Live Real, Now

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?

 

ING Rocks

Finance

 

INGDirect Sale
INGDirect Sale

I just got an email from INGDirect.   To celebrate Independence Day, they are having a sweet, sweet sale.

You can:

  • Open a checking account and get between $50 and $126 for doing so.
  • Open a Sharebuilder account and get $76 to start buying stocks.
  • Get $1776 knocked off the closing costs of a mortgage.
  • Get $76 in a new IRA, to give you a little boost for retirement.

Take advantage of all of that and you’ll get $2054 in cash or discounts.

Seriously, this deal rocks.  If you don’t have an INGDirect account, get one.  There are no overdraft fees and no monthly fees.

The sale ends tomorrow at midnight, so hurry.

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Teaching My Child about Money in a Way I Was Not Taught

Finance

When I was in high school and working 15 to 20 hours a week, my mom gave me free rein to use the money I earned as I would like.  Actually, she said nothing to me about saving for college or putting some money into savings.

When I had friends who complained that they had to put away some of their earnings, I commiserated with them.  How unfair of their parents to make them save some of their money!  They worked hard for their money, often at crappy part-time jobs.  They deserved to spend the money any way they saw fit.

The way I saw it, why save for college?  According to financial aid rules, if the student has any savings, she would have to use the majority of it to pay for college.  How unfair.  To add insult to injury, if prospective college students have some savings, they would qualify for less financial aid, which often meant fewer student loans.

The injustice. 

Yes, it was better to spend my hard earned money than save it and be penalized.

No one told me differently.  In fact, many people in my family agreed with me and encouraged me to buy a used car to get to and from my job.   Of course, I paid the loan payments for the car, the gas I used and my insurance out of money from my job.  That was a responsible use of money, but I also went out to eat with friends, a lot.  At 16, I was going out to eat with my friends twice a week at least.

However, my plan worked perfectly.  When I went to college, I didn’t have to use any of my hard earned cash.  No, not me, because I hadn’t saved anything.  Instead, I left college with nearly $20,000 in student loan debt.  I took two years off and paid down as much student loan debt as I could, getting it down to about $8,000, but then I went to graduate school and took on more student loan debt.  I graduated with nearly $25,000 in debt total.  I am still paying on it today, 13 years later.

Now that I am the parent, I am one of those “awful” parents who makes her kids save.  My son knows when he gets his allowance, some goes to save, some goes to donate, and some goes to spend.  True, it makes me cringe when he uses his spend money on little trinkets like temporary tattoos, stickers, and gum, but I keep silent.  He did the work to earn the money, and he can spend it as he likes.  However, I am inflexible with saving; that money must be set aside.  When he goes to college, I expect that he will have to use the majority of that money.  Rather than seeing it as a waste, I see it as an important component of his financial education.  Spending his money to pay a portion of his college education will hopefully make him take college more seriously.

Meanwhile, I have already begun having chats with him about money, spending, and budgeting.  He watches his dad and I work hard to pay down our debt with gazelle intensity.  He sees me use a calculator at the grocery store to see how much our groceries will be.

Ultimately, he will make his own financial decisions as he grows up, but I plan to teach him throughout these important years so that even if he turns into a spendthrift, he will have a firm financial understanding to revert to as he ages.  While my mom taught me how to stretch money further, she never taught me how to save; I hope saving is a lesson my son takes with him throughout his adulthood.

How do you teach your kids about money management?

Melissa writes at Fiscal Phoenix where she encourages people to rise from the ashes of their financial mistakes as she and her husband are doing.

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3 Questions to Ask in a Spending Crisis

Finance

94 Stainless Steel Smart Money Clip Credit Car...
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:

  1. 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.
  2. 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.
  3. 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?

Make Yourself Accountable

Finance

Everybody knows the reputation New Year’s resolutions get for being abandoned in under a month.  Following through with your saving and budget goals can be difficult.   There are thousands of strategies for keeping your resolutions, but I’ve found that the best goal-keeping mechanism is to make yourself accountable.    There are several ways to accomplish this.

Make Firm Goals. If your goals are open to interpretation, it’s easy to interpret them in a way that lets you off the hook.  Make the goals concrete and immune to interpretation, and that can’t happen.  “Get up earlier” may mean five minutes, which is technically meeting the goal, but not really.  “Get up at 5am” is clear and concrete.

Get a “Goal Buddy”. When I am out shopping, if I’m struck by the impulse to buy something I probably don’t need, I call my wife.  She’s more than happy to encourage me to put the movie or game back on the shelf.   I have a friend who will call me up if he’s thinking about buying a new gadget so I can talk him down.  Friends don’t let friends mortgage their futures.

Go Public. As you may have noticed, I’m being as open as possible with my goals for the year.   I have laid out clear goals and I provide fairly frequent updates through both this site and twitter.  If I fail, I fail in front of an audience.  That’s strong encouragement to succeed.  Tell your family, friends and coworkers.  Announce your goals on the internet.   Make it as difficult as possible to fail gracefully.

Punish Yourself. I have a line item in my budget called “In the hole“.   If I go over budget one month, the overage is entered as an expense the following month.   This serves the double purpose of getting the budget back on track and forcing me to sacrifice something the next month to make that happen.    Another option may be to write out a check to a charity you hate, and drop it in the mail if you miss your goal.  Anything unpleasant can work as your punishment.

How do you keep your goals?

Make Extra Money, Part 6.5: Why I Do It The Way I Do It

Business, Finance

This is a follow-up to part 6 of the niche site walkthrough, Setting Up a Niche Site.  If you haven’t read that post, this one won’t mean much.  Go ahead.  Read it.  I’ll wait.

