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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?

 

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?

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Money Hacks Carnival #105: The All Government, All the Time Edition

Misc

Jefferson Memorial
Carnival Time

Welcome to the 105th edition of the Money Hacks Carnival:  The All Government, All the Time Edition. Deep in the bowels of tax season, it’s not surprising that tax- and government-related articles are popular.

Editor’s Picks

LeanLifeCoach presents What Is Your Learning Style? This is an important lesson for anyone trying to teach.  My main side hustle involves teaching.  We try to address each learning style to engage all of our students.  I’m a visual learner.  In school, I always read ahead and I’ve never been able to focus while someone reads to me.

Consumer Boomer presents The Best IRA for You.  Holy Educational Post, Batman!  Be careful, you’ll learn something if you read this post.

PT presents How to Find Free Stuff Online Without Getting Spammed.  I like free things.   I hate spam.  I’m a part of the target audience of this post.  I use an active Gmail account for getting freebies.  The spam filter can’t be beat.

Fanny Seto presents 5 Tips on How to Get a Job in this Economy.  I’m glad I haven’t had to deal with this recently.   If you’re unemployed, take the opportunity to develop a hobby or explore other opportunities.  You may be out of work, but that means you have the one thing you can’t replace: time.  Use it wisely.

Taxes or Feeding the Monster

Jeff Rose presents How to File Taxes with Your 1099s.  All you’ve ever wanted to know (and more!) about the 1099.

Paul Williams presents Deduct Haiti Earthquake Relief Donations on Your 2009 Tax Return.  If you itemize, make sure you include any donations to Haiti relief.

freefrombroke presents TurboTax Online 2009 Overview.  I love TurboTax.  I use it every year and have done so since I discovered I wasn’t capable of figuring out the Earned Income Credit.

Four Pillars presents What Happens If You Lose Your W2 Form?.  Keeping track of your tax documents is always important, but what do you do if that doesn’t work?

Matthew Paulson presents Troublesome Tax Myths.   Taxes aren’t optional.  Ask Wesley Snipes.

Working for a Living or Earning the Monster’s Feed

Darwin presents 10 Highest Paying Degrees 2010 – Best Majors in Demand Now.  The part that doesn’t surprise me is that the hard sciences pay well.   Art-as-science comes with a smaller paycheck.   Hmm….

J. Money presents Life in Grad School Doesn’t Have to Suck…All Your Money.  I’ve didn’t make it to grad school, but I did work my way through college with a small baby.  It’s good to have a support network.

The Financial Blogger presents Getting Ready for Another Purchase!.  I’ve never given any thought to buying a blog.  It’s a fascinating read.  Make sure you read the related posts to get the full value.

Banking, Credit, and Investing or He Who Pays the Piper Calls the Tune

GLBL presents What to Expect From Mortgage Rate Trends for 2010.  I learn something every day.  Define “intraday”.

pkamp3 presents Cutting Up the Card.  It may be caused by a down economy, but less consumer debt isn’t a bad thing.

D4L presents 20 Dividend Stocks Riding The Tsunami Of Dividend Increases.  My first dividend-paying stock paid me 16 cents once.  Stocks kind of scare me.  In my mind, they’re not much different than a slot machine, so I don’t buy much.  I think I had 20 shares of that first stock.

Personal Finance or The Government Doesn’t Have to Be Involved

Matt_SF presents Personal Finance Equations You Should Know: the Cash Flow Equation.  If equations make you smile, this is the post for you.

Craig Ford presents 101 Ways To Improve Your Marriage Money Relationship.  This goes beyond finance and dips firmly into happy relationship territory.

Hedy presents My Better Business Bureau experience.  I’ve found that the sincere threat of a Better Business Bureau complaint can be effective, too.

2 Cents presents Economics: Your Personal Finance Weather Forecast.  As a sci-fi junkie, I love the quote at the beginning of the article.

Dodging Taxes and Anarchism

Nope.  No submissions in this category.

That’s all.  While you’re here, don’t forget to subscribe to my rss feed and follow me on twitter.

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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Side Hustle: Garage Sale Management

Finance

Garage Sale

Pre-sale preparation and marketing are important, but ultimately, the money comes from how you manage the sale.

