Live Real, Now

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

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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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Teaching My Child about Money in a Way I Was Not Taught

Finance

When I was in high school and working 15 to 20 hours a week, my mom gave me free rein to use the money I earned as I would like.  Actually, she said nothing to me about saving for college or putting some money into savings.

When I had friends who complained that they had to put away some of their earnings, I commiserated with them.  How unfair of their parents to make them save some of their money!  They worked hard for their money, often at crappy part-time jobs.  They deserved to spend the money any way they saw fit.

The way I saw it, why save for college?  According to financial aid rules, if the student has any savings, she would have to use the majority of it to pay for college.  How unfair.  To add insult to injury, if prospective college students have some savings, they would qualify for less financial aid, which often meant fewer student loans.

The injustice. 

Yes, it was better to spend my hard earned money than save it and be penalized.

No one told me differently.  In fact, many people in my family agreed with me and encouraged me to buy a used car to get to and from my job.   Of course, I paid the loan payments for the car, the gas I used and my insurance out of money from my job.  That was a responsible use of money, but I also went out to eat with friends, a lot.  At 16, I was going out to eat with my friends twice a week at least.

However, my plan worked perfectly.  When I went to college, I didn’t have to use any of my hard earned cash.  No, not me, because I hadn’t saved anything.  Instead, I left college with nearly $20,000 in student loan debt.  I took two years off and paid down as much student loan debt as I could, getting it down to about $8,000, but then I went to graduate school and took on more student loan debt.  I graduated with nearly $25,000 in debt total.  I am still paying on it today, 13 years later.

Now that I am the parent, I am one of those “awful” parents who makes her kids save.  My son knows when he gets his allowance, some goes to save, some goes to donate, and some goes to spend.  True, it makes me cringe when he uses his spend money on little trinkets like temporary tattoos, stickers, and gum, but I keep silent.  He did the work to earn the money, and he can spend it as he likes.  However, I am inflexible with saving; that money must be set aside.  When he goes to college, I expect that he will have to use the majority of that money.  Rather than seeing it as a waste, I see it as an important component of his financial education.  Spending his money to pay a portion of his college education will hopefully make him take college more seriously.

Meanwhile, I have already begun having chats with him about money, spending, and budgeting.  He watches his dad and I work hard to pay down our debt with gazelle intensity.  He sees me use a calculator at the grocery store to see how much our groceries will be.

Ultimately, he will make his own financial decisions as he grows up, but I plan to teach him throughout these important years so that even if he turns into a spendthrift, he will have a firm financial understanding to revert to as he ages.  While my mom taught me how to stretch money further, she never taught me how to save; I hope saving is a lesson my son takes with him throughout his adulthood.

How do you teach your kids about money management?

Melissa writes at Fiscal Phoenix where she encourages people to rise from the ashes of their financial mistakes as she and her husband are doing.

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Sunday Roundup: Spent weekend

Misc

Photographer: Frank C. Müller
Image via Wikipedia

The problem with running a training class for a side hustle is that it sucks up half of my weekend, whenever I hold a class.   I like my weekends.  Unfortunately for downtime, I like extra money more.

30 Day Project Update

This month, I am trying to do 100 perfect push-ups in a single set.  I’m recording each session in a spreadsheet.  I am currently up to 50 in a set and 175 in a session, spread across 5 sets.  This week, my elbow started hurting, so I took 2 and a half days off.

Weight Loss 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 38 pounds since January 2nd.   That’s 2 pound since last week.

Total Inches: I have lost  22.5 inches in the same time frame, down 1.5 inches since last week.   My biceps, which are part of this measurement, have grown half an inch each since I started doing push-ups twice a day.

Best Posts

My mother-in-law hates dandelions, with a passion that just isn’t sane.   I want to make her a meal that consists of nothing but dandelions.

When I got my first RSA SecureID card, I thought it was the coolest thing ever.   If you’ve never had one, it gives you a rotating password that changes every 30 seconds, so nobody can guess you password for long.  It was neat, and, apparently, not that secure.

The idea of a tortoise on wheels makes me smile.

I’d like to try to make yogurt.  I can try whatever flavors I like.  Poptart-and-broccoli yogurt just sounds….

