Success Warrior: The Blog That Embraces ADHD

Playing Hard To Get with Money

Tia and I were talking during a car ride on Monday and we agreed on an observation.  I've been giving it some thought and mentioned it again to PTE Rick today.  I'm sure there's a known psychological reason behind it but it doesn't matter.  All that matters is understanding that it exists.

Tia and I could buy things but we don't.  We say, "We could . . ." a lot.  We don't buy much though.  (I did buy this arch-thingy for one of my climbing roses on Monday.  I'll take a picture when the roses are blooming.)

I think a lot of it goes back to people wanting what they can't have.  Credit cards and store credit have solved the problem of not being able to have it but people still can't afford much of what they buy.

Once you can, items seem to lose their desirableness.  We just buy what we truly need or want.  It seems like a paradox.  We shop more when we can't afford it and shop less when we could actually buy things.

I still believe that part of it comes back to the idea of spending money.  Credit isn't money.  You aren't spending *your* money when you use a credit card.  The pain comes later.  When you are using your own money, your more picky.  At least that's how it works for us. 

Taking What I Can from Bernanke

My close friend, Ben Bernanke, will probably be dropping interest rates for the next few months in an effort to try and keep the country out of a recession (don't you dare suggest that we are already in a recession or I'll be forced to defend Ben's stance).

I'll be keeping an eye on the interest rate and when it looks like it's been dropped as much as it's going to go, I'll refinance my house.

Remember, boys and girls, when I talk about refinancing, I'm talking about refinancing for the amount that I owe.  I won't refinance and take the equity out of my house.  I called that "the sinister refi" and that's completely different.

Unlike bigger cities in the US, houses here have continued to appreciate in value.  What this means is that I will be able to lower my payments with the lower interest rate and I will probably be very close to being under the PMI limit.

We'll probably get a mortgage for 80% and a second loan for any amount over that.  We'll put all the extra money toward the second loan which will be at a higher interest rate to get it paid off as quickly as possible.

This will free up more money on a monthly basis to deal with the possible rocky financial road that lays ahead of us.

That's the plan anyway.

The Wendover Effect - Part 2

You can read Part 1 of the Wendover Effect HERE.

Living here in isolation has had several other effects on us.  Some would probably have happened anyway but being here changed us more quickly.  Writing this blog changed things too and I probably wouldn't have spent so much time on my blog if we didn't live here.  We changed our life when we moved here so that one of us was with Trey all the time.  That put an end to our social life.  We also knew that Wendover was a temporary stop to regroup and so we haven't gone out of our way to create new friends that we'll just be saying goodbye to.

One important lesson that we've learned is that we don't really need much stuff to live.  We don't buy very many things because we just don't need them.  We see things that seem nice or fun to have but by the time we get to town, we don't remember what it was.  If it's something that we really need, that need will keep coming back, reminding us.

The Wendover Effect

Moving into the middle of BFE was a bit of an adjustment but in the end, we think it has worked out for the best.  Between living here and writing this blog, our financial lives have changed.  Here's some of the factors and some of the results of living in the middle of the desert, 120 miles from a city. 

The first difference is the lack of stores.  There is a grocery store and a poor attempt at a hardware store and an adult toy store and a Family Dollar.  That's it.  If you can't find what you're looking for in any of those, it's a 90 minute drive to get it.

We learned 4 very good lessons from this:

1.  The Internet is a better invention than sliced bread, by far.  We order things on line all the time.  Shipping and handling are cheaper than gas and save us 4 hours of travel time.

2.  We plan better.  We anticipate our needs and we make lists.  If we have to go shopping, we know what we want and what stores we'll be going to.  We don't browse.  When shopping on line, we try to get as much stuff from one place as we can.  Just because S&H is cheaper than gas doesn't mean we don't try to reduce it when we can.

3.  We go without.  We used to impulse buy and now the only thing that stays on the list is stuff that we think we'll really need.  When it's not Christmas, we might go for 3 months without going into town.  If we still want or need something after 3 months, it's usually worth the purchase.  When stores were close by, we'd go on a whim for a single item and then usually pick up some other neato stuff that we didn't really need.

