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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?

Fall From Grace

Finance

When you accumulate a certain level of debt, it feels like you’re wading through an eyeball-deep pool of poo, dancing on your tiptoes just to keep breathing. Ask me how I really feel.

It shouldn’t be a surprise that I’m in debt. We have gone over this before. The story isn’t one of my proudest, so I’ve never talked much about how it happened.

Our debt was entirely our fault. We messed up and dug our own poo-pool. There were no major medical bills, no extended unemployment, just a strong consumer urge and an apparent need for instant gratification. Delayed gratification wasn’t a skill I’d considered learning. The idea of it was a thoroughly foreign concept. Why wait when every store we visited offered no payments/no interest for a year? We didn’t give much thought to what would happen when the year was up.

We got married young. We bought our house young. We started our family young. We did all of that over the course of two years, well before we were financially ready. Twenty years old, we had excellent credit and gave our credit reports a workout. Credit was so easy to get. By the time I was 22, we had a total credit limit more than twice our annual income. We fought so hard to keep up with the Joneses. A new pickup, a remodel on our house. Within a month of paying off the truck, I got a significant raise and rushed out to buy a new car.

Every penny that hit the table was caught in a net of lifestyle expansion. I was bouncing on my tiptoes.

Four months into my new car payment, I was laid off. There’s me, hoping for a snorkel. A week later, we found out our son was going to be a big brother. Our pool had developed a tide.

We killed the cable and cut back on everything else and…managed. Money was tight, but we got by. I got a new job, but had we learned any lessons? Of course not. We got a satellite dish, started shopping the way we always had. Times were good, and could never be bad. We had such short memories.

Fast forward a couple of years. Baby #3 is on the way while baby #2 is still in diapers. Daycare was about to double. Daddy started to panic. I built a rudimentary budget and realized there was no way to make ends meet. There just wasn’t enough cash coming in to cover expenses. That’s when I made my first frugal decision: I quit smoking. That cut the expenses right to the level of our income. It was tight, but doable.

There was still one serious problem. Neither one of us could control our impulse shopping. For a time, I was getting packages delivered almost every day. It was never anything expensive, but it was always something. Little things add up quickly.

Last spring, I realized we couldn’t keep going like that. I started looking into bankruptcy. Somehow, we managed to toss ourselves into the deep end of the pool. We had near-perfect credit and no way to maintain it.

While researching bankruptcy, I found our life preserver. We put together a budget. We cut and…it hurt. It’s taken a year, but every bill we have is finally being tracked. We have an emergency fund and we are working towards our savings goals. It hasn’t been an easy year, but we are making progress. We’ve eliminated 15% of our debt and opened out budget to include some “blow money” and an occasional date night. We are always looking for ways to decrease our bottom line and increase the top line. Most important, we are actually working together to keep all of our expenses under control, with no hurt feelings when we remind ourselves to stay on track.

We are finally standing flat-footed, head and shoulders above the poo.

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

Priorities

Business

I once saw a sign on the wall in a junkyard that said, “Failure to plan on your part does not constitute an emergency on my part.”

Another good one: “If everything is top priority, nothing is top priority.”

Once a week, I meet with my boss to discuss my progress for the previous week and my priorities for the coming week. This is supposed to make sure that my productivity stays in line with the company’s goals.

Great.

Once a day, my boss comes into my office to change my top priority based on whichever account manager has most recently asked for a status update for their customer.

Not so great.

At least twice a week, he asks for a status update on my highest priority items. Each time, he could mean the items we prioritized in the weekly meeting, or the items he chose to escalate later. Somehow, getting a new task escalated doesn’t deescalate an existing task.

Everything is a top priority.

To compensate, I’ve been working a few 12 hour days each week, and occasionally coming in on the weekends.

I’m dedicated and still behind.

Prioritizing is treated as an art, or in the case I just mentioned, a juggling act. It should be considered a science. It’s usually pretty simple.

Is the problem costing you money? +1
Is the problem costing your customer money? +2
Is the problem going to hurt your reputation? +1
Is there a deadline? +1
Is it soon? +2
Is it urgent? +1
Is it important? +2
Are there absolutely no real consequences for anyone if it doesn’t get completed? -500

That’s it. Too many times, we get hung up on urgent-but-not-important items and neglect the important things.

The hard part comes when it’s someone else setting your priorities, particularly when that person doesn’t rate things on urgency, importance, and cost but rather “Who has bitched the loudest recently?”

Can I tell my boss that I’m not going to do things the way he told me too? No. A former coworker very recently found out what happens when you do this.

Can I remind him that I’m busting my butt as hard as I can? Yes, but it will just earn me a request to come in on the weekend, too.

