Live Real, Now

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

Search Results for: slow-carb-diet-how-to-avoid-going-bat-crazy/INGDirect/what-happens-when-you-save/money-problems-day-3-whats-coming-in/contact-me/5-life-altering-lessons-i-learned-from-my-debt/debt-burnout/first-3-things-to-do-in-the-new-year/three-alternatives-to-a-budget/ignore-your-budget

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?

 

My Financial Plan – How I Improve on Ramsey

Finance

In April, my wife and I decided that debt was done. We have hopefully closed that chapter in our lives. I borrowed, then purchased, The Total Money Makeover by Dave Ramsey. <a href=budget” width=”300″ height=”213″ />We are almost following his baby steps. Our credit has always been spectacular, but we used it a lot. Our financial plan is Dave Ramsey’s The Total Money Makeover, with some adjustments.

Step 1. Budget:

The budget was painful, and for the first couple of months, impossible.  We had no idea what bills were coming due. There were quarterly payments for the garbage bill and annual payments for the auto club.  It was all a surprise.  Surprises are setbacks in a budget.

When something came up, we’d start budgeting for it, but stuff kept coming up. We’re not on top of all of it, yet, but we are so much closer. We’ve got a virtual envelope system for groceries, auto maintenance, baby needs(we have two in diapers) and some discretionary money. We set aside money for everything that isn’t a monthly expense, and have a line item for everything that is. My wife is eligible for overtime and monthly bonuses. That money does not get budgeted. It’s all extra and goes straight on to debt, or to play catch-up with the bills we had previously missed.  I figure it will take a full year to get all of the non-monthly expenses in the budget and caught up.

Step 2. The initial emergency fund:

Ramsey recommends $1000, adjusted for your situation. I decided $1000 wasn’t enough. That isn’t even a month’s worth of expenses. We settled on $1800, plus $25/month. It’s still not enough, but it’s better. Hopefully, we’ll be able to ignore it long enough that the $25/month accrues to something worthwhile.

Step 3. The Debt Snowball:

This is the controversial bad math. Pay off the lowest balance accounts first, then take those payments and apply them to the higher balance accounts. Emotionally, it’s been wonderful. We paid off the first credit card in a couple of weeks, followed 6 weeks later by my student loan. Since April, we’ve dropped nearly $10,000 and we haven’t made huge cuts to our standard of living.    At least monthly, we re-examine our expenses to see what else can be cut.

Step 4. Three to six months of expenses in savings:

We aren’t on this step yet. In step 2, we are consistently depositing more, making us more secure every month.

Step 5. Invest 15% of household income into Roth IRAs and pre-tax retirement:

I have not stopped my auto-deposited contribution. It’s stupid to pass up an employer match. My wife’s company does not match, so she is currently not contributing.

Step 6. College funding for children:

We have started a $10 College fund.

Step 7. Pay off home early:

I don’t see the point in handling this one separately. Our mortgage is  debt, and when the other debts are paid, we will be less than a year from owning our house, free and clear. This is rolled in with step three. All debt is going away, immediately.

Step 8. Build wealth and give!

We have cut off most of our charitable giving. Every other year, it has been a significant percent of our income, and in a few more years, will be so again. The only exception to this is children knocking on the door for fundraisers. I have no problems with saying no to a parent fundraising for their kid, but when the kids is doing the work, door-to-door, especially in the winter, I buy something. My son’s school, on the other hand, gets fundraisers ignored. When they come home, I send a check to the school, ignoring the program. I bypass the overhead and make a direct donation.

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.

Enhanced by Zemanta

Keep Your Friends Out of Debt

Finance

Local Brick
Image via Wikipedia

If you’re like me, you get a bit evangelical about getting out of debt.  I try to convert spendthrifts and irritate my fellow debtors.   I’m probably pretty annoying at times.   What I’ve learned–or at least pretend to have learned–is the direct approach rarely works.   Hitting someone over the head with a brick won’t convince them of anything, even if it’s a very frugal brick.  Try it sometime.  You may convince them to buy a bigger brick to return the favor, but you won’t convince them to save money.

What can you do?  Your friends want to spend money they don’t have and worse, they want you to come with to spend money you either don’t have or don’t want to spend on bad music and overpriced beer.  Suggest less expensive activities.

If your friends want to catch a movie, suggest a matinee or hitting redbox for a night in.   It may even be worth investing in a projector and screen if movie night becomes a habit.   My couch is certainly more comfortable than the theater seats and my soda is cheaper.

