financial zen

I’m taking that “oh-so-forbidden” (I kid, I kid) route to personal finance shame - I’m buying a house.

Guess what? Interest-only mortgages are making a comeback. Guess what? On houses people can’t afford. Because, in theory, you’re going to take the difference (i.e. “savings”) and hope to get a return on it higher than what you’ll be paying down the line - or maybe you’ll pay more than you owe and have your house paid off in less than twenty years. Maybe sixteen, maybe ten - who knows? The point is to not buy a house you can’t afford - but then would Interest Only loans on a house you can afford work in your favor?

Free Money Finance has five tips to get the best deal in buying and selling (from parade magazine) - buying is what I am doing (did?) and we (Wife and I) hit it pretty much on the head. We’ve got great credit ratings, our debt is almost extinguished (I promise to update my networth this week! And my NCN Network!). Overall, we’re doing incredible - on top of our finances, enough cash to cover emergencies, and we landed a great deal in a great neighborhood - a house that was on the market for 180+ days, passed inspection with flying colors.

But why housing? Why not investing?

We want a house. We, being my wife and I, want a place to call home, where our neighbors are not against our walls, their dogs aren’t scratching at our door, and they aren’t blaring their polka music at full blast at 3am. We’re wanting stability, and a place where we can have space to grow a family, a backyard to throw Barbecues in, and a place we can decorate and design the way we want it, how we want it, without the landlord complaining.

Yes, it’s an emotional thing. But you have to weigh the cost (financially) with what we will get out of it (utility). Trust me, it’s something we’ve debated, gone over, checked our selves on renting vs. buying many times (and we’re not the only one) - we came to this decision after a lot of thought. We won’t have to deal with misinterpretations of our lease, or poor maintenance (I get to be poor maintenance!).

It’s a hefty decision - but like many bloggers have pointed out, sometimes you save too much for retirement that you miss out on life. I’m not saying they aren’t right about investing or renting, I’m saying that a person who buys a house has more in mind than just making money.

(Note: My Personal Finances is calculated using my salary - not my wife’s income, so we’ve got a good idea what will happen after the baby’s born)

Our personal finances for the month of April - we went over by $146.11! - mainly because of our inattentiveness to our fast food fix! I’ve noticed my weight slowly declining since we noticed the unhealthy fast food trend. Our goal for this month is to keep our dining out to <$40 (I promised The Wife Sonic if we can manage our budget this month). We had a slight increase in clothing expenses - namely a couple prego clothing items (we buy mainly used - but we found a couple cheap garments we'd prefer new). We also bought sunglasses! Stylish and $10 from a mall kiosk (I love to haggle). A large chunk was dedicated to paying off bills (and knocking out some student loan).

Also increased! Medical bills! Who knew kids were so expensive? He's note even born yet and The Baby Logan is looking at a $2500 bill (possibly less).

Our gas intake is under control some - we're averaging about a tank a week (it's a long drive to the office - thank God we car pool!) My car should be back from our Friend the Mechanic this week - for a lot less then my first estimate (it was between $800-$1100). Thank God for Mechanic friends.

I’m moving to a new office closer to our home, but that could change in the coming month (I’m weighing a few job options - one is a lot closer, the other is right next door to my current location). This should effectively increase my budget - it depends on the location and pay.

Lastly - I’ve got a chart with the No Credit Needed Network! I’m anxious to update my progress - all in good time, I suppose! I’ve got a lot going on (hence my less than stellar posting) but I will not neglect writing! I’ve got a stash on incomplete writings I’ll try to have ready (and relevant) so I can hopefully keep this up every morning.

I’m digging this post by J.D. at Get Rich Slowly - the Perfect Enemy of the Good.

Just to sum it up - we often waste time to make our experiences “the way we want them to be” instead of focusing on doing the actual experience.

We make tiny excuses to avoid items - like J.D. and his quest for his favorite shirt to wear for a jog - we look for little excuses to hold us up. I want to wear those shoes, I want to wear the hat I can’t find, should I wear my running shoes or some casual shoes? What’s the weather like? Hey honey, do you want to come, even though you said you were goign to take a nap? Where’s the dog? - we delay and cut back on what we should be doing instead of DOING it.

I did the same thing for years - in school, with work, with responsibilities. There was always something else I could come up with as an excuse. NO MORE! It’s been my vow to quit this behavior, and so far - I’ve succeeded.

Budgets are worked on, tightened up. My classes are going smoothly (being a full-time student, employee, and husband is a tough act to maintain, on top of writing!). Work is… work, but I’m salary and putting as much effort forward as I can, even when faced with difficulties!

So, procrastinators of the world, stand up, shape up, and GET IT DONE!

Kind of ironic, but thanks to the guest post at Consumerism Commentary of Zen Habits I came across a post that shares my namesake:
Financial Zen: How to get financial peace of mind

These tips are the ultimate basics to controlling your finances - they keep you sane and aware of your financial state of mind (and prevent the bills from piling up). Check out Zen Habit’s break down - I’ve attached my own comments to his very crucial tips.

