Talking about salary

I've gotten some hits recently from my comments on Blueprint for Financial Prosperity when he talked about how not so general salary discussion was common among him and his friends.

I commented that this was true of me and a hadnful of my friends also. Now, this is a small group of guys littered around the US, so it's not like we get together every month and slap down our paychecks on the table, but of this group I have a good idea what they make (I think) and they also have a pretty good idea what I make. It is comfortable for us, and in no way awkward. It allows us to have better, deeper conversations about how our jobs and personal lives are going. It also relays a since of trust between us that I don't know we would feel otherwise.

I have also discussed my earnings with both my parents. While my dad was not too great with money for a large portion of his life, my mom seems to be the exact opposite. They are divorced, and have been for a very long time.

When I first got a job offer, I was floored that someone actually wanted to give me so much money for something that I would have done for free, at least for the time being (not so much anymore) I couldn't wait to tell my parents what their son was going to get paid, thinking that they would see, appreciate, and feel a sense of pride that their son was so successful. This was what I got from both my parents at the time.

A little backstory. While my dad has never been the kind of guy to tell me what he makes, he has understood that some basic undestanding of salary and job worth is a good thing for me to know. My mom on the other hand never talked to me about personal finance except to tell me she keeps an emergency fund in her account at all times. She never talked to me about budgeting, investing or retirement.

Back to the story...

When I told my parents I would be able to work in my field and get paid well to do it, they were both very happy for me. Over time though, when profit sharing time came aournd, when I got raises (over ten grand in three years) and I would talk about them with my mom, she would be happy. But every once in awhile I would talk about some purchase, and she would insuate that such purchase would obviously be no problem for me, and other comments that would make it seem like I was "Mr. Moneybags." Now, I do not think that she did this intentionally, but when conversations of money would come up, conversations would get tense and uncomfortable on both sides. Because of this, I do not talk with my mom about money in not so general terms. "My bonus this year was very nice" and "I got a good raise this year" are phrases that I use now.

I miss not being able to tell her I got a $3000 raise, or my bonus was $2000. It makes me feel like there is a part of my life that I view a parent should be a part of is not open to me. it makes me think twice about what I share with her now. Make sure not to do this to your kids, and if you do this to your kids, stop. If you do, you might miss out on other non money related times in their life because they don't know how you might hold it against them later.

Why I work

Frugal Dad talked about why people work today. That got me thinking about my somewhat crappy job situation.

I know the field that is for me. I basically knew it when I was in highschool, and I do understand how lucky I am to have realized it early on. I was able to plot out a loose plan about how to get there. I went to a small highschool, and wanted to go to a small college. So I got a bachelors that would allow me to get into a Masters program for my field opf choice. I went straight fomr my B.S. to my M.S, and jumped at the first job that came my way in my field. Now, it's not like I had 20 offers knocking down my door, it was after 9/11 and the economy was even more in the tanker than it is now hiring wise. I had applied at a number of places and never got even a phone interview because I had zero experience. I was finally able to get an offer from a company that on the surface looked like a great deal.

I was told I would be a technical decision maker, pay my dues for a couple of years, and then move on up. Well, I've moved up, but I am still doing the same thing, but on thigns that are more difficult/important, and higher profile, which always makes me nervous. I have also come to the realization that once I finally get the to the place I have strived for, my role would not drastically change either, which kind of sucks.

Now, I got my masters to be able to work at a job I love, at lest that was my goal. I want to be able to love going in to work everyday, and truely feel I am making a difference in the world. Although that is how I felt for a long time at my job, this is not why I go to work everyday now. Now I go to work because I mak good money, am able to support my family, and have a very good chance at some point relatively soon (sort of) be able to do something within my company that does give me this feeling again.

And no matter how much I love my job, I don't love it as much as hanging around the house on the weekends. And vacations and long weekends rock. I plan on retiring early, moving to a lower cost of living area, and puttering around the house.

Hey IRS! Where's my money!

So everyone and their brother has been posting that the IRS would start doling out the stimulus checks yesterday for those who direct deposited the initial refund.  The original schedule also had me being first on the list, slated for May 2nd.  So where's my money?  A friend of mine from work had his in his checking account Sunday.  Sunday ?!?!?!?!

• Direct Deposit Check
• SSN ending in 00 for goodness sake Check
• Income Stimulus No Check!
  

Has anyone out there received their money yet?

How debt can affect you

I've paid for this twice already has a very interesting post on why debt stinks. I completely agree with the article, and I've been thinking about the same thing recently.

