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I’m the Bad Guy

My wife and daughters are active in a saddle club, even though we don’t own any horses. We’ve been borrowing them for shows when my girls compete.

My wife’s cousin has been trying to sell one of her horses for a few months. Because this horse has alpha-male problems, it has to be kept in a stall. Stall boarding runs $450 per month as opposed to $200 in a group paddock.

Since my girls love this horse, Cousin continually tries to convince my wife to buy it.

My wife’s response is “Jason won’t let me buy a horse, yet.” Then all of her friends get to complain about how I’m not supportive.

Uhhh, no.

We are $10,000 away from paying off truck. We’re $23,000 away from being mortgage-free. After that, we’re planning to rent out the house we’re in and buy a hobby farm.

Yes, Mr. Unsupportive is planning to uproot everything and move to the country so my wife and daughters can have horses on site.

Shame on me. I’m such a jerk.

In a couple of years, I want to buy a $450,000 spread on about a dozen acres and let my wife’s dreams come true.

Or, we could buy a couple of horses now and never have the money for a down payment.

Or, we could buy the farm now, buy the horses now, spend every last cent of our savings on a down payment, spend more than half of our income on our mortgage payment, never get ahead, and end up losing everything.

Such a jerk.

This is a case where we have to do everything in the right order, or it will all come tumbling down on our heads in a few years. If I have to be the bad guy to avoid screwing ourselves later, so be it.

Healthcare.gov: Is this failure a warning of what’s to come?

Politicians

The official launch of online registration for government healthcare has been rife with disastrous glitches from the very beginning. This cataclysmic failure has spurred severe service outages across the country, and this chronically dysfunctional interface serves as foreshadowing for an epidemic of systematic organizational deficiencies. Healthcare.gov is only the first in a series of planned bureaucratic catastrophes.

Luckily, this informative overview exists to demystify the overly complex world of the medical legislation informally known as Obamacare. Being armed with the facts provided below can protect anyone during these times of economic uncertainty in which the destabilizing influence of expensive health treatments can suddenly arise.

The Internet Errors

The requirement of preemptive registration resulted in a complete system crash. The ability to input health data was also starkly limited. Security issues also seemed evident as certificates failed to show updated validations, and there was no indication of where confidential information would be stored.

Lack of Foresight and Oversight

The decision to mandate initial registration was a hastily made last-minute change that failed to consider the magnitude of public interest. This unfortunately coincided with a government shutdown, which left limited federal resources available to respond to claims of malfunctioning servers. The biggest mistake made by the Department of Health and Human Services was underestimating the massive influx of uninsured applicants.

To further complicate woes, a chief contractor behind the layout of healthcare.gov is expected to testify that additional time and money could not have salvaged the doomed enlistment effort. His official testimony will shed light on administrative laziness, and the legislative committee is expected to issue serious reprimands, but nothing will recompense the thousands of individuals deprived access to healthcare registration on the date promised to them years in advance. These problems were completely avoidable, but the team in place refused to promptly pay attention.

Proposed Solutions

The Obama Administration has conveniently remained mum on the topic of minor adjustments to the healthcare law, but Congressional Democrats have proposed implementing small delays to the overall roll-out. The dates for enforcing the individual mandate have become a focal point of discussions to modify Obamacare. Because citizens were not given feasible access to the online enrollment system, it would be unconstitutional to levy fines for their lack of registration.

The Foreboding Warning

If politicians cannot even tackle basic website programming, then they should not be trusted to manage the well-being of millions of Americans. Partisan divisions have made two factions that are fully noncoalescent, which means all future fixes will be the result of an incomplete compromise between two warring parties. Real health concerns have been forgotten by the incessant squabbling of politicians in their ivory towers. This means that every new initiative will only cause further societal strife and struggle. Members of Congress have expanded the breadth of their authority without grasping the technological realm. As a consequence, these politicians will continue overextending the limits of their power, and the public will be left to pick up the pieces.

5 Things Guaranteed To Annoy Your Wife

Finance, Relationships

The grotesque nagging wife (Photo credit: Wikipedia)

One from the vaults….

