Zero-Balance Budget

There are a plethora of different ways that people choose to budget. Each one has its strengths and weaknesses I am sure. In the reading and research I’ve done, and what we’ve practiced as a couple, I have found that a zero-balance budget makes the most sense for us. Right now I would like to simply outline the approach that we take to budgeting each paycheck.

First off, I get paid every 15 days or so; twice a month. It makes the most sense to me to budget for whatever time frame your pay comes in. I used to get paid once a month, so we did a monthly budget before. I know that many people have irregular incomes, or are commission-based so I won’t speak to that for now, we’ll save that for a post on a later date.

First, I list out all of our expenses and give them a value. Over time, you can figure out where you can cut back, or where you might need more. For example, we first started budgeting about $150 per month for gas. I work from home, and we almost live on campus for Jos, so our gas budget moved a bit and shrunk to the $80 that it is now (benefits of a Prius). On the other hand, our first budget had no “fun” or travel money. We both have loved exploring Oregon, so we started factoring in $100 per budget to get out and about. Paying off debt is a sacrifice, but it doesn’t have to be a death march. So here is an example list of expenses. You may have some we don’t have, or may not have some that we do.

  • Internet
  • Rent
  • Gas
  • Compassion International (child we proudly sponsor in Ecuador)
  • Missionary friend we support
  • Oil changes/car maintenance
  • Cell phone bill
  • Medication
  • Electricity
  • Insurance
  • Allowance (we each get a bit of fun money that doesn’t count toward the budget)
  • Miscellaneous expense
  • Eating out
  • Student Loan payments
  • Fun/Trips
  • Groceries
  • Tithe (we are followers of Jesus and believe in supporting the Christian body and others through our local church)
  • Haircuts

This is just an example list that we start from each pay period. It’s a decent place to start. The next step is to assign an amount to each category. Some expenses are easy like the Internet is always $40. But some expenses are variable, like electricity. Make an educated guess based on past bills or what you usually expect to pay. Reviewing past months’ spending can be helpful. It may also shock you, so brace yourself! 🙂

Once you have listed an amount next to each expense, add up all your expenses. Then subtract your expenses from your paycheck. For example, let’s say my check was $1,000 and my expenses came to $920 for this two week period. I would have $80 “left over.” However, with the zero-balance budget, we need expenses + savings + debt repayment (insert other items here) to equal our paycheck. So in this example, that extra $80 goes towards an extra student loan payment! Now our paycheck of $1,000 is equal to our total expenses of $1,000.

You may be discouraged if you find that your total expenses are larger than your paycheck. This is the case for a lot of people, they just don’t know it. So they might make $1,000 but unknowingly spend $1,200 in that same time frame. That extra $200 can probably be found on their credit card balance. Yikes! With a budget in place, you spend what is in each category, and when it is gone, it’s gone! No more eating at restaurants or fun money for a couple days until that next paycheck comes in. A little self-control goes a long way.

The point of creating the budget is to analyze what you need and don’t need. Are you paying for cable? How about an expensive $1,000 phone you’re making payments on? Maybe you have a car payment you can’t afford. Even little things like a $10 subscription service to a music service might need to get the ax. Creating a budget can be extremely eye-opening. And it should be! We are trying to make a positive change!

For Jos and I, we subtract our expenses from our paycheck, and then the entire remainder goes straight to student loan debt. Might sound crazy, but we’ve made some awesome progress with this approach. It becomes a bit of a game, doing your best to maximize the leftover to make a large payment. Remember, making a payment now saves your future self a lot of money. Do your future self a favor!

Zero-balance budgeting is great because it gives every dollar an assignment. There is no guilt for spending money in a category that is allocated to that expense. And it helps establish healthy boundaries. When a category runs out, wait until that next check comes in. Don’t forget, you can make adjustments. You may find you consistently have money left over in a category. Go ahead and reallocate those funds elsewhere. Or perhaps your grocery budget just isn’t enough to get you by so you may need to expand it by a few bucks. Find what works for you. Be reasonable and do your best to be a bit frugal where there is room for it.

