Post 101-What Rich and Poor People Do With Tax Returns

Good Morning to the Millions and Millions of Readers out there, I always like to laugh in the morning!

I first want to congratulate myself for sticking with this and getting to my 101st post.  It was almost 3 years to the day since I started my first post.  I was not as consistent as I could have been, skipping 2011 entirely and a 6 month stretch in 2012-2013, but life and priorities happen, but I'm certainly glad I'm here today.  I just want to thank those who read or comment, I hope it has helped or made you think about finance and fitness along the way.

I think the post below is the question that everyone asks as I did in my first post, well the journey continues.

                      What do I need to do to get fit and wealthy?

                                                

TAXES-The Rich and the Poor

Let me first start by saying I don't know what the Rich or Poor do with the money they receive from a refund from there tax returns.  Here's a few things from friends and family that I have seen along the way(no judging....yet)

• I'm buying a new big screen TV(I have seen more empty big screen boxes on my daily walks now than I have seen during black Friday/Christmas time)
• Buying a new/different car(Chances are your refund isn't big enough for a new car, so they are putting some money down and financing the rest)
• I'm not sure what I'm going to do, probably just save it(doesn't seem like a bad idea at all)
• I'm paying down my debt(I'm sick of paying the regular payment for what feels like the rest of my life.)

I look at the first 2 and think a couple things.  One is you know what I paid the government this whole year and I deserve this money, I have been saving the whole year I deserve something nice.  Another part of me thinks that's got to be the stupidest thing you can do with your money right now!  You have been paying the government extra all year long not earning any interest or paying down any extra debt and what did you do with the money, you couldn't get it out of your hands fast enough.  It's called delayed gratification.  I'm sure you want a new phone, new TV, new computer, new car, trip to Vegas.

As you can see by the length of each rant, I'm not a huge fan of the first 2 bullet points.  What do I think about the last 2 bullet points?

One is that this person must be making the right choices they are getting a return and saving the money or at least trying to eliminate some of there debt.  This person must be rich or know about how to handle there money and will be rich one day.  Another part of me says this person only thinks they know what is going on, why are they getting a refund, they decided it was a good idea for the government to hold on to there money while they had credit card debt at 19%, a car loan of $500 month, and eating ramen noodles so they didn't go over there grocery budget, they might be as blind as the person buying the new car!  

While this rant was similar to the above, I think they are making "weatlhy" decisions in the end.  While in theory I do think that it is a poor decision to loan the government money at 0% return, I believe that most Americans including myself find it a struggle to save money, so even though we are giving the money to the government to hold on to, we know they are pretty reliable and will give us what we have saved and feel pretty good about ourselves.

So in the end if you are waiting on your tax refund or already spent it on a big screen TV, keep this post in mind on your decision today and for the future.  If you think I'm crazy here's a post over at Get Rich Slowly that has a couple ideas as well.  

You Can't be Financially Independent in Debt

So I was thinking the other day how fast I would be able to pay off my debt . I knew that the only way I'd be able to be financially independent is that I paid off each and every loan it's not something I'm proud of but I am in debt and the only way that I'm coming out of it is by hard work and making each and every payment till they're gone.

I have a student loan that's with Discover(bought from Citibank aka the Satan of banks) and this loan is keeping me from being $250 closer to financial independence . The loan is $250 a month that means that every single f****** month, I have to pay the bill they charge me interest,they even send me a statement and I open it and read over the numbers and usually it's depressing.

As previously mentioned this is my old Citibank student loan, I used this for extra money to go to the university of Syracuse, because I wanted to study abroad. This is my pain for living in small mansion in London, getting on a plane to go see how many countries, spring break in Spain, this is a private tuition to Syracuse this is even get in including a $5000 scholarship that barely even put a dent in it. But it's not a that I didn't have a great experience or meet some great people, this is the extra holding me back of getting rid of debt, I am to $250 month closer to never having to pay a single payment ever again to Discover/Citibank, what a powerful statement, what a great feeling. Who knew that paying off debt or the anticipation of paying off debt would be so exciting, must be because I am that closer to financial independence.

I think about my money all time whether it's my job salary, investments, paying off loans, credit cards, cash, I really do think about it all the time. I think you have to, I believe if you want to excel at something you have to obsess over it, always be working towards your goal. If you have read the blog over time you have seen that consistency is one of the things I struggle with and my strategy of defeating this is not making this a marathon, but making each part of my life a sprint and then relax. During that sprint, I'm intense I have a goal, I have a destination that I am climbing towards. You have to want it, simple as that. I go through phases with music and listening to different items, well a while back I couldn't' get enough of motivation videos, they are great for when you are pursuing something and you want a boost.

I think that's where I'm at, I really think that I'm come to the point where I I'll do whatever it takes to get rid of debt and get closer to financial independence, closer to Warren Buffett and that's why I write about this stuff Finance Fitness and Dreams.

Paleo and the 30 Day Challenge-It's Finance and Fitness

I have been away from writing for awhile and due mostly to focusing on other items in my life.  I found it best to use all of my focus on one item in my life to get the most production.   This is what I refer to as Sprint and Relax.  

