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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?

5 Pain-Free Ways to Save Your Money

Finance

Everyone needs an emergency fund. More than that, you will eventually need retirement savings, a new car, a big-screen TV, or maybe just a new kidney. Whatever the reason, one day, have a comfortable savings account will make your life easier.

But, Jason, you say, it’s hard to save money! How can I start saving when I can’t make ends meet? I’ve got rent, 9 kids, and a DVD addiction that won’t quit. My mortgage is underwater, my Mercedes still has 8 years on the loan, and the Shoe-of-the-Month Club only carries Christian Louboutin’s. What can I do?

Well, I’ll reply, since I am Jason and you asked for me by name, you need to find a way to make it happen. I’d never recommend someone give up their diamond-studded kicks, but something’s gotta give. In the meantime, there are some ways you can save money without feeling the sting of delayed gratification.

1. Save your raise. When you get your next raise, pretend you didn’t. Set up an automatic transfer to stick that new 5% straight into a savings account. Don’t give yourself an opportunity to spend it.

2. Find it, hide it. When your Aunt Gertrude dies and leaves your her extensive collection of California Raisins figurines, sell them and save the money. If you find a $20 bill on the ground, throw it right into your savings account. When your 30th lottery ticket of the week gives you a $10 prize, save it! Don’t waste found money on luxuries. Use it to build your future.

3. Let it lapse. Do you have magazine subscriptions you never read? Or a gym membership you haven’t used since last winter? Panty-of-the-Month? Crack dealer who delivers? Stop paying them! Let those wasted services fall to the wayside and put the money to better use. I don’t mean flipping QVC products on eBay, either. Save the money.

4. Jar of 1s. Roughly once a week, I dig through my pockets and my money clip looking for one dollar bills. Any that I find go in a box to be forgotten. I use that box as walking-around money for our annual vacation, but it could easily get repurposed as a temporary holding tank for money I haven’t gotten to the bank, yet.

5. Round it up. Do you balance your checkbook? If you don’t, start. If you do, start doing it wrong. Round up all of your entries to the nearest dollar. $1.10 gets recorded as $2. $25.75 goes in as $26. If you use your checkbook or debit card 100 times a month, that’s going to be close to $75 saved with absolutely no effort. It even makes recording your spending easier.

There you have it, 5 easy ways to save money that won’t cause you a moment’s pain.

Do you have any tricks to help you save money?

Does Money Make Miley Cyrus Act Crazy?

Celebrities

If you’re like millions of people who saw Miley Cyrus’s performance at the MTV Video Music Awards recently, you’ve probably wondered what the effect of massive success on the music and acting star. Cyrus seems to be

Cover of "Hannah Montana The Movie" — Cover of Hannah Montana The Movie

doing everything possible to remake her image in the exact opposite of her squeaky clean mold that Disney and other companies have created for her over the last several years. (A rumor has it that Disney even created a contractual obligation for Cyrus to maintain a certain haircut during her “Hannah Montana” television show.) There’s a sense of someone taking on their first sense of independence, and running with it — the star seemed to be sending the message to the audience that she was not going to live according to the expectations of others anymore, and from the look of it, they got that message loud and clear.

The horrified looks of Rihanna, Drake, and Will Smith aside, the real question people had is whether the massive financial rewards of Cyrus’ singing career can explain her crazy behavior. Cyrus is said to be worth about $100,000,000 — certainly a fortune by any standards. And since she is still struggling with the problems of young adulthood — forming an identity, understanding her values and taking a place in society, it’s very likely that her finances contribute to at least some of her behavior.This effect of money can come from many different areas of life. For one, many people who become wealthy at a young age are suddenly struck with the fact that they have no need to work, but who often want to develop a career and contribute to society. Take Steve Jobs for example, who at 31 years old was fired from Apple Inc. by the company’s board of directors. Jobs had in fact started the company himself, and was worth well over a hundred million dollars by that time. And yet, feeling like contributing to society was more important to his life than resting on his laurels, Jobs started a new company, NeXT, where he hoped to contribute inexpensive computers to universities.