I work really hard to save money on vacations, and this post is full of good ideas to help me do that.

eBay is making changes to their fee structure that will make it a lot cheaper to sell things.  I’m guessing the back-the-customer-no-matter-what-at-the-expense-of-the-seller’s-getting-scammed policy was costing them some money.

The big box stores are pushing for Amazon to collect sales tax on all sales, in opposition to a Supreme Court ruling on the topic.  It won’t make a difference in sales.  Amazon will still be cheaper.  And I’ll get a Canadian mail drop.

LRN Timewarp

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

I talked about teaching my kids the joy of delayed gratification.  Interestingly, my son has since decided he doesn’t want an XBox 360, because the buy-in is too high, with having to buy games and controllers to match the console.  We’ve also changed his allowance to savings ratio.  Now, 25% of everything he makes hits his bank account.  The rest is his to do with as he sees fit.

Last year at this time, it was scam week here.  I wrote a post on debt scams and another on disaster scams.

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

Money Problems: Boosting Your Income was included in the Totally Money Carnival.

Living in Debt: How I Sacrificed My Future was included in the Carnival of Personal Finance.

My post on spendthrift whiners was hosted on Faith and Finance.  In return, I hosted his post on paper statement fees.

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

Yakezie Blog Swap

Jacob hosted the Yakezie Blog Swap, which is a bunch of bloggers writing on the same topic and sharing the posts with each other.   Here is his list of the participants this round.

He wrote about 3 of my financial pet peeves (spending too much money on drinks, financing expensive furniture, and active investing strategies) on Narrow Bridge Finance.

Robert from The College Investor wrote about how people making mistakes with their 401k accounts is a big “no-no” at Thousandaire.
Narrow Bridge Finance posted about how people not taking responsibility for their financial actions infuriates him on My Personal Finance Journey.
Prairie Eco-Thrifter posted about how sales tax is her biggest financial pet peeve at 101 Centavos.

101 Centavos posted about how wasting food makes his blood pressure rise at Prairie Eco-Thrifter.

LaTisha D Styles writes about how greedy banks upset her at Retire by 40.

Retire by 40 wrote about how bigger is not necessarily better at FSYA Online.

Bucksome Boomer writes about how advertisers that hide the real price of a product is maddening at The Single Saver.

The Single Saver wrote about parents who do not teach their children financial responsibility at Bucksome Boomer.

Kevin from Thousandaire writes about people having misconceptions about Roth IRA’s at The College Investor.

Time from Faith and Finance vents about financial institutions charging to send paper account statements, but still send out a plethora of paper junk mail at Live Real Now.

Jason from Live Real Now politely rants about how aggravating it is to see people whine about their less-than-ideal financial situations, yet do nothing about it, at Faith and Finance.

Money Sanity vents about people complaining about paying overdraft and bank fees, while at the same time, having no idea how much credit card debt they have or their checking account balance at The Saved Quarter

The Saved Quarter writes about people who are financially irresponsible and want to complain about how broke they are while showing off the new things they bought at Money Sanity

Barb Friedberg talks about how investment advisors that get paid to sell products (more salesman than investment advisors in my book) upset her at Happy Simple Living

Happy Simple Living writes about how companies and people that exploit others aggravate her at Barb Friedberg Personal Finance. 

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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3 Habits Every Soon-to-be-Successful Debtor Needs to Cultivate

Finance

Getting out of debt is primarily a matter of changing your habits.   We’ve all heard people swear by skipping your morning cup of coffee to get rich, but that’s just a small habit.   Much more important are the big habits, the lifestyle habits.  Here are 5 habits to cultivate for financial success.

