Live Real, Now

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

Search Results for: three-alternatives-to-a-budget/budget-lesson-part-3/slow-carb-diet-how-to-avoid-going-bat-crazy/budget-lesson-part-2/brown-bagging-your-way-to-savings/budget-lesson-part-5/money-problems-day-3-whats-coming-in/what-happens-when-you-save/budget-lesson-part-1/4-ways-we-keep-wasting-money/money-problems-day-1-setting-goals

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?

 

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?

[Read more…] about Christmas for the Destitute

Credit Card Pitfalls You Have To Avoid

Business

The idea of a credit card is appealing. You don’t have to have the money to pay for things; you can just use the card. It creates instant gratification and you start to get used to the idea of getting what you want when you want it. Unfortunately, this can be a disaster waiting to happen.

If you get in over your head and begin to negatively affect your credit rating, it is not the end of the world. By looking at things like bad credit credit cards at Money Supermarket you can start to make things right again. Watch out for these pitfalls that could cause you to stumble into a bad credit card situation.

 Enticing Rewards

You see the commercial or advertisement online and reward credit cards make it seem like you will be drowning in points that can be redeemed for airline miles or gift cards. Initially, you may think that this is a great reason to sign up for a card. Then, you begin to use the card often in order to earn points.

The problem comes when you start spending just to get the rewards and you can’t or don’t make payments to return to a zero balance every month. You may end up with a hefty annual fee on top of everything else. Don’t let the temptation of getting a reward create a problem with your credit score.

 Maxing Out the Credit Card

When someone hands you $5,000, you will be tempted to spend it. Why not enjoy the new money? The problem is that a $5,000 credit card balance needs to be paid back. Don’t fall into the trap of spending the entire line of credit immediately.

If you do run into some financial difficulty or you really need a credit card for something, you will have nothing left to use. If you go over the limit, you can be sure that there will be some fees that come along with it. Use it wisely. Charge something and pay it off.

 Skipping a Payment or Paying Late

Once you have a credit card, everything is going to affect your credit score. If you miss a payment or pay late, you can be sure that this is going to show up against you. Aside from the damage to your credit score, most credit cards come with a substantial penalty in the form of a late fee that gets tacked onto the next payment.

Always pay on time. Pay in early if possible. Keeping up to date with your credit card will show up positively on your credit rating.

 When Problems Arise

Even if you do your best to avoid these pitfalls, sometimes financial problems can be unavoidable. An unexpected emergency requires you to max out the card. You run into a problem at work and lose your main source of income.

If you see that your credit is starting to decline, it is always possible to build that score back up. Start over using bad credit credit cards to make a positive impact on your credit score. With this scenario, you get an opportunity to once again avoid these pitfalls and improve your credit.

10 Ways to Secure Your Kids Against Debt

Finance, Parenting

Everybody wants their children to do well.  I want my kids to grow up without making my mistakes.  Here are a few ways to help them avoid debt.

  1. Talk to your kids about money.  Your kids will never learn how to handle their finances if nobody teaches them how.   This is important.    The factor that contributes most to stress, divorce, long hours, and unhappiness can’t be left to chance.
  2. Set a good example. Spend less than you have and let them see you doing it.  No matter what you tell your kids, if they see you doing otherwise, they will learn the bad lesson.   Money, work, relationships.  They all need attention, and your kids are watching you manage each of them.  Make them proud.
  3. Open a savings account for them, and let them fill it. Teach them the value of their money by letting them work for it, watch it accumulate, and spend it on something they care about.  I make my kids work to convince me to make a withdrawal, so they know it is only for the important things.  I don’t, however, decide what is important for them.
  4. Start a college fund. $100 or $10, it doesn’t matter.  Start putting something aside today.   College costs keep rising.  In 10 years, or 20, you can be sure that college will cost more than it does today.  Last year, nearly two-thirds of students graduating with a four-year degree did so with an average debt of more than $23,000.   Anything you can do to move your kids towards the debt-free 35% will help.  They will thank you for it for the rest of their lives.  Remember, they are in charge of choosing your nursing home.
  5. Teach delayed gratification. Don’t let them think that every whim needs to be satisfied…ever, let alone immediately.  Sometimes, anticipation improves the act.   When I am looking forward to a good meal for a few days or weeks, I really savor it when I finally do get the chance to eat it.  If they want everything they see, make them figure out what they want most, and what it will take to get it.
  6. Teach them to balance a checkbook. This is one of life’s basic skills that far too many people are lacking.   If you can’t balance your checkbook, how do you know what you have?  If you don’t know what you have, how can you know what you’re able to spend on necessities, or even luxuries?  Knowing where you are is at least as important as knowing where you are going.
  7. Give them control of money. This is the best time to learn how to manage money.  Give them an allowance and make it big enough to cover school lunch and bus fare.   Let them practice real-world skills and, more importantly…
  8. Let them make mistakes with it. This is their opportunity to make financial mistakes that won’t haunt them for years or decades.   Let them have some money and let them screw it up.  When they can’t buy the new game, or can’t fix their car, they will learn.  It’s better to do that as teenagers living at home than as adults forced to move back home.
  9. Let them see your pride in their good decisions. If they do well, tell them.  Let their endorphin rush come from your praise instead of their purchase.  You aren’t helping them by getting them hooked on the latest gadget.  You are helping them by making them feel good about making the right decisions.
  10. Beat them with a stick.

How do you protect your kids’ future finances from the kids themselves?

 

https://liverealnow.net/tag/budget/

Jules Bianchi – Is a high-risk career worth the money?

Celebrities

Formula One World ChampionshipThe violent crash at the Japanese Grand Prix calls into question whether the life of a racing driver is worth the money. These men are paid handsomely for their efforts, but they could die at any minute on the track. It is best for people to remember what it is like to do this job, but it is also wise for people to think about what it means to the driver who do this job.

The Risk

The risk in F1 is high, and Jules Bianchi saw that firsthand when he was injured so badly that he had to be rushed to the hospital for emergency surgery for head injuries. His crash was so violent that is stopped the race. People crash all the time, but this crash stopped the race. Bianchi is no doubt a millionaire, but people would wonder why he would risk it all just to drive a car quickly.

Every one of the drivers on the circuit does not have an imagination. People like Bianchi or Schumacher or Alonso or Vettel do not think for a second about what could happen when they crash. These men only think about winning races. They only think about doing their best. They know the risks, but they do not sit around thinking about it.

The Pay

F1 drivers are paid extremely well, and they participate in the most glamorous sport in the world. They do something that is more difficult than any other sport, and it is difficult, but they live the lives of rock stars. They know this fame will be short-lived, but they drive regardless.

Jules Bianchi knew the risks when he got in the car. He is being paid extremely well to do his job, and it is worth it to him. People around the world may not have the bravery or raw talent to become a great driver, but he does. He has a ride on the Formula One World Championship circuit. He has to take his car to the limit if he wants to do well.

The Alternatives

Someone like Jules Bianchi does not have to leave the sport even if he is injured badly. Many drivers will get back in the car, but other drivers will simply move to other parts of the sport. Drivers can become owners, engineers and test drivers. These drivers can become test drivers and designers for auto makers, and they can commentate on the sport they love.

They do not want to go to these alternatives because they cannot drive forever. There is also a Masters Series coming up for F1 where drivers who are over 45 can ride. These men get back in the car at high risk to their lives because it is what they love. When someone is this passionate about something, they must keep doing it.