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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?

Party Planning on a Super Tight Budget

Finance, Life

: Image by Another Pint Please… via Flickr

I like to party.

Actually, that’s a lie. I’m too introverted to be a partier. More accurately, I like to throw two parties per year. I am also cheap frugal, so I try not to break the bank feeding fifty of my closest friends.

I have two entirely different parties. The first, known as the “Fourth Annual Second Deadly Sin Barbecue of Doom”, is a daytime party with a lot of food. The second is a Halloween party which takes place at night and refreshments are more of the liquid variety. Two different parties, two different strategies to keep them affordable.

Meat

For the Halloween party, meat consists entirely of a meat/cheese/cracker tray and a crock-pot full of either sloppy joes or chili. Quick and easy for about $20. For the barbecue, meat is the main attraction. The menu varies a bit from year to year. Last year, we had burgers, brats, hot dogs, a leg of lamb, pulled pork, and a couple of fatties. The year before, we had a turducken, but no fatties. From a frugal standpoint, the only meat mistakes were the turducken and the lamb. Neither are cheap, but both as delicious. The rest of the meat needs to be bought over the months preceding the party, as they go on sale. Ten pounds of beef, 2 dozen brats, 2 dozen hot dogs and a pork roast can be had for a total of about $75, without having to worry about picking out the hooves and hair. Fatties cost less than $5 to make.

Sides

Both parties have chips, crackers and a vegetable tray. Chips are usually whatever is on sale or the store brand if it’s cheaper. Depending on our time management, we try to cut the vegetables ourselves, but have resorted to paying more for a pre-made veggie tray in the past. This runs from $15-30.

Drinks

For kids and adults who don’t drink, I make a 5 gallon jug of Kool-Aid. Cost: About $3. For adults, I provide a few cases of beer. I don’t drink fancy beer, so this runs about $50. For the Halloween party, I throw open my liquor cabinet. Whatever is in there is available for my guests. The rule is “I provide the beer. If you want something specific, bring it yourself.” I have a fairly well-stocked liquor cabinet, but I don’t stock what I don’t like or don’t use. Part of the stock is what guests have left in the past. I don’t drink much and I buy liquor sporadically when I have a whim for something specific, so raiding the leftovers in the liquor cabinet doesn’t register on my party budget.

Potluck

While it seems like an obvious and easy way to keep costs down, I do not and will not expect my guests to bring anything. I throw a party to showcase either A) my cooking, or B) my Halloween display. I don’t charge admission. I don’t charge for a glass. I throw a party so I can have fun with the people I care about and the people the people I care about care about. I consider it a serious breach of etiquette to ask anybody to bring something. On the other hand, if someone offers, I will not turn it down.

Fun

The most important part of either of my parties is fun. All else is secondary. I seem to be successful, since reservations are made for my spare beds a full year in advance. Last Halloween, people came from 3 states.

Cost

How much do my mildy-over-the-top parties cost? The barbecue runs about $150-180 plus charcoal and propane. Yes, I use both. I’ll have 2 propane grills, 1 charcoal grill, and a charcoal smoker running all day. The Halloween party costs $80-100 for the basics. The brain dip costs another $20 and there’s always at least another $50 in stuff that seems like a good idea to serve.

Update: This post has been included in the Festival of Frugality.

Carnival of Money Stories – Halloween Aftermath Edition

Finance, Misc

: Image by Dunechaser via Flickr

Welcome to the November 1, 2010 edition of the Carnival of Money Stories. One thing I didn’t do when volunteering to host this was to check my calendar. Did you know that November 1 follows October 31, every year? On Saturday, I had 30 people over for my annual Halloween party. On Sunday, I ran a haunt in my yard and coordinated to get a dozen kids out begging for candy while using my house as a base of operations. I’ve had guest from out-of-town since Friday. Halloween weekend is, by far, the busiest weekend of the year at my house.

Editor’s Picks

J. Savings presents Side Hustle Series: I’m a Restaurant Server posted at Budgets Are Sexy, saying, “Is serving tables thankless work? Yes. Are customers sometimes unpleasant? Of course. But the benefits are plenty!”

Wenchypoo presents Marketing, Marketing Everywhere–There’s No Escape! posted at Wisdom From Wenchypoo’s Mental Wastebasket.

The Wise Squirrel presents Does it Matter Who is the Main Provider Between Husband and Wife? posted at Squirrelers, saying, “Money story about a dual-income couple in which the husband had the opportunity for a big promotion that would have required a move, AND his wife to leave her job. Their different viewpoints are discussed.”

Business

Ryan @ CML presents Get a Tax Deduction for a Working Vacation posted at Cash Money Life, saying, “Tips on how to write off a business trip as a tax deduction.”

Career

Jeff Rose, CFP presents How to Pass the CPA Exam and Become a Certified Public Accountant posted at Jeff Rose, saying, “If you are interested in becoming a CPA, here are some of the experiences of someone who just recently passed the CPA exam.”

Jason @ Redeeming Riches presents What Sam Walton Teaches Us About Money, Success, and Family posted at Redeeming Riches, saying, “Sam Walton had it all – or did he? Find out the biggest regret he had on his death bed.”

