What Would You Choose

August 23, 2012

My brother asked me hypothetically the other day if I had money to give away to one organization which would I choose.  You would think I would have had an answer right away, but I’m still stumped.  At first I thought about Autism Speaks because it affects so many people these days and I think awareness goes a long way with this disorder.  Then I thought about Make a Wish Foundation.  I think it is really cool that they grant people their last wish and give families a joyful memory at the end of a loved one’s life.  Yesterday I started thinking about how much of a difference a large sum of money could make for Compassion International and aid in all the work they are doing for so many children across the world.  I was recently watching the today show and there was a story on there about a family who was fulfilling their son’s dying wish to go to cheap restaurants and leave $500 tips.  Luckily they videotaped it and it is so fun to watch the reaction of people getting a huge tip and how many of them really needed the money.  So this is completely hypothetical, but what would you do with let’s say $10,000?  I’m just curious, no we didn’t just win the lottery or anything!

When I was in high school I used to think that I was financially successful if I was able to pay my very few bills (gas and car insurance) and then have money left over to shop.  The percentage of expendable income I had in high school was insanely high.  I wish I had the calculation, but I worked sometimes 5 nights a week and only maybe $75 a month was spoken for.  I went shopping rather frequently and enjoyed buying whatever I wanted.  Fast forward to 5 or 6 years later.  Marriage…it’s not super cheap.  You suddenly have to pay for your living expenses as one family unit.  No more $200-$400 a month rent because you are splitting your payments between 2 to 12 people ( yes I lived with 12 people).  Then you buy a house, oh boy, if there is one thing that sucks your money (besides children) it’s home ownership.  I am SO thankful for our house and I know it’s a wise investment, but my word those things are expensive!  I’ve realized my financial success measuring stick has changed considerably in the last few years.  Now I measure success as living below your means and being able to pay your bills and sticking to a budget.  I would MUCH rather have no debt than stuff!  I understand some debt isn’t avoidable and I’d be lying if I said we didn’t have debt.  However, we are on a rather fast track to paying it off in the next couple years and that feels so good.  Maybe someday we’ll have the vacation house, boat, nice cars, etc., etc., but for now I’m just happy when there is money in the bank when the month is over!  That’s financial success at this stage in our life!  How about you, what does your measuring stick look like?

Big Lots

March 9, 2011

So as gas prices climb I’ve been looking for REALLY easy ways to save some money.  I don’t understand couponing.  I mean I can take coupons that I find to the store and save some money,however, I cannot understand how to get free things or get paid to buy things, etc.  I am impressed with people who can do this, but I’m not there yet.  I do love Big Lots though.  Yesterday I had to go to the tax office which happens to be next to Big Lots so I went in with my grocery list and picked up some things.  I can’t believe how inexpensive my shopping trip was.  Now I will say I got my Cheez-Its for free because he thought he wrung them up, but when I got home I checked and he didn’t.  Not my fault and not going back to pay for them considering I’m trying to save on gas!!  All in all my total was $11.90 and I got everything pictured below.  Yes I know the food I got is not super healthy, but this is pretty much the only bad stuff I buy and then at the grocery store I buy all my produce, meat and dairy…don’t judge!

FYI the generic fruity pebbles are SO MUCH better than the real ones. They have a new Gluten Free formula and it's not very tasty.

Dave Ramsey would totally disapprove of the way we work our finances.  We use our capital one credit card for almost every single purchase we make.  We’ve always paid it off when it’s due so we’ve never paid interest.  Today we cashed in the points we have been saving for the last year and got a lot of great gift cards.  Last time I cashed in our points I just had it apply the rewards to our charges, but when I looked into gift cards I found we could get an extra $125 worth of stuff if we got the gift cards.  So Andrew got 10,000 points, I got 10,000 and then we split the rest on date night giftcards.  So here is what we got.

Andrew spent all his points in one place and got an Amazon giftcard

I of course had to spread mine out so I got Amazon, Target, Container Store and Banana Republic/Gap/Old Navy

Together we chose Chili’s, TGIFridays, Panera and with our extra 1000 points left we got a small Amazon card to go towards our purchase of Quicken that we will be ordering soon to put us on a budget for the fall.

