- Uop past midnight. 3am feeding. 5am hurts. Back to bed? #
- Stayed up this morning and watched Terminator:Salvation. AWAKs make for bad plot advancement. #
- Last night, Inglorious Basterds was not what I was expecting. #
- @jeffrosecfp It's a fun time, huh. These few months are payment for the fun months coming, when babies become interactive. 🙂 in reply to jeffrosecfp #
- RT @BSimple: RT @bugeyedguide: When we cling to past experiences we keep giving them energy…and we do not have much energy to spare #
- RT @LivingFrugal: Jan 18, Pizza Soup (GOOOOOD Stuff) http://bit.ly/5rOTuc #budget #money #
- Free Turbotax for low income or active-duty military. http://su.pr/29y30d #
- To most ppl,you're just somebody [from casting] to play the bit part of "Other Office Worker" in the movie of their life http://su.pr/1DYMQZ #
- RT @MoneyCrashers: Money Crashers 2010 New Year Giveaway Bash – $8,300 in Cash and Amazing Prizes http://bt.io/DQHw #
- RT: @flexo: RT @wisebread: Tylenol, Motrin, Rolaids, and Benadryl RECALLED! Check your cabinets: http://bit.ly/4BVJfJ #
- New goal for Feb. 100 pushups in 1 set. Anyone care to join me? #
- RT @BSimple: Your future is created by what you do today, not tomorrow"— Robert Kiyosaki So take action now. #
- RT @hughdeburgh: "Everything you live through helps to make you the person you are now." ~ Sophia Loren #
- Chances of finding winter boots at a thrift store in January? Why do they wear our at the worst time? #
- @LenPenzo Anyone who make something completely idiot proof underestimates the ingenuity of complete idiots. in reply to LenPenzo #
- RT @zappos: "Lots of people want to ride w/ you in the limo, but what you want is someone who will take the bus w/ you…" -Oprah Winfrey #
- RT @chrisguillebeau: "The cobra will bite you whether you call it cobra or Mr. Cobra" -Indian Proverb (via @boxofcrayons) #
- RT @SuburbanDollar: I keep track of all my blogging income and expenses using http://outright.com it is free&helps with taxes #savvyblogging #
- Reading: Your Most Frequently Asked Running Questions – Answered http://bit.ly/8panmw via @zen_habits #
Six Year Loan in 10 Months
Back in October, I mentioned that we were taking on more debt.
Our plan was:
We now have a car loan for $21564. Our plan is to sell the Caliber for $9500 and the F150 for $6800. That will leave $5354. We have a beneficiary IRA that has to be cashed out relatively soon, so we’re planning to do that early in January to push the tax burden to next year, which will end the loan.
How has that worked out?
We made the final payment on the Tahoe today. Our first payment was December 10, 2012. It took us 10 months to pay off six year loan.
We had initially hoped to have it paid off by March. That didn’t happen. Our plan didn’t work, so how did we do it?
Here’s what happened:
We sold the F150 for $6400, cash.
We still haven’t cashed out the IRA.
We sold the Dodge Caliber for $8500, but….
(This is where the story starts.)
While we were fixing up our rental house, we met quite a few repairmen and installers of various expensive doo-dads. Several of them were interested in buying the Caliber. One of them convinced my wife that we should accept payments for it. That’s a mistake we’ve made before, but we decided to make it again.
We wrote up a loan agreement, listed ourselves as the lien holder on the title and sold the guy a car for $1500/month with no interest. It was supposed to be paid off in just a few month, so it didn’t seem like that big of a deal.
He made two payments, then disappeared for a while.
When he re-materialized, he told us he’d been in the hospital and had lost his job.
Crap.
When the time came to make his next payment, he told us he was going into the hospital for a couple of weeks, and he’d work something out after.
It’s “that kind” of hospital. The dry kind.
Suddenly, it was May and he was telling us his sister would help make payments because drinking yourself into rehab once a month makes it hard to keep a job.
Stories, excuses, BS.
Finally, we got sick of it. I like helping people, but I despise being lied to.
Repo time.
In Minnesota, if you’ve ever taken action(or not taken action) that would make it appear that you were okay with a modified payment plan contrary to the loan agreement–for example, not taking the car back after the first missed payment–you have to send a “Letter to Cure”, which is a 10-day notice of intent to repo. This gives the customer a chance to make things right.