1. Pay off your debt. If you’re reading this, this is your goal. It’s my goal. $0 debt! I recommend using the snowball method I posted earlier about.
2.Pay your bills as soon as they come in. Master this one. It’ll save you so much grief (and late fees) which also leads into…
3.Make your payments automatic. I DO NOT recommend having any company having access to your checking or savings. Read the Consumerist and find how badly they can accidentally screw you over because of “automated payments.” However, I do recommend having a bank/credit union that lets you set up bill payments online. I have checks sent out from my bank for everything I get a statement for. No problems - yet.
4.Develop a financial security net. Everyone recommends a emergency fund.
5.Review your finances at least weekly. Every weekend I double check my expenses and make sure I’m on track to paying off my debts (and my bills are on time - this has saved me more than once!) which leads to…
6.Talk about money with your partner. Your plan is only as good as your foundation. My wife is essential in this, and we talk about our finances openly with each other. She’s my other half, and she should know our “state of finances” - it’s even better that she talks to me about it directly, actively engaging in the same behaviors

So it’s a simple list - care to add? What does your spouse do with you in terms of finance?

In true fashion, I’ve stumbled on a jewel of last month at lifehack which directs to Marcus Vorwaller’s blog with these ten great gems:

1. Think daily. Meditate.
-When is the last time you did this? I try to do a little meditation or relaxation at the start of the day.
2. Get in the zone.
-Whatever I’m trying to do, I try to focus on it so it is my priority.
3. Make it a point to do something bold every day.
-It’s easy to regret your awkward conversations but hard to regret the ones you didn’t have.
4. Learn something new.
-I trained my dog to lay down. What have you done that’s so great?
5. Debate something.
-I miss my old few friends that could get together and argue about the most random of topics, or events in our lives.
6. Spend time with a child.
-Pretty soon I’ll be spending a lot of time with a child, but I made a point before to visit my nieces and nephews. I love the wonderful insights innocence gives them.
7. Go outside.
-When it’s nice out, go out. Walk your dog, stretch your legs! Go to a park and walk bare foot in the grass. It’s one of my favorite relaxation techniques.
8. Recognize what makes you happy.
-This is what’s hardest for most people I know. They get too stressed or wrapped up in life/themselves that they no longer know. It becomes more “escapism” than happiness.
9. Stop broken thoughts.
-I’m guilty of this. Disjointed. Broken. Half-complete. I’m getting better.
10. Don’t stress about it.
-This is one tip I can’t help but stress (heh). Don’t stress about it. don’t put yourself in situations where you feel the need to stress. Don’t bite more than you can chew, and if you do, realize you will get through it eventually.

Honestly, they seem to be simple steps - but I think people get so bogged down and wrapped up in themselves (and life in general) that they forget about these things.

Queercents has a great two parter on Jobs, Careers, and Money (Part I, Part II) it made me think of my current state of affairs with my “career” cum “job.”

I entered the company with no degree doing something I had done for a hobby (Web Design) for years - now I was getting paid salary to take part in a Fortune 500 company’s web site(s) (one of many people, I should say). I knew a couple guys here who don’t have degrees and are making decent money - they’ve got a condo, a car, and a dog. I was dating my wife at the time, and it seemed like a good gig, and tho-and-behold! A position opened up! I applied, and after being introduced to my future boss, I was told to put in my resume (and send my boss a copy, directly).

I got the job. (Obviously

This of course lead me to the first professional, dedicated position of my life. Salary, 401k, benefits. Retirement. Career path. Or so I thought. As time went on, I learned new skills, learned new technologies, but was finding myself less and less impressed by my career - I enjoy designing, I enjoy making flyers for friends, making web sites - in my free time. Doing it professionally really took the joy out of it - you’re restricted, and even when you’re given free reign, it’s still not as exciting as I thought it’d be. Implement new code and technologies, find new ways of doing old things. But it’s just not that exciting - it’s my job, it’s what I do. I know the answers, I can tell them code when they ask, I know what’s causing that display error - but it’s not allowing me to grow as a person.

I’ll hold off for now until part II (which I didn’t intend, but this is something insightful for me).

I’ve stated a couple times - I’m a student. Yes, I’m a salaried web designer/developer, but it’s *definitely* not something I’m interested in doing forever. I’m 100% aware of how fortunate I have a job in this industry (especially without a degree). I studied art/design in high school and when I first attended college - I thought Design was cool, and I liked seeing my work displayed. Now what I do is considered “IT” and I am beginning to dislike IT work.

The problem wasn’t the pay, it was the *satisfaction.*

I don’t help anyone. Especially in my past two roles - the majority of my work is not viewable to the public. It’s internal or agent-only, or it’s coding - the coolest thing that I felt smug about was figuring out a bug IE7 had with displaying CSS and Javascript in drop down menus - I was the only person on the net that posted about it. So I posted everywhere about it - it was my little discovery, and now you can find a number of blogs talking about how they discovered it (maybe it’s a Renaissance thing?)