When you are invited to dinner, suggest a potluck or have a barbecue. It’s almost always cheaper to eat in, and cooking together can be a wonderful social activity.   If that’s not practical, use coupons.  Restaurant.com has some amazing deals, but don’t use them without an coupon.  Their default price is a $25 gift certificate for $10.  With a coupon (currently DAD), you can get that same certificate for $3.   That usually means a minimum tab of $35 and mandatory tip of 18%, but it’s still a good savings.  Your $35 meal will cost $19.30 when all is said and done.

[ad name=”inlineleft”]Don’t compete for the coolest gadgets. “I just got an iPod for $300″ should be countered with a receipt for a $20 mp3 player, not an ad for an iPad.   Race to zero, not zeros.

Don’t be ashamed of your frugality.   “I they are laughing you don’t need ’em, cuz they’re not good friends.”   My habits aren’t secret. If I say something isn’t in the budget, my friends know I won’t be doing it.  It’s not up for debate.

Above all, I try to be proactive. I try to suggest cheaper alternatives before the expensive options are on the table.   Having a beer on my deck and watching a movie in my living room is so much cheaper than drinks at a club before a concert.

Update:  This post has been included in the Carnival of Personal Finance.

Save Your Family

Finance, Life, Parenting

I don’t attach much importance to dreams.  They are just there to make sleepy-time less boring. Last night, I had a dream where I spent most of my time trying to prepare my wife to run our finances before telling my son that I wouldn’t be around to watch him grow up.    That’s an unpleasant thought to wake up with.  Lying there, trying to digest this dream, I started thinking about the transition from “I deal with the bills” to “I’m not there to deal with it”.   We aren’t prepared for that transition.   Last year, we started putting together our “In case of death” file, but that project fell short.    The highest priorities are done.   We have wills and health directives, but how would my wife pay the bills?  Everything is electronic.  Does she know how to log in to the bank’s billpay system?    Which bills are only in my name, and will go away if I die?   Is there a list of our life insurance policies?

I checked the incomplete file that contains this information.   It hasn’t been updated since September.  It’s time to get that finished.  Procrastinating is inappropriate and denial is futile.   Here’s a news flash: You are going to die. Hopefully, it won’t happen soon, but it will happen.  Is your family prepared for that?

The questions are  “What do I need?” and “What do I have?”

First and foremost, you need a will.  If you have children and do not have a will, take a moment–right now– to slap yourself.   A judge is not the best person to determine where your children should go if you die. The rest of it is minor, if you’re married.   Let your next-of-kin, your spouse keep it.  I don’t care.   Just take care of your kids! Set up a trust to pay for the care of your children.   Their new guardians will appreciate it.  How hard is it to set up?   I use Quicken Willmaker and have been very pleased.  Of course, the true test is in probate court, and I won’t be there for it.   If you are more comfortable getting an attorney, then do so. I’ve done it each way.    You can cut some costs by using Willmaker, then taking it to an attorney for review.

It’s a sad fact that often, before you die, you spend some time dying.  Do you have a health care directive?   Does your family know, in writing, if and when you want the plug pulled? Who gets to make that decision?   Have you set up a medical power of attorney, so someone can make medical decisions on your behalf if you aren’t able?  Do you want, and if so, do you have a Do-Not-Resuscitate order?  Willmaker will handle all of this, too.

What’s going to happen to your bank accounts?  I’m personally a fan of keeping both of our names on all of our accounts.   I share my life and my heart, I’d better be able to trust her with our money. If that’s not an option, for whatever reason, fill out the “Payable on Death” information for your accounts, establishing a beneficiary who can get access to your money if you die.   Do you want your spouse to lose the house or the car if you die? Should your kids have to miss meals?  Make sure necessary access to your money exists.

Does anybody know what you have for life insurance? Get a copy of the policy and make sure your spouse and someone else knows what company holds it and how much it is worth.

Now, it’s time to make some lists.   You need to gather account numbers and contact information for everything.

  • Bank accounts. List every bank and account you own.  Checking, savings, CDs.
  • Investment accounts. Again, every company, every account.
  • Mortgage and car payment information.
  • Life insurance. Get your policy numbers, contact information, beneficiaries, and amount of coverage all in one place.
  • Credit card accounts. Every card, every company.    If it’s just your name on the account, your spouse will need to send certified death certificates to stop collections.  Otherwise, she’ll need to pay the bills.
  • Utilities.  Get the account number for the electric bill, the gas bill, water/sewer/garbage, cable and phones.
  • Other bills. These include car/home insurance, Netflix, memberships and anything else you pay.
  • I’ve included the account information for my web host, registrars and websites. Some of it is salable, some of it is income-generating.
  • Car titles. Put the actual titles in the pile of lists.
  • Property deeds. Keep these here, too.

