Live Real, Now

The no-pants guide to spending, saving, and thriving in the real world.

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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?

 

Ignore Your Budget

Finance

IMG_1144
Image by Boz Bros via Flickr

For the first year of our journey out of debt, we had a strict budget, with all of our discretionary money spent out of an envelope system.  We had an envelope for groceries, one for discretionary spending, one for clothes and one for baby crap.   At the beginning of the month, we’d divide the money into the envelopes according to our budget spreadsheet.  If we used a card for anything, we’d take a matching about of money out of the appropriate envelope and put it in a box to get reconciled the next month.

Ugh. Almost 2 years later, it has turned into too much work and too much nagging about everything either of us put on a card.

We decided to simplify the system a few months ago.   Now, we still have a budget.  It’s even a zero-based budget, but we ignore it.  We only look at it if something changes for the worse.  If something changes for the better, the extra money just gets automatically rolled into our debt snowball, so there’s no need to worry about updating the spreadsheet.

Instead of envelopes, we kind of eyeball it.   We budget $450 per month for groceries, so we aim to spend $100 on our weekly grocery run.  That leaves some room for losing track of how much we are putting in the cart, or a last minute addition to the list.  It also leaves room for our secondary grocery trip to buy bread and milk later in the week.  We do go through a lot of milk at my house.  We budget $55 per month for diapers, but the deal we are currently getting with Amazon Mom is only costing us $30.79 for 6 weeks of diapers.  We ignore the difference.

This—and our heavily automated bill pay and savings—lets us keep our finances on track, without stressing over every dollar or fighting over every little thing that comes home unplanned.   I used to fire up Quicken and balance the checkbook every week.  Now, that happens at the beginning of the month, usually.  If I forget, it doesn’t matter.  At the beginning of February, I balanced the checkbook for the first time in almost two months and we never came close to exercising our overdraft protection account.  In fact, we had some extra, so that got sent directly to our debt.

Overall, it’s been good to test out a new system.  We have almost no financial stress and managing our money takes about a couple of hours per month instead of per week.  It’s all win.

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Why Going Green is Good for the Pocket

Finance

Going green is about making changes, some of them very small, to lessen the impact you have on the planet and its precious resources. But if it can be both good for the planet and good for your pocket then who would seriously not want to ‘go green’?

Saving money is at the top of most people’s minds at the moment, so check out your credit card at Moneysupermarket to ensure you are getting the best deal and see how going green can affect the rest of your finances.

Most of the things we can do to reduce our consumption of both energy and materials are automatically going to save us money.

Some of the more obvious steps to make your home more energy efficient can result in substantial savings, such as fitting good insulation, having double glazing and putting up thick curtains to keep the heat inside.

These simple tips are not all that can be done in the home, as by starting to think differently about how you use the different areas of your home, you’ll find out how zonal living can save you even more.

Zonal living is about only using energy as you need it in the home. Heating can be varied from room to room, ensuring that the temperatures in each room are adjusted according to when and how the room is used.

Keeping bedrooms cool at night, for example, not only saves you money, but also promotes better sleep. You can achieve zonal heating by fitting thermostatic valves to your radiators and using electrical timers to switch heaters on and off at appropriate times.

Most of us now have more electrical appliances in our homes than we actually use and each of them can be steadily consuming energy even when not in use.

The worst culprits are probably the TV and DVD player, because it’s so convenient to use the remote to switch them off. You might think you’re turning them off, but all that’s happening is you’re putting them on standby. Spend a few seconds actually switching off appliances at the plug and you’ll be amazed at the savings over the course of a year.

The same applies to cell phones. Nowadays, most of them recharge in a couple of hours or less. If you leave them to charge overnight, you’re simply wasting energy and money.

Could you cut down on your usage of the tumble dryer? Nothing in the white goods department uses up quite so much energy as these noisy machines so, if you can, buy a washing line and rediscover the joys of laundry dried by the breeze and sun; your bank account will reap the benefits.

