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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?

 

One Year Later….

Misc

In April of 2009, I told my wife we were either going to straighten out our finances or file bankruptcy. At that time, we had $90,394 in total debt, including $30,000 in credit card debt.  It hasn’t been easy, but we are working out way out of that hole.   Since then, we have paid down more than $30,000.  That’s not $30,000 in payments, but $30,000 less debt.  We are now less than $60,000 in debt.   We have entirely stopped accumulating more and I don’t remember the last time we carried a new balance on a card or had to use our overdraft protection.   Next month, my car will be paid off, 10 months early.

Given my new-found fanaticism, I spent the next 6 months or so evangelizing about our debt repayment.   Eventually, I decided to share my thoughts and progress with the world and launched this site on December 1, 2009.   Today is my anniversary.

Here we are, 234 posts, 695 comments, and 17, 661 spam later.   You all rock.  Except the spammers.

To say thank you, I’m giving away a $100 Amazon gift card to some lucky reader.  Yes, I rock, too.

There are several ways you can enter the drawing:

1. Subscribe to Live Real, Now, either by RSS or email. If you are already subscribed by email, you are automatically entered.   To show me you have subscribed by RSS, there is a contest code in the feed.  Just post that in the comments. (1 entry)

2. Follow me on twitter and tweet the following: “@LiveRealNow is giving away $100. Come get some! Follow and RT to enter! http://bit.ly/f1roKM #Giveaway #Yakezie” (1 entry possible per day.  Every day you retweet this is another entry!)

3.  “Like” LRN on Facebook. This is easy, just click the little ‘like’ button on the left.  If you’ve already done that, you have already entered once.(1 entry)

4. Send me an email at Jason <AT> LiveRealNow <DOT> net telling me what you would like to see me write about more (or less!).  You can also use the contact form. (1 entry)

I’m closing this down on the 15th.  That’s 18 possible entries for $100 you may win early enough to help with some last-minute Christmas shopping.

UPDATE:

And the winner is…Claudia!  Congratulations.   Email sent.

Sunday Roundup: Reddit Rocks

Misc

Enthiran
Image via Wikipedia

Friday was my biggest traffic day, ever.   Mike‘s guest post, Brown Bagging Your Way to Savings, went slightly nuts on reddit.  For a few hours, it was in the top 10 on the front page, generating more traffic every half hour than I normally see in a day.  That was fun.

In other news, my kid is in the #2 slot for wrestling the heavyweight slot on his wrestling team.

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 25 pounds since January 2nd.   That’s 3 pounds since last week.  17 more to meet my goal for February.

Total Inches: I have lost 14 inches in the same time frame, down 2.5 since last week.

Best Posts

J. Money has launched an awesome new project called Love Drop.  Once a month, they go make a huge difference in someone’s life.   Wise Bread interviewed them yesterday.

Tip: Use the word “solved” in a google search to find the answers to tech problems.

If OMG and Awesome got drunk and made a baby with Optimus Prime, Arnold Schwarzenegger and Cobra Commander’s nastiest fantasies, the offspring wouldn’t be this good. Holy crap.  Major cheese alert.

Q. Why do some business lobby hard for excessive regulation in the name of protecting the environment or forcing people into decisions they disagree with, only to turn around and lobby for waivers to those regulations once they are passed?  A. Because it’s not about the environment or health or giving-a-crap.  It’s about the money.  When an established company pushes for regulations, it’s to keep upstarts from entering the market.  Regulations add barriers to entry.   Anybody who’s trying to force you to do something for your own good has a product to sell to meet that “need”.

LRN Timewarp

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

Have you ever given any thought to the idea that debt is a social disease?  It’s taboo, you usually didn’t do anything nice to get it, and it’s hard to get rid of.

In case I haven’t made it obnoxiously clear, I’m more than a bit of a geek.  The post I wrote about D&D and personal finance should make it more obvious.

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

Medical Costs and Choices was included in the Festival of Frugality.

How to Save Money On Anything was included in the Carnival of Personal Finance.

Mike from http://savingmoneytoday.net presented Brown Bagging Your Way to Savings, which is the post that went kinda nuts on reddit.  He also hosted my post, Resisting Temptation.

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 weekend!

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Teaching Kids about Money

Finance, Parenting

Today, Mr Credit Card from www.askmrcreditcard.com is going to contribute with an article about things we can teach our kids about life and money. He asks that you check his best credit card offers page if you are looking for a new card

I honestly think teaching kids about money this is the most overlooked thing that most parents do not teach. Instead, kids learn from our behavior and how we treat money. But I really think the subject of how to manage money must be taught.

I have three kids and teaching them stuff is sure tough. But as a parent, I would like to instill good habits (including money habits). Here are some of the things I think we can do to teach them about various aspects of life that will affect their outlook about hard work and money.

Reward Hard Work hard and Not Just Results – Some kids are talented at certain things like math or baseball. Very often (in their early ages), they excel in school or sports without much effort because of talent. But very often, because of the talent, they do not develop the habit of working hard (because they do not have to). But as they grow older, they are going to face obstacles. If they do not learn the value of hard work and overcoming difficulties, they will hit the brick wall often. Teaching them the value of hard work (even if they are talented) is so important.

