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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 Have a Perfect Life

Life

A few years ago, my wife and I were discussing life improvement, the options in front of us, and our future goals. She said she felt trapped by the scope of our goals and didn’t know where to start. That led to a discussion on

achieving our goals, which led to this.

Examine your life. Take stock of every aspect of your life. What pleases you? What upsets you? What do you do that adds no value to your life? Or worse, removes value? What do you do that adds the most value? What would you like to change? Eliminate? Improve? Count the small things. Nothing is insignificant. Write it all down and be specific.

Analyze your list. Are there any obvious patterns? Is there a single thread that is making you miserable or affecting multiple other items? Would eliminating 1 factor improve 90% of the rest? Is there a bad job or a toxic relationship ruining your happiness? Be honest and be critical.

What are your dreams? Where would you like to be in six months? A year? 5? 10? How would you like to retire? When? Write it all down. This is now your life plan.

Set goals. Set concrete, definable goals. Set goals that have an obvious success point. When you reach your goal, you want to be able to point it out. “Lose weight” is not a goal. “Lose 50 pounds in the next year” is a measurable, definable, concrete goal. Set incremental goals to reach your larger goals and, more importantly, your dreams.

Here’s an example:

Dream: Retire at 50.

Incremental Goal: Get a 10% raise within 6 months
Incremental Goal: Eliminate debt within 3 years
Incremental Goal: Max out 401k contribution
Incremental goal: Save 150,000 within 10 years
Incremental Goal: Save 45k each year after that.
Retire

When you are setting up your goal plan, make sure to include the analyzed items mentioned earlier. These are the things that will make today happier for you.

Now, you have examined your life. You have analyzed the results. You’ve gathered your dreams and compiled a goal plan based on your hopes, dreams, goals and desires. What’s next?

We’re going to take a page from David Allen. It’s time to Get Things Done. What do you have to do next to reach your goals? What is the next step? Don’t let yourself be overwhelmed by the scope of the entire list. Select one single item from your plan and look for the one single next step to make on the path to that goal.

Going back to the retirement goal plan, the next step towards a 10% raise could be researching salaries for your job description in your area to give you ammunition in the meeting with your boss. It could be updating your resume to hunt for a better paying job, or even just studying up on some resume tips.

If you want to run a marathon next year, the next step is to start walking every day to train your body.

If you want to improve communication with your spouse, the next step is probably to let her know.

If you want to eliminate debt, the next step may be setting up a budget or canceling unnecessary services like cable.

Every goal has a path leading to it. If that’s not true, you haven’t defined a concrete measurable goal.

Examine your life. Analyze your situation. Know WHAT you want. Know what you want to change. Set goals to get there, one step at a time. Take a single step towards your goals.

Then take another.

What are you doing to reach your goals and improve your life?

5 Ways to Help Your Friends Stay Out of Debt

Finance, Life

There’s a saying that you are the average of your 5 closest friends. Take a look at the people you hold dearest. Combined, they are you. If they are all in debt, chances are, so are you.

As a corollary, you are a part of your friends. If you become more financially responsible, it will rub off on the people who care about you.

Given these two rules, one way to improve yourself is to help those around you improve themselves. If your influence convinces your friends to move closer to your ideal, it will be easier, almost effortless to move closer to it, yourself.

It sound manipulative, but if you are manipulating your friends, you are doing it wrong. Don’t try to force or trick your friends, just be honest and sincere in your efforts to help. Nobody wants to be in debt. This is you being nice.

1. Suggest cheap activities.

While it is okay to splurge occasionally, don’t be afraid to suggest less expensive activities. If someone suggests going to a movie, mention the dollar theater. If they want to go out for dinner, offer to host a potluck. Trip to the casino? Game night at your house. There are almost always cheaper ways to have fun. As long as you are spending time with the people you love, you’ll have a good time. Do you really need to drop $100 to do that?

2. Don’t flaunt your toys.

If you buy an iPod and immediately run to show it off, you are going to trigger a case of “keeping up with the Joneses”. If your friends spend all of their time around people who are constantly buying expensive toys, buying expensive toys becomes normalized in their minds. Debt becomes the norm. Then extreme debt. Don’t reinforce the destructive debt cycle by showing off the expensive trophies of excessive, unnecessary consumerism.

3. Point out opportunities to save.

This is a fine line to walk. If mention how much money your friend is wasting on 13 shot venti soy hazelnut vanilla cinnamon white mochas with extra white mocha and caramel every single morning, you’re going to get annoying fast. In fact, you are already annoying me, so knock it off. On the other hand, if Caribou is having a sale on the 13 shot monstrosity, speak up. Nobody is going to complain about getting a $15 coffee for less than $10.

4. Give them a side hustle.

If you’ve got a friend who’s into landscaping and you’ve got a neighbor who needs a landscaper, make the connection! If you know a web designer and a business in need of a website, get them together. Do what you can to match the needs of the people around with each other. They will all appreciate it, and everyone will be better off. Be the guy who helps everyone connect with the people they need.

5. Be encouraging.

Put another way, don’t be a dick. Nobody likes being nagged. Nobody likes being told they are doing everything wrong. Be encouraging, not mean.

If you can do all of that, it’s natural that your friends will start acting the way you want yourself to act. The less they want to waste on a trip into debt, the less tempted you will be to do the same.

Things You Should Buy Online to Save Money

Finance

Article written by money supermarket.