Fuel costs only ever seem to go up, so adopting a more efficient style of driving will help your pocket as well as the planet. The Drive 55 campaign claims that keeping within the speed limit of 55 mph can cut as much as 50% off your fuel bill.

When you move away from a junction or lights, you can use up large amounts of gas, so learning how to use your gears smoothly is another way of saving cash.

None of these steps require great changes but taking a little time and putting a little thought into your energy consumption will help save you money and help conserve energy and resources.

Post by Moneysupermarket.

 

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5 Ways to Help Your Friends Stay Out of Debt

Finance, Life

Playing the Shogun (2006) board game
Image via Wikipedia

There’s a saying that you are the average of your 5 closest friends.    Take a look at the people you hold dearest.  Combined, they are you.  If they are all in debt, chances are, so are you.

As a corollary,  you are a part of your friends.   If you become more financially responsible, it will rub off on the people who care about you.

Given these two rules, one way to improve yourself is to help those around you improve themselves.   If your influence convinces your friends to move closer to your ideal, it will be easier, almost effortless to move closer to it, yourself.

It sound manipulative, but if you are manipulating your friends, you are doing it wrong.   Don’t try to force or trick your friends, just be honest and sincere in your efforts to help.  Nobody wants to be in debt.  This is you being nice.

1.  Suggest cheap activities.

While it is okay to splurge occasionally, don’t be afraid to suggest less expensive activities.  If someone suggests going to a movie, mention the dollar theater.  If they want to go out for dinner, offer to host a potluck.  Trip to the casino?  Game night at your house.   There are almost always cheaper ways to have fun.  As long as you are spending time with the people you love, you’ll have a good time.  Do you really need to drop $100 to do that?

2.  Don’t flaunt your toys.

If you buy an iPod and immediately run to show it off, you are going to trigger a case of “keeping up with the Joneses”.  If your friends spend all of their time around people who are constantly buying expensive toys, buying expensive toys becomes normalized in their minds.   Debt becomes the norm.  Then extreme debt.  Don’t reinforce the destructive debt cycle by showing off the expensive trophies of excessive, unnecessary consumerism.

3.  Point out opportunities to save.

This is a fine line to walk.   If mention how much money your friend is wasting on 13 shot venti soy hazelnut vanilla cinnamon white mochas with extra white mocha and caramel every single morning, you’re going to get annoying fast. In fact, you are already annoying me, so knock it off.  On the other hand, if Caribou is having a sale on the 13 shot monstrosity, speak up.  Nobody is going to complain about getting a $15 coffee for less than $10.

4.  Give them a side hustle.

If you’ve got a friend who’s into landscaping and you’ve got a neighbor who needs a landscaper, make the connection!   If you know a web designer and a business in need of a website, get them together.   Do what you can to match the needs of the people around with each other.  They will all appreciate it, and everyone will be better off.  Be the guy who helps everyone connect with the people they need.

5.  Be encouraging.

Put another way, don’t be a dick.  Nobody likes being nagged.  Nobody likes being told they are doing everything wrong.  Be encouraging, not mean.

If you can do all of that, it’s natural that your friends will start acting the way you want yourself to act.   The less they want to waste on  a trip into debt, the less tempted you will be to do the same.

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10 Tips to Help Parents Stay Out of Debt

Finance, Parenting

Cobbler shaker (right), jigger, and a bar spoon.
Image via Wikipedia

People say that when you have a baby, your world gets flipped upside down.    That’s not true.  Your world gets dropped in a martini shaker and left to the whims of a sadistic bartender with a shaking fetish.  Everything changes.    That sounds like an exaggeration and nobody believes it until it happens, but it’s true.

When you find out you are about to reproduce, you will experience a phenomenon called “nesting”.   Nesting is the idea that, if you take your credit cards and beat them against the curb until they bleed and VISA calls you asking for mercy, you will be transformed into the best parent ever, regardless of what you may actually screw up.   It’s the way parents calm their fears by spending money, often on things that aren’t needed.

