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Don’t Screw Future-You

Finance, Life

A conversation between me and my temporally displaced self.
Future Me: Excuse me, Jason?
Me: Yes?
FMe: <Slap!>
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: <Slap!>  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: <Slap!>  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?
FMe: <Slap!>
Me: Really?  Again?
FMe: <Slap!>  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?

 

Budgeting tips – sticking to your budget

Finance

Image by adriagarcia at Flickr.com
Image by adriagarcia at Flickr.com

If you are looking to get out of debt, or you are currently debt-free and want to stay that way, then it is important that you get a grip of  your financial situation and live within your means.

A good way to do this is to create a budget as this gives you a clear indication of  how much money is coming in, how much is going out and also highlights any areas where you may need to make cut backs should you be falling short each month.

Once you have sorted out the figures and made necessary amendments, for example paying bills by direct debit in order to make savings or cutting existing debts by carrying out a balance transfer to a lower rate credit card, it is time to start focussing on the lifestyle changes.

As you will find, it is one thing to create a budget and quite another to stick to it, but by adhering to the following   steps and exercising a certain amount of will power, you should be able to ensure that you live within your means and resist the urge to reach for that credit card.

Keep focussed

Before you start to look at how you can stick to your budget you need to clarify why you need to stick to your budget!

A budget can initially seem like something that has been devised with the sole intention of stopping you having fun and buying or doing the things that you want. So it is important to remember that, though some cutbacks may be necessary in the short term, a budget is a long-term strategy that will allow you to take control of your finances and, all being well, live a happy life that is free from the worry of excessive debt.

Change your habits

Unfortunately, a successful budget can require a change in lifestyle and this can be one of the most difficult things to adhere to.

For example, if you have previously enjoyed eating out regularly then you may have to make cut backs in this area to ensure that you are living within your means. But, instead of seeing this as a negative, try to focus on the positives and remember the reasons why you are budgeting.

And a change in habits doesn’t necessarily mean that you have to cut back on your enjoyment of life and it may actually open your eyes to other pursuits you may not have previously considered.

For example, instead of eating out try preparing a meal at home and turn your dining room into a restaurant. This means that you can still have the fine dining experience but at a fraction of the price and without the worry of making a reservation!

Shop smarter

Lists figure heavily when creating a personal budget and list-making is a habit that you should get used to when trying to stick to your budget.

When budgeting it is vitally important to avoid impulse buying and a great way to do this is to always make a list of things you need before you go shopping.

This means that you will have a clear idea of what you need and you will be less inclined to make random purchases that may just turn out to be an unnecessary drain on your finances. It’s also worth mentioning at this point that you should always differentiate and prioritise the things you need over the things you simply want.

If you are unsure how to make the distinction then put off making the purchase for a couple of days and then reconsider if you actually need it. This cooling off period will often convince you that you can do without it and save you money.

In addition, savings can be made on your shopping by simply swapping big name brands for supermarket own varieties, using discount coupons and looking for any special offers.

Overall, it is important to be fully focussed and committed to your budget plan and to be aware that a change in finances may require a change in lifestyle. But a few short term changes may well add up to better finances in the long term.

Article written by Les Roberts, budget reporter at Moneysupermarket.com.

 

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Saturday Roundup – No More Car

Misc

Free Money (film)
Image via Wikipedia

…err, no more car loan.  I paid off my car this week, a year early!   Now I’m down to 2 debts: a credit card with an embarrassingly high balance and my mortgage.  We’re rocking the debt snowball!

Free Money Tip

INGDirect is having a sweet promotion.  Open a checking account, use it three times in 45 days, and get $50 free.  Free money is the best kind.  I love my ING account and keep all of my savings there.  If you don’t have an account there, yet, now is a great time to open one.

30 Day Project Update

This month, I am trying to establish the Slow Carb Diet as a habit.   At the end of the month, I’ll see what the results were and decide if it’s worth continuing.   For those who don’t know, the Slow Carb Diet involves cutting out potatoes, rice, flour, sugar, and dairy in all their forms.   My meals consist of 40% proteins, 30% vegetables, and 30% legumes(beans or lentils).    There is no calorie counting, just some specific rules, accompanied by a timed supplement regimen and some timed exercises to manipulate my metabolism.   The supplements are NOT effedrin-based diet pills, or, in fact, uppers of any kind.  There is also a weekly cheat day, to cut the impulse to cheat and to avoid letting my body go into famine mode.

