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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?

Budgeting Sucks

Finance

Budgeting kind of sucks.

Filling out a budgeting spreadsheet, putting in all of your expenses, listing all of your income, tracking all of your spending. Yuck.

Balancing the fact that you may have $200 to spare, but if your gas bill is a bit lower one month then you have a some more money, but if your electric bill’s a little bit high, then you have a little bit less. It’s too much work.

Here’s the new plan:

I just opened up a new credit card. This credit card’s got a fairly high limit, not that I care since I’m never going to come close to the limit. It’s got an okay interest rate, not that I care–it’s going to be paid off every month. It also has a good travel rewards plan, so our family vacations can, to a large extent, be paid for.

Now, with this card, I’m taking all of my regular bills, and setting them up to be automatically paid by the credit card. It’ll get automatically charged every month. I won’t have to think about it. Once a month, I’ll just log on and pay off the card. All I have to do is make sure the balance stays under my monthly budgeted amount. I already know what I have to be paying each month, so, no problem.

This will make it easier to budget and track my actual spending. It’ll even make it easier to balance my checkbook, since right now, I’m logging into my bank account a couple of times a month to compare it to Quicken. Any budget helper is nice.

After this plan takes effect, my bank account will only have any ATM withdrawals that I need to make–which shouldn’t happen more than once or twice a month–and my checks to day care. There should be just six manual transactions every month plus all of my miscellaneous transfers to and from INGDirect, which should also be minimal– there should only be two of those each month.

This will simplify everything while at the same time giving me the maximum amount of travel rewards I’ve been able to find. Hopefully, it will work as well as I think it will.

How to Save Money On Anything

Finance

Haggling (Photo credit: pritzkerphoto.com)

There is a little-known secret to saving money on almost anything. If you want to know what it is, please send a case of beer and a self-addressed, stamped envelope to my house.

No takers?

In that case, I will share the secret that has been passed down from father to son since the Mesopotamians landed the Santa Maria at Plymouth Rock.

Ready?

The secret is to…ask.

That’s right, just suck it up and say “Pretty Please”.

How does it work?

In the easiest version, you call up one of the companies you pay regularly and you say “How can I save some money?”

Allow me to give you some examples.

How to save money on insurance

Call up your insurance company and ask, “How can I save some money with you?” You may be offered a multi-line discount if you let them insure your home and your car or you might be told to raise your deductible. If you have a $1000 emergency fund, you can afford a $500 deductible. They may recommend that you drop some coverages that you don’t need or they may ask you some questions that will allow them to lower your rate. For many years, I lived 2 miles from work and got a discount for the low mileage.

How to save money on utilities

When you call your electric company to ask the magic question, they may offer to conduct a home energy audit to determine where you home is leaking energy. If they try to charge you for the audit, remind them how long you’ve been a customer in good standing.

Another option they may offer is to install a remotely-triggered switch on your air-conditioner. Around here, that switch is good for a 15% discount off of my bill in the summer.

How to save money on your cell phone

If you are out of a contract or near the end of your contract you have leverage. Look up the best comparable deal from another company. Then, call your cell phone provider, ask to be transferred to the retention department, then ask them to convince you to stay. They will.

If you aren’t near the end of your contract, you can still call and ask. If that doesn’t work, watch the mail and any emails from the company. If they change the terms of your contract, you can get out of it without paying a penalty. If you get that opportunity, call and ask for the retention department.

How to save money on credit cards

I am assuming you have a credit card with a balance that gets carried from month to month.

Credit card companies are competitive. Find a competing deal and call your company. Ask them to beat the deal. If the competitor is offering 9%, ask for 8%. If they refuse, call up the competitor. Tell them you will transfer your balance over if they will waive the transfer fee. A surprising number of companies will be happy to do so.

Most bills can be reduced in some way. All you have to do is ask.

Have you had any luck pointing the shrink ray at your bills?