Frugality

“Beware of little expenses; a small leak will sink a great ship”– Benjamin Franklin

As Chris Farrel wrote in “The New Frugality“, being frugal is not about being cheap, but finding the best value for your money.  When my wife and I had our second baby, we couldn’t justify spending $170 on a breast pump, so we bought the $30 model.   It was quite a bit slower than the expensive model, and was only a “single action”, but for $140 of savings, it seemed worth the trade.   Six weeks later, it burned out so we bought a new one, still afraid to justify $170 on quality.   This thing took at least 45 minutes to do its job.  When it burned out 6 weeks later, we decided to go with the high-end model.   This beauty had dual pumps, “baby-mouth simulation” and it was fast.  The time was cut from a minimum of 45 minutes to a maximum of 15.   That’s 3 hours of life reclaimed each day fro $140. Six months of breastfeeding for each of two kids means my wife regained 45 days of her life in exchange for that small amount of money.   At the rate of 6 weeks per burnout, we would have gone through 8 cheap pumps, costing $240.   The high-end unit was still going strong when we weaned baby #3.  Buying quality saved us both time and money. I wish we would have gone with the good one from the start.  Sometimes, the expensive option is also the cheap option.

Maturity

A very sad, sad panda :(
Image via Wikipedia

“Maturity is achieved when a person postpones immediate pleasures for long-term values.” -Joshua Loth Liebman

Being a mature, rational adult is hard.   It means accepting delayed gratification over the more enjoyable instant variety. We save for retirement instead of charging a vacation.  It takes a lot of restraint to put off buying the latest toys, clothes, gadgets,  cars or whatever else is currently turning your crank until you actually have the money to actually afford it.   It means planning your future instead of looking like a surprised bunny caught in a spotlight every time your property taxes come due.   (Who knew that the year changed every year?  Do they really expect annual payments annually?  Geez!  There’s so much to learn!)   It means thinking about your purchases and buying what you actually need, actually want, and will actually use instead of resorting to retail therapy whenever you feel like a sad panda.    The only benefit to mature, rational management of your finances is that, given time, you will have the security of knowing that, no matter what happens, you will be okay.   That’s a huge benefit.

Pleasure

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“Do not bite at the bait of pleasure, till you know there is no hook beneath it.” – Thomas Jefferson

If it hurts, you won’t do it.   You have to learn to take pleasure from from things that won’t make you broke and you have to learn not to hate putting off the things you can’t afford.    Take pleasure in the little things.  Enjoy the time with your family.  Presence means so much more than presents. So many people never learn how to enjoy themselves.  Take the time to experience life and enjoy doing it.

Update:  This post has been included in the Carnival of Debt Reduction.

How to Maximize Your Income and Reduce Your Expenditures

Finance

If the past few years have taught us anything, it’s that we need to be taking out less debt and building up more savings. And certainly, it’s where the public seem to be heading – levels of mortgage overpayment and personal savings have rocketed in the past year amongst those who have the luxury of being able to put income aside.

For many of us though, finding money to save is a real struggle. After the bills and living costs are taken out of a monthly salary payment, there’s not always a lot left to play with. So what do you do?

The answer lies in getting tough with yourself, carrying out a review of your current spending patterns and working out a sensible budget. Essentially you need to both maximise income and reduce expenditure – both sides of the coin. There are plenty of ways to do this when you start thinking, so be creative and start thinking outside the box.

Here are a few top tips to get you started:

Ask for a pay rise – it seems like an obvious option, but so many of us never do it. Take a look at the market and see what similar companies are offering for your job role or profession. This will give you an idea of whether you’re currently being paid enough for your skills level and experience.

Ask your manager in a calm and prepared manager and come with facts and examples to back up your request. If the request is turned down, try again in a few months time, with more evidence. Also, ask HR for advice about your job salary banding and progression, so you show that you’re serious.

Get a new job – the obvious option when your pay rise request is denied. You may find that you can earn more elsewhere in the same profession, or flex your skills into a new career entirely. See a professional careers advisor for guidance.

Get a second income – more people than ever are opting for this route, by becoming self-employed on a part time basis. There are numerous industries that rely on an army of part-time staff, often self-employed. Examples are party-planners, sales people, freelance designers, coders, copywriters and researchers, market researchers, bar and restaurant staff and plenty more.

Take in a lodger – if you have a spare room, then the government allows you to take in a lodger without paying tax on rental income (up to £4250 pa.) This can be an effective way to make the use of your home to bring in income. Do your research first though on how to select the right lodger and make the relationship work.