While we are still keeping our heads in the sand with respect to our debt since e don't have any active credit cards, the concept still applies to the basicfinancial. I get profit sharing with my job, and it is a sizable amount of cash to get at one time. I have never gotten more than I have at once then even my smallest profit sharing my first year. And until this year, it has always meant something fun and something big. While this year we still did use enough of it for fun items like renovating our new houses office, and a couple of other fun items, most of it went towards getting caught up on bills since we had yet to come completely above water from our wedding 6 months prior. That was a massive amount of money and while we were still able to pull it off, it hurt us for quite some time (about 6 months).

But even with can recycling, birthday checks (although those still mostly go to something fun), all of our "extra money" has been going towards bills, and now towards some semblance of an emergency fund. No new computer, or at least computer parts, no new TVs. Just boring financial security. It's tough talking yourself out of spending $20 on some new headphones, or getting a new ipod case, or some other, even inexpensive, item.

Savings on groceries

So in reading a lot of the personal finance blogs, I've become very interested in starting to save on groceries.  Currently, we spend about $400 a month on groceries for 2 people, 3 dogs and 2 cats ( I roll the animal food into the grocery tracking since I usually buy it all at the same store)  We very rarely use coupons, and the ones we do use are usually attached to the items we buy that day. the digerati life has a post about how to save a ton on your groceries.

So I am going to try to start posting on how we save on groceries and even what we buy. The catagories I will be usiing:

Catagories

• Basics
• milk
• bread
• beverages (koolaid, countrytime, soda, etc.)
• meat
• Home items
• cups
• storage containers, ziploc, foil
• paper toewls, toilet paper
• Indulgence
• sweets
• beer
• nicer food items
• snacks
• Side Dishes
• boxed items
• rice
• vegetables
• Quick Meals
• Hamburger helper type
• quick pizza
• microwavables
• Cleaning Products
• Dish soap
• shampoo
• regular soap
• laundry detergent

I'll catalogue any coupons we use also, and how much we saved using them.    To kick it off here is the latest grocery bill breakdown:

• Basics: $42.28
• Home items: $16.06
• Indulgence: $19.87
• Side Dishes: $0.00
• Quick Meals: $8.00
• Cleaning Products: $0.00
  
• Coupons: $0.00

This is why I blog

It has been a rough week over here at basic financial. We have started saving and meticoulously watching what we spend our money on, but money is once again tight. I am halfway tempted to withdraw the money from our ING savings account just to have that ever so small but much softer cushoin in our checking account, but I don't want to lose the momentum.

I probably should have waited to buy the lawnmower. That was a shade under $300 that would have made me feel safer now. I also forgot to pay my student loan bill last month, so I doubled payed that this month. That was another $200. Combine that with the $150 in our savings, and that is all our extra money for the month. I don't know if I am rationalizing the mower or not, but it was the cheapest rider I have seen anywhere. We needed a new mower, being relatively new homeowners, and the cutting season being upon us now. Plus it's a deere so I know it will last forever, or close to it, but I could have gotten a push mower for around $100. I would probably still had some grass to mow, as I'm lazy, but I have found that I enjoy my yard much more now. I have even figured out how to add on to my back patio for just about free.

But the extra money would have been nice.

I'm not going to pull the money out of savings. This is why I am blogging, so that I can talk myself out of spending money.

J.D. over at Get Rich Slowly talks about getting off the paycheck to paycheck cycle

basicfinancial weekly roundup

Thisweek was not as good as last week.  On Thursday alone I matched the number of transactions as last week.  It's not as bad as it looks becuase this is the bill paying time, but we had 21 transactions this week.  3 were for the new mower, which worked out fantastically by the way, 2 were work related and 1 was for my stupid mistake of running out of gas 50 yards from a gas station on an off ramp of a local highway as I was heading to get gas and needing to buy another red gas can to match my collection.  Another expense was to mail a birthday present to my wife's mother.  So that takes care of 7 of the weekly expenses.  We still had 4 trips to the grocery store though, and I had to eat out twice this week because I did not have the time to come home for lunch like I thought I would have had when I left those mornings.

One of the best expenses though was the first autmated deposit into our ING savings account.  Oh hell to the yeah.  It was nice to see that.

Banner Day at basicfinancial

It is a banner waving day over here at basic financial.  We have had out first automatic deposit into our ING savings account! w00t!

We are also now the proud owners of a John Deere RX95 riding lawnmower.  You read correctly, now I can sit on my butt while I mow the grass.  It did not come with the cupholder, so I will have to scrounge around the house to see if I can fashion one out of what we have, but I think this should be possible.  I was able to get the mower for $280 off of craigslist, which saved me a ton of dough, as I was originally planning on getting one much larger than I really need for at least $700 more.   But instead we are doing the fiscally responsible thing and starting our savings.  I beleive this calls for another w00t!

