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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?

 

Money Problems – Day 3: What’s Coming In?

Finance

Husquarna automower, taken by me 2007-06-02
Image via Wikipedia

Today, I continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

This is day 3 and today, you are going to take a look at your income.

We are only interested your take-home pay, because that is what you have to base a budget on.  If you base your budget on your gross pay, you’re going to be in trouble when you try to spend the roughly 35% of your check that gets taken for taxes and benefits.

Income is a pretty straight-forward topic.  It is—simply—how much money you make in a month.  If you are like most people, the easiest way to tell how much money you make is to look at your last paycheck.  Then, multiply it by the number of pay periods in a year and divide the total by 12.

Here’s the formula:  Cash x Yearly Pay Periods / 12.  Yay, math!

If you get paid every 2 weeks, multiply your take-home pay by 26, then divide by 12 to figure your monthly pay.   For example, if you make $1000 every two weeks, your annual take-home pay is $26,000.  Divide that by 12 to get your monthly pay of $2166.66.  If you get paid semi-monthly, you’ll take that same $1000 x 24 / 12, for a total of $2000 per month.

Now you know how much you make each month.  Woo!

Is it enough?  Who knows?  We’ll get into that later.  In the meantime, spend some time thinking about ways you can make more money.  Do you have a talent or a hobby that you can turn into cash?

  • If you’re a craftsy type, make stuff and sell it on eBay or Etsy.
  • If you’re a writer, start a blog, sell articles on oDesk, or start writing for paid article directories.  Squidoo has a revenue sharing plan for your articles.
  • Facebook maven?  Start making Pages for companies.  They will pay for it.
  • Are you mechanically inclined?  Watch your local free market sites for lawn mowers and snowblowers that don’t run.  You can fix them up and sell them.
  • If you’re a clean freak, start a home-cleaning service on evenings and weekends.

There are always ways to make some extra money, if you are willing.  Sit down with a friend or loved one and brainstorm what you can do.  Write down anything you can do, you enjoy, or you are good at.  Remember, there are no stupid ideas when you are brainstorming.  The bad ideas will get filtered out later.

How could you make some (more) side cash?

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Saturday Roundup – Dirty Beggar Edition

Misc

Ninjas killed my father
Image by Chris Pirillo via Flickr

I have a favor to ask.  Free Money Finance is running his annual March Money Madness blog contest.   Please drop by and vote for me. Just comment with “Game 6: Bags”.  Thank you!

Starting next week, my roundups will be happening on Sunday.   I weigh in on Saturday, and that just makes me feel rushed on Saturday mornings.

Free Money Tip

INGDirect is having a sweet promotion.  Open a checking account, use it three times in 45 days, and get $50 free.  Free money is the best kind.  I love my ING account and keep all of my savings there.  If you don’t have an account there, yet, now is a great time to open one.

30 Day Project Update

This month, I am trying to establish the Slow Carb Diet as a habit.   At the end of the month, I’ll see what the results were and decide if it’s worth continuing.   For those who don’t know, the Slow Carb Diet involves cutting out potatoes, rice, flour, sugar, and dairy in all their forms.   My meals consist of 40% proteins, 30% vegetables, and 30% legumes(beans or lentils).    There is no calorie counting, just some specific rules, accompanied by a timed supplement regimen and some timed exercises to manipulate my metabolism.   The supplements are NOT effedrin-based diet pills, or, in fact, uppers of any kind.  There is also a weekly cheat day, to cut the impulse to cheat and to avoid letting my body go into famine mode.

I’m measuring two metrics, my weight and the total inches of my waist , hips, biceps, and thighs.   Between the two, I should have an accurate assessment of my progress.

Weight: I have lost 20 pounds since January 2nd.   That’s 3 pounds since last week.

Total Inches: I have lost 10 inches in the same time frame, down 1 since last week.

That is kind of a disappointing week, after losing 17 pounds in the two previous weeks.  Still, it’s progress.   Should I blame it on getting sloppy with the supplements and timed exercise, which aren’t(technically) necessary, the vagaries of losing weight, or the fact that I(gasp) had some feta cheese on a salad yesterday(Dairy is out, but I didn’t recognize it until it was too late and I was happy.)?   I’ll go with B.  Weight loss is never completely consistent.

