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Living the XBox Life on an Atari Income

: Image via Wikipedia

At some point, everyone has “champagne wishes and caviar dreams.” Over the last 25 years, we’ve even been peddled the “you can have it all” myth from every direction, including the media and the government.

The truth is simple: you cannot have it all. You can have anything, but you can’t have everything. In order to have one thing, you have to give up something else. It’s a law of nature. If you have $5, you can either get a burger or an overpriced cup of coffee, but not both.

“But wait!” you shout, rudely interrupting the narrator, “I have a credit card. I can have both!”

Wrong.

And stop interrupting me.

If you have $5 and borrow $5 to get some coffee to go with your burger, you will eventually have to pay that money back with interest. You will have to give up a future-burger AND a flavor shot in your overpriced coffee.

Everything you buy needs to be paid for, some day.

If you have an Atari income, but insist on living the XBox life, you will wake up one day, buried in bills, forced to live the Commodore-64 life out of sheer desperation.

There is a solution.

Don’t get all XBox-y until you are making XBox money. That way, you’ll never have to worry about going broke tomorrow paying for the fun you had yesterday.

Even when you have an XBox income, ideally you’ll restrict yourself to living a Gamecube life, so you’ll be able to put some money aside to support future-you instead of constantly having to worry about your next paycheck.

Make a Budget

Finance

: Image by r.lovewell via Flickr

In the past, I’ve gone through a detailed series of budget lessons demonstrating how to make a budget and showing my personal budget spreadsheet template. If you weren’t here to see them develop, you probably haven’t seen them at all. I’ve never built an actual index for those posts.

This is the master index of my budget planning resources. As I develop more, this will grow.

Budget Lesson #1 – In this lesson, I go over how we handle discretionary income and I explain our modified envelope system. The discretionary budget contains things like our grocery bill, or the clothes we buy. We have near-total discretion over what is purchased, hence the name.

Budget Lesson #2 – Lesson #2 contains the details of our monthly bills. These are the ones that are consistent, predictable, and actually due each month. Most people take these for granted as the bills they have to pay, but it’s not true. You can get almost all of your regular bills reduced just by asking. You would also be surprised what you can do without, when properly motivated.

Budget Lesson #3 – This is where I explain how we deal with the non-monthly bills. That is, the bills that have to be paid, but are not due on a monthly basis. I also share the personal budget spreadsheet template I developed. I am working on a few sample templates to match various imaginary scenarios. If you’d like to be an anonymous case study, and get free help setting up a budget, let me know, please.

Budget Lesson #4 – In this lesson, I describe our “set-aside” funds for things that will need to be paid eventually, but not on a set schedule. Sometimes, they are never actually due. We set aside money for the parties we throw, for car repairs and for a number of other things. A few of these items are outright optional, but they are part of what makes life fun. You can’t make a budget without including some of the extras.

Budget Lesson #5 – This is the companion piece to lesson 2. Learn how I’ve reduced–or attempted to reduce–each of these bills. For the better part of two years, I called Dish Network every few months to ask for a discount. For almost 2 years, it was granted. Then one, day, they told me they were putting a note on our account to keep us from getting any more discounts, so I canceled. 100% discounts help us save more.

Budget Lesson #6 – This is the reduction companion to lesson 3. These bills are harder to reduce. Have you ever successfully gotten your property taxes lowered?

Budget Lesson #7 – This is the reduction companion to lesson 4. Notice a pattern, yet?

Budget Lesson #8 – Here, completely out of order, is the reduction companion to lesson 1. Watch as I magically reduce–or rationalize–our discretionary budget.

So, dear readers, what part of budgeting should I address next?

Inadvertent BOGO

Finance

I refuse to buy my kid more expensive video game systems. He’s got a friend who’s got one of each, going back 15 years.

We don’t do that, so he’s spent the last 6 months saving to buy his own XBox 360. After his birthday this month, he finally had enough, so we ordered it a few days ago.

Wednesday was the Great Unboxing.

I was making dinner in the kitchen while the punk and his friend unpacked the box from Amazon.

The squeals were normal. The shouts of “Dad, why did you buy two XBoxes?” were a surprise.

Two?

No.

