Friday, August 31, 2012

Automatic Plan-Make things Automatic-Make Paying off Credit Cards a Priority

Automatic Plan-Make things Automatic-Debt, Savings, and Investments

  1. Figure out Where all of your Money is Going
  2. Make things Automatic-Debt, Savings, and Investments
  3. Make paying off Credit Cards a Priority
  4. Add additional payments to the Debt you like the least
  5. Pay off home early
  6. Make sure you and your loved ones are taken care of
  7. Build wealth and give!

If you have read my blog before you know I hate credit cards.  I have done almost everything wrong with credit cards, besides maybe paying late and who knows maybe I did!  Here is a small list of stupid things I have done with credit cards:

  • Pay for my entire Spring Break and not have money to actually pay that
  • Balance Transfer and not be able to pay off the debt before the 0% ends
  • Open up Store Credit Cards with very high interest rates
  • Use the Card to Buy inventory for my business
  • Basically live off of my credit card for 3 months

All of these bad ideas, all of them cost me so much money over the course of probably 12 years of credit cards.  I now have $0 credit card debt and love it.  So what did I do to accomplish this,  I chose the credit card I hated the most, easy selection for me Citibank and paid them off first.  I took every dollar I had and threw it at the credit card.  Spare change, refunds, extra money from side jobs, raise, bonus, whatever I had all towards paying this off.  It worked, it took some time but it worked.  I then had another credit card that I owed money on and due to a small financial windfall paid that off as well.  But it would have been the same thing, take every extra dollar you have and put it towards those stupid credit cards.

Once you have accomplished paying off your credit cards, stopped accumulating any more debt, and have officially cut up those credit cards, pat yourself on the back step 3 is in the books.  Make paying off your credit cards a priority, they are the worst.  They have the highest interest rate, get you into the most trouble, and overall are just a curse for 99% of the world.   So cross it off the list and say good-bye credit cards.

Wednesday, August 22, 2012

Automatic Plan-Make things Automatic-Debt, Savings, and Investments

  1. Figure out Where all of your Money is Going
  2. Make things Automatic-Debt, Savings, and Investments
  3. Make paying off Credit Cards a Priority
  4. Add additional payments to the Debt you like the least
  5. Pay off home early
  6. Make sure you and your loved ones are taken care of
  7. Build wealth and give!

    Make things Automatic-Debt, Savings, and Investments

    There is a reason companies want you set up on an automatic plan, whether it be student loans, car payments, or a gym membership.  If you set it up to come out automatically versus writing a check and doing it yourself, there is much higher probability that the company gets paid.

    So let's all be really smart and copy exactly what companies have been doing for years to get our money. 

    • Most important thing, Pay Yourself-Even if it's $25 every pay period set it up to come right out of your check into your savings.   
    • Because you know where all your money is now going from Step 1, you should have a good idea of your expenses.  The easiest thing to do is have everything set up at one central location.  You can set up your Bill Pay and all of your Savings Transfers.  After you have that set up there may be one or two bills that is easier to go through that company.  An example is my student loans, if I set up an automatic debit through my student loans I get a discount in my rate and still automatic, good for everyone.
    • So if you haven't already start or set up your 401k with your work.  I have read many different ways to look at this, but I recommend starting with whatever your company matches.  If they match 3%, set up 3%, it really is a foolish thing not to use this.  Let's say you make 100K to make things easy.  You set aside 3% of your pay before taxes and have 3K in your 401k at the end of the year, well at the end of the year they match this total, so you now have 6K.  That's a good amount of money for just agreeing to save!
    So you know where your money is going and now you have everything set up to where you want your money to go and even better yet it's automatic.  I think this is a great start, just make sure to monitor the comings and goings.  I like to make sure right before I get paid to make sure everything looks right and is going

    Thursday, August 9, 2012

    Automatic Plan-Figure Out Where All Your Money is Going

    Automatic Plan.  So you have to start somewhere, no it doesn't instantly make you rich, but it can in the long run.

    You need to know exactly how much is coming in and more importantly in Step 1 is Going Out.  For some people it is easy, they use online banking so they can take a look at the last 3 months of transactions and get a great idea of what they are spending.  Even download it to, Excel spreadsheet(personal favorite) or whatever financial software or online tool you use to figure if your money is going towards groceries or new clothes. Just remember to make sure you keep an eye out for ATM and Bank withdrawals, chances are you don't remember where that $60 went on Friday night after work, well maybe you do, but you have chosen to suppress that memory of buying everyone you recognized a "Happy Friday Cocktail".

    By my calculations this is f***ing impossible.  It's not this is a weather spreadsheet, let's just do plus and minus today.

    So you have some tools that you can use, but being old fashioned in this case works as well.  Save all your receipts for 30 days, every receipt, write it down because it matters.  Buy a special notebook to keep track of everything, don't forget you need a receipt for that.

