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Make a Budget

Finance

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Image by r.lovewell via Flickr

In the past, I’ve gone through a detailed series of budget lessons demonstrating how to make a budget and showing my personal budget spreadsheet template.  If you weren’t here to see them develop, you probably haven’t seen them at all.    I’ve never built an actual index for those posts.

This is the master index of my budget planning resources.  As I develop more, this will grow.

Budget Lesson #1 – In this lesson, I go over how we handle discretionary income and I explain our modified envelope system.   The discretionary budget contains things like our grocery bill, or the clothes we buy.  We have near-total discretion over what is purchased, hence the name.

Budget Lesson #2 – Lesson #2 contains the details of our monthly bills.  These are the ones that are consistent, predictable, and actually due each month.  Most people take these for granted as the bills they have to pay, but it’s not true.   You can get almost all of your regular bills reduced just by asking.   You would also be surprised what you can do without, when properly motivated.

Budget Lesson #3 – This is where I explain how we deal with the non-monthly bills.  That is, the bills that have to be paid, but are not due on a monthly basis.  I also share the personal budget spreadsheet template I developed.   I am working on a few sample templates to match various imaginary scenarios.  If you’d like to be an anonymous case study, and get free help setting up a budget, let me know, please.

Budget Lesson #4 – In this lesson, I describe our “set-aside” funds for things that will need to be paid eventually, but not on a set schedule.  Sometimes, they are never actually due.   We set aside money for the parties we throw, for car repairs and for a number of other things.  A few of these items are outright optional, but they are part of what makes life fun.  You can’t make a budget without including some of the extras.

Budget Lesson #5 – This is the companion piece to lesson 2.   Learn how I’ve reduced–or attempted to reduce–each of these bills.   For the better part of two years, I called Dish Network every few months to ask for a discount.  For almost 2 years, it was granted.  Then one, day, they told me they were putting a note on our account to keep us from getting any more discounts, so I canceled.   100% discounts help us save more.

Budget Lesson #6 – This is the reduction companion to lesson 3.  These bills are harder to reduce.  Have you ever successfully gotten your property taxes lowered?

Budget Lesson #7 – This is the reduction companion to lesson 4.  Notice a pattern, yet?

Budget Lesson #8 – Here, completely out of order, is the reduction companion to lesson 1.   Watch as I magically reduce–or rationalize–our discretionary budget.

So, dear readers, what part of budgeting should I address next?

Three Alternatives to a Budget

Finance

the envelope system: day one
Image by J. McPherskesen via Flickr

Budgets aren’t for everyone.  For some people, the very idea of trying to track where their money going is painful.  And that’s just the idea of tracking the money.  It gets far worse when you’ve got $10 budgeted for coffee, $12 for fast food, $66.50 for gas, and $0.75 for entertainment.  It’s can be hard to follow a strict budget for long.

If you know you need to track your money, and you also know that a strict, zero-based budget won’t work for you, what can you do?  Luckily, there are alternatives.

1. Hope and Pray. This is otherwise known as the “Call my bank everyday and see how close I am to over-drafting” system.  To fully embrace this system, you need to not only abandon a written–or even organized–budget, but you should also throw your checkbook register in the garbage.   Make sure you’ve got a good overdraft protection account attached to your checking account and let your money take care of itself.  This is the ultimate zen of personal finance.  Don’t stress or worry, just hope for the best.   This system works best if you make more money than Oprah and have modest tastes.  For those of us who have to watch our money a bit to make sure the month outlasts our money, this probably isn’t a great plan.

2. The Envelope System. To implement this system, you do need to create a basic budget so know what you are obligated to pay.  Once you have that done, take a stack of envelopes and label them for each item you have to pay.   Add another envelope for food, another for entertainment, and another for miscellaneous because there is always a miscellaneous.   Divide the money among the envelopes.   Now for the magic. When you have to spend something, take the money out of the appropriate envelope and spend it.  That’s it.  If, however, there isn’t enough money in the right envelope, but you still need to spend the money, you have to take it out of a different envelope and spend less on the category that lost money.

