No Brakes

Slow Down

Growing up, I was mostly poor, but I didn’t realize it. The electricity was never shut off and I never missed a meal, but there was rarely money for anything extra. Clothes were only purchased immediately before school started. Shoes were always at least one size too big. Hand-me-downs were a way of life. With very rare exceptions, new toys were given on birthdays and at Christmas. As a Christmas baby, this was unfortunate. If I wanted something during the year, I had to buy it. I had an allowance on and off–more off than on–for a few years. So, I got my first job-a paper route-when I was six. Most of the toys I accumulated as a child, I bought.

Through all of this, my parents never said “We can’t afford it.” I was simply told that if I wanted something, I could either save my money or wait for Christmas. I never saw my parents paying bills, but they got paid. I never saw a checkbook get balanced, but it did. There were only a few times money management was ever mentioned, even in passing.

Naturally, when I moved out on my own, I expected money to take care of itself, just as it had the entire time I was growing up. That wasn’t terrible until I got married, bought a house, built an addition and decided a needed a new car. There was nothing in me to apply the brakes. I can count the number of missed payments I’ve had on one hand-with fingers left over. I can’t begin to guess the number of purchases, both large and small, that I should have skipped but didn’t.

Shortages growing up coupled with absolutely no budget training turned into financial irresponsibility as an adult.

My wife grew up with almost the exact opposite training. She was also poor, but the household budget was clearly in evidence and generally taken to an extreme. Her training involved getting “the best bang for the buck”. If an item was on sale and could potentially be useful, her mother bought five. I don’t mean five similar variations. That’s five identical products, same size, same color. She still has a display box full of screwdrivers with interchangeable tips. It looked useful and it was on sale, so she bought them all.

Through all of that, the bills were always paid.

This training has made it difficult for my wife to turn down a sale price. If something is on sale-or worse, clearance-there is an excellent chance it will be coming to our house. Once again, there are no brakes.

Shortages growing up coupled with almost two decades of watching every sale turn into a purchase has turned into financial irresponsibility growing up.

Neither one of us were prepared to handle the financial aspect of being an adult. That is something we intend to improve on for our children.  We intend to give them the ability to brake themselves.

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I Won the Lottery!

No, I didn’t, but this is what I’d do if I won an obnoxious amount of money.

  1.  Take 6 months or a year, hire traveling tutors for the kids, and see the world.  This gives the extra benefit of being completely out of reach for anyone trying to borrow money.
  2. Pay off the mortgages of a few close family and friends.
  3. Set aside a big chunk to support my decadent, extravagant lifestyle.
  4. Create a fund.

This fund will have the purpose of making all of my descendants live life on the easy setting in perpetuity.   It will give them enough money to cover the major hurdles everyone has in life, without giving enough that they don’t have to work.   Here’s the money I see them getting:

  • Upon the birth or adoption of a child with my last name (Because I’m a jerk like that.  My name will last forever!): $10,000
  • Graduate high school with at least a B average: $5,000
  • Attending college while making progress towards graduation: $10,000 per year, up to 8 years(to allow for doctors and rocket scientists and stuff)
  • Graduating college:  The amount of college costs (tuition, room & board, etc.) up to $200,000.
  • Marriage, provided my descendant maintains my last name: $20,000
  • Starting a business, up to twice in a lifetime: $50,000

Each of these items that occur after the recipient becomes an adult would have the stipulation that their will gifts half of their estate back to the fund.  That way, everyone who got this headstart will help pay it forward.

This will require management, so I would appoint trustees to manage it.   Their job will be to grow the fund and adjudicate any requests.   They will have the authority to buy property, invest in businesses, or whatever will grow the fund to support future generations of my spawn.   Three, because that way there can be no ties.   Each of the three will have a named successor, who must be one of my descendants.   They will, of course, earn salaries.   I don’t see this being part-time work.   A salary that puts them at the 80th income percentile in the US seems fair.   They won’t have the ability to give themselves raises, beyond a statistical adjustment.

Amounts can be adjusted to cover rising costs, inflation, or potential depletion of the fun upon the majority vote of the Council of Three, with the overriding goal of making sure the fund survives to help future generations.

I actually see the organization of this being a corporation built around the management of a trust fund, but I’m not a lawyer or an accountant, and this is a fantasy, so I can see it however I want.