Sometimes the price you pay in-store for a product or service can change dramatically if you find the same product online, and in most cases the price in-store can be considerably higher. There’s nothing worse than getting home from a shopping trip thinking you have a bargain, until you realise that you could have saved a lot more had you have waited until you got home. Here are a few examples of things you should buy online to save money:

DVD’s and Blu Rays

All movies, whether on DVD or Blu Ray format, are generally cheaper if bought online, it’s a fact that I have learned over the years. I’ve always found that searching the sites of film selling giants Amazon and Play, I can always find a movie that little bit cheaper and some considerably so. There are also some websites such as dvdpricesearch that compare prices of all of the big merchants for you; it’s a great way to save time and money.

Flights and Holidays

In my opinion, the day of buying flights face to face is slowly on the decline, I seem to find considerably cheaper prices by searching online at home. I think the main reason for this is that, travel or holiday agents just do what we do, they search online for the best prices, and unless they have any exclusive deals then they will just be getting the same prices as us. I tend to use some online travel comparison websites that again do the searching for you; however, some work better than others so make sure you do your research.

Books

I always purchase books online, whether in the standard physical format or in the form of an e-book. Books are just one of those things that always seem to be cheaper, with the likes of Amazon and Borders available online and offering fantastic discounts. There are also many websites that sell niche or rare books online that can be considerably cheaper than going direct to a book seller.

Auto Insurance

Auto insurance is one of those things that we all hate purchasing, but if you want to drive your vehicle on the road, then by law we have to spend our hard earned cash on it. Getting your auto insurance online can save you a lot of money. Using price comparison sites, you only have to fill in one form as if you’re applying for one quote, you will then be provided with a list of pricing options available to you.

Cell Phones

Whether you are just buying a handset or if you’re looking for a monthly cell phone price plan, I always seem to find better deals online than I can in-store. Of course in-store you have the ability to try and haggle but I’ve found that the deals I get offered are never as good as those that I can find online. Online you can also search by provider website which is another great way to save money, and it would take you a lot of time to visit each store!

Jason’s note: I shop online a lot. I buy things that most people don’t realize are available online. An interesting counterpoint question: What should you buy in-person to save money?

Credit Cards: How to Pick a Winner

Finance

Image via Wikipedia

We live in a decidedly credit-centric culture. Whip out cash to pay for $200 in groceries and watch the funny looks from the other customers and the disgust from the clerk. It’s almost like they are upset they have to know how to count to run a cash register.

If someone doesn’t have a credit card, everyone wonders what’s wrong, and assumes they have terrible credit. That’s a lousy assumption to make, but it happens. For most of the last two years, I shunned credit cards as much as possible, preferring cash for my daily spending. Spending two years changing my spending habits has made me comfortable enough to use my cards again, both for the convenience and the rewards.

Having a decent card brings some advantages.

Credit cards legally provide fraud protection to consumers. Under U.S. federal law, you are not responsible for more than $50 of fraudulent charges. many card issuers have extended this to $0 liability, meaning you don’t pay a cent if your card is stolen. Trying getting that protection with a wallet full of cash.

The fraud protection makes it easier to shop online, which more people are doing every day. At this point, there is no product you can buy in person that you can’t get online, often cheaper. How would you order something without a credit card? Even the prepaid cards you can buy and fill at a store will often fail during an online transaction because there is no actual person or account associated with the card. The “name as it appears on the card” is a protective feature for the credit card processors and they dislike accepting cards without it.

If you’re going to use a credit card, you need to make a good choice on which credit card to get. There are a few things to check before you apply for a card.

Annual fee. Generally, I am opposed to getting any card with an annual fee, but sometimes, it’s worth it. If, for example, a card provides travel discounts and roadside assistance with its $65 annual fee, you can cancel AAA and save $75 per year. A good rewards plan can balance out the fee, too. I’m using a travel rewards card that has a 2% rewards plan. That’s 2% on every dollar spent, plus discounts on some travel purchases. In a few months, I’ve accumulated $500 of travel rewards for the $65 fee that was waived for the first year. The math works. A card that charges an annual fee without providing services worth several times that fee isn’t worth getting.

Interest rate. This should be a non-issue. You should be paying off you card completely every month. In a perfect world. In the real world, sometimes things come up. In my case, I was surprised with a medical bill for my son that was 4 times larger than my emergency fund. It went on the card. So far, I’ve only had to pay one month’s interest, and I don’t see the balance surviving another month, but it’s nice that I’m not paying a 20% interest rate. Unfortunately, as a response the CARD Act, the days of fixed rate 9.9% cards seems to be over.

Grace period. This is the amount of time you have when the credit card company isn’t charging you interest. Most cards offer a 20-25 day grace period, but still bill monthly. That means that you’ll be paying interest, even if you pay your bill on time. To be safe, you’ll need to either find a card that has a 30 day grace period, or pay your balance off every 15-20 days. Some of the horrible cards don’t offer a grace period of any length. Avoid those.

Activation fees. Avoid these. Always. There’s no card that charges an activation fee that’s worth getting. An activation fee is an early warning sign that you’ll be paying a $200 annual fee and 30% interest in addition to the $150 activation fee.

Other fees. What else does the card charge for? International transactions? ATM fees? Know what you’ll be paying.

Service. Some cards provide some stellar services, include concierge service, roadside assistance, and free travel services. Some of that can more than balance out the fees they charge. My card adds a year to the warranty of any electronics I buy with it, which is great.

Credit cards aren’t always evil, if you use them responsibly. Just be sure you know what you’re paying and what you’re getting.

What’s in your wallet?

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!