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The no-pants guide to spending, saving, and thriving in the real world.

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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?

 

Budget Lesson, Part 1

Finance

Sample <a href=budget” width=”300″ height=”185″ />
Image via Wikipedia

Over the next few weeks, I will be going over my budget in detail.

The first section is income, but that’s straightforward.  A line for each income source, bi-weekly, monthly and annual totals.  Simple.

Before we start, a word on the organization.  There are five columns:

  • Category – This is the description of the line item.
  • Cost – How much do you pay for this item?
  • Time – What is the frequency of the payment?  Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
  • Monthly – Cost and Time are combined to calculate the monthly expense, to make it possibly to budget.  If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
  • Yearly – This column is mostly informative.  It’s helpful to see this in comparison to my annual pay.

The first section I am actually going to address is discretionary spending.

  • Groceries/Dining    $475.00 – We don’t budget heavily for groceries, which would be a surprise if you saw me.  At the smallest I have ever been, fit, I was never small.  We shop smart, buy in bulk when it makes sense, and rarely eat out.  We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
  • Discretionary    $250.00 – This gets used for household items, like toilet paper and soap.  It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
  • Baby stuff    $60.00 – We have two children in diapers.  ‘Nuff said.  This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
  • Gas/oil    $200.00 – Gas and auto-maintenance.  This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
  • Clothes    $15.00 – All of our dressers are overflowing, so this is strictly replacement cost for the time being.  Our kids wear a lot of hand-me-downs.
  • Blow Money    $50.00 – Occasionally, habitual shoppers need to shop.  If they don’t do it on-budget, they will do it off-budget and kill the whole idea.

Initially, we used a “virtual envelope” system.  We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent.   Didn’t work.  We are going on a pure, cash-only system as of the first of the year.  No money, no spendy.

5 Things to Do in the New Year

Finance

Creditcard
Image via Wikipedia

CNN Money has an article up on 5 things to do this year.   After posting a similar article a couple of weeks ago, I thought it’d be interesting to post about someone else’s perspective.

1.  Shop for a no-fee checking account.

If you are paying fees for a checking account, go somewhere else.  There are so many alternatives available that you shouldn’t be throwing money away.   Ally Bank has a great no-fee checking account, as does INGDirect, though ING won’t let you write paper checks against the account.  The same principle applies to credit cards.  If you have a card with an annual fee and you aren’t getting some monster services or rewards to go with it, run away.

2.  Save your raise.

I don’t necessarily agree with this one.  If you are in debt, it’s better to use the raise to pay off that garbage, first.   When I got my last raise, I immediately boosted the automatic payment for my car to use every new penny.   I’ve never had the money available, so I haven’t missed it.  Whatever you do, fight lifestyle inflation.   Just because you have some more money doesn’t mean you need to spend it.   At my last job, I got a substantial raise, so I bought a new car, only to get laid off a few months later.

3.  Go for a checkup

Wealth doesn’t matter if you squander your health.  Go get a physical.   Every disease is easier to treat if you catch it earlier as opposed to later.   Don’t make the mistake of running your body into the ground.  You will regret it later.   Effective this year, most health plans will cover a physical with no copay, co-insurance, or deductible allowed.

4.  Score a better rewards card.

B***-****.   If you’ve still got debt, don’t concentrate on using more of it.  Get that crap paid off.    If you’re out of debt, look into getting a rewards card that aligns with your goals.   If you like to travel, get a card that gives you frequent flier miles.   Otherwise, I’d go with a cash-back rewards card.

5.  Use your vacation days.

37% of Americans don’t take all of the vacation to which they are entitled.  That’s insane!  We work harder and better when we have time to recuperate and relax.   Unfortunately, I usually fall into that unfortunate 37%.    My vacation resets on February 1st, and this will be the first year in a lot of years that I haven’t had to roll it over or even lose some.

What is your financial plan for the new year?

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5 Ways to Save Money by Going Green

Finance

This is a guest post by MoneySuperMarket.

Making changes in your daily life that minimize your impact on the environment is the right way to go green. While most people are happy just to know the environment is being protected, there are other benefits to going green. Pick a few of these five lifestyle changes and enjoy having a little extra cash in your pocket as well.

Eat More Meals At Home

Dining out is a fun family experience, but it takes its toll on your wallet and your neighborhood. Restaurants create millions of tons of trash each year. This tip is to the people who already avoid fast food for health reasons, but cooking with your friends and family is a great way to get closer.

Pick Up A Creative Hobby

Some hobbies require a lot more equipment or materials, therefore creating more waste and using more energy. Creative extracurricular activities use inexpensive or recycled goods instead, requiring fewer trips to the sports goods store. Woodcarving can be practiced with scraps from cabinetmakers, while yarn for knitting can come from old sweaters that are no longer worn.

Cool Off The Hot Water Heater

Each water heater features a small screw or dial that allows you to set the perfect temperature. Millions of people have their heaters set higher than necessary, wasting a lot of electricity each year. You can safely turn the heat down to about 125 degrees Fahrenheit, which could net you some hefty annual savings if it is at 140 or 150 degrees right now. Most people never use water for washing or showering that is higher than 130 when mixed in the tap.

Carpool With Co-workers

Driving back and forth to work puts a lot of wear and tear on your vehicle. Rising gas prices has made it even harder to afford a long daily commute by car. Sharing the responsibility among a group of co-workers or fellow parents at your child’s school can help to spread out the costs and the impact on the environment.

Try Your Hand At Gardening

You don’t have to have a green thumb to grow your favorite herbs in a windowsill pot. Start out easy and try a potted dwarf lime tree or a terracotta planter full of strawberries on the patio. The vegetables you harvest don’t have to contain pesticides. Compare your gardening costs against prices for high-end organic produce at the store. You could save thousands of dollars each year and reduce the damaging effects of large-scale agriculture.

