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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?

 

Budget Lesson, Part 6

Finance

It’s been a month since I’ve written a post for the budget series, so I’ll be continuing that today.  See these posts for the history of this series.

This time, I’ll be reviewing my non-monthly bills.  These are the bills that have to be paid, but aren’t due on a monthly basis.  Some are annual, some are quarterly.

  • School Lunch – This could be cut by sending a bag lunch.   We pay about $1.25 per day for school lunch.   At that price, I don’t think I can beat the nutrition, let alone the convenience of the meal.  We pay this whenever the account gets below $10.
  • Property Taxes – We pay this semi-annually.  This bill goes up every year due to the ****** ***-******* ******-******* who don’t care about their constituents making ends meet.  ******* ***** ******* *******.   Huh.  Who knew WordPress came with a censor?  I could move, but I’d have to get out of commuting distance to get this down much.
  • Life insurance – I’ve got two quarterly life insurance policies.   I can’t get these much cheaper, but I should be able to next year.  The questions asked if I’ve smoked in the last three years, and that will be up on Halloween.
  • AAA   – It’s only been recently that I’ve owned vehicles reliable enough to avoid paying my AAA dues for me.   I could cancel this, but for $80 per year, the hotel discounts make it a wash.  One vacation per year comes close to making the difference.
  • Vehicle Registration – The only way to cut this would be to get rid of a vehicle.  I don’t think that’s possible for us.  We work in opposite directions and, for at least one quarter per year, spend too much time chasing around for activities.
  • Daycare – We’ve been using our current daycare provider since my oldest(10) was one.   When my youngest turns 2 in June, our costs will go down.   Without one of us quitting our job, this bill can only go down as the kids grow up.
  • City Bill – This bill combines our garbage, water, and sewer.   With three adults, three kids, and 5 animals in the house, reducing our garbage level is difficult.  We do try to manage our water usage in the summer, to keep that down.
  • Web host – I have a few domain names and a hosting package to handle my side hustles and miscellaneous projects.    This is a deductible expense.  I have been allowing my domain names to expire if the project isn’t being actively pursued.
  • Memberships – I have annual dues to two organizations.  I’m making payments on lifetime memberships, so these will be going away in about 18 months.

Reviewing this list, there doesn’t seem to be too much I can cut and accomplish any meaningful savings.  Am I missing something?

Carnival Roundup: Bully Edition

Life, Parenting

My mother-in-law’s house is ready.   The walls are painted, the hardwood floors have been sanded and polished, the carpets have been cleaned.  Now, we just have to get the lease signed and let the renters in.

A school bus photographed in New York, New Yor...
A school bus photographed in New York, New York. Bus is a 2000-2001 Carpenter Classic 2000 body with an International 3800 chassis. (Photo credit: Wikipedia)

This week, we had our first real bullying incident on the school bus.  I guess one of the benefits of having a kid who is the biggest in the school is that nobody punches him.  My daughter doesn’t have that benefit.   She was punched and pushed for being in the wrong seat on the bus a couple of days ago.   Thankfully, the school dealt with it quickly.   The bus is equipped with video and the little girl copped to it.  She’s s off of the bus for a few days and her parents have been informed.   Unfortunately, her twin sister seems to be the vengeful type.  She came home yesterday lying about how my daughter behaved on the bus and got another little girl to lie about getting hit and bit by my daughter in school yesterday.

How do I know it’s all lies?

First, my daughter didn’t ride the bus yesterday afternoon.  She was scared in the morning, so I promised to pick her up from school.   Hard to misbehave on the bus when she was cuddling with her mother on the couch.    The other little girl–who goes to daycare with the twins just up the street from our daycare provider (who happens to be the grandmother of the twins)–recanted once she was away from the vengeful twin.  Her mother filled us in last night.  I’m not a fan of a grandmother defending a kid’s lies.  No kids are angels, but helping them lie doesn’t make them better people.

