Search Results for “slow-carb-diet-how-to-avoid-going-bat-crazy/quit-smoking-my-first-frugal-move-ever/INGDirect/first-3-things-to-do-in-the-new-year” — Page 11

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?

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:

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.
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.
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.
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.
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?

Overbanked

Finance

Last week, when I mentioned that I lost my phone, there was some interest in my self-insurance warranty plan.

Post Office Savings history — Image by brizzle born and bred via Flickr

The truth is, that’s just one of 14 savings accounts I keep. I find it’s simpler to keep track of my savings goals by moving the money to separate accounts than to track everything in a spreadsheet. This lets me tell how I’m doing at a glance.

I have one account each at two major traditional banks. These savings accounts exist to provide a target for an automatic transfer that eliminates fees on the associated checking accounts. Whenever much money accumulates here, I sweep it out and throw it at my credit card.

I also have 12 accounts at INGDirect. I chose ING because they are extremely convenient and, at least at the time, had a competitive interest rate. Different countries have different banking options.

Here are the rest my accounts:

Emergency fund. I deposit $25 every month. I also keep part of my emergency fund in a CD that’s also at ING.
Property tax fund. Every month, I deposit a bit more than a twelfth of my annual property tax bill. When the time comes to pay, I just transfer the money from my account to the tax assessor. It works well.
College fund. Yes, this is a straight savings account. Right now, I’m focused on debt, not college. When my debt is gone I’ll ramp this up. I started this just to get started. From here, it’s a few seconds of work to increase the amount I contribute, which is currently $10 per month.
Warranty fund. Instead of buying warranties, or going into a panic when something breaks, I deposit $50 into this account every month. When something breaks, I take the money out of this account(assuming I have enough) and use it to replace or repair whatever is missing. $50 isn’t a lot to contribute, if you have things breaking every week. I go several months without touching this money, and it’s always been enough to cover what we need.
Vacation fund. This is pure fun money. I sock away a bit out of every check, and occasionally when other money comes in. Then, we plan our vacation around how much money we have here and how many points we have saved on our credit card. Vacations seem like a luxury when we’ve got debt, but I work so much and miss so much of my kids, day to day, that I consider this a necessity. It’s a week of downtime with my family, doing something they will remember. It’s worth it, several times over.
Braces fund. So far, we know that two of our kids are going to end up in braces. One of them will probably be this year. We had more in this account, but stole some to cover our vision therapy bill. When our insurance reimbursement finally comes back, that will go straight into this account.
Camera fund. My wife really wants a prosumer-level camera, so I started an account to save for it. If we go over budget, this is the first account we raid, since this is purely a luxury.
Personal goal accounts. We each have a goal account set up for things that don’t affect the family. As a practical matter, I save to go to FINCON and a hunting trip with my Dad and my brother, while my wife saves for a couple of scrapbooking retreats each year. These accounts are funded solely from extra money and don’t have an automatic deposit.
Car fund. This started as a car repair fund, with a $50 deposit each month. When my car was finally paid off last year, I took half of my car payment and redirected it into this account, to help us pay cash for our next car. Last month, I stole some money from this account to play stockbroker. It wasn’t a lot of money, but I’ve gotten a 25% return over the last 6 weeks.
Internet. This is just a convenient account to catch money that gets paid from things like my Amazon affiliate account.
Held for tax. The name should be self-explanatory. When I get paid from any of my side hustles, I set aside about 25% to cover any tax bill I may be missing. After I file my taxes, I shoot any leftover money out to my other savings goals or my credit card, as appropriate.

I also have a couple of monthly line items in Quicken that I haven’t broken into separate accounts, just to provide an overdraft buffer, like our gift budget.

That’s proof that I am over-banked. How about you? How do you track your savings goals?

