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

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3 Questions to Ask in a Spending Crisis

Finance

94 Stainless Steel Smart Money Clip Credit Car...
Image by ExecGifts via Flickr

Having a well-funded emergency fund is one of the foundation blocks for almost every saving or debt-repayment plan.   The theory is that you’ll be better able to weather a financial storm if you don’t have to raid your budget or beat on your credit card every time an unexpected expense rears its ugly head.   The number varies based on your pundit and your stage of life, but generally ranges from $1000 to 8 months of your expenses.  The money needs to go in a liquid account, so it can be accessed when necessary, but it needs to be completely ignored otherwise.  What good is an emergency fund that has been spent?

Now that you have your emergency fund, you are set, right?  But what happens when something comes up?  When is it okay to spend that money?  Emergencies can take so many forms: medical emergencies, car repairs, accidents, a good sale.  Wait.  What was the last one? What actually constitutes an emergency that is worth shredding your security blanket?

Here are three questions to ask yourself before you spend that money:

  1. Is the expense necessary? If it’s a voluntary expense, you should create a savings goal and wait to buy it until you can actually afford it.    Emergency funds are meant for emergencies, not whims.  A good sale is never an emergency.
  2. Is it important? When my motorcycle breaks down, it gets parked until I can afford to pay for the repairs.  When my car breaks down, I need to get it fixed so I can get the kids to daycare and myself to work.
  3. Is it urgent? Is this an expense that can be postponed until next month, when you have a chance to sell something you don’t need, or rearrange some items in your budget to “find” the necessary cash?  If it doesn’t need to be paid right now, it may be best to put it off.  In the case of medical bills, you can usually get on a payment plan with no penalties, if you ask.   That can change an expensive obligation to a manageable monthly bill.

Your emergency fund should only be used on things that are important, necessary, and urgent.  Anything else should get postponed until you can afford to pay it using your on-budget expense items.     As the wise man once said: “Lack of planning does not constitute an emergency.”  Of course, if you are in a financially stable situation and willing to take a small risk for a short time, eliminating an entire debt item to save the interest can be the right decision.

What would you be willing to spend your emergency fund on?

5 Ds of Identity Theft

Finance

Scanned image of author's US Social Security card.
Scanned image of author's US Social Security card. (Photo credit: Wikipedia)

Identity theft is, at its most basic level, the act of using someone else’s identity or credit without permission.   From a stolen credit card to a forged phone bill in Moscow, it all involves your good money paying for the bad habits of another.    Thankfully, there are ways to reduce the odds of having your identity stolen.  LTC David Grossman reviews the “5 Ds of Survival” in his seminars and books.   Today, I bring you the 5 Ds of Identity Theft.

In the words of the master, “Denial has no survival value.” Denying the possibility of identity theft will not keep it from happening.  You have to take steps to keep yourself safe.  “It could never happen to me” is not a valid defense mechanism in any situation, financial or otherwise.

Deterrence means keeping the information away from identity thieves. The harder it is for the criminals to get your information, the more likely it is that they will move on to an easier target.  And yes, a kid stealing Grandma’s credit card is a criminal and needs to be treated as such.

  • Some people use a shredder, but not me.  I have a fire pit that catches all of my personal documents.  I’d like to see an thief get my social security number from the ashes in the bottom of the pit.
  • Don’t carry your social security card.  If you lose your wallet, your driver’s license and social security card contain all of the information needed to steal your identity.  Keep it locked up at home and don’t give the number out unless absolutely necessary.
  • Don’t use stupid passwords.  Anything listed on yourFacebook profile or otherwise available on Google in association with your name is a stupid password.  Don’t make life easy for the people looking to screw you.  Your birthdate, maiden name, and “password” all qualify as stupid passwords.  Use KeePass to securely generate and store your passwords.
  • Lock up your personal information.  I throw two large parties every year.   Purses and wallets get stored in a locked bedroom, so nobody can grab them.  That was a lesson learned the hard way.  If there’s someone in your home you don’t trust absolutely, lock up anything that can be used against you.
  • Don’t release personal information to anyone, for any reason, unless you have initiated the contact.  Don’t give a credit card number to a telemarketer.  Don’t give a spammer your personal information.  It’s your privacy, use it.
  • Don’t click anything in an email.  If it’s a company you have a relationship with, type the address in your browser by hand.

Detection is up to you. Some credit card companies will alert you to suspicious purchases, but you can’t rely on it.  I was once called because I went to the gas station and Best Buy, which is apparently a common pattern for a stolen credit card.

  • Examine your credit card statements.  If there’s a purchase you don’t recognize, find out what it is.
  • Watch for bills to arrive as expected.  You do know when you pay the gas bill every month, right?
  • Watch for unexpected bills to arrive.  If you get a statement for a credit card you don’t have, it’s a problem.
  • Check your credit report three times per year.  AnnualCreditReport.com will let you see each of the three major credit reports each year.  Space them out so you see your report every 4 months.

Defending your identity happens after you’ve detected a theft. This involves getting your credit and sometimes, your money, back.

  • File a fraud report with the credit bureaus.  This will force potential creditor to follow certain procedures before opening new credit accounts for your identity, including calling your cell phone, if you choose.  Stop the identity theft in its tracks.
  • Close the fraudulent accounts.   Don’t leave them open for abuse.
  • File a police report and report the fraud to the FTC at ftc.gov/idtheft .  This may or may not help catch the criminal, but without it, there will never be a punishment.  Make stealing your identity an expensive proposition.   Hopefully, 1o years of his life will be wasted in jail in return for the theft.

