The Number 1 Problem with Personal Finance

I just read a whole thread on Twitter “bashing” FIRE and extreme miserliness. The gist was “Why be miserable just to save money?”. It then started veering into the mentality of “If I can’t/don’t want to be miserly then why shouldn’t I spend/waste tons of money?”
I rarely get political but I think we have the same issue with politics today.

THE NUMBER ONE ISSUE WITH PERSONAL FINANCE AND POLITICS TODAY IS EXTREMISM ON BOTH SIDES.

The problem with extreme blogs and subreddits (though why anyone uses that as a barometer is beyond me) is that the extremism is broadcast and amplified on social media. At the other end is the extreme materialism that has permeated our culture. Those that show off their extremely lavish lifestyles. This, too, is broadcast and amplified on social media. I know that I sound like a grouchy old lady complaining about today’s ills and “social media” but I am just a millennial who is seeing what is going around in the world. There is no moderation. There is no “middle ground”, there is no “balance”. There is either good or bad. Extreme one way or extreme the other way.

In terms of finance, there is either a miser or a lavish spender. Pay off all your student loans in 2 years or never pay them off. Never buy deodorant or buy $11 deodorant. Analyze each purchase or never look at the bill. I think that “we” (as in people who live today) often tend to look at things and then either hate or love them. If we have an idea with which we disagree, we automatically take up the opposing stance without considering that there may be a middle ground. There may be a balance. There may be good and bad mixed up together. We are so desperate to label everything “good”, “bad”, “tolerant”, “intolerant” that we can’t see that maybe there is a middle. Maybe there is a mixture of both.

Now, since this is a personal finance blog and I don’t want to sit and complain about “what is wrong with the world today” I will turn my rant to personal finance.

There is a way to be financially responsible without becoming a miser. There is a way to enjoy life without spending all our money. You can be financially stable without being a millionaire or retiring at 40.

Now, if you choose to practice extreme frugalism, out of choice, (there are many people who must do this out of necessity) than I guess that is your choice and right. Just be aware that extremism can often lead to abuse and then it is no longer your choice or right.

My message is this: don’t be turned off from being financially responsible by extremism. Don’t stop listening or doing the best you can just because you heard/read/saw/experienced the other end. Allow yourself to find the medium and the balance that works for you.

You can stick to a budget and still buy things you enjoy.
You can cut frivolous spending and still do things you enjoy.
You can use hand-me-downs and not traumatize your children.
You can save money and still spend some.
You can be careful about going into debt and still go to school.
You can make careful financial decisions and still have children.
You can choose to stay home often and still still go to a family wedding.
You can not buy a brand-new Audi and still have a decent car.
You can shop sales and use coupons without driving you and your family crazy.

It does not need to be all or none. It really doesn’t. That voice in your head? The one that is telling you that it’s not worth doing unless you’re doing it completely? Realize that extremism is rearing its ugly head.

Let’s not let extremism of any sort ruin our lives and our futures.

4 Great Books to Read Right Now

Running List of Books

Here are some great books that I love that have really helped me with gaining control of my financial life. Even though some of the books have nothing to do with finances- they have helped gain control of my life and therefore of my finances. Everything is intertwined. Having control of your life will help you have control of your finances. Having control of your finances will help you be in control of your life.

All these books are available on Amazon (affiliate links are located in this post) but you can check your local library to see if any are available. I don’t like to spend money and that includes books so I don’t buy a book unless I have already read it and KNOW that I want to own it.

I personally invested in a Kindle a few years back and I constantly check out books from the library onto my Kindle instead of buying books or e-books. This way I don’t need to make it to the library while they are actually open.

Here is a list of 4 great books and I would love to add more to the list. These are all worth a read!

(You can also give them as gifts but people don’t take kindly to being giving self-help books as a gift. It comes across as um.. sanctimonious and jerky.)