Best Posts

If some puny little constellation can mess up our zodiac signs, what will a second sun do?

Everyday Tips and Thoughts ran a post on cell phone etiquette.  I agree wholeheartedly with the bathroom talkers.  I’m in there trying to concentrate, and you’re yammering to your bank, or your girlfriend?  Expect me to flush every 2 minutes.

Important question: what caliber for land shark?

Do you juggle too much?   Project Happily Ever After explains the difference between balls that bounce and balls that break.

Buy Like Buffet is giving away an iPad.

LRN Timewarp

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

I wrote a post about saving money on health care.  It’s still a good post, but the HSA/FSA rules have changed.  Now, you need a  prescription to stock up on OTC meds at the end of the year to spend out your account.

When you buy something, do you ask yourself if you really need it? I wrote a post to help answer that question.

I also posted lesson 4 of my budget series.  This is where I go over my “set aside” funds, the money for bills that are not regular or for set amounts.

Carnivals I’ve Rocked and Guest Posts I’ve Rolled

5 Things to Do in the New Year was included in Crystal’s rockin’ Totally Money Carnival.  I’ll be hosting it in a couple of weeks.

Quit Smoking: My First Frugal Move…Ever was included in the Carnival of Personal Finance.

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

Get More Out of Live Real, Now

There are so many ways you can read and interact with this site.

You can subscribe by RSS and get the posts in your favorite news reader.  I prefer Google Reader.

You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.

You can ‘Like’ LRN on Facebook.   Facebook gets more use than Google.  It can’t hurt to see what you want where you want.

You can follow LRN on Twitter.   This comes with some nearly-instant interaction.

You can send me an email, telling me what you liked, what you didn’t like, or what you’d like to see more(or less) of.   I promise to reply to any email that isn’t purely spam.

Have a great weekend!

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Money Problems – Day 5: Boosting Your Income

Finance

Pizza Delivery Bike
Image by Kevin H. via Flickr

Today, I am continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

Today we’re going to look at ways to boost your income.

People spend a lot of time talking about ways to reduce your expenses, but there is a better way to make ends meet.  If you make more money, you will—naturally—have more money to work with, which will make it easier to balance your expenses.  I’ve found it to be far less painful to make more money than to cut expenses I enjoy.

I can hear what you’re thinking.  It’s easy to tell people to make more money, but what about telling them how?  Guess what?  I’m going to tell you how to make money because I rock.

By far, the simplest way to make more money is to convince whoever is paying you to pay you more for what you are already doing.   In other words, get a raise.  I know that’s easy to say.  Money’s tight for a lot of companies and layoffs are common.   None of that matters. Your company knows that hiring someone new will involve a lot of downtime during training.   If you’ve been visibly doing your job, and the company isn’t on the brink of failure, it should be possible to get a bit of the budget tossed your way.

  • The first thing you need to do is get visible.  If you habitually come in 15 minutes late, make it 15 minutes early.  If you are working an alternative schedule, consider switching to the standard schedule, so everyone who matters can see you are at work.    Start sending status updates to your boss, including copying him on emails to other people you work with, if those emails signify important milestones in a project.
  • Next, log your work. Keep track o what you do, what you’ve accomplished, and—most important—how much money you have made or saved for the company.
  • Third, do your research. Hit the salary survey sites to find out what other people in your field are making.  Don’t worry if you are on the high side.  There is always someone making more than you.  If you are the exception to that rule, try using a similar variation of your job description and title.   What’s the concrete difference between a software engineer I and and a software engineer II?  About $15000.
  • Finally, schedule a meeting with your boss and ask.  Lay out the things you’ve done, the amount you make for the company and what other companies are paying.  Chances are, your boss will have a hard time refusing your request.

Another simple idea is to get a second job. Personally, I hate this idea, but it works wonders for some people.  Gas stations and pizza stores offer flexible schedules and they are always hiring.   If they aren’t willing to work with your schedule, or it doesn’t work out, you can always quit.  This isn’t your main income, after all.

My favorite option is to create a new income stream.   What can you do?