Non-financial information to list:

  • Online accounts. Any financial sites that would be useful, or any community sites you would like to have informed about your death.  Your online presence is a part of who you are.
  • Email accounts. Will your survivors need to interact with anybody potentially contacting you?   They will need your username and password, or most big providers won’t let them in.
  • Social media. How many networks do you participate in?  Do you want to disappear, or should all of your Facebook friends know your dead?
  • Blogs. Do you have a blog that needs an announcement?   Does it generate income?  Could it be sold?
  • Contact list. Who else needs to be informed of your demise?  Don’t make your loved ones hunt for the information.

Now, take all of this information and put it in a nice, fat envelope and lock it in the fireproof safe you have bolted to the floor.  Make a copy and give it to someone you trust absolutely.   Make sure someone knows the combination to the safe or where to find the key.

Your loved ones will appreciate it.

Failure! 30 Day Project Summary – March

Life

My 30 Day Project for the month of March has been to do 100 sit-ups in a single set.   Based on February’s results, I had a plan.

I will be doing 5 sets, morning and night, as follows:

Set 1:  Half of my maximum amount.

Sets 2-4: 3/4 of my max.

Set 5: Do sit-ups until my abs start to cramp, thus setting my max for the next session.

I failed miserably.

It started off perfectly.   My base amount was 20 sit-ups.   I had a plan.  I’d proven, at least to myself, that I was able to follow an intense workout plan, even through pain.    I was encouraged by February’s results, so I dove in.

The first 3 or 4 days went well.   I had some muscle strain, but that was expected.   I hadn’t done sit-ups for years.   I discovered muscles I actually hadn’t known existed, just from how they hurt.   This was the good pain, the pain that shows progress.  After doing the push-ups in February, this pain wasn’t as bad as I had expected.   Push-ups are an excellent ab workout.

Maybe I became complacent.  Either my form slipped, or I was going too fast and “bounced” through the sit-ups, but I pulled a muscle in my back.   This was the bad pain, the pain that warns of fundamental problems.   My form, my size, my history of back problems, who knows?   One or more of those possible problems reared up to turn an excellent idea into a disaster.   March’s plan got sidelined for a few days.

When my back was better, I started again.   Again, everything was fine for 3 or 4 days.  Then my back betrayed me, again.   Another break, another try, another strain and I gave up.    I made it to 50, then just stopped.   Too much more, and I wouldn’t be able to tolerate sitting at my desk.   Or maybe I just wimped out, afraid to hurt my back again.

I’m disappointed.   I haven’t done a single sit-up in the last week.

To make matters worse, without the sit-ups to do in the morning, I’ve been letting myself snooze my alarm clock instead of getting up at 5.   March has been such a slacker month.

Lesson learned:  Always listen to your body.   Don’t get tied into a specific routine–even one you created for yourself–if your body is demanding to stop.   Watch your form and make sure you aren’t putting undue strain on anything that can cause long-term damage.

Lesson learned, part II:  Push-ups are more fun and less painful than sit-ups.   They will be getting incorporated into my ongoing routine.

Ending the sit-ups did leave me enough energy to get an early start on April’s 30 Day Project.   The goal for next month is to declutter every room in the house:   Every closet, every dresser, every drawer.

Loft Bed

To start, we replaced our son’s dresser, bed, and desk with a loft-bed that combines the three.   While transferring items from the desk and dresser to the new bed, everything was sorted to make sure it still fit and was used and useful.  If it didn’t meet those criteria, it was either tossed or priced and boxed for a garage sale.

In the girls’ room, we removed a dresser, the changing table, a toddler bed, a convertible crib/toddler bed.  It all got replaced with a set of bunk beds and the dresser we took from our son.   Everything got the same garage-sale check before it was put away.

Both of these changes easily tripled the usable floor space in each room and all of the kids love their new beds.   Using the magic of Craigslist, I think we got the new furniture for 10-15% of retail, and have old furniture to add to our sale, which will further defray the cost.

This leaves the master bedroom, the bathroom, the front closet, the kitchen and our entire basement to go.   Shoes and jackets that have never been worn.   Books that will never be reread.  Bye-bye.   Some of it will be painful, but we all realize it’s necessary.  We’ve already filled more than 2 dozen boxes of stuff to sell.   None of it is coming back in the house.  If it doesn’t sell, we’re donating it.

More to come as we progress through the mountains of crap.