One Million and Beyond

Planning Ahead

August 30th, 2008

Planning ahead can be incredibly beneficial when its actually done rather than talked about. Over the course of my career I’ve worked in project management and I’ve seen a lot of good plans go awry and projects started without any planning. When things did go awry the situation was a lot easier to fix and direction restored when the project was planned out. When you don’t plan ahead you don’t know what to expect.

Without a plan you end up going in all sorts of directions for without a direction. You loose your focus. Say for example you want to start a business and you’re a good developer (programmer) and good with computers. You take the leap and go for it one week you’re fixing a company’s network and the week after you’re looking after a small broken program that needs fixing. You’re passably good at all of these items but there is no real direction to this business of yours.

The analogy paints an interesting picture in that you might succeed without a plan but the likelihood is far lower because there is no purpose behind what you’re trying to accomplish.

Not everything in life needs to be planned ahead

Yes there are times when things simply don’t need to be planned out – a spontaneous trip to the beach can end up being a beautiful and memorable day. I would like to think that intuitively people should know when they need to pause and plan out their actions but too many people don’t even do that. I could be wrong but I think this one is based on experience; If the activity is something that you think will be complex or challenging then you should plan it out.

Planning ahead can save you a lot of money

When I was in high school my computer science teacher showed us a very ancient video that talked about planning out a software project. The video was dated when we watched it in the early 90’s but what I remember from that video to this day is fixing a problem when planning out a programming project might cost you $1000 in the planning stages but finding and fixing that same problem as you’re about to get into testing might cost you $25,000. That’s a big difference and it applies all over the place.

A do it yourself home reno – if you start without planning a project out can mean you need to call a plumber in when you’re 95% done and he tells you that you have to rip up all the work you’ve done to just to be able to finish the last 5%. They might not be great examples but it happens all the time.

Planning ahead is particularly important when it comes to your money – without planning ahead you end up floating along without much direction. If you happen to be saving your money you might be missing out on interest or investment opportunities.

If you are living pay to pay and beyond your means just making ends meet can be a challenge planning ahead might mean the difference between paying late fees on your credit card bills (that you might forget otherwise)

Planning a project or your finances out can seem like it’s a real pain in the butt but when you don’t do it there is a much bigger chance that something will go wrong and when that happens you lose money and time. I’ve seen both sides of the picture and yes you can have a successful project that’s not planned out but I would say these are rare. You don’t have to go to the extreme because you can get stuck in analysis paralysis where you spend more time planning than doing but the concept can save you thousands of dollars.

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Wanted: Passion for something – anything will do

August 26th, 2008

Take a look at anyone really successful in their subject matter and you’re find a couple things that got them that level of success: passion and perseverance. The ability to pick yourself up when things don’t go your way and keep working towards your goal is the first one that is really important. You have to learn from your mistakes and grow.

The second one, passion, is a bit more elusive. I’ve been doing a lot of introspective thinking lately and I’m noticing that a good reason for my situation (still being in debt) is in a very large part a lack of passion. I think that this is a situation that a lot of people find themselves in. I’m not sure if people notice this or not but when you look around you tomorrow how people are really passionate about what they’re doing?

Is passion something that only a handful of people happen to have? I don’t think so. I am slowly coming to the conclusion that people either loose their passions somewhere along the way or they simply don’t nurture their interests to the point of becoming passions. A lot of HR books and people writing posts about finding your passion write that you should start with what you wanted to be as a child. Personally I don’t truly remember what I wanted to be as a kid. It changed and often had the wrong things associated with it.

I didn’t grow up with wealthy parents, we were never so far into debt that we didn’t have food or anything remotely close but we also didn’t have our own house because or much extra money. My parents were reasonable people that provided for our needs and some occasional expenses. In part this lead me to wanting to be things like lawyers or people in positions of affluence. I know now that most of these jobs that I ‘wanted’ to be were for the wrong reasons and I wouldn’t enjoy them now.

Which brings me back to a starting point that I’ve been bumping into for a few days now; what am I passionate about? Unfortunately the answer is elusive even if it exists. There are a few things that I enjoy as interests including personal finance which is why I write about it but when I take a step back and really look at my results there is a lot more that I could have done. This blog has been up for almost two years and I’ve done pretty well with it I think. Truth be told I’m still blown away that there are more than 165 people that subscribe to the RSS feed. But unfortunately I write about personal finance and my personal net worth has stayed virtually the same since starting this site.

