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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?

Things to teach your kids about money

Finance, Parenting

cute kid (Explore) — Image by Swami Stream via Flickr

As parents, it is our job to teach our kids about a lot of things: driving, reading, manners, sex, ethics, and much, much more. How many of us spend the time and effort to teach our kids about money? A basic financial education would make money in early(and even late) adulthood easier to deal with. Unfortunately, money is considered taboo, even among the people we are closest to.

It’s time to shatter the taboo, at least at home. Our kids need a financial education at least as much as they need a sex education, and—properly done—both educations take place at home.

How do you know what to teach? One method is to look back at all of the things you’ve struggled with and make sure your kids know more than you did. If that won’t work, you can use this list.

Balance a checkbook. This is the most basic of financial skills. The easiest way to teach this is to help him open a checking account and demand he keeps the register current and reconciled. Make him use a paper register. Quicken or an alternative may handle the work, but your kid will never learn the underlying principles if he doesn’t have to sit down with a pen and calculator to do the work. The cheat can come later, when he is capable of handling the task himself. It’s the same reason schools don’t let kids use calculators until the basics are thoroughly mastered.
Calculate paid interest. Understanding how much something costs after accounting for interest should be enough to scare anyone away from credit cards. I believe that the reason it doesn’t is because most people don’t understand how to figure out what interest is costing them. In case you don’t know yourself, the math is simple: balance X interest rate(as a decimal) / 12. That will show you how much you are paying each month for the privilege of borrowing money.
Use your money to make money, not to pay interest. The flip side of interest is earned interest. It’s always best to let your money work for you, building your wealth than to struggle to finance a bank’s payroll liabilities.
Save 25%. My son is required to put a quarter of everything he earns in his bank account. He gets $20 for shoveling the neighbor’s driveway, so $5 goes in the bank. The money he gets for gifts is handled the same way. Everything he gets, whether it be from a gift, his allowance, or work he does—gets divided the same way. If I can establish that habit for him, and impress upon him the value of saving 25% enough that he continues into adulthood, he will never have money problems.
Always contribute to retirement. At every opportunity, from every paycheck, make a contribution to retirement. At a minimum, a 401k contribution should be made at a level that takes full advantage of any company match. If there is no match, even $25 per paycheck will add up over time. Teach them to work towards the 401k contribution limits.
Spend less than you earn. This is the shining, glorious foundational principle of successful finances. Not just individuals, but businesses and even governments should learn this lesson. If–at all times–you are spending less than you earn, you will have more options to handle the remaining bits. If you live on the wrong side of this equation, you will never be able to get ahead, no matter how hard you work.

Those are the lessons that I am working to instill in my children, a little at a time. Am I missing any?

20 Lazy Ways to Save Money

Finance

: Image by Paul Vivier via Flickr

Investopedia ran a post on 20 lazy ways to save money. I thought it was worth sharing my take on the post.

1. Schedule automatic payments. I do this obsessively. I run all of my regular payments through my bank’s online bill-pay. I think there are 2 bills that get paid manually; 1 is a quarterly payment, the other is due annually.

2. Eat your groceries. According to the post, Americans–on average–throw away 15% of the groceries they buy. I totally believe that. We don’t throw away that much, but it’s still too much. It tends to be the fresh vegetables, which we eat as side dishes instead of the main course. We need to switch that mindset, both to use the vegetable efficiently and to eat healthier.

3. Bundle services. I refuse. I hate the idea of having a single point of failure for multiple systems. If the power goes out, I lose my cable, but I keep the phone. If, for some reason, I can’t pay my phone bill, I don’t lose my internet connection. I like keeping these things separated.

4. Pay off credit card. Hardly a lazy process, but otherwise…duh!

5. Mark your calendar. I use my Google Calendar as obsessively as I use automatic payments. I put in reminders, grocery lists, or anything else I need to know at a specific time.

6. File your taxes on time. I just helped a friend dig out of this mess. I pay as soon as all of my paperwork is delivered. The IRS doesn’t give up and they have leverage, including garnishment and even jail.

7. Roll it over. When you change jobs, take your 401k with you. Don’t leave it behind like a series of red-headed stepchildren. It’s too easy to lose track of the accounts. Don’t cash it out! I made that mistake once and lost far too much to taxes. A rollover doesn’t count against your 401k contribution limits.

8. Switch credit cards. If you can a good balance transfer offer that’s followed by a better interest rate than you currently have, use it. But don’t forget to pay attention to the transfer fees. Do the math. If it costs you $500 to transfer the money, how much interest do you have to save to make it worthwhile?

9. Use your privileges. If you have a AAA membership, use it. It gives you a discount on hotels, oil changes, car rentals, and more. Read the paperwork. Former military gets a ton of random discounts, too. Ask.

10. Rent instead of buy. Renting can save you money over buying, if it’s something you’ll only use once, but borrowing is free.