How many people will you have staffing the sale?  There are a few considerations here.   How many people are involved in the sale?  How many people can take the time off?   It’s best to have three people at the sale at all times. Two people can manage the money while the third plays salesman and security.   Staffer #3 is in charge of watching for price-tag swaps or other theft, answering questions, and trying to upsell.    It also allows for breaks, which, if you’ve ever spent a day in a garage drinking coffee, is important.

When are you going to be open?  You don’t want to open so early you don’t have time to wake up and get ready for the sale, but you don’t want to open so late the professional garage-salers drive past and forget about you.   Plan to open sometime between 7 and 9. When will you close?   Staying open until 6 will catch most of the after-work crowd, but it makes for a long day, but closing at four cuts out a lot of the late-day shoppers.   Our hours were 8-5, which seemed to be a good compromise between a long day and the best sale.

[ad name=”inlineleft”]Don’t be afraid to shut down. The first day of our sale was cold, wet, and miserable.   We had to canopies in the driveway, but everything was getting wet, anyway.   Traffic was slow and we weren’t enjoying ourselves, so we shut down.  Lunch and a nap improved our outlook considerably.   At the end of the day, we start packing up, even if people were there.    We tried to only pack what they had looked at, and we didn’t try to rush the potential customers, but we did let them know that the sale was ending for the day.  The folks who came in half an hour after close on the last day seemed upset that we didn’t unpack everything for their amusement.

Our layout was designed to get everything easily visible while maximizing traffic.   The first day, we were confined to the garage and tents, so space was limited.   There were baskets under each of the tables.   That forced people to crouch and block each other.   The second day, we expanded to fill the driveway.   Our tables were organized in 3 rows–a “U” shape with a double-wide row of tables in the middle.   This allowed people to see everything in one pass.   The middle row had periodic breaks so we could move around to help the customers.    The pay table was in the middle of one of the outer rows, which let us monitor the entire sale.

Find someone to watch the kids and pets. If you have to keep an eye on your children, you aren’t watching the customers or giving them the attention they need.  Your dog–no matter how well-behaved–is a liability.   It will be stressed at the people.  Some customers will be allergic or afraid.  Just don’t do it.

Ideally, you will have someone who isn’t taking money, knows a little bit about most of the merchandise, and isn’t too shy to talk to strangers.   His job is to wander around, answer questions, and help people decide if they want an item.   He’s the sales-weasel. If he’s pushy, he’ll chase off the customers, but if he’s hiding, he isn’t making any money.   Unusual items should have a sign attached explaining why they are special, so the sales-weasel doesn’t have to explain it to everyone.

Every single item should be priced, but not everything needs to be priced individually.   We priced all of the movies in a group.  “VHS: $0.50 or 5 for $2, DVD $3 or 4 for $10”.   Nobody should have to ask what an item costs. If there are multiple people doing a sale together, make sure everyone is using colored price tags to identify who is selling what.

People come to garage sales expecting to find good deals.  If they don’t, they’ll leave. Our rule of thumb for pricing was about 25% of retail, with wiggle-room for the item’s condition. New-in-the-box sometimes made it up to 50% of retail.  Our goal was primarily to reduce clutter, so a lot of items were priced at 10%.    You have to keep in mind that, if you price things too low, people will assume there is something wrong with it and not assign a value in their own minds.    Price it at what you would be willing to pay in a garage sale, then mark it up–just a bit–to account for haggling.

People love to haggle at garage sales.  It gives them an opportunity  to brag about the great deal they fought for.   Try to accommodate them.   One of the people participating in our sale was selling antiques with a definite value.    She didn’t want to haggle on any prices, so we simply hung up a sign that read “All white-tagged prices are firm.”   Everyone else was willing to accept almost any reasonable offer.   Our most important rule for accepting a price?  If you pissed me off, I didn’t budge on price. Insult me, or offer 1/10 of the price, and my defenses go up, bringing your final price with it.   Talk nice and use some common sense while haggling, and you got what you asked for.

[ad name=”inlineright”]Could we have maximized the sale more?  Probably.   I had intended to hang up a sign that simply said “$100” to set a high anchor-price on everything, but I forgot.

Note: The entire series is contained in the Garage Sale Manual on the sidebar.

Update: This post has been included in the Carnival of Personal Finance.