“Budget” can be a swear word to some people. But it doesn’t have to be for you. A budget can spell freedom if it is followed and refined along the way. Don’t know where to start? I would love to get you pointed in the right direction. Feel free to reach out to me through the Contact page on this site.

The Power of the $1,000 Cushion

Until I started making smarter financial moves, one of the things I did regularly was use credit cards. Most of us have been there. It started as just wanting to “build my credit” a little bit, then I started using it for things like gas, and then the occasional dinner out, and then Christmas presents. All of a sudden I found myself bumping into the max balances on a couple of my cards. The dangerous thing is how easy it is to simply open another card and continue the trend.

One of the most powerful shifts that I saw in my finances was when I started implementing a cash buffer, or cushion. We decided on $1,000, but it could be whatever amount you are comfortable with. The power of it comes out when the unexpected arises in life, which it always does at some time or another.

Say you are cruising along, making progress on your financial goal of eliminating some debt. You’ve got your expenses from month to month, but one day your car starts making a noise. It gets worse and you find yourself at the shop. They tell you it’s going to be $650 to get the issue repaired. If you are living on credit cards for these kinds of expenses, you pull out the plastic and dig a deeper hole for yourself. OR, you tap into that cash cushion that you’ve cleverly saved up. Now you can pay cash for the repair, and still have a couple hundred dollars left just in case. You survive the rest of the month, and when the next paycheck rolls around, you can simply replenish the cushion fund.

Using this cushion helped us get off of credit cards once and for all. As unexpected expenses arose, we had the flexibility to keep the credit card in our pocket and instead pay cash (we use debit cards, but you get the idea).

Credit cards debt has a very nasty way of sticking around longer than we want it to. An expense that we expected to pay off with no interest in 30 or fewer days trickles into the next month, and the next, because you know, life hits. Before you know it your $650 repair ultimately costs you $800, $900, maybe more after interest is applied.

If you are wanting to start making progress on putting your credit card away and keeping it there, this is the place to start. Establish a financial cushion for yourself and you’ll be surprised how much less you’ll need your credit cards. Paying off credit card debt starts with putting the card down and not using it. It may seem obvious, but it took me a long time to figure out, and I can only speak from experience.

Why not start your financial cushion fund today?

Not By Mistake

In the big scheme of life, it’s easy to look back and see why some things turned out the way they did. Why did LeBron James become one of the best basketball players of all time? Why was Tiger Woods such a dominant golfer? Why was Peyton Manning so good at diagnosing defenses and putting the football right where it needed to be for his receivers?

We can talk about all the things that they did to get to where they were. But one thing is abundantly clear. None of it was by mistake.

Whether it is learning a new skill or trade, picking up a hobby, or trying to Figure Out Finances, there are steps that need to be taken to take you where you want to be.

When Josilyn and I were dating, I was managing a hotel in Missoula. The pay was good, but I had bad habits. I was eating out almost every day during the work week. I started doing it every once in a while, then three times a week, then almost every day. It became a habit for me. It should come as no surprise that I wracked up a healthy amount of credit card debt due to my lack of attention to the details of my financial life.

One day I was honestly just curious to see what I was spending. I printed out three months’ worth of statements from my credit cards and my checking account. It was bad. Really bad. Some months I was spending over $600 on dining out alone. OUCH. I knew something had to change.

Since then, eating out has become a once in a while nicety. Jos does an incredible job of cooking meal preps each week for both of us for lunch. She makes awesome homemade dinners. We eat a lot of cereal, eggs, and toast for breakfast. We almost always have coffee at home instead of going to pick it up at a coffee joint.

Intentionality is what gets us where we want to go. I realized I didn’t want to live with debt forever. It took some growing pains to get to where we are now, but the reward is great as we watch our total debt balance drop like a rock each month. Our choices matter, and where we end up is not by mistake.

My Big Car Mistake(s)

This is more story time than anything. I have always been fond of cars. I love the way it feels to be behind the steering wheel, changing gears and working the clutch. An open road is a place of peace for me. I love it.

My love of cars has its pros and its cons. On the one hand, my interest in cars has given me a pretty decent knowledge of how they work, which makes and models are reliable, and how to do general maintenance and fix a few things here and there. But like any good thing, it can take you for a bad ride.

