Articles with bad decisions

I Dread Dealing With Money

Being thrust into control of my finances again has brought up a lot of “money emotions” for me. My relationship with money is an odd one because I mostly feel dread when thinking about money. Yes, dread.

Dread:   1. a) to anticipate with great apprehension or fear

                    b) to fear greatly

                2. to feel extreme reluctance to meet or face

Yep, that pretty much nails how I feel about money.

Even just thinking about checking my bank account balance fills me with dread. I actively avoid it… I even put it on a list It’s so weird to admit, but I dislike money. My happiest was when I was at a point in my life that I didn’t have to worry about money, or even think about it at all. Mrs. SSC was more than happy to take the role over and I was more than happy to throw my finances at her and run away laughing. Which is basically what happened.

Of course I was happy to hand this over… But now, it’s just me. Eep!!

Now that control of those finances got handed back to me, it’s all nice and neat and pretty and mostly organized. I’m curious how long it stays that way. Again, I’m amazed with how some of you check your bank accounts once a day, MORE than once a day (why? Just… why?), and you track ALL of your money. Yes, I’m admitting I’m amazed how easy it seems to come for… well, basically anyone/everyone I follow in the Personal Finance Community. You guys are on it! I’m just an imposter, riding the coattails of a person that IS good with money.

That’s how I feel anyway. I have no personal finance confidence and the dread is real.

Where Did the Dread Come From?

I think “when” may be a better question than “where”, but like everything that shapes our lives, for me it was back in childhood. I had money stress before I could even work and earn money. “But how can you stress about money that early” some of you are asking and others are probably nodding in agreement. Well, I didn’t grow up in the most financially stable of environments. The phrase, “money burning a hole in your pocket” was never more applicable than with my dad. He’d get paid every other Thursday and he’d cash his check and it was like a mini-holiday, at least for that night. We’d go out to eat, and then go to the mall followed by the bookstore. Instead of focusing on priorities, for those Thursday nights at least, there was money being spent on “frivolities”.

Why did I say frivolities? Well, because typically, the Wednesday before payday, we’d be low on groceries, gas, usually very low on actual money available, and there were at least 1-2 late bills waiting to be paid. When I started noticing this, was when things would happen like the lights would be out or the electricity or water would be turned off. The ever present mechanical breakdown of the car(s) and having to sweet talk the mechanic into a payment plan because we had to have the car running. Seeing my parents stress about this and then get upset, fight, or whatever the reaction was, spilled over to me. Even then I could feel it and it was ALWAYS about money. Usually the lack thereof, or the fact it got spent on “frivolities” and not “necessities”. That was the biggest sticking point and fight topic around our house.

While I couldn’t do much about things back then, at least until I started working, I still got stressed about money. And it was the worst kind of stress because it was worrying about things out of my control. I had fuck all to do with turning a light switch and it working or not but I’ll never forget that horrid feeling of flipping a switch and nothing happens. I’m going to say my “dread” associated with money started back then.

I Money Good, Relatively Speaking… (pun definitely intended)

Coming from that sort of background, it’s not hard to be better than what you’re used to seeing. Always seeing no money around turned me into “a saver”. Meaning I didn’t immediately spend money as soon as it showed up, but I would save it. I still remember my siblings being amazed/jealous that when they wouldn’t have money, I’d always have some money. Even in Atlanta when I was living with my brother back in ’96, he’d be like, “Alright man, you ready to go out tonight?” I’d say, “Yep, let me get some cash.” And I’d duck into my room, grab some cash and walk out and he’s giving me a look like, “where the hell is he stashing that, and how does he keep coming up with money?” When I came back from that summer, I had $2500 saved, just enough to cover a whole year of college, lol.

Got those phat stacks! Of singles, lol.

Comparatively, I always saved and had “better money sense” than what I grew up with. That’s not throwing my parents under the bus, but we can all agree some people are better with money than others. As a whole, you can put ALL my family into the “not good with money” category, I was just a little better than the rest. Back then, I never liked being in debt, and would save up to buy something outright if I needed it.

Mo’ Money, Less Problems!

Finally, around 1992 or so, I could start working and what a game changer! I had so much stress relief just from being able to buy my own groceries. I started paying the bills BEFORE they got cut off. What a concept! I had some control and I still had money left over. How in the hell did my $4.25/hr job cover the bills when my parents struggled with a $40-$50k income?! Lack of discipline with spending, I guess. IDK… This was when I went from dread to anger.