What does that say about my passion for personal finance, and growing my money? The answer isn’t a whole hell of a lot. In the two years that I’ve had this site I could have significantly lowered my credit card debt and paid off my car loan. Both are under control and very slowly lowering but they’re still there. My investments and savings are limited because a real drive to get rid of them is missing.

I read a great post this morning by Leo from Zen Habits that says you shouldn’t compare yourself to others and I have to agree. My weaknesses compared to another persons strengths does me no justice and only helps lower my self esteem. But I would say that comparing yourself to successful people who gives you a point of reference to learn from. I can see potential for growth and having passion about something and I find that it’s lacking when I compare myself to others not as a measuring stick but to see what they’ve done.

I honestly think that this is an open topic of thought for myself and I think that I need to cultivate some of my interests into stronger ones and potentially passions. I originally started this blog writing about money with the goal of having a million dollars of liquid assets by the time I turn 35. I’m now 31 and I make about half of what I was making when I started writing. I am doing a lot of introspective thought and I will be looking at everything a little bit more critically to see what I’m doing and to see if I can’t find that passion (at least when it comes to money I know was there once).

Posted in Commentary, Financial Situation | 5 Comments

Week 13 Budget Assessment

August 25th, 2008

The only thing that I can say for this week is wow did things get de-railed from my budget. I’m just glad that I had some extra cash on hand or I would have needed to dip into the credit card department. The unfortunate thing is that as a result I won’t be making any head way. Before I go much further into looking into what happened here are last weeks numbers:

This week’s budget was large to start with because of the expected car maintenance which was the one category that was below what I was expecting to pay. It was nice that the car didn’t cost me as much as I thought it might – this was a pleasant surprise. The remaining categories are a series of smallish reasons to be over which all added up to a lot.

I guess I might as well go through the list one by one.

Alcohol – I was within budget until we had a surprise visit from some friends to help us move some furniture around. I offered them a couple beers to help me move and I ended up getting a few for this current week.

Lunches – I ate lunch out of the office pretty much every day of the week and then paid while my wife and I were doing some shopping. All of this spending could be billed as stupid spending since it didn’t need to be made at all – it was all laziness.

Food – The one that really sticks out for me is the food category – we shopped at a slightly more expensive store and we were in need of stocking up on some of the staples. I really didn’t think it would be this high but it was. The only saving grace here is the fact that this current week’s budget should be considerably lower.

Entertainment – This category is nicely under control which is nice.

Smokes – I ended up getting one extra pack during the week and I bought in a couple stores that were more expensive (again this is more of a stupid spend than anything else).

Misc – This category would have been very nicely under control but we purchased a light fixture for the house. This was a purchase that would have happened at some point or another and we were being picky about the light.

Transportation – The car ended up costing me a lot less than I was expecting (which is good or this week would have been scary).

Overall I’m very disappointed with the results from this week. After seeing the fact that a little bit of inattentiveness and my budget ballooned out of control I’ve put one small change into effect. I’m going to be posting daily updates in the sidebar to the right to make sure that I stay on track with my spending. I just need to make sure that I stay on top of my spending or I might end up falling into the bad habits that got me and kept me in my mess for so long.

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Weekly Budget – Week 14 (Aug 25-31)

August 24th, 2008

This past week ended up being fairly expensive for me higher than I was expecting. The goal for the upcoming week will be to bring things back into check because this unexpected spending is going to hurt my budgeting and my being able to continue to pay my bills. I’ll cover off the unexpected spending in tomorrow’s assessment post. Here are this week’s projected spending:

The biggest difference from last week will be the fact that my transportation costs are back down to a more reasonable $10 which is my standard backup amount when I have to pay for parking or take transit somewhere. Other than a few parking tickets that I’m going to have to pay off I don’t expect this one to jump up much for a couple months.

I’m going to cut the alcohol spending down a bit because I really don’t need to spend as much money as I have been on this category. Continuing on vices the smoking is pretty much the same as last week. I’m still debating a proper quit date but that will be a separate post and soon.

The only other main difference with the numbers from last week is the decrease in the food spending. We purchased a fair amount of groceries this week that will take us into at least the middle of the week before we need more. I think that this number might be significantly lower but I would like to err on the cautious side.

The one non-financial goal that I would like to accomplish this week is to update my weekly goal on a daily basis. By this I mean that little box to the right that tracks my ongoing results each evening. I found that when I didn’t do this I wasn’t as careful with my money but by having this constant reminder I think this weeks rather tight numbers are very achievable.

