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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?

 

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.

Money Problems – Day 4: Making a Budget

Finance

Fiscal Year 2010 Budget Briefing (200905070001HQ)
Image by nasa hq photo via Flickr

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.

This is day 4 and today, you are going to make a budget.

Now that you’ve got your list of expenses and you’ve figured out your income, it’s time to put them together and do the dreaded deed.  Your going to make a budget today.  Don’t be scared.  I’ll hold your hand.

Here are the tools you need:

  1. Your list of expenses from Day Two.
  2. Your list of income from Day Three.
  3. A spreadsheet.  I recommend the spreadsheet included in Google Docs, but Excel or the Open Office alternative, CALC, are acceptable substitutes.

Setting up the spreadsheet is dead simple.

Create a column for the label, telling you what each line item is.  Create a column to hold the monthly payment amount.   At the bottom of column 2, create a formula that totals your expenses.   If you are including a bill that isn’t due monthly, use a formula similar to the day 3 income formula to figure out what you need to set aside each month.  To figure a quarterly bill, multiply the amount by 4, then divide by 12.  To figure a weekly bill, multiply by 52 and divide by 12.

Scoot over a few columns and do the same thing for your income.

Scoot over a couple more columns and set up a total.  This is easy.  It’s just a matter of subtracting your expenses from you income.  Hopefully, this gives you a positive number.

To make this even easier, I’ve shared a blank budget spreadsheet.  No excuses.  If that simple spreadsheet doesn’t meet your needs, I’ve got a much more detailed version that includes categories.   I use the detailed version.

Making a budget may be the most intimidating financial step you take, but everything else is built on the assumption that you understand where you money came from and where it is going.  Without,it, your navigating a major maze based on a coin flip instead of a map.

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Sunday Roundup: Outta Town

Misc

Scrapbooking Cupcakes!
Image by clevercupcakes via Flickr

This weekend, my wife is off scrapbooking with my mother and sister-in-law.   Instead of hanging around the house trying to keep three kids entertained, I’m at my brother’s house, since his wife abandoned him with their kids, too.   I’ll let his kids keep mine entertained, and vice versa.  Woo!

30 Day Project Update

I am on the Slow Carb Diet.   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 30 pounds since January 2nd!   That’s only 1 pounds since last week.  12 more to meet my goal for February.  The difference this week?  I’ve cut back on the supplements, to see if they actually make a difference.  It would appear they do.

Total Inches: I have lost 16 inches in the same time frame, down 1.5 since last week.

Best Posts

I totally got live this joke.

Are you a compulsive shopper?  Money Crashers has some tips to cut that down.

Before I got a smartphone, I relied on a PocketMod for almost everything a smartphone does.  Does that make me a geek?

$39Glasses is having a killer sale.  $15 off a $40 item is huge.

Tim Ferriss has a guide to slow-carb seasonings.   It’s worth reading if your food is boring you.

LRN Timewarp

This is where I review the posts I wrote a year ago.  Did you miss them then?

This was Scam Week last year.  I had a post on debt scams and scams that target disaster victims.  As we roll into flooding season, it’s important to know how these scams work.

I also discussed my attempt to teach my son to savor delayed gratification.  It has been working.  He makes long-term(for an 11 year old) plans regularly.

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

Money Problems: Setting Goals was included in the Festival of Frugality.

Your Budget is Worthless was included in the Carnival of Personal Finance.

Brown Bagging Your Way to Savings was included in the Carnival of Money Stories.

Debt Burnout was included in the Totally Money Carnival.

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

Get More Out of Live Real, Now

There are so many ways you can read and interact with this site.

You can subscribe by RSS and get the posts in your favorite news reader.  I prefer Google Reader.

You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.

You can ‘Like’ LRN on Facebook.   Facebook gets more use than Google.  It can’t hurt to see what you want where you want.

You can follow LRN on Twitter.   This comes with some nearly-instant interaction.

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.

Have a great week!

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Sunday Roundup: Ice Fishing

Misc

Ice Fishing in Portland, Maine
Image by Captain Kimo via Flickr

Update: Something wonky’s happening with this post.  If you’re seeing it in your reader again, just ignore it.

Twenty years ago, my grandparents were living in Arizona.   They went to see Grumpy Old Men in the theater and, during an ice-fishing scene, they overheard the people next to them talking about how impossible it was.  You can’t walk on the ice, let alone drive there!   Naturally, my grandparents corrected them.

For the uninitiated, in the land of 10,000 frozen lakes, ice fishing is an actual pastime.   The ice on a lake can reach 36 inches, which is more than enough to drive on by 24 inches.    Ice-fishing aficionados will drill a hole through that frozen mess, drop a line through the hole and find dinner.    Last night, I went ice fishing for the first time in at least 10 years, probably 15.    On the lake we were on, they actually plow roads across the ice.   It sounds cold, but we were in a 20-foot fish house with a generator, a couch, and a TV.  The neatest thing was the underwater radar thingy that turns ice-fishing into a video game.