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2010 Budget Changes

Misc

We’re making some changes to how we manage our finances this year.   Our destination isn’t changing, but the trip is.

  • All of the cards are going away. Not necessarily destroyed, but certainly inconvenient.   There’s a $7000 overdraft protection account attached to our debit cards.  There’s no need for an “emergency” card.  If it’s truly an emergency, we are covered.   We are going to destroy some and ice the rest.
  • We’re going to go “cash only”. We’ve going to the envelope system.  There will be an envelope for grocery money, gas money, discretionary money, and baby crap.  If there isn’t enough money in an envelope, it will have to come out of another envelope.  If we don’t have enough money, we’ll have to do without, instead of spending imaginary money at 10% interest.   Gas will be the exception, so we don’t have to bundle the kids up to pay for gas.   No money, no spendy. We tried a “virtual envelope”, with every purchase tracked by category in a spreadsheet, but it didn’t work.  Real cash, real empty envelopes.  Discretionary money covers school activities, miscellaneous household item, and anything else that pops up.
  • We’re going to start the “30 day list”.  If we want something, we’ll put it on a list.  If we still want it 30 days later, it will be okay, provided there’s money for it.  This is part of what the discretionary budget is for.
  • My wife is getting $50/month “blow money”.  Absolutely unaccountable.  If she doesn’t have this vent, the whole system will fall apart.

This is all stuff my wife and I have talked about and agreed to, but now, it’s organized and laid out. We HAVE to do it or something similar.  We are both on board with this plan.   We should see our debt management plan skyrocket, without feeling like we are missing out on life.


Side Hustle: The Garage Sale Preparation

Finance

We had a garage sale last week, as a wrap-up to the April 30 Day Project.  We got rained out halfway through the first day of our 3-day sale, but we still managed to clear $1500.  We held the sale in our neighbor’s garage because it had more space and better visibility.

Wednesday night, while carrying boxes over, I missed the step to their property from our driveway and crashed while carrying three boxes.   That’s a twisted ankle and a bleeding knee.  Naturally, while I’m hopping and swearing, everyone is concerned that I’m okay.   The worry-warts.   Anyway, it hurt, so we stopped setting up while we still had a few boxes left in the basement.

[ad name=”inlineleft”]Thursday morning, I decided to show them all.   At 5:30AM, before anybody else is strongly considering the possibility of maybe thinking about getting ready to hit the snooze button, I decided to get the rest of the boxes ready.   They’d all wake up, worried about how I’m feeling, asking if I’m to stiff to carry boxes.  The best way to show them they don’t need to worry would be to have all of the boxes dealt with before they woke up.   So I started.    Up and down the stairs, with a stiff, twisted ankle, gloating to myself about how tough I was…BOOM, down the stairs. I was on my back, sliding down the stairs.    I caught a stair-tread in the small of my back and another on the point of my tailbone.  Mommy?

After I stopped twitching on the floor at the base of the stairs, I managed to get the last of the boxes ready.   Instead of sympathy, I spent the rest of the weekend getting asked if I needed an inflatable doughnut to sit on.  There are places I’d prefer not to have bruised.

Unpacking the boxes made me glad that everything was priced.  We spent 6 weeks going through our entire house–every room, every dresser, every drawer–to eliminate the clutter.   As something went into a box, it got priced, so we didn’t have to do it all at the last minute.  That is the most important time-saving step for a garage sale.   Price it as you pack it. You don’t want to waste hours pricing stuff while tripping over potential customers.

Another preparation tip to do early:  Find tables!   Ask around. You’d be surprised at who has a dozen folding tables collecting dust in his basement.    It’s better to borrow that to rent.    The best price I found was $17.50 to rent an 8′ X 30″ table for a week.   We didn’t have to do that, but we thought we would have to.  I borrowed a few, found a few, and built a few out of sawhorses.

The week before the sale, we placed an ad in the paper. When I placed the ad, the paper called to suggest we change it from running the weekend before to running just the days of the sale.   I agreed, to a point, but their Sunday circulation is miles ahead of the weekday circulation, so why pay to run an ad nobody will see on Thursday?    I ran it Sunday through Tuesday, because I wanted the Sunday ad and we got 3 consecutive days in the price.   Did I actually know better than the paper’s sales-weasel?  Who knows?   I think I made the right decision.

The Sunday before the sale, I posted an ad on Craigslist. Interesting fact: little old ladies use Craiglist to plan their garage-sale adventures.

Two days before the sale, we made signs. Bright pink signs with brighter yellow starbursts. They were all simple. “Mega Sale! 8-5” followed by an arrow and our address. Simple, easy-to-read, and bright. The morning of the sale, after the ibuprofen kicked in, I put the signs up. When you make signs out of paper, always include a crossbar. It rained a lot the first day of the sale, so the signs wilted. The second morning, I went out with some duct tape and crossbars and fixed them all.

The day before the sale, we got cash and change. We had $50 in 1s and 5s and $25 in silver change. No pennies. Nothing was priced to make us need them.

The morning of the sale, we set up two canopy tents in the driveway and pulled the prepared-and-filled table out under them. We finished stacking as much as we could on the tables and called it “open”. There were a few boxes we couldn’t put out due to the rain. We simply ran our of room. At noon, $65 into the sale, we decided enough was enough and shut down–cold, wet, and miserable. Lunch and a nap made the day better.

Later, I’ll discuss the other parts of our successful sale.

Note: The entire series is contained in the Garage Sale Manual on the sidebar.

Update: This post has been included in the Money Hacks Carnival.