Look for opportunities to earn – examples include signing up for overtime during busy periods at work or selling unwanted items on eBay. You could also sign up with the local council to count votes during election period, or help steward at large events. There are various agencies offering links to such opportunities if you search online.

On the other side of the coin lies spending reduction. This is a bitter pill for some to swallow, but there really is no point in earning more if you’re not going to make good use of it!

Food shopping – when it comes to food shopping, start using grocery coupons/vouchers and sign up for reward schemes. Downgrade your brands when you’re out shopping, so that you save money on you shop each time. Look at bulk buying offers, local grocers, markets and other opportunities to slash monthly grocery bills.

Travel – identify ways to save on travel, firstly by walking when a journey is a mile and under. If you’re doing this regularly you’ll save on petrol and you can cancel your gym subscription! With train tickets, book well in advance to take advantage of special deals and with holidays, look for cheap holiday offers and promotions via online search sites – these check the whole of the market to find the best prices and options for your requirements. Holiday extras such as car hire and airport parking can also usually be arranged via these online travel sites so be sure to compare prices to save yourself some money.

Clothes shopping – instead of shopping expensively on the high street, channel your passion for fashion into eBay. Many of your regular brands will be on there already and you can sell last season’s purchases to make way for the current season of items. Get savvy with bids and set yourself limits – you’ll find some great bargains if you’re clever about it!

Entertainment – when it comes to entertainment, sign up to group buying schemes for special offers and look more broadly in your area for things to do that don’t cost a lot of money. Things like local leisure centres, museums, parks, libraries, city parades and exhibitions are often free or subsidised by the council and you can enjoy time with the family without spending a lot of money on more commercial entertainments.

Hobbies – rather than taking up yet another expensive sport that you’ll buy all the equipment for and then never see through, find low cost hobbies to enjoy and cultivate. Walking or running, painting, music appreciation, gardening, racket sports, debating groups, local social clubs – all of these can be enjoyed without necessarily parting with too much cash. And it will broaden your horizons too – thinking more broadly about what counts, such as spending time with loved ones, rather than throwing money at free time like there’s no tomorrow!

 This post brought to you by MoneySupermarket.

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5 Things to Do in the New Year

Finance

Creditcard
Image via Wikipedia

CNN Money has an article up on 5 things to do this year.   After posting a similar article a couple of weeks ago, I thought it’d be interesting to post about someone else’s perspective.

1.  Shop for a no-fee checking account.

If you are paying fees for a checking account, go somewhere else.  There are so many alternatives available that you shouldn’t be throwing money away.   Ally Bank has a great no-fee checking account, as does INGDirect, though ING won’t let you write paper checks against the account.  The same principle applies to credit cards.  If you have a card with an annual fee and you aren’t getting some monster services or rewards to go with it, run away.

2.  Save your raise.

I don’t necessarily agree with this one.  If you are in debt, it’s better to use the raise to pay off that garbage, first.   When I got my last raise, I immediately boosted the automatic payment for my car to use every new penny.   I’ve never had the money available, so I haven’t missed it.  Whatever you do, fight lifestyle inflation.   Just because you have some more money doesn’t mean you need to spend it.   At my last job, I got a substantial raise, so I bought a new car, only to get laid off a few months later.

3.  Go for a checkup

Wealth doesn’t matter if you squander your health.  Go get a physical.   Every disease is easier to treat if you catch it earlier as opposed to later.   Don’t make the mistake of running your body into the ground.  You will regret it later.   Effective this year, most health plans will cover a physical with no copay, co-insurance, or deductible allowed.

4.  Score a better rewards card.

B***-****.   If you’ve still got debt, don’t concentrate on using more of it.  Get that crap paid off.    If you’re out of debt, look into getting a rewards card that aligns with your goals.   If you like to travel, get a card that gives you frequent flier miles.   Otherwise, I’d go with a cash-back rewards card.

5.  Use your vacation days.

37% of Americans don’t take all of the vacation to which they are entitled.  That’s insane!  We work harder and better when we have time to recuperate and relax.   Unfortunately, I usually fall into that unfortunate 37%.    My vacation resets on February 1st, and this will be the first year in a lot of years that I haven’t had to roll it over or even lose some.

What is your financial plan for the new year?

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