Take a piece of paper and a close friend and brainstorm how you can make some money. Write down every type of activity you have ever done or ever wanted to do.   Then write down everything you can think of that other people who do those activities need or want.  Remember, during a brainstorming session, there are no stupid ideas. Take those two lists and see if there is any product or service you can provide.

You can start a blog—although don’t expect to generate much money early—or try writing for some revenue-sharing article web sites, like hubpages or squidoo.   Other options include affiliate marketing, garage sale arbitrage(buying “junk” at garage sales, fixing it up and selling it), or even doing yard work for other people.

One interesting business I’ve seen lately is a traveling poop-scooper.    These people travel around and scoop poop out of ddog-owners’ yards.  Business booms in the spring when the snow melts, but it can be an ongoing income, since dogs don’t stop pooping.

Raising your income can make it easier to pay your bills, pay off your debt, or even taking nice vacations.  How have you made some extra cash?

 

 

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Hayden Panettiere Gets Engaged – Crazy Wedding or Not?

Gossip

Hayden Panettiere
Cover of Hayden Panettiere

Hayden Panettiere has formally announced her engagement! The starlet will be marrying Vladimir Klitschko, who is a world renowned boxer that has won an Olympic gold medal. The unexpected public revelation has sparked rumor trails regarding glitzy wedding plans. While no date has been set, and nothing has been confirmed, there is widespread speculation that the event is going to be glamorously over-the-top.

A decadent gala may very well be in the planning stages. The “Nashville” actress, age 24, is one of America’s most idolized entertainers. She appeared on “Live with Kelly & Michael” to declare her commitment. During the show, she flaunted an extravagantly oversized engagement ring. This fancy display could be the precursor to an expensively ostentatious wedding.

Although Panettiere’s fiance is 13 years older than her, it is the first marriage for both partners. This may instill extra incentive for the couple to make their officiation an extremely flashy occasion. Because Klitschko is a famous Ukrainian athlete, he will also be anticipating a magnificently choreographed wedding. Both individuals could invest fortunes in perfecting their walk down the aisle together.

Of course, one of the biggest decisions that Panettiere faces is the selection of her gown. All eyes will be on the fabric that she chooses for this special day. If they go through with a public wedding, the dress will be permanently immortalized in global media. She is going to want to show off flawless class, glimmering austerity and sizzling sultriness. Fashion critics are eagerly anticipating her selection. The high-end designer that she picks will receive a tremendous boost in popularity, especially if she pulls off a beautiful presentation.

A crazy wedding would be completely in character for the young television star. Her most known role was a bubbly cheerleader on the long-running series, “Heroes.” With vivacious charm, she became a sex symbol across the country. Explosiveness is simply a part of her personality, so a bombastic celebration is to be expected. Furthermore, Ukrainian wedding parties have a tendency to be more raucous than American traditions. If they follow any of the groom’s cultural practices, the event could become out of control.

The massive ring on Panettiere’s finger indicates no desire for privacy regarding this affair. In fact, it was an invitation for the mainstream media to cover the entire ordeal. This hints that the couple might be planning a gigantic wedding event. They can easily afford it, and the public celebrations will rapidly enhance the star’s critical acclaim.

In contrast, a private exchange of vows would disappoint her legions of fans. Furthermore, paparazzi could still infiltrate the wedding to snap pictures. To avoid any uninvited intrusions, the couple should be open to media coverage during their nupital arrangements. This will let them control the event, and allow them to recoup some of the expenses through lucrative network contracts. Regardless of how they conduct the wedding, it is certain that the whole world will be diligently watching with admiration, and perhaps a slight tinge of jealousy.

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Money Problems – Day 8: Insurance

Finance

insurance
Image by alancleaver_2000 via Flickr

Today, I am continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

On this, Day 8, we’re going to talk about insurance.

What is insurance?  Insurance is, quite simply a bet with your insurance company.   You give them money on the assumption that something bad is going to happen to whatever you are insuring.  After all, if you pay $10,000 for a life insurance policy and fail to die, the insurance company wins.

A more traditional definition would be something along the line of giving money to your insurance company so they will pay for any bad things that happen to your stuff.   How do they make money paying to fix or replace anything that breaks, dies, or spontaneously combusts?  Actuary tables.  Huh?  The insurance company sets a price for to insure—for example—your car.  That price is based on the statistical likelihood of you mucking it up, based on your age, your gender, your driving history, and even the type of car you are insuring.  What happens if a meteor falls on your car?  That would shoot the actuary table to bits, but it doesn’t matter.   They spread the risk across all of their customers and—statistically—the price is right.