3.  Percentages. This is the simplest of the non-budget budgets.   Take 50% of your money and spend it on necessities, like the mortgage, food,  and utilities.   The next 30% goes to savings and retirement.  The last 20% is for fun or any other thing you want to spend it on.  This naturally works best if you are out of debt, but if not, just make sure most of the 20% fun money goes to repaying debt.   This system works best if your bills are automated and you will need to set up a basic budget first, so you can make sure your necessities come in under 50% of your income.

Not every budget plan will work for everyone, but there are always alternatives that can still help you manage your money.

How do you track your money?

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Future Dreams

Relationships

While jogging with my wife a few days ago, we had a conversation that we haven’t had in years. We discussed our dreams.

It’s an important conversation for couples to have. What are your hopes? What are your dreams? Where do you want to be in 10 years? In 20? In 50? Planning for the future gives you a map for the present.

My wife and I hadn’t had this conversation in years. A few days ago, we did. Our life-goals are simple and achievable.

I want to leave the corporate world and support my family with writing and the training classes I do. I want a chunk of land outside of any major metropolitan area, but close enough for the entertainment and shopping. I want enough land to expand my classes on my own property, relying on no one.

My wife wants enough land to have some horses. It was unspoken, but I think she wants my goals to take off so they can support her goals, too.

We want a comfortable retirement and we want to help the kids with college.

We’re a bit behind the game for college funding. That’s ok, though. There is nothing wrong with a kid working his way through college and learning those life lessons.

We are also behind on the retirement. But, if I can support us doing the things I love, I don’t need $X million. Retirement isn’t a cessation of activity, it is taking the time to do the things you love on your own schedule. If writing a book while sitting on my private range is enough to fund our life, that’s the perfect retirement.

Dealing With the Police 101

Life

NEW YORK, NY - FEBRUARY 01: Shackles for slav...
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Last night, a friend called me up and asked me to accompany him to the police station.  The police had knocked on his door, waking up his girlfriend while he was out.   When he called, they wouldn’t tell him why they wanted to talk to him.   Was it an ex trying to make his life difficult or one of his employees getting investigated?

This friend has had a number of interactions with the police, but never learned how to deal with them.  Before we left, I gave him a crash course in “stay out of jail”.

Lesson 1:  The Police Are Not Your Friends.

During an investigation, you are a suspect.   They are looking for a conviction.   There may be a “good cop” trying to “help you out”, but he is trying to put you in jail.  “Protect and Serve” doesn’t mean you.  In general, it means society as a whole.  During an investigation, they are serving the interests of the prosecutor.

Generally, they are going to look at you–as the target of their investigation–as the enemy.  This is normal.  They spend all of their time dealing with scumbags and s***heads.   Naturally, they start to assume that everyone who isn’t a cop will fall into one of those categories.

Don’t get pissed when they act rude, ignore you, or anything else.  It isn’t a lack of professionalism, it’s just a different profession.   They are using interrogation techniques that have been proven successful.   Ignore it and focus on Lesson 2.

It will feel wrong to disobey the authority you’ve been taught your entire life to obey.  You’re not.  You are standing by your rights.  Nobody cares about your future more than you do.  Certainly not the guy investigating you.

Lesson 2:  Your Lawyer is Your Friend.

The second a police interaction starts to look like they are investigating you, demand your lawyer, then see Lesson 4.    When you demand an attorney, they stop asking you questions.   You can take it back and start talking, so again, see Lesson 4.  It’s your attorney’s job to talk to the police and, if necessary, the media.  It’s your job to talk to your attorney.

You don’t need an attorney ahead of time.  Criminal defense attorneys are used to getting calls at 3AM.  It’s part of their job.   If you have a low enough income as defined by whatever jurisdiction you are being investigated in, you can get a public defender.   That’s better than nothing, but I’d prefer to hire a professional shark, even if it means mortgaging my future.   Prison is a big gamble.

Lesson 3.  Consent is Your Enemy.

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

“Officer, I do not consent to any search and I would like to speak to my attorney.”  Remember this.  Memorize it.

They need probable cause, a warrant, or permission to search your stuff.   Never agree to it.   Don’t stop them if they search anyway, but never, ever agree to a search.   If the search is done improperly, your lawyer(see Lesson 2) will get the results of that searched thrown out.

