiculous distances to get to me; 
  • if food is coming from afar, at least the growers are getting a fair payment for their labour so they can make a living; 
  • the animals we eat have first lived a good life in a natural environment; 
  • the produce we eat has been grown in a sustainable manner that enriches the earth; 
  • and the cleaning products we use aren't causing damage to ourselves and our planet. 

Clothing: This is a greater challenge for me. I try to buy New Zealand-made or second- hand clothing where I can, but sometimes I just can't find those options in clothes I would actually wear. Most of L's clothes are hand-me-downs, and I hardly buy new clothes now that I'm a stay-at-home mum. However, we haven't found good options for ethically clothing Paul. If anyone has good ideas, please send them my way.

Sanity allowances
Paul and I each get a monthly sanity allowance, which we're allowed to spend on whatever we want. We get this money out in cash at the start of the month so once it's gone, it's gone. It's amazing how much more care I take of my money when I have to physically hand it over to spend it.

I would love to hear the decisions others have made around money. Please use the comments box below to share your thoughts.


  1. this is wise stuff, thanks for the post. Will be in a similar boat thanks for the tips :)

  2. Great stuff, Emma! :) Isn't is so good having a budget AND keeping to it! And Debit Visas - such a great invention! Changing over has made a big difference for us!
    Sorry I still haven't gotten that info to'll get a picture of why if you read my blog for the next while! Getting there...

  3. Hi Emma, thanks for you post. I have just got my grocieries again today and I sometimes get a bit discouraged when it costs so much, but am committed to making sure I buy as much New Zealand grown and made as possible. I could do with more time to make homemade cleaners etc.
    Thanks. Its great to know there are others like me.

  4. Great post! Found you on MoneySavingMom. We are trying to save for a down payment on a different house also!

  5. You have some great tips here - very encouraging! I'm also visiting from MoneySavingMom...and as a sidenote: my husband and I have always wanted to visit New Zealand. Maybe someday we'll be able to save up enough to make the trip, but until then I'll just visit virtually through your blog! :-)

  6. Hi Brooklyn - Good luck with the saving scheme. If you're reading MoneySavingMom's tips I'm sure you'll get there, because you'll already be thinking outside the square.

  7. Hey Carrie, New Zealand is amazing. Sometimes I kick myself that I get to live in this beautiful country. I hope you do get to visit one day! Whereabouts do you live?

  8. We live in the US, up in the beautiful mountains of East Tennessee. It's not New Zealand, but it's still a lovely spot to call home. :-)

  9. That sounds lovely Carrie. I'd love to explore more of the US one day. I spent a year in Colorado and that was beautiful, but there is so much more I want to see.

  10. Great stuff Emma! Hey, have you heard of Enjo? They are cleaning cloths that don't require any cleaning products what's so ever! The special fibre cleans just as well if not better than using chemicals etc. I bought a few off trade me (they are pretty expensive new). Sometimes I use a bit of baking soda with the cloth to clean the bath but other than that it's just the cloths. brilliant!
    Jennie x

  11. Hey Jennie, no I haven't come across those. I'll check it out on Trade Me. Thanks for the tip!


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