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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?

Focusing on the Now

Life, Relationships

My company uses a service called KnowYourCompany, that sends three emails each week to the entire staff. Each email asks a question that the staff can either respond to publicly, or just to the company leadership team.

The questions follow a formula.

On Monday, we get an email asking what we are working on. This allows us to see what everyone is doing, and in theory, makes offering your skills easier to do because you can see what you might be able to help with.

On Wednesday, the question is something about the company or our interaction with the company. One week this question was as simple as “Are there any company policies that aren’t completely clear?”

On Friday, the question is more personal. It’s a getting-to-know-each-other question. Last Friday’s question was “What’s something you want to do in the next year that you’ve never done before?”

I found that I don’t have an answer.

Right now, I don’t have any long-term goals. Recently, my personal life has been complicated enough that the idea of planning for later this year–much less the next 5 or 10 years–is more than I can deal with.

My side hustle goals are focused entirely on what needs to happen in the next week. Work goals are only a month out. My personal goals involve making it through the next few days without letting anything collapse.

Sometimes, life kicks you in the crotch so hard, you have to let the future worry about itself while you focus on what’s happening right now. Without a functional present, the future doesn’t matter. You have to focus on the Now first, or everything else evaporates.

It’s not a great situation, but it is an interesting perspective. I’ve spent so much of the last decade focusing on what comes next that what’s happening right now has suffered.

Focus on Now. Sometimes, What’s Next can take care of itself for a while.

Ignore Your Budget

Finance

For the first year of our journey out of debt, we had a strict budget, with all of our discretionary money spent out of an envelope system. We had an envelope for groceries, one for discretionary spending, one for clothes and one for baby crap. At the beginning of the month, we’d divide the money into the envelopes according to our budget spreadsheet. If we used a card for anything, we’d take a matching about of money out of the appropriate envelope and put it in a box to get reconciled the next month.

Ugh. Almost 2 years later, it has turned into too much work and too much nagging about everything either of us put on a card.

We decided to simplify the system a few months ago. Now, we still have a budget. It’s even a zero-based budget, but we ignore it. We only look at it if something changes for the worse. If something changes for the better, the extra money just gets automatically rolled into our debt snowball, so there’s no need to worry about updating the spreadsheet.

Instead of envelopes, we kind of eyeball it. We budget $450 per month for groceries, so we aim to spend $100 on our weekly grocery run. That leaves some room for losing track of how much we are putting in the cart, or a last minute addition to the list. It also leaves room for our secondary grocery trip to buy bread and milk later in the week. We do go through a lot of milk at my house. We budget $55 per month for diapers, but the deal we are currently getting with Amazon Mom is only costing us $30.79 for 6 weeks of diapers. We ignore the difference.

This—and our heavily automated bill pay and savings—lets us keep our finances on track, without stressing over every dollar or fighting over every little thing that comes home unplanned. I used to fire up Quicken and balance the checkbook every week. Now, that happens at the beginning of the month, usually. If I forget, it doesn’t matter. At the beginning of February, I balanced the checkbook for the first time in almost two months and we never came close to exercising our overdraft protection account. In fact, we had some extra, so that got sent directly to our debt.

Overall, it’s been good to test out a new system. We have almost no financial stress and managing our money takes about a couple of hours per month instead of per week. It’s all win.

Choosing the Best Term Life Insurance

Finance

This is a guest post.

Term life insurance is arguably the simplest form of life insurance offered by companies today. It is a dramatically different policy than universal or whole life plans. The latter tend to charge policyholders much higher premiums over the lifetime of their policies. However, whole life plans remain in effect for the lifetime of the insured, until death occurs or the policy is cancelled. On the other hand, term life insurance policies last for a fixed length of time, and the periods usually range from five, 10, 15, 20, or 30 years. With a term plan, the premiums you will pay are much lower, and if you pass away during the term of your policy, your beneficiaries will receive a full death benefit from your plan.

Types

Term life insurance generally falls into one of five different categories. Level, decreasing, renewable, return of premium, and convertible are the five kinds of term life insurance policies that companies typically offer their customers. The best method for selecting term life insurance is to consider your amount available to spend along with your age in order to decide which variety is the best fit for you and your family.

If you choose level term insurance, you will get a predetermined dollar amount of coverage for a set length of time. You will enjoy low overhead and you will have peace of mind knowing that your premiums will never fluctuate with the vicissitudes of the market. The predictability of a level term plan is perhaps the greatest feature of this type. Another type of term life insurance is decreasing term life insurance. It is strikingly similar to a level plan, and the only real variation is the amount of money your beneficiaries will receive if you die. With a decreasing term plan, the amount of your death benefit decreases over time. A good reason for choosing decreasing term life insurance is having small children. You know that you need the money more now while they are young, so paying less for life insurance in the short term is a good idea.

A convertible term plan is a hybrid. It lets a policyholder change their existing term life policy into a whole life plan without facing hefty penalties for doing so. Another option, a return of premium term life insurance plan, is very similar to level term plans. The major dividing factor between the two is that a return of premium plan actually gives back all the money paid in premiums to the beneficiaries if the insured dies during the term of the policy. It’s best to pick this plan if you want coverage for your family but you death is highly unlikely to occur during the term of your policy.

