financial zen

No doubt you’ve read about the woman with the octuplets. The woman, who isn’t married, has no job, and so our dollars pay for “her” childrens upbringing, housing, etc. etc.
In one aspect, it’s wonderful she wants to be a mother. It’s another that she is financially inept to do so, let alone bypass adopting – which, by the way, you can be paid to adopt (still with tax dollars, but this is a digression – children are here who need love, who need a mother period). This isn’t a “pro-life/choice” debate – this is a woman who does things the wrong way and is rewarded for it. Book deals, paid appearances, and tax dollar funding.

How I screwed up

So many places to begin! I’ll go chronologically.

I waited until I was financially secure to get married.

That’s right – I had a paying job that could afford a mortgage payment if necessary. But I was salary, I was in love, and it made sense.
But getting married, I set myself up for a number of other colossal mistakes. I mean, by getting married when I was financially stable, I was able to afford rent and groceries! It’s crazy that I could’ve stayed with a student job, gotten married, and just lived on welfare, in government subsidized housing, and gotten food stamps instead!

I had kids with my wife

How idiotic we are – we waited until we had jobs and were married! If we were unemployed, or even better – not married – tax dollars could’ve covered everything, including W.I.C. so we’d get free food and other baby items! Instead, we paid for our baby like a couple of fools and the hospital took our money!

We bought a house we could afford

I overpay my mortgage, too. To think – I could be paying half as much in a house that cost twice as much and then have the Government stop the bank from foreclosing! We could be buying up properties left and right and making a mint by having the foreclosures stopped! Instead, we saved money, we paid money, and we continue to pay our mortgage without Government (or anyone else’s for that matter) assistance!

We have one child, and are considering another

We could be going for double digits, people! Seriously, my wife could just keep having more babies than we could afford – but hey, book deals come to irresponsible parents! Free stuff, too! And if we hit that magical mark, tax dollars could start paying for other aspects of our lives. Instead, we’re being responsible, and – while not just saying “oh, it’s not fiscally responsible to raise a child in today’s economy” – we’re saying “can we make this happen and be loving parents to two children or more?” Jobless or employed – you can be loving and responsible. Naturally – for us at least, but there are limits that one should place to prevent multiple births.

This is partially – partially – tongue in cheek. But the more I read (I know, mass media) of people crying about their hand outs and their continual rewards for the irresponsibility – the more aggravated I become over my constant striving for responsibility as a parent, an employee, and a citizen. Wall Street suddenly turned it’s back on the bailout money so it wouldn’t have to cap salaries – so I guess things weren’t that bad then?

They’re starting to realize that if the American economy collapses and the world economy follows, it doesn’t matter where they shuffle their money to – if money is devalued everywhere, it could leave them broke with nothing to show for it except the paper trail.

I hope people continue to be responsible – as I strive to be – in light of this horrible corruption, rip-offs and buy-offs. Buddha knows it’s difficult.

“Yesterday is history, tomorrow a mystery. But today is a gift – that is why it is called ‘present.’”

Very often I come across articles and bloggers writing about saving money in college. It’s beating a dead horse. It’s the same “tried-and-true” advice time after time. It’s written by people on the outside, looking in. Former students. Graduated professionals.

What? Things have never changed? The same rules apply?

I’m sorry to break it to everyone, but people love to generalize the college experience. They want to trivialize the details – so let’s try and break it out for you:

Rule #1 – Scholarships aren’t a sure thing.
Yes, you can apply until your fingers are numb. But you can’t rely on this type of cash to sustain you, or fulfill your “life-long college dream” choice. I’m not saying don’t apply, I’m saying don’t listen to all the hub-bub about Loans are the devil, you’ll be in debt forever, etc…

Rule #2 – Loans are an excellent tool.
People will moan about paying off their student loans (even more so when they drop out without finishing). Education that is worth money, will cost money. But my question to you is – do you need to take your first two years of classes at the expensive place? My suggestion to you is to research community colleges – some offer “transfer” degrees to institutions – you take the general education classes at community college, save yourself a few grand, and then go drop the big bucks on your Bachelor’s Degree. You’ll save money in more than one way.

