Updates and Human Capital

Seems last entry was October 2016…believe it or not, I have an excuse.

Since my entry last Fall, Karen and I have succeeded in taking our “Bologna Holiday” which cost a couple of tanks of gas and sodas. In addition, we survived Christmas financially by staying on a pretty tight budget. We also successfully raised a substantial amount of cash so I could take a mission trip overseas, thanks to good friends who saw the need!  We had to withdraw from our emergency fund to have the air conditioner repaired in Karen’s car. We’ve had a slew of birthdays that have come and gone, and now, here we are almost feeling Fall again.

Our bank account is still growing, although painfully slow. I know of no one who climbs a mountain as slow as we do. We have finally managed to save that $1000 emergency fund, and now, because we know another car is going to be needed in the not too distant future, (another teen will be turning 16) we are finally saving for that. No going into debt for vehicles! Mom and Dad will get the new car, the kids get to buy the hand-me-downs at a discounted price, just in case you are wondering. We are also not having to live from paycheck to paycheck, which is nice.

While all this has been going on, I have been in pursuit of a Bachelor’s degree in Accounting, and am scheduled to finish around this time next year. This is taking a ton of time, and consequently, why I haven’t been journaling and sharing all the financial lessons I’ve learned lately. I had a break between the riveting subjects of “Creating an Income Statement” and “Balance Sheet and Statement of Cash Flows,” so I decided to take a break and endeavor to persevere in the area of writing. Liabilities are always more fun to write about when you find the only debts you owe are your mortgage and student loan.

A while back it occurred to me, if I’m ever going to get a little further ahead with our bank account, I was going to have to invest in my education. There was no way I was going to make more money without a formal education of some kind.

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Human Capital, written about in many an economics class, is the “skills, knowledge, and experience possessed by an individual or population, viewed in terms of value or cost to an organization or country,” according to Dictionary.com. Presumably, one’s investment into his Human Capital will pay off in terms of his productivity, which should lead to more net income, assuming that is the purpose for investing in himself. For us..it is.

We have tried not to go into a great deal of debt for this degree. I’m currently attending Western Governor’s University, which is an online college with course material that is no joke. For those interested in possibly pursuing their education further, check out www.wgu.edu. Let me know if you decide to go for it! Last I checked, because of financial aid and pell grants, we were only about 10 grand in debt. Seems like a lot as I write, but I am also looking at what the future might bring. I do not think it unreasonable that this degree could bring an extra 10 grand per year into our pockets once obtained; therefore, I do not think it unreasonable to have it paid off in a short amount of time, a year or a little more, should our standard of living not increase, and then enjoying the benefits of the increased income afterward.

Although increased income is a great benefit, there is also the benefit of knowing that it was done….period! It’s not been an easy ride to be a student and also be a working husband, daddy and friend. Karen sometimes has to put the princess in bed after I’ve studied or taken a 3 hour test. Family and church gatherings have been missed because I’ve had to study. Sons have had to wait for that video game or not have friends over because Dad needed the quiet for a night. It has taken sacrifice and grit to see this through to the end, and it will continue to do so until I’m finished, but we’re almost there. I’m not sure I will ever be able to take seriously those who say the market is flooded with qualified candidates who have bachelor degrees because “bachelor degrees are a dime a dozen”or a “master degree is the new bachelor degree.”  I know what it costs and am determined that it is not undermined, I don’t have to settle. For some companies, working experience and grit will count for something. For me, it will be the pride that I stuck with it through tough courses I sometimes failed, the personal knowledge I will apply to my life because of the material learned, and the fact that when it is finished, it’s finished. Until then…

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Bologna Holiday

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We are creatures of habit. We like the way we do things, bad behavior or not. We love to celebrate special occasions in life: a birthday, an anniversary or a holiday. Heck, at my house we like to celebrate when Friday rolls around! Most celebrations demand a debit from our checkbook for some reason. In my recent Microeconomics class I learned that most people are happy when they are consuming some kind of good or service. I can probably agree with that. The problem is that most of the time we pay for these goods and services when we can’t afford to. Think about it from a diet perspective. I can’t count the number times have we’ve been going along at a good clip for a couple of weeks, we eat right, we exercise, we avoid cookies and cakes, and then BAM: a special occasion. “Oh I guess I can eat this 2500 calorie piece of cheese cake, it is Friday after all!” We do this with our money so many times, and it absolutely kills our momentum.