How to Qualify?

The uniting thread between most term life plans is that you are required to fill out a formal application first, and then you must pass a physical exam so that you may qualify for life insurance coverage. Additionally, most life insurance plans force you to repeat the exam each time you choose to renew your policy. However, if you choose a type of term life insurance called renewable term life insurance, you are allowed to bypass this stipulation entirely, so you can score some massive savings on premiums you will pay in the future. It’s best to choose this type of term life insurance if you are already older, or if you have health conditions that you expect to get dramatically worse during the term of your plan.

During the medical exam, your physician will take a full and extensive medical history from you. This is so that the insurance company can get a complete and accurate picture of your health in order to assign you the right amount of premium for your plan. Next, the insurance company will consider your motor vehicle record. This is so the insurance company can get a feel for whether you pose a big enough risk on the road to have a high likelihood of an accident that may cause your death and end your policy.

Then, your doctor may ask you other health and lifestyle questions if the life insurance company requires him or her to do so. You will need Attending Physician Statements (APS) that certify your answers and the results of your medical tests were true and accurate to the best of your knowledge. You will also need Medical Information Bureau (MIB) reports for your application as well as corporate documents if you are applying for business coverage. After you have submitted all of these materials, your insurance company should be able to render a decision about whether they will award you a term life insurance policy, as well as how much your annual premiums will cost you.

Carnival Roundup

Misc

As of today, my mother-in-law’s house is just about ready. We’ve got some stuff in a couple of the bedrooms to clean out, then it’s time to scrub it all down, paint, and clean the floors. It’s been a long, horrible, emotional summer getting this property ready, but we are definitely at the “light at the end of the tunnel” stage.

This weekend, the renters are going to come over and help wipe it all down. That will be nice.

Live Real, Now was included in the following carnivals recently:

Yakezie Carnival: List of Awesome Finance Articles hosted by Learn Financial Education

Carnival of Retirement hosted by Club Thrifty

Yakezie Carnival: The Less than Graceful Edition hosted by Earth and Money

The Wealth Artisan FinCarn hosted by Wealth Artisan

Carnival of Money Pros hosted by Master the Art of Savings

Carnival of Financial Camaraderie #49 hosted by My University Money

Carnival of Personal Finance #381 hosted by Tie the Money Knot

Yakezie Carnival hosted by I Am 1 Percent

Carnival of Money Pros hosted by Young and Thrifty

Carnival of Financial Camaraderie #50 hosted by Wealthy Turtle

Yakezie Carnival hosted by I Heart Budgets

The Wealth Artisan FinCarn hosted by Wealth Artisan

Carnival of Money Pros hosted by Vanessa’s Money

Carnival of Financial Camaraderie #51 hosted by My University Money

Carnival of Retirement #40 hosted by Term Life Insurance, Inc.

Thanks for including my posts.

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Priorities

Business

I once saw a sign on the wall in a junkyard that said, “Failure to plan on your part does not constitute an emergency on my part.”

Another good one: “If everything is top priority, nothing is top priority.”

Once a week, I meet with my boss to discuss my progress for the previous week and my priorities for the coming week. This is supposed to make sure that my productivity stays in line with the company’s goals.

Great.

Once a day, my boss comes into my office to change my top priority based on whichever account manager has most recently asked for a status update for their customer.

Not so great.

At least twice a week, he asks for a status update on my highest priority items. Each time, he could mean the items we prioritized in the weekly meeting, or the items he chose to escalate later. Somehow, getting a new task escalated doesn’t deescalate an existing task.

Everything is a top priority.

To compensate, I’ve been working a few 12 hour days each week, and occasionally coming in on the weekends.

I’m dedicated and still behind.

Prioritizing is treated as an art, or in the case I just mentioned, a juggling act. It should be considered a science. It’s usually pretty simple.

Is the problem costing you money? +1
Is the problem costing your customer money? +2
Is the problem going to hurt your reputation? +1
Is there a deadline? +1
Is it soon? +2
Is it urgent? +1
Is it important? +2
Are there absolutely no real consequences for anyone if it doesn’t get completed? -500

That’s it. Too many times, we get hung up on urgent-but-not-important items and neglect the important things.

The hard part comes when it’s someone else setting your priorities, particularly when that person doesn’t rate things on urgency, importance, and cost but rather “Who has bitched the loudest recently?”

Can I tell my boss that I’m not going to do things the way he told me too? No. A former coworker very recently found out what happens when you do this.

Can I remind him that I’m busting my butt as hard as I can? Yes, but it will just earn me a request to come in on the weekend, too.

Can I ignore the official priorities part of the time, and work on what I feel is most important to keeping our customers happy? Yes, but it’s easy to go too far. “Boss, I ignored what you said, but this customer is happy, now!” won’t score me any points if it happens every week.

Priorities are simple, but not always easy. How do you balance your priorities?