    OK great you have written down everything that is going out, Congratulations!!!  I mean it, this was so tough for me.  I knew I was spending to much, I didn't want to admit it, but when I looked at the numbers I knew something had to happen.  Well almost done with Step 1, we just have to figure out how much is coming in, should be pretty easy take your last month's paychecks that are for normal hours and add them up.  Easy to say if you are working a 9-5 for a company, if you are Self-Employed take whatever you pay yourself in a given month and if you don't do this do it now give yourself a salary.

    So by my calculations all we have to do is take What's Coming In (Minus) What's Going Out=What We Have Left.  Seems simple enough, just have to sit down, take some time and figure these numbers out.  I know it seems like this isn't that important, but we are building a house and we need a foundation, no cracks in this fine looking base(Slapping the Base reference here).  Also I don't care if your number is negative $4,000, negative $40, or positive $400, we really are looking for our base number something that we can use for that fine looking base.

    1. Figure out Where all of your Money is Going
    2. Make things Automatic-Debt, Savings, and Investments
    3. Make paying off Credit Cards a Priority
    4. Add additional payments to the Debt you like the least
    5. Pay off home early
    6. Make sure you and your loved ones are taken care of
    7. Build wealth and give!
    Here's another more experienced blogger's perspective.  Here is a great article by J.D Roth from Get Rich slowly.

    Fitness-Joe Rogan Made Me Do It-Day 4

    I have discovered a small portion of the Vegan world.  Day 3 was a success for eating Vegan and Fruitarian.  I purchased some mini corn dogs, or veggie corn dogs, whatever is in those things.  They were very good, much better than I anticipated.  So I did eat the whole box, so that probably ruined whatever weight loss this would have for eating the delicious pieces of goodness.  Day 5 will have every good intention of completing this small journey, but I will be arriving in Nicaragua Friday night and eating only fruits and vegetables may not be on the menu.  I will give an overview as soon as I can, but so far Vegan is..........

    Day 4

    • KIND bar
    • banana
    • strawberries
    • Vegan burrito
    • blackberries
    • Cliff bar
    • Blueberries
    • Banana
    • Almonds

    Wednesday, August 8, 2012

    Fitness-Joe Rogan Made Me Do It-Day 3

    Joe Rogan is doing me some good or at least the idea that he put in my head.  Day 2 went pretty well much better than Day 1.  I didn't overeat on the nuts, had less of the bean salad from the night before.  I feel good. 

    Big challenge today, no coffee!!!  I went with a morning Jamba Juice of Greens and Apples.  Here's what's in it:  Apple-Strawberry Juice, Green Vegetable Juice (Carrots, Spinach, Bell Pepper, Kale, Spirulina, Lettuce), Peaches, Mangos, Bananas, Ice.


    • Gonna try a Vegan restaurant so who knows
    • nuts
    • strawberries

    • Gonna check out the grocery store, nothing planned, but fruits and vegetables are on the menu

    Tuesday, August 7, 2012

    Why I think Dave Ramsey's a Genius, But I Want My Own Plan!

    I agree with Dave Ramsey, his way works, but why can't others.  I instead of going with his steps I am going with my own priorities.  I think that you need to live and enjoy things while you are young.  I believe that you need to pay for items in cash or have money saved.  For example if I want to go on a trip and it costs $2,000, then I will have $2,000 in the bank before I take that trip.  I will put together a couple of steps showing what I believe and what I am currently doing.

    Here's the process:
    1. $1,000 to start and Emergency Fund
    2. Pay off all debt using to Debt Snowball
    3. 3 to 6 months in savings
    4. Invest 15% of household income into Roth IRAs and pre-tax retirement
    5. College funding for children
    6. Pay off home early
    7. Build wealth and give!
    I have a plan, but Dave Ramsey has a proven plan so he wins.  But here has been my working plan.

    Automatic Plan

    1. Figure out Where all of your Money is Going
    2. Make things Automatic-Debt, Savings, and Investments
    3. Make paying off Credit Cards a Priority
    4. Add additional payments to the Debt you like the least
    5. Pay off home early
    6. Make sure you and your loved ones are taken care of
    7. Build wealth and give!
    I'll go into more details as the blog moves on, but my approach is geared more towards the person who has all there bills online, the person who gets online statements.  Be Young, Have Fund, Drink My Kool-Aid.

    Fitness-Joe Rogan Made Me Do It-Day 2

    So how am I doing Fruitastic, maybe Vegantacular.  These are not words in the English dictionary, not like I've been paging through the book looking for these words, but my guess not there.

    Day 1 went well, no meat, mostly fruit and veggies.  So I stuck to the plan so far unless dairy is a no go(which it sorda is), then I failed.  I had some greek yogurt and milk/cream in my coffee.  I went a little crazy on the nuts(no funny punch line needed), so that was my biggest downfall.  But I ate and felt full, don't feel like I overate at all.  I really wanted a pizza and a soda, but will power held out.

    Here's what Day 2 looks like:

    • Coffee with cream/milk
    • apple
    • grapes
    • salad with veggies and some oil/cilantro dressing
    • carrots
    • Bean salad
    • Nuts
    • Yogurt

    Monday, August 6, 2012

    Fitness-Joe Rogan Made Me Do It-Day 1

    So i'm starting it out right with my Vegan/Fruitarian Diet.  Here is my diet schedule for the day:

    • Bluberries-Carton
    • Apple-1
    • Coffee with milk
    • Bean Salad-1 pound container
    • Rasberry-Carton

    Fitness-Joe Rogan Made Me Do It

    I have been listening to Podcasts like it's 1994 and I only have one CD.  Also by the way my first CD, Coolio It Takes a Thief.