What has this got to do with money?  Well, I think delayed gratification is one of the hardest thing to teach, so we try to praise our kids when they achieved something due to hard work. We tell them that they accomplished it because they worked at it and we explain that to be able to afford expensive things, they have to study hard, work hard and earn their own money!

Going to Shop Does Not Mean You Have to Shop! – There are various ways to go about doing it. One way is simply to explain concepts as they come along. For example, initially, my kids always wanted to buy stuff when they go to Toys R Us or anywhere else. To put a stop to this nonsense, we had to explain that just because we went to a shop does not mean we have to buy anything. We could be just looking, doing some research or simply buying a gift for someone else.

Ask Them What Happened To Stuff They Bought A While Ago – Another thing that we like to bring up to our kids when they want to buy something on impulse is to remind them of something they bought in the past and whether they are now still excited over it and playing with it. Chances are that they will say no! We found that this was a very effective way to make them realize that they should think twice before buying anything.

Teach Kids to Compare Price – Here is another technique we use: When we go grocery shopping, Mrs Credit Card asks the kids to compare prices of the cheapest cereals. We explain to them that even though they love a particular one, there are times when it is not the best time to buy it. They should only buy it if it is on sale. We also ask them to compare the price relative to the weight of the product to see which gives greater value for money. After a while, they catch on and only buy cereal that is on sale!

Make Them Work – I see lots of kids organizing lemonade stands outside their houses during summer. It could be to draw crowds for a garage sale or to raise money for a fundraiser. I think this is such a great thing as they can learn so many things just from selling lemonade. They can learn the the concept of selling things for a profit.

Another common task kids or teens take is to work to earn some money. It could be as simple as baby sitting, walking your neighbors dog or working at the ice-cream shop. Making them realize that they need to earn before they can spend is a good lesson.

Slowly Give Them More Responsibilities – As kids grow older, I believe in giving them more responsibility. It could be making the oldest kid look after their younger siblings. Or giving them tasks like clearing the trash, doing the dishes, etc. I know of some parents who give their teens prepaid credit cards to start teaching them about using “credit” (though it is not technically credit). Maybe that is a bad idea as you want them to know to manage a student credit card when they are old enough to get one.

Selling Things For Fund Raisers – One of the things that I admire about the Boys Scouts is that they are always doing fundraisers for their scouting trips and events (no money, no outings). It teaches them “cold calling” or more likely, approaching Dad and Mom’s friends to sell things like coffee beans and Christmas wreaths!

Teach Them Not To Waste Stuff – Another thing I like to emphasize to kids is not to waste stuff. Whether it is the water when they brush their teeth or making sure they do not waste food, we are pretty particular about this. I think this is a good mindset to instill in our kids.

Performance Matters More Than How Good Your Look – I find that kids like to buy fancy stuff and beyond a certain age, they are conscious about brands. I’ve mentioned this before, but when my kids first played baseball and soccer, they keep bugging me to get them the fancy gear. I had to keep telling my kids that how you perform matters more than your gear. After a couple of years of playing, I think they have finally come to realize this and no longer bug me about things.

It’s a Never-Ending Process – Teaching your kids about money and other things that are important is a never-ending process. But you have to do it when they are young because once they grow older, they tend not to listen to their parents anymore and are more likely to be influenced by peers.

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

Money Problems – Day 3: What’s Coming In?

Finance

Husquarna automower, taken by me 2007-06-02
Image via Wikipedia

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 3 and today, you are going to take a look at your income.

We are only interested your take-home pay, because that is what you have to base a budget on.  If you base your budget on your gross pay, you’re going to be in trouble when you try to spend the roughly 35% of your check that gets taken for taxes and benefits.

Income is a pretty straight-forward topic.  It is—simply—how much money you make in a month.  If you are like most people, the easiest way to tell how much money you make is to look at your last paycheck.  Then, multiply it by the number of pay periods in a year and divide the total by 12.

Here’s the formula:  Cash x Yearly Pay Periods / 12.  Yay, math!

If you get paid every 2 weeks, multiply your take-home pay by 26, then divide by 12 to figure your monthly pay.   For example, if you make $1000 every two weeks, your annual take-home pay is $26,000.  Divide that by 12 to get your monthly pay of $2166.66.  If you get paid semi-monthly, you’ll take that same $1000 x 24 / 12, for a total of $2000 per month.

Now you know how much you make each month.  Woo!

Is it enough?  Who knows?  We’ll get into that later.  In the meantime, spend some time thinking about ways you can make more money.  Do you have a talent or a hobby that you can turn into cash?

  • If you’re a craftsy type, make stuff and sell it on eBay or Etsy.
  • If you’re a writer, start a blog, sell articles on oDesk, or start writing for paid article directories.  Squidoo has a revenue sharing plan for your articles.
  • Facebook maven?  Start making Pages for companies.  They will pay for it.
  • Are you mechanically inclined?  Watch your local free market sites for lawn mowers and snowblowers that don’t run.  You can fix them up and sell them.
  • If you’re a clean freak, start a home-cleaning service on evenings and weekends.

There are always ways to make some extra money, if you are willing.  Sit down with a friend or loved one and brainstorm what you can do.  Write down anything you can do, you enjoy, or you are good at.  Remember, there are no stupid ideas when you are brainstorming.  The bad ideas will get filtered out later.

How could you make some (more) side cash?

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