Posts Tagged ‘ budgeting ’

Having Another Child, From A Business Perspective

Tuesday, October 29th, 2013

2 years, 11 months.

Dear Jack,

In 4th grade, I had the privilege and honor of doing the cartoon for my town’s junior edition of the newspaper.

The movie Dick Tracy was in theatres the summer before, so I crafted up a clever (?) comic strip called Nick Tracy.

As you can see, Nick Tracy steps in to save the day, as a bully-looking character named Alan mentions to a more studious-looking fellow that he is thinking about quitting school.

(I wonder how old I intended the characters to be, because I sort of get the impression they were in 4th grade at the time, just like me.)

But when it was all said and done, the takeaway actually had less to do with staying in school and more about the reason why kids should not quit school: so they can get a job. I was only 10, but I was concerned about my classmates getting jobs.

You will always know me as the Dave Ramsey-endorsing, Robert Kiyosaki-following (author of the book Rich Dad, Poor Dad), credit card-bashing dad I am. Granted, it took me plunging into financial hades (I’m trying to avoid the cliche “rock bottom”) to be the budget-obsessed, debt-free parent I’ve worked so hard and deliberately to become.

So while there was a learning curve involved as I transitioned into my 30s, ultimately, as I rediscovered this old comic strip of mine from 22 years ago, I now realize: I’ve always been seriously focused on money.

What I never cared about was buying trophies with money. I laugh at the idea of a person being congratulated about a new car purchase: They’re simply being congratulated on having to make car payments.

I’m not impressed by anyone’s material possessions they can afford (or can give the illusion of affording, thanks to credit cards and/or loans), but I am completely impressed by people who actually know how to manage their own money. Because I am so eager to learn from them.

The irony is, I’m impressed by the fancy things people don’t buy, but could afford. To hear of a CEO choosing to drive his old Toyota instead of a new BMW, that’s a man I’m going to respect.

With that being said, the main thing holding me back now from the thought of wanting to have another child is the financial aspect of it. Robert Kiyosaki has trained me to see the world in terms of assets and liabilities.

In his book, Rich Dad, Poor Dad, he recognizes children as financial liabilities. If I am looking at our family as a business unit, as I feel I should, then I have to be willing to remove the sentimentality aspect of bringing another child into this world and instead attach a dollar sign to your potential younger sister or brother.

As I learned from my editor in an article she wrote a few months ago called Will Millennials Be Able To Afford Children?, I found out that not even counting the cost of college, it costs around $240,000 to raise a child from birth to age 18.

You’re worth it, by the way!

But that would it take for me to feel comfortable (and passionate) enough to justify in my mind the expense of having another child?

Based on our current income and our plans to move to a better neighborhood so that we can get you into a good school system, I’d say… it would take doubling our family’s income, plus somehow miraculously being able to spend more time together as a family. Then I might be a little bit more ambitious when it comes to growing the family.

I’m not daring God at all on this. That’s just what it would take, based on where I’m at with it right now.

 

Love,

Daddy

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Will Cash Be Obsolete To The Class Of 2029?

Monday, February 4th, 2013

2 years, 2 months.

Dear Jack,

This past Saturday morning as I laid down on the floor in a haze, having woken up at 5:40 AM with you, I watched you carry around one of Mommy’s old purses, which for some reason you called your “wallet like Daddy’s.”

You then took out an old expired debit card and slid it across your high chair:

“I buy groceries with my money.”

The fact you have quietly observed Mommy and I scan our debit card enough times to associate that action with the word “money” is interesting to me.

You do understand the concept of coins being money because you have a piggy bank.

However, I’m pretty sure you have no idea what cash is. I just don’t know that you’ve ever seen Mommy or I use it.

By the time I graduated high school in 1999, I had never even heard of a debit card. All I ever used to buy anything was the green stuff, not a card.

You will graduate high school exactly 30 years after Mommy and I did. It will be the year 2029.

I’m wondering by the time you’re 18, if using cash to buy something will be as obsolete as land line phones, video rental stores, or writing checks.

To you, money may simply be a debit card. (We are Dave Ramsey followers so the thought of a credit card is taboo in our family.)

As for me, I grew up seeing how much each individual bill was worth. I knew that I preferred a $10 bill over a $1 bill. The numbers meant something more… certainly quantifiable.

For you, though, the concept of money will be much different if you grow up using a debit card instead of cash. When you look down at a debit card, you won’t literally see a sign noting $20.

Therefore, it becomes your parents’ responsibility to teach you the importance of budgeting. We must incorporate in your mind that a debit card does not symbolize simply the total amount of money in the account, but more importantly, it symbolizes the key to accessing the specific amount set aside for that exact purchase that particular day.

Mommy and I have definitely had to learn the hard way when it comes to money. But this week, we are paying off our other car.

Then, we’ll just have the rest of my student loans before we’re debt-free.

I think it’s cool to see you scan your debit card like Mommy and Daddy. I really look forward to teaching you how money works; even if it’s without getting our hands on cold, hard cash.