If you’re married, or anything close to being married, you’ve irritated your wife. Even if you think you are perfect and the epitome of unannoyingness, I promise, there has been a day when she strongly wished you traveled for a living.

It’s long been known that the two things most likely to break up a marriage are money and sex. The former because there is too much, too little, or just the right amount going to the wrong places, and the latter because there is too much, too little, it’s not with each other, or it is with each other, but you’d really prefer otherwise. If your problem is the latter, I can’t help you.

If your problem is the former, I can help you understand some things you may be doing that are driving her batty. Kill-you-in-your-sleep-and-pretend-it-was-the-dog type of batty.

1. Nagging her about her shopping, but buying whatever you want. Gentlemen, this is known as a double standard. Don’t do it. In my house, my wife’s on an allowance. It was her idea. A few months later, I realized that I needed to be on one, too. Naturally, her allowance is bigger than mine. I don’t mind the disparity, because she still smokes. If her allowance didn’t give her room to smoke and shop, her allowance would be nothing more than a polite fiction. Whatever you do, find something that works for both of you and meets both of your needs, fairly. Anything else will only build a resentment that will burn for a long time.

2. Nagging her about her shopping, yet demanding she do all of the shopping. My wife has a weakness: clearance tags. If something is on sale, there’s a good chance it’s going to come to our house. I have an aversion to shopping. I hate it. Our budget dies a little bit each time my wife shops alone. We’ve come to an agreement. Now, I do most of the shopping, so she doesn’t feel tempted. I’m learning to embrace my inner material girl so we don’t have to have “discussions” every time she steps out for milk and comes home with $100 worth of clothes for the younger brats.

3. Nagging her about her shopping. Nobody likes being nagged. If you’re having a problem that keeps repeating itself, talking about it more won’t help. Neither will talking about it louder. You need to find a way to communicate that she will hear and understand. Different people communicate in different ways. Find the way that works for both of you.

4. Nagging her. A wise man once said, if everyone around you is a jerkface, maybe the problem isn’t everyone around you. Have you ever considered the idea that the problem might be you? If nagging is the only way you have to deal with people, you need to work on that. Don’t blame her. Maybe you’re ticked off about something that isn’t irritating. If that’s the case, she certainly has the right to be annoyed that you are nagging her.

5. Going on and on about how much you’d like to be me. Yes, I live the rockstar life, driving the station wagon with 6 disc changer and all. Yes, I am the neatest thing since sliced bread, and even that was a close contest, but really, confidence is important. You don’t have to be me to be cool. You’re swell, too. You’re right, this one isn’t about money, but it’s probably still irritating.

There you have it, my perfect solution to a happy marriage: don’t nag and quit trying to be me. There are other important bits, like love, respect, and communication, but this is a good start.

What do you do that annoys your spouse?

Winning the Mortgage Game

Finance

There’s a game that’s often mistakenly called “The American Dream”. This game is expensive to play and fraught with risk. It single-handedly ties up more resources for most people than anything else they ever do.

Conway's Game of Life — Image via Wikipedia

The game is called Home Ownership.

At some point, most people consider buying a house. On the traditional, idealized life-path, this step comes somewhere between marriage and kids. That’s usually the easiest way to organize it. If you have kids first, you’re much less likely to buy a home. This is a game with handicaps.

Once you get to the point where you are emotionally ready to invest in the 30-year commitment that is a house, your first impulse tends to be to rush to the bank to find out how much money you can borrow.

That’s a mistake. If you take as much as the bank will qualify you for, you’re most likely to overextend yourself and end up losing your house. That’s the quick way to lose the home ownership game.

The best thing you could do is figure out how much you can afford before you visit a bank. Conventional wisdom says that your mortgage payment should be no more than 28% of your gross income, but that’s absurd. Who builds their budget on their gross income? I like 28%, but only of your net income. To make the numbers easier to remember, I’d round it to 30%. If you take home $3000 per month, your mortgage payment should be no more than $900 per month.