  1. The Total Money Makeover by Dave Ramsey. This is the basic book of personal finance and paying off debt. Although many people disagree with some of his methods it has worked for many, many people particularly those who are drowning in debt and can’t seem to get out. Its a great basic book and you have to read it first to disagree with it.
  2. How Not to Die by Dr. Michael Greger– This is not a personal finance book but a health book that helped me improve my eating habits. He is a big proponent of a plant-based diet which means cutting out a lot of animal-based proteins. Using this book as a guide has helped me cut down on my grocery bill tremendously while eating healthier. How Not to Die Cookbook is the cookbook companion and includes recipes that he approves of. Just Remember: just because it is vegan does not mean it is budget-friendly. I actually own this book which should tell you how much I like it because I don’t buy books.
  3. Sink Reflections by FlyLady– One of my favorites. My mother read this when I was a teenager and I adopted many of her tools since then. This is not a personal finance book but following her book will save your finances. Getting organized about meal planning, cleaning, shopping etc. will save you all that money that is unnecessarily spent. No more spending money on take-out because there is no dinner, no more buying things twice because you forgot where you put it, no more last minute shopping. The tools and habits in this book are life-changing! No joke.
  4. The Millionaire Next Door by Thomas Stanley- I haven’t read this book yet but it is on my reading list. This was recommended by @Financesafter50 after I posted on Twitter asking for recommendations. See what his response was here.

What other books have changed your life? Hit the comments or respond to my tweet! Great books will be added to this post! Respond here!

 

Shopping and Kids: A Terrible Combination

How To Say “No” To Your Kids

We’ve all seen it: the kid screaming in the store because they so desperately want the toy that is the only thing that is standing between them and eternal happiness. And the mother, red-faced and angry, trying to complete her shopping while her kid is screaming and howling across the store.

And sometimes you are that mother and the only thing standing you between you and eternal happiness is your kid stopping to scream. So there are really only two options: give in to the kid or have a shopping trip from hell. Neither are ideal. This is only made worse if you cannot actually afford to buy the child said item. Kids don’t really get that when it comes to bread vs. random action figure then bread wins every time. They just assume that they will be well-fed, no matter what. And it comes down to us, the poor parents, to make those difficult decisions (not). But no matter how tight money is, there is probably not a mother in the world who considered giving in to her child when that tantrum starts.

Two weeks ago, I had a lot less cash than I usually did. This meant no extra spending on anything. Since I am very strict about using my credit card (emergencies only-and that means medicine.) I had taken my kids to the park and I just couldn’t deal with the inevitable walk home past all the lovely shops on the way to my house. Even without the possible tantrums-who can handle that look of longing and heartbreak on those adorable faces? So I did something that I thought was pretty smart- walk the long way around and miss all the stores entirely. It took longer-but hey-we can all use a little extra exercise!

So how do you say “no” to your kids?

The best way is to avoid the situation altogether. Basically, I don’t take my kids to the store. Ever. And no-this doesn’t mean that I just leave them at home with a babysitter or ordering everything online. This usually means, early morning trips or very late store trips. Or waiting until my husband comes home or husband doing the shopping instead of me even though I don’t like the vegetables he picks out. It’s not easy to organize this way but it certainly beats taking my children shopping! And I save money this way! And please don’t take your kids to a really “fun” store if you are not planning/cannot afford to get them anything-it’s too hard for those little people to control themselves!

When I do take my kids to the store there is a LOT of preparation involved:

  1. I set out expectation beforehand: “We are only buying milk and bread- nothing else” or “We can pick out 1 treat- and I have to approve of it”.
  2. In the store I try to keep them as engaged as possible in what we actually have to buy. I let them pick the items of the shelf. I offer options- red or green peppers? I have them hold the items that we are purchasing.
  3. Before we get to the checkout (where enticing options are usually lurking) I remind them again: “we are not buying anything this time- only the milk and bread that we picked out” or “You already picked out one treat -we are not getting anything else”.
  4. I praise them constantly for not complaining and make a big deal when we leave the store about their great behavior: “wow! I am so proud that you didn’t even ask for a toy!”

How do you make saying “no” to your kids less painful? How do you make sure your kids don’t derail your budget?

Why My Kids Get No Screen Time

My kids don’t get “screen time”- in other words, they don’t watch TV. We don’t own one and I don’t allow them to watch anything on our tablet or phones either. Actually, my kids don’t even ask to watch TV- we don’t have one and they have never watched on a Tablet-as they don’t even think of it as an option. They are still young so I still have some measure of control over what they know. By not having it in the house at all I can make sure that I don’t just “give in”- even for a short amount of time.