 

Love,

Daddy

 

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5 Impractical Ways To Save Your Family Money In 2013

Tuesday, January 1st, 2013

2 years, 1 month.

Dear Jack,

From first glance, we look like a pretty normal American family. If people only knew…

As for this time around, I would like to focus on 5 impractical ways that our family saves money…

I’ve heard it said that Generation Y parents are predicted to become much like the penny-pinching generation who was our age during the Great Depression.

Well, I believe it. Here’s the how and the why.

These are 5 impractical ways we as a family save money:

1. We don’t pay for cable or satellite TV. Instead, we pay $7.99 a month for the Netflix streaming plan. We have unlimited access all the shows you love, like Thomas & Friends and Sesame Street; for Mommy and me, there’s Lost and The Office. That’s not even mentioning all the movies that are available.

2. We don’t pay for Internet on our phones. Since we’re already paying for wireless Internet for our house and because our jobs don’t directly depend on it, it’s difficult for us to justify paying even more for Internet so we can play Angry Birds on our phones while we’re bored. Because honestly, as your parents, we never have time to be bored. I wouldn’t mind that, though.

3. We hardly ever go out to eat. By hardly ever, I mean, on a bad month, about twice. While the documentary Food Inc. conveys a message that a family of 4 can eat for less on McDonald’s Dollar Menu, that’s not accounting for the fact there won’t be leftovers the next day. Shunning restaurants saves money.

4. We don’t update our electronics or possessions that cost over $100. My iPod has a cracked screen and its charge only lasts about 2 days. The screen of our 2006 model TV is only 30 inches wide, yet the length of it is nearly just as long. Oh yeah, and it’s been struck by lightning, so parts of the screen are discolored. Mommy and I have had the same cell phones for well over 2 years, but because Verizon recently started charging an “activation fee” for their “free phones,” we decided to just keep our old ones. In other words, if it ain’t dead, don’t fix it.

5. We live by a strict weekly budget, on an Excel spreadsheet. Like financial guru Dave Ramsey says, “If you don’t tell your money where to go, it will tell you where to go.” It’s impractical to account for every dollar spent, but knowing that we are projected to reach “debt free” status in 2013, I don’t mind living an impractical lifestyle.

So what if we shun credit cards and cable TV like the plague, or perhaps more relevantly, like high-fructose corn syrup? Mommy and I are obsessed with telling our money where to go.

We’ve learned the hard way. Just a couple of years ago, our money was telling us where to go. As for 2013, Lord willing, we will finally be free of debt.

Somehow, becoming debt-free is one of the most practical things I can think of.

 

Love,

Daddy

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The New Version of Our Old Selves

Thursday, July 14th, 2011

Seven months.

After all the plotlines my wife and I have lived through in accordance to our move from Nashville to my hometown in Alabama, and now back to Nashville again, it’s only natural for us to wonder: Why?

Q) Why did we spend seven months and [x amount] of dollars to live here in my hometown, only to have to go back to where we came from?

A) It took moving away from Nashville to cause us to become positively changed people so that we could go back to Nashville as the necessarily improved versions of ourselves.  But we didn’t know any of this when we left Nashville.

I can confidently say that living in the small town of Fort Payne, Alabama has caused us to fully adopt the millionaire mindset (living as frugally as possible.)  Because we became Dave Ramsey followers shortly after we got married and have since been living on a budget, we thought we were doing pretty well when it came to financially planning our lives.

But we had much more to learn.  And I know for a fact I would have never learned to be this much of a penny-pincher if it weren’t for my unemployment and my wife’s inability to get a job, despite having a Master’s degree.

The move to Alabama has been the most humiliating process I have endured in my life:  Note that when I used the word “humiliating” just now, I meant it in the sense of being humbled and disciplined, not embarrassed or shamed.  (Here’s Wikipedia’s definition: “Humiliation is the abasement of pride, which creates mortification or leads to a state of being humbled or reduced to lowliness or submission.”)

Looking back, I can see how our former budget allotted my wife and I too much “blow money” (Dave Ramsey’s term for extra cash for personal enjoyment), too much “gift money” (money spent on gifts for birthday and Christmas gifts for our friends and family), and too much “food money” (money spent on eating out at restaurants and going out for coffee on the weekend).  Not only that, but now we have learned to ask the question, “What will cause us to earn/save the most money?” when making any decision, big or small.

The version of me from a year ago just didn’t care about money.  I only cared about happiness.  And that was an epic flaw in my thinking.  Now I realize that without conservative financial planning, I will not have sanity.  And without sanity, I can not be happy anyway.

The truth is this: Without moving to my hometown and being psychologically broken down, I would have never been a responsible enough decision maker when it came to finances.  Moving to Fort Payne was the only cure for my disease.

It’s more than just refusing to use a credit card or to buy name brand products.  It’s a matter of taking my finances nearly as seriously as I take my love for my wife and son, health, and my religious beliefs.  So now as we rebuild our lives again, we will be able to be better stewards of our income.  Our money will be better saved, better spent, and better given away.

Photos courtesy of Moments in Time Photography in Fort Payne, Alabama:

www.mitbyamie.com

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