It isn’t possible to get into more trouble for standing by your rights.  There is no crime on the books anywhere in the US called “Refused Consent to Search”.   Your day will not go worse because you defended your Constitutional rights.

Lesson 4.  Shut Up.

I know a few defense attorneys.   According to them, most of the people in jail either committed a crime in front of a bunch of witnesses, or they talked their way into jail.   Shut up.   You’ll want to either justify or defend yourself depending on the circumstances.  Don’t.  Shut up.  It may be one of the hardest things you ever do, but keep your mouth closed.  The only thing worse than talking is lying.  Don’t lie, just keep quiet.

There is nothing you are going to say that will make your interrogator invite you home for Christmas.   He isn’t your friend, you won’t meet his parents, you aren’t going to his birthday party.   There is absolutely no win in talking to him.  Shut up.   The answer to every question is “Lawyer.”  If the only thing you say babble is “Lawyerlawyerlawyerlawyerlawyerlawyer”, you’re probably not going to do too badly.

In your car, the dynamic changes a bit, but the principles don’t.  When a cop pulls you over, don’t argue.  You can’t win an argument with a cop on the side of the road.  Be nice, be polite, and as soon as possible, pull into a parking lot and take as many notes about the encounter as you can.   If you are planning to fight whatever he pulled you over for, don’t give him any reason to remember you or spin his official report to make you look bad.    Again, shut up.  Catching a theme?

Gambling With Your Future

If you are being investigated by the police, your future–or some part of it–is on the line.   While you are gambling with your criminal record and your freedom, don’t forget that you are an amateur in this arena.  The police, the prosecutor, and your attorney are the professionals and the stakes can be huge.  Keep your mouth shut, call your attorney, and thank me later.

 

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5 Personal Safety Apps that Could Save Your Life

Life

Image representing iPhone as depicted in Crunc...
Image via CrunchBase

No one likes to think about the possibility of dying too young. But knowing that potential exists, you take the smart step of protecting those you love by carrying term life insurance. But what about preventing the worst? Did you know your iPhone or Android device can call for help or record vital information if you ever find yourself in a life-threatening situation? Here are five personal safety apps that could save your life.

1) myGuardianAngel

Once this app allows you to reach all of your emergency contacts with the push of one button. You enter the contact information for anyone you would want to get in touch with if you were in any sort of emergency as soon as you download it. If you are in an emergency, the app will call your contacts, send them an e-mail with your GPS location and immediately begin recording audio and video from your phone.

2) StaySafe

This app is good for anyone who works or travels alone. You can schedule the app to automatically notify friends or family after a certain period of time when your phone is inactive. For example, you can estimate how long you expect to drive from one location to another on your own and then the phone will contact someone automatically if you are out of contact longer than expected. That way your friends will know to send help because something is wrong, even if you aren’t in a position to contact them yourself. StaySafe sends your contacts a detailed GPS location for you so that they can easily find you and bring help.

3) RESCUE

This full-service app can help you on the scene as well as notify your emergency contacts for you. If you are in trouble, you can trigger the app to sound a loud alarm that might frighten off anyone who might be planning to do you harm. The alarm can also help someone find you if you are lost or unable to move from your current location. When the alarm is triggered, the app will also send immediate notifications to your emergency contact list so that they can begin to send help right away. Emergency services such as the police and fire department can also be set for notification through the RESCUE app.

4) Night Recorder

This is a good app to have when you need to make a quick recording of your surroundings for any reason. The app can be set to begin recording at a touch. If you are stranded, you could create a recording by speaking about the landmarks you can see and explaining how you got to your current location. The recorder can then send an email of your recording to anyone on your contact list.

5) iWitness

With this app, you can instantly make video or audio recordings of your situation so that there is a permanent first-hand record of everything that happens. It is a handy tool for anyone who has been in a car accident or involved in a medical emergency because you can go back and look at the video to see exactly what happened if there is any question about it later. The app will also contact emergency services or your personal emergency contacts if you are in trouble. The built-in GPS locator will transmit your exact location so that people can find you quickly and easily.

Post by Term Life Insurance News

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