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?

 

Getting Back on Track

Life

I should be ashamed to admit it, but we drove ...
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Have you ever set a goal…and failed?

At some point, it happens to all of us.   After all, our reach should exceed our grasp, right?   That doesn’t make it easy to admit failure, or to correct it.   Did you let a New Year’s resolution lapse, or slip off of a diet?   Have you started shopping indiscriminately again, or stopped going to the gym?

It’s okay if you did, but it’s time to fix it.

How can you get back on track after failing a goal?

1.  Pick a day to start over.

Just like when you first started towards your goal, you have to decide when you’re going to get back on board.    If you can’t decide, just pick the beginning of the next month.   A new beginning is a great time to tackle your new beginning.

2.  Recommit.

You failed once.  Accept it and move on.  Past behaviors don’t have to be an indicator of future performance.   Just do better this time.

3.  Announce it.

Somebody has noticed that you aren’t on the wagon.   Your coworkers are seeing you eating candy, or your spouse has noticed you buying things you don’t need.  Talk to these people.  Tell them you’re going to redo the things you’ve undone.  You’ll change the world, but you have to start with yourself.

4.  Don’t be ashamed of your lapse.

Unless I have seriously misjudged my audience, you are human.  Humans sometimes make poor decisions.  Being ashamed won’t help you, but take the opportunity to learn from the past.  Do you know what caused you to fail?  Are there triggers to your behavior that you can avoid this time around?  When I quit smoking, I tried to avoid rush hour, because I smoked heavily while I drove and I wanted to avoid being in car for as long as possible, minimizing one of my triggers.   What cause your lapse, and can you avoid it?

5.  Don’t do it again.

This one should be the most obvious, but the fact that it’s a problem means it’s not.   Do whatever it takes to not make the same mistakes and uphold your goals.  Don’t smoke.  Don’t eat garbage.  Exercise more.  Whatever you’ve decided to do or not do, do it….or not.

Have you missed a goal?  How have you picked it back up?

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Single Income Family

Finance

Effective next week, we are officially a single-income family.

If you can count all of my side-hustles as “single income”.

This week, my wife did the paperwork for her final week of state-sponsored unemployment.  She also applied for the federal extension, but that’s not automatic.

In a nutshell, this reduces our monthly income by $1340.

What does that mean for us?

1.  Our truck, which I was hoping to have paid off by March(3 months ago), still has about 7 regular-sized payments left.  Instead of making double payments, we’re now making the schedule amount.  The reason for the payoff delay is another post entirely.  Savings: $400.  In a pinch, we could stop making payments for almost 3 years due to how much we’ve already paid.

2.  The riding lessons I use to spoil my girls are cut in half.  Instead of weekly lessons, we’re going bi-weekly.  Savings: $100.  In a pinch, this could go away completely.

3.  We had a conversation that included, “Honey, when I complain that you bought more than our weekly budget of food in one trip, I’m not being a dick.  Here’s how much money we have.”  That conversation appears to have been productive.

4.  No vacation this year.  We let our spending jump a couple of times this year, so last week, I dropped most of our vacation fund to make up for it.  The expense of being matron-of-honor at a wedding will be an upcoming post, too.

[Edit]

5.  My wife is working at our daycare provider 2 days per week in exchange for daycare discounts.    Financially, this isn’t perfect, but it cuts the cost and gets the girls out of the house.  I work from home and have a hard time keeping them out of the office.

6.  We are considering long-term stay-at-home status for my wife.

[End Edit]

Right now, our budget says we make $100 more than we spend.  That includes all of our savings goals, and setting aside money for some luxuries like our Halloween party.   We’re not hurting–which makes me happy–but we do have to watch our expenses in a way that has just become mandatory.

I can’t tell you how happy I am to have renters.  Between our roommate here and the renters in the house we fixed up last year, we’re adding about $1000 to our income.   Rent is keeping us cash-flow positive.

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Fall From Grace

Finance

When you accumulate a certain level of debt, it feels like you’re wading through an eyeball-deep pool of poo, dancing on your tiptoes just to keep breathing.   Ask me how I really feel.Tip Toe

It shouldn’t be a surprise that I’m in debt.  We have gone over this before.   The story isn’t one of my proudest, so I’ve never talked much about how it happened.