Credit

Mr Credit Card presents Cash Vs. Credit, A Real World Experiment posted at Ask Mr Credit Card.

Debt

The Family CEO presents Debt Snowflakes: Or How I Made $821.73 in Extra Credit Card Payments This Month posted at The Family CEO.

Kaye presents Stuck in the Middle posted at Mrs Nespy’s World, saying, “The beginning of the journey was excited, the end will be exhilarating, but this “in the middle” stuff is for the birds.”

Kate Kashman presents Why Not To Bounce Checks posted at The Paycheck Chronicles, saying, “An accidental bounced check in college is still causing trouble, 20 years later.”

Michael Pruser presents Managing $225,000 in Debt Is Starting to Ware on Me posted at The Dough Roller, saying, “My struggles on managing a ton of debt!”

PT presents 5 Lessons Learned From Filing Bankruptcy posted at Prime Time Money, saying, “Lessons learned from an actual account of going through a bankruptcy.”

Silicon Valley Blogger presents Should You Pay Off Loans or Invest Your Money? posted at The Digerati Life, saying, “So you’ve got some money. Should you pay off your debt with it or invest the money? Here’s a personal account on what I’ve done.”

Housing

BWL presents Success Story: Paying Off A House In 5 Years While Tithing posted at Christian Personal Finance, saying, “This is an encouraging story of a woman who stuck to her convictions about giving 10% of her income and still managed to pay off her house in less than 5 years!”

Miranda presents Do I Really Want to Rent Out My House? posted at Personal Dividends – Money+Lifestyle.

Investing

2 Cents presents What Would Make Me Invest in the Stock Market? posted at Balance Junkie, saying, “We have not invested in the markets for a while now. A reader recently asked what it would take for us to get back in. Here’s my answer!”

FIRE Getters presents Early Retirement Case Study – Sandy Aldridge and Dale Lugenbehl posted at FIRE Finance, saying, “At times the fast pace of our city lives appear stifling making us long for a slower pace of life with more exposure to clean air and green vegetation. Our souls yearn for a simple life which is in greater harmony with Mother Nature. Of late our work related health problems have been making us yearn, almost every morning, for a more relaxed life with greater freedom. So we were thrilled to read about Sandy Aldridge and Dale Lugenbehl who retired early (at ages 48 and 47 respectively) more than a dozen years ago to their eight-acre farm in Cottage Grove, Oregon …”

Other

Neal Frankle presents Find A High Paying 2nd Job Using Craigslist posted at Wealth Pilgrim: Money Management Advice, Financial Stess Management, Addiction Recovery Plan & Resources, saying, “You Can Find A High Paying 2nd Job Using Craigs List If you’re looking for high paying 2nd jobs, look no further than your computer screen.”

Super Saver presents Retiree Financial Lessons from the Recession posted at My Wealth Builder, saying, “Although I wish this recession had not happened, I am glad that it happened early in our retirement, while we were better able to meet the financial challenges.”

Craig Ford presents Medi-Share Medical Sharing | A Health Insurance Substitue posted at Money Help For Christians, saying, “Medical sharing is a great way to reduce your health insurance costs.”

passive family income presents Cutting Out Wasted Expenses to Save More Income posted at Passive Family Income, saying, “How many wasted expenses are you paying for? After sorting through my family’s past years credit card and bank statements, I have found several small money leaks in our personal finances.”

Kristina presents Our Parents Estate posted at Dual Income No Kids, saying, “If your parents are divorced, how has their separation affect the way you have planned your estate?”

Donna Freedman presents Rockin’ the surveys — when it’s worth it. posted at Surviving and Thriving, saying, “Online surveys can be a nice source of extra income — except when they aren’t.”

Joe Plemon presents My Car Needs an Engine. Should I Sell it, Fix it or Junk it? posted at Personal Finance By The Book, saying, “What do you do when your beloved car needs an engine: sell it, fix it or junk it? This post explores the options.”

FMF presents My Type of Couple posted at Free Money Finance, saying, “Story of a couple who collected 400k cans to pay for their wedding.”

Lindy presents Once Upon a Time…I Used an Iron posted at Minting Nickels, saying, “One of the likely first stops in expense-slashing is the luxury of paying for laundered shirts. This is a tale of my ironing saga (yes, it qualifies as a saga). And it’s not as boring as this description sounds. Thanks!”

Sandy presents One Disaster Away posted at Yes, I Am Cheap, saying, “We sometimes pass judgment on others for the financial situation, but most of us need to realize that all it takes is one disaster to be in the same situation.”

Bucksome presents Top 7 Ways I Budget My Time posted at Buck$ome Boomer’s Journey to Retirement, saying, “Budgets are needed for more than money in this story about 7 ways to budget time.”

Tom @ Canadian Finance Blog presents How to Watch Cheap and Free TV in Canada posted at The Canadian Finance Blog, saying, “Want to know how to see free TV in Canada? You have a few options with over the air free HDTV, broadcaster’s websites and cheap services like Netflix!”

