- 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 #
How have you improved your situation today?
Every day, in some small way, it’s important to do something to improve your situation. Whether it’s paying down debt, researching inexpensive alternatives to your existing expenses, or something as simple as hugging your spouse or playing games with your kids.
Educate
I was once told that every day, you either get smarter, or you get dumber. Don’t do the latter. Never pass up an opportunity to educate yourself. Make the day good for you.
- Read a book. There are hundreds of personal finance books available. Dave Ramsey’s Total Money Makeover is a great place to start.
- Read a blog. Once again, lack of choice is not a problem here. There are thousands of choices. My favorites are in my sidebar, to the left.
- Find a mentor. Failing that, get a PF-Buddy. Find someone you can call when you need the moral support to make an appropriate or difficult financial decision.
- Take a class. Whether it’s a personal finance class, or some other way of improving yourself, do it. Many cities offer affordable community education classes. Ad Hoc college courses are another option.
Elucidate
It’s incredibly important to understand your situation. If you don’t know where you are, how can you control where you’re going?
- Examine your finances. I heartily recommend Quicken to track your finances, but Mint is a great place to see where your money has gone.
- Know your debt. It’s important to know your debt. Own it. Know your fees and your rates. Know every cent you owe. Get a spreadsheet or a notebook and write it all down. Keep it updated. Mint is great for this. I update my debt-sheet monthly.
- Know your spending. This is another plug for Mint. There’s no better way to see where your money has gone in the past. I use Quicken for the present and future, Mint for the past and snapshots.
- Find your waste. Do you have the cheapest plans that meet your needs for television, internet, phone service? Do you have AAA and roadside assistance through your insurance company?
- Talk to your spouse. Discuss your finances. Make sure everyone is on the same page and there are no surprises or hidden bills. Plan together.
- Eliminate problems early. If you see a problem, eliminate it before it gets out of control. The earlier you identify a problem, the easier it is to eliminate.
- Family meeting. Get the family together so everyone can participate, even the children. Young eyes sometimes have a clarity that a lifetime of habits has clouded. If your kids understand the concept of money, they are old enough to participate and even help. Brainstorming means that no idea is a bad idea. It may not be implemented, but everything is worth hearing.
Eradicate
What’s left? Eliminate baggage. Kill your bills. If you’re paying for something you don’t want or need, get rid of it!
- Unnecessary items. Do you have an extra cell phone or an insured motorcycle in the garage? Time to cancel.
- Unused items. Do you really use the movie package in your cable bill? Are you saving money with Netflix, or would Redbox be a better option?
- Forgotten bills. Did you sign up for an identity protection scheme or an appliance repair plan for an appliance that no longer exists? Cancel!
- Fees. What fees are you paying? Do you have an annual fee for your credit card or minimum balance fees at your bank? Find new institutions. Loyalty to your bank may be costing you money.
Unused or unnecessary bills are nothing but unhappiness generators. They don’t provide value so trim the waste and get rid of what you don’t need.
Ignore Your Budget
For the first year of our journey out of debt, we had a strict budget, with all of our discretionary money spent out of an envelope system. We had an envelope for groceries, one for discretionary spending, one for clothes and one for baby crap. At the beginning of the month, we’d divide the money into the envelopes according to our budget spreadsheet. If we used a card for anything, we’d take a matching about of money out of the appropriate envelope and put it in a box to get reconciled the next month.
Ugh. Almost 2 years later, it has turned into too much work and too much nagging about everything either of us put on a card.
We decided to simplify the system a few months ago. Now, we still have a budget. It’s even a zero-based budget, but we ignore it. We only look at it if something changes for the worse. If something changes for the better, the extra money just gets automatically rolled into our debt snowball, so there’s no need to worry about updating the spreadsheet.
Instead of envelopes, we kind of eyeball it. We budget $450 per month for groceries, so we aim to spend $100 on our weekly grocery run. That leaves some room for losing track of how much we are putting in the cart, or a last minute addition to the list. It also leaves room for our secondary grocery trip to buy bread and milk later in the week. We do go through a lot of milk at my house. We budget $55 per month for diapers, but the deal we are currently getting with Amazon Mom is only costing us $30.79 for 6 weeks of diapers. We ignore the difference.