11. Buy instead of rent. Rent-a-center is a ripoff, but they can’t even legally operate here. If you’re going to use something regularly, buy it.

12. Ask. I love to call up every company I give money to and ask if there’s a way I can give them less. Outside of chain stores and restaurants I almost always ask for a lower price.

13. Just say no. Extended warranties are generally a waste of money. However, if I can’t afford to replace the item, I do get the warranty. On my car, I brought it in for a full inspection and repair a few weeks before the warranty ran out and made all of that money back. We are slowly building a warranty fund to replace the need for any future extended warranties.

14. Have the awkward conversation. We tried giving gift-giving the axe, but nobody enjoyed that. Now, we cap the gifts at $20 and do a round-robin type of gift. $40 for gifts keeps 10 adults happy.

15. Eat at home. Generally, I can cook almost anything better at home, but I really do enjoy eating out and trying new restaurants. We just keep it from being a regular expense.

16. Balance your checkbook. What a waste of time! With automatic payments and cash for all of the discretionary budget items, I balance the checkbook once a month.

17. Stick with your bank. Either use your own bank’s ATM network, or use a bank that refunds ATM fees. I only take out cash on the first of the month, for the entire month and I do that with a teller, so this is never an issue for us.

18. Use your TV. Cable movie packages instead of a video membership? Really? That’s a horrible idea.

19. Quit those bad habits. I quite smoking, saving $200 a month. I don’t drink much and I’m working on fixing my eating habits. Vices are fun, and this is certainly not a fun way to save money.

20. Forget the pet. There is no way this would fly at my house. we have 5 cats, 2 gerbils, and a dog. Our renter has 2 pythons. We’re a flippin’ zoo and honestly, mess and cost aside, we all like it that way.

How do you stand on these ideas?

Working My Life Away

Finance, Life

Since J. and Crystalare playing, and I don’t have a post scheduled for today, I thought I’d share my work history, too.

There are a couple of interesting things about my work history. Job #1 started when I was 6. Job #9 started when I was 21. I’m 33 now.

Paper route. I delivered the local ad-rag. The route was split with my brothers. When I was 6, my share of the route was just the street we lived on. I think I had 8 papers to deliver. Later, that expanded to almost half of our tiny town.
Odd farm jobs. I spent some time doing whatever needed to be done on a local hobby farm. That means everything from helping shore up a sagging wall in the barn to raking walnuts off of the yard.
Dishwasher at my school. My freshman year, I gave up a study hall to wash dishes and serve lunch. My school was K-12, so I’d eat at the same time as the little kids, then wash their dishes and serve lunch to the rest of the students for $4.25/hour. I kept at it until my senior year, when I decided to relax a bit.
Construction. Working with my Dad, until I fell off a ladder and severed a tendon in my finger when I landed. Easily the most difficult boss I’ve ever had, but it was excellent preparation for every other job I’ve ever had. His philosophy was that if he had to ask for it, I should have already known he needed it. Try carrying that training into another job and see if they complain.
Dishwasher/Cook. I turned 16 and needed a job to afford a car that I needed to get a job. Nasty cycle. It took a couple of weeks of looking. Apparently, if a teenager puts on a nice shirt and shows up to the interview on time, he is way ahead of the curve. It took about 2 months to go from dishwasher to cook, and I kept the job until I was 18. I was working full-time all through high school.
Palletizer. I spent 9 months standing at the end of a conveyor belt, picking up 50 pound bags of food powder mixes, taking 3 steps, and putting them on a pallet. We averaged 1500 bags per night. Fifteen years later, I still can’t comfortably button the cuffs of most shirts. When I flex, my forearms look like I have an unhealty “adult” internet addiction.
Cook. While I was palletizing, I had a second job as a cook at a bar, working for a guy who was trying to avoid turning a profit by drinking his main product. This was 5 miles from the other job, and my car died right after I started, so I biked from job to job. In Minnesota. In the winter. I was a lean, mean popsicle.
Machine Operator. I moved from the sticks to the Minneapolis area and was immediately hired to be run a CNC machine based on a friend’s recommendation to his boss. The pay was great for an 18 year old with no skills. I worked 5 twelve-hour graveyard shifts. The job mostly consisted of putting a little chunk of metal into a machine, closing the door, pushing a button, and sitting down for 15 minutes. This is the period of my life that trained me to shop for books based primarily on thickness.
Bill Collector/System Administrator. After Brat #1 was born, 12 hour graves got to be a big pain. I’d work from 5 to 5, come home and make sure my wife got at least 4 hours of sleep, then I’d sleep for 4-5 hours and go back to work. Brat #1(who is now 13 and about 6 feet tall) needed to be fed every hour, so solid sleep didn’t happen for months. I took a pay cut to work normal, day-shift hours. I ended up working my way through college by collecting on defaulted student loans. Shortly after I graduated, I got promoted to be the system administrator of the collection system, responsible for hundreds of millions of dollars of debts flowing into and through our system correctly. I had a security clearance allowing me access to the Department of Treasury’s computer system. After a few years of this, the company decided that there were too many people with the same job description, so 5 overworked admins got laid off while the 6th got screwed with far too much work.
Software Engineer. This is now. I write cataloging and ecommerce software, while managing a small team of programmers. I spend half of my day working on customer software estimates, training, and assisting on sales demos and half of my day writing code. I’m kind of a big deal.