Lauren Mendel presents A Very Scary Money Story posted at Richly Reasonable – Successes and failures, all in the name of living reasonably., saying, “This Halloween week read the true, terrifying tale of how Husband and I almost lost literally every important document that we have. Muahahaha! You might want to lock your doors and close the blinds before reading this one…”

Sun presents What’s in My Wallet? posted at The Sun’s Financial Diary.

Shopping

Money Beagle presents Costco Coupon Policies – Truth or Fiction? You Decide posted at Money Beagle.

ctreit presents Our family budget has to accommodate this chocolate snob posted at Money Obedience, saying, “Name brands versus store brands.”

Rachel presents Sometimes Less Is More | MomVesting posted at MomVesting, saying, “Melinda talks about how the value of many things isn’t necessarily determined by their cost.”

That concludes this edition. Submit your blog article to the next edition of Carnival of Money Stories using the carnival submission form. Past posts and future hosts can be found on the blog carnival index page. Thank you, everyone, for participating!

3 Reasons You Hate Your Budget

Finance

: Image via Wikipedia

One of the first steps in clearing up your financial mess is to set up a budget. You need to figure out how much money you are making, how much you are spending, and what you can do to keep one of those numbers smaller than the other. If your income is smaller than your expenses, you’ve got work to do. If not, yay!

Even if you don’t obsessively cling to your spreadsheets and calculator, you need to spend the time to establish a budget–at least once–to know where you stand. When you do, you’ll find out it sucks. With good reason.

1. It takes too long to set up. Setting up a budget can be a long, drawn-out pain in the butt. Fortunately, it doesn’t have to be, but you won’t know that until after you make your first budget, then see some fairly drastic changes, and make a second budget. That one will be easier. For the first one, just concentrate on making a list of all of you regular bills and how often they are due. Don’t be surprised when you miss some. I missed a couple of our quarterly bills. All told, it took a year to get our budget completely done.

2. It doesn’t lie. Once you have all of your expenses down on paper, you are done hiding. You can’t tell yourself it’s all puppy dogs and ice cream when you are staring at the giant red pit that is the negative balance of your bad decisions. Nobody likes the messenger who brings bad news. When your budget shows you how big the hole is, you are going to hate it. That’s when it’s time to confront the problem head on and get out of the hole. Find the problems and rip ’em out. Cancel the cable, taxidermize the cats, and start buying generic underpants. It’s time to take an honest look at your situation. If you can’t handle where you are, how are you going to get where you want to be?

3. It’s not fun. When your friends go out, but you stay home because you’re broke, you will hate it. Y’ou’re also gonna hate comparing your old cell phone to the iPhone in the hands of the d-bag contemplating bankruptcy. Like Dave Ramsey says, “Live like no one else, so that later you can live like no one else.” Skipping some of the fun now will turn into security later. When you get to that point, it will have all been worth it.

Why do you hate your budget?

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

Celebrities

The 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.

How to Live Happily Without a Budget

Finance

Three years ago, we sat down and built our budget. We spent 9 months adding the non-monthly bills that we forgot about when we created the budget. Setbacks and shortfalls almost killed the budgeting plan completely. It took almost an entire year to get our budget right.

Unrelated Image

Now? I refer to the budget once per month. No more. I don’t check it at bill-paying time. I don’t think about it daily. It’s there as a reference when I need it, but it no longer drives our finances. How did we get to that point?

First, we firmly established our budget. We know exactly what we need to cover our expenses. None of the predictable bills catch us by surprise any more. This is important.

Once we had the budget established, the rest was easy. I moved almost every bill to US Bank’s online bill-pay system and switched to electronic billing and automatic payments. The automatic payments are all through US Bank. I only allow my mortgage to be set up with the merchant. I want total, instant control over the rest. I won’t call a merchant to ask them to change a payment if something comes up. The bank sends me an email when a payment is automatically scheduled, and again when it is paid.

Once I got comfortable with the automatic payments, I switched to electronic billing. I don’t need to see the bill or waste the paper if I know it is being handled for me which is why I encourage you to manage all your finances online. I do check the few bills that may change, like the credit card and cell phone. Now, I see few of my bills. They are all sent electronically to my bank, automatically paid, and scheduled in Quicken–all without intervention from me.

[ad name=”inlineleft”]We also use an envelope system. I know how much we need for groceries, baby crap, clothes, etc. At the beginning of the month, I take out all of that money in cash and put it into the appropriate envelopes. Other than this money, almost everything else takes care of itself. I don’t need to pay attention to by bills on a day-t0-day basis. Any extra money that comes in gets divided among our debt repayment and savings goals, which only takes a few minutes to arrange.

I glance over my budget at the beginning of every month, but I only review it when something changes. If we change our cell phone, or our budgeted gas bill changes, I make the change to our budget. Other than that, it’s not even an afterthought.

That’s how we do it.

Another option includes the Sloppy Math System. This consists simply of rounding deposits down and rounding expenses up. The more you round, the better the system works. If you round every deposit down $50, and round every expense up to the next $10, you are naturally building more room for error. Given enough time, you will have enough of a slush fund to handle emergencies and the occasional impulse purchase.

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