So here's to many months of enjoyment out of seeing our bank account grow and the length of our
 grass shrink.

Teach your kids about money!

Teaching our future kids about financial stability is very high on my parental skills training list.

I spoke with my dad over the weekend, and told him about the retirement calculations that I made, and he siad," Wow! That's great. My dad never taught us anything about that, and I wish he had. I figured all that out way too late." I wanted to shout "You didn't teach me about it either!!!!!!" But it is not his fault, nor is it my mom's. I am the one that racked up the debt. I am the one that knowingly let bills slide, especially after a move. I am very glad for blogs that web pages that discuss personal finance, or I would never have known how to go about saving in a responsible manner either.

And I am thankful for friends, who are like me. I have a couple of close friends that talk openly about money issues and challenges we each face. We have a not so rough idea what each of us make, and savings and income and all the bullshit that comes along with having a job are all out the window. That kind of thinking though is so anti how I grew up.

My mom told me once that she keeps $500 in her account in case anything goes wrong. That is all the money advice I recieved growing up. Occasionaly I would run into some cash, and my mom would tell me I need to save it, but my mind had already spent it. And she would let me, after all it was my money and I could do what I wanted with it. This was the type of household that I grew up in. When I wanted to grow my hair long, I could. When I wanted to spend my money, I could. When I got out on my own, after I had my safety net, and sometimes when I didn't, I would spend my money, just like I always had.

Luckily, I did not repeat my dad's mistakes as largely as he made them. I am able to save up some cash, and still pay off the bad debt, and have a much firmer grasp on my overall financial health than my dad did at his age. Luckily I have friends that I can talk with. And while I know it's not there fault, I still wish they had sat me down to talk about financial stability.

Buy used, or at least consider it

A few days ago, I blogged about when to spend money and ways to cut down on your bills. Today, I'd like to talk about another way to save money, buying used.

We bought our house about 6 months ago, right at the end of grass growing season. The last time I cut the grass was when I was cleaning up the yard at our rental for the last time. We moved from a lot that was about 1/4 acre, to one that is 3/4 acres. I ama bit of a fatbody, and mowing the smaller lot was a pain in the ass with a pushmower. I also grew up mowing a full acre lot with an electric mower when I was lucky. When I was unlucky, my mom decided that the grass looked better when it was cut with a motorless push mower. Luckily since this technique was last used in full force around the turn of the 1900's people had figured out the tricky concept of gear ratio's, but I was still stuck cutting a full acre minus ~800 sq.ft. with a 16" pushmower. Not Fun. Do not do this to your kids!

But now I am in the market for a riding mower. We've gone to Home Depot and Lowes an I have sat on the mowers like a kid on the dinosaur in front of the grocery store, but the cheapest that they have is still almost $1000. So I have turned to craigslist. I was talking with my boss, who is in his mid to late fourties about this, and he had no clue what craigslist was. This blew me away. I am in a tehnical field, and he is a technical guy, and even has the broadband. How could he have not heard about america's pawnshop.

I became obsessed with it when I was trying to buy an electric guitar after playing my acoustic for a few years. So many pretty pictures, so little time. And now, I stand to get a mower, albeit slightly used, and a little smaller than what the big stores sell because my yard is pretty flat, for about $200, which is about the cost of a self propelled mower, which is my other option as the old one just won't cut it any more. Ha. And it'll even be a john deere most likely so it is a good company with a good product that should last me many years.

So if you have decided that you have to go buy some new piece of machinery, don't be turned off becuase it is used. There are a lot of people out there who take very good care of their items, and who simply don't need them anymore, of have stepped up the ladder a little bit.

We're not screwed on retirement

Since I started thinking about our lack of savings, and any real sort of retirement plan, I have been worried that I would need to work until I'm 62 and then count on social security (yeah right) to enjoy the lifestyle that we now do.

But it is not so!

My goal has always been to retire when I'm 50, and either teach high school or work at a Lowe's or Blockbuster part time and reap the employee discount benefits. Well, using the compund interest rate equation, I can retire at 50 and make the same amount of money as I do now, except counting only the interest of our investments and not any job. I made some basic assumptions, did not include the cost of raising two hypothetical kids, nor did I count the increased cost of living that will occur over the next 20 years. But I also did not count any raises outside of normal, i.e. no promotional raises. But, the calcualtion does not include any company match to my 401K, nor does it count any of my pension, even though my pension is very stable since I work for a company that does not carry any debt whatsoever.


