Live Real, Now

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?

 

Cooking Poor

Finance

Frugal cooking can be an intimidating concept.   It’s easy to turn a meal into a huge expense, but it’s not that hard to trim your grocery budget without sacrificing variety and flavor.   It just takes some planning and a few money-saving techniques.  We usually feed our family of five, often with guests, for about $100 per week.

Schedule your meals. Find or make a weekly meal planner.  I recommend this or this.  Cross out the meals you don’t need to worry about due to your schedule that week.  If you won’t be home, you don’t have to cook that meal.  Fill in the meals in the remaining slots.  Keep your schedule in mind. If you get home from work at 5:30 and have to be somewhere by 6:30, dinner needs to be something quick. Also, make sure you include every side dish you will be serving.  Now, look at the recipe for each dish in every meal.  Write down everything you need to make all of the food you plan to eat that week.   While planning your meals, think about how to use your leftovers.   If you cook chicken breasts one day, the leftovers can be chicken nuggets the next.

Take inventory.  Take your meal plan and a pen while you look through all of your cabinets and your refrigerator.  Why buy what you already have? If you already have steaks in the freezer, don’t waste your money buying more.  If you have it, cross it off of your meal plan shopping list.  Whatever is left is your shopping list.   Review it.  Is there anything that can be combined or eliminated?  Is there a key ingredient for a sauce that’s missing?

Don’t forget the staples.  If flour or sugar is on sale, stock up.  Anything you use on a regular basis is a staple, buy it when it’s cheap.

Build a shopping list from your meal plan.  When you are in the store, stick to your list.   It’s hard, but avoid impulse purchases at all costs. Don’t shop hungry, don’t buy things just because they are on sale, and don’t dawdle.  Get what you need and get out.

Avoid pre-processed food.  We slice and shred our own cheese.    Buying the pre-shredded cheese costs an extra $5 and saves just 5 minutes.  Don’t buy pre-sliced apples or anything that will only save a few minutes for several dollars of cost.

Every couple of weeks, I cook a large pot of either beans or rice and keep it in the refrigerator.  Almost every meal that we cook gets a cup or two of beans or rice added to it.  It doesn’t alter the flavor much, but it adds a few extra servings for pennies.  It’s a healthy way to stretch any meal on the cheap.

We have a large bowl in the refrigerator filled with mixed greens.   We buy whatever salad-like greens are on sale and prepare the large salad all at once.   Most meals start with a salad, which makes it easier to fill up without relying on the protein dish, which is generally the most expensive part of a meal.  As a dedicated meat-eater, it took some getting used to, but it’s a good meal–cheap and healthy.

Cook enough for at least 3 meals.  That will eliminate 2/3 of the work involved in cooking.   Plan ahead to make your meals simple and easy.

Freeze the leftovers in usable sizes.   Stock up on semi-disposable meal-sized containers.   Freeze some in single-serving sizes for work, and others in family-size servings for last minute meals at home.  Preparing for last minute meals keeps you from serving garbage or takeout when life gets in the way of your plans.

Avoid wasting leftovers.   Wasted food is wasted money.

When you are done cooking meat, take any drippings or scraps and throw them into the slow-cooker along with any vegetable scraps laying around.  Cook it overnight, then strain it into an ice cube tray.  You now have stock/broth ready to be added to any recipe.

Plan for serial meals. Chicken breast leftover from today’s meal can become chicken nuggets tomorrow, to be shredded into chicken salad the next day.

When there isn’t enough left for a full serving, we put the remains in a resealable bag in the freezer.   When we accumulate enough to fill our slow-cooker, we dump in all of the bags with a couple cups of water.    I look through the refrigerator for any leftovers that have been overlooked that week or any vegetables  getting close to being too old.  It all gets cut up and added to the cooker to cook on low all day.  I rarely add seasoning because everything going in the pot tastes good.  We never get the same meal twice and our “free soup” is never bland.

That’s how we cook cheap, without sacrificing too much time.  How do you save money cooking?

This post is a blast from the past.  Originally posted here in January 2010.

Are We Facing a Financial Crisis Today?

Finance

This is a guest post.

It is hard to deny, that we are currently in a financial crisis. This is true not just in the United States but in the entire world! Indeed if

Lehman Brothers Rockefeller centre
Image via Wikipedia

you look at what has been happening in Europe, the United States is not even in the worst shape among the advanced countries. Ireland, Portugal and especially Greece are suffering slow economic growth and crippling debt, with many other European countries not far behind them. Even countries that are still experiencing strong growth like China and India have no insurance against suffering a slow down in their rate of expansion.

However the United States is the world’s largest economy, so our milder economic problems have a larger proportional effect on the rest of the world. As the saying goes among economists, “When the U.S. catches a cold, the rest of the world gets pneumonia!” Therefore there is tremendous pressure on the United States to resolve the current financial crisis. America is trying to lower its debt and balance its budget before a serious financial crisis develops here like in Europe. If Congress and the President can agree on how this can be done then strong U.S. growth may return and thereby stimulate economic growth worldwide.

Alas, this debt cutting and budget balancing is easier said than done. Cutting spending means reducing or even eliminating government services that people have become accustomed to and prefer not to give up. Social Security for retirement, Medicare for health insurance, food stamps for the poor and many other spending programs all have people who depend on them and who are not happy to have them curtailed or eliminated. When such cuts were attempted in Greece and Great Britain, rioting broke out in major cities by those opposed to the cutbacks. Such violence is not expected in the United States, but it is still politically very difficult to make the kinds of cuts required for fiscal recovery. In fact the U.S. recently had one of its major credit ratings lowered because of skepticism that America has the political will to make the necessary changes.