I was angry about having to pay for ALL my own bills, AND help with my family’s bills. My parents had split up around 1993, but why the hell is it my responsibility to cover my mom’s financial shortcomings!? I pitched in and “helped out the family” because that was expected of me. However, my older brother never bought a tank of gas for his car, or a quart of oil, or paid for his car insurance, or paid for any repairs, or had a job, or was expected to work, or expected to buy his own clothes, or was expected to help out the family in any way whatsoever. It wasn’t fair that I got the brunt of having to deal with the stress of bills, which ones were due when, where they got paid, and all of that, but if noone else was going to do it, I could at least make my role in it suck a little less by taking control.

It’s no wonder I relate to Shameless so much, lol. BUT, that situation also gave me a pretty independent spirit. When my whole family moved out of the house when I was 17, it was actually the biggest relief in the world. First dad moved out, and then Mom, leaving the 3 of us kids basically living on our own. My brother and I eventually had a “come to Jesus talk” with mom. We told her that we can’t be effective parents to our younger sister and that she needs to, um, well, be a mom. I had been floating ALL the bills and was the only “earner” in the house, so we also asked for money. So, instead of money, she took my sis with her and shortly after my brother left to attend culinary school. In a space of 2-3 months I went from household provider to single person with only me to worry about. WHAT A RELIEF. What 17 year old wouldn’t want to be living alone? My mom’s take, “You’ll be fine. You’re strong and independent and can handle this.” Um, yeah, but SHOULD I have to handle that? For better or worse, I finally had control of everything. Yikes! No wonder I dread dealing with money so much… I mean with all that positivity surrounding it in my formative years, I don’t understand why I would dread all things money. Maybe that’s why I default to Warren Zevon a lot, “Send Lawyers, Guns, and Money! They’ll get me out of this!”

How to Overcome the Dread

I honestly don’t know how to overcome the dread because I’m 42 and it’s still lingering. Ok, that’s not true. Give me a 6 figure salary and have someone managing my money for me and there’s zero money dread. That’s not likely to happen anytime soon and I need to figure out a better relationship with money anyway. How can i expect my kids to have a good relationship with it if they see me treat it with kid gloves and act like it’s bigger than me. Yikes!

Another one of my bigger worries about chasing FIRE was a return to dealing with this “money dread”. There were many conversations had with Mrs. SSC about how we could work thru this, or how big of a problem it may be, and if it was enough of a trigger to not quit working. I hate that dreaded feeling enough that I’d honestly rather work another 5 years or more to NOT EVER have to feel it again. Maybe I will, I don’t know.

I know what I’m going to do to try and take back my negative feelings associated with money though.

First!

I’m going to look at my bank account EVERY day! Every… Stupid… Day… I’ll log into my bank and at least glance at it. No, I’ll stare at it. Then, I’ll smile at it. Yes, as dumb as that sounds, me smiling or laughing at my bank account will help. Maybe even just bullying it a bit and taunting it like, “So, you think you’re getting out of here, huh? Get spent, see the world? Well, Not Today buddy! Not! To! Day!” while I also shake my finger at it, or something like that… Who knows? I know, I’m weird. But I like keeping it “personal”, in personal finance.

Second!

Now that all the “buying of crap” for a house is mostly over, and all my other money stuff is in Mint, I can go thru and set bill reminders for myself, where I don’t have autopay setup already. I’ve already paid a couple of bills “past due” so, yes, that has happened. Instead of beating myself up about it, I can now make that dread suck just a little less by setting calendar reminders and “forgetting about it” until they need to be paid. Plus, I can see what my monthly “recurring stable budget items” are and plan for them.

Third!

I just have to remind myself it’s only money. Yes, I typed that and sent it into the PF blogosphere.

“It’s Only Money”

Yikes! What’s the point of saving money if you don’t use it to ease your life? Well, for me, there isn’t a point. That is LITERALLY the point of saving money in my opinion. Not to hoard it and collect the most, but to have it so when life goes all pear shaped, you have one less thing to worry about during those times. So, I’ll allow myself to spend that money, but just not WASTE that money. It was a lot of work saving it, so I need to treat it with respect and not piss it away. In my opinion, stressing about money whilst looking at a big pile of it just seems beyond idiotic.