Rule #3 – Diversify your food.
Ramen seems to be called the staple of the college diet. Yes, it’s cheap. Yes, it’s not necessarily the healthiest option. My suggestion to any kid in college that lives in or around the campus – find out where the deals are. Dollar tacos? Half-off specials? These places are prime for cheap, good eats (often rivaling the price of making it yourself) – plus they come with the added bonus that you get to hang around your class-folk. People under estimate the value of networking at any stage of college.

It’s equally important to recognize that while you are in college, brand name foods may not be worth their price tag. Generic vegetables all taste the same. Some things you may not want to skimp on – peanut butter, perhaps. Maybe you like a specific kind fo salad-dressing. The point is – don’t splurge on everything except the few items you’ve grown to love (or no generic has been able to match – yet).

Rule #4 – Drink – in moderation.
This is another key networking tool – when used wisely. Boys and girls, know your limits. No one likes the excessively drunk kid. No one likes taking care of the drunk. If you choose to drink in college – pace yourself, don’t give in to peer pressure, and when you call it quits – mean it. I’ve had to help too many people out when they “couldn’t say no” to one more drink. Leaving the party “too sober” is never followed by a story involving drunken accidents, bad one-nighters, or illness.

Rule #5 – Put off new purchases.
I love following this one after the drinking issue. I’ve met a few guys who would buy a brand new outfit (occasionally on credit, occasionally on the allowance their parents give them) and then go out drinking, get too drunk, or are too uptight about “getting dirty” that they come off very stand-offish to everyone. You can get good clothes on sale (or at Good Will, or thrift stores). You really do not need the hottest fashions unless that’s your major (but if you’re a fashion designer, you should be MAKING the hot new things, not buying someone else’s). Guys – seriously, do you need designer jeans? That impresses only people who are concerned if you can buy them expensive things.

You won’t always win.
Just as a quick wrap-up, sometimes, you’re going to lose. You may get an F for the first time ever. You may have a teacher or a class that you just can’t conquer – but that’s reason to talk out, to discuss, to speak up. Break old bad habits – being shy never helps, and in a room full of people that aren’t talking, chances are they’re as shy as you. I’m still trying to crack this shell in myself.

The point is – you can spend cash. you can work part-time. You can work full-time and go to school full-time – I’m doing it for almost a year straight. I’m on the Dean’s list. think about the short-term (community college) along with the long-term (where you’re going afterwards).

Actually, perhaps that’s a better point. Just think. Think about yourself, your education, your money, your future. Think about how you’d want to tell your kids about the kind of life you *really* lead in college – the person that had a few beers, was a regular on $1 taco night, and still pulled a B average, or the locked in the dorm room, stressed straight-A student? When you graduate, it could be the people you made friends with that land you your job (or a future one). They’re not going to care tha tyou didn’t carry a 4.0. They’re going to care you took the time to get to know them.

Good luck, college kiddos, I’m in the grind with you and I know it’s not getting easier – but I know it’s definitely worth it.

Remember what I said last time?
Some people smarter and more qualified than I – agree:

There has been a lot of hand-wringing about whether or not the U.S. economy is currently in a recession. This morning’s data will, I think, lead to a near-unanimous view that the U.S. economy is in a recession. Not only was employment growth in February negative, but the B.L.S. also tells us that the previous two months were worse than originally thought. Over the past three months, non-farm payrolls fell at an annualized rate of about 0.1 percent.

This is a natural flow of rhythm in the world market, however. I’m thankful I’ve got a good job at a good company. Bush is trying to stave it off. He’s all ready cut taxes, and then came up with this – so he’s appealed to “Big Business” and also “to the common man” – essentially Keynesian economics and not in the same year, of course, being his last year in office he knows he should do everything he can instead of leaving the office in a wreck. Who knows what the next candidate will do?

Do you believe it? That’s the big question today: When’s the next bull? How long will the bear last? And forget Washington’s rhetoric about “no recession.” The truth is, you can call it a “bear,” “slow growth,” a “downturn,” a “recession” — call it whatever you want. Timing’s the real question. How long will it last? When will it bottom? 2008? 2011?