Can I ignore the official priorities part of the time, and work on what I feel is most important to keeping our customers happy? Yes, but it’s easy to go too far. “Boss, I ignored what you said, but this customer is happy, now!” won’t score me any points if it happens every week.

Priorities are simple, but not always easy. How do you balance your priorities?

Christmas for the Destitute

Finance, Parenting

First, my disclaimer: I’m not destitute.

However, I’m trying to spend Christmas acting like I am a pauper.

Why, with small children and beautiful-and-more-than-deserving wife, would I want to deprive my family of a bountiful holiday?

Before we get into the reasons for being a horrible grinch bent on depriving my children of their god-given right to rampant consumerism, let’s look at the Philosophy of Destitution.

The primary reason to pull back and tone it down is basic frugality. Excessive anything is not frugal. I am training my children–and for that matter, my wife and my self–in the finer arts of personal responsibility and frugality. Accumulating debt for a fleeting holiday is insane. If we can’t afford to buy it, we certainly can’t afford to give it. Anything else would be setting a bad example and children learn best by example.

Another piece of the Philosophy of Destitution(when I read this word, I hear a deep, booming voice in my head, like a 30s radio superhero voiceover) is “green”. I consider myself a conservationalist rather than an environmentalist, so don’t read too much into that color. I try to be responsible, instead of destructive and I try to avoid being wasteful. Toys that won’t be played with are wasteful. A garbage can full of packaging for those same toys costs money. It is much cheaper to avoid the landfill here.

Back to “Why”. Why would I be willing to deprive my family?

Budget Lesson, Part 8

Finance

This is a continuation of the budget series. See these posts for the history of this series.

This time, I’m looking at our discretionary budget. These are the things that don’t have a fixed cost. Any individual item is largely optional, and, ultimately, we don’t track these purchases closely. At the beginning of the month, I pull this money out of the bank in cash, except for 1 category. When the discretionary budget is gone, it’s gone.

Groceries/Dining – At the beginning of the week, we sit down with a meal planner and (Can you guess?) plan our meals. The planner we use has a weekly calendar with a checklist below each day to build the grocery list. At the bottom of the page is another checklist for staples that don’t apply to a specific day’s meal, like milk or snacks. We build the list, then transfer it to another sheet, broken out by grocery department. That keeps me from having to criss-cross the store. I make one lap. When I go to the store, I only bring that week’s grocery budget in cash, so I keep close track of how much is going into the cart. Recently, we’ve gotten so good at making our meals cheaply from scratch that I reduced our monthly food budget by $50. I enjoy good food, so I wouldn’t reduce this budget item if it was a sacrifice in quality. For example, the Rainbow Foods store-brand chips actually taste better than Lay’s for half of the price. We stock up when things are on sale and cook creatively. Sometimes, if time has been too tight to make a meal plan, we eat solely from the pantry for a week, buying nothing but bread and milk. By sticking to the list, and not fearing the store’s brand, we are able to feed our family of 5 1/2 for $450 per month and still eat well.
Discretionary – This is for the random things that come up, and some of the not-so-random. Toiletries, activity fees, admissions, and fund-raisers all come out of this fund. At the end of the month, whatever is left gets tucked into a box and forgotten. When the box gets full, it goes to the bank to be applied to debt. There isn’t a lot to cut here, since this line-item is only $200.
Baby stuff – This category is continually shrinking. Our middle kid is recently potty-trained and our youngest is trying. There is no baby food and no formula, just 1 pack of diapers every month. In 6 months, this category will be eliminated.
Gas/oil – This is the single category that isn’t cash-based. It makes no sense to take the kids out of the car to pay inside, especially in the winter. Also, all of the temptation is inside. It’s much better to spend the money at the pump. There isn’t much we can do to reduce this, at the moment. Our next car won’t be a full-sized pickup, but we are several years from that purchase. We’ve started clipping oil-change coupons to keep this down to the minimum amount possible.
Clothes – We only allocate $15 per month for clothes. In a good month, we don’t spend it. We can’t eliminate it completely, because things do come up. Over the summer, I’m hoping to completely leave it alone to save up for a new(used) winter jacket for our older daughter, who doesn’t get hand-me-downs.
Blow Money – This is the safety valve. It can’t get reduced and still work.

We’ve now addressed out entire budget, including what we can do and have done to keep our costs under control. Looking back, I don’t see too many cuts I’ve missed.

Sunday Roundup: Father’s Day

Finance

Father's Day Cake 2009 — Image by Jim, the Photographer via Flickr

On Father’s Day, 3 years ago, my third and final kid was born. My kids are all horrible brats and I love them dearly.

I wouldn’t give up fatherhood for anything. Watching my kids grow and learn, steering their development, and teaching them how to navigate life is the most fulfilling thing I’ve ever been a part of. Also the most frustrating. I can’t imagine being anywhere else, not being with my kids. I have no respect for deadbeat parents.