I’m measuring two metrics, my weight and the total inches of my waist , hips, biceps, and thighs.   Between the two, I should have an accurate assessment of my progress.

Weight: I have lost 17 pounds since January 2nd.   That’s 6 pounds since last week.  I cheated this week and had a slice of toast and 6 croutons with my grilled chicken-but-no-cheese salad.

Total Inches: I have lost 9 inches in the same time frame, down 3.5 since last week.

Naturally, the first week is the most dramatic.  That’s when my body was flushing most of the garbage I’d been eating, including holiday feasts.  I’ll have a hard time complaining about 6 pounds in a week.  My guess is that I drop another 10-15 pounds by the end of the month, bringing the average to about 1 pound per day.   Over time, that will drop as my base caloric burn drops to match my new weight.

Best Posts

Realized Returns is giving away a Kindle.  I would greatly appreciate it if you didn’t enter, because I’d love to get a Kindle.

Maximizing Money has put together a stellar list of financial blogs.  If I’m not enough to keep you going, take a look at that list.

Mystery shopping sounds like it could be such a sweet deal for some people. Always try to make money doing what you love.

Here is another list of sites that can make you some money.  I love side hustles.

And finally, here is Lifehacker, showing you how to make better cocoa.

LRN Timewarp

This is where I review the posts I wrote one year ago.

I wrote a post on saving money while cooking.  This post has easily withstood the test of time.  We keep getting better at stretching our budget.   Over the last year, we’ve actually reduced our food budget by an additional $50 per month, while the quality of our meals has gone up.

This was the first week I posted a 30 Day Project update.   My first goal was to start waking up at 5AM.   That worked well for almost the entire year, but I’ve let that slack off over the last few months.  On the weekends, I don’t set an alarm or try to get up early, but I’m still up by 7:30, usually.  During the week, my alarm goes off at 5:10, but I let myself snooze it.   I’ve discovered that I do better at attending to my personal projects(like blogging) late at night instead of early in the morning.  So, I’m going with what works, instead of trying to force what doesn’t.

I also reviewed the bills I pay that aren’t paid monthly in my third budget lesson.

Carnivals I’ve Rocked and Guest Posts I’ve Rolled

First 3 Things to Do in the New Year was included in Crystal’s rockin’ new Total Money Carnival.

4 Ways We Keep Wasting Money was included in the Festival of Frugality.

Living the XBox Life on an Atari Income was included in the Carnival of Personal Finance.

Swamp Finance was hosted by Squirrelers.

I ran the guest post, The Best Financial Advice I Ever Received for Saving Money Today.

Thank you! If I missed anyone, please let me know.

Get More Out of Live Real, Now

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That’s all for today.   Have a great weekend!

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Budget, updates, and the future

Finance

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.

 

How to Live Happily Without a Budget

Finance

Three years ago, we sat down and built our budget. We spent 9 months adding the non-monthly bills that we forgot about when we created the budget.   Setbacks and shortfalls almost killed the budgeting plan completely. It took almost an entire year to get our budget right.

Unrelated Image

Now?  I refer to the budget once per month.   No more.   I don’t check it at bill-paying time. I don’t think about it daily.   It’s there as a reference when I need it, but it no longer drives our finances.  How did we get to that point?

First, we firmly established our budget.  We know exactly what we need to cover our expenses.   None of the predictable bills catch us by surprise any more.  This is important.

Once we had the budget established, the rest was easy.   I moved almost every bill to US Bank’s online bill-pay system and switched to electronic billing and automatic payments.   The automatic payments are all through US Bank.  I only allow my mortgage to be set up with the merchant. I want total, instant control over the rest.  I won’t call a merchant to ask them to change a payment if something comes up.   The bank sends me an email when a payment is automatically scheduled, and again when it is paid.

Once I got comfortable with the automatic payments, I switched to electronic billing. I don’t need to see the bill or waste the paper if I know it is being handled for me which is why I encourage you to manage all your finances online.  I do check the few bills that may change, like the credit card and cell phone.  Now, I see few of my bills.  They are all sent electronically to my bank, automatically paid, and scheduled in Quicken–all without intervention from me.

[ad name=”inlineleft”]We also use an envelope system.  I know how much we need for groceries, baby crap, clothes, etc.   At the beginning of the month, I take out all of that money in cash and put it into the appropriate envelopes.   Other than this money, almost everything else takes care of itself. I don’t need to pay attention to by bills on a day-t0-day basis.   Any extra money that comes in gets divided among our debt repayment and savings goals, which only takes a few minutes to arrange.