    I listen to lots of genres, sports, business, comedy.  Today and throughout the last 2 weeks I have been listening to Joe Rogan, yes that crazy mofo from Fear Factor(shown below) or for you fighting nuts, he commentates for the MMA.

    So he is on some crazy stuff  Just in general, but he's a smart dude who researches everything and has his beliefs.  So although pretty intense he is fun to listen to.  So who does he has on his show but a paleontology diet guy, so I get excited and listen to all this eat like a cavemen diet info.  One word, SOLD. 

    Well about 15 Google searches later and I will be going for a week of a combination of Vegan and Fruitarianism, leaning towards the later.  Here are a couple Wikipedia links to give you a general description of the diets.  I will write a blog every day, but I will not publish them all until I get back from Nicaragua.  So Monday-Friday, Vegan/Fruitaranism.  I am not trying to save the world, I love steak, burgers, turkey, I could actually go on an all meat diet, but for another day.  Just doing this because I need a change.  Let's do this.

    Sunday, August 5, 2012

    What's Your Priority-Retirement, Travel, Cars, Boats

    So recently my wife posted on Facebook about our upcoming trip to Nicaragua(she's there now, I leave in 5 days).  One of our family friends said "Don't you two ever stay at home" and this made me realize something, we have decided to make travel and vacation a priority. Now we didn't put it up on a bulletin board or write on our goal lists(well not entirely true, going to Nicaragua is one of 2012 goals).  But we have eliminated or tried other items as a priority, here's a brief look.

    Retirement-Now don't get me wrong we save money in our 401k, have some money in an IRA, but to say we make it a priority would be a far fetch.  To me making retirement a priority is maxing out your IRA, 401K, or buying our home we plan to retire in.  While we are making a conscious effort to save for retirement, I can't say we talk about our retirement or retirement income daily, weekly, or even monthly, although I'm pretty nerdy so I try to talk about this with the wife from time to time.

    Boats and Cars-Yes we own a car, no we don't own a boat.  As you can see not a big priority for us.  Let's start with the easy one, boats.  I do not own a boat, do not have a desire to own a boat, don't own a lake house, don't fish.  So this is not a priority pretty simple for me.  Cars on the other hand a little more complicated.  My wife owns and needs a car for work, she owns a 2007 Toyota Sequoia, it is fully paid for and like our previous retirement discussion we make a conscious effort to take care of the vehicle, but we are not planning on owning 2 vehicles or upgrading to the new 2013 model, we are happy with the vehicle and see no immediate need for anything else.

    Travel-So without even knowing it, travel and vacation have become a priority.  We like to take trips, whether it is to see family or go some place we have never been before.  When we were dating due to being far away from each other we would basically go on vacations as our dates, we deemed ourselves the "Vacation Couple".  In my 2012 goals I wanted to travel to Nicaragua Hawaii and they are booked and scheduled.  We made travel a Priority!  

    The lesson I took from all of this is it's ok to spend money on things you really love to do, if you love driving your 40K BMW that's great, but you have to make that your priority, but don't try do everything.  I didn't mention that we drive a Mercedes, have a nice boat, and travel the world.  We know that to stay within our means we have decided to make travel and vacations a priority.  I hope everyone does the same.

    Thursday, August 2, 2012

    Credit Card-Necessary Evil or Necessary Tool

    So as I look back, I see numerous errors I have made with my credit card, here are just a few:
    • Purchase my Spring Break Cancun on my C.C.(this doesn't mean Country Club)
    • Do balance transfers with the hope to pay off the bill before interest rate goes up, while still buying stuff on my C.C.
    • Living off my C.C
    • Not keeping track of what I actually spend
    Trust me the list could go on, but this hits some pretty major violations on what credit card companies want you to do.  I have since paid off my credit cards, with the help of my wife and have begin using my credit card as a tool.  There are many things I don't like about using a credit card, but I have decided to stick by these 3 major rules:

    1. Keep track of what I am spending
    2. Make sure I have enough money in my checking/savings to pay the bill by the due date
    3. Be very careful, remember how much I dislike Citibank I do not want to give them any money ever
    So just recently I went through and put together a spreadsheet on what I spent(We are using the card for Housing expenses only with one exception of our most recent Hawaii Trip).  I noticed that per our savings we are able to cover the entire balance.  So I followed Rule 1 and 2 with paying extra attention to Rule 3.  Now we do need to be very careful because the card was intended to be used for house purchases only, so if there was a Rule #4 I would have violated it.  I did however follow all the rules and know that the balance can be covered. 

    The lesson I take out of this is I want to not use my Credit Card ever again and it may be possible in the near future, but as of right now I am treating it like both a Tool and Evil, if I do use a credit card in the future it must be this way!