Several people have asked me to explain why I use the plugins and settings I use.   In this installment of the Make Extra Money series, I’m going to explain every choice I recommended last time.

WordPress

WordPress is a site development dream.  With the right themes and plugins, you can literally make a WordPress site look, feel, and behave in any way you wish.   Even without digging too deep into plugins and premium themes like Headway, you can put together a niche site blog in very little time and know that it’s happening on a robust platform that is actively being improved.

Configuring WordPress

Updates

Keeping your site updated is the single most important thing you can do to avoid getting hacked.   Since I haven’t yet figured out how to make hacking a terminal disease, I do the best I can to avoid letting them cause problems.   Keeping your site updated is the condom of WordPress.

WWW

This is entirely a personal preference, but, after 20 years of reinforcing habits, most people type “www” by default.  WordPress will automatically forward visitors correctly, so this isn’t actually a necessity.

The “Misc” Category

I don’t spend much time worrying about categories when I post, and sometimes I experiment with using external software to post from pools of articles, so I set up a default category.   “Misc” is much nicer to see than “Uncategorized”, even if they mean the same thing.

Theme Selection

I like SimpleX because it is uncluttered and easy to navigate.  It’s hardly the most powerful theme out there, but it doesn’t pretend to be.  If I want more, I use Headway.

Plugins

Plugin Central

Plugin Central is just a plugin installer that lets you install and activate many plugins at once.  Even knowing exactly what plugins you want, this easily saves half an hour of setup time.

All in One SEO Pack

SEO is important.  In fact, it’s what I base my niche site traffic on.   All in One SEO makes it easy to manage the SEO titles that search engines see and the meta descriptions that search engine’s display to visitors when they see your site after a search.   Some themes do this themselves, but I still use this plugin.

Meta keywords are all but useless, but not entirely.   Google and Bing don’t care, but some networking and sharing sites do.

I “noindex” the tag archives because I don’t want the search engines finding each page twice.  Identical pages with different addresses will register as two pages with Google.  How does it know which one I consider most important?  It doesn’t, so I don’t give it the option of indexing my tag archives.

Contact Form 7

This is just a free and easy contact form.  I haven’t found anything better for the price.

WordPress Database Backup

Backups are important.  Always back up your data.  Do you want to spend 3 weeks building a site, just to have your server crash, killing everything?  5 minutes now will save hours or days of headache later.

SEO SearchTerms Tagging 2

When someone comes to your site from a search engine, this plugin takes the term they searched for and appends it in a list at the end of the post the visitor found.  This reinforces your site as a good result for that search term.  It also provides a handy list of the most popular search terms people use to find your site.

Conditional CAPTCHA for WordPress

I hate spam.  If Akismet finds a spam comment being posted, this plugin will give the user a change to enter a CAPTCHA code to post the comment. Even if I turn off comments on a site, I keep this installed in case I ever change my mind.   Real comments are good for SEO, so I occasionally test allowing the comments.  I won’t waste the time moderating comments on a niche site, so this is a good compromise.

Date Exclusion SEO

If someone comes to a site and sees the last post was two years ago, they’ll leave. I don’t want a post to look like it’s outdated, so I suppress the dates.

Pretty Link Lite

This plugin lets me mask a link and set it to nofollow.  Nofollow tells the search engines to discount the value of the link, which removes a spam-site indicator from their algorithms.   Masking the link turns a messy affiliate link into a link that looks internal, making it easier for a visitor to click and allowing you to see how often a link is clicked.

Google XML Sitemaps

Making it easy for Google to find your entire site is a good thing.  This plugin helps with that.

WP Policies

This plugin provides a long list of site policies, formatted for a WordPress page.  The most important one is the disclaimer announcing the fact that your are making money on your site.

WP Super Cache

Super Cache creates a pre-generated copy of your page so the site doesn’t have to hit the database to rebuild it dynamically every time someone visits.  It’s all about speed, which affects your search rank.

JetPack

I like using the WordPress.com stats instead of Google Analytics for most of my niche site.  I don’t see a need to announce to Google that these 12 sites are owned by me, so I don’t.   WordPress.com included their stats plugin in JetPack, then discontinued the standalone plugin, so I use JetPack.

Backup

If I subscribe to my own feed, I get every post in Google Reader.  That means I don’t need to make a daily backup of any of my sites.   For the amount of changes I make to my niche sites, weekly might still be overkill, but that’s what I do.   I get the backups by email so I have a copy somewhere other than the host.  I don’t believe in letting anyone control my money but me.

Settings

Discussion

Most comments to niche sites are spam comments, so I hide them without actually turning them off.   Sometimes I test letting the comments through, because some niches might have great people that want to post good comments.  I haven’t had a lot of luck with that, on my niche sites.

Permalinks

The default permalink structure is absolutely not recommended for search engine purposes.  It’s also harder for someone to mention.   I don’t put dates in the link for the same reason I hide dates in the posts: I don’t want anything to look outdated.

Menus

I keep the navigation menu simple.  It has three purposes:

  1. Link to the page that’s designed to make money.
  2. Link to the pages that show Google and readers it is an active site.
  3. Link to the disclaimer that keeps my butt away from federal fines.

Anything else is wasted space.

Widgets

On my niche sites, I use widgets to help with navigation and to point people to the pages that will make the most money.     I haven’t addressed how I do the second part yet, because I haven’t created those pages yet.

Posts

Right now, http://www.masterweddingplanning.net/ has exactly one post, and it’s a duplicated post from eZineArticles.   It has served its purpose.  This site is fully indexed by Google.

When I get the rest of the content written, I’ll delete that post.

There you have it, the reasons behind every choice I make during site creation.  Did I miss anything?  Do you have any other questions?

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