Fourth!

There is no fourth item, I just wanted to type more exclamation points!!! Lol!!!!!

Summary

I don’t know how to fix my dread associated with money, but I know how I’m going to try to fix it. That’s all I can hope for, right? Find a problem, pick a solution, and try it. When that fails, try another solution until one actually solves the problem. Like I wrote previously, if I can make this problem suck just a little bit less, it is worth it. Even if it takes most of a year to get that ironed out, well, that’s progress. I went from not dealing with any bills, or any financial accounts (allowance excluded) for the last 11 years and well, now I get to relearn those skills. I sure don’t want to fall back on my usual habits that were in place back then.

When all else fails, “Send lawyers, guns, and money! They’ll get me out of this!” – Warren Zevon

If you aren’t familiar with the tune, shame on you… But here it is.

Is an $8 tomato worth it?

Recently the topic of a fall garden has come up around the SSC household. With the high temps starting to stay at/below 90 during the day, and night temps around 75 (time for a fire!) it got me thinking we should plant some stuff for the cooler weather. We keep talking about wanting to garden and grow more stuff as part of our Lifestyle Change, but we don’t do too much of that now. I figure now is the best time to get with it so we can iron out any bumps and what not before we go big with a garden. However, our success rate with getting anything edible from any plant isn’t exactly stellar. Is it due to our ungodly hot climate, our lack of green thumb, or possibly lack of diligence with taking care of the garden due to our schedule? I’m all for the fall garden, and have even agreed to scale it back a bit, but I’m having trouble getting Mrs. SSC on board due to our usual gardening adventures fails.

Our first “big garden” attempt down here was nothing short of a disaster. We’d decided to do a raised bed, with a garden system that made a 6’x6’ box separated into 4 squares. We then put our usual peppers in 2 squares, some squash in another square, and something else in the 4th square. The fact I can’t remember what it was should be a clue as to how successful it turned out. We were doing well with the garden even though it was as far away from the house as it could possibly be in our backyard. Then we went on vacation. Ever mindful, I set up a timer and watering system so it would get water while we were gone. I hooked up the sprinkler, ran it out to the garden, and even adjusted the flow and coverage of the sprinkler so as to be efficient. I was SO proud of myself.

When we returned home the scene looked like it was out of a plant horror movie. Some plants were dead – straight up dead, while the other plants looked droopy, wilted, and brown. Not dried up lack of water brown, but a weird brown, like a “death” brown. I thought I may have overwatered, but that couldn’t be the case. I checked the sprinkler and timer and they looked good too. Then I stepped into the spray of water and was scalded from my knee down to my flip flop covered foot!

Gah!!! Idiotic me didn’t think about how hot the water would get while it was sitting in ~50’ of garden hose stretched out across the yard, in the sun, ALL DAY, in the middle of Houston summer. Yep, I had managed to kill the garden with repeated scaldings over the course of a week. Side note – if you want to get rid of a certain patch of grass or weeds and don’t want to use chemicals this seems to be an effective method, as even the weeds were dead… We haven’t tried keeping anything alive since beyond our two pepper plants and the occasional tomato plants or herbs.

This guy's about 6' tall and flowering again!
This guy’s about 6′ tall and flowering again!

This year I got one tomato before the heat cranked up and I calculated it cost me around $8. I’ve kept that plant alive and I’m hoping for a fall crop now that it’s cooler and it’s starting to flower again.

She's a sad tomato...
She’s a sad tomato…

However, the other one got decimated by some kind of bug. I went to water it and all of its leaves were gone. There were just little leafless nubs all over it. I brought it inside to try and resuscitate it, to no avail. Our pepper plants are still cranking out peppers though, and we do have a pineapple we started from a cutting earlier this summer that’s looking quite nice.

 

 

This guy seems happy as can be!
This guy seems happy as can be!

Now that it’s cooler, I proposed the Fall Garden! However, I want to only put up 2 squares, so it’s half the size. Also, I would put it on our back porch so it’s right next to the hose and in our daily view so we won’t forget about it. Plus, the kids seem like they could get excited about it. Our oldest transplanted a bean plant he started in daycare, and it got over 6’ tall and made a decent amount of beans. He really enjoyed that.