On day 8, he called us, fresh from rehab, promising his sister would help him out. On day 10, she called. Her business had been broken into and she was working that out, but she’d arrange something with us after the weekend.
Crap, that sounds like more excuses.
Remember, this was already August, and the car was supposed to have been paid in early April. We’re such suckers.
By the middle of the week, she called and said she’d make the payment. My wife and I decided that we’d give her three days, then go take the car. On day 2, she said she was overnighting money.
On day three, we got a check and two postal money orders to cover the balance. $4500.
Today is the 10th day from that deposit. The check has cleared, and payment is off to the bank, killing the loan.
But wait, 4500 + 6400 is only $10,900. That leave $10,664 unaccounted for.
From the beginning, we were making double payments. Instead of paying $425 per month, we paid $850 most months, except when things got a little tight over the summer. The tax refund we got that we weren’t expecting also went to the loan. Every extra dollar got sent to the bank, because we weren’t sure how the car loan drama was going to end.
Taking the cars we sold out of the equation, we still paid off the remaining $10,664 in just 10 months. Interest payments came to about $300, which the buyer of the Caliber says he wants to pay us, but I’m not counting on it.
So again, we are debt free and have just freed up $850 in our monthly budget. Half of that will be getting saved for the next car, and half will go towards our other savings goals.
10 Ways to Secure Your Kids Against Debt
Everybody wants their children to do well. I want my kids to grow up without making my mistakes. Here are a few ways to help them avoid debt.
- Talk to your kids about money. Your kids will never learn how to handle their finances if nobody teaches them how. This is important. The factor that contributes most to stress, divorce, long hours, and unhappiness can’t be left to chance.
- Set a good example. Spend less than you have and let them see you doing it. No matter what you tell your kids, if they see you doing otherwise, they will learn the bad lesson. Money, work, relationships. They all need attention, and your kids are watching you manage each of them. Make them proud.
- Open a savings account for them, and let them fill it. Teach them the value of their money by letting them work for it, watch it accumulate, and spend it on something they care about. I make my kids work to convince me to make a withdrawal, so they know it is only for the important things. I don’t, however, decide what is important for them.
- Start a college fund. $100 or $10, it doesn’t matter. Start putting something aside today. College costs keep rising. In 10 years, or 20, you can be sure that college will cost more than it does today. Last year, nearly two-thirds of students graduating with a four-year degree did so with an average debt of more than $23,000. Anything you can do to move your kids towards the debt-free 35% will help. They will thank you for it for the rest of their lives. Remember, they are in charge of choosing your nursing home.
- Teach delayed gratification. Don’t let them think that every whim needs to be satisfied…ever, let alone immediately. Sometimes, anticipation improves the act. When I am looking forward to a good meal for a few days or weeks, I really savor it when I finally do get the chance to eat it. If they want everything they see, make them figure out what they want most, and what it will take to get it.
- Teach them to balance a checkbook. This is one of life’s basic skills that far too many people are lacking. If you can’t balance your checkbook, how do you know what you have? If you don’t know what you have, how can you know what you’re able to spend on necessities, or even luxuries? Knowing where you are is at least as important as knowing where you are going.
- Give them control of money. This is the best time to learn how to manage money. Give them an allowance and make it big enough to cover school lunch and bus fare. Let them practice real-world skills and, more importantly…
- Let them make mistakes with it. This is their opportunity to make financial mistakes that won’t haunt them for years or decades. Let them have some money and let them screw it up. When they can’t buy the new game, or can’t fix their car, they will learn. It’s better to do that as teenagers living at home than as adults forced to move back home.
- Let them see your pride in their good decisions. If they do well, tell them. Let their endorphin rush come from your praise instead of their purchase. You aren’t helping them by getting them hooked on the latest gadget. You are helping them by making them feel good about making the right decisions.
- Beat them with a stick.
How do you protect your kids’ future finances from the kids themselves?
https://liverealnow.net/tag/budget/
Carnival Roundup: Sick
Last Friday, my youngest daughter woke me up at 3AM by puking in my bed. Saturday, my son came down with a fever that we discovered on Wednesday was part of a nasty sinus infection. Sunday, my wife appeared to catch the flu that she was kind enough to share with me on Tuesday. Thursday, my youngest caught a horrible cold that’s had her coughing hard enough to feel nauseous. Only my six-year-old has escaped unscathed.
