Budget, updates, and the future

I have recently reworked our budget, including a new spreadsheet, sorted by categories. It’s a Google Doc template available here. I will dive into each section in detail in coming weeks.

My wife and I had a long conversation about what has worked and what has failed miserably regarding our debt and repayment plan. The results of that conversation will be the subject of a few posts over the next couple of weeks.

Our destination hasn’t changed. Our map hasn’t changed. We are making some changes to the route we take, to allow better for our strengths and weaknesses, both as a couple and as individuals.

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Don’t Screw Future-You

A conversation between me and my temporally displaced self.
Future Me: Excuse me, Jason?
Me: Yes?
Me: May I ask what that was for?
FMe: Of course.
Me: What was that for, jerk?
FMe: That was payback for all of the hell you have put me through.
Me: What?!? ¬†I’ve never even met you, before.
FMe: Of course you have. ¬†I am future-you, and I’m sick of getting screwed by past-me, that is, you.
Me: Huh?
FMe: Listen close. ¬†You’re not ¬†the sharpest brick in the box and I don’t want to explain this twice.
Me: ???
FMe: A long time ago, when you first met our wife, you were dumb.
Me: I don’t appreciate….
FMe: Shut up. ¬†I was dumb then, too. ¬†Remember? ¬†You…err…we bought a new truck, built an addition on our…err…your…err…whomever’s house, got married in the same year. ¬†On top of many other expensive decisions. ¬†Do your recall?
Me: Yes, I do.  So what?
FMe: If that wasn’t enough, you and your smoking-hot bride are still shopping like you’re rich. You drive a new car. ¬†Your kids wear new clothes. ¬†You’ve got a house full of new furniture. ¬†How did you pay for all of that?
Me: Naturally, I charged it.  Zero payments, zero interest for a year!  Pretty smart, huh?
FMe: What happens in a year?
Me: I don’t know. ¬†I’ve got a full year to figure that out.
FMe: ¬†I’ll tell you what happens! ¬†Future-you, that’s me, gets screwed! ¬†¬†Your raise didn’t come through. ¬†You had a baby. The truck broke down. ¬†Your wife took maternity leave. ¬†A roommate moved out. ¬†You took a loss in the stock market. ¬†You didn’t plan! ¬†You had no savings to cover any of those problems because you were too busy servicing debt to pay for your current life.
Me: How was I to know?
FMe: ¬†Life happens! ¬†You never know what is coming next. ¬†You need to plan and save for what might happen. ¬†Otherwise, you’ll just accumulate more debt to be serviced by yours-truly. ¬†That is not acceptable.
Me:  So?  What are you going to do about it?
Me: Really?  Again?
FMe: ¬†I’m struggling to pay your debt. Your son starts college next year, but you’ve left me completely unable to help. ¬†Your daughter wants to get married in a couple of years, but the Father-of-the-Bride can’t afford a tux. ¬†My wife, your beatiful bride, wants a vacation that I can’t afford. ¬†¬†You’ve screwed me, dude.
Me: I’m sorry. ¬†What can I do to fix it?
FMe: Buy me dinner, first.
Me: Huh?!?!?
FMe: Stop the excess spending. Spend less than you make, for a change.  No credit.
Me: None?
FMe: None. ¬†Nada. ¬†Zip. ¬†Zilch. ¬†Only spend what you can afford. Budget. ¬†Pay off those nasty bills. ¬†Don’t leave me hanging.
Me: So, what you’re saying is that, if I don’t have the money, I shouldn’t buy it?
FMe: Exactly. ¬†That’s the path to wealth, freedom, and financial independence.¬† Live in the real world.
Me: Gee, thanks, Future-Me!  Now I know.
FMe: And knowing is half the battle.

What would your future-you have to say to you?

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Answer: How Much Term Life Insurance Do I Need to Buy?

From a question posted here:

Thank you for all your help in my previous question. After meeting with the agent, I’ve decided on term life insurance over whole life. But I am still not sure how much term life I should buy. Should I buy as much as I could afford or some specific amount?

My answer(edited a bit):

That question is far too open-ended.

Are you married?  If yes, are you the primary breadwinner?  Do you have children?  Investments?  Savings?

Here’s my situation:

I am married, with three children.  I have the primary income.

We have a mortgage, a car payment, and some consumer debt.

I added up all of the debt as my base level of term life insurance.  My family will not be burdened with debt if anything happens to me.

To the base level, I added 5 years of my net income.¬† Without changing a thing, my family will be supported exactly as is for 5 years if I die.¬†¬† They won’t, however, have the same level of expenses, due to the base level of insurance paying off all debt.¬†¬† All of my living expenses also evaporate.¬† For example, there will be one car sold, one less mouth to feed and body to dress, etc.

I figure with the lower expenses and no debt, my insurance will support my family for 10 to 15 years if my wife manages the money right.   If she continues to work, it should last almost forever.

How do you figure the “right” amount of life insurance?[caption id="" align="alignright" width="196" caption=" "] [/caption]

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Future Dreams

While jogging with my wife a few days ago, we had a conversation that we haven’t had in years. We discussed our dreams.

It’s an important conversation for couples to have. What are your hopes? What are your dreams? Where do you want to be in 10 years? In 20? In 50? Planning for the future gives you a map for the present.

My wife and I hadn’t had this conversation in years. A few days ago, we did. Our life-goals are simple and achievable.

I want to leave the corporate world and support my family with writing and the training classes I do. I want a chunk of land outside of any major metropolitan area, but close enough for the entertainment and shopping. I want enough land to expand my classes on my own property, relying on no one.

My wife wants enough land to have some horses. It was unspoken, but I think she wants my goals to take off so they can support her goals, too.

We want a comfortable retirement and we want to help the kids with college.

We’re a bit behind the game for college funding. That’s ok, though. There is nothing wrong with a kid working his way through college and learning those life lessons.

We are also behind on the retirement. But, if I can support us doing the things I love, I don’t need $X million. Retirement isn’t a cessation of activity, it is taking the time to do the things you love on your own schedule. If writing a book while sitting on my private range is enough to fund our life, that’s the perfect retirement.

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