I was thinking of planting some cauliflower, but maybe they get too big for that small of an area. Maybe plant some root vegetables like turnips, carrots, or something along those lines, and maybe something leafy like Collard Greens or Bok Choy. I even proposed to fund it from the allowance, but was reminded my allowance is a bit tight currently, Oops…

I think our gardening fails are mainly due to our busy schedule, not being diligent with the garden, and having the plants out of sight. The high summer heat doesn’t help either, but I don’t want to make too many excuses. With the weather getting nicer, we’ve been spending more time out back, so we should be able to manage it way better. I really think the kids would like gardening too since our oldest liked seeing the bean plant get big and make beans he could eat. I think it’s worth giving it a shot and hoping they want to get more involved.

What are your thoughts? Should we start a fall garden? Thoughts on what we should try to grow – any advice is welcomed. Do you want to hear about more gardening fails? I have plenty!

Free money cost me HOW much?!

money graph
Free money cost me HOW much?!

While Mrs. SSC was paying the bills, she noticed that Discover had a cash-back reward offer for her personal Discover credit card that she uses for her ‘allowance’.  Anyway, Mrs. SSC noticed that there was an offer of “spend $2k/month for the next 3 months and get $300 FREE!” Mrs. SSC thought this was awesome, since we have a second Discover card account that we use as our primary household credit card for bill paying/grocery/gas/etc… type of card that gets paid off every month. So, she went to see if she could sign up for this awesome deal with our household Discover card, and any guesses on whether it was offered on that account or not? Hmmm? Anyone?

No, is the correct answer.

So, for the card we typically have a fairly consistent amount spent on each month, there is bubkus in regards to additional offers. On the more meager monthly spend card (Mrs. SSC allowance spending) there was this nice reward offer. So then, would it be worth it to use that card for groceries and gas and get an extra $300 in a few months? Sure.  But, really Discover just wants her to boost her spending to match that of our other account with them… As my 3 yr old would say in a sing-songy voice “Ooohhh, Discover….”

So, Hooray Us! for getting an offer to get cash back above and beyond their typical rewards, but it strikes me as devious or scheming in how it was presented.

Although, thinking about it now, I guess it’s just plain business. They see someone not spending much on their card each month, so why not try and lure that person to spend 3-4 times the amount they normally spend. Especially with the holidays, if you give a consumer a target of say ~$2k to hit and get “rewarded” with a free $300 to spend at Amazon among other places, well, it would seem that it should be a no brainer to spend that amount and get your “free money”. Then maybe they are over their usual budget and can’t pay it all off at once and then interest accrues. Who wins there? Discover.

But think about this in the case of most consumers.

Hell, let’s use me as an example of said consumer, from just a mere 7 years ago. I carried revolving debt and was constantly paying towards it, because my spend was way over my pay-down each month. Yes, yes, I know, Bad Mr. SSC, and you can read about that more here. But I would’ve been delighted at that offer. Spend $2000/month and get $300? Hell yeah, free money! But is it really? Let’s say I had just 16% interest (I paid late occasionally, so it was probably closer to 18% – cringe!!) over the course of one month, that interest would be $320. Someone check my math, I could be way off…. They’ve already gotten their “free money” back plus $20 if I don’t pay it down for just 1 month. 1 month! That’s it.

So for all those analysts sitting inside the machine that is called Discover, they’ve just earned their bonuses. Think about it. If they get just 10,000 people to accept this offer and not pay their additional $2k spend down for just one month, they made Discover an extra $200,000!! That’s just from the $20 extra per person that doesn’t pay it all down. And that’s not compounding that with the fact it will probably take more than 1 month to pay it down, so just by this one little offer, they will most likely make more than they put out there to give away as free money. Genius Discover, pure genius!

For those not in a situation to pay that balance off, it’s lose, lose. But I wouldn’t have known that or thought about it back in the day, and they would’ve made way more than the $300 they “gave” me. I would have never realized I just stole from myself because it was worded as spend blah amount and get Blah amount FREE!

Have you ever gotten taken by something that seemed great but you realized later, “This free money cost me SO much more than it was worth?”

I’d love to hear that younger Mr. SSC wasn’t the only one that wouldn’t see past that “free offer” and get taken for much, much, more.

