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/ignore-your-budget/quit-smoking-my-first-frugal-move-ever/INGDirect/first-3-things-to-do-in-the-new-year

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?

 

Over-scheduled

Life

Busy Icon
Image via Wikipedia

Wow. I’m having a hard time believing it’s August already.  Every year seems to slip by a little faster, but this summer has truly flown by, somehow without anything to show for it.   I haven’t gotten any of the yard work or household projects finished.   I’ve taken on so much that I can’t do anything but the side hustles.

This summer, I’ve been busy.  I teach classes one Saturday each month, I’ve picked up a couple of web design jobs,  I’m the webmaster for a nonprofit, and I’ve taken on an affiliate marketing project.    Oh, and I can’t forget my 50-hour-per-week day job or the ebook I’ve promised to help prep and launch.  With all of these projects, my cash flow situation is better than its been in a while, but my time is seriously crunched.

That’s not even counting the family activities.  We’ve had swimming lessons, birthday parties and family reunions…all in the last month.

Our family is seriously over-scheduled.  It seems like there is no downtime, which is a situation I’ve always tried to avoid in the past.   Somehow, I’ve lost the ability to say “no”.   Because of that, I’m now left with the impossible task of trying to scale back.  While I can’t abandon my commitments, I need to work towards resolving them all and not taking on more.

[ad name=”inlineleft”]It’s time to scale back through attrition.   In a month or two, I should be down to a sane schedule again, and able to tackle the things I really want to do that have been indefinitely delayed.

Everybody takes on too much at times.  How do you avoid over-committing?

  • Learn to say no. It is okay to refuse to take on more projects.   You probably aren’t the first person to turn down the project and you probably won’t be the last.  Don’t assume its your responsibility.  It is fine to leave it for someone else.
  • Prioritize. Don’t prioritize your projects, prioritize yourself.  Know what you need to accomplish.  Know what you want to accomplish.  Deny the things that other people want you to accomplish if the new tasks don’t fall into the first two categories.   You need to feed your family.  You need to pay your bills.  You don’t need to take on the soccer team’s newsletter or volunteer to make 1000 cupcakes for some fundraiser.
  • Know your commitments. Most people overestimate how much available time they have while underestimating how long a new project will take.  This leaves them double-booked.  Take a realistic look at what you are currently doing, even if it means keeping a log of your day for a few weeks.  You’ll probably be surprised by what you are already doing.
  • Stay organized. If you aren’t keeping track of what you need to do, you’ll end up running around crazy trying to get it all done.  Keep a calendar and leave yourself notes.    I get daily reminders of what is on my Google calendar each morning.
  • Know your limitations. If you aren’t technical, don’t volunteer to build a website.  Do your strengths, let someone else deal with the things that are your weaknesses.

It’s entirely too easy to do too much.  When every moment of your day has two of more things that need to be done, you’ll do them all poorly.  How do you avoid taking on too much?

Budget Lesson, Part 1

Finance

Sample <a href=budget” width=”300″ height=”185″ />
Image via Wikipedia

Over the next few weeks, I will be going over my budget in detail.

The first section is income, but that’s straightforward.  A line for each income source, bi-weekly, monthly and annual totals.  Simple.

Before we start, a word on the organization.  There are five columns:

  • Category – This is the description of the line item.
  • Cost – How much do you pay for this item?
  • Time – What is the frequency of the payment?  Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
  • Monthly – Cost and Time are combined to calculate the monthly expense, to make it possibly to budget.  If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
  • Yearly – This column is mostly informative.  It’s helpful to see this in comparison to my annual pay.

The first section I am actually going to address is discretionary spending.

  • Groceries/Dining    $475.00 – We don’t budget heavily for groceries, which would be a surprise if you saw me.  At the smallest I have ever been, fit, I was never small.  We shop smart, buy in bulk when it makes sense, and rarely eat out.  We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
  • Discretionary    $250.00 – This gets used for household items, like toilet paper and soap.  It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
  • Baby stuff    $60.00 – We have two children in diapers.  ‘Nuff said.  This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
  • Gas/oil    $200.00 – Gas and auto-maintenance.  This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
  • Clothes    $15.00 – All of our dressers are overflowing, so this is strictly replacement cost for the time being.  Our kids wear a lot of hand-me-downs.
  • Blow Money    $50.00 – Occasionally, habitual shoppers need to shop.  If they don’t do it on-budget, they will do it off-budget and kill the whole idea.