4.  We've learned to improvise with items from the available local stores.  Did you know that you can MacGuyver a rolling pin out of a dildo?  Our Easter sugar cookies with the rabbit imprint were a big hit!

Here's Something To Be Thankful For - The Van Is Paid Off!

We wanted it paid off before Thanksgiving.  We cut it kind of close but it's done.  We paid it off in about 2.5 years or so.  The balance was zero yesterday, a day before Thanksgiving.  That means that we'll be going through the holiday season with one less bill and when we get the title in our dirty little hands, we'll call the insurance company and get our insurance lowered.

We're going to ease off on paying things off (things? My Saturn and a house that's up for sale) until January.  We are planning on putting the extra money from January into savings to prepare for my wife to cut down to one job.  She works in a school where 9 months of work is spread out over 12 months of pay and we aren't sure what will happen if she quits in the middle of the year.

Once we know that outcome, we'll be off and running to pay off the Saturn (and then lower the insurance again - schwinggg!).

Unless we sell the house.

Success Warrior Retirement Plan

Cherise requested that I do a post on retirement.  I fear that she will find this significantly lacking in useful information.  Not because I don't know anything about what to do for retirement but because I don't agree with what I read.  It's a personal thing.  Most of the information out there is probably good but it has never resonated with me (add "resonated" to my list of overused words for this election - too many Ron Paul articles include "his message resonates with people" and as a coach, I read the word way too much).

With that disclaimer in place, let me describe my personal retirement plan at this point in my life.  It could very well change in the future but this is what's going on right now.

First, I fully expect to work until I just can't work anymore.  Until the Alzheimer's kicks in to the point where I just don't make sense any more (and doesn't continue to help in my humor posts), I'm going to be doing something that brings in money. 

Not because I have to so that I'm surviving on cat food and crackers but because I think that human beings were built to serve a purpose.  When people stop serving a purpose, they die quicker.  Not that making money is necessarily a purpose but I have no dream of working hard until I'm 60 and then never working again.  I fully expect to live to be at least 100 years old and I don't want to be bored during that time.  I will probably be doing something that gives me an extremely flexible schedule and not necessarily be 40 hours a week so that I can spend time with kids and grandkids.  I'll be doing something though.  I may be a writer or speaker or something.  After our next move, I'm thinking about going back to college to be Economist.  It will be something that doesn't require too much physical strength and keeps my mind active.

Can We Really Pay Off the Van Before Thanksgiving?

That was the prime question in our weekly meeting, which we held last night.  We played with the numbers and went back and forth with ideas. 

The bottom line is that it's going to be possible but it isn't going to be easy. 

I'm going to remind you that we're paying off the van a couple years ahead of schedule and we realize that if it takes us an extra month, we're still way ahead of the game.  We know this.  We understand this.  We even talked about it but we kept coming back to . . .

How cool would it be to enter the holiday season without the van payment? 

We would have our house payment and the $120 Saturn payment as our only debts. 

It wouldn't just be a monetary change but a mental and emotional change.  You want something to be thankful for on Thanksgiving?  How about one less debt?

We figure that we can do it but we are going to have to be more careful with our money.  In small ways, but we're at the point where every little bit helps.

When the debt is large, it's harder for us to be motivated.  As it gets smaller and smaller, each dollar pays off a greater percentage and our motivation goes up.  We're at the point now where our motivation is high and trying to figure out how we can cut costs.

The problem is, we have cut most of the fat off already.  We have been spending on average an extra $25 a week at the grocery store.  So, we'll cut back there.  That gives us about $100 extra dollars.  We have been going out to eat once a week which is about $20 a week.  We're going to cut that out until the van is paid off so that's another $80. 

That was everything we could see to cut.  Beyond that, it becomes a matter of sticking to the plan and watching for ways to earn a few extra bucks.

It's going to be close but it's going to be worth it if we make it.

Weekly Meeting: Sliding Backward

We had our weekly meeting last night.  We didn't have it last week because we were out of town but there wasn't any extra to catch up on.  We've been doing this long enough that the mechanics really flow smoothly.