This—and our heavily automated bill pay and savings—lets us keep our finances on track, without stressing over every dollar or fighting over every little thing that comes home unplanned. I used to fire up Quicken and balance the checkbook every week. Now, that happens at the beginning of the month, usually. If I forget, it doesn’t matter. At the beginning of February, I balanced the checkbook for the first time in almost two months and we never came close to exercising our overdraft protection account. In fact, we had some extra, so that got sent directly to our debt.
Overall, it’s been good to test out a new system. We have almost no financial stress and managing our money takes about a couple of hours per month instead of per week. It’s all win.
Resolutions That Don’t Suck
I’m not a huge fan of New Year’s resolutions. Generally speaking, if you don’t have the willpower to do something any other time of the year, you probably won’t grow that willpower just because the last number on the calendar changed.
Seriously, if you’ve got something worth changing, change it right away, don’t wait for a special day.
That said, this is the time of the year that many people choose to try to improve…something. Some people try to lose weight, other people quit shooting meth into their eyeballs, yet others(the ones I’m going to talk about) decide it’s time to get out of debt.
Now most people are going to throw out some huge and worthless goals like:
- I need to lose some weight.
- I need to save more.
- I need to be a better person.
- I need to shoot less meth into my eyeball.
The problem with goals like that is the definitions. What is “some”, “more”, “better”, or “less”? How do you know when you’ve won.
It’s better to take on smaller goals that have real definitions.
Try these:
- I’m going to lose 20 pounds.
- I’m going to save $1200.
- I need to stop locking my children in the closet when I go to the movies.
- I am never ever going to shoot meth into my eyeball again.
But Jason, I hear you saying, where am I going to find $1000 to save? Well, Dear Reader, I’m glad you asked. Next time though, could you ask in a way that others can hear so my wife doesn’t feel the need to call the nice men in the white coats again?
Let’s break that goal down even further.
Instead of saving $1200, let’s call it $100 per month. That’s a bite-sized goal. Some people don’t even have that to spare, so what can they do?
Let’s make that resolution something like “I’m going to have frozen pizza instead of my regular weekly delivery.” If your house is anything like mine, that brings a $60 pizza bill down to $15 for some good frozen pizza for a savings of $45. If you order pizza once a week, that’s $180 saved each month, double your goal. That’s a win with very little suffering.
Now, you can take that extra $80 that you hadn’t even planned for and throw it at your credit cards. That’s a free payment every month. Before you know it, you’ll have your cards paid off and a decent savings account.
Then you can thank me because I made it all possible.
10 Tips to Help Parents Stay Out of Debt
People say that when you have a baby, your world gets flipped upside down. That’s not true. Your world gets dropped in a martini shaker and left to the whims of a sadistic bartender with a shaking fetish. Everything changes. That sounds like an exaggeration and nobody believes it until it happens, but it’s true.
When you find out you are about to reproduce, you will experience a phenomenon called “nesting”. Nesting is the idea that, if you take your credit cards and beat them against the curb until they bleed and VISA calls you asking for mercy, you will be transformed into the best parent ever, regardless of what you may actually screw up. It’s the way parents calm their fears by spending money, often on things that aren’t needed.
Q. How do you avoid becoming a debt-ridden, worried mess of an over-protective, over-extended new parent?
A. What do you get when you cross an elephant and a rhinoceros?
I can’t help with the rest, but here’s 10 ways you can avoid the debt problems.
- Have a budget. I may have said this before. It’s possible this counts as a recurring theme here. If you don’t have a budget, you aren’t in control of your money. If you aren’t in control, then how do you know where it has gone or where it is supposed to go?
- Budget for baby crap. This will be a recurring expense for years, so get used to it. A friend of mine is on the cusp of having everyone out of diapers for the first time since 1993. Do you think they plan that expense? Diapers.com has $10 off and free shipping on orders over $49. Use code “ LiveReal” during checkout.