What kinds of insurance should you get?

Homeowner’s Insurance

For most people, their home is, by far, the largest single purchase they will ever make.  If your home is destroyed, by fire, tornado, or angry leprechauns, it’s gone, unless you have it insured.   Without insurance, that $100, or  200, or 500 thousand dollars will be lost, and that’s not even counting the contents of your home.

Homeowner’s insurance can be expensive.  One way to keep the cost down is to raise your deductible.  If you’ve got a $1500 emergency fund, you can afford to have a $1000 deductible.  That’s the part of your claim that the insurance company won’t cover.  It also means that if you have less than $1000 worth of damage, the insurance company won’t pay anything.

You can get optional riders on your homeowner’s insurance, if you have special circumstances.  You can get additional coverage for jewelry, firearms, computer equipment, furs, among other things.  You base policy will cover some of this, but if you have a lot of any of that, you should look into the extra coverage.

Auto Insurance

Car insurance is required in most states.  That’s because the kind caretakers in our governments, don’t want anyone able to hit you car without being able to pay for the damage they caused.  To my mind, I think it would be more effective to just make whacking someone’s car without paying for it a felony.  If someone is a careful driver or has the money to self-insure, more power to them.

Auto insurance comes with options like separate glass coverage, collision, total coverage (comprehensive), or just liability.  Liability insurance is what you put on cheap, crappy cars.   It will only pay for the damage you do to someone else.

Rental

I’ve never had rental insurance.  The last time I rented, I could fit everything I owned in the back of a pickup truck with a small trailer, and it could all be replaced for $100.   Heck, I had the couch I was conceived on.  Err.  Ignore that bit.

Almost everything you can get homeowner’s insurance to cover will also cover renter’s insurance, except for the building.  It’s not your building, so it’s not your job to replace it.

Life Insurance

If you care about your family, you need life insurance.   This is the money that will be used to replace your income if you die.   I am insured to about 5 times my annual salary.   If that money gets used to pay off the last of the debt, it will be enough to supplement my wife’s income and support my family  almost until the kids are in college. You should be sure to have enough to cover any family debt, and bridge the gap between your surviving family’s income and their expenses.  At a minimum.  Better, you’ll have enough to pay for college and a comfortable living.

Life insurance comes in two varieties: whole and term.  Whole life…sucks.  It’s expensive and overrated.     The sales-weasels pushing it will tell you that it builds value over time, but it’s usually only about 2%.  It’s a lousy investment.  You’re far better off to get a term life policy and sock the price difference in a mutual fund that’s earning a 5-6% return.

Term life is insurance that is only good for 5, 10, or 20 years, then the policy evaporates.  If you live, the money was wasted at the end of the term.  The fact that it’s a bad bet makes it far more affordable than whole life.  It doesn’t pretend to be an investment; it’s just insurance.  Pure and simple

Personal Liability Umbrella

An umbrella policy is lawsuit insurance.  If someone trips and hurts themselves in your yard, and decides to sue, this will pay your legal bills.  If you get sued for almost anything that was not deliberate(by you!) or business related, this policy can be used to cover the bill.

If you call your insurance company to get an umbrella policy, they will force you to raise the limits on your homeowner’s and auto insurance.  Generally, those limits will be raised to $500,000, and the umbrella coverage will be there to pick up any costs beyond the new limit.

A little-known secret about umbrella policies:  They set the practical limit of a lawsuit against you.  Most ambulance chasers know better than to sue you for 10 million dollars if you only have a policy to cover 1 million.   They will never see the other 9 million, so why bother?  They’ll go for what they know they can get.

The flipside to that is that you should not talk about your umbrella policy.   Having a million dollars in insurance is a sign of “deep pockets”.  It’s a sign that it’s worthwhile to sue you.  You don’t want to look extra sue-able, so keep it quiet.

Insurance is a great way to protect yourself if something bad happens.   Today, you should take a look at your policies and see where you may have gaps in coverage, or where you may be paying too much.

 

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