Author Archives: Zackary

The Value of Stuff

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I’m not sure if it’s just from me reading to much of The Minimalists or if I’ve just been slow to realize how much stuff I have that I’ve valued wrong. I have several items that I once spent a lot of time and energy on that are now unused. I remember the Summer of 2004 saving up for the Nintendo GameCube and I’ve not played it since 2010 at the latest. Needless to say it’s on my list to sell.

I’ve even been purging myself of items I was holding onto just for memories such as my childhood blanket and school projects. Which has alarmed my family and my better half into fear since they believe I’m getting rid of my material possessions. Yet it has nothing to do with that. I want to simplify my life and make it easier, and have stuff with a true value.

Just this past week I got rid of last year’s copies of PC World, why I held on to old issues is for the mindset I might want to re-read an article. But I’ve grown to see my flaws and I’m starting to apply this to other items. The same can be said of books, several months old and not even once have I opened a few books.

Instead I’m starting to value just my day, life, and health. Which along with simplifying means I should think twice before making a big purchase. The last Amazon book I bough was purchased to improve a money-making skill. Same with furniture, last purchase was a file cabinet to hold my growing records. Both items only add value to my life.

As I age and get older I may revert back, but at least for now I’m learning to value my stuff better. Which some of the stuff I’m getting rid of (my GameCube for one) I’m selling in order to go toward my fund for Western. Other items I just want gone as they have outlived any use to me. Which I hope by the end what I do have is stuff I feel like is worth it, not just some piece of crap junk that will be thrown out.

Side projects and Extra Income

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Since the last post I have paid $311 on my student loan, of which over $220 was interest. I have also done a few side jobs which should help supplement my income, to the tune of over $300. Which I have yet to decide what I should do with the profits (after I pay taxes). Here are the choices I can do:

  • Throw it into my E Fund – This is actually the most appealing option as I am making efforts to increase the balance. Yet I’m not sure if it’s the most efficient use.
  • Set back for School – I know come December/January I will be needing new books and I want to keep up not taking out a loan. Alternatively I could set it back for my Western expenses. I should be starting in the Fall of 2013, if everything goes the way I want it to.
  • Leave it in my Business – This option would mean I leave the profits in my business as a cushion, for future payments.

The most likely candidates are to set it back for school and as a business cushion. I think I will split it half and half and keep on planing.

On a side note I want to get another one of my goals started, and that is to run several sites for profit, maybe even do an E-book or two. I have a feeling that Western will be more then i can afford and I want to ensure that I can go.

Planning for Big Purchases

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As you may know from my earlier articles I am a college student and I was talking about the cost of books in the last post. I have since bought the last text book only to receive my car insurance bill in the mail. Which had me thinking on how I should purchase costly items in the future. Which I consider anything over $150 a costly purchase cause I am paid $500 every month.

Currently when I make a big purchase I look at all my accounts, even my business ones. Then I decide if it’s really worth the cost. Which in most cases I end up paying myself extra to cover the price. Making me wished I didn’t do that or that I would pay myself more. Each time I will get the thought of just being like everyone else and using only what I have personally, only to keep on doing this.

So where I want to be is a point where I have enough money in my (personal) account to cover the purchases I know I will be making. One purchase I know is coming up soon is Christmas gifts, even though there’s still another three months I know now I need to make these changes.

  • Keep to the budget, keep to the budget, keep to the budget – I cannot express how lazy I’ve gotten on budgeting. I used to set one each month but here lately I haven’t set down and actually created one.
  • Have a minimum balance of $100 in my account before I pay myself – I used to have this, until recently. Now by the time I’ve paid myself it seams like half of it is gone since I will delay filling up my tank (~$50/$60) along with funding my E. Fund and other expenses I transfer out. (sometimes $65, other times $25). Which I’m lucky if I have even $20 in my account before payday.
  • Set aside money for fun/gifts – This will be new because I haven’t ever set aside money for gifts. But I have had fun money ($15/mo) but I haven’t had a set amount in months so it back fires now since I no longer track it. So when I see an object I want I just check my accounts like I said above and buy it, without thinking if I have any bills or transfers coming up.
  • Increase my efforts of paying off my Student Loan – This doesn’t fit here but I can’t help but think about it when I see how much interest I have accrued in 2012 that I have yet to pay back. It’s in the $200 range right now, and the last thing I would want is for it to be capitalized.

So these are the things I need to start doing and change to better be ready for big purchases, with a few goals mixed in. I am going to start working extra on projects I subcontract on and divide the differences between the goals I have listed. I figure that having an extra $50 here or $25 there that I can throw at any of the goals will be a start.