From there, it pretty easy to figure out how much house you can afford. Using this e mortgage calculator, you’d be able to afford a mortgage of $175,000 if we assume an interest rate of 4.5%. Throughout most of the United States, that will buy you a reasonably sized home, though certainly nothing ostentatious. Clydesdale Bank also has an excellent loan calculator.

Some people like to start out with an interest-only loan. That same emortgage calculator shows that an income of $3000 per month would be able to afford a $240,000 with almost the same payment. That seems like a good plan, but eventually, you’ll have to pay more than just the interest. Taking out a loan that will one day be more than you can afford on the assumption that you’ll be making more money by then is not sound financial planning. That’s the same logic that helped me bury myself in debt.

When you buy a house, make sure to base your payments and your mortgage on what you can realistically afford. Anything else, and you’ll only end up poorer and less happy than when you started.

Get Age on your Side

Misc

One of the best ways in the early years of your career to provide for your long term future is to have a 401K for your retirement where your employer will match your own contributions up to a certain figure. Your contribution is pre-tax incidentally. Albert Einstein once said that compound interest was the ‘eighth wonder of the world’ and it is compound interest that will help even small amounts to grow into a substantial figure on retirement if savings begin in your 20s.

It is worth illustrating this with real figures. A figure of $4,000 a year saved between the ages of 25 and 35 with no further contributions after that will produce a larger final figure at 65 than someone starting at 35 and contributing $4,000 per annum for 30 years. The latter has invested three times as much as well. The factors that decide this are time and compound interest. The whole total of former is working for him or her for 30 years. A fair amount of the second example is only ‘working’ positively for a limited time. Start early!

An Illustration

It is worth looking at examples to see what size of fund is realistic. 8% is not an unreasonable sum to put away on a salary of $40,000 a year, a salary that grows at 2% per annum for 20 years. If the employer pays 3% in addition and growth is a modest 7%, the fund at the end of 20 years would be around $210,000. If you can put 10% in instead, or if you extend the saving period to 30 years the fund rockets to over $500,000! It’s time and compound interest again because in the example over 20 years you will have only put in just under $80,000 yourself to have a fund two and a half times bigger.

A Couple of Observations

Can there be a bigger argument for saving from an early age than that? Surely not! The question is how to manage your money well enough so that you can start to save in the early years of your career. You may well have a student loan to begin to pay off. Probably two of the most important things to do with realisticloans.com, or not to do depending how you look at it are:

Credit Cards. Avoid building up debts by buying things you cannot afford. The interest charged on outstanding balances is penal. If you have a balance, perhaps as a legacy of subsidizing your student life, take out a personal loan to clear it. It is much cheaper in terms of interest rate and repayable in monthly instalments over a fixed term
Resist the temptation of trying to impress with material things. Impress people by who you are and not a new car or the latest fashions.

Expenditure

There is no doubt that you may well have monthly expenditure you did not face before, especially if you have relocated to start work. Such expenditure is unavoidable but you should spend some time on researching whether you are getting the best deals. That applies to a number of significant things such as utilities, insurance and telephone. There are comparison websites that do a good deal of research for you and at least will provide you with a short list to look at further.

The aim is to create a regular surplus that can be transferred out of your checking account when your monthly pay comes in to work positively for you and your future. You will need to apply self-discipline to your finances but you can see from the example of ‘time and compound interest’ what they benefits are for being in control. It really is not much to sacrifice.

There will be times in the years to come when you have big financial decisions to make. Real estate comes to mind immediately and a long term mortgage can reasonably be regarded as positive debt because it should produce good growth over the term you have committed yourself to. With real estate often comes marriage and a family; and all the expense that involves. Yet that responsibility is yet another reason to start young in saving for the future, and your possible dependents.

Search Results for: three-alternatives-to-a-budget/subscribe-by-email/budget-lesson-part-3/money-problems-day-1-setting-goals/budget-lesson-part-5/budget-lesson-part-1/consumer-action-handbook/questions-from-a-reader/experiences-v-stuff/evil-interest/save-your-family

The Internet Errors

Lack of Foresight and Oversight

Proposed Solutions

The Foreboding Warning