That’s it, if I don’t count my side hustles. I’ve been earning a paycheck for 27 years, and have only had 10 jobs.

When did you start working? How many jobs have you had?

Things You Should Buy Online to Save Money

Finance

Article written by money supermarket.

Sometimes the price you pay in-store for a product or service can change dramatically if you find the same product online, and in most cases the price in-store can be considerably higher. There’s nothing worse than getting home from a shopping trip thinking you have a bargain, until you realise that you could have saved a lot more had you have waited until you got home. Here are a few examples of things you should buy online to save money:

DVD’s and Blu Rays

All movies, whether on DVD or Blu Ray format, are generally cheaper if bought online, it’s a fact that I have learned over the years. I’ve always found that searching the sites of film selling giants Amazon and Play, I can always find a movie that little bit cheaper and some considerably so. There are also some websites such as dvdpricesearch that compare prices of all of the big merchants for you; it’s a great way to save time and money.

Flights and Holidays

In my opinion, the day of buying flights face to face is slowly on the decline, I seem to find considerably cheaper prices by searching online at home. I think the main reason for this is that, travel or holiday agents just do what we do, they search online for the best prices, and unless they have any exclusive deals then they will just be getting the same prices as us. I tend to use some online travel comparison websites that again do the searching for you; however, some work better than others so make sure you do your research.

Books

I always purchase books online, whether in the standard physical format or in the form of an e-book. Books are just one of those things that always seem to be cheaper, with the likes of Amazon and Borders available online and offering fantastic discounts. There are also many websites that sell niche or rare books online that can be considerably cheaper than going direct to a book seller.

Auto Insurance

Auto insurance is one of those things that we all hate purchasing, but if you want to drive your vehicle on the road, then by law we have to spend our hard earned cash on it. Getting your auto insurance online can save you a lot of money. Using price comparison sites, you only have to fill in one form as if you’re applying for one quote, you will then be provided with a list of pricing options available to you.

Cell Phones

Whether you are just buying a handset or if you’re looking for a monthly cell phone price plan, I always seem to find better deals online than I can in-store. Of course in-store you have the ability to try and haggle but I’ve found that the deals I get offered are never as good as those that I can find online. Online you can also search by provider website which is another great way to save money, and it would take you a lot of time to visit each store!

Jason’s note: I shop online a lot. I buy things that most people don’t realize are available online. An interesting counterpoint question: What should you buy in-person to save money?

Priorities

Business

I once saw a sign on the wall in a junkyard that said, “Failure to plan on your part does not constitute an emergency on my part.”

Another good one: “If everything is top priority, nothing is top priority.”

Once a week, I meet with my boss to discuss my progress for the previous week and my priorities for the coming week. This is supposed to make sure that my productivity stays in line with the company’s goals.

Great.

Once a day, my boss comes into my office to change my top priority based on whichever account manager has most recently asked for a status update for their customer.

Not so great.

At least twice a week, he asks for a status update on my highest priority items. Each time, he could mean the items we prioritized in the weekly meeting, or the items he chose to escalate later. Somehow, getting a new task escalated doesn’t deescalate an existing task.

Everything is a top priority.

To compensate, I’ve been working a few 12 hour days each week, and occasionally coming in on the weekends.

I’m dedicated and still behind.

Prioritizing is treated as an art, or in the case I just mentioned, a juggling act. It should be considered a science. It’s usually pretty simple.

Is the problem costing you money? +1
Is the problem costing your customer money? +2
Is the problem going to hurt your reputation? +1
Is there a deadline? +1
Is it soon? +2
Is it urgent? +1
Is it important? +2
Are there absolutely no real consequences for anyone if it doesn’t get completed? -500

That’s it. Too many times, we get hung up on urgent-but-not-important items and neglect the important things.

The hard part comes when it’s someone else setting your priorities, particularly when that person doesn’t rate things on urgency, importance, and cost but rather “Who has bitched the loudest recently?”

Can I tell my boss that I’m not going to do things the way he told me too? No. A former coworker very recently found out what happens when you do this.

Can I remind him that I’m busting my butt as hard as I can? Yes, but it will just earn me a request to come in on the weekend, too.

Can I ignore the official priorities part of the time, and work on what I feel is most important to keeping our customers happy? Yes, but it’s easy to go too far. “Boss, I ignored what you said, but this customer is happy, now!” won’t score me any points if it happens every week.

Priorities are simple, but not always easy. How do you balance your priorities?

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