The fact that Cyrus is barely into her 20s should tell you something about how much time she has to develop her career. She has enough to retire at an age when most people are just starting their first real job. And that is a tough position to be in. If she is hoping to push her singing and acting career well into adulthood — as most artists would like to — it may be that she is trying to make her mark now. Think of it a bit like Bob Dylan in 1964, releasing electric music for the first time, when before that point he was primarily known as a folk singer making gentle acoustic music.

Dylan’s idea may have been a bit like what Cyrus’ is. That is to say, maybe Miley Cyrus is trying to avoid becoming a has-been, a relic of the 2000’s who burned out playing inoffensive pop music. If this is the case, Cyrus may be able to shift her career into a different mode by showing herself to be an uncompromising artist. Remember that even the greats of the past — Frank Sinatra for example — were once viewed as essentially music for teenagers, and not serious artists. Sinatra even suffered career failure in his 20’s when his audience grew up and moved on to other things. But he came back to record success when he began allowing his music to mature and his ideas to gain focus. If Cyrus can pull such a move, she may not be remembered as a teeny-bopper, but as a serious artist.

A Budget Isn’t Enough

Finance

: Image via Wikipedia

You know exactly how much you make, to the penny. You’ve listed all of your bills in a spreadsheet, including the annual payment for your membership to Save the Combat-Wombat. You know exactly how much is coming in and how much has to go out each month. Your income is more than your expenses, yet somehow, you still have more month than money.

What’s going on?

The short answer is that a budget is not enough.

A budget is not…

…a checkbook register. Do you track everything you spend? Are you busting your budget on $10 lattes or DVDs every few days? Is the take-out you have for lunch every day adding up to 3 times your food budget? Are you sure? If you don’t track what you spend, how do you know what you’ve actually spent? You have to keep track of what you are spending. Luckily there are ways to do this that don’t involve complex calculation, laborious systems or even proper math. The easy options include using cash for all of your discretionary spending(no money, no spendy!), rounding your spending up so you always have more money than you think you do, or even keeping your discretionary money is a separate debit account. That will let you keep your necessary expenses covered. You’ll just have to check your discretionary account’s balance often and always remember that sometimes, things take a few days to hit your bank.

…a debt repayment plan. You may know how much you have available, but if you aren’t exercising the discipline to pay down your debt and avoid using more debt, you not only won’t make progress, but you’ll continue to dig a deeper hole. Without properly managing the money going out, watching the money coming in is pointless.

…an alternative to responsible spending. Your budget may say you have $500 to spare every month, but does that mean you should blow it on smack instead of setting up an emergency fund? I realize most heroin addicts probably aren’t reading this, but dropping $500 at the bar or racetrack is just as wasteful if you don’t have your other finances in order. Take care of your future needs before you spend all of your money on present(and fleeting) pleasures.

A budget is a starting point for keeping your financial life organized and measuring a positive cash flow. By itself, it can’t help you. You need to follow it up with responsible planning and spending.

The 10-Step Saving Action Plan

Finance

: Image via Wikipedia

Getting started saving money is hard. It’s easy to get used to instant gratification and impulse purchases. Postponing material fulfillment takes discipline and deferred enjoyment. I don’t like deferring my enjoyment, but I do it. The path to successful savings isn’t always easy, but it is gratifying, when you give it the time and effort required to see actual results.

Here’s the 10 step plan to successful savings:

Recognize the need. If you don’t understand why you need to save, you won’t do it for long. If you think it’s more important to buy a new car, a new TV, or the fanciest portable gadget out there, you won’t prioritize saving. You need to think about how saving a solid nest egg will benefit you and your future self, before you can be sure you will stick to your savings plan.
Pay yourself first. When you get paid, whether it’s a traditional paycheck or a surprise windfall, immediately drop 10-15% in a savings account you keep completely off-limits, no exceptions. If you make this an unbreakable habit, you will have a surprising amount of money in a surprisingly short amount of time.
Prioritize. Prioritize your expenses. If you don’t care about a particular optional expense, get rid of it! Examine the rest of the bill for things you can trim. Do you really need 5000 channels? Can you make do with just 300 specialized versions of ESPN?
Compare prices. If you buy from the lower-priced store, you save money. No s****, huh? Doing this requires that you forgo impulse purchases and do some research before you buy most things. Shop online, at least enough to know what you should be paying.
Save your change. When you get home at night, put your change in a jar. When the jar gets full, bring it to the bank. A medium-sized mason jar full of silver-colored coins will bring in about $100. Put that directly into savings.
Save your dollars. I pay cash for everything I buy in person. When my money clip gets too many one-dollar bills, I put them all into a box. This would be a phenomenal addition to my savings account, if I weren’t planning to use it for spending money on our vacation next month.
Save the extra $$. If you get unexpected money, don’t let it enter you regular cash flow. Get it straight into a savings account. You weren’t expecting it, so you won’t miss it.
Save the new $$. Save your raise. If you start making more money, save the difference. Like #7, you’ll never miss it. Don’t give yourself a chance to expand your lifestyle.
Club the naysayers in the knees. There will always be people who denigrate your choices. If they tell you it’s crazy to live within your means, or get upset because you don’t want to go to the fancy restaurant, screw ’em. Not literally of course. We’re trying to apply a punishment here, after all. If they don’t like your choice, kick them in the shins.
Reward yourself. Don’t be afraid to schedule rewards at certain savings goalposts. When you get $5000 saved, let yourself take $300 to the high-end steakhouse. When you get $10000, look at buying the camera you want. Give yourself a reason to stay motivated. It is, after all, your money.

This is how we’ve managed to build up a small-but-comfortable emergency fund and tackle a nice chunk of our debt. Do you have plan to save?

Budgeting tips – sticking to your budget

Finance

If you are looking to get out of debt, or you are currently debt-free and want to stay that way, then it is important that you get a grip of your financial situation and live within your means.

A good way to do this is to create a budget as this gives you a clear indication of how much money is coming in, how much is going out and also highlights any areas where you may need to make cut backs should you be falling short each month.

Once you have sorted out the figures and made necessary amendments, for example paying bills by direct debit in order to make savings or cutting existing debts by carrying out a balance transfer to a lower rate credit card, it is time to start focussing on the lifestyle changes.

As you will find, it is one thing to create a budget and quite another to stick to it, but by adhering to the following steps and exercising a certain amount of will power, you should be able to ensure that you live within your means and resist the urge to reach for that credit card.

Keep focussed

Before you start to look at how you can stick to your budget you need to clarify why you need to stick to your budget!

A budget can initially seem like something that has been devised with the sole intention of stopping you having fun and buying or doing the things that you want. So it is important to remember that, though some cutbacks may be necessary in the short term, a budget is a long-term strategy that will allow you to take control of your finances and, all being well, live a happy life that is free from the worry of excessive debt.

Change your habits

Unfortunately, a successful budget can require a change in lifestyle and this can be one of the most difficult things to adhere to.

For example, if you have previously enjoyed eating out regularly then you may have to make cut backs in this area to ensure that you are living within your means. But, instead of seeing this as a negative, try to focus on the positives and remember the reasons why you are budgeting.

And a change in habits doesn’t necessarily mean that you have to cut back on your enjoyment of life and it may actually open your eyes to other pursuits you may not have previously considered.

For example, instead of eating out try preparing a meal at home and turn your dining room into a restaurant. This means that you can still have the fine dining experience but at a fraction of the price and without the worry of making a reservation!

Shop smarter

Lists figure heavily when creating a personal budget and list-making is a habit that you should get used to when trying to stick to your budget.

When budgeting it is vitally important to avoid impulse buying and a great way to do this is to always make a list of things you need before you go shopping.

This means that you will have a clear idea of what you need and you will be less inclined to make random purchases that may just turn out to be an unnecessary drain on your finances. It’s also worth mentioning at this point that you should always differentiate and prioritise the things you need over the things you simply want.

If you are unsure how to make the distinction then put off making the purchase for a couple of days and then reconsider if you actually need it. This cooling off period will often convince you that you can do without it and save you money.

In addition, savings can be made on your shopping by simply swapping big name brands for supermarket own varieties, using discount coupons and looking for any special offers.

Overall, it is important to be fully focussed and committed to your budget plan and to be aware that a change in finances may require a change in lifestyle. But a few short term changes may well add up to better finances in the long term.

Article written by Les Roberts, budget reporter at Moneysupermarket.com.

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