Recently realized just how easy it is to let ourselves be Okay with using stuff that’s easily accessible. And conversely, how difficult it can be to access the stuff that’s tucked away. For example, have you ever shopped at a “buy-in-bulk” big chain like Costco, Walmart, BJ’s, etc.? These chains are great for stocking up on stuff like groceries, essentials, and some even sell liquor and beer.
Well, typically I’m not a big drinker by any stretch of the imagination; however, on one such occasion of doing our monthly buy-in-bulk session, I was tempted to add a gigantic bottle of Johnny Walker to the cart. The reasoning seemed logical at the time. Why not have some bourbon in stock at the house? It’ll be great for when guests are over. And I’m not impartial to indulging in some fine bourbon on sunny afternoons, when i have the day off. Read more
Last week I had a $400 emergency. Actually it was more like a $513 emergency, and was left-out of work for two weeks. Fortunately I’m prepared for a situation like this, because I’ve been funding a small emergency fund. And therefore had to withdraw some money from it. Last year, it was reported that an average of 34% of respondents with an income less than $40k/year would be able to cover a $400 emergency. Which means paying in cash, or using a credit card that’d be paid off by the end of the month.
The average number of respondents who reported being able to “handle the emergency” was higher along higher income brackets (e.g., of those making $40k – $100k / year, 62% responded in this way). Which means that 38% and a full two-thirds (i.e., 66%) of individuals last year, earning between $40k – $100k and ≤ $40k respectively, reported being unable to handle an emergency expense totaling $400. Furthermore, being unable to handle such an emergency expense was related to putting it on a credit card, and paying it off over time, borrowing money from friends and/or family members, or just not paying the expense all together¹.
In the much anticipated sequel to my declining invitations post, this article is taking the notion of extreme saving from a different perspective. Going out to lunch? Getting drinks with friends? Out-of-state wedding invite? All of these events could receive a “yes” response. But it all depends on whether you’re living on a bare-bones budget, or living-large.
Most people would claim that they’re living somewhere in between: If I’m declining multiple invitations (however big or small); if when I hit the “maybe” button on that Facebook invite it means “not a snowball’s chance in hell,” it’s because I’m clenching my wallet (literally?) between my ass cheeks.
Conversely, if I’ve become a regular “yes man” then I’d eventually have to pull the caravan over to the curb, and button-down the money wagons. So this article is geared towards finding that happy medium, to properly build up my Fun Stuff budget category; which means being able to say Yes to more invites (at a moderate pace) down the road, or not.
Part of making, and sticking to, a budget that actually works is having to occasionally decline invitations. Often times our friends, family members, and especially our significant others will make requests upon us, which demand the allocation of our resources.
Have you ever thought, “that sounds like a lot of fun, BUT deep down is it worth the cost?”
Surely this decision crosses our minds multiple times a day. And most of the time, we’re forced to decide upon one of various potential outcomes using the best of our judgement. The extent to which we allocate resources to the chosen outcome (i.e., how much money it may cost) often influences our decision, one way or another; however, depending upon the significance of the request, our ability to comply may be limited.
For example, my brother who lives out of town recently was in-town because he was invited to go to a wedding (and apparently his frequent flyer miles were expiring soon). His ability to decline the invitation (from an ol’ college friend) was somewhat limited; however, the cost of complying with such an out-of-state wedding invitation was probably sufficient enough to warrant a pass this time around. Read more
What if it were possible for anyone to save $1,000,000? Would you want to know how? Maybe that sounds a little far fetched. How about the notion that anybody can save $100,000? Are you interested now? Perhaps, perhaps not. What if I said that it’s possible for both you and I to save $10,000? Now I bet your ears perked up. And finally, let’s both agree that it’s possible for almost anyone to save a cool $1k? Uh-huh. You’re totally on board with it? Cool. Because what most people don’t realize is that the process for saving either $1k or $1M is essentially identical.
It’s just a matter of the degree to which we’re saving money that determines how much we’re able to bank. Let’s look at it another way: Imagine that suddenly it were possible for human beings to forgo the need to sleep ever again. Drink a magic elixir, and you’re devoid of needing any resting period longer than one hour per day. That means the extra eight hours of daytime (or night-time rather) could be put to use towards more productive means. You might work an extra six hours each day, and put the other two hours towards practicing an instrument, for example. Read more
The age old question of how to allocate available income is best resolved by either paying off pre-existing consumer (credit card, car loans, etc.) debt, and/or investing for the future. Presumably, when we speak of investing the most popular way to accomplish this is through stocks and bonds. But how much to throw at debt, and how much to invest is often under debate. Are there fixed percentages that financially responsible individuals use (e.g., 85:15%, 60:40%, etc.)? Can we just add an extra $100 on top of our minimum monthly payments and live with that? Does investing in asset classes that average a certain percentage of return justify putting our dollars there [e.g., if I can confidently assume a 9% rate of return year-over-year (YOY) but my car loan interest rate is only 6%, I should choose funding that particular asset class]?
All of these questions will be explored, and more, in this article. But first, it’s worthwhile mentioning that no two snowflakes are identical. And thus, not everyone will have the same savings strategy. Although the strategies contained herein may be effective for some, and not others, the basic idea(s) are almost universal. So take what you can from me, and absolutely feel free to tweak according to personal preferences.
Now, let’s go tackle some debt.
Before you read this article, be forewarned. There are affiliate links contained herein, that if you click on and/or signup with, may earn me (and you) a small commission. This in no way effects the pricing of the product(s). Referral links are labeled appropriately as such.
The relationship that we have with money is an interesting one. Why is it interesting? Well, for one there’s indeed an emotional attachment to money. A universal feeling that the owner has when possessing the almighty green-backs. This feeling is powerful; but not quite as powerful as the feeling we get when coming into possession of dollars. That feeling of, “the world is my oyster” to the extent of the buying power that that cash amount has.
When somebody slips me a tip, my brain lights up as I quickly stash it away out of sight. Try to immediately remove the dollars from my sensory register. And when those dollars are gone? The brain slowly recovers from it’s heightened state; however, the mind seizes the new numbers, and quickly computes any of numerous calculations of money. The same goes for other forms of receiving cash: accepting a gift, when paychecks come, finding money on the ground.
Afterwards, some time later, there are several potential places for the money to go: into the gas tank, or take a walk to the restaurant, etc….. hey maybe into the bank! Read more
Whats’ the biggest expense for rideshare drivers? Hands down has to be all the gasoline consumption, which is required for large quantity of mileage driven. During an average week, personally I’ll spend $40-50 on filling up my tank twice or three times. That works out to be ~$150/week easily!
To combat that never-ending thirst for gas that my vehicle has seemingly developed, always on the lookout for deals at the pump, with credit cards, at grocery stores, etc. Basically anyplace and anyway that I can cut down fuel costs, I’m doing it. Read more
What does having no credit card debt feel like? Like discovering an oasis in the middle of the desert. How do you get to that point?
You need to make much more than just the minimum monthly payment. And I have transferred big chunks of my balance to low interest credit cards. That means more of each payment is going towards the principal balance, instead of interest. But that wasn’t always the case. Read more
J.M. here. As I get into the year more, I’m constantly thinking about making a budget that will stick. And subsequently, in my next Friday financial installment, wrote this money savings article associated with my new budget. It’s not easy budgeting for future expenses, especially when spending temptations are so abundant. Check out this very basic budget plan for starters on where to begin.