One thing I’ve learned about cars is that they are a depreciating asset, meaning, they lose value over time. At one point I bought a 2004 Mach 1 Mustang with my first every auto loan. I picked it up for $9,500 in great condition. It was a ton of fun! Unfortunately, the payments were a stressor. That payment comes around each month and kind of kicks your butt. I eventually realized I didn’t like the high insurance rates, poor gas mileage, and the constant stress of writing a check to the bank each month. If only I had learned.

Later, I made the mistake of having two cars at the same time as a single guy. Dumb, right?! Yeah, it was. I had a 1998 Buick LeSabre while having the Mustang. The Buick was paid for, but I had to pay extra for the insurance, gas, maintenance, you get the picture.

At this point in my infinite wisdom, I sold the Mustang for $7,000, taking a hit on that depreciation we talked about. I sold my perfectly good Buick as well to one of my best buddies and roommate at the time. Let’s just say he figured out how to steer his finances in the right direction before I did. That car is still serving him well today.

After having two cars at the same time, one on a loan, I figured I “deserved” a nice big, comfortable car. It had to be fast though. So I got a 2010 Ford Taurus SHO. Really cool car, a great sleeper (for you car folks out there). My loan for that was almost $300 a month. I was shelling out money left and right to the bank for interest on an asset that lost value every day. Buying it for almost $17,000 with an “extended warranty” (please don’t ever get one of those), I ended up parting with it a year later for $12,500. Ouch.

Why do I share all these personal details about car deals gone wrong? Well, I share them because they were mistakes that I hope others don’t make. If you don’t have the money for a car, don’t buy it! If you want it, save for it. In that time of saving, you might just find that you didn’t want that car after all, or you might realize that what you are driving now is just fine. At the end of the day, it’s not about getting there in style, it is about getting there.

As a funny wrap up to this post, I now drive a 1993 Mazda Miata. Yeah, one of those small little convertibles. Got it for $5,000. This time it is paid for. The best part is, I always thought that my Mustang and SHO were super cool cars. I’ve gotten way more compliments on the Miata as it turns out… life has a funny way of making us laugh at ourselves sometimes.


The Age of the $1,000 Smartphone

I for one am all about cool new gadgetry and technology. I keep a steady pulse on a number of tech blogs and sites to see what is coming next, what cool features we can all expect out of our next smartphone in its next iteration. There are some incredible innovations and technologies being rolled out every week it seems.

I’ve always been an early adopter, one of the first to purchase and embrace these new flashy devices. Back in high school, I think I had one of the first iPod Mini’s (you know, the one with the aluminum body and the black and white screen. Yeah, soooo retro!). Later I got one of the first Verizon smartphones that spearheaded the move to 3G data. It was a slider phone, the Motorola Droid! Remember those commercials, “Droid Does”? Quite the ad campaign.

I am all about the latest and greatest. But I think this is also a time for a reality check.

I just hopped on Apple’s website to spec out an iPhone XS Max with 512GB of storage. $1,449 for that bad boy. Oh, and you should probably get Apple Care since you wouldn’t want such a big “investment” to get busted or stolen. So that will tack on $299. Wow, we are looking at a $1,748 phone. You’ll probably want a case too, right? And maybe some Bluetooth headphones since these super advanced phones don’t have a headphone jack anymore… what are we at, $2,000 now?

Maybe you have the means to spend $1,000 to $2,000 on a phone every year or two (don’t get me started on what the plans cost these days for unlimited data that isn’t really unlimited at all). I don’t have that kind of money, and unless you make six figures a year I would argue that you might not be able to afford it either.

I think companies like Samsung and Apple are trying to find what the threshold of insanity is on the price of a flagship smartphone. If I were them as a business, I would keep pushing the price up until sales slump. Hell, even if they slump a few percentage points at these prices, they are still making an absolute killing. Don’t let them take your hard earned money!

What do you do 99% of the time with your phone? Text regularly, check social media, check your bank balance (if you don’t, it’s a good time to start 🙂 ), maybe read a few articles, maybe take a couple of pictures.