Bad Decisions 5: Cashing out my 401k!

Capture401kHave you ever done something ridiculous like cashing out a 401k? I did. Yep, one of the biggest money mistakes you can make and I did it, against countless advice to NOT do it. Let’s go back to how this all got started.

The year is 2005: I had been out of college for about 3 years, had a nice steady job, and had finally gotten accepted into grad school. It was a great school with a top-notch reputation, and I would practically be guaranteed an almost 6-figure salary when I graduated. However, I was having trouble maintaining a good work/school balance. I was still working my full time construction-type job, which had pretty variable hours throughout the work week. Scheduling my job and school was a nightmare, so after a year of dealing with a harried schedule I decided school was way more important and had to be my focus. I had been going to school part-time, but since that wasn’t working out well, I bit the bullet and quit my job and signed onto school full-time.  This left me with a decision to make regarding my 401k.

After looking into IRA rollovers, as well as my present bank account, I decided, “Hell, I’ll just cash it out. I can easily make up the difference when I start working again in a few years, no harm no foul. That money can help me more now.”  I had applied for some student loan help already (see Bad decisions: It’s raining student loans!), but I was accustomed to living off of ~$45k a year and dropping to $20k a year as a student really hurt. I mean, I wasn’t able to keep my spending in check at $45k, so how would I do that with half the money? Realistically, I know realize that I could have made $90k and still not kept my spending in check…but that’s another story. So, I informed my company that I was going to cash it out and got some pushback. “What?!?! Don’t be stupid, just roll it over into an IRA.” “Why would you want to cash it out, you’ll get hit with taxes and penalties, you won’t even be able to keep half of it!” But I just thought, “Ha-ha! Little did they know I’d already come up with how much I’d be able to keep, and yes, with the taxes and penalties, I would not be able to keep every cent of it. BUT, here’s the kicker! I’d be able to still keep more than I put in after I cashed it out and paid it all off.” Yep, I thought I was being pretty, pretty, pretty smart. I had already calculated that the value I would get paid out, penalties and all was greater than the amount I had originally paid into my 401k… so I’d still be ahead. I was a pretty smart guy.

Even my financial person did their best to talk me out of it at the 11th hr. They even had paperwork for an IRA ready to go in case I had a moment of clarity.  Did I still take the cash out? You betcha! I even had some members of my family on my side supporting my decision, because, “Hey, you need that money now. You’ll get more money once you get out of school and get a nice job.” And who am I to argue with someone that’s agreeing with me? So I cashed it out.

So, what did I do with it you ask? Surely something great and fun, and memorable because I gave up so much potential growth on that 401k, right? No, not really. As I’ve been thinking about writing this post, I realized I can’t even remember where it all went. Six years of saving for nothing!

Well, that’s not entirely true… My car’s transmission went out and instead of forking over $2k to fix it, I thought “you know what, I’m not a car guy, I need an SUV. They look cooler! Besides,I go to the mountains and snowboard and hike and fish and do outdoors stuff, of course I need an SUV.” So, I started car shopping, used of course, and something I could cover with cash, or at least just a minimum loan. I’d only had a couple of credit crads and one car loan previously, so a small car loan couldn’t hurt, right? I went out and test drove a few SUVs and haggled and got a decent deal on a 4WD Ford Explorer Sport. I loved that SUV.  I’d paid most in cash, and drove off with it, while they were working up the loan details for the remaining portion. A few days later they called and said, “Well, because of your credit score not being stellar, and the fact that you don’t have a job, the banks aren’t wanting to loan you any money right now. You’re going to have to bring the SUV back or come up with the remaining portion.”  Gah!!! In hindsight, I should’ve taken it back and found something I could get with the cash I put towards this deal, but no…. That’s not how young Mr. SSC thinks. Instead, I checked my bank, and what do you know, my student loans had come in, so I withdrew the remainder of the money needed and ta-da! I had my new vehicle. The rest of the 401k money went toward credit card debt, and into my meager savings account. The SUV was about the only fun thing I did with the 401k money. Man, did that Explorer turn out to be nothing but a money pit, constantly needing repairs. After only having the car for maybe 3.5 years, I traded it in for a new car – thus saying goodbye to the end of my 401k.

