Jana Says

Living life from cover to cover

Financial checklists

by Jana 34 Comments

I am a fan of lists. I keep lists for everything—to-dos, grocery shopping, gifts, blog post topics, bills. You name it; I probably have a list for it somewhere. In fact, I love lists so much that the other day my 5-year-old comes out of the bathroom and says “Mommy, we’re out of soap. Put it on your list”. It’s so rampant that even my 5-year-old knows about them.

List are necessary

I must have lists. Normally, I have the attention span of a gnat. One minute, I’ll be happily working on a blog post and then I’ll decide that I need to take a look at my Google reader which leads me to another blog which leads me to the news and so on and so on. You know the board game, Candyland? How you can get all the way to the top and then pull a card that puts you back down at the bottom? My brain follows that same type of nonsensical path to get to the end goal of completing whatever task I’ve been distracted from.  Lists bring me back to my starting point. They keep me focused and on target.

My lists also highlight where I’m succeeding and where I’m failing. For instance, if I have a to-do list that involves writing, laundry, cooking, grading papers and running errands, I’m will most likely cross off everything except laundry. So my to-do list for the next day will also have laundry. This pattern will probably repeat for about 4 days until I finally get around to the laundry. I will find every excuse not to do laundry. That is an area where I fail.  If it were not for my list (and the mountains range of laundry populating my basement), it would be hard for me to realize this is an area of weakness.

The financial lists

I use the same concept for tracking my finances. I use lists to keep me on target and focused. To do so, I maintain separate lists for all different parts of my finances. For instance, when I was in debt, I had a list of my debts. I keep lists of my savings account, including how much is in each account. I keep lists of my bills, and a separate list of which bills get paid on each payday. The amount of lists that I can generate to keep track of my finances is endless.

I also keep a list of the general aspects of my financial life. This list is a little different.  Let me try to explain.There are certain things that every financially responsible person should have.  To determine if I have those, I ask myself the question “Do I have _______?” Then I have a checklist for the blank. The checklist looks like this:

  • A budget
  • An emergency fund of 3-6 months’ salary (I prefer salary to expenses)
  • My most recent credit report
  • Homeowner’s insurance
  • Car insurance
  • Life insurance
  • A will
  • Retirement savings
  • College savings for my daughter

Having a list of these financial necessities forces me to look at where I’m succeeding and where I’m coming up short. I used this checklist to determine some of my financial goals for 2012 and it also serves as a reminder that I really, really need to get certain things done.

If you’re interested in creating your own financial checklist, I suggest that you start simply. Ask yourself, what should I have in my financial life? Then make a list of those things. Your list doesn’t have to look like mine. You may not have kids or your kids are grown, so college savings won’t be on your list. Maybe you’re planning on having a baby; you could add “baby fund” to your list. Maybe you aren’t as afraid of death as I am so you put “burial plot” on your list. Other items to add could include:

  • Pet insurance
  • A proper business license
  • A financial advisor
  • New car savings
The amount of items to add is infinite. Your list can and should include anything you think is important to you and your financial health. This is not a one size fits all approach. 

Maintaining the lists

I update my lists about every 6 months, or as necessary. It’s important to me to give myself enough time to work on achieving my tasks and goals without giving myself too much time. Too much time means I won’t get them done; too little time means I’ll berate myself for not getting it done sooner. This is not a healthy relationship so when I’m establishing deadlines, I try to find a happy medium.

Not every item needs regular review. For some of the items, once they’re checked off, it’s just a matter or reviewing the policy or document yearly to make sure that they’re still accurate or appropriate (and yes, “reviewing the document” does go on my list).

I typically keep my lists in my all-purpose notebook (cooks have all-purpose flour, I have an all-purpse notebook). I’ve tried to maintain my lists electronically. The only time this worked was when I was tracking my debt repayment because I’m terrible at math. For the rest, there is just something satisfying about putting a checkmark or crossing something off with a pen that isn’t captured when I do it on my phone.

Now that the new year is upon us, it’s a great time to get your finances organized (if they’re not already). Lists are a great tool to help.

What does your list look like?

Outsourcing chores

by Jana 18 Comments

A few years ago, at the recommendation of a co-worker, I read Tim Ferriss’s “The 4 Hour Work Week”. To be honest, I hated the book. I thought that he came off as pompous, rude, snobby and kind of douchey. Most of what he discussed could in no way, shape or form be applied to my life and my situation. Except for one idea. Outsourcing.

Quite frankly, I love the idea of outsourcing the unpleasant aspects of my life. I would love to be rid of the chores that I can’t stand so that I can focus on the things that I do love and want to cultivate. And, if I think about it, I already do outsource some things—haircuts, dog grooming, trash and recycling pick up, and car maintenance. I don’t mind paying for these services because they are convenient, make my life easier and honestly, no one wants me cutting his or her hair. Or working on a car.