-marketwatch

Whether or not you believe it, we’re in the midst – or start – of a depression. This isn’t the great depression, just things aren’t pretty anymore. Being a student of economics (yes, a student of many things!) I particularly enjoy the quoted Marketwatch article, because it sites the many causes of our current dilemma – without resorting to name-calling and crying.

Let’s break it down:

• We’re in a war with ourselves, overspending and living in denial.
• We’re letting other people let us be lead, cluelessly down a treacherous path.
• We let ourselves be diluted that ‘something will happen to set things right.’

Plain and simple, we’re at election season, and all I’ve heard it “vote for me, because I stand for change.” or “vote for me, because I have experience, and that matters.” “For for him, he’s not a politician.” “Don’t vote for him, he’s being lead by lobbyists!”

I’m pretty sure you can pick out who is who in that bunch. The point is – no one has really stated how they will fix the economy or our current crunch. Bush gave tax credits to big companies – and then gave the american public a check (well, he will be). He did things for the “rich” and the “poor.” He’s doing what he can to try and stave off the inevitable – a long, hard look at ourselves and how we’re letting greed lead the way.

People live by credit, overcharge, overspend and let their big purchases lie to them about their stability.

Time’s up people, sell back your over-priced gadgets, cars, and toys. I’m not saying live a meek life – I’m saying live within your means. I’m not here to tell you what you’re doing wrong, just tell you that maybe – just maybe – you need to look at yourself in the mirror and say “am I happy?” Do you need this stuff? Or do you need to start thinking of the future, and how you want future generations to look back and say “That is when it changed – that is when things started to get better.”

I’ve got some ideas (and a little more free time) so let’s see how things pan out in the coming weeks…

For most people, an understand of economics isn’t necessary. You’ve got your checking account under control – you’ve got your own online billpay, you don’t send checks to Nigerian princes, and you don’t link any accounts to deduct from your account, you’ve got your savings accounts under control (speaking of which, I have ING referrals available! Make free cash by having a deposit!), you contribute to your 401k, have a financial planner, you’ve got everything going for you. But maybe you’d like to understand it a little more.

This leads us into Economics!

Understanding economics is important in personal finance – not just because of investments (like your 401k) – but because you should understand the current economic environment so you can forecast the state of the economy, inflation, and interest rates for the future. Essentially, you’re keeping your eyes open for any changes in the market that could be detrimental to your financial situation – whether you consider yourself successful, or on your way. The state of the economy can turn your life upside down if you aren’t preparing for it.

If you lose your job, suddenly your steady income is gone. Did you prepare an emergency fund? Are your financial affairs in order? If there’s a recession, is your job secure enough to not worry about lay-offs? Can your hours be cut but it won’t affect you detrimentally in your finances? Many factors can come into play – but the amount of information involved, between inflation, recessions and expansions, can take volumes to fully understand! I’m going to work additional articles in covering these certain angles this week so we can benefit and further our Personal Finance knowledge.

“A failure to plan is a plan for failure”

I don’t know about you, but I fell into the interest of personal finance from getting into reading blogs. The more I read, the more it intrigued me. It reminded me of the past experiences and money mistakes. Perhaps most people are put off by their lack of understanding terms – meaning they need to improve their financial literacy (the knowledge of facts, concepts, principles, and technological tools that are fundamental to being smart about money). This leads to most people learning about personal financial planning and developing and implementing a coordinated and integrated long-range plans to achieve financial success.

In planning, we hold ourselves responsible for our own success, happiness, and establishment of our security and standard of living (in the present and the future). It’s a huge part of our life that many people ignore until it’s too late – and then they learn from their mistakes, but it costs them (potentially) thousands of dollars, or wrecks their credit rating (which can potentially effect your employment, your mortgage, your car purchase… every financial aspect of your life). It’s my goal as I continue my education to get a better understanding and establish a better budget and mind set – I don’t mean miserly, I don’t mean “living like no other today so you can live like no other tomorrow” – I mean being able to save up for vacations without putting it all on credit, buying a car with cash, and using credit card arbitrage to its full potential. It’s a difficult premise, but then again, life isn’t easy.