Ten Easy Ways to Cut Spending at Home

Finance

With the sorry state of the economy over recent years, most home-owners are looking at ways to cut down on monthly spends without being frugal. These are ten simple steps to save your household £100s without missing out on home comforts;

Invest in ISAs. Taxes are becoming a bigger pain than ever before, the only way to avoid the sting in the governments tail is to invest in ISAs. Although there are standard cash ISAs, Stocks and Shares ISAs offer the opportunity to invest for less. This can be risky so only invest what you could afford to lose in the worst case scenario, however if you invest wisely you could potentially bring in a handy amount of cash at the end of your ISA investment term. [Ed. For my American readers, ISAs are tax-sheltered savings or investment accounts.]
Do the weekly shop online. A site like mysupermarket.co.uk offers up all your regular shopping goods but compares the price from all major supermarkets (Tesco, Asda, Ocado and Sainsburys) to make sure you pay the best price for your weekly shop. It saves you the time and effort of battling through supermarket crowds and paying over the odds for your weekly shop. Sites such as Topcashback offer money back on your total bill (up for 10%), giving you something for nothing, which these days can’t be ignored!
Homemade not Homepride! It might be the easy option, but ready meals come with a large mark up. By ditching the meals in favour of freshly prepared food you can save yourself a packet and learn a new skill to capitalise on in the future perhaps. Visit local markets for your produce at a far lower price than the local supermarket. So overall, you’re saving money and benefiting from the best, freshest local produce.
Satellite vs. Freeview. When it comes to your TV package you must choose wisely. Packages range from around £50 a month for those who demand all the sports and movie channels, to £13 one off cost for Freeview, dependant on what box you chose. Weigh up if you really need most, hundreds of channels you never watch or an extra £50 a month. [Ed. My basic currency conversion is £1 = $2. It’s not perfect, but it is close enough.]
Household insurance shouldn’t cost the earth. Although this is a safety net, not a legal necessity, most households prefer the security of knowing that if disaster strikes, it won’t strike your bank balance. With sites like moneysupermarket.com it is simple to find the cheapest policy for you, only taking a few minutes but potentially saving hundreds.
Ditch the DIY bodging. With the majority of households carrying out regular DIY, hardware stores are raking in the profits when it all goes wrong. We can’t all be natural born handymen and women but with the help of local courses you can be trained in the art of household maintenance for around £100, a bargain when you compare the costs of getting in the professionals to fix DIY disasters. [Ed. Youtube is also a great resource to learn DIY repairs.]
Auction your clutter. If we’re being honest, we all have that cupboard at home filled with things we really don’t need and will never use! It’s time to be cutthroat and unemotional, get the laptop out and auction everything that hasn’t been used for a year. Don’t use the excuse of ‘it might come back into fashion’ or ‘that’ll come in handy one day’, it won’t and by getting rid you benefit from extra cash and extra space – win/win.
Swap top brands for own brand. I’m not saying settle for foods you dislike, but often you can benefit from supermarket own brands without your taste buds suffering. Items like tinned fruit and veg, bread and butter all taste extremely similar, weather you penny pinch or splash the cash. So trade in your £1.25 loaf of bread in favour for one costing 20p and see if you notice the difference.
Stick to a shopping list. By shopping for a list and sticking to it, it cuts out impulse buys that are responsible for the shock you receive when you get to the tills. Plan your weekly meals and simply buy what you need, cutting waste and potentially cutting your waistline! Also try to avoid 3 for the price of 2 deals on products with a shelf life, as often this results in a bin full of gone off food!
Invest in Skype. To cut down on costly phone bills, use Skype where necessary. An internet let service, it allows you to call and video call people with Skype for free, or phone normal phone lines for a fraction of the cost of using your usual phone line. With free to download software, you would be silly to throw away money on costly phone bills.

Article written by Moneysupermarket.com.

Extra Money? What Do I Do With Extra Money?