Live Real, Now was included in the following carnivals recently:
Lifestyle Carnival hosted by Money Master Mom
Carnival of Money Pros hosted by Family Money Values
Carnival of Retirement #59 hosted by Midlife Finances
Yakezie Carnival hosted by My University Money
Carnival of Money Pros hosted by The Happy Homeowner
Carnival of Retirement #61 hosted by Free at 33
Yakezie Carnival hosted by Debt Black Hole
Carnival of Financial Camaraderie #71 hosted by Debt Round Up
Carnival of Retirement #60 hosted by Master the Art of Saving
Yakezie Carnival hosted by NZ Muse
Carnival of Money Pros hosted by Money Reasons
Lifestyle Carnival hosted by Vanessa’s Money
Carnival of Financial Camaraderie #69 hosted by Savvy Scot
Yakezie Carnival hosted by The Frugal Toad
Lifestyle Carnival hosted by Savvy Scot
Carnival of Money Pros hosted by Drop That Debt
Carnival of Retirement #56 hosted by Making Sense of Cents
Y & T’s Weekend Ramblings hosted by Young & Thrifty
Yakezie Carnival hosted by The Amateur Financier
Lifestyle Carnival hosted by Free at 33
Yakezie Carnival hosted by KNS Financial
Carnival of Money Pros hosted by The Ultimate Juggle
Lifestyle Carnival hosted by Blue Collar Workman
Y & T’s Weekend Ramblings hosted by Young & Thrifty
Finance Carnival for Young Adults hosted by 20s Finances
Carnival of Money Pros hosted by Cash Net USA
Carnival of Financial Camaraderie #66 hosted by Vanessa’s Money
Carnival of Retirement #53 hosted by Good Financial Cents
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Yakezie Carnival: The 93 Edition
Welcome to the Yakezie Carnival. The Yakezie is a group of the best personal finance blogs on the internet. In short, we rock. Joining the Yakezie is a 6 month challenge involving Alexa ranking and cross-promotion.
These are posts submitted by Yakezie members. Please note, this is the 93 Edition, not the 93rd Edition.
Today is April 3rd, the 93rd day of the year.
93 is a Blum integer. For those of you who don’t know, a Blum integer is, to quote Wikipedia, a natural number n if n = p×q is a semiprime for which p and q are distinct prime numbers congruent to 3 mod 4. Now you know as much as you did before. If you understand that definition, you probably already knew what a Blum integer was. To me, this means a Blum integer is a number that has a definition that I have to copy and paste to even repeat coherently. It exists solely to make math geeks feel smart. I am not a math geek.
On to the carnival!
KrantCents brings us Cash or Credit, a post about the choice between using cash or credit for purchases. We’ve wrestled with this one before. A few months ago, we basically abandoned the cash-only system as inconvenient and too easy to ignore. Right now, we are transitioning to a travel rewards card for all of our regular purchases. I’m going to see how much of my trip to the Financial Blogger Conference I can get for free.
Using thelemic isopsephy, a form of numerology promoted by Aleister Crowley, Will + Love = 93. Crowley once said something to the effect of “Never lie. Just live the kind of life no one will believe.” I love that quote, but I can’t remember where I read it.
Dr. Dean presents 5 Tips Plus A Bonus On Saving Money: Today! and says “Dr Dean’s patients are telling him their costs are rising, despite the feds promise that inflation is under control. 5 tips to save a little money, now (with a fun bonus!)” As a father of 3, the bonus tip needs to be rethought. Long-term costs….
On February 8th, 1993, GM sued NBC for faking crashes that show GM trucks catching fire in car accidents. First, if Hollywood has taught me anything, it’s that cars catch fire in every accident, no matter how minor. Second, where’s Toyota’s lawsuit, now?
Jacob at My Personal Finance Journey bring us Are Extended Auto Warranties A Scam? and says “A look at the considerations that should go in to deciding whether or not extended warranties are worth their weight in gold.” I want to call extended auto warranties a scam, but I can’t. When I bought my car, I got the warranty and paid a couple of thousand dollars for it(I don’t remember exactly how much!). For years, it was worthless, but shortly before the warranty expired, I had a couple of problems that needed to be fixed, so I brought it in and asked for a complete inspection to go with the repair. All told, I got close to $5,000 in repairs for that $2,000 warranty and my car drives like new at 7 years old.