Because we love our little extras, it’s no surprise when we are heartbroken because we are broke and decide not to go eat an extravagant meal for a special occasion, buy a hundred-dollar gift for birthday or Christmas, or take a vacation for an anniversary. My wife and I recently experienced this feeling during our fifteenth wedding anniversary. We would have loved to have had a big time somewhere with no kids. The truth was, we couldn’t afford it, the only way we could have done this is to take from our emergency funds or from our 401k, and at the time, it just wasn’t worth it. We opted to do something later on, if the opportunity presented itself. As luck would have it, a month later we are able to afford a couples retreat with our church for $175 bucks. We are also taking a Fall drive just to see the Autumn colors Oklahoma has to offer soon…it might cost a tank of gas and an eat out meal.

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The point is, if you can’t afford to spend extra, DON’T, no matter what the occasion! A special day doesn’t negate the universal laws of mathematics. If you have to check your account to go out to eat because you might overdraw if you spend too much, you should probably eat the bologna in your refrigerator.

Be Real Budget Buster!

The first few months of creating budgets is tough. When a budget is made, BE REAL. Things are going to happen. The budget is going to get screwed up. Humans are not perfect, and to expect perfection the first go round of a budget is madness. Defeat is certain at first, especially when financial behavior is equivalent to that of a hormonal teenage drama queen, which can apply to males or females. Got kids, spouse or dogs? Junk food, flowers or dog toy is bound to bust the budget!

What do I mean by being real? Should one account for “extra” money in their budget in case of screw ups. That’s not exactly what I mean. My family prefers to do an every dollar budget. We allocate EVERY dollar of our budget until there is no money left to allocate. We picked this type of budget up through Dave Ramsey’s Financial Peace University. Every dollar of our income is budgeted in a certain way, so there’s nothing left over for “screw ups.” Which means whenever we bust a budget in one area (overspend more than we’ve budgeted) then another budgeted area automatically has less to spend; this equates to two whammies for the price of one. Big sarcastic YAY!

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So being real? It means expect a little failure…at first. Strive for perfection, but don’t get disappointed when failure comes. It WILL. For an analytical guy like me, it makes me want to curl up into a tiny ball in a dark corner with my beans and start counting to see what went wrong. The very best thing one can do is shake it off, and try to do better, but don’t quit! Persevere with that budget! A few months of this kind of perseverance and there will be success.

FYI, any mentions I have of Dave Ramsey or any affiliates like Every Dollar, I don’t get a cent, and neither do they, I just really love the products.

 

The Rich Man’s Dilemma, Trump, Hillary, and Anyone Else’s Need

One night, not long after my wife and I decided that our financial mountain climbing needed to begin, and a pretty tight budget had ensued, I noticed a change in Karen’s demeanor. When I asked her about it, she said she just felt “blah.” Understanding that feeling more than I’d like to admit, I left her alone, but her soberness continued. She wasn’t being moody or irritable, but as a husband I could see there was something that wasn’t quite right with my wife. There was an uneasiness I couldn’t put my finger on.

I had decided to spend some time between my studies with a bit of  PS4, a habit that I’ve learned to reign in, as I know there are usually better things to do with my time. I put my controller down and asked her again what was bothering her. She then asked a very poignant question: “What if God doesn’t want us to have money?”

It’s a valid question, and one that I believe Christians should wrestle with more often than what they do. My wife was doing a bit of wrestling with this because of a few reasons.

  1. Christ wasn’t wealthy, not by any stretch of the imagination. When a scribe came to Jesus to pledge his loyalty, and to inform him he would follow Jesus anywhere, Jesus responded by stating “Foxes have holes, the birds of the air have nests, but the Son of Man has nowhere to lay his head.” (Matthew 8:19-20) Jesus depended on God to provide his every need and a roof over his head was no exception. The disciples and Jesus routinely depended on the generosity of others to shelter them.
  2. In 1 Timothy 6:10, Paul wisely informs Timothy that the love of money is the root of all kinds of evils. Incidentally, if one would continue to read that verse they would find the love of money being the reason some have wandered away from the faith. If one needed any more proof that the love of money, or greed, caused people to do evil things, take a look at our current election season. Research the absolute gross disregard for moral living from the Republican and Democratic candidates and find that they would say or maybe even do anything for the next hundred thousand dollar “donation.”
  3. The Bible clearly draws a distinction between the Rich Man in Hell and Poor Lazarus being with Abraham after both men died. The rich man was in torment. Abraham and Lazarus were not. And in a very desperate conversation between the rich man and Abraham we find that Abraham reminds the rich man that he was given good things in life while Lazarus had not, and there was no way that the rich man would find relief. The rich man cries out in anguish, asking that Lazarus would rise from the dead and go to the rich man’s brothers and warn them of the Hell he was experiencing. The nearly damning bad news came to the rich man, “if they will not believe the Moses and the Prophets, they will not believe one who should rise from the dead.” (Luke 16:19-31)

Almost makes you want to stay on the poorer side of life. I will focus on point three as it seems to be a hang up for a lot of people.