Paying for College

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College just started this week and with the usual classes come books. Only this time around I did not take out a student loan. I just took one of my checks for contracted work and cashed it, then went down to the book store and bought the books I failed to get online. Which I meant to get more online, but I waited to long and Amazon showed a two month wait on some of the books. (Which on Amazon one book was about $130, at the college bookstore it was $220.) During this whole mess I have also been thinking about my plan past my Associates degree. Here are the options I believe that I have:

  • Continue on to a Bachelor’s degree full-time
  • Focus all my energy on building my business after graduation
  • Do the Bachelor’s degree, but take it one/two classes at a time

The reason for the two different Bachelor degree option is the cost. The university I would transfer to requires me take 42 credit hours. Currently they charge 410 per credit hour, which rings up to be 17,220. Which if I am a full-time student then the state lottery based scholarship would cover almost $4000 of that amount. Leaving me with over $13,000 to come up with. Which if I’m not able to get other financial aid leads me to option two…

Taking two classes (2460 – 562.50 = 1897.50) per semester. Which the 562.50 is the pro-rated scholarship and will be with me for six semesters. This will in the long run cost me about $13,800. But the almost $1900 is better to manage then the $3795 I would need to come up with for three of the semesters. Or I could take three classes two of those semesters and be even on the cost.

But while I’m doing all this I will be working in and on my business, to grow it. Which leads to the last option. Taking all my time and the $13,000 I would need and devoting it all to my business. Investing in better equipment and nicer ads. And in some ways it is almost tempting just to choose that option. But I do have to take into account why I’m getting a degree if I’m running my own business. That is for a backup, should something happen to my business with a Bachelor’s degree I feel like it’s safer and it allows me to advertise that with my business.

Lucky I still have till fall of 2013 to be deciding, I may end up choosing one of these options or none of these options. I still got a lot of learning and saving to do in these months to come.

When your broke from spending to much

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You just got paid from your job, and you feel like you can buy anything you want to (within reason.) Within a few days all your money is gone (from buying junk) and now you have to sit bored waiting till the next pay day. But while you had the money you believed that there was more available, then you checked your balance and you have maybe five dollars till you overdraft. I’ve experienced this in my life, even just recently, just not to that extreme of within a few days.

But for me it was a case of buying more then I should have. Coupled with the fact that I went out of county and took my significant other shopping. But I did enjoy that day which more then made up not being able to do anything for about a week. Now if I hadn’t enjoyed  myself but instead bills pushed me to the edge then I might have been more upset and angry. Even more important was that I wasn’t stressed out, cause I knew I would be getting paid by the company I own soon.

Now that my (good) experience being short term broke is over I do have to look at it through someone else’s eyes, someone who was broke cause of expenses or from overspending on material things with no pay in sight. I would have freaked out and been stressed.

No buffer – This would have been the biggest issue, cause if any unexpected expenses came up (think car being towed) then I would have been worried. Which would have been way out of my comfort zone.

Debt Cycle – I call this where you get in debt to hold yourself over till the next payday, only to pay back the debt and be broke again. Think about it, if you use your credit card to pay all your bills then as soon as you get paid you pay off the credit card. If your not careful you could be broke again since you “lived” off of the credit card, which would start a bad cycle that would be hard to break.

Couldn’t Go Out – This affected my significant other more then me. With no money to freely spend we wasn’t able to get out and I had to remind myself I can’t spend. I ended up putting the debit card inside a drawer until I paid myself. I knew if I went out and just charged the amount I risked placing myself in the Debt Cycle, which I wanted to avoid.

These are the big three for myself that being broke would have limited.

P.S. Happy Fourth of July and try to stay out of debt during this Holiday Season.

The Bare Essentials

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In personal finance we may or may not hear of the phrase “The Bare Essentials” but what does it mean and what are the implications of it?

Photo by pshegubj showing a blank expense journal.

Every time I hear of someone cutting back to the “Bare Essentials” I get a visual image of the person cutting every single expense out but what is needed. No cable TV, park the car, etc. But is this the real meaning or do you need to see another meaning? I believe there’s another meaning.

Let me explain, if I was to cut back to the bare essentials then I would cut my eating out way down for starters. But that wouldn’t be the “bare essentials” as I could cut eating out altogether, leaving myself to only eat Peanut Butter and Jelly each day. But your starting to see another meaning. Plus, I’m not sure about you but I wouldn’t like PB&J each day.

Same thing with all of your other expenses, although a few expenses should be cut completely unless it is needed for a job, etc. If your cutting to the bare essentials I’d fully expect you to cut your TV service or downgrade to the cheapest package possible. While others such as fuel are limited in the amount you can cut. Depending upon your job you will not be able to just not come in. Most bosses wouldn’t enjoy that.

So how come when we hear of the “Bare Essentials” we take it to literal vs just almost-extreme expense cutting?

Removing Clutter

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As I type this post I sit at a desk with papers covering it. I look across my room and see a table with junk in it. Then past the table is a stack of magazines that’s been there since 2008. Lots of junk that needs to be stored or thrown out. I debated on attaching a picture but felt like we could envision that instead.