Our debt was entirely our fault.  We messed up and dug our own poo-pool.   There were no major medical bills, no extended unemployment, just a strong consumer urge and an apparent need for instant gratification.  Delayed gratification wasn’t a skill I’d considered learning.  The idea of it was a thoroughly foreign concept.   Why wait when every store we visited offered no payments/no interest for a year?   We didn’t give much thought to what would happen when the year was up.

We got married young.   We bought our house young.  We started our family young.   We did all of that over the course of two years, well before we were financially ready.   Twenty years old, we had excellent credit and gave our credit reports a workout.   Credit was so easy to get.    By the time I was 22, we had a total credit limit more than twice our annual income.  We fought so hard to keep up with the Joneses.   A new pickup, a remodel on our house.   Within a month of paying off the truck, I got a significant raise and rushed out to buy a new car.

Every penny that hit the table was caught in a net of lifestyle expansion.   I was bouncing on my tiptoes.

Four months into my new car payment, I was laid off.  There’s me, hoping for a snorkel.  A week later, we found out our son was going to be a big brother.   Our pool had developed a tide.

We killed the cable and cut back on everything else and…managed.   Money was tight, but we got by.  I got a new job, but had we learned any lessons?  Of course not.   We got a satellite dish, started shopping the way we always had.  Times were good, and could never be bad.  We had such short memories.

Fast forward a couple of years.   Baby #3 is on the way while baby #2 is still in diapers.   Daycare was about to double.  Daddy started to panic.   I built a rudimentary budget and realized there was no way to make ends meet.   There just wasn’t enough cash coming in to cover expenses.   That’s when I made my first frugal decision:  I quit smoking.  That cut the expenses right to the level of our income.  It was tight, but doable.

There was still one serious problem.    Neither one of us could control our impulse shopping.   For a time, I was getting packages delivered almost every day.  It was never anything expensive, but it was always something.  Little things add up quickly.

Last spring, I realized we couldn’t keep going like that.   I started looking into bankruptcy.   Somehow, we managed to toss ourselves into the deep end of the pool.  We had near-perfect credit and no way to maintain it.

While researching bankruptcy, I found our life preserver.   We put together a budget.   We cut and…it hurt.     It’s taken a year, but every bill we have is finally being tracked.   We have an emergency fund and we are working towards our savings goals.    It hasn’t been an easy year, but we are making progress.    We’ve eliminated 15% of our debt and opened out budget to include some “blow money” and an occasional date night.   We are always looking for ways to decrease our bottom line and increase the top line.   Most important, we are actually working together to keep all of our expenses under control, with no hurt feelings when we remind ourselves to stay on track.

We are finally standing flat-footed, head and shoulders above the poo.

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

Money Problems – Day 2: What’s Going Out?

Finance

Today, I continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

On this, day 2 of the series, you need to gather all of your bills: your electric bill, your mortgage, the rent for your storage unit, everything.  Don’t miss any.

Go ahead, grab them now.  I’ll wait.

Did you remember that thing that comes in the plain brown wrapper every month?  You know, that thing you always hope your neighbors won’t notice?

Now, you’re going to sort all of the bills into 5 piles.

Pile #1: These are your monthly bills.  This will probably be your biggest pile, since most bills are organized to get paid monthly.  this will include your credit cards, mortgage(do you rent or buy?), most utilities and your cellphone.

Pile #2: Weekly expenses.  When I look at my actual weekly bills, it’s a small stack.  Just daycare.  However, there are a lot of other expenses to consider.  This stack should include your grocery bill, gas for your car, and anything else you spend money on each week.

Pile #3:  Quarterly and semiannual bills.  I’ve combined these because there generally aren’t enough bills to warrant two piles.  My only semi-annual bill is my property tax payment.  Quarterly bills could include water & sewer, maybe a life insurance policy and some memberships.

Pile #4:  Annual bills.  This probably won’t be a large pile.  It will usually include just some memberships and subscriptions.

Pile #5:  Irregular bills.   The are some things that just don’t come due regularly.  In our house, school lunches and car repairs fall into this category.   We don’t have car problems often, but we set money aside each month so our budget doesn’t get flushed down the drain if something does come up.

Now that you have all of your expenses together, you know what your are on the hook for.  Next time, we’ll address income.

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