What I didn’t understand or calculate at the time, was the lost growth potential that my 401k could have been earning for me during those 2 years. Realistically, I wouldn’t have touched it until I was 60, if it had actually survived, so I didn’t calculate all of those earnings I would miss out on. By cashing it in, I was only counting the $8-9k I could get in the short term, which yes was more than I put into it at the beginning, so I didn’t short myself there. I was also counting on the fact that with my post grad-school job I would be able to replace that money in a year or two, so I reasoned that my 401k wouldn’t miss out on more than a couple of years growth. HOWEVER, I didn’t take into account the fact that it could keep growing and growing, from about the $12-15k it was when I cashed it out to about $45k. I wasn’t “gaining” an extra $1-2k from what I put into it, I was stealing ~$30k from my future self. Ultimately, me being “smart” cost me way more than I thought. What a moron I was. I look back on it now and shake my head that I could be so financially ignorant, but I just thought of the near future and not the retirement future, and that is what kept me thinking, “This is a good decision, and I can recover from it in no time.”

 

Mrs. SSC says:

Wow! I’m beginning to realize that I don’t know even half of the stupid, bone-headed decisions Mr. SSC made when he was younger!  Good thing we rushed into marriage – now we are stuck with each other!  Anyways, so Mr. SSC asked me to calculate what he lost by cashing in his 401k back in 2005.  Let’s say Mr. SSC cashed out $12,000 in 2005, of which he got $9,000.  If instead he rolled it over to an IRA based on the advice of his coworkers, HR, and financial expert, instead of listening to his financially-backward family, who were probably just hoping that some of that money would come their way.  Anyways, I’m pretending that this more intelligent version of Mr. SSC  gets 7% returns, and inflation increases 3% yearly.  Wow! Mr. SSC would have the equivalent of $42,000 at the time he turned 60… or about 10 months of living expenses.  Looks like Mr. SSC gave up almost a year of freedom for that ‘cool’ SUV.  Sigh…   Just for reference, when I quit my engineering job to start graduate school in 2003, I had ~$45,000 in my 401k from about 4 years of work, which I diligently rolled over. This could grow to over $170,000 by the time we turn 60, and luckily, my good decisions should buffer Mr. SSC’s nasty financial mistakes.

 

What are some boneheaded money mistakes you’ve made in your life? Even better, what did you learn from them? Let me know!

Bad Decisions 4: Budgets are a four letter word

IMG_9803When I was growing up I saw my family go through cycles of budgeting vs not budgeting. My dad saw budgets the way most people see diets, a means to an end, but nothing that is sustainable or pleasant. Essentially, mom would implement a budget, it might get stuck to for a few weeks, maybe even a few months, but inevitably dad would feel too shackled by the constraints of the budget and go back to spending as if he was made of money, which he wasn’t. I never saw budgets as something useful, but rather viewed them as negative and something that meant you weren’t doing it right and needed to be told how to spend your money. I kept that view for way too many years, and didn’t realize how helpful budgets and tracking finances could be.

Clearly, I was wrong about budgets and now I realize that the only thing a budget does is let you see where your money goes, and it helps you divvy it up so that the important things get covered before you spend on excess things like gym, boats, dinner out, etc… You can make your budget as strict or loose as you need. I viewed budgets as a fascist rule over my finances with strict lines I couldn’t cross, or I’d face consequences! Consequences! Therefore, I avoided implementing budgets in the real sense of the word, because who chooses to get ruled by anything? Let’s be honest, I still hate budgets. The word itself brings up negative memories associated with being broke as hell as a little kid, arguments associated with money issues, and the feeling I’m getting punished for something I did wrong financially. It’s no wonder I never had a budget or tried to stick to one.

I’m just fortunate I married someone financially minded, that is way better at money, finance management, saving, and has a hell of a lot more financial discipline than me. Even she implements budgets or tries to. Seriously, whenever Mrs. SSC mentions the word, I recoil and get edgy and defensive. It’s amazing what gets imprinted during our upbringing. Back to budgets. If you’re reading this you have some interest in finance management so let’s get to where I went wrong with mine. Straight out, I’ll tell you I still don’t have one. Never could get one implemented, stick to it, or even had the desire. I had the desire to get out of my situation, but it’s like dieting; I didn’t want to be fat, but I didn’t want to work to be skinny either.