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

I’m aware that I’ve been a bit of a slacker about posting these links.  My apologies to everyone who deserved a link but didn’t get it in a timely manner.

Yakezie Carnival  hosted by Narrow Bridge

Finance Carnival for Young Adults   hosted by Finance Product Reviews

Carnival of Financial Planning   hosted by Family Money Values

Yakezie Carnival   hosted by Moneywise Pastor

Lifestyle Carnival hosted by Vanessa’s Money

Carnival of Money Pros  hosted by See Debt Run

Carnival of Financial Camaraderie #64 hosted by Master the Art of Saving

Carnival of Retirement #52  hosted by Master the Art of Saving

Yakezie Carnival  hosted by Your PF Pro

Lifestyle Carnival #33 hosted by Lifestyle Carnival

Carnival of Financial Camaraderie #62  hosted by Savvy Scot

Carnival of Money Pros   hosted by Debt Black Hole

Carnival of Money Pros    hosted by Making Sense of Cents

Lifestyle Carnival #31  hosted by Vanessa’s Money

Carnival of Money Pros  hosted by The Frugal Toad

Money Mail Carnival #5   hosted by The Money Mail

Carnival of Money Pros  hosted by Vanessa’s Money

Money Mail Carnival #4  hosted by The Money Mail

Finance Carnival for Young Adults #39 hosted by 20s Finances

Yakezie Carnival hosted by My Family Finances

Carnival of Money Pros    hosted by Growing Money Smart

Carnival of Financial Camaraderie #57  hosted by My University Money

Money Mail Carnival #3 hosted by The Money Mail

Yakezie Carnival    hosted by I Heart Budgets

Carnival of Retirement #46  hosted by Making Sense of Cents

Yakezie Carnival hosted by The Ultimate Juggle

Carnival of Money Pros   hosted by My Multiple Incomes

Carnival of Financial Planning hosted by Master the Art of Saving

Money Mail Carnival #2 hosted by The Money Mail

Carnival of Financial Camaraderie #56 hosted by See Debt Run

Carnival of Money Pros   hosted by Finance Product Reviews

Yakezie Carnival hosted by Parenting and Money

Lifestyle Carnival #27  hosted by Femme Frugality

Carnival of Financial Camaraderie #55 hosted by My University Money

Yakezie Carnival hosted by The Ultimate Juggle

Lifestyle Carnival #26 hosted by Mo Money Mo Houses

Carnival of Money Pros  hosted by Debt Black Hole

Carnival of Financial Camaraderie #54 hosted by Cash Net USA

Carnival of Financial Planning hosted by Young Family Finances

Yakezie Carnival   hosted by Portfolio Princess

Carnival of Money Pros   hosted by Thirty Six Months

Carnival of Retirement #41  hosted by Financial Conflict Coach

Lifestyle Carnival   hosted by Master the Art of Savings

Yakezie Carnival  hosted by Cult of Money

Lifestyle Carnival  hosted by Blue Collar Workman

Carnival of Money Pros   hosted by Making Sense of Cents

Carnival of Retirement #41 hosted by The College Investor

Thanks for including my posts.

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Money Problems – Day 7: Paying Off Debt

Finance

Scottsturgis unicorn
Image via Wikipedia

Today, I am continuing the  series, Money Problems: 30 Days to Perfect Finances.   The series will consist of 30 things you can do in one setting to perfect your finances.  It’s not a system to magically make your debt disappear.  Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.

I’m not running the series in 30 consecutive days.  That’s not my schedule.  Also, I think that talking about the same thing for 30 days straight will bore both of us.   Instead, it will run roughly once a week.  To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.

On this, Day 7, we’re going to talk about paying off debt.

Until you pay off your debts, you are living with an anchor around your neck, keeping you from doing the things you love.  Take a look at the amount you are paying to your debt-holders each month.   How could you better use that money, now?  A vacation, private school for your kids, a reliable car?

