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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?

Tips to budget successfully

Finance

This is a guest post written by Andreas Nicolaides, a financial author for UK based MoneySupermarket.com.

Whether your aim is to save money for a special occasion or you just want to make sure you don’t have to struggle financially when it comes to the end of the month, a budget can be a saving grace. Budgets help us quickly and easily identify our total income and all our expenditure, allowing us to plan for the best and prepare for the worst financial situations.

Set yourself a target

If you have decided to set up a budget, then there must be a reason. Are you looking to save for an upcoming event? Or maybe you have realised that you are struggling to make your payments every month and you would like to feel more financially secure. Based on what you would like to get out of your budget, you should set yourself a specific, measurable objective.

My first objective I set for myself was to save $100 every month for a year. This sort of objective is easy to manage and easy to monitor and this is what we are trying to achieve. One important thing I would mention here is to ensure your objective is achievable; don’t set yourself a target that is too far out of your reach, being realistic is extremely important.

How do you set up your budget?

The main key thing when you start to put your budget together is to make sure you’re as honest as possible. Get yourself a pen and some paper and on one page detail all of your income. Include the obvious and also remember to include any benefits you are entitled too. Then grab another piece of paper and detail all of your monthly outgoings, remember to be honest and thorough and try not to forget anything. Once you have both figures, deduct your expenditure from your monthly income that will give you your monthly figure.

You have some extra cash?

If when you have your figure you realise that there is some cash left over, you can then decide what you want to do with it. My advice here depends on your own personal circumstances, for example if you have high levels of debt, your main aim should be tackle your high interest debt aggressively and as often as possible.

If you have some money left over and your aim is to save, then set up an interest bearing bank account. If you are based in the US then you could look to set up an LSA or lifetime savers account. In the UK we have the equivalent, that is called a cash ISA saving account.

No money left over?

If after working out your budget you find you have no money left over, then you need to do something about it. Debt is one of those things that won’t just disappear overnight; it’s something that takes time and commitment, but not giving up is paramount.

How to cut down your expenditures?

One of the main things you can do when you realise you are in a bad situation is to try and cut down on your expenditure. Here’s a couple of quick ways:

Use price comparison sites – These sites are great to check and see if you are paying too much on your bills, and if you are, you will have a list of fantastic options available for you to choose from. This is a great way of saving money on things like your car insurance, see here.
Sell unwanted items – Selling unwanted items is a quick way to making some cash, everyone has them around their home, so why not make use of them instead of letting them build up dust?
Cut down on your spending – Try to avoid buying luxuries and try to stick to a specific shopping list when out doing the weekly food shop, this will help you avoid unnecessary purchases

A budget is used by many just to monitor what they spend month to month, but I hope I have detailed how it can be a helpful financial tool that can help you reach your financial goals. I hope my tips to budget successfully will help you get started on your way to financial freedom.

Best of Money Carnival #87, the Gold Rush Edition

Misc

: Image via Wikipedia

Welcome to the Best of Money Carnival #87, the Gold Rush Edition.

On January 24th, 1848, gold was discovered in Coloma, California by construction overseer James W. Marshall. The following year, one hundred thousand people moved to California to either strike it rich, or profit from those who were trying to strike it rich. The gold rush began 163 years ago today.

10. N.W. Journey presents Business use of Home Deduction posted at Networth Journey and says, “How to deduct your business home expenses.”

Some people recommend stockpiling gold so you’ll have something of value to spend after society as we know it collapses. Does anyone know how to make change from a gold bar for a loaf of bread?

9. Darwin presents Present Value of Money Explained – MBA Monday posted at Darwin’s Money and says, “One of the most important financial concepts is also one of the most misunderstood. Make sure you understand the Present value of Money – with these real life examples. It will save you thousands!”

In 1854, a 195 pound gold nugget was found at Carson Hill in California. It was valued at $43,534. That would be worth $3,160,357.20 today.

8. RJ Weiss presents What Your Optimal Income? posted at Gen Y Wealth and says, “An exercise to find your optimal income level.”

Q: Which weighs more: a pound of feathers, or a pound of gold? A: A pound of feathers. Gold is weighed using Troy Weight, which only has 12 ounces per pound.

7. BWL presents How To Select A Financial Advisor posted at Christian Personal Finance and says, “Find out how to select the best financial adviser for you.”

Until the onset of modern electronics, which use gold because it doesn’t corrode or tarnish, gold had no practical value of its own. Its entire value resided in the fact that it was pretty and relatively scarce.

6. Miss T presents 10 Ways to $ave Energy Comfortably | Prairie EcoThrifter.com posted at Prairie Eco-Thrifter and says, “How great is it to save money and the planet at the same time?!”

Q: Which weighs more: a ounce of feathers, or a ounce of gold? A: A ounce of gold. Troy Weight has fewer ounces that avoirdupois, but each ounce weighs more. There are 31.1 grams in a Troy ounce, but only 28.4 grams in a standard ounce.