Sooo – here’s was my  “budget strategy” from back in the bachelor days. Money in = ~$800 and money out = $737.50. Clearly this wasn’t sustainable, because I only had ~$30/week to “have fun with”. What a crock! And note there isn’t anything going to savings at all either. And honestly, the check would just get deposited and this was all “deducted” theoretically, not actually set aside in different accounts. Even when it jumped up a few hundred more a check after undergrad, it didn’t matter because my spending habits were to spend more than I made. Plus, I had more than that going out in student loan payments… Gah!

However, even this could have worked with a little mindful spending, but therein lies the flaw in my whole system – tracking spending! How did I track it you ask? I kept a running total in my head, money in vs what was in my account. Yeah, it worked great, that’s why I’m writing about it in the “bad decisions” posts. Remember, I’m not super great with numbers, plus, I have to remember everything and keep a ledger in my head and make sure what was spent was deducted and added up correctly. I have a pseudo-photographic memory so actually, this worked better than you’d think. The main flaw was when I would have “extra money”. My $ in and $ out would be totaled, and even if I accounted for auto-draft bills that were coming due, I’d think, “Yeah good job Mr. SSC, you’ve trimmed costs and done well, and you have some extra coin to spend!! We’re going out!” Inevitably, within a week or so, a bill would hit, something I forgot about and I’d be in the hole.

So, yeah, I never actually sat down and figured out money in/money out and saw the stark reality that I was broke! Always… Constantly… And there should NEVER be extra money, ever. Had I actually just sat down and figured out what bills I had, and then put my pay next to it, and could see how close they were, and maybe I could’ve saved myself a lot of trouble. BUT I never did this. I just “knew” what my rent was, my cell bill, car insurance every 3 months, credit cards were always something, utilities varied depending on season, and gas and groceries were background noise.

This didn’t ever really change until I met Mrs. SSC and saw you could live differently. It still hasn’t changed really, Mrs. SSC just holds me to an allowance that’s brilliant and evil! I’m forced to decide if I want or need something. That’s changed my spending habits more than anything. Being forced to be accountable might suck, but has ultimately been great.

Another positive is that I have seen the positive effects of budgeting and finance tracking. Essentially, without Mrs. SSC, I’d still be in the same boat even with my salary being pretty comfortable. I would have just spent it on a boat, a truck to pull the boat, a sweet semi-restored classic muscle car (dude, I sound pretty country when it comes out like that). Anyway, the point is, I’d just blow it on more expensive crap and not be able to retire in 4 years like we’re planning on. I totally understand how most people are in debt to their eyeballs or making 6 figures and broke as hell. It doesn’t matter whether you make $40k a yr or $140k a yr, if you don’t know how to live within your means, you’ll overspend regardless of your income. Just look at how many pro athletes making millions go bankrupt, actors too, musicians… Bad spending habits just mean you blow more money per purchase not that you have enough money to cover your dumb decisions. I just suck at managing finance. I try really hard, but ultimately I’d fail at managing it well, because I haven’t gotten there yet.

BUT, seeing the spreadsheet and last 6 yrs of finance tracking and our budget, I see the benefit of it. Because of Mrs. SSC doing that and her amazing skills, we can retire in 4-6 yrs. living the same lifestyle we do now. Because of budgets and finance tracking, we even have savings to bridge the gap between now and 60 when we can access our 401k. Our budget includes savings, investments, college for kids, and all those other things most people see as secondary. But shifting them into your budget forces you to save and account for that. Like pre-tax 401k contributions, suck it up and do it if you’re not already. I did it even when I was making $35k/yr. You’ll never notice it, except for when you get older and think to yourself, “Thank goodness I saved that money, I can retire now.”

Or, you can cash it out at some point like I did. I would never recommend cashing out your 401k. Read why I did, and what I did with it, from what I can remember, because yeah,it was that great I don’t even know where it all went except general frittering away….Let me know if and how you track your finances, and stay tuned to the next ” Bad decisions” post: Cashing out my 401k!

 

 

Mrs. SSC:  One tip I have for budgeting, is that I treat our savings as a bill. I set it up to get automatically invested every month, so I have to make sure our budget stays on track. If we need to cut corners on something make ends meet, we are forced to try and trim the grocery bill or other superfluous spending, and not our savings.