Point is - my little discovery is pretty useless for everyone I know.

So I researched my hopes and desires - what do I want to do? Where to focus my life?

Well, I based it on a couple principals that I’ll post about (thanks to Queer Cents for getting me dwelling on it) and a google search I came across this article:

Three Steps to Employment Zen

1. Discover what you are designed to do.
2. Do it.
3. Minimize everything else.

1. I was good at art and great at math. I hated math, so I chose art in college. Wasn’t really happy. I liked designing, but I hated compromise with teachers/people about what “art” should be.
2. I took classes for art and design - now I’m taking finance classes. It’s progress. If I can transition to a new job, I will!
3. Everything else is now a hobby. Web Design will go on the back burner, as will art and writing (well, creative writing - this blog is a continuing education tool).

What helped me get to this point? What mattered to me?
I thought I wanted money, after my failed stint with art. Did you know Lawyers (despite some making insane amounts of cash *cough*ambulancechaser*cough*) have an incredibly low satisfaction rate? Albeit I came across a law blog - Legal Andrew talking about going into the Public Service - less money, higher satisfaction! I considered this route. Oddly enough, I wrote on a personal blog (which I keep separate) and got a note from an old friend in Indiana that works with Americorps and freelances for InTake Weekly - basically stating that he may make less money than me, but that giving something back to people was a helluva satisfying feeling.

Because of my art-intensive history, I considered marketing/advertising. I read it is highly competitive (which leads to a lot of burn out) and lots of low pay work at first. Depending where you end up, you can be rich or always stressing. Next big thing. Sell sell sell. Make it look good. Turn a bad product into the next hot thing. Basically, I should be a lawyer, at least people expect the sheisty-ness then.

Then I came across an idea while perusing all these great personal finance blogs (look to the right for a start - it’ll grow, and I plan on adding a “friends” section to people that aren’t personal finance sites). I thought to myself - I’ve always been great at math (which I’ve hated) and here is a profession that is satisfying (I know, I know, lies, damned lies, and statistics, but bear with me).

The thing that gets me is - I can work at a major company and make good money. Once I get enough experience (and maybe a name) I can start my own business. In starting my own business, I’ll get to flex my marketing and design skills enough to utilize them. Long-term goal, I know, but I really do have a path that lead me to start this blog - to show my current screw up in finances (I’ll have my NetWorth posted by the end of today) and my journey to turn that around. From “Rags to Moderate Riches™” as it were. It’s also a great indicator that if I become a Financial Advisor I’ll be living proof of my abilities, and I’ll get to interact with people and show them how I can help them - and I mean, really help them.

I guess a turning point was in talking about the company’s 401k plan - discussing the before/after tax savings, Explaining to a friend that not getting the company match in 401k is losing free money - I was connecting and saying something that could affect their lives for the better - but it was up to them to take the advice.

Not Rich Dad, Poor Dad. But Effectively. Efficiently. In ways that matter.

I read once on Lifehacker about using the snowball calculator to pay off debts. (Or was it at Get Rich Slowly? I don’t know - they both reviewed the same method)

Yup, the Dave Ramsey method.

This works by gathering all your information, and I suggest using this calculator.

Select your number of debts (mine was 5, currently)
Setup a minimum amount per month you are willing to devote to this (I chose $1000 - a conservative estimate, really)
And which way would you prefer to snowball? Interest or balance? - the great thing about this calculator is you can compare them both and see which way you would benefit the most.

Instead of doing it by the “emotional” method of paying the lowest off, I’m doing it by interest rate - I stand to save more money that way (~$200 in the long run). Of course, this is assuming I’m not going to have any purchases made, any increase of debt, or any changes in income - no doubt with a baby on the way the changes will be coming - and when my wife and I get a house purchase in order - the mortgage actually shouldn’t affect this plan - I’m establishing this as if we are all ready paying on the mortgage.

Has anyone else used this method? What are your experiences with it?

It’s my goal to post once a day - but have it be somewhat insightful at least.

I’m working on getting my “net worth” listed here to help track my progress - I’ll probably get that setup tomorrow, as for right now I’m still trying to run through an alternative theme (when I check out NCN, I feel like a rip-off - another project for tomorrow).

Here’s the ‘rough’ figures - no pretty chart yet:

Grand total of savings, expenses, and student loans, my net worth is:
-6,031.97

Not great. But last year:
-14,633.96

An increase of over $8,000! It should’ve been more. That’s why I’m here today, doing this blog, because I will do *much* better this year. That’s all for today, tomorrow I’ll have more to share and a few tips as well.

Golbguru at Money, Matter, and More Musings has a link to Financial Fundamentals for 2k7.

This list may be common sense to people, but as a rule I never rule out that *somebody* hasn’t thought about some of these. I’ll sum it up for you:
Personal Finance Bloggers have been touting these since the first day I started following them.
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