Q.  How do you avoid becoming a debt-ridden, worried mess of an over-protective, over-extended new parent?

A. What do you get when you cross an elephant and a rhinoceros?

I can’t help with the rest, but here’s 10 ways you can avoid the debt problems.

  1. Have a budget.   I may have said this before.   It’s possible this counts as a recurring theme here.  If you don’t have a budget, you aren’t in control of your money.  If you aren’t in control, then how do you know where it has gone or where it is supposed to go?
  2. Budget for baby crap.    This will be a recurring expense for years, so get used to it.   A friend of mine is on the cusp of having everyone out of diapers for the first time since 1993.   Do you think they plan that expense?  Diapers.com has $10 off and free shipping on orders over $49.  Use code “ LiveReal” during checkout.
  3. Double the number you have in #2.  Seriously.  It will cost you more than you think, but it doesn’t have to cost you as much as you fear.  It’s far better to have too much budgeted and find yourself with extra money than it is to budget too little and be forced to make up the difference at the feet of Master Card.
  4. Only take the advice of people you know and trust. Every random jerkface on the street has (usually) well-intentioned advice for new and expecting parents.   Ignore them all.  If they aren’t your doctor, your mother(assuming she did her job right), or friends with children, they are clueless and their advice should be immediately round-filed.   Ditto for parenting magazines.   The writers don’t know better than you do.   Read the magazines for six months and watch for conflicting advice, not only in the same magazine, but often from the same writer!   Don’t add the stress of bad advice from strangers to what is already a stressful time.
  5. Don’t get every gadget designed to cushion the baby. A wipe warmer is a waste of money.   Do you want your baby to be scared of a little chill forever?  Cold wipes build character.    If that isn’t good enough, hold the wipe in your hand for a few seconds before using it.   There are a million other gadgets to keep your little one from ever feeling a moment of discomfort.   Don’t waste your cash.  It may only be 10 pounds, but it’s tougher than you think.
  6. Don’t get every gadget designed to cushion the parent. They make ergonomic bottles, braces to hold your arms in the right position to feed, fancy cloths to catch baby vomit.   Tough it up. Support your baby yourself.  Build some muscle and some character.   Use cloth diapers to catch various treasures your little brat will spit up on you.   Spending more doesn’t always make it better.  The ergonomic bottles that make it easier to feed a baby, make it harder for the baby to hold the bottle.   This is actually making your life more difficult.
  7. Focus on the necessities. Yes, the fancy formula with the pre-digested proteins has a nicer label.   It doesn’t make a difference.    The generic brand at the warehouse store usually has the exact same ingredients in the exact same ratios as the brand name at the baby store–for half the price.   There is nothing special about the blankets in the baby section–except the price.    The fancy bottle warmer doesn’t do anything that a cup of warm water on the counter won’t handle.   You need:  A crib, unless you are doing a family bed; a easy-to-clean mat to change diapers(on the floor works!); and a diaper bag(back-to-school backpacks are more ergonomic and easy to organize than anything in the baby store!).  Everything else is a luxury.
  8. Time counts more than stuff. No matter what else you hear, no matter how old your child gets, time with you counts more than anything else you could do or buy.   Be there for your kids and the rest is gravy.
  9. Brand-name and designer labels are not status symbols. The opinions of the other soccer mommies do not matter.   The opinions of the random jerkfaces on the street do not matter.   Designer labels do not make you a better parent and are not an indicator of a happy baby.
  10. Always remember:  Babies bounce and have short memories. While I don’t recommend bouncing your baby on the floor, they are surprisingly resilient.   They don’t hold grudges, either.   There is room to make mistakes without screwing up your kid.

For a hundred thousand years, people raised babies with nothing more than a scrap of hide to alternately chew on or wipe with.  You can probably get buy with just a bit more.   Relax and enjoy the process of raising your kids.   Money doesn’t matter nearly as much as your presence.

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