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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?

 

The Unfrugal Meal

Finance, Parenting

A Teppanyaki chef cooking on a modern gas powe...
Image via Wikipedia

I spend a lot of time talking about how to save money here.  It’s kind of what I do.

Not today.

Today, I’m going to talk about the best way I’ve wasted money during my vacation this week.

First, so my feelings are completely understood:  A vacation is about experiences and memories.   I could spend all day at the park with my kids, or I could spend a memorable meal with them.   Which will they remember longer?

It ain’t the park.  They are there almost every day.

Of course, if the restaurant is McDonald’s they wouldn’t remember for long, either.

Tuesday, after a long day of hands-on, interactive museum-going, we took the kids to a Japanese steakhouse.   Teppanyaki, where they cook the food at the table, complete with fire, spatula spinning, and airborne food.

I’m the only one in my family who has seen that before.    Honestly, watching the art, the skill, the banter, and the giant fireball leaves me as wide-eyed as my kids.

They loved it.

Watching the chef throw a bowl full of rice across the table made my son’s jaw drop.

Seeing the chef carry fire from one side of the grill to the other on his fingers made my youngest squeal and beg for more fire tricks.

Getting squirted by the chef when he was putting out a flare-up made the middle brat giggle, possibly because the squirt gun was a little kid, dressed up as a fireman, with his pants down.   She got “peed” on and loved it.

Aside from cooking-as-a-show, the service was fantastic.   There was always a waiter nearby to keep our water glasses full or to provide “little kid” chopsticks, which are modified with rubber band to remove the need for skill to eat.   They had the courses perfectly timed.   The minute the salad was cleared, the soup was delivered.   When that was done, the chef rolled up to start on the rice.  My two-year-old was eating white rice without complaint for the first time.

Giggles and squeals.  Three days later, they are still talking about it.   My 11-year-old, who’s trying so hard to be an unimpressible teenager, says it was the coolest restaurant he’s ever seen.

Frugal, it wasn’t, but the memories were worth the money.

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Does Money Make Miley Cyrus Act Crazy?

Celebrities

If you’re like millions of people who saw Miley Cyrus’s performance at the MTV Video Music Awards recently, you’ve probably wondered what the effect of massive success on the music and acting star. Cyrus seems to be

Cover of "Hannah Montana The Movie"
Cover of Hannah Montana The Movie

doing everything possible to remake her image in the exact opposite of her squeaky clean mold that Disney and other companies have created for her over the last several years. (A rumor has it that Disney even created a contractual obligation for Cyrus to maintain a certain haircut during her “Hannah Montana” television show.) There’s a sense of someone taking on their first sense of independence, and running with it — the star seemed to be sending the message to the audience that she was not going to live according to the expectations of others anymore, and from the look of it, they got that message loud and clear.

The horrified looks of Rihanna, Drake, and Will Smith aside, the real question people had is whether the massive financial rewards of Cyrus’ singing career can explain her crazy behavior. Cyrus is said to be worth about $100,000,000 — certainly a fortune by any standards. And since she is still struggling with the problems of young adulthood — forming an identity, understanding her values and taking a place in society, it’s very likely that her finances contribute to at least some of her behavior.This effect of money can come from many different areas of life. For one, many people who become wealthy at a young age are suddenly struck with the fact that they have no need to work, but who often want to develop a career and contribute to society. Take Steve Jobs for example, who at 31 years old was fired from Apple Inc. by the company’s board of directors. Jobs had in fact started the company himself, and was worth well over a hundred million dollars by that time. And yet, feeling like contributing to society was more important to his life than resting on his laurels, Jobs started a new company, NeXT, where he hoped to contribute inexpensive computers to universities.

The fact that Cyrus is barely into her 20s should tell you something about how much time she has to develop her career. She has enough to retire at an age when most people are just starting their first real job. And that is a tough position to be in. If she is hoping to push her singing and acting career well into adulthood — as most artists would like to — it may be that she is trying to make her mark now. Think of it a bit like Bob Dylan in 1964, releasing electric music for the first time, when before that point he was primarily known as a folk singer making gentle acoustic music.

Dylan’s idea may have been a bit like what Cyrus’ is. That is to say, maybe Miley Cyrus is trying to avoid becoming a has-been, a relic of the 2000’s who burned out playing inoffensive pop music. If this is the case, Cyrus may be able to shift her career into a different mode by showing herself to be an uncompromising artist. Remember that even the greats of the past — Frank Sinatra for example — were once viewed as essentially music for teenagers, and not serious artists. Sinatra even suffered career failure in his 20’s when his audience grew up and moved on to other things. But he came back to record success when he began allowing his music to mature and his ideas to gain focus. If Cyrus can pull such a move, she may not be remembered as a teeny-bopper, but as a serious artist.

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Budget Lesson, Part 8

Finance

This is a continuation of the budget series. See these posts for the history of this series.

This time, I’m looking at our discretionary budget. These are the things that don’t have a fixed cost. Any individual item is largely optional, and, ultimately, we don’t track these purchases closely. At the beginning of the month, I pull this money out of the bank in cash, except for 1 category. When the discretionary budget is gone, it’s gone.

