Tag: Money

Control your money before it controls you

On December 7, 2011

My wife and I have worked to get our financial house in order. We have become devout followers of Suze Orman. We have made a rough budget. We have our first emergency fund. We are nearly credit card debt free. We are working to save up an 8 month emergency fund so we can stay that way. We are paying off student loans. We are looking to the future and home ownership. Paying overdraft fees and having to stop spending because we ran out of money before payday is a thing of the past.

We have made a lot of big steps this year. We didn’t want to be a family that was making good money and still living paycheck-to-paycheck. It is an easy trap to fall into and we have been there.

We knew things had to change when we were both working full-time and still barely had money for our bills and expenses. We weren’t going into debt but we weren’t getting out of it either.

Our path to financial health has been slow and steady. There are no quick fixes. We made some good decisions and stuck to them.

First, we did what I think was the smartest step we could take. We created a shared bills calendar. I made a new Google Calendar, called it Bills and shared it with my wife. I added my pay days, a strange 7th and 22nd of every month, and she added her more normal 1st and 15th. Now we knew when our money was coming in.

Next, we added all of our recurring monthly bills. Student loan payments, Netflix, web hosting, Audible, cell phone and Internet were all laid out in front of us. Now we knew when that $300 would be heading to students loans or when FiOS would take its $54. There is something wonderful about seeing all of your money laid out in a calendar.

Now that we knew when and how much of our money was coming and going, we changed some payment dates to better cope with rent. After that, we made a rough budget. How much gas do we buy? What about groceries? Do we want to put away savings for medical bills and vacations? We assigned values based on the previous month’s spending and continue to tweak it. Now that we know where our money is going, how do we start saving?

We are fortunate to bank with PNC Bank and use their Virtual Wallet software. The Virtual Wallet allows us to break our savings into three accounts. From there we can set savings goals and ear mark amounts towards each of those goals.

For instance, we have categories for medical bills, new car tires, vacation and a new sofa. We put a lump sum into savings every pay check. Then my wife goes into the virtual wallet and applies $50 to one category $30 to another and so on until all the money is accounted for.¹

I like this much more than having one big sum of savings money. The money already being put towards something means it will not get spent on frivolous things.

Through a simple bills calendar, using our bank’s web-based software and making a simple budget we are digging out of debt. We know where all of our money goes every month. We are in control of our money instead of letting it control us.

I erroneously thought the Virtual Wallet was applying the money to different categories. It does not, so I’ve revised this sentence. ↩

Big Spender

By Carl

On December 1, 2011

In Observations

Communication and trust are vital to a happy marriage. Everyone will tell you this about any relationship but what most people don’t talk about in marriage is how your thinking must change.

Before I entered this relationship I had to think about myself and make decisions about my money and my time. I had to make decisions only keeping my best interests in mind.

After you enter a relationship and eventually a marriage all of this changes. Instead of looking out for yourself and taking your wants and whims into account you also need to take into account the wants, whims and feelings of your significant other.

No one tells you this when you agree to marry the lady or guy of your dreams. It is something which must be learned and practiced.

I did something stupid recently. I bought a watch. It was expensive. This was a huge mistake on my part. This mistake was two-fold.

My mistake was not because I bought the watch.
My mistake was not even because of the price of the watch.

First, my mistake was the timing of the purchase.

I had just gotten paid and was feeling that look at all the money in our account feeling. I bought the watch and didn’t think anything more of it.

Until I got home.

It was at that point I realized the magnitude of my mistake. I had spent a sizable chunk of the money we were going to have left after the rent check, which I wrote out that evening, went through.

I had forgotten at the time of purchase but my wife had mentioned the night before about not spending a lot of money because it was going to be tight until she got paid in a couple of days. Also because we had agreed not to buy Christmas present for each other this year.¹

Second, I did not think to talk to her before I spent $100 of our money.

No longer is this my money and my life. This is now our money and our life together. We are working very hard to pay off our credit card debt², pay down student loan debt and generally be smart about how and where we spend our money.

I had not taken any of this into account when I clicked that buy button.

When you enter a marriage, you are no longer only responsible only for yourself. You are now responsible for yourself and your spouse. Your decisions are their decisions when it comes to time and money. In the future, I will consult my wife and make sure I’m thinking about what is best for us, no just for myself.

There is very little we need. Even coming up with a list of wants for family has been very difficult. ↩
We will be credit card debt free by early next year! ↩

Macs are too expensive

By Carl

On May 18, 2011

In Observations

The price of things is all relative to how often you need to buy them. Would I spend $100 on toilet paper? Never. I need to buy rolls and rolls of the stuff every month to keep enough around to use. Would I spend $5000 on a used car? Yes, the money I spend for the car is meant to last for many years. My 2001 Ford Taurus is still humming along nicely $5000 later. It’s paid off and I have no need to replace it.

The same goes for computers. Week after week people tell me they will never buy a Mac because they’re “just too expensive” and the PC they have or just bought was much cheaper. That’s fine. I will not argue with you. I will simply ask two questions, how many PCs have you owned in the past 4 years? How much have you spent on repairs and troubleshooting?

If the answer is one and “covered by warranty” then you may stop reading right here and go on with your day. I am sorry to have wasted your time.

However, if you’ve had two or three or more than I have to ask why? Why would you keep buying something you need to replace or repair on a yearly basis?

Before my MacBook died, it was the only machine I used for nearly four years. I upgraded the operating system as new ones were released. I maxed out the memory and installed a larger hard drive than the factory option at the time. But beyond that, I did not make any other changes and that machine served me well. I took it everywhere and used it everyday.

I have never had a Windows-based computer, laptop or desktop last anywhere near that long. I’ve had hardware failures and operating system corruption long before that. I’ve had to reinstall Windows more times than I care to count and troubleshoot a host of problems that sent me delving deep into forums and knowledge bases, often finding little knowledge.

Sure, I fall squarely into the realm of computer geek and not “normal computer user” which may make me an edge case for computer usage. However, in the nearly four years I had my MacBook it never suffered a hardware problem. ((Beyond the plastic case chipping that was evident with most of the first generation MacBooks))

I can count on one hand the number of times the machine kernel panicked on me during that time. In short, I rarely had any sort of problem with it and what little problem I did have was easily remedied with a reboot. I don’t know of anyone who can boast that about their Windows computer. ((I am not counting little old grandmothers who use theirs once a week to email their grand kids.))

Would you skimp on the cheapest television or refrigerator on the market?

How many hours do you expect to spend on your computer in the next week? The next month? The next year?

Why would you skimp and buy the cheapest machine you can afford? You may save $500 now on the laptop thrust at you by the closest Best Buyer in Blue. How many times will you need support on that machine in the next three years?

With Apple computers, you have a year of technical support and repairs from Apple. With the purchase of Apple Care, the only extended warranty I’d ever buy. you get an extra three years of support on your equipment.

This means any hardware failures are covered, free, no questions asked. Just walk down to the nearest Apple Store and speak to a Genius and they’ll take care of you. What other store can boast that? Will Best Buy take such good care of you? Will Microsoft offer to help you troubleshoot Windows or Office in person?

Apple also offers free one-on-one training in their stores. Buy any Apple product and they’ll teach you how to use it. They also offer classes on various higher functions like simple video editing, backing up your data and any other questions about their products.

You’re going to spend more money on that Apple laptop but it will come back to you many times over in the next three years. When you buy an Apple computer, you’re not just getting a computer. You’re also getting a year of support an answers. You’re getting a quality computer that you’ll spend far more time using than fixing.

If your time is valuable, you owe it to yourself to buy a Mac.