Yes, I follow the patriarchal model of maintaining my last name.   Sue me.   My last name, a parent who is descended from me and has my last name, and a will that states you’ll do your part to continue the awesomeness isn’t a high price to pay to avoid nearly all of the expensive things that hold people back.

That’s my master plan to take over the world, in the future, by proxy.

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Single Income Family

Effective next week, we are officially a single-income family.

If you can count all of my side-hustles as “single income”.

This week, my wife did the paperwork for her final week of state-sponsored unemployment.  She also applied for the federal extension, but that’s not automatic.

In a nutshell, this reduces our monthly income by $1340.

What does that mean for us?

1.  Our truck, which I was hoping to have paid off by March(3 months ago), still has about 7 regular-sized payments left.  Instead of making double payments, we’re now making the schedule amount.  The reason for the payoff delay is another post entirely.  Savings: $400.  In a pinch, we could stop making payments for almost 3 years due to how much we’ve already paid.

2.  The riding lessons I use to spoil my girls are cut in half.  Instead of weekly lessons, we’re going bi-weekly.  Savings: $100.  In a pinch, this could go away completely.

3.  We had a conversation that included, “Honey, when I complain that you bought more than our weekly budget of food in one trip, I’m not being a dick.  Here’s how much money we have.”  That conversation appears to have been productive.

4.  No vacation this year.  We let our spending jump a couple of times this year, so last week, I dropped most of our vacation fund to make up for it.  The expense of being matron-of-honor at a wedding will be an upcoming post, too.

[Edit]

5.  My wife is working at our daycare provider 2 days per week in exchange for daycare discounts.    Financially, this isn’t perfect, but it cuts the cost and gets the girls out of the house.  I work from home and have a hard time keeping them out of the office.

6.  We are considering long-term stay-at-home status for my wife.

[End Edit]

Right now, our budget says we make $100 more than we spend.  That includes all of our savings goals, and setting aside money for some luxuries like our Halloween party.   We’re not hurting–which makes me happy–but we do have to watch our expenses in a way that has just become mandatory.

I can’t tell you how happy I am to have renters.  Between our roommate here and the renters in the house we fixed up last year, we’re adding about $1000 to our income.   Rent is keeping us cash-flow positive.

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My New Windfall

Tax season is over.

money

money (Photo credit: 401(K) 2013)

This year, TurboTax and Amazon teamed up to offer me a 10% on up to $1200 of my refund if I took it as an Amazon gift card.

$120 free if I spend that money with a company I’m going to spend money with anyway?

Yes, please.

I spend lots of money with Amazon.  I subscribe to many of my household items there, because I use them and I don’t want to have to think about buying them.  I get my soap, shampoo, toilet paper, paper towels, and garbage bags automatically delivered.  There’s a bunch of other stuff, too, but that’s what I remember off the top of my head.  If I have 5 items in a monthly delivery, I get 20% off.

Free money, free shipping, and none of the hassles of shopping?

Yes, please.

So now I have a $1320 credit with the company I use for most of my non-grocery shopping.

I also have 962 items on my wishlist with Amazon.

To recap: $1320 burning a hole in my metaphorical pocket and 962 items that I have wanted at some time in the past, begging me to bring them home.

That’s a dilemma.

The smart answer is, of course, to let that money hide in Amazon’s system and slowly drain out to pay for the things I actually need.

The fun answer is to stock up on games and books and toys and gadgets and cameras and, and, and….

Some days, it’s hard being a responsible adult.

I think I’m going to compromise with myself.  I’ll leave the vast majority of the money where it is, but I’ll spend a little bit of it on fun stuff, and a little bit more on stuff I don’t quite need, but would be useful, but not so useful that I’ve already bought it.

A new alarm clock to replace the one next to my bed that automatically adjusts for daylight savings time but was purchased before they changed the day daylight savings time hit so I have to adjust the time 4 times per year instead of never.  That’s on the list of not-quite-needs.

The volume 2 book of paracord knots is on the list of wants that can’t possibly be considered a need, but it’s going to come home, anyway.

I figure, if I spend a couple of hundred dollars on things I really, really want, I’ll scratch that itch and leave most of the money alone.

What would you do with a $1300 gift card at a store you shop at every week that sells every conceivable thing?  Spend it right away, or stretch it out, or something else?

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