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Book Review – You’re Broke Because You Want To Be

August 21st, 2008

The idea behind the title of You’re Broke Because You Want to Be is a very profound one; your financial situation is the way it is because you chose it to be that way. Most people would start citing excuses or reasons why it isn’t but the reality is if you wanted your financial situation to be different from what it is then you would make the necessary changes. The general premise behind this book isn’t a new one and its one that I agree with whole heartedly – you are ultimately responsible for your actions regardless of what they are.Larry Winget’s book takes it a step further and forces you to think about it a bit deeper. If you’re in debt, heavily in debt, the actions you take will dictate how your financial future unfolds. If for example you decide to spend money you don’t really have then you’re going to continue being in debt regardless of how much you complain about it. I know this is true because over the past few years my financial situation has stagnated; although there might have been some positive movement I’m still roughly where I was a couple years ago.

You’re Broke Because You Want to Be takes a very hard no nonsense approach to the problem and makes you confront the issue without giving you room for excuses. The bottom line is how you spend your money really makes a huge difference and if you continue to do what you’ve done then there is no way you can possibly expect any form of change in your situation.

Money Defines You

This was a great statement from the book that really caught my attention. In a world that likes to sugar coat a lot of stuff this one statement is truer than many I’ve read in personal finance books. How much money you have defines what you do and how you do a lot of things. People spend more money than they make and the net result is then end up in debt. They become defined by this debt and then the excuses really start flying.

I really enjoyed You’re Broke Because You Want to Be and I highly recommend it to anyone whose financial situation isn’t as good as they would like it to be. The no nonsense down to earth approach Larry Winget takes really forces the issue and I enjoy reading his books. They force me to get angry with my situation and this forces action. The other thing that I really like about Larry’s style is the fact that he places great importance on education and improving your situation; it really takes the wind out of all situational arguments.

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Week 12 Budget Assessment

August 19th, 2008

I was a little surprised when I tallied up the numbers for this past week. I knew I had gone over a bit but I didn’t think I was almost $100 over my budget for the week. We had some family over this week and I was expecting a few additional costs but nothing dramatic. Here are this week’s numbers:

I wasn’t surprised when I looked at each category individually since the jumps aren’t drastic. The Alcohol spending was a bit above what I was expecting but then again I haven’t purchased any of the better beers in a while so I wasn’t really estimating properly when it came to that. Food was a bit more than I was expecting as well but again the difference wasn’t great. This goes for pretty much every category.

The one category that completely surprised me was the Gas costs – I did a bit more driving this week but I didn’t think I had done quite that much. I guess all of these numbers really do add up quickly (gas costs included). The other item that wasn’t budgeted and planned for was any entertainment costs; when the in-laws were in town I have a beer with a couple of them and treated. Not expected but not a bad way to spend some money. Overall I’m a little disappointed that my budgeting was so off this week and I’ll have to keep this in mind the next time that there’s family visiting.

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Weekly Budget – Week 13 (Aug 18-24)

August 18th, 2008

This week’s budget is brought to by the common cold – we thank the virus for infecting us. I managed to get a cold in the middle of the summer which is annoying but there’s not much you can do about a cold. Hopefully it’ll pass quickly. This week’s budget is a bit of a wild ride since there are a few unknowns coming up that can completely throw what I’m projecting out the window. Here is this week’s budget:

So at first glance most of the categories are pretty similar from week to week with $100 going into food this week. We’ve gone through most of the food in the house so it’ll be time to spend a little bit more to get stocked back up. The major difference this week is that I need to get some car work done so the transportation budget it $250. I’m not sure how much it will end up costing – I need an oil change and then to get my car emissions tested. If everything goes well then I’ll be below budget on that line item but unfortunately this is one of the unknowns this week.

The second unknown is one that I haven’t included in the budget. We are supposed to go visit family out of town this weekend. If that comes to pass then the $30 for gas this week won’t even get us part of the way there. But I’m not sure if we’ll end up going or not (especially if this cold doesn’t go away quickly).

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Carnival of Personal Finance #165 is Up

August 14th, 2008

This week’s Carnival of Personal Finance is up, this week it’s being hosted by No Debt Plan and he themed the whole carnival around College Football. I was included this week which was very cool but there are a lot of great articles posted up, here are a few that caught my attention:

Entrepreneurs: Is Extreme Frugality A Waste of Time?

Chasing Money – Is There Ever An End To It?

Ways Not Having a Job Impacts Our Personal Finances

Spare Change

Definitely check the Carnival out – they’re always full of great posts.