Finance

A couple of months ago, I started a new job. The new job has bonus potential every month, and

getting that bonus is largely under my control. Effectively, if I’m not a total slacker, I’ll get
about $500 every month, but it’s not guaranteed.

We’re also getting a small 4 figure tax refund this year. I wasn’t expecting that at the beginning
of last year, but one of my side hustles has taken a turn down a path I didn’t plan for, which
lowered my tax liability considerably.

Both of these things are money that we can’t plan for, so it’s not in the budget. It is extra
money.

What the heck do you do(responsibly) with extra money? It’s easy to take the money and run to the
spend it someplace fun.

Easy.

And tempting.

Very tempting.

But that wouldn’t be responsible at all.

The Dave Ramsey plan says we should put it on our debt, but our debt is down to just a mortgage,
and that’s down to $9000.

Retirement?

I actually over-contributed to my retirement last year, and had to file a form to get the
overpayment back instead of paying a penalty on that money. My wife’s account isn’t getting maxed,
yet, but she’s also way ahead of me in retirement savings.

So what to do with it?

I added a calculator that let’s me punch in a number and it breaks it out by our optional goals.

It has 6 categories:

Extra mortgage payment: 25%. My goal is to pay off the mortgage completely this year.
Retirement contribution: 25%. I do want to max Linda’s retirement contributions this year.
Emergency fund: 15%. We have an emergency fund, but I want to grow it to 6 months of our expenses.
Family: 15%. This if for whatever family thing we’re planning to do. It could be pushed into a down payment for another rental property, or a vacation, or a camper. We’ll decide this each time we get the extra money.
Jason’s Fun Money: 10%. This is for me to blow on something fun, like a 3D printer.
Linda’s Fun Money: 10%. This if for my wife to blow on something fun, like a present for me.

So, if we get $2500 randomly dropped in our mailbox, we’ll put $625 on the mortgage and a
retirement fund, $375 to the emergency fund and the family fund, and $250 to Linda and I for fun
stuff.

That lets us see progress on a few of our goals, while still rewarding how hard we’ve worked and
how much we’ve done without while becoming financially stable. 65% of it is pure grown-up &
responsible spending. 35% is generally fun, but can be repurposed if necessary.

What do you do with surprise money? Do you blow it or do something responsible with it?

Saturday Roundup – Holiday Edition

Misc

Merry Christmas.

Or, Happy Saturday, as the case may be.

T0day, we are herding all of my nieces, nephews, brothers, sisters-in-law, and parents into my house for a second Christmas dinner and gift exchange. It’s the first holiday we’ve hosted. It should be interesting.

On a side note, we’ve gotten so much snow, I’ve almost lost my grill, sitting on my deck. Another 2-3 inches, and my patio table will be just a white mound of cold.

Best Posts

Here is a great story about waking up the Christmas spirit. That’s spirit, not spirits. We’re not discussing booze.

Think you can retire on a million bucks? Think you can get to a million bucks?

I’ve recently realized that I’ve spent more time on the hiring side of the interview table than the out-of-work side. I’m nowhere close to 500 hires, though.

Oooh! Shopping for money! That’s something I’m going to look into. Nothing like turning habits into cash.

This is some serious travel hacking. 15 flight, 16 cities, 9 countries, 35000 miles for $400.

LRN Timewarp

This is where I review the posts I wrote one year ago.

The secret to fearless change? Just get started. Everything else will follow.

I also wrote a post about one of my core values. Without integrity, what can you really have?

Finally, a post on how distractions will kill your productivity.

Carnivals I’ve Rocked

How Much Should You Tip? was an Editor’s Pick in the Festival of Frugality. Thanks!

Shaving for Real was included in the Carnival of Money Stories.

Anchor Price Your Salary was included in the Carnival of Personal Finance.

Thank you! If I missed anyone, please let me know.

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That’s all for today. Have a great weekend!