At first blush, it would seem money is something that one would want to stay as far away from as possible. To hear the repentant requests of a rich man in terror cry from Hell is not a pleasant sound, but we can imagine it, and maybe even make a collective hard swallow. Deep down, we ALL want more, and this is not the price we want to pay to get it.

Might I offer, that money is not the issue; but our problem, just as the rich man’s problem,  is the dogged pursuit of the things for this life, and the total disregard of riches for the next? There are a couple of things from Christ’s teaching of Lazarus and the rich man I’d like to point out.

  1. Lazarus was broken by the state he was in, his poverty was such that the dogs came to lick his wounds. What state would that put a man’s heart? What would it do to his mind, his soul? He longed for help, and I imagine his prayers reflected this. Money? Lazarus wanted food! He was desperate for help, and eternally, he found it. Just as he believed he would receive mercy from the rich man, he found mercy in God.
  2. Why didn’t the rich man help to feed Lazarus, to show him mercy in his time of need? Did he even think about it? Did he love his possessions too much to sacrifice them? Was he too prideful to even speak to the lowly Lazarus who begged at his gate? Regardless of the reason, he didn’t help, there was something lacking in his heart and spirit that enabled him to be generous with what he had. He was not looking for help, not in this life, or for the next.

The difference between these two men were the attitudes and motivations of their heart. One was apt to be in Paradise because he had little, he desired peace and looked upward for it, while the other, looked for nothing. He was content with the riches of this life. The rich man’s security and more than likely, pride, kept him from giving or getting help, for he had need of nothing. So Jesus says about the rich to his disciples, “For it is easier for a camel to go throughout the eye of a needle than for a rich person to enter the kingdom of God.”

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It’s THAT difficult for a rich man to see his need….

So, does God want us to be rich in this life? I would say that if it keeps us from seeing our need for Jesus and his salvation, the answer is a resounding, NO. God is “not willing that any should perish, but that all should come to repentance.” (2 Peter 3:9) Is money inherently evil? No. A goal for this life for my wife and I is to give abundantly, to missions, to needy folks, to those with no hope, financially or otherwise. Ultimately, so others can see their need for the next life, and ask that Jesus would bless them richly with salvation and mercy.

Jesus lived a perfect life because we couldn’t, and gave his life as the perfect sacrifice for sin. He rose from the dead after three days to be victorious from death and Hell and prepares a place for those who believe he did all of this for them. Believe. It’s a need we have, and one that will only be offered in this life. Eternal life will be the riches that will never be earned through works, but given, freely, as a gift to God’s children, but only if they will believe.

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Longer Shower’s Flat Fat Fees

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The more I look to save money, the more often I am finding it’s done over a fairly lengthy amount of time, and a year seems to be where it’s at for me and my family right now. Why a year? Well, I for one have found that I can barely blink before Christmas rolls around from year to year. It seems just long enough to make those pesky “insignificant” amounts (i.e. cup of coffee, vending machine snacks, late fees for utilities) add up to where it seems significant. So we’ll take a look at something we all pay and plan to pay indefinitely, but rarely have the forethought to do anything about to make our lives easier: utility bills.

Flat Fees

First, I love a flat fee. Who doesn’t? It’s awesome to know exactly what your bill is going to be each month, and never think about it. Our gas bill is like that. Some time a couple of years ago, we contacted our gas company and asked them about an average bill pay plan. Someone mentioned they work with their customers and we decided to investigate. Turned out our average monthly gas usage based on a year was $90. So that’s what we pay per month, $90, whether we use that much or not. The gas company keeps whatever surplus there is on those months we don’t use as much gas, like in the summer, and credits our account. When we use a ton, say in the winter months, the over credited amount goes to what we use. We pay one flat fee all year-long, and the gas company keeps our gas on. I can’t say I know all about it procedural wise, I am not employed at the gas company, but the logic is sound.

Not all utilities work this way, but that doesn’t mean the average payment can not be made, all it takes is a little forethought and research.