Buying a Fixer Upper House

Business

Have you ever thought about buying a fixer upper house? In recent years there have been some great options for people looking to purchase property for the sole purpose of renovating and flipping real estate. There are some great locations with pretty nice houses that have either been damaged or neglected and are now for sale. These circumstances make it difficult for someone to purchase and remodel the house without spending a lot of money. In recent years there have been a couple of options for people who want to buy run down houses to flip. Mortgage companies have come out with different mortgage options for anyone who is looking to invest in real estate. There are loans tailored to meet whatever goal you have when purchasing a house that even allocate funds for renovation. The two that we will discuss in this post are Home Path and FHA 203 (k) renovation loans.

HomePath Loan:

The HomePath loan program was created by Fannie Mae and is meant to offer foreclosed homes to anyone who qualifies to purchase them. This type of loan is great because not only do you qualify for a loan to buy the house but also receive enough for renovations and remodeling. This pushes buyers to purchase homes that have been foreclosed and thus contributing to the real estate market and the economy as a whole. It’s also great for the buyer because it give them incentive to purchase a space that they might not go for right off the bat. Everybody wins.

FHA 203 (k) Renovation Loans:

203K loans allocate funds for the initial purchase of the house along with funds for the renovations. Companies offer low down payments and flexible underwriting guidelines. Almost any kind of residential property qualifies making it really easy to get approved. Many people don’t know that this kind of loan exists but it is definitely something that is not only beneficial to those taking out the loan but also to those looking to get rid of a place that won’t sell on its own because it isn’t visually or aesthetically appealing.

If you are on the market looking for a home, consider taking out a HomePath or 203k loan designed for houses that might need some fine tuning to look their best. It is a great option for anyone looking to flip property and for anyone who wants to purchase a space that might not be appealing upon first glance. Fixing up a place will not only increase the value of your new home but also probably cost a lot less than if you were to purchase a newly remodeled space for market value.

Party Planning on a Super Tight Budget

Finance, Life

: Image by Another Pint Please… via Flickr

I like to party.

Actually, that’s a lie. I’m too introverted to be a partier. More accurately, I like to throw two parties per year. I am also cheap frugal, so I try not to break the bank feeding fifty of my closest friends.

I have two entirely different parties. The first, known as the “Fourth Annual Second Deadly Sin Barbecue of Doom”, is a daytime party with a lot of food. The second is a Halloween party which takes place at night and refreshments are more of the liquid variety. Two different parties, two different strategies to keep them affordable.

Meat

For the Halloween party, meat consists entirely of a meat/cheese/cracker tray and a crock-pot full of either sloppy joes or chili. Quick and easy for about $20. For the barbecue, meat is the main attraction. The menu varies a bit from year to year. Last year, we had burgers, brats, hot dogs, a leg of lamb, pulled pork, and a couple of fatties. The year before, we had a turducken, but no fatties. From a frugal standpoint, the only meat mistakes were the turducken and the lamb. Neither are cheap, but both as delicious. The rest of the meat needs to be bought over the months preceding the party, as they go on sale. Ten pounds of beef, 2 dozen brats, 2 dozen hot dogs and a pork roast can be had for a total of about $75, without having to worry about picking out the hooves and hair. Fatties cost less than $5 to make.

Sides

Both parties have chips, crackers and a vegetable tray. Chips are usually whatever is on sale or the store brand if it’s cheaper. Depending on our time management, we try to cut the vegetables ourselves, but have resorted to paying more for a pre-made veggie tray in the past. This runs from $15-30.

Drinks

For kids and adults who don’t drink, I make a 5 gallon jug of Kool-Aid. Cost: About $3. For adults, I provide a few cases of beer. I don’t drink fancy beer, so this runs about $50. For the Halloween party, I throw open my liquor cabinet. Whatever is in there is available for my guests. The rule is “I provide the beer. If you want something specific, bring it yourself.” I have a fairly well-stocked liquor cabinet, but I don’t stock what I don’t like or don’t use. Part of the stock is what guests have left in the past. I don’t drink much and I buy liquor sporadically when I have a whim for something specific, so raiding the leftovers in the liquor cabinet doesn’t register on my party budget.