We start with $500 a month for the first year and we add $300 to the monthly savings deposits. At an everage of 8% interest, which I don't think wer could get now, but I bet over 20 years we can average, we will be sitting pretty. Yea!

Ways to save and spend money

It was a good week at our house. We only had 5 times this week we spent money! This even included the wife's haircut, vet bill, and one of my guilty pleasures.

Our main money issue to date is that we nickel and dime ourselve to death. Rarely do we have an expenditure other than bills and groceries over $20. We just have 20 or more of these a month. So even though I monitor the money on a very regular basis, we constantly have the "It's only $5. That's not a big deal, I can get this." Then at the end of the month we have no extra savings.

But not this week!

The vet bill, though, brings up a good way to save money. Saving money while having a miserable life is rarely recommended. One way that we have chosen to brighten our lives is with our dogs and cats. We recently got a new puppy (female) to our mix. If you do decide to get a puppy and have to pay to get it fixed, use the Banfield Puppy Wellness program. It costs $21.95 a month and you sign up for a year, but you get free doctor visits, included vaccinations, and fixing is included. The spaying of a female costs almost as much as the cost of the plan anyway. Big savings if you do decide to get an cat or a dog.

Another fun expenditure that I have is Sirius Satellite radio. That came in this week for $12.99. I am a big Howard Stern fan, and regularly enjoy listening to his whole show. We've both agreed that I can keep this purchase, becuase this activity takes up more than 30 hours a week, so it costs me only $0.10 an hour for enjoyment. Well worth the cost. And I mean how can you not like it with Artie Lange fighting with his assistant Teddy, and then possibly quitting the show.

If you want to read up more on Frugality, and not feeling guilty about spending money when you are actively trying to save more, head over to Trent at The Simple Dollar. He's got a lot of good posts about this topic.

On being poor

I thought about postponing this post but it's been on my mind a lot today, so I'll go ahead and post it.

There have been 2 times in my life when I have been dirt nasty poor. One I remember, and the other I don't remember but oddly enough still live with some of my habits created during that time.

The first time I was poor was when my family first moved after my parents divorced. My mom, sister and I moved back to where her family was the day after my 4th birthday. My mom was a high school teacher and didn't have a job lined up for after the move. We lived with my grandparents and uncle during the following summer, and we moved into our own house after the school year started and my mom started working again. The neighborhood was adjacent to the good part of town, and could have seen a revival, but didn't. This is the time that I do not remember being poor. C'mon, I was only four.

When I was in college, I brought a couple of friends home with me during a break. We went out to the clubs and had a pretty good time. When we got back to the house, I offered to make everyone some cheese sandwiches. They had no clue what that was. I said, it was two pieces of bread and a slice of cheese. My mom hard us come back, so she came down to the kitchen and saw I was making cheese sandwiches. She was amazed, and told me that was what my sister and I ate when money was extremely tight. She wanted to save money, so she didn't have one. I had no clue that I had gotten my taste for cheese sandwiches during this time, but I still eat them to this day.


The other time that I was dirt nasty poor was when I was in grad school. I had decided to go to grad school without initially being accepted into any research group, so I had no sponsership, no stipend, and no job. I had a very little amount of savings, that I used to buy a bike to get further than my fat butt would walk, and to get into an apartment that was just above Section 8 housing. In fact, the building was owned by people who also owned Section 8 housing, and their government assisted housing was even on the same block. It was the cheapest apartment in town, and it showed.

I eventually got a job waiting tables, but that barely met my bills. There was a week before payeday I ate peanut butter and jelly off of a spoon because I could not afford to buy bread, and I happened to still have some PB&J left over from a previous grocery shopping trip. But it was all I had left, and payday was 2 days away. This was not fun.


I suppose there are 2 ways that these life experiences can shape a person. They could either get extremely OCD about saving money, and still never spend it in the fear that they would be in that situation again, or they could buy things and become the ultimate consumer to show off that they are not in that situation. The latter is what I became. I am still amazed that these experiences would not scare the living bejeezus out of me to where I would always have the money to cover any expenses. Instead, it was the start of my depth into ruining my credit history.

60% Rule

Trent over at The Simple Dollar had an interesting post the other day. I guess it is an older idea, but I had never heard it. If you are able to put away 40% of your income a month into an account that gets an average of 10% return (which stocks do over time, as well as other forms of investments even with ridiculously low interest rates) after 11 years the interest on your account will be equal to the 60% of your income that you have using for living expenses. After 15 years, the interest will be equal to 100% of your income.