I think for me, I had to come to the realization that is unreasonable to pay the asking price for these new phones. It’s ludicrous. Probably about a year ago, I picked up a used iPhone 6S for $180. I paid cash for it and have not made a phone payment since. It has a large screen, great for reading and checking email, watching my Denver Broncos highlights (let’s be real it’s been a rough year), the camera works really well when I need it, I replaced the battery at Apple for $29, so it is just as fast and lasts just as long as the day it came off the shelf. It is a great phone, and it cost a fraction of what these new phones cost. Ah, and mine does have a headphone jack. Nice!

Phones and cell plans can be a huge drag to you meeting your financial goals. Do you really need the latest and greatest to scroll your Instagram feed? Is it just a status thing? Maybe take stock of why the newest phone feels like a need when indeed it is a want. With a little shopping around for a nice, lightly used phone, and some more shopping for a good discount service provider (I’d be happy to give you advice on finding both!), you could save hundreds of dollars every year. Maybe even $1,000. No joke! I’ll leave you with some math since I’m making that a bit of a theme here in my  writing:

Scenario A / Lowest end iPhone XS 64GB on 24 month payment plan: ~$50.00/month

Add that to the lowest end “unlimited” individual plan from Verizon: ~$75.00/month before taxes and fees

Monthly cost for Scenario A: $50 + $75 = $125/mo. times 24 months = $3,000/2 yrs.

Scenario B / Used iPhone 6S Plus paid in cash divided by 24 months: $7.50/month

Add to that a 10GB/month plan from MintMobile: ~$25.00/month

Monthly cost for Scenario A: $7.50 + $25.00 = $32.50/mo. times 24 months = $780/2 yrs.


Scenario B would save you $2,220 over the course of 2 years. That’s a 74% savings. Astronomical savings.

Let me know if you want to learn more about these discount MVNO’s for phone service on the cheap, or if you don’t know where to start getting a used phone. I’d be happy to help you start saving today!

Side Hustle

For months I have been working hard at my current job, making pretty good money and chunking away at our student loans. We started the year with about a $22,500 balance on my own undergrad loans from Azusa Pacific. Through a lot of hard work, dedication, focus, and God’s provision, we’ve been able to drop that total to just under $9,000 here at the beginning of November. Pretty crazy!

At the end of September, I was working 40-45 hours per week, which was fine. But I felt in the back of my head that I had a little bit of extra time and energy every week. I wanted to make a bigger dent in the loan progress, so I looked around for side gigs. I’ve always done computer jobs on the side here and there. A cleanup, hard drive replacement, whatever it may be. But those jobs are very irregular. I wanted something a little more predictable and steady.

In looking for good side jobs, I kept reading about delivering pizzas. Seemed like something reserved for young high schoolers. But I read more, and I was intrigued with being able to work independently, get to spend time in my own car with my music and work at my own pace most of the time. On top of that, pizza delivery is a tipped position, so there is potential for making more than the standard wage for an entry level position like that. I also had another asset in my corner: a Prius.

I applied to one of the national pizza chain companies here in Forest Grove, less than a half mile from our house. I lucked out here in the Portland metro area, as the minimum wage is actually a very healthy $12.00/hr. As I’ve worked, I’ve found that if I really hustle and keep a smile on my face, tips can be pretty healthy. In my rough math, I usually make $6-9 per hour in tips, pushing the hourly wage to around $20/hr. Really not bad at all!

This has taken a large amount of humility, however. One of my first weeks, I delivered to the local university and stepped into the campus center building and was met with smirks and giggles from some of the college students as I stood there with a few pizzas in hand with my dorky hat on. I was kind of embarrassed, but in the back of my mind, I actually sympathized with those students who are racking up greater student loan debt than I ever did. They will learn soon enough, I suppose.

This side hustle has been challenging. I usually work 2-3 nights per week, usually right after my day job I head there and work until close at 11:30PM or so. It’s not glamorous, it’s not sexy, but it is getting the job done. I’m pocketing $300-$350 in wages and probably $200 or so in tips every two weeks.

Moral of the story is: put your pride aside, or take that step of faith, and try it! Whatever “it” is, you can do it!