Actually, yes. There were two of the things in the box. Did I order two? Did I accidentally pay for two?

Nope. The packing slip only listed one, my order history only showed one, and my credit card was only charged for one.

Yet, there were two in the box. Free XBox! Woot!

That means an XBox in the bedroom for Grand Theft Auto and Red Dead Redemption, and an XBox in the basement for Madden and Star Wars. No fighting. No turns to take. And it didn’t cost us an extra $200.

That’s all win.

If there’s nothing on the packing slip, then Amazon didn’t know I had it. Even if they did, I didn’t do anything to make them send it. There was no fraud. Legally, I had no obligation of any kind to do anything other than enjoy my new prize.

Lots of win.

The kids were excited. Everyone gets a turn. Multiplayer games.

The parents were excited. We get a turn. M-rated games.

So much freaking win in that box.

But….

There’s always a but.

We didn’t order it. We didn’t pay for it. It wasn’t ours.

A friend told me to sell it. She knows how hard we’re working to pay off debt.

A coworker said, “Screw them. They’re just a big corporation who’d be happy to screw you first.”

But it wasn’t ours.

I spent 12 hours trying to rationalize a way to keep it that wouldn’t be unethical, make me feel guilty, or–most important–send a horrible message to my kids.

I couldn’t do it.

It wasn’t ours.

I had a talk with my son. It was his money that got this little prize into our house, after all. He wanted to keep it, naturally. He’s got a lot to learn about persuasion. He acknowledged that sending it back was the right thing to do. He agreed that it would suck if the roles were reversed. His only argument in favor of keeping it was “I want it.”

Even he admitted that was completely lame.

It’s going back. I let him think that was his decision.

I talked to Amazon. They apologized for the inconvenience and gave me a UPS label to send it back at no cost. It didn’t cover pickup, but I’ve got a drop box in my office building, so I can deal with that.

My wife was pissed. The customer service rep never bothered to say thank you. She called Amazon to complain to a manager. After reminding him that we had no duty to return the free XBox, he gave us a $25 gift card to say thank you.

I love my wife.

My son, for deciding to to the right thing, gets to spend the gift card. My wife, for being awesome, gets to be with me. I miss my free XBox.

What would you do? Would you keep the free XBox, sell it, or send it back?

Three Alternatives to a Budget

Finance

the envelope system: day one — Image by J. McPherskesen via Flickr

Budgets aren’t for everyone. For some people, the very idea of trying to track where their money going is painful. And that’s just the idea of tracking the money. It gets far worse when you’ve got $10 budgeted for coffee, $12 for fast food, $66.50 for gas, and $0.75 for entertainment. It’s can be hard to follow a strict budget for long.

If you know you need to track your money, and you also know that a strict, zero-based budget won’t work for you, what can you do? Luckily, there are alternatives.

1. Hope and Pray. This is otherwise known as the “Call my bank everyday and see how close I am to over-drafting” system. To fully embrace this system, you need to not only abandon a written–or even organized–budget, but you should also throw your checkbook register in the garbage. Make sure you’ve got a good overdraft protection account attached to your checking account and let your money take care of itself. This is the ultimate zen of personal finance. Don’t stress or worry, just hope for the best. This system works best if you make more money than Oprah and have modest tastes. For those of us who have to watch our money a bit to make sure the month outlasts our money, this probably isn’t a great plan.

2. The Envelope System. To implement this system, you do need to create a basic budget so know what you are obligated to pay. Once you have that done, take a stack of envelopes and label them for each item you have to pay. Add another envelope for food, another for entertainment, and another for miscellaneous because there is always a miscellaneous. Divide the money among the envelopes. Now for the magic. When you have to spend something, take the money out of the appropriate envelope and spend it. That’s it. If, however, there isn’t enough money in the right envelope, but you still need to spend the money, you have to take it out of a different envelope and spend less on the category that lost money.

3. Percentages. This is the simplest of the non-budget budgets. Take 50% of your money and spend it on necessities, like the mortgage, food, and utilities. The next 30% goes to savings and retirement. The last 20% is for fun or any other thing you want to spend it on. This naturally works best if you are out of debt, but if not, just make sure most of the 20% fun money goes to repaying debt. This system works best if your bills are automated and you will need to set up a basic budget first, so you can make sure your necessities come in under 50% of your income.