  • Groceries/Dining  – At the beginning of the week, we sit down with a meal planner and (Can you guess?) plan our meals.  The planner we use has a weekly calendar with a checklist below each day to build the grocery list.  At the bottom of the page is another checklist for staples that don’t apply to a specific day’s meal, like milk or snacks.   We build the list, then transfer it to another sheet, broken out by grocery department.  That keeps me from having to criss-cross the store.   I make one lap.  When I go to the store, I only bring that week’s grocery budget in cash,  so I keep close track of how much is going into the cart.    Recently, we’ve gotten so good at making our meals cheaply from scratch that I reduced our monthly food budget by $50.   I enjoy good food, so I wouldn’t reduce this budget item if it was a sacrifice in quality.   For example, the Rainbow Foods store-brand chips actually taste better than Lay’s for half of the price.    We stock up when things are on sale and cook creatively.   Sometimes, if time has been too tight to make a meal plan, we eat solely from the pantry for a week, buying nothing but bread and milk.   By sticking to the list, and not fearing the store’s brand, we are able to feed our family of 5 1/2 for $450 per month and still eat well.
  • Discretionary  – This is for the random things that come up, and some of the not-so-random.   Toiletries, activity fees, admissions, and fund-raisers all come out of this fund.  At the end of the month, whatever is left gets tucked into a box and forgotten.   When the box gets full, it goes to the bank to be applied to debt. There isn’t a lot to cut here, since this line-item is only $200.
  • Baby stuff  – This category is continually shrinking.   Our middle kid is recently potty-trained and our youngest is trying.   There is no baby food and no formula, just 1 pack of diapers every month.   In 6 months, this category will be eliminated.
  • Gas/oil  – This is the single category that isn’t cash-based.   It makes no sense to take the kids out of the car to pay inside, especially in the winter.    Also, all of the temptation is inside. It’s much better to spend the money at the pump.    There isn’t much we can do to reduce this, at the moment.   Our next car won’t be a full-sized pickup, but we are several years from that purchase.    We’ve started clipping oil-change coupons to keep this down to the minimum amount possible.
  • Clothes  – We only allocate $15 per month for clothes.   In a good month, we don’t spend it.   We can’t eliminate it completely, because things do come up.   Over the summer, I’m hoping to completely leave it alone to save up for a new(used) winter jacket for our older daughter, who doesn’t get hand-me-downs.
  • Blow Money  – This is the safety valve.  It can’t get reduced and still work.

We’ve now addressed out entire budget, including what we can do and have done to keep our costs under control.  Looking back, I don’t see too many cuts I’ve missed.

Budgeting tips – sticking to your budget

Finance

Image by adriagarcia at Flickr.com
Image by adriagarcia at Flickr.com

If you are looking to get out of debt, or you are currently debt-free and want to stay that way, then it is important that you get a grip of  your financial situation and live within your means.

A good way to do this is to create a budget as this gives you a clear indication of  how much money is coming in, how much is going out and also highlights any areas where you may need to make cut backs should you be falling short each month.

Once you have sorted out the figures and made necessary amendments, for example paying bills by direct debit in order to make savings or cutting existing debts by carrying out a balance transfer to a lower rate credit card, it is time to start focussing on the lifestyle changes.

As you will find, it is one thing to create a budget and quite another to stick to it, but by adhering to the following   steps and exercising a certain amount of will power, you should be able to ensure that you live within your means and resist the urge to reach for that credit card.

Keep focussed

Before you start to look at how you can stick to your budget you need to clarify why you need to stick to your budget!

A budget can initially seem like something that has been devised with the sole intention of stopping you having fun and buying or doing the things that you want. So it is important to remember that, though some cutbacks may be necessary in the short term, a budget is a long-term strategy that will allow you to take control of your finances and, all being well, live a happy life that is free from the worry of excessive debt.

Change your habits

Unfortunately, a successful budget can require a change in lifestyle and this can be one of the most difficult things to adhere to.

For example, if you have previously enjoyed eating out regularly then you may have to make cut backs in this area to ensure that you are living within your means. But, instead of seeing this as a negative, try to focus on the positives and remember the reasons why you are budgeting.

And a change in habits doesn’t necessarily mean that you have to cut back on your enjoyment of life and it may actually open your eyes to other pursuits you may not have previously considered.

For example, instead of eating out try preparing a meal at home and turn your dining room into a restaurant. This means that you can still have the fine dining experience but at a fraction of the price and without the worry of making a reservation!

Shop smarter

Lists figure heavily when creating a personal budget and list-making is a habit that you should get used to when trying to stick to your budget.

When budgeting it is vitally important to avoid impulse buying and a great way to do this is to always make a list of things you need before you go shopping.

This means that you will have a clear idea of what you need and you will be less inclined to make random purchases that may just turn out to be an unnecessary drain on your finances. It’s also worth mentioning at this point that you should always differentiate and prioritise the things you need over the things you simply want.

If you are unsure how to make the distinction then put off making the purchase for a couple of days and then reconsider if you actually need it. This cooling off period will often convince you that you can do without it and save you money.

In addition, savings can be made on your shopping by simply swapping big name brands for supermarket own varieties, using discount coupons and looking for any special offers.

Overall, it is important to be fully focussed and committed to your budget plan and to be aware that a change in finances may require a change in lifestyle. But a few short term changes may well add up to better finances in the long term.

Article written by Les Roberts, budget reporter at Moneysupermarket.com.

 

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