On May 10th, 1893, the United States Supreme Court officially declared the tomato to be a vegetable, proving once again that, not only will the government stick its nose into absolutely anything, but it doesn’t feel a need to base its decisions on facts or science. Remember that when you hear any government declaration regarding scientific facts or advances.
Money Reasons bring us Are We All COGs in the Machine Of Life? and says “Break away from the business machine that is using you as a COG spinning doing the owner’s bidding. Why just spin in circles wasting life away? Start your own business or develop some life fulfilling hobbies!” I love the idea of breaking out and doing what you love, whether or not it makes you any money. Life’s too short to hate everything about it.
In Q1, 1793, France declared war on Great Britain, Spain, and the Netherlands. Now, they make whine, pastries, and self-righteous politicians. The Earth is also 93 million miles from the sun. Coincidence? I think not.
Evan at My Journey to Millions offers up Important Dates When Investing in Dividend Producing Stocks and says “When you are dealing with dividend paying stocks there are dates whose definitions can be considered a term of art and you should know about including declaration date, ex-dividend date, record date and payment date.” I get lost when dealing with most investments. That’s mostly because, at this point in my financial journey, I don’t care. I’m still working on paying my way out of debt. I’ll worry about the investments later.
93 is located at the 42nd digit of pi. That is obviously significant. I should team up with Thelema to invent some mystical reason to take a paid holiday tomorrow to celebrate the works of Douglas Adams.
Melissa at Mom’s Plan presents How to Accomplish Your Goals Part Two: Write Down a Step-by-Step Timeline and says “Writing down the goal is only one step of the process; directing yourself as to how you will complete the process is just as important.” Having goals turns life into a game. Games are fun, so goals are good.
By contentment, the acquisition of extreme happiness. – 93rd Aphroism Patanjali’s Yoga Sutra
Darwin’s Money brings us Life Settlement Investment – Scam or Legit? and says “Life Settlement Investments – Profiting from Death? Scam? Or legitimate high yield alternative investment? Find out for yourself with the facts here.” Life settlement funds appeal to me in a totally morbid, Running Man kind of way. It’s less disturbing that Treadmill to Bucks.
Finally, 93 is the number of the flight that successfully fought back on 9/11. Never forget.
3 Questions to Ask in a Spending Crisis
- Image by ExecGifts via Flickr
Having a well-funded emergency fund is one of the foundation blocks for almost every saving or debt-repayment plan. The theory is that you’ll be better able to weather a financial storm if you don’t have to raid your budget or beat on your credit card every time an unexpected expense rears its ugly head. The number varies based on your pundit and your stage of life, but generally ranges from $1000 to 8 months of your expenses. The money needs to go in a liquid account, so it can be accessed when necessary, but it needs to be completely ignored otherwise. What good is an emergency fund that has been spent?
Now that you have your emergency fund, you are set, right? But what happens when something comes up? When is it okay to spend that money? Emergencies can take so many forms: medical emergencies, car repairs, accidents, a good sale. Wait. What was the last one? What actually constitutes an emergency that is worth shredding your security blanket?
Here are three questions to ask yourself before you spend that money:
- Is the expense necessary? If it’s a voluntary expense, you should create a savings goal and wait to buy it until you can actually afford it. Emergency funds are meant for emergencies, not whims. A good sale is never an emergency.
- Is it important? When my motorcycle breaks down, it gets parked until I can afford to pay for the repairs. When my car breaks down, I need to get it fixed so I can get the kids to daycare and myself to work.
- Is it urgent? Is this an expense that can be postponed until next month, when you have a chance to sell something you don’t need, or rearrange some items in your budget to “find” the necessary cash? If it doesn’t need to be paid right now, it may be best to put it off. In the case of medical bills, you can usually get on a payment plan with no penalties, if you ask. That can change an expensive obligation to a manageable monthly bill.
Your emergency fund should only be used on things that are important, necessary, and urgent. Anything else should get postponed until you can afford to pay it using your on-budget expense items. As the wise man once said: “Lack of planning does not constitute an emergency.” Of course, if you are in a financially stable situation and willing to take a small risk for a short time, eliminating an entire debt item to save the interest can be the right decision.
What would you be willing to spend your emergency fund on?