Not every budget plan will work for everyone, but there are always alternatives that can still help you manage your money.

How do you track your money?

Saturday Roundup – No More Car

Misc

: Image via Wikipedia

…err, no more car loan. I paid off my car this week, a year early! Now I’m down to 2 debts: a credit card with an embarrassingly high balance and my mortgage. We’re rocking the debt snowball!

Free Money Tip

INGDirect is having a sweet promotion. Open a checking account, use it three times in 45 days, and get $50 free. Free money is the best kind. I love my ING account and keep all of my savings there. If you don’t have an account there, yet, now is a great time to open one.

30 Day Project Update

This month, I am trying to establish the Slow Carb Diet as a habit. At the end of the month, I’ll see what the results were and decide if it’s worth continuing. For those who don’t know, the Slow Carb Diet involves cutting out potatoes, rice, flour, sugar, and dairy in all their forms. My meals consist of 40% proteins, 30% vegetables, and 30% legumes(beans or lentils). There is no calorie counting, just some specific rules, accompanied by a timed supplement regimen and some timed exercises to manipulate my metabolism. The supplements are NOT effedrin-based diet pills, or, in fact, uppers of any kind. There is also a weekly cheat day, to cut the impulse to cheat and to avoid letting my body go into famine mode.

I’m measuring two metrics, my weight and the total inches of my waist , hips, biceps, and thighs. Between the two, I should have an accurate assessment of my progress.

Weight: I have lost 17 pounds since January 2nd. That’s 6 pounds since last week. I cheated this week and had a slice of toast and 6 croutons with my grilled chicken-but-no-cheese salad.

Total Inches: I have lost 9 inches in the same time frame, down 3.5 since last week.

Naturally, the first week is the most dramatic. That’s when my body was flushing most of the garbage I’d been eating, including holiday feasts. I’ll have a hard time complaining about 6 pounds in a week. My guess is that I drop another 10-15 pounds by the end of the month, bringing the average to about 1 pound per day. Over time, that will drop as my base caloric burn drops to match my new weight.

Best Posts

Realized Returns is giving away a Kindle. I would greatly appreciate it if you didn’t enter, because I’d love to get a Kindle.

Maximizing Money has put together a stellar list of financial blogs. If I’m not enough to keep you going, take a look at that list.

Mystery shopping sounds like it could be such a sweet deal for some people. Always try to make money doing what you love.

Here is another list of sites that can make you some money. I love side hustles.

And finally, here is Lifehacker, showing you how to make better cocoa.

LRN Timewarp

This is where I review the posts I wrote one year ago.

I wrote a post on saving money while cooking. This post has easily withstood the test of time. We keep getting better at stretching our budget. Over the last year, we’ve actually reduced our food budget by an additional $50 per month, while the quality of our meals has gone up.

This was the first week I posted a 30 Day Project update. My first goal was to start waking up at 5AM. That worked well for almost the entire year, but I’ve let that slack off over the last few months. On the weekends, I don’t set an alarm or try to get up early, but I’m still up by 7:30, usually. During the week, my alarm goes off at 5:10, but I let myself snooze it. I’ve discovered that I do better at attending to my personal projects(like blogging) late at night instead of early in the morning. So, I’m going with what works, instead of trying to force what doesn’t.

I also reviewed the bills I pay that aren’t paid monthly in my third budget lesson.

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

First 3 Things to Do in the New Year was included in Crystal’s rockin’ new Total Money Carnival.

4 Ways We Keep Wasting Money was included in the Festival of Frugality.

Living the XBox Life on an Atari Income was included in the Carnival of Personal Finance.

Swamp Finance was hosted by Squirrelers.

I ran the guest post, The Best Financial Advice I Ever Received for Saving Money Today.

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

Get More Out of Live Real, Now

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You can send me an email, telling me what you liked, what you didn’t like, or what you’d like to see more(or less) of. I promise to reply to any email that isn’t purely spam.

That’s all for today. Have a great weekend!

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.

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Free Money Tip

30 Day Project Update

Best Posts

LRN Timewarp

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

Get More Out of Live Real, Now