Besides for the financial savings (No TV, no cable, no Netflix, no Hulu, no Amazon Prime, No DVD Rentals, no device for each kid) I want to raise my kids with good habits right from the start. My kids are still young so I still have the opportunity to raise them without the peer pressure and external influences that start to seep in as they grow older.

TV is on for an average of 6 hours and 47 minutes a day in an American household. The number is staggering! Think about what you can do with all that extra time! My kids read, do arts and crafts, play with toys, play with mud, and just hang out. They are learning to do things with their time that are much more valuable that just sitting in front of a screen. This may not continue until adulthood but they are not getting into the habit of sitting- they are getting into the habit of doing.

TV also is FULL of marketing messages- subtle and overt. When we TV and movies we are bombarded with different messages that OTHER people decide to share with us- usually in the pursuit of making themselves money (everyone’s gotta make a living!). I have no need for my children to be exposed to that. Think of all the branded merchandise and characters that are available and marketed directly towards children. We hear and bemoan the “marketing zombies” that so many people have become- why should I offer my kids up for that?

This may not be directly related to personal finance (even though think about the money we save by not buying a TV or any subscriptions services!) but its about creating life-long habits in ourselves and our children. Its about starting as you mean to go on.

This is a condescending post

Here Goes:

Make coffee at home.

Don’t eat out.

Don’t buy things you don’t need.

Get less manicures.

So reads the lists of “50 ways to save money and become a millionaire overnight” that every personal finance blog and website has. The theory behind this click bait article is that everyone is really secretly rich but because they spend their money badly they are instead living in poverty. After all, poor people are poor because they don’t know anything about personal finance. If you would just stop subscribing to every subscription know to man-kind you would become as rich as Bill Gates. After all, Bill Gates makes his own coffee. (I don’t actually know if this is true but seems like the type of thing I would read somewhere). The condescending tone of these posts seem to imply that you (yes, you!) are spending so much money on silly things that if you stop then you become a millionaire! (Overnight!)

And I guess maybe these lists are good for some people. If you do all those things and don’t have enough money and aren’t saving then you should stop. Seriously. Stop. Its stupid. (And maybe one day I will write one as well to get some clicks and maybe also help someone save a dime) But what if you are one of those people (like me!) who read through those lists (avidly) and don’t have one thing to stop spending on?! I don’t buy coffee, I don’t eat out, I don’t have subscriptions. Because here is the problem with the “blog” mindset. They want you to believe that everyone can be rich. Everyone really is rich and here are a few simple ways to make that happen. The thing is that if you were truly making “rich” money than the coffee isn’t really making or breaking you. And the thing is that a lot of people are not earning a “rich” salary. And it’s not necessarily because we don’t hustle enough.

Some people just aren’t going to be rich. And that is OK. You don’t have to be rich. You don’t have to make it big. What you have to do is make it OK. And that means doing the best you can with what you got. And what you got is the middle-class salary that most of us are earning. Or the big salary in a big city where you can’t afford housing.

Now, don’t get me wrong- don’t buy coffee too often (I really never do, unless I am in an airport) and when you do buy something make sure that it is in your budget. We are very strict about budgets. But stop looking to get rich. Stop thinking that all it takes is a little will-power and a fewer manicures to make that happen. Live within your means. Spend what you can. Save WHATEVER you can. Work towards meaningful, achievable goals (Emergency Fund, Home ownership, Retirement Account) and stop feeling bad that you aren’t one day going to be super rich. Its OK. Really.

Why I Didn’t Get a Raise

Well, actually I did get a raise. Sort of.

My boss gave me a raise but I didn’t give it to myself. What do I mean? Right now I am at the point where I am “making it” day to day but there are still goals that I need to meet. My emergency fund is not fully funded. I have some big purchases that I need to save up for.

My raise is going to pay for that. If I have been fine with my current paycheck then I can live without my raise. The first thing I did when I was told that I would be getting a raise is increase my retirement savings contribution. If the money is immediately accounted for-then I will never miss it! I then sat down and decided how much more needs to go into each of my savings accounts- my emergency fund, my large purchases account etc. After a while, I will increase my discretionary spending but not until I bulk up my savings a bit!