As I added up our electric bills, I found that we spend roughly $1500 to $1600 per year in electricity. Personally, I was shocked we spend that much. I’m not sure why the shock factor, I suppose I’ve never considered the cost on a yearly basis. I normally just cringe when the bill hits the mailbox month to month and hope it’s not too high. So after finding the sum total per year, Karen and I decided we would start setting $130 a month aside for electricity, regardless of how much the bill is. Some months, this self-induced premium will cover the lower amounts, and we’ll just stuff the leftover in an envelope; other months, the bills will be too high for $130 to cover, so whatever’s in the envelope from lower months will come out to save the day. Do this with your water bills, trash bills, or whatever bills you happen to pay a variable amount on.

Use Less

As Jeff Foxworthy notes in one of his comedy routines, “TURN SOMETHIN OFF!” I cannot count the number of times I’ve went behind my four-year old princess to turn out lights. She’s tall enough to reach the light switches now, and she utilizes every inch of her vertical reach in order to make sure all rooms are well-lit. To not follow her means that I just as well throw my money on top of a lamp shade, let Babygirl flip the switch and slowly watch it burn.

Along those lines, cut the shower time. If you have teenagers, you know this is a must. I want someone to invent a way to cut showers off by remote, or put a timer on the shower head (maybe I’ll invent it). When 10 minutes is up, so is your shower, get in, get all crucial areas washed, finish up any bonus areas, and get out. Money is flowing down the drain.

“That’s a little strict!” You say? How many gallons is your household using a year? Do you know?I can get in and do all things shower and get out in seven minutes. A family can’t help but save money when everyone is running that kind of efficiency in the bathroom.

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Late Fees

The dreaded late fee will destroy a yearly budget. Pay utility bills on time. A late fee not paid is money in our pocket. We used to be terrible at this, but realized it was happening a while back. If payday didn’t fit where it should so we could pay it on time, call the utility company and get your due date changed. Most places are pretty reasonable to work with you if they aren’t the size of Podunk, USA.

Try some of these things out and see where the finances are in a year! It might just save you on aspirin too.

Paper or Plastic? Or…Boxes?

“Please stop throwing away the bags.” Karen asked for the second day in a row as the bag hit the bottom of the trash can. I normally store my lunch in what has come to be known as “Wal-Mart” bags and toss it after emptying the contents of plastic containers that held whatever leftovers we had from the night before.

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“Why?” I thought with confusion in the five seconds it took her to answer the question right after I had thought it.

“We don’t go to Wal-Mart any more.”

This is not a post railing against Wal-Mart or any other big chain retail or grocery store. They have their place in our life, but they don’t have it as often as they used to. I remember one Saturday complaining to my wife that it seemed like we had just been to the same store the day before. Shortly after we realized we had actually been to that same store for something nearly every day that week!

After my family woke up and realized the way we spent money, groceries were automatically an area we began looking at closer. I have to give credit to my frugal wife, she is the one who took charge of this area of our lives and is doing an excellent job. These are a few observations I’ve noticed since we started to live differently:

Budget for groceries

Make an amount that should be spent on groceries, now according to Dave Ramsey, double it. We spend way more than we think we do. Once that’s set, start planning.

Plan a trip once a week

Don’t underestimate this point. Gas isn’t cheap. Whenever we are making a single trip to the store, we are hit with a double whammy. The money we are going to give some merchant for whatever item we happen to make the trip for, and the gas we are spending to get to and from the store. If we go more than once, it’s multiplied. Right now gas is about $1.85 a gallon on average here in OK. My wife and I live 6 miles away from our local Wal-Mart, her car gets roughly 24 miles to the gallon. Say we make two trips a week to buy groceries and what not; that is 12 miles each trip, so if we go 2 trips, we are spending 1 gallon of gas, minimum. Multiply that by 52 weeks in a year and we’ve spent the same amount we would in the store alone on one trip, $96.20. Doesn’t sound like much huh? Remember, this is JUST to go to the store, not to a ball game, not to drive to work, or any other fun family function. It’s even better if it can be planned on the way home from work.

Make a grocery list BEFORE going to the store

One would think this goes without saying, but we won’t. Think before leaving. Write down the days of the week, think about eating for each meal, each day. Put together a menu. Once the menu is built, buy the ingredients needed for it.

Combine ingredients across different meals to save extra.

For instance: This week, I’m eating oatmeal for breakfast. I am forcing myself, because high cholesterol dictates this. I will also be eating chicken of some sort at least twice this week, so I buy a big flat of it, to make sure that there is enough for myself, Karen, and left over for our lunches. Sandwiches are a good cheap meal: bread, lunch meat, cheese, mustard, veggies to go on sandwich. How about some beans? Good fiber! Yes, write it down. Need stuff for kids? Pizza, cookies, fruit, or how about they just eat what we eat? Got it all wrote down? Let’s go!