For us it’s a great deal because we purchase the things we need with our card and get rewards in the things we want.  Very Fun!  I can’t wait to get my cards in the mail and have myself a mini shopping spree!

FYI:  I know “someone” is paying for the gift cards, I.E. the places we swipe our cards, so anytime I shop local small business I do my very best to pay in cash.  So really the big corporations are the ones paying for my gift cards and I honestly don’t feel super bad about that!

All done!

April 21, 2010

Today, we wrote a check for the final payment on Andrew’s car! In a couple weeks we will have the title, and will own both our cars 100%!! It will be a good chance to start fresh. Since getting married and discussing finances, we agree that we’d like to get into minimal debt, and pay as much as possible with cash. Hopefully we can set aside enough money each month that by the time we need to replace one car, we’ll have the money for one. We have also learned that it makes a lot more sense financially to buy a lightly-used car. Andrew’s car was purchased new, and while it has been a good car and has plenty more miles to go, we could save a big chunk of money on the same car a couple years later, or buy a much nicer 2-year old car for the same amount. At least we haven’t made any major mistakes in our learning process!

Laura and I are in an interesting, pre-“real world” state for the next year. Being in grad school has been equated to making an investment in education which is expected to return big dividends in the future (according to one website, a Ph.D. earns $2.2 million more over a lifetime than one with a high school diploma, and $1.3 million more than one with a bachelor’s degree). One attitude that we’re practicing right now is to be comfortable living below our means. That’s incredibly difficult when your income barely covers rent, insurance, and food; is it too much to ask for a night out to dinner here or there? But, we’re taking this as a good experience for when we have a larger income (hopefully a year from now!); we’d love to use the extra income for things like charity, traveling to see family more, and investing…

That said, I have a group of friends that are really into investment strategy. None of us are really practicing these principles outright, but as we’re all fairly poor, we’re using this time as an education for the “near” future. Last night, we sat down for a rip-roaring game of CASHFLOW!cashflow

Haven’t heard of Cashflow? Probably because it retails for $195 (my friend got a deal on ebay). It was created by the guy who wrote the book “Rich Dad Poor Dad.” Despite my skepticism, it was actually a fun and non-cheesy  (pun not intended) game. It reminds one of Monopoly, with the exception that you start out the game with a randomly-assigned life. I was a truck driver, and the others were a lawyer, a doctor, and a teacher. Although I had the lowest salary, the teacher actually had a lower take-home income thanks to higher expenses. To put it into perspective, my salary was $2500, and the doctor was $13000. But the game is designed (correctly, I’m sure) so that a truck driver has a cheaper house, cheaper car, and less general expenses than a doctor. As the game progresses, you earn your income after expenses from a “pay day” roll, but you can also land on either “opportunity” cards or other spots dictating expensive life situations like having a baby or getting a divorce. The goal is to acquire enough assets (real estate, businesses, etc.) using bank loans or your own savings to get out of the “rat race,” which they define as having a passive income (that income not including your salary, say dividends or rental income) greater than your expenses. I guess I picked up the concept quickly, because I was the first (and only) one out of the rat race.

The point that the author (Robert T. Kiyosaki) is making is that everyone should increase their financial knowledge. If people understand that acquiring assets is the path to financial independence (and that assets are not your own home or your car and boat, but income-producing property), they would allow their money to work for them. Another point is that it doesn’t matter which “card” you’re dealt (i.e. truck driver achieves independence leaving doctors and lawyers in the dust).  Granted, in life, like the game, you need to forego “doodads” (new car, boat, luxury vacations) in lieu of acquiring assets. Once your assets provide you enough income to cover your expenses, do whatever you want with the surplus!

There are all kinds of reasons not to follow this advice. “How can I go without buying a new car?” “I want to secure a great lifestyle with a beautiful home and nice cars since I work so hard, not risk my money on investments.” I don’t know what our strategy is going to be, or how we will balance investing with our own needs and wants, but I think it is a conversation everyone should have with themselves or their spouse if they truly want to have financial independence.