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How to spot stupid spending

August 12th, 2008

We’ve all spent money on things that really didn’t make sense before. You know those times where you just weren’t paying attention and overpaid on parking or didn’t pay and ended up with a parking ticket. Those moments where you simply stop and shake your head wondering what were you thinking. For me that’s stupid spending. I’ve always thought of this that way but while reading Larry Winget’s You’re Broke Because You Want to Be it really came bubbling forth; I used to spend a lot of money on stupid things.

Although personally I’m a lot better at it now than I used to be I still occasionally catch myself and shake my head. For example: I need to pay for street parking where I live and I can get weekly passes from the city for $15 or a 6 month pass for $60. Personally this one is a bit of a no brainer; I should have gotten the 6 month pass. There were some timing issues with getting one and the weekly one was available online so I got that for a few weeks. Now this is a stupid expense for me since all I needed to do was make a bit of effort and I would have saved myself a bunch of money (mostly on the handful of parking tickets I ended up getting). All of this is wasted money, the weekly passes and parking tickets included.

Very often I find that the stupid spending comes about from laziness. If you happen to forget to go to the bank to get cash and decide to use a competitors ATM. Not paying attention and paying a late fee on a bill. All of these are from us being lazy. I know I’ve done it and I’ll probably do it again. Most of the time that I end up with stupid expenses I know about it, which makes them worse and I’ve started tracking a stupid expenses category in my weekly budgets.

Why catch these stupid expenses?

I’m getting ruthless on this type of spending because I’ve decided I’m done with being in debt and broke. I know it will take a long time to get out of the problem it took me years to get into but I need to stop spending my money on truly stupid things. I don’t mean trimming down miscellaneous spending since it will always come up and a lot of these things are actually necessary. I want to remove the unnecessary and pointless wasting of money like my parking problem (which is solved) and my ATM fees in the past.

The reasoning behind this strong push to remove stupid spending is because if I’m able to catch $10 a week which is entirely possible I’ll end up saving $520 a year in wasted money. That’s a whole lot of money to be throwing away for no reason and that money will be put to much better use such as paying down debt.

Another reason that I need to catch these stupid expenses is that I can’t afford to have them at the moment. The reality is that for many people that $10 a week in stupid expenses is really nothing significant and they would rather spend the money for the convenience. At the moment I don’t have that luxury and I’m frustrated with myself for wasting money for so long.

To close off this post I wanted to start a list of stupid expenses that I’ve paid in the past as both an example and get ideas from you, my readers. What have you spent money on that has been a truly stupid way to spend your money?

The List of Stupid Expenses

• ATM Fees
• Parking Tickets
• Late Fees on bills
• Buying duplicates of books
• Buying extended warranty on my car
• Unnecessary spending at the grocery store
• …

Posted in Commentary, Financial Situation, Saving Ideas | 2 Comments

Week 11 Budget Assessment

August 11th, 2008

This past week has been a great week for me since I was able to not only pay all of my bills on time and get caught up on a few things that have been lagging but I was also able to stay below budget. The best part is that i was able to stay 10.8% below budget. This is a significant amount and here are the numbers:

I made a concerted effort to bring my lunch which translated to only spending 4.66 on lunch this week. This is one of the categories that I’ve really made an effort to keep tabs on since its extremely easy to pop out for lunch spend $10 rather than taking 10 minutes to bring lunch from home. I know that this is part of the way I got into debt and stayed there. With a little effort I’ve been able to keep my food spending in check and this week is a perfect example of this.

I did end up spending more money on food but this is being tempered by my not dpending any money on miscellaneous items. This was a bit of a trade off with my wife; she spent a bit of extra money on what I’d consider a miscellaneous expense so I spent a bit of extra money on food.

The biggest expense this week was paying for my parking and as it turned out I wasn’t able to buy a 6 month street parking pass since it’s close to the end of the year. I ended up only spending $44.60 rather than the $60 I was expecting. I’m glad that I finally managed to get the parking pass taken care of since continuing to pay for weekly passes amounts to nothing more than stupid spending (and the parking tickets are even stupider).

Other than this I was able to keep my smoking and alcohol costs down a bit which I’m happy about and it’s nice to know that I am actually in control of these items. I might have been able to cut back on these a bit more but I’m still happy because both were under budget.

Overall I’m incredibly happy with my results this week. I’ve never been this far below my budget and I’ve paid for parking till November reducing a regular weekly cost for me.

Posted in Budgeting and Planning | 2 Comments

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