I am incredibly grateful that I had a proper model for manhood and fatherhood. My dad taught me the concepts of honor, integrity, and responsibility. I couldn’t be the man I am now, if he wasn’t the man he is. Thanks, Dad.

Best Posts

Sometimes, the coolest things in the world are the things most likely to kill you. Call me crazy, but I’d happily strap a 1200 cc propeller to my crotch and find out what 10,000 feet looks like.

Via Budgeting In The Fun Stuff, Super Frugalette reminds us that, when there’s a significant amount of money involved, spending a few hundred dollars on an attorney isn’t wasteful.

Fivecentnickel discuss multi-level marketing. It doesn’t matter which company you are in, if your downline is more important that your product, it’s a bad business model.

Keith Ferrazzi shows us how to improve our body language when it really matters.

When I started driving, I tossed my car in a ditch going way too fast. Naturally, it was my parents’ fault for giving me the curfew I was trying to beat. They never would have bought it if I would have told them I was driving like my grandma and it jumped into the trees by itself. Why does the FBI think that’s believable? Corruption, maybe?

Financial Samurai talks about living a life without regrets, which is a personal goal of mine.

Food storage will become critical when the zombies come.

Beer is good. Even the cave-men thought so.

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

3 Ways to Keep Your Finances Organized was an Editor’s Pick in this week’s Festival of Frugality. Thanks!

5 Reasons Your Wealth Isn’t Growing was included in this week’s Carnival of Personal Finance.

Money Problems: Insurance was included in the Totally Money Blog Carnival.

Unlicense Health Insurance was included in last week’s Carnival of Personal Finance.

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

Yakezie Blog Swap

Last week, the Yakezie shared what they would do with a single financial do-over.

– Melissa from Mom’s Plans shares her biggest financial mistake at Barbara Friedberg Personal Finance: Opening an eBay Store and Using Credit. It is a great story about how not to grow your business and how competing priorities can pose a real challenge.

– Budgeting in the Fun Stuff shares her biggest financial mistake and potential do-over at Super Frugalette: Investing in a Friend’s Business. Its a good, but costly lesson learned about small business.

– Eric from Narrow Bridge Finance shares how He Wouldn’t Have Paid Down His Student Loans So Fast at The Saved Quarter. This may seem counter-intuitive, but he has some good points. Check it out.

– Mr. S from Broke Professionals shares how He Wouldn’t Have Bought a New Car at My Personal Finance Journey. This has some great analysis, especially considering the new car was a hybrid!

– The College Investor posted at Wealth Informatics: What you should know when you are investing?

– Wealth Informatics posted here: If you had one financial do-over, what would it be and why?

– Barbara Friedberg shares how She Was Scammed at Mom’s Plans. You have to watch out for the hard sell!

– Joe at Retireby40 tells us about How He Invested his 401(k) in Company Stock right before the dot com crash, at Financially Consumed. A financial adviser may have helped avoid this one!

– Financially Consumed shares his Car Purchase Do-Over And Over at Retireby40. Car addicts have it tough!

– LaTisha from FSYA shares her do-over story in It’s Never Too Late at Little House in the Valley. Sometimes the do-over is quicker and more painless than most.

– Little House yell’s Do-Over! Do-Over! at FSYA Online. It looks at the road to saving more, starting on an elementary school playground!

– The Single Saver asks, What Are The Long Term Consequences of Small Purchases at Totally Money. A cool post on how past purchases cost future returns!

– Miss Moneypenniless from Totally Money shares her story of Vacationing to the Brink of Bankruptcy. Sometimes a vacation can be fun, but the bills afterward may be daunting.

– Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it sometimes?

– Jason from Live Real, Now shares how he Amassed $90,000 of Debt at Debt Eye. A good lesson in living a little more frugally.

– Kevin from Debteye shares his do-over: Not Buying a House Right Out of College at Live Real, Now. I have said it before that buying a house can be challenging right out of college.

– Penny from The Saved Quarter shares how She Would Have Finished College Before Having Kids at Narrow Bridge Finance. An awesome story that has will soon have a happy ending!

– Jacob from My Personal Finance Journey shares how he was Scammed on eBay at Broke Professionals. An important lesson for anyone selling or buying online.

– Marissa from Thirty-Six Months shares how she Accumulated a Ton of Student Loan Debt at So Over Debt. If you are going to live the life, you’re going to pay the price!

– Andrea from So Over Debt shares How She Would Have Started Saving for Retirementat Thirty-Six Months. I would love to read a post on each of the stories you mentioned getting to where you are now!

– Below Your Means shares his story about A Missed Investment Opportunity. There are so many times I wish I could have gone back and bought a stock!

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Have a great week!

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Best Posts

Yakezie Blog Swap