So what have I been up to for the last 2 months?  Well the most important thing was I did the 30 day Paleo Challenge.  Paleo might be known better to you as the Caveman diet or the hunter-gatherer diet.  Here is a general outline of what I ate for those 30 days, shown below, you can check out  Robb Wolf's What is the Paleo Diet? for more info.

 Ok to Eat                 Avoid

Fruits	Dairy
Vegetables	Grains
Lean Meats	Processed Food & Sugars
Seafood	Legumes
Nuts & Seeds	Starches
Healthy Fats	Alcohol

I really took this seriously, I ate almost to the tee the outline above, I don't eat that much bread anyways besides sandwiches,which is usually the most difficult item for people to give up, but that was easily replaced with lettuce or cabbage.  Cheese or Dairy was probably the most difficult for me and after the 3rd week I ended up adding it back in.  Like many lifestyle changes, you end up taking what you can't live without and  I added cheese back in but went with a common theme in the paleo way of life to eat everything as natural as possible, just like your grandma used to make.  So I added Kerrygold Swiss Cheese which is made from all natural grass-fed cows, I also did the same thing with butter, using the same brand.  

I was able to lose around 15 pounds in those 30 days, which I am really proud of.   My parents came to visit and I knew immediately I would take a little break from my Paleo lifestyle.  Overall I have stuck with Paleo, many of the principals are easy to follow.  If I am ever in doubt for any of the items I choose to eat or need a recipe, I can always check the Internet to confirm or for the most part if it's Gluten Free then it's good to go.

  

Losing weight and being healthy for me starts with Paleo.  I did not go out of my way to exercise with the exception of walking my dog every day, so I think that's what made me feel great about this, I wasn't running 5 miles a day or lifting 3 days a week, I stuck with Paleo and it worked.

I think finance and fitness have so many of the same principals to winning.  You have to eat healthy or be financially fit, no credit cards or ice cream,  eat less than you need or don't spend more than you earn.  So many of these things are exactly the same and exactly the reason why America is Obese and Broke.  So try something different this week and bring all of your lunches or don't put sugar in your coffee this week, I think we all need to start somewhere and today is a good day.

Finishing up a Sprint and Saving for Vacation with Grocery Money

As I update my sprint to paying down my student loan, I made a bold claim that I was going to pay off a portion by the end of July, well I am happy to say I am still on my way, it's going to be tight though, because I have been holding off on using my "man fund" to pay off the remaining balance.  I just made a payment on 6/18/13 so the balance should be right around $800 with a little over a month to pay off, then it's party time!!!  LOL No it's on to the next debt, the borrower is slave to the lender and nobody wants to be a slave.

My next plan of divide and conquer is to plan and cash flow my vacation, no credit cards, no savings that I apply to debt, it will be 100% be cash flowed by cutting back!!! Cut it out you say guy from Full House!  Oh we will, I tell you, we will.

So our plan is to travel to San Francisco and possibly up or down the coast to some nearby cities.  The cost can vary and according the San Francisco visitor's bureau, tourists staying in a hotel spend $244 per person per day.  We are going to go about this a little differently, since we plan to vacation in early September we have about 3 months to save, we will then take the amount that we save and use this during our trip, if we have a $100 total we better find someone with a couch who lives in San Francisco.  The good news to start is our air fare is taken care of, we made the right move last summer and accepted Delta's offer for some free vouchers and and extra day in Nicaragua, BOOM, airfare paid for.

So because my wife doesn't like sharing any details about money and the fact that I love my wife and my marriage, I will only share the money we save, not any incomes or what we have budgeted for.  We will keep things simple, if I have $100 budgeted for and only spend $30, then more of the BOOM! saved $70 for "San Francisco is Fantastico"(patent pending).  This will also include money budgeted for eating out, this is our real vice where we spend far too much money.  The same plan will apply $100 budgeted, spend $40, and yep you got it BOOM Baby!!!! $60 saved.  Based on this while I don't have a concrete number my projected savings we will need is probably about $1000, which is about $300 or $400 month, so that's a lot of savings, but I love a challenge.

Here are a couple of simple plans to save a few extra dollars:

1. Make a list every week for our Groceries and project what we will spend before we go.  I did this and came within a dollar it was kinda freaky actually.  This way I know what I'm spending before I ever step into the grocery store.
2. Cash only.  I take out my budgeted money after each paycheck and only use that to pay for groceries.  If I want the chocolate cookies dough and it's $2 over what I brought, I politely ask to have it removed.
3. Do not eat out.  This will be the hardest to accomplish.  This will involve wait for it, making coffee and breakfast at the house, eating leftovers and sandwiches I brought from home, and even planning our dinners for the week and taking it out the night before(nice little Pot Roast in the slow cooker right now).
4. Say NO.  This also rings up as one of the more difficult things to do.  Say no to eating out, say no to that work lunch with everyone.  We are not going to totally cut off the eating out for lunches, but 1x a week is the limit.

The message here is finish up a sprint and let's save some money to go on vacation, because honestly do you want to wait till your 65 to go on cool vacations???????? 

I would love to see some comments on how you save on groceries and going out.  Thanks for reading.