On the plus side the United States has always managed to gets its financial house in order in the past, and most observers believe it will do so again, although there may be some spectacular political fireworks along the way! In the meantime many are wondering how to enhance their safety against today’s uncertainty and how to achieve financial freedom and peace of mind until better times arrive. While it is not possible to shield oneself completely from the financial crisis, it may be wise to get some cheap insurance quote to discover what types of insurance policies may give you some protection.

Whatever your financial status, there are always ways to protect what you own if you are willing to shop around. But whether one receives cheap insurance quotes or higher ones, now is the time to protect your assets until today’s financial crisis passes.

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3 Reasons You Hate Your Budget

Finance

Ice-cream dessert
Image via Wikipedia

One of the first steps in clearing up your financial mess is to set up a budget.    You need to figure out how much money you are making, how much you are spending, and what you can do to keep one of those numbers smaller than the other.   If your income is smaller than your expenses, you’ve got work to do.   If not, yay!

Even if you don’t obsessively cling to your spreadsheets and calculator, you need to spend the time to establish a budget–at least once–to know where you stand.  When you do, you’ll find out it sucks.  With good reason.

1.  It takes too long to set up. Setting up a budget can be a long, drawn-out pain in the butt.   Fortunately, it doesn’t have to be, but you won’t know that until after you make your first budget, then see some fairly drastic changes, and make a second budget.  That one will be easier.    For the first one, just concentrate on making a list of all of you regular bills and how often they are due.    Don’t be surprised when you miss some.   I missed a couple of our quarterly bills.  All told, it took a year to get our budget completely done.

2. It doesn’t lie. Once you have all of your expenses down on paper, you are done hiding.  You can’t tell yourself it’s all puppy dogs and ice cream when you are staring at the giant red pit that is the negative balance of your bad decisions.  Nobody likes the messenger who brings bad news.  When your budget shows you how big the hole is, you are going to hate it.   That’s when it’s time to confront the problem head on and get out of the hole.   Find the problems and rip ’em out.    Cancel the cable, taxidermize the cats, and start buying generic underpants.   It’s time to take an honest look at your situation.  If you can’t handle where you are, how are you going to get where you want to be?

3.  It’s not fun. When your friends go out, but you stay home because you’re broke, you will hate it.    Y’ou’re also gonna hate comparing your old cell phone to the iPhone in the hands of the d-bag contemplating bankruptcy.   Like Dave Ramsey says, “Live like no one else, so that later you can live like no one else.”   Skipping some of the fun now will turn into security later.  When you get to that point, it will have all been worth it.

Why do you hate your budget?

Things to teach your kids about money

Finance, Parenting

cute kid (Explore)
Image by Swami Stream via Flickr

As parents, it is our job to teach our kids about a lot of things: driving, reading, manners, sex, ethics, and much, much more.  How many of us spend the time and effort to teach our kids about money?  A basic financial education would make money in early(and even late) adulthood easier to deal with.  Unfortunately, money is considered taboo, even among the people we are closest to.

It’s time to shatter the taboo, at least at home.  Our kids need a financial education at least as much as they need a sex education, and—properly done—both educations take place at home.

How do you know what to teach?  One method is to look back at all of the things you’ve struggled with and make sure your kids know more than you did.   If that won’t work, you can use this list.

  1. Balance a checkbook. This is the most basic of financial skills.   The easiest way to teach this is to help him open a checking account and demand he keeps the register current and reconciled.  Make him use a paper register.  Quicken or an alternative may handle the work, but your kid will never learn the underlying principles if he doesn’t have to sit down with a pen and calculator to do the work.  The cheat can come later, when he is capable of handling the task himself.  It’s the same reason schools don’t let kids use calculators until the basics are thoroughly mastered.
  2. Calculate paid interest. Understanding how much something costs after accounting for interest should be enough to scare anyone away from credit cards.  I believe that the reason it doesn’t is because most people don’t understand how to figure out what interest is costing them.  In case you don’t know yourself, the math is simple:  balance X interest rate(as a decimal) / 12.    That will show you how much you are paying each month for the privilege of borrowing money.
  3. Use your money to make money, not to pay interest.   The flip side of interest is earned interest.  It’s always best to let your money work for you, building your wealth than to struggle to finance a bank’s payroll liabilities.
  4. Save 25%. My son is required to put a quarter of everything he earns in his bank account.  He gets $20 for shoveling the neighbor’s driveway, so $5 goes in the bank.  The money he gets for gifts is handled the same way.  Everything he gets, whether it be from a gift, his allowance, or work he does—gets divided the same way.   If I can establish that habit for him, and impress upon him the value of saving 25% enough that he continues into adulthood, he will never have money problems.
  5. Always contribute to retirement. At every opportunity, from every paycheck, make a contribution to retirement.   At a minimum, a 401k contribution should be made at a level that takes full advantage of any company match.   If there is no match, even $25 per paycheck will add up over time.   Teach them to work towards the 401k contribution limits.
  6. Spend less than you earn. This is the shining, glorious foundational principle of successful finances.   Not just individuals, but businesses and even governments should learn this lesson.  If–at all times–you are spending less than you earn, you will have more options  to handle the remaining bits.  If you live on the wrong side of this equation, you will never be able to get ahead, no matter how hard you work.

Those are the lessons that I am working to instill in my children, a little at a time.  Am I missing any?

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