Using this formula, I could retire when I'm 45, and move back down south where the cost of living is 10%-15% less than where we live now, and live very comfortably, and still put away for retirement. Now, we are no where near being able to put 40% of our income away. We just started putting anything away Sunday. But talk about a motivating factor. My mom raised me and my sister on half of what I make now, and we had a very good upbringing.

So, that will be one of my mid term goals, putting away 40% of my current income. I am sure there will be a decent reward when I hit that one. Don't know what yet, but I have plenty of time to figure that one out.

Another way to cut bills

So, the ING account has $50 in it, and I was able to confirm the normal checking account today, so they will allow the $100 a paycheck now. I am excited about it. Can't wait to see it grow.

We've started paring down our bills too. My wife is not that great with directions, and the printed Mapquest pages don't always do that well, when you are driving, so she had Telenav on her cellphone for over a year now. She has a blackberry that she needed for business, so to get Telenav on her phone, we had to get the unlimited data package for $40 plus the $10 a month for the actual Telenav.

I also had the Internet on my phone for smoke breaks and bathroom use at work. I would cathc up with ESPN and CNN. I got hooked on it when we were with Nextel and the text only internet cost me $3.99 a month. We switched to Sprint when the merger happened and then the internet cost me $15. I was so hooked on it that I didn't want to give it up. So combined, we were spending $65 a month for phone based Internet and nav services. This was on top of our normal cellphone bill. The bill was a ridiculous $176 a month for 2 people. Ridiculous.

I realized that a decent standalone gps, my wife does do much better with some sort of gps system, would cost at most $200- $250, which would give us a 4 month turnaround on savings.

Then the Mio got great reviews. And then it went on massive sale at Radioshack.
We ended up getting it for $129 plus tax. This gives us a 2 month turnaround on savings,
which was half of what we were even thinking was ok. AWESOME!

So, if you are trying to find ways to cut your monthly spending, but don't want to give up the things you enjoy, look for other ways to get want you want, and you can probably find a way.

A savings account!

I signed up for an ING.com savings account yesterday. I put $50 bucks in for the initial deposit, and was able to schedule $100 dollars on the 15th and last day of the month starting this month. It has a 3% APR. The reason I went with ING.com is because I like the idea of it not being tied to my bank's online system. I have tried that before, and found that it was way to easy to transfer money from the savings back into my checking account. Money only stayed in the account for a month or so before it was transferred back to cover bills.

I found out about ING.com from a friend of mine who uses it for his savings and debt reduction. He is about to pay off his biggest debt, and makes less than me. This really got me thinking about why I don't have any savings, and I have not really attacked my debt after years of making decent money. If he can, then I can! And you know what, you can too! It doesn't take much. It just takes paying yourself first, and an honest assessment of what you make and what you spend your money on. We recently did this and we cut back on our bills.

So, by the end of the month I'll have put $250 into my account. Woohoo! I plan on doubling the bi-monthly payments once I see how the ING thing goes.

basic financial beginnings

I have no savings. I am approximately $4,000 in debt. I will update this number with the actual value as soon as I find out. I am a married man about to turn 30, with no kids, and a bevy of animals (dogs and cats).

We bought a house 6 months ago for $169,500 with a 7% interest rate. Yes it is higher than the average. We were lucky to get that rate. My credit is not good, I think it is ~610. I don't know the actual number since you need to pay the credit reporting agencies to find out, and I don't want to spend that money. We found this rate through a smaller mortgage company in our area, when the majors were offering us 8%- 8.5%. We got in about 2 months before the massive subprime meltdown. We would not qualify for a loan right now. I am the only one on the loan, as my wife's credit is even worse than mine.

We were only able to buy our house because we are first time homeowners and we were approved for a program that payed our 3% down payment required by FHA, and the sellers payed the closing costs. We actually got a $1200 check upon closing because we payed $500 earnest money that we got back at closing and we had a rebate from our real estate company through my job.

I make ~$70k a year, and live in a city that has a cost of living about 10% higher than the national average. I have had my job for 3 years, and still live check to check if we are lucky. Sometimes we even do the check advance to cover our bills.

This is were my journey begins. Don't laugh or cry too hard.

basic financial

I have recently begun to actually take consideration of my family's financial security. I have started reading blogs like The Simple Dollar and Zen Habits. The one thing that really has made it hit home with me about how even small steps can make a difference are the examples that use real dollar amounts instead of percentages, or ideas without examples at all. In my reading though, I have not seen many of these examples.

My goal for this blog is to a) track my journey to financial stability and b) hopefully inspire others in my situation to start saving, even if it is a small amount at first.

My game plan for this blog is to be as transparent as possible about my savings and debt reduction. Here's hoping that I can help someone else out by showing how I start saving and eventually reach financial stability.