- Double the number you have in #2. Seriously. It will cost you more than you think, but it doesn’t have to cost you as much as you fear. It’s far better to have too much budgeted and find yourself with extra money than it is to budget too little and be forced to make up the difference at the feet of Master Card.
- Only take the advice of people you know and trust. Every random jerkface on the street has (usually) well-intentioned advice for new and expecting parents. Ignore them all. If they aren’t your doctor, your mother(assuming she did her job right), or friends with children, they are clueless and their advice should be immediately round-filed. Ditto for parenting magazines. The writers don’t know better than you do. Read the magazines for six months and watch for conflicting advice, not only in the same magazine, but often from the same writer! Don’t add the stress of bad advice from strangers to what is already a stressful time.
- Don’t get every gadget designed to cushion the baby. A wipe warmer is a waste of money. Do you want your baby to be scared of a little chill forever? Cold wipes build character. If that isn’t good enough, hold the wipe in your hand for a few seconds before using it. There are a million other gadgets to keep your little one from ever feeling a moment of discomfort. Don’t waste your cash. It may only be 10 pounds, but it’s tougher than you think.
- Don’t get every gadget designed to cushion the parent. They make ergonomic bottles, braces to hold your arms in the right position to feed, fancy cloths to catch baby vomit. Tough it up. Support your baby yourself. Build some muscle and some character. Use cloth diapers to catch various treasures your little brat will spit up on you. Spending more doesn’t always make it better. The ergonomic bottles that make it easier to feed a baby, make it harder for the baby to hold the bottle. This is actually making your life more difficult.
- Focus on the necessities. Yes, the fancy formula with the pre-digested proteins has a nicer label. It doesn’t make a difference. The generic brand at the warehouse store usually has the exact same ingredients in the exact same ratios as the brand name at the baby store–for half the price. There is nothing special about the blankets in the baby section–except the price. The fancy bottle warmer doesn’t do anything that a cup of warm water on the counter won’t handle. You need: A crib, unless you are doing a family bed; a easy-to-clean mat to change diapers(on the floor works!); and a diaper bag(back-to-school backpacks are more ergonomic and easy to organize than anything in the baby store!). Everything else is a luxury.
- Time counts more than stuff. No matter what else you hear, no matter how old your child gets, time with you counts more than anything else you could do or buy. Be there for your kids and the rest is gravy.
- Brand-name and designer labels are not status symbols. The opinions of the other soccer mommies do not matter. The opinions of the random jerkfaces on the street do not matter. Designer labels do not make you a better parent and are not an indicator of a happy baby.
- Always remember: Babies bounce and have short memories. While I don’t recommend bouncing your baby on the floor, they are surprisingly resilient. They don’t hold grudges, either. There is room to make mistakes without screwing up your kid.
For a hundred thousand years, people raised babies with nothing more than a scrap of hide to alternately chew on or wipe with. You can probably get buy with just a bit more. Relax and enjoy the process of raising your kids. Money doesn’t matter nearly as much as your presence.
Back to Cash
It appears that I can’t be trusted with a credit card.
At least, not a credit card that gets used for our regular shopping.
Over the past few months, our spending has slipped past our budget by more than I like. The problem appears to be that it’s really easy to toss “just one more thing” in the cart when there’s no hard limit on how much is available to spend at the register.
If you do that a few time, it’s easy to find yourself $1000 over budget.
Ouch.
If it weren’t for my side hustles, we’d have been growing our debt recently.
As of the beginning of this month, our credit card has once again been relegated to automatic bills, the gas station and online purchases.
No more groceries, no more scrapbooking stuff, and no more restaurants.
I would have done this sooner, but we were so far over budget that I didn’t have the cash to yank out all at once to cover our month’s expenses. We ended last month at a good place, so I went for the clean break and withdrew all of our day-to-day spending on the first. When I got home, it went straight into envelopes so we know what we’ve got to spend this month.
Bye-bye, credit cards!