5. Craig Ford presents Employers Look at Credit Reports | Ludicrous or Smart Business? posted at Money Help For Christians and says, “Should employers be able to see your credit report?”

Outside of collectible or government-issued coins, gold is priced according to it’s spot price, which fluctuates constantly. Dealers will generally pay a percentage under spot when buying gold, then sell for a percentage over spot. Always know the spot price of gold before you agree to buy or sell any.

4. MoneyNing presents Tax Time: Do I Have to Report that Income? posted at Money Ning and says, “Did you receive any income last year? Do you really have to report everything?”

Gold is the 58th most rare natural element, out of 92.

3. Silicon Valley Blogger presents I Just Lost My Job! How I’m Downsizing My Household Expenses posted at The Digerati Life and says, “I share my story of job loss and what ideas I have for paring down my expenses in order to cope with this loss of income. In the meantime, I’m doing what I can to find a new job!”

Only 20% of the gold from the Gold Rush deposits has been reclaimed. The rest is still out there.

2. The Financial Blogger presents 5 Reasons Why You Need A Partner In Your Business posted at The Financial Blogger and says, “A post outlining the benefits of a business partner.”

As of the end of 2009, more than 160,000 tons of gold have been mined, most of which was done in the latter half of the 20th century.

And the winner is…

1. Amanda L Grossman presents Frugal Lessons from People Who Survived the Great Depression posted at Frugal Confessions – Frugal Living and says, “Have you ever met someone who was alive during the Great Depression? They are changed people. The Great Depression left a great impression on their thoughts, their styles, and their habits. I am fascinated by this time period, and researched the question of what frugal habits these people developed to survive.”

I’d like to thank everyone who participated. Next week’s host is PT Money, so don’t forget to submit your entry!

A Budget Isn’t Enough

Finance

: Image via Wikipedia

You know exactly how much you make, to the penny. You’ve listed all of your bills in a spreadsheet, including the annual payment for your membership to Save the Combat-Wombat. You know exactly how much is coming in and how much has to go out each month. Your income is more than your expenses, yet somehow, you still have more month than money.

What’s going on?

The short answer is that a budget is not enough.

A budget is not…

…a checkbook register. Do you track everything you spend? Are you busting your budget on $10 lattes or DVDs every few days? Is the take-out you have for lunch every day adding up to 3 times your food budget? Are you sure? If you don’t track what you spend, how do you know what you’ve actually spent? You have to keep track of what you are spending. Luckily there are ways to do this that don’t involve complex calculation, laborious systems or even proper math. The easy options include using cash for all of your discretionary spending(no money, no spendy!), rounding your spending up so you always have more money than you think you do, or even keeping your discretionary money is a separate debit account. That will let you keep your necessary expenses covered. You’ll just have to check your discretionary account’s balance often and always remember that sometimes, things take a few days to hit your bank.

…a debt repayment plan. You may know how much you have available, but if you aren’t exercising the discipline to pay down your debt and avoid using more debt, you not only won’t make progress, but you’ll continue to dig a deeper hole. Without properly managing the money going out, watching the money coming in is pointless.

…an alternative to responsible spending. Your budget may say you have $500 to spare every month, but does that mean you should blow it on smack instead of setting up an emergency fund? I realize most heroin addicts probably aren’t reading this, but dropping $500 at the bar or racetrack is just as wasteful if you don’t have your other finances in order. Take care of your future needs before you spend all of your money on present(and fleeting) pleasures.

A budget is a starting point for keeping your financial life organized and measuring a positive cash flow. By itself, it can’t help you. You need to follow it up with responsible planning and spending.

Festival of Frugality #287: The Independence Day Edition

Misc

Today, it is my please to host the 287th Festival of Frugality, the Independence Day Edition. Yesterday, was Independence Day in the US. It’s the day we celebrate throwing off the yolk of high-tax, no-rights tyranny and blowing stuff up.

That’s not what this Festival is about. As much as I love this country and enjoyed celebrating, today, the theme is the Independence Day movie.

Coolest ID4 fact, ever: A promotional piece that aired in Spain for this film set off a “War of the Worlds” type of wide spread panic. The promo featured a popular Spanish news anchor and the piece ran as if there really WAS an alien attack to occur on July 4.

Editor’s Picks

The explosion of the Welcome Wagon Helicopters was actually footage of a pyrotechnics accident on set.

Miss T. gives us Seven Reasons to Avoid Penny Auction Sites. She does a great job of explaining the evil that is Penny Auctions, from outright fraud to the rip-off that is the basic business model. Some of these sites make $5000 or more on an iPad auction. They don’t even have to carry an inventory before running an auction.

Independence Day holds the record for most miniature model-work. It beat the previous record by double.