Initially, we used a “virtual envelope” system.  We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent.   Didn’t work.  We are going on a pure, cash-only system as of the first of the year.  No money, no spendy.

Budgeting Bulimia

Finance

As the President is so quick to point out, ten years ago, there was a large budget surplus.  Naturally, the government went into a massive cycle of lifestyle expansion.   That expansion, combined with lower tax revenue and a recession has brought us from a $230 billion surplus to a $1.4 trillion deficit.  That’s a bit above the trivial level.  A definite binge.

In Minnesota, there was a $2 billion surplus just a few years ago, which was obliterated by, once again, government expansion and a recession.   During the boom years, government programs were enacted with no thought to sustainability.   Nobody thought about the fact that a surplus isn’t a balanced budget, either.   We just kept adding to the budget, thinking the good times would last forever.  Another binge.

Last year, the governor of Minnesota had to “unallot” money from the budget.  He went through the budget with a red pen and struck line items until the budget was balanced, a requirement in this state.  This infuriated his political opposition.  They were not prepared for the purge.

Federally, the purge hasn’t happened, yet.  Give it time.  Excessive spending using imaginary money can only last so long.  It will stop.  The longer the binge, the harder the purge.

Families are doing the same thing. Four years ago, I got a raise and immediately bought a new car.  Binge.  Two months later, I was laid off and had to cut everything possible to make ends meet.  Purge.   Tax refunds, inheritances, drawings.  So many of these things give us an excuse to commit to long-term expenses without planning for long term sustainability.  If I inherit $5000, is that a good time to add $500 to my monthly bills?  No!  That’s an unhealthy binge.   In ten months, if the money lasts even that long, I will be forced to purge something to keep afloat.

The responsible, healthy way is the same as healthy, responsible eating.   Diet and exercise.  Spend less, save and earn more. That’s the strategy that will let you level out life’s valleys, instead of puking all over the floor.  Don’t spend every cent you see, just because it is there.  Set some aside for a rainy day.

Leave the binge-and-purge financing to the politicians.

Update:  This post has been included in the Festival of Frugality.

Five Signs You Don’t Need That

Finance

Everybody occasionally buys things they don’t need, from DVDs to luxury cars.   There are signs that what you’re buy may not be an actual necessity.

Here are five signs you should put that back:

  1. You’re buying that sweater or video game for the endorphin hit, you’re shopping for the addictive high not to fill an actual need.  It’s a habit that’s as hard to break as smoking, if not harder.  You can’t, after all, stop shopping altogether.
  2. You already have one.  Or 10.   A relative can’t turn down a sale and she buys for life.   She regularly buys 3 of whatever useful gadget is available on the shopping channel.    Her house has turned into a sad story of compulsive hoarding.
  3. The rationalizations for your purchase include “It’s cool”  or “My friends all have one.”  If you are buying something just for the bragging rights, it has become an ego purchase, which is something to avoid.   The insidious part of an ego purchase is that you have to keep topping your last purchase and the last purchase of your social circle, or the purchases lose value.  It’s a vicious circle.
  4. It doesn’t have a “place”.  Where are you going to put it?  Is it going to go in the corner, or is there a drawer or shelf it can live on.  If there’s no play to consider “away”, you’re just buying clutter.  If you must have it, go home and toss, sell, or donate 2 things to make room. If possible, do that before you actually by the new toy.   If it’s important, you’ll come back for it.
  5. You didn’t know you needed it 10 minutes ago.  If you actually need it, it’s on your list, right?  Impulse purchases have been the biggest budget-killer in my house.  That’s why we use Alice for the household goods.  If we don’t see the it, we can’t throw it in the cart at the last minute.    We no longer shop with the debit card, so we have to watch what we buy.  It’s embarrassing to have to undo a purchase at the checkout because I didn’t bring enough cash.

What did I miss?