If you’ve got a ton of debt, the real cost is in missed opportunities.   For example, with my son’s vision therapy being poorly covered by our insurance plan, we are planning a much smaller vacation this summer–a “staycation”–instead of a trip to the Black Hills.  If we didn’t have a debt payment to worry about, we’d have a much larger savings and would have been able to absorb the cost without canceling other plans.  The way it is, our poor planning and reliance on debt over the last 10 years have cost us the opportunity to go somewhere new.

The only way to regain the ability to take advantage of future opportunities is to get out of debt, which tends to be an intimidating thought.   When we started on our journey out of debt, we were buried 6 figures deep, with a credit card balance that matched our mortgage.    It looked like an impossible obstacle, but we’ve been making it happen.   The secret is to make a plan and stick with it.   Pick some kind of plan, and follow it until you are done.  Don’t give up and don’t get discouraged.

What kind of plan should you pick?  That’s a personal choice.  What motivates you? Do you want to see quick progress or do you like seeing the effects of efficient, long-term planning?   These are the most common options:

Debt Snowball

Popularized by Dave Ramsey, this is the plan with the greatest emotional effect.   It’s bad math, but that doesn’t matter, if the people using it are motivated to keep at it long enough to get out of debt.

To prepare your debt snowball, take all of your debts–no matter how small–and arrange them in order of balance.   Ignore the interest rate.  You’re going to pay the minimum payment on each of your debts, except for the smallest balance.  That one will get every spare cent you can throw at it.   When the smallest debt is paid off, that payment and every spare cent you were throwing at it(your “snowball”) will go to the next smallest debt.   As the smallest debts are paid off, your snowball will grow and each subsequent debt will be paid off faster that you will initially think possible.    You will build up a momentum that will shrink your debts quickly.

This is the plan I am using.

Debt Avalanche

A debt avalanche is the most efficient repayment plan.  It is the plan that will, in the long-term, involve paying the least amount of interest.  It’s a good thing.   The downside is that it may not come with the “easy wins” that you get with the debt snowball.   It is the best math; you’ll get out of debt fastest using this plan, but it’s not the most emotionally motivating.

To set this one up, you’ll take all of your bills–again–and line them up, but this time, you’ll do it strictly by interest rate.  You’re going to make every minimum payment, then you’ll focus on paying the bill with the highest interest rate, first, with every available penny.

DOLP

This is the plan promoted by David Bach.  It stands for Done On Last Payment.   With this plan, you’ll pay the minimum payment on each debt, except for bill that is scheduled to be paid off first.   You calculate this by dividing the balance of each debt by the minimum payment.   This gives you an estimate of the number of months it will take to pay off each debt.

This system is less efficient than the debt avalanche–by strict math–but is better than the snowball.  It give you “quick wins” faster than the snowball, but will cost a bit more than the avalanche.   It’s a compromise between the two, blending the emotional satisfaction of the snowball with the better math of the avalanche.

Snowflaking

For each of these plans, you can give them a little steroid injection by snowflaking.  Snowflaking is the art of making some extra cash, and throwing it straight at your debt.   If you hold a yard sale, use the proceeds to make an extra debt payment.   Sell some movies at the pawn shop?  Make an extra car payment.  Every little payment you make means fewer dollars wasted on interest.

Paying interest means you are paying for everything you buy…again.  Do whatever it takes to make debt go away, and you will find yourself able to take advantage of more opportunities and spend more time doing the things you want to do.  Life will be less stressful and rainbows will follow you through your day.  Unicorns will guard your home and leprechauns will chase away evil-doers.   The sun will always shine and stoplights will never show red.   Getting out of debt is powerful stuff.

Your task today is to pick a debt plan, and get on it.   Whichever plan works best for you is the right one.    Organize your bills, pick one to focus on, and go to it.

Assuming you are in debt, how are you paying it off?