Don’t think that this means that I make so much money that I don’t need the money from my raise- I absolutely do! But if I have been living poorely until now I can do it a little longer until I feel that my savings accounts are in a better place. I can do without now so that my future is a little more secure. And trust me-I do without often!

“Extra money” is the best money to put away- if you never had it then it doesn’t hurt as much to part with it.

A Deal is only a Deal if you can Afford it…

A deal is only a deal if you can afford it… Keep on repeating that to yourself as all the Black Friday deals start popping up on your feed and you pass all those ads.

Black Friday can be a day to get some good stuff but it can also be a day where you blow all your money on impulse shopping.

So here are some tips to guide you through the weekend:

  1. Make a list of what you need and stick to the list. Spending $16.97 on Rubbermaid Storage Containers is great if you need storage containers, but if you never use storage containers then it’s just $17 in the garbage even though it’s technically a good deal.
  2. Decide how much you want to spend and don’t spend more! The same advice that always applies is even more applicable for Black Friday. Make a budget and stick to it! There is great pride to be had in not going over your spending limit.
  3. Allot some money for splurging. How much will you spend on impulse shopping and on fun things you see and don’t really need. It’s ok to splurge if you have the cash to back it up.
  4. Don’t count on rebates. Rebates can bring your purchase price down by a lot but don’t buy something unless you can afford to cover the entire amount. Rebates have a nasty habit of being lost, forgotten, rejected or take an endless amount of time to arrive. So if you won’t be able to afford to pay for the whole things- don’t buy it.
  5. DON’T FEEL PRESSURE- with all the advertising and marketing dollars spent over the next few days it’s hard not to get caught up in the pressure of needing to buy stuff. It can get to the point where you feel as if you “missed out” by not getting any “good deals” and being left out of all the action BUT there is nothing to gain by shopping for the sake of shopping. Don’t wake up tomorrow feeling like you spent all your money on things you don’t need and won’t use. Many of these items will probably go on sale again at one point and if you are frugal and stick to your budget then you can pay full price for these items at a later point.

Happy Saving!

When Emergency Strikes- Tales of Dental Woe

I spent $500 at the dentist today. It was an emergency and there was nothing I could do. Things like this can be really upsetting. I worked hard to get my emergency fund at $1000 dollars (It took me 5 years!) and now I have to rebuild it. Taking a step or two down the savings ladder is really depressing. Its times like this that I have to remind myself of a few things:

  1. Thank goodness that I live in a place that I can spend money at a dentist that can fix my problem! This is something that was have caused me to lose a tooth if I lived in a different age or place, or possibly my life. Luckily, after a few hours and (actually pretty painful) simple procedure my problem is cured. A few hours of pain
  2. I have the money to pay for this. After, all what is an emergency fund for if not for an emergency? Yes, it is annoying to have to empty out your emergency fund account, yes, it is depressing to have to “rebuild” the account in the next few month, yes, it is frustrating that I may have to push off my new computer purchase for a while so that I can double-down on putting money into my emergency fund, BUT I was able to pay the entire dental bill on the spot.
  3. Since I don’t make a lot of money it took me a really long time to build up my emergency fund (5 years! as I was unemployed and then underemployed for a chunk of it) but at the same time it means that smaller emergencies can affect me more. The fact that I have this emergency fund is really a blessing. All my hard work paid off- now I won’t be in debt and have to pay interest on this bill. I wouldn’t want this one incident to affect me for longer than it has too.
  4. Obviously I wasn’t meant to have this money- but isn’t it great that I had the money to lose in the first place? I am grateful that This dental escapade does not mean another bill that I will have to pay over months. It doesn’t mean that I have to pay down a credit card balance (with interest!) over the next few months. It doesn’t mean that I have to decide which bill I will pay next month. It doesn’t mean I can’t buy anything that I need to buy. I am grateful that I was able to have the money to pay the dentist right away. I am grateful that I have this emergency fund to use for emergencies instead of having an event derail my financial plan for a while. And that is why it is SO important to have these savings put in the appropriate place- because while we cannot prevent emergencies from happening, we CAN make sure that the small emergencies don’t ruin us.