Tia has added an extra part to what we do now.  She's been doing it for the last month and I don't know if I have mentioned it here before.

When we get together, we look over how we spent our money for the last week to see if there is anything that we want to improve on.  We've gotten to the point now where that is very rare.  We have built up the discipline that we spend money where we intend to spend money.

We review our goals and the dates that we have set.  Every couple weeks, there's a bit of tweaking that needs to be done.  Some goals are moved closer, some are moved back.

I go over our current balances and how they compare to each other.  That's the sliding back part in the subject line.  Our money versus debt went backwards a bit this time.  Our debt went down but our money went down more.

The fact that our debt went down is what's important but I like to track the difference.

We spent money on our trip so that was money that went out but not against our debt.  My 401k is tied to the stock market and I own a few stocks.  Both of those went down (even though they promised me the housing fiasco wouldn't affect the economy - damn them!).

After that, my wife shows me her plan for how we are going to spend our money for the rest of the month.  I give my input but at this point, we are on the same wavelength so it's more a matter of just keeping me in the loop. 

We are going to start setting money aside each week for items on our wish list.  We have set a minimum that we will continue to pay toward our debt so that we can reach our goals.  Anything left over goes to the next item on the list.  The first item on the list is a computer.  It's time.  As much as I'm going to hate to part with my TRS 80, it's time. 

Actually, I won't be parting with it.  I'm going to disconnect it from the internet and let Trey use it for his Hooked on Phonics and anything else that we get for him.

Any extra money that I can bring in will accelerate the purchase of Wish List items.  Tomorrow, I start my babysitting gig so that is going to help on that front. 

It's a system that really works well for us and I highly recommend that you use some kind of system for yourself.  You can develop your own, you can use mine, or there are probably hundreds of other variations out there.  The bottom line is that you have to know where you are and what you want to achieve if you want to be in control of your money.

Burst Your Way Out of Debt

Here's something that I cover by example in my book.  Leo Babauta of Zen Habits did a guest post on Get Rich Slowly and spells it out even better.  I'll give you the general idea and encourage you to visit his post to get the full story.

For people that have a hard time paying a little bits at a time toward debt each paycheck, you can set up systems where you pay your monthly payments and then when you money that isn't in the form of a paycheck, you put that money toward your debt.  You might be able to pay off some of your debts in this way in one swoop.

This would also work for people who have gotten themselves into debt to the point where there just isn't much money left from each paycheck.  You can use this "windfall" money to pay down or pay off debts.  That will free up money from your paychecks that you can start paying toward the rest of your debts.

Use the money as a way to get out of debt if that system works better for you or use it as a way to get things rolling if you are using a "snowball" system.  Either way, it's a great way to reduce debt more quickly and give yourself some financial leeway.

Full Article:  How to Eliminate Debt in Bursts Instead of Incrementally

5 Sword Points for PTE Rick for sending me the link.

Joining the KMA Club

The object of my game right now is to join the KMA.  In the police world, the KMA meant that you had your 20 years in so you could retire at any time.  If you didn't like something, you could tell them, "kiss my ass," and walk out.

Of course, most of them would immediately have to go out and get another job so they weren't really full-fledged members of the club.

I'm not talking about never working again because I think there are plenty of things that I like to do that will bring in money.  It's not a *job* though when it's fun or you're really looking forward to doing it.

I'm talking about not being reliant on the job or worse, trapped.

PTE Rick's post on what some companies do to their employees is an excellent example of what I'm talking about.  People who get themselves into this type of situation will have the hardest time joining the KMA Club.

On the other hand, if you own all your property free and clear (including your house), it's very easy to change where your money comes from.  If you get to the point where your money is making money, it gets even easier. 

I think I would get bored if I didn't have something that I was working on but I want to be the one choosing how and when I spend my time (and how much time that is).  There are plenty of predators out there or companies who are so focused on the bottom line that they don't care in the least what happens to you.  It's up to you to get yourself in a position where those things have very little, if any, effect on you.

Work on joining the KMA today.