 

 

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Carnival of Money Stories – Halloween Aftermath Edition

Finance, Misc

Technicolor Zombie Apocalypse
Image by Dunechaser via Flickr

Welcome to the November 1, 2010 edition of the Carnival of Money Stories.  One thing I didn’t do when volunteering to host this was to check my calendar.  Did you know that November 1 follows October 31, every year?    On Saturday, I had 30 people over for my annual Halloween party.  On Sunday, I ran a haunt in my yard and coordinated to get a dozen kids out begging for candy while using my house as a base of operations.   I’ve had guest from out-of-town since Friday.  Halloween weekend is, by far, the busiest weekend of the year at my house.

Editor’s Picks

J. Savings presents Side Hustle Series: I’m a Restaurant Server posted at Budgets Are Sexy, saying, “Is serving tables thankless work? Yes. Are customers sometimes unpleasant? Of course. But the benefits are plenty!”

Wenchypoo presents Marketing, Marketing Everywhere–There’s No Escape! posted at Wisdom From Wenchypoo’s Mental Wastebasket.

The Wise Squirrel presents Does it Matter Who is the Main Provider Between Husband and Wife? posted at Squirrelers, saying, “Money story about a dual-income couple in which the husband had the opportunity for a big promotion that would have required a move, AND his wife to leave her job. Their different viewpoints are discussed.”

Business

Ryan @ CML presents Get a Tax Deduction for a Working Vacation posted at Cash Money Life, saying, “Tips on how to write off a business trip as a tax deduction.”

Career

Jeff Rose, CFP presents How to Pass the CPA Exam and Become a Certified Public Accountant posted at Jeff Rose, saying, “If you are interested in becoming a CPA, here are some of the experiences of someone who just recently passed the CPA exam.”

Jason @ Redeeming Riches presents What Sam Walton Teaches Us About Money, Success, and Family posted at Redeeming Riches, saying, “Sam Walton had it all – or did he? Find out the biggest regret he had on his death bed.”

Credit

Mr Credit Card presents Cash Vs. Credit, A Real World Experiment posted at Ask Mr Credit Card.

Debt

The Family CEO presents Debt Snowflakes: Or How I Made $821.73 in Extra Credit Card Payments This Month posted at The Family CEO.

Kaye presents Stuck in the Middle posted at Mrs Nespy’s World, saying, “The beginning of the journey was excited, the end will be exhilarating, but this “in the middle” stuff is for the birds.”

Kate Kashman presents Why Not To Bounce Checks posted at The Paycheck Chronicles, saying, “An accidental bounced check in college is still causing trouble, 20 years later.”

Michael Pruser presents Managing $225,000 in Debt Is Starting to Ware on Me posted at The Dough Roller, saying, “My struggles on managing a ton of debt!”

PT presents 5 Lessons Learned From Filing Bankruptcy posted at Prime Time Money, saying, “Lessons learned from an actual account of going through a bankruptcy.”

Silicon Valley Blogger presents Should You Pay Off Loans or Invest Your Money? posted at The Digerati Life, saying, “So you’ve got some money. Should you pay off your debt with it or invest the money? Here’s a personal account on what I’ve done.”

Housing

BWL presents Success Story: Paying Off A House In 5 Years While Tithing posted at Christian Personal Finance, saying, “This is an encouraging story of a woman who stuck to her convictions about giving 10% of her income and still managed to pay off her house in less than 5 years!”

Miranda presents Do I Really Want to Rent Out My House? posted at Personal Dividends – Money+Lifestyle.

Investing

2 Cents presents What Would Make Me Invest in the Stock Market? posted at Balance Junkie, saying, “We have not invested in the markets for a while now. A reader recently asked what it would take for us to get back in. Here’s my answer!”