Philip submits Turn Wasted Extra Money Into a Debt Payment. I have a friend who is positive he can’t reduce his monthly expenses at all, while eating out almost every day.

The alien ship “miniature” was 65 feet across.

Boomer presents Financial Support For Your Adult Children. I love my parents. A lot. I couldn’t imagine moving back in with them, and I’m pretty sure they’d feel the same way soon enough. Although, Mom, if you’re reading this, can I have an allowance again?

This was the highest grossing film in 1996.

Suba presents Why you should not use 401k. I’ve never questioned the wisdom of maxing out a 401k. It’s good to see those assumptions challenged and the numbers crunched.

The Best of the Rest

President Whitmore: Good morning. In less than an hour, aircraft from here will join others from around the world. And you will be launching the largest aerial battle in the history of mankind. Mankind, that word should have new meaning to all of us. We cannot be consumed by our petty differences anymore. Perhaps it is fate that today is the fourth of July, and we will once again be fighting for our freedom. But not for freedom from tyrrany or oppression or persecution. We’re fighting for our right to live, to exist. And should we win the day, the Fourth of July will no longer be known as an American holiday, but as the day when the world stood up and declared in one voice that we will not go quietly into the night! We will not vanish without a fight! We’re going to live on! We’re going to survive! Today we celebrate our Independence Day!

FMF presents Save Money on Groceries by Shopping on Wednesday posted at Free Money Finance.

Harri Pierce presents Have a second hand summer posted at TotallyMoney.

Daniel presents Top 10 Reasons to Shop Online vs. Shopping In-Store posted at Sweating The Big Stuff.

President Whitmore: It’s a fine line between standing behind a principle and hiding behind one.

Philip Taylor presents The Best Time to Buy posted at PT Money Personal Finance.

Outlaw presents Pay Yourself First and Have Money in the Bank posted at Outlaw Finance.

Crystal presents Frugal Tips for the Pet Dog posted at Budgeting in the Fun Stuff.

Matt presents The Price of Water posted at Stupid Cents.

That’s right! That’s what you get! Look at you! Ship all banged up! Who’s the man? Who’s the man?! Wait until I get another plane! I am going to line up all your friends right beside you! ~ Captain Steven Hiller

Alan presents The Cost of Online Gaming: Free to Play posted at Canadian Finance Blog.

Paula @ AffordAnything.org presents Diets and Debt: Managing Money and Your Weight posted at AffordAnything.org.

Kay Lynn presents Summer Fun for the Frugal Family posted at Bucksome Boomer.

Jacob @ My Personal Finance Journey presents Top 10 Money Saving Tips posted at My Personal Finance Journey.

If you’re so smart, tell me something, how come you go to M.I.T. for 8 years to become a cable repairman?~ Julius Levinson

Glen Craig presents The Cost of Clutter on Your Finances and Life posted at Free From Broke.

Eddie presents 55 Suggestions To Save $1000 posted at Finance Fox.

Darwin presents Are You Better Off Than Your Parents? posted at Darwin’s Money.

Sustainable PF presents Sustainability Tip #179: Loose Cap Lose Gas posted at Sustainable Personal Finance.

WHOOOOO!!!!!!!!! Elvis has left the building! ~ Captain Steven Hiller

I hope you enjoyed the carnival. Please take a moment to subscribe to Live Real, Now.

6 Questions to Financially Get to Know Each Other

Finance

This topic has been blatantly stolen from Budgets are Sexy.

1) How do you spend: cash, debit or credit? I use cash almost exclusively. I live in Minnesota and have two small children, so bundling the brats up to go inside the gas station to pay is nuts. Gas stations get the debit card. Online shopping, or automatic payments set up in the payee’s system are done on a credit card that gets paid off every month.

[ad name=”inlineright”]2) Do you bank online? How about use a financial aggregator (Mint, Wesabe, Yodlee, etc.)? I bank online. I use USBank for my daily cash flow, INGDirect for savings management and Wells Fargo for business. I used Mint strictly as a net worth calculator and alerting system. I use Quicken to manage my money and a spreadsheet for my budget, but I really like the quick, hands-off way that Mint gathers my account information and emails low balance alerts.

3) What recurring bills do you have set on autopay? Absolutely everything except daycare, 2 annual payments, and 1 quarterly payment.

4) How are your finances automated? I use USBank’s billpay system, instead of setting up autopayments at every possible payee. This gives me instant total control and reminders before each payment. The exceptions are my mortgage, netflix, and Dish. My mortgage company takes the money automatically from my checking. The other two hit a credit card automatically. Our paychecks are direct-deposited and automatically transferred to the different accounts and banks, as necessary.

5) Do you write checks? If so, how often? Once per week, for daycare. Occasionally for school fundraisers.

6) Where do you stash your short-term savings? I have quite a few savings accounts with INGDirect to meet all of my savings goals. For the truly short term, I add a line item in Quicken and just leave the money in my checking account.

Who’s next?