Destroy.  Unfortunately, fraud and identity theft are not yet capital crimes.   Maybe someday.

Deter, detect, defend.  These are the secrets to avoiding, and recovering from, identity theft.

 

Three Ways to Make Christmas Cheap

Finance

Car off cliff sign
Image via Wikipedia

We failed Christmas Budgeting 101 this year.   I haven’t totaled the damage, yet, but we have spent at least $500 more than we had planned.

It hurt.

Next year, we’re going to handle the Christmas budget differently.   This year’s model isn’t working.   It’s a lot like pushing a car down a hill to get it started, but ignoring the cliff at the bottom.

1.  Use cash.  A huge part of our problem was that Capital One is helping us celebrate.   It’s horrible, because we both know we shouldn’t be using a credit card, for exactly this reason, but we can’t seem to make the transition back away from the plastic.   Part of the reason is that Amazon and ThinkGeek don’t accept cash, and part of it is convenience.    Don’t get me wrong, we’re not carrying a balance on the card, but it’s still far too easy to overspend.

2.  Communicate!  If our gift budget is $500, and I spend $300 online while she’s busy spending $300 in stores, out budget is shot.   Worse, if we spend that money buying stuff for the same people, our budget is shot before our shopping is done.   A little bit of this happened to us this year.

3.  Explore atheism.  There really is no more effective wa

y to cut down holiday expenses than to eliminate the holiday completely.   This may not be the best answer for everyone, but it’s effective.   On the other hand, I know several atheists who celebrate Christmas as much as anyone else.    This probably isn’t a good alternative for most people.

3, Take 2.  Cut back on “stuff”.  My kids have more toys than they can play with.  My kids’ parents have more toys than they can play with.  Do we really need more?   Wouldn’t it be better to spend the money I’d normally use to buy my wife a present on a series of date nights, spread out through the year?   I could take my kids to Feed My Starving Children so they can understand how privileged they are and how much the things they take for granted are really worth.

There are so many other ways to celebrate a holiday that has turned into a national orgy of consumerism.  Next year, we’ll be trying some of the alternatives.

 

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Sunday Roundup: Home Depot and Your Kids

Misc

Logo for The Home Depot. Category:Brands of th...
Image via Wikipedia

Yesterday, I took my girls to Home Depot.  On the first Saturday of every month, Home Depot has a workshop for kids that gives kids a chance to make a small craft project with a parent.  For free.  This month was race cars.   My girls look forward to it all month.

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.  As of this writing, I am up to 26 in a set, doing about 90 per twice-daily session.  I’m expecting to do more tonight(Saturday) as I’m currently taking a 24 hour break to let my muscles heal a bit.  By previous experience, I’m guessing I’ll hit 30-35 in the morning.

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 35 pounds since January 2nd.   That’s 2 pounds since last week, meaning I missed my February goal by 7 pounds.   I added some cheese back into my diet, to see if it hurt.  It did.   Research showed that dairy inhibits the insulin response, make dairy a bad thing for a diet entirely out of proportion to its glycemic index.

Total Inches: I have lost 19.5  inches in the same time frame, down 2.5 inches since last week.

Best Posts

Lifehacker ran a post on simple ways to make money online. They may not all pay well, but the poorly-paid tasks are something you can do while watching TV.

Finally! A post explaining the exact connection between autism and vaccinations.

I’d love to see free-market healthcare given a chance, just once.  We’d never go back.

Going to college, try some of these scholarships.

Most observant people realize that TSA is a joke.  For those who didn’t realize that, TSA admitted it, too.

LRN Timewarp

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

This week last year, I wrote a post about doing 100 push-ups in a single set.  Is it a coincidence that I’m trying again a year later?

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

Money Problems – Day 3: What’s Coming In? was included in the Festival of Frugality.

5 Reasons Why I Splurge On Travel was included in the Totally Money Carnival.

Ignore Your Budget 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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Carnivals

Finance

I’ve been a bit of a slacker when it comes to posting the carnivals I’ve been included in.   This is me playing catch-up.

Live Real, Now was included in five carnivals last week:

Prior to last week, I was included in:
Thanks to all of the hosts for including my posts and my apologies for not posting the links sooner.  If I missed you, 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!

Sunday Roundup: Vacation!

Misc

Friday was the start of my vacation.  I’m terribly excited.   After a couple of months of long hours, launching a side business, and trying to keep up with my kids, I need a break, from at least my day job.

We’ll be spending a long weekend with my parents, followed by 6 days at home, doing all of the fun things there are to do around Minneapolis.   Brat #1’s vision therapy ate into the vacation fund a bit, so we’re staying cheap and close to home.

Best Posts

Did you know that preventing global warming will keep ET from wiping us out for our own good?

Birth control has come down in price, if you have a cell phone.

When you making a will, did you think to provide instructions for your online life?

How about deciding where to put your spawn?

Carnivals I’ve Rocked

4 Ways to Change Your Life for the Better was included in the Carnival of Financial Planning.

Playing For Blood was included in the Totally Money Carnival.

Zombie Wheels: How to Own a Car that Just Won’t Die was included in the Festival of Frugality.

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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