The Six Steps to Personal Finance Success

1. Financial planning, focusing on establishing and achieving long-term goals through planning and budgeting,
2. Money management, centering on minimizing income taxes and efficient utilization of cash and credit,
3. Managing expenditures, especially for “big ticket” items such as vehicles and housing,
4. Income and asset protection through insurance, so that hard-earned resources and assets are not placed at undue risk,
5. Investment planning, with its focus on selecting the appropriate investment vehicles based on the objectives at hand and the relative levels of investment risk, and
6. Retirement and estate planning, with the ultimate goal of being able to live off of one’s financial nest egg and plan for transfer of assets to heirs.

It’s never just a simple process – fortunately we have trained professionals to assist. Certified Financial Planners can help you plan with these six steps, and Certified Public Accountants can help you get your finances together and straightened out. Over the next few months I’m planning on elaborating on these six points – from an educational stand point, as I am not a CFP, CPA, or any other TLA.

It’s reassuring to read it a million times on PF blogs, and once again in class:

“The rich get rich by spending less than you earn.”

That’s right, folks. It’s an educational, economical factoid for your consumption.

Even the glorious, never-wrong (truthiness?) wikipedia has an article about local food.

Of course, they pull in the economical problems of eating locally – mainly the problem in a free market, and the damage that can be done if we don’t support the world market. The world requires free trade – a world economy can’t go ’round if we don’t all put in our share.

As well – they bring the variety issue – we can’t get summer foods year round without it. However, by growing in season, foods are fresher and tastier – particularly when you grow them yourselves, so it’s got your blood, sweat and tears in it. You put yourself into your food – your spirit – and it comes out when you harvest. I don’t think shopping gives the same satisfaction.

Ahhh, economics. Everywhere we want to be. As a student, my thoughts are still incomplete, maybe you have something to add?

In my last post I wrote about stumbling upon community supported agriculture – eat locally grown food. Prior to finding this gem, in response to my high gas prices commentary Jay pointed out:

My gut says it’s possible that food grown elsewhere and trucked in could still be “better” for the environment than that grown locally due to various efficiency considerations. But I’m not making any claims as I have absolutely no idea which one is better. So, show me the data.

Now, very often writers (myself included) write stories based on loose information – half truths, speculation, or theories. So I’m going to attempt to look into the 100-mile diet and can we really save the world in doing so?

The 100 mile diet site has 13 reasons to eat local – here’s the ones that I feel highlight the economical reasons:

• 4. Get in touch with the seasons. – I love this one. Eat in season foods means eating foods when they are at their best and fresh, not frozen from god knows where (which means not putting the impact of world-wide travel on your food).
• 7. Save the world. – Yes, you can save the world as an Iowa study found. More information (like how much money would be pumped back into the local economy) can be found at WorldChanging.
• 13. And always remember. – Everything about food and cooking is a metaphor for sex. Okay, so it’s not an economical reason, but still, a little sex in cooking for two is never a bad thing.

Miles to Go Before I Eat has calculations available to help show the different methods of food traveling to your doorstep – it’s not pretty how much energy is wasted for far-off eats!

Has anyone else come across information arguing for eating locally? Or has anyone come across definitive information detailing how it’s all a crock?

Take a moment and read up about people like No Impact Man. Read about it – the 100 mile diet, not buying anything new (the compact) – living self-sufficiently, reducing our global foot print (which I wrote about before).

Basically, get rid of your car and start riding public transportation (or better yet, BIKE to work). Too far? Car pool. Eat local – don’t shell out for the goods that had to travel over a hundred miles in a refrigerated truck, buy from the local farmers market.

What lead to this? This article on MSN Money, about profiting off this fiasco. After all, why bother with fighting with it when you can make money off of it? Disgusting.

It’s a goal of mine to be able to get a hybrid (or live close enough to work to bike). I’m working on getting a budget setup to afford organic, local produce (including beef, pork and chicken, I’m sorry, but I’m an omnivore). It’s a long-term goal – with a baby on the way and a tolerant wife I can only do so much. :)

I’d love to go at this 100%, but as with many things in life, it’s one step at a time.