Often when one thinks about clutter we visualize just physical clutter. All those receipts in my “to file” box and all those papers and empty containers just laying everywhere. Even my significant other has commented on it. But what about clutter elsewhere in our life? Let me give a few examples:

  • Money Clutter – I consider this to be when your money and financial life isn’t in order and it’s over complicated. I.e. you have no idea where all your money is going or how money flows in and out. Kinda like where you spend a lot and you do not track it and you get a bunch of bills in and they just accumulate.
  • Task Clutter – I have several items on my to do list and it seams crowded. Instead of just setting one project a week to do, I try to fit in several. Which I hardly manage to get just the one done. But had I just set the one project to be done I could have focused all my attention on it and marked it off my list. Else it’s just “cluttering” my list up.
  • Emotional Clutter – We should all have a good idea on what this is. We commonly refer to it as “emotional baggage” or some other term that just means past feelings that were bad or painful for us. This one is a bit harder to get rid of, but never the less it holds us down.

I’m sure you get the where I’m going with this. It is very important that you keep your life uncluttered as much as you can. This week my to do list is to remove some physical clutter and hopefully remove the table that sits in the middle of my room.

Off-topic:

Just an update on the trying to only use $20 cash for the weekend, it failed since I went out to eat with family. But it was less then $40 so at least it wasn’t double.

Making Excuses to Cutting Expenses

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I am not sure about yourself but I know that I invent all kinds of excuses instead of taking care of the tasks at hand. One of those tasks is looking at my expenses and seeing which ones to cut.

Before my income went up I would often keep a spreadsheet printed out that I would fill out every time I bought something. I also used to keep cash in envelopes. Well as time went on I stopped using envelops and spreadsheets. Now when I record expenses I just put it into the computer and make sure money is there.

Eating out is one of those expenses I know I have to cut, but I have used excuses like not enough time or no point in avoiding it. I used to use cash and when the cash was gone I would stop spending. But with a debit card it is now easier to over spend then with cash. I also tried to use one account just for eating out, yet when it’s empty I end up just using my other accounts.

There are two options I know of to do

1. Continue on as is This is the easiest and most simplistic. I can keep my own laziness up and not curb the expenses.

2. Try to use cash one month and when it is gone it’s gone this is what I should do, but each time I run into the issue of how much is enough?

I think I’ll try #2, But I do know that at one point $25/mo would be plenty.
But lately I have set $50 and its gone in a week or two. Yet I do know I do not want to go over $100/mo. I will give $100/mo a try and see how it goes. For this weekend I have  $20 in cash, lets see how far I get with it.

What is your suggesting? Just leave a comment and let me know.

Progress on Emergency Fund

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If you remember from my 2012 Money Goals article and from the first quarter update I stated that I wanted to start saving back in my Emergency Fund. Since I have posted that I have yet to re-start the “E Fund” as it is labeled. The question I ask myself is why?

Is it because I’m to lazy or because of money issues? Do I not worry about if something bad happens what am I to do? Yes, and no, it is actually a mixture of all these. When I first started the E Fund I would put every little bit of extra money in my account. I had hardly any work to do and time was on my side. When I would go out to eat I would round up all transactions and move the “change” to my E Fund. I would get an extra check for my birthday or etc and I’d go put it into my E Fund. So what happened to the great progress?

At that point over a year ago I got a car, work reached a slow period and I just stopped rounding up and moving the excess. I started to use my extra money to buy myself a new monitor, a new cell phone, and more. I just let the account sit idle not even throwing a single penny into the account since I last touched it. Instead I started to take from the fund to pay my bills, while wasting my real income on unneeded expenses such as going to the movies and eating out.

So starting today I am going to change that, I just signed up for automated transfers on the 15th and end of the month. I will start out with just $10 each time. I would like to eventually increase this amount, but for now this is better then nothing. I am also setting one up for $15/mo just as a start for a place to live.

Which reminds me, I should start working more to increase my income which will let me bump it up. Which I have a week and a half before my summer classes start. Lets see where I stand in the next few weeks.

Moving Forward

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I’m sure that several of you may have wondered when I would start posting articles again. The answer is this week. As you know from my last post I needed to take time off and during this time I have learned several lessons.

One of the very first things I learned is you can never have a big enough emergency fund. When this event happened my parents was able to pay in full for the funeral. They wasn’t limited by money. This helped enormously. I cannot imagine having to sacrifice during a time like that.

I also learned that you need to keep your family close. When this happened we had our yard full of people and  it was one of the larger funerals in the town. It made it a lot easier to have people with whom you can rely on.

Third, I learned that an understanding boss is a blessing. If I had been working somewhere else, there is no guarantee that I could have missed so much work as I did. To top it off one of my contracting clients even paid me a partial bit since they understood I still had expenses.

Which brings me to another thing, you shouldn’t over do eating out. By the end of it I felt physically sick from all the fast food and junk I have been eating. I normally packed my lunch and eating out as much as I did or having people bring fast food to us only made me physically worst.

On Friday I plan to publish a rough time line of topics for the next coming week. With summer session right around the corner along with the 2nd quarter being half over with these next few weeks will only fly.