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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?

 

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?

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Balance Your Borked Budget

Finance

You’ve got a budget worked out to the penny.  You know every dollar that comes in and every dime that you spend.    All of your bills are getting paid on time.  Then, one day, it all comes crashing down. Your budget is no longer even a reasonable approximation of your cash flow.  You’ve got no idea what’s coming in or going out.   Bills are piling up and fees are digging you deeper in debt.

What happened?  More importantly, how do you get back on track?

The first thing you need to do is identify the problem. What, exactly, went wrong?  Did you lose your job or need a surprise botox injection?  Your car died or your kid developed a hockey habit?  Sports car or shoe sale?  Whatever the cause, if you can’t identify it, you can’t deal with it.  Some of the possible problems may be things that can get clubbed and buried in the backyard, while other things may be expenses that won’t be going away.    If it’s a one-time expense, you can simply refocus your debt repayment to take it into account.  If it’s an ongoing expense, you will need to adjust your other expenses, possibly in a drastic manner, to make ends meet.  You can’t know which way to go without knowing what caused the problem.

Next, commit to to making it right. Don’t leave it at a mere commitment.  Actually commit and actually do it right. Future-you is counting on you to fix the problem before he gets screwed.   This is important.  Without firm–and real–commitment, nothing else will matter.  At best, you will be treading water.  At worst, you will drown yourself in unanticipated bills.

Cut everything extra.   Every expense–whether it’s your mortgage or your maid–is a rock in your pocket, one hundred miles from shore.  How much can you carry and stay afloat?  This isn’t the time to keep paying something because you enjoy it.  If it isn’t absolutely necessary, it’s got to go.  Cut your internet, cancel Netflix, learn to shut off the lights when you aren’t using them.   Is the early termination fee less than 6 months of your cable bill, your satellite bill?  Cancel it.    You can always sign up again later.  This is the time to be ruthless.

Is there a way to bring in some extra cash?  Can you pick up a second job, or land a freelancing gig?  If you’ve suddenly found yourself unemployed, can you spend some time on being a Mechanical Turk?  Sell all of the things you don’t use anymore, or, more likely, never should have bought in the first place?  Do you have a spare kidney?

Remember, this is a drastic situation calling for drastic measures.  Your future is depending on you.  Don’t make him come back and kick your butt.

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

Chains of Servitude Update

Finance

It’s been almost exactly one year since I told my wife that we were either going to take control of our finances or file bankruptcy.

At that time, we were spending at least $500 more each month than we made, and often, it was $1000 more.   We had more than $5000 accumulated on our overdraft line of credit, more than $30,000 in credit card debt, $2500 on a student loan, $12,000 on a car note, and our mortgage.

Our savings were nonexistent.   We had automatic deposits established, but we’d transfer the money out right away to cover other expenses.    Everything that came up was an emergency and a surprise.  We had no real idea how much our lifestyles cost or what it actually took to maintain.

Maintaining our finances took several hours every payday to balance the checkbook and pay bills.

Fast forward 1 year.   The student loan is gone, the line of credit will be gone next month, and the car loan will be paid off before the end of the year.   We’ve reduced our total debt load by more than 20%.

We have a useful emergency fund and we’re meeting our other savings goals, including a college fund for the kids.    We don’t have extremely high balances, but it’s reassuring to have more than a couple of months of expenses in our savings accounts.

We’ve automated almost everything and gone to a cash-only system.   I now spend about 20 minutes a month balancing the checkbook and less than 5 minutes paying bills.

A year ago, we were in a hole, digging as fast as we could.   Now, we can see the end of the debt tunnel and we are rushing as fast as we can to get there.    According to my debt spreadsheet, we will be completely debt free in just under 4 years, ignoring any money coming from our side-hustles and work bonuses.

We’re making better progress than I had hoped for, and it keeps getting easier.    Smart spending is becoming a habit, instead of a just wishful thinking.

Update:  This post has been included in the Carnival of Debt Reduction.

Resolutions That Don’t Suck

Finance

a beautiful macro shot of Crystal Methamphetam...
a beautiful macro shot of Crystal Methamphetamine in a black background (Photo credit: Wikipedia)

I’m not a huge fan of New Year’s resolutions.  Generally speaking, if you don’t have the willpower to do something any other time of the year, you probably won’t grow that willpower just because the last number on the calendar changed.

Seriously, if you’ve got something worth changing, change it right away, don’t wait for a special day.

That said, this is the time of the year that many people choose to try to improve…something.   Some people try to lose weight, other people quit shooting meth into their eyeballs, yet others(the ones I’m going to talk about) decide it’s time to get out of debt.

Now most people are going to throw out some huge and worthless goals like:

  • I need to lose some weight.
  • I need to save more.
  • I need to be a better person.
  • I need to shoot less meth into my eyeball.

The problem with goals like that is the definitions.  What is “some”, “more”, “better”, or “less”?  How do you know when you’ve won.

It’s better to take on smaller goals that have real definitions.

Try these:

  • I’m going to lose 20 pounds.
  • I’m going to save $1200.
  • I need to stop locking my children in the closet when I go to the movies.
  • I am never ever going to shoot meth into my eyeball again.

But Jason, I hear you saying, where am I going to find $1000 to save?  Well, Dear Reader, I’m glad you asked.  Next time though, could you ask in a way that others can hear so my wife doesn’t feel the need to call the nice men in the white coats again?

Let’s break that goal down even further.

Instead of saving $1200, let’s call it $100 per month.  That’s a bite-sized goal.  Some people don’t even have that to spare, so what can they do?

Let’s make that resolution something like “I’m going to have frozen pizza instead of my regular weekly delivery.”  If your house is anything like mine, that brings a $60 pizza bill down to $15 for some good frozen pizza for a savings of $45.  If you order pizza once a week, that’s $180 saved each month, double your goal.  That’s a win with very little suffering.

Now, you can take that extra $80 that you hadn’t even planned for and throw it at your credit cards.   That’s a free payment every month.  Before you know it, you’ll have your cards paid off and a decent savings account.

Then you can thank me because I made it all possible.

 

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