Potluck

While it seems like an obvious and easy way to keep costs down, I do not and will not expect my guests to bring anything. I throw a party to showcase either A) my cooking, or B) my Halloween display. I don’t charge admission. I don’t charge for a glass. I throw a party so I can have fun with the people I care about and the people the people I care about care about. I consider it a serious breach of etiquette to ask anybody to bring something. On the other hand, if someone offers, I will not turn it down.

Fun

The most important part of either of my parties is fun. All else is secondary. I seem to be successful, since reservations are made for my spare beds a full year in advance. Last Halloween, people came from 3 states.

Cost

How much do my mildy-over-the-top parties cost? The barbecue runs about $150-180 plus charcoal and propane. Yes, I use both. I’ll have 2 propane grills, 1 charcoal grill, and a charcoal smoker running all day. The Halloween party costs $80-100 for the basics. The brain dip costs another $20 and there’s always at least another $50 in stuff that seems like a good idea to serve.

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

5 Steps to Save

Finance

: Image by BitHead via Flickr

“Saving is too hard.”

“I don’t know where to start.”

“How much should I save?”

“Who the heck are you to tell me what to do with my money?”

“Shut up, Jason.”

These are the things I hear when I start talking about getting a good strategy in place to save some money. Financial matters are intimidating to a lot of people. They’d rather not think about their money any more than they absolutely need to, if that much. Here, I’m breaking it down to some simple steps to make saving easy.

1. Get motivated. Why do you want to save some money? Are you trying to make a secure future, or do you just want to buy a new toy? These are the kind of questions you have to ask yourself. Nobody else can tell you why you want to make changes to your lifestyle, and nobody else’s reasons matter in the least. Saving money is something you have to do for you.

2. Figure out how much you can save. Generally, you’re going to need a budget so you can figure out what you can afford to save, but not always. If you are making ends meet, then you get a raise, you can obviously afford to bank the difference. If you do that, you’ll never even notice the missing money. If you try to save so much your mortgage goes unpaid, you’re plan is doomed to failure.

3. Open an account at a new bank. The biggest problem I used to have when I was trying to save was that it was too easy to get the money. Every time I checked the balance of my checking account, I saw the balance in the savings account. Worse, it took seconds to transfer that money from my savings account to my attached checking account. Every time I wanted to see if I could afford whatever toy I was looking at, I’d see money that wasn’t earmarked for anything in particular. Naturally, that money got spent more often that it was ignored and allowed to grow. Now, I can completely forget about the money.

4. Automate. I’ve automated everything I can. All of my bills are paid automatically, except for one company that insists on quarterly paper invoices. I’ve got $665(neighbor of the beast!) automatically transferred to my INGDirect account, to get divided between my various savings goals, including a fund for my semi-annual property tax payments and a fund to pay for the braces we haven’t actually had to buy yet, but will in a couple of years. The money disappears into a bank I don’t use for my day-to-day expenses and grows completely out of sight. Every once in a while, I look at the account and get surprised by how much has accumulated.

5. Get rich. Once you’ve got the other four steps in place, all you’ve got to do is let it work. Over time, you will build wealth in a way that may surprise you. Your goal at this point is to do nothing new. Every once in a while, you can pull out some money and tuck it into an investment account to get some real growth going for you.

“Thank you.”

“You’re the best.”

“What would I do without you?”

“How can I show you my appreciation? <wink><wink>”

“What the heck are you doing with my wife?”

These are the things I always hope to hear after sharing my strategies to save money.

Search Results for: slow-carb-diet-how-to-avoid-going-bat-crazy/quit-smoking-my-first-frugal-move-ever/INGDirect/first-3-things-to-do-in-the-new-year

Meat

Sides

Drinks

Potluck

Fun

Cost