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 29 pounds since January 2nd!   That’s 4 pounds since last week.  13 more to meet my goal for February.

Total Inches: I have lost 15 inches in the same time frame, down 1 since last week.

Best Posts

Thinkgeek has a new high-protein, low-carb snack.  Did you know that toasted ants taste like bacon?  I’m far more tempted than I should be.

On the off chance that somebody has missed the memo over the years, tax protesting–the art of ignoring your taxes because you don’t like them–will not end well for you.

I’ve been fighting an urge to get a Kindle.  Over the last few weeks, the itch has been getting harder to ignore.  Money Crashers has a list of resources for free ebooks, making the itch that much worse.

That’s two posts on spending money.  Here’s one to balance that with making money.   Do you know the best time to post an eBay auction?

LRN Timewarp

This is where I review the posts I wrote a year ago.  Did you miss them then?

Have you ever participated in a financial binge & purge?  Budgeting and planning can help you avoid the purge, but you’ll have to forgo most of the binges.

Everybody gets caught by life’s ups and downs occasionally.  When that happens, how can you fix the damage to your budget and finances?

Finally, I explained my plan for shopping quickly.

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

Brown Bagging Your Way to Savings was included in the Festival of Frugality.

Debt Burnout was included in the Carnival of Personal Finance.

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

Get More Out of Live Real, Now

There are so many ways you can read and interact with this site.

You can subscribe by RSS and get the posts in your favorite news reader.  I prefer Google Reader.

You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.

You can ‘Like’ LRN on Facebook.   Facebook gets more use than Google.  It can’t hurt to see what you want where you want.

You can follow LRN on Twitter.   This comes with some nearly-instant interaction.

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.

Have a great week!

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Unlicensed Health “Insurance”

Finance

Gibraltar monkey
Image by Salim Virji via Flickr

Health insurance is–without a doubt–expensive.

As much as I hate the idea of socialized health care, it does have one shiny selling point to counter its absolute immorality: it’s cheap.  Assuming, of course, you ignore the higher taxes and skewed supply/demand balance.

Here in the US, we’re free from that burdensome contrivance.  Instead, we have health care and health insurance industries that are heavily regulated and ultimately run by people who have A) never held a job outside of government or academia, and B) have no idea how to run either a hospital or a business.  That works so much better.    Some days, I think our health system would be better run by giving syringes and band-aids to drunken monkeys.   The high-level decision making wouldn’t be worse.

Thanks to that mess and the high unemployment rate that somehow hasn’t been remedied by the 27 bazillion imaginary jobs that have been save or created in the last 2 years, some people are hurting.    Not the poor.  We have so many “safety net” programs that the poor are covered.  I’m talking about the “too rich to be considered poor, but too poor to be comfortable”, the middle class.

If are much above the poverty line, you will stop qualifying for some of the affordable programs.  The higher above the line you go, the less you qualify for.  That makes sense, but the fact that we have so many safety net programs means there is a lot of demand created by all of the people who are getting their health care “free”.

That drives the prices up for the people who actually have to pay for their own care.  Yes, even if you have an employer-sponsored plan, you are paying for the health insurance.   That insurance is a benefit that is a part of your total compensation.  If employers weren’t paying that, they could afford higher wages.

As the price goes up, employers are moving to a high-deductible plans, which puts a squeeze on the employees’ budgets.   Employees–you and I, the people who actually have to pay these bills–are looking for ways to save money on the care, so they can actually afford to see a doctor.

In response to that squeeze, some unscrupulous people(#$%#@%! scammers) are capitalizing on the financial pain and selling “health discount plans” which promise extensive discounts for a cheap membership fee.   These plans are not insurance.   In a best-case scenario, the discount plans will get you a small discount from a tiny network of doctors and clinics.  Prescription drug plans are no better.  You may get a 60% discount, but only if you use a back-alley pharmacy in Nome, Alaska between the hours of 8 AM and 8:15 AM on January 32nd of odd leap years.

How can you tell it’s a scam?

The scammers will try to sell you on false scarcity. They’ll say the plan is filling up fast and you have to buy now if you want to get in on it.   For all major purchases, if you aren’t going to be allowed time to research your options, assume it’s a scam.  Good deals won’t evaporate.

They aren’t licensed. Call the Department of Commerce for your state and see if the company is a licensed insurance provider.  Pro tip: they aren’t.

They don’t want you to read the plan until after you’ve paid.   That’s a flashing, screaming, electro-shock warning sign for anything.  Once you’ve given them your money, your options are reduced.

The price is amazingly low.  Of course it is.  They aren’t actually providing any services, so their overhead is nonexistent.  They only have to pay for gas to get to the bank to cash your checks.

Really, the best way to judge if something is a scam is to go with your gut. Does it feel like a scam?  Do you feel like you’re getting away with something? Does it sound too good to be true?

To recap: health care/prescription discount plans = bad juju.

 

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