I glance over my budget at the beginning of every month, but I only review it when something changes. If we change our cell phone, or our budgeted gas bill changes, I make the change to our budget.  Other than that, it’s not even an afterthought.

That’s how we do it.

Another option includes the Sloppy Math System. This consists simply of rounding deposits down and rounding expenses up.  The more you round, the better the system works.    If you round every deposit down $50, and round every expense up to the next $10, you are naturally building more room for error.  Given enough time, you will have enough of a slush fund to handle emergencies and the occasional impulse purchase.

Money Hacks Carnival #105: The All Government, All the Time Edition

Misc

Jefferson Memorial
Carnival Time

Welcome to the 105th edition of the Money Hacks Carnival:  The All Government, All the Time Edition. Deep in the bowels of tax season, it’s not surprising that tax- and government-related articles are popular.

Editor’s Picks

LeanLifeCoach presents What Is Your Learning Style? This is an important lesson for anyone trying to teach.  My main side hustle involves teaching.  We try to address each learning style to engage all of our students.  I’m a visual learner.  In school, I always read ahead and I’ve never been able to focus while someone reads to me.

Consumer Boomer presents The Best IRA for You.  Holy Educational Post, Batman!  Be careful, you’ll learn something if you read this post.

PT presents How to Find Free Stuff Online Without Getting Spammed.  I like free things.   I hate spam.  I’m a part of the target audience of this post.  I use an active Gmail account for getting freebies.  The spam filter can’t be beat.

Fanny Seto presents 5 Tips on How to Get a Job in this Economy.  I’m glad I haven’t had to deal with this recently.   If you’re unemployed, take the opportunity to develop a hobby or explore other opportunities.  You may be out of work, but that means you have the one thing you can’t replace: time.  Use it wisely.

Taxes or Feeding the Monster

Jeff Rose presents How to File Taxes with Your 1099s.  All you’ve ever wanted to know (and more!) about the 1099.

Paul Williams presents Deduct Haiti Earthquake Relief Donations on Your 2009 Tax Return.  If you itemize, make sure you include any donations to Haiti relief.

freefrombroke presents TurboTax Online 2009 Overview.  I love TurboTax.  I use it every year and have done so since I discovered I wasn’t capable of figuring out the Earned Income Credit.

Four Pillars presents What Happens If You Lose Your W2 Form?.  Keeping track of your tax documents is always important, but what do you do if that doesn’t work?

Matthew Paulson presents Troublesome Tax Myths.   Taxes aren’t optional.  Ask Wesley Snipes.

Working for a Living or Earning the Monster’s Feed

Darwin presents 10 Highest Paying Degrees 2010 – Best Majors in Demand Now.  The part that doesn’t surprise me is that the hard sciences pay well.   Art-as-science comes with a smaller paycheck.   Hmm….

J. Money presents Life in Grad School Doesn’t Have to Suck…All Your Money.  I’ve didn’t make it to grad school, but I did work my way through college with a small baby.  It’s good to have a support network.

The Financial Blogger presents Getting Ready for Another Purchase!.  I’ve never given any thought to buying a blog.  It’s a fascinating read.  Make sure you read the related posts to get the full value.

Banking, Credit, and Investing or He Who Pays the Piper Calls the Tune

GLBL presents What to Expect From Mortgage Rate Trends for 2010.  I learn something every day.  Define “intraday”.

pkamp3 presents Cutting Up the Card.  It may be caused by a down economy, but less consumer debt isn’t a bad thing.

D4L presents 20 Dividend Stocks Riding The Tsunami Of Dividend Increases.  My first dividend-paying stock paid me 16 cents once.  Stocks kind of scare me.  In my mind, they’re not much different than a slot machine, so I don’t buy much.  I think I had 20 shares of that first stock.

Personal Finance or The Government Doesn’t Have to Be Involved

Matt_SF presents Personal Finance Equations You Should Know: the Cash Flow Equation.  If equations make you smile, this is the post for you.

Craig Ford presents 101 Ways To Improve Your Marriage Money Relationship.  This goes beyond finance and dips firmly into happy relationship territory.

Hedy presents My Better Business Bureau experience.  I’ve found that the sincere threat of a Better Business Bureau complaint can be effective, too.

2 Cents presents Economics: Your Personal Finance Weather Forecast.  As a sci-fi junkie, I love the quote at the beginning of the article.

Dodging Taxes and Anarchism

Nope.  No submissions in this category.

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