FIRE Getters presents Early Retirement Case Study – Sandy Aldridge and Dale Lugenbehl posted at FIRE Finance, saying, “At times the fast pace of our city lives appear stifling making us long for a slower pace of life with more exposure to clean air and green vegetation. Our souls yearn for a simple life which is in greater harmony with Mother Nature. Of late our work related health problems have been making us yearn, almost every morning, for a more relaxed life with greater freedom. So we were thrilled to read about Sandy Aldridge and Dale Lugenbehl who retired early (at ages 48 and 47 respectively) more than a dozen years ago to their eight-acre farm in Cottage Grove, Oregon …”

Other

Neal Frankle presents Find A High Paying 2nd Job Using Craigslist posted at Wealth Pilgrim: Money Management Advice, Financial Stess Management, Addiction Recovery Plan & Resources, saying, “You Can Find A High Paying 2nd Job Using Craigs List If you’re looking for high paying 2nd jobs, look no further than your computer screen.”

Super Saver presents Retiree Financial Lessons from the Recession posted at My Wealth Builder, saying, “Although I wish this recession had not happened, I am glad that it happened early in our retirement, while we were better able to meet the financial challenges.”

Craig Ford presents Medi-Share Medical Sharing | A Health Insurance Substitue posted at Money Help For Christians, saying, “Medical sharing is a great way to reduce your health insurance costs.”

passive family income presents Cutting Out Wasted Expenses to Save More Income posted at Passive Family Income, saying, “How many wasted expenses are you paying for? After sorting through my family’s past years credit card and bank statements, I have found several small money leaks in our personal finances.”

Kristina presents Our Parents Estate posted at Dual Income No Kids, saying, “If your parents are divorced, how has their separation affect the way you have planned your estate?”

Donna Freedman presents Rockin’ the surveys — when it’s worth it. posted at Surviving and Thriving, saying, “Online surveys can be a nice source of extra income — except when they aren’t.”

Joe Plemon presents My Car Needs an Engine. Should I Sell it, Fix it or Junk it? posted at Personal Finance By The Book, saying, “What do you do when your beloved car needs an engine: sell it, fix it or junk it? This post explores the options.”

FMF presents My Type of Couple posted at Free Money Finance, saying, “Story of a couple who collected 400k cans to pay for their wedding.”

Lindy presents Once Upon a Time…I Used an Iron posted at Minting Nickels, saying, “One of the likely first stops in expense-slashing is the luxury of paying for laundered shirts. This is a tale of my ironing saga (yes, it qualifies as a saga). And it’s not as boring as this description sounds. Thanks!”

Sandy presents One Disaster Away posted at Yes, I Am Cheap, saying, “We sometimes pass judgment on others for the financial situation, but most of us need to realize that all it takes is one disaster to be in the same situation.”

Bucksome presents Top 7 Ways I Budget My Time posted at Buck$ome Boomer’s Journey to Retirement, saying, “Budgets are needed for more than money in this story about 7 ways to budget time.”

Tom @ Canadian Finance Blog presents How to Watch Cheap and Free TV in Canada posted at The Canadian Finance Blog, saying, “Want to know how to see free TV in Canada? You have a few options with over the air free HDTV, broadcaster’s websites and cheap services like Netflix!”

Lauren Mendel presents A Very Scary Money Story posted at Richly Reasonable – Successes and failures, all in the name of living reasonably., saying, “This Halloween week read the true, terrifying tale of how Husband and I almost lost literally every important document that we have. Muahahaha! You might want to lock your doors and close the blinds before reading this one…”

Sun presents What’s in My Wallet? posted at The Sun’s Financial Diary.

Shopping

Money Beagle presents Costco Coupon Policies – Truth or Fiction? You Decide posted at Money Beagle.

ctreit presents Our family budget has to accommodate this chocolate snob posted at Money Obedience, saying, “Name brands versus store brands.”

Rachel presents Sometimes Less Is More | MomVesting posted at MomVesting, saying, “Melinda talks about how the value of many things isn’t necessarily determined by their cost.”

That concludes this edition. Submit your blog article to the next edition of Carnival of Money Stories using the carnival submission form. Past posts and future hosts can be found on the blog carnival index page.  Thank you, everyone, for participating!