Try some place different

Do some research about discount grocery stores, there may be one near that will help save a bundle. According to Money & Career Cheat Sheet, here are a few of the more affordable stores across the nation. Incidentally, we love Aldi’s. It’s in the next town over, but it’s well worth the gas spent (or saved because we planned accordingly). I just had a friend exclaim how she’s going to Aldi’s today, she’s heard too much good about it. Sure, patrons have to bag (or box) their own groceries, but it makes grocery shopping affordable. It’s good for the environment too. We use Aldi’s own boxes to put our groceries in, rather than them crushing them and sending to a recycler. No plastic bags for me to throw into the bottom of the trash can and then go to a landfill because I’m not thinking when I come from home from work.

'That's Jeb Lambert. He was actually the first one to say 'paper or plastic'. Before that everyone said 'plastic or paper'... I mean, can you imagine?'

 

Eat what is bought

Again, this should go without saying; but I can’t count how many times we have bought good, wholesome groceries and they rotted in the fruit or vegetable crisper while we went on a fast food bonanza. Lately our refrigerator looks naked just before a trip to the store. One would think we aren’t making it, but we are, we are just controlling ourselves. Babies aren’t starving, the boys are fine, and K and I might be losing weight because we are making wiser decisions without going to the local Sling-A-Bean Burrito Shack.

Take advantage of discount coupons

Okay, I was going to try to go without mentioning coupon clipping, but I would be lying to say we haven’t had a cheeseburger or pizza every now and again. The only time we buy them, though, is when Karen gets a fancy coupon the store can redeem on her smart phone through email. It comes in handy in a pinch, but a pinch only comes once a week, and it’s BUDGETED.

Finally, give this a TRY. If it gets screwed up, so what? Try again. Savings will come but don’t give up! It’s food, we have to eat, but we don’t have to eat from stores that think they are monopolies. Save gas and coupons, save money by not bingeing because a grocery list was made, and relax. Everything’s going to be fine. Me and mine are out to prove it.

Pitfalls of the Climb

It’s interesting how just about the time a person thinks they are standing on solid ground and can breathe for a moment, the ground falls out from underneath their feet. That’s been our experience over the past few days.

'No. . . this isn't the fiscal cliff.'

 

Many companies do biometric screening for insurance credits as an incentive to keep employees healthy and well. It’s good for the employee, who can get a decent bonus to stay in shape; and it’s good for the insurance company, who doesn’t have to pay as many claims to employees who are staying well and away from the doctor. Such is the case with my company. Let’s just say, I wasn’t healthy enough to make the cut. It’s something that I am now making a full-time project and has lit a fire under me to change my habits, routines, and diet so next year the wellness credit will be mine. In the meantime however I found that the lack of said credit is more than likely going to eat up the money I save in carpooling, so there’s that.

Another challenge we’ve run across is a balance that has come due for my college course work. It was not a charge I was expecting to pay as I expected the Pell grant and student loan would be covering it. I received a refund not long ago for the amount of the balance due, so I assumed the balance was paid over and above and that was the reason for the refund. Turned out the opposite was true, the refund check they sent us was actually supposed to pay the balance that is now due and we simply had to “pay the refund back” as the good folks at the bursar’s office so eloquently put it. My eyes couldn’t roll back in my head far enough to accommodate the frustration I was feeling. In the end, we had to pay the balance due from our meager savings.

Ah yes, and to add insult to injury, my son’s “pay as you go” phone comes due every 30 days. Not every 31 days, every 30 days. Meaning that the amount is taken from our account a day earlier every month than it was from the previous month if the month had 31 days in it. Since there are several months that have 31 days in it, when that bill comes due is basically a moving target, this month it debited our account in the negative by $10.

I was hoping at the very least to have a positive balance to report once we were paid on the 15th….

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I must admit, a couple of days this week I wanted to throw my hands up, stick my head in the snow and ignore it all, or freeze to death of hypothermia. I grab the rope, ready to repel, or just jump off the metaphorical cliff face in frustration, harness or no harness (a bit mellow dramatic I know).

All of these things are annoyances. Pitfalls on the journey up the mountain. Nevertheless, we have to keep going, at a slow pace, even trudging if need be. IT’S GOING TO BE SLOW GOING. Pay more attention to billings, get out the paper, write it all down, and build the budget again. Hammer another stake in the cliff face and pull ourselves back up.