The problem is that I want to outsource household chores. I’m not the most domestically inclined woman around. While I do enjoy some things like cooking and baking and child care and general errands, there are certain things I cannot stand. Those are the ones I would like to eliminate. But the cost for outsourcing those chores is way too expensive for my budget. Or is it? I decided to do a little research and come up with an amount that I would have to pay each month to outsource the 3 things I hate the most:

Laundry

Dane Cook once joked that the only way to completely have no laundry is to wash your clothes naked. Sadly, he’s right. Laundry is a cruel joke, especially when you have a child and dogs. I am forever stuck in a cycle of wash, dry, fold, put away. Repeat the next day. I think I spend a minimum of 10 hours a week doing laundry for my family (fortunately, my husband does his own laundry. This is a huge blessing). While I’m able to complete other tasks while the washer and dryer are running, it’s still annoying to be in the middle of a task only to have to stop to attend to the laundry. Not to mention that I hate the whole laundry process. So I wondered what it would cost to have someone do my laundry for me.

I looked around and there are services that will wash and fold my clothes. Here’s the info on the                   cheapest company I found:  $1.25 a pound with a minimum of 10.  That’s just for your standard wash, dry, fold that is supposedly done according to my explicit directions. They claim to have no extra fees, including delivery. Let’s assume I have 25 pounds of laundry per week. That’s a minimum cost of $125 per month. However, they don’t say how long it would take to complete the service, and I have to schlep my clothes to the place and pick them up.

The verdict? Not worth it. I’m not really saving any time by having to drive back and forth to the place, it’s expensive compared to doing it myself and I’m basically a slave to their time frame.

Cleaning

I’ll admit it. I’m a terrible housekeeper. My house would never be deemed uninhabitable as I insist that beds are made, bathrooms are tidy and there are no dirty dishes all over the house. However, I’m lazy with dusting and vacuuming, my kitchen floors don’t gleam, toys are usually all over my living room and laundry is usually everywhere (see above about how I hate laundry). My husband and I do the best we can but my house never looks quite clean enough. I would love to have one of those houses that sparkle. But with me in charge, it’s not going to happen.

Enter a cleaning service. These are pros whose job it is to make my house sparkle in that commercial, TV show way. I did use a cleaning service last year, just prior to Thanksgiving, in order to get my house respectable enough to have company. That service cost $220 for 2 hours but I figured it was expensive due to the fact that it was an initial, deep cleaning. If I remember correctly, it was approximately $100 per week for regular home maintenance, based on the size of my house and what would need to be done.  Let’s say I have the service come 2 times per month. That’s roughly $200 and I would have to stay home (I have extreme paranoia issues and can’t stand when people I don’t know are left unattended in my home).

The verdict? It’s a possibility. I loathe cleaning and I’m not good at. Additionally, a cleaning service would free up time for me to work on my blog or other projects.

Food shopping

There is nothing that makes me more anxious than the thought of a supermarket on a Saturday or Sunday morning. The small aisles, the shopping cart collisions, the wrath at the deli counter, the agony at the register. It all makes me grimace with displeasure. Unfortunately, this is the one chore per week that I cannot put off (have I mentioned that I purposefully have 3 weeks of clothes and underwear so that I can go that long without doing laundry?). I’d send my husband but he loves supermarkets like I love MAC and I fear for our budget. So each week, armed with my budget, my list and my body armor, I trudge to the supermarket for what is the worst hour and half of my week. And every week that I’m there, I wish there was a way to avoid this horror.

I have learned that there is! Apparently, my grocery store has a service where I can order my food online and then a refrigerated truck will deliver the groceries right to my front door! This is fantastic! After the first delivery, which is free, there is a delivery charge which is based on the amount of food ordered (<$150 has one set of fees, >$150 has another) and the time frame in which the food is delivered. However, like the cable companies, your food has a delivery window and the delivery charge is based on the window you pick. Let’s say I pick the 4 hour delivery window. That would run me $3.95, for a total of $103.95 each week.

The verdict? I’d give it a try for free. Although I am freaked out by the thought of someone else handling my groceries, it might be worth it to avoid having the headache of food shopping. Besides, while I’m waiting, I can always do laundry or clean!

Do you outsource any household chores? What value do you get from it (besides time)?

 

Revising home economics

by Jana 13 Comments

As I was sewing a button onto my husband’s shorts the other day, he made a comment that he’s glad I took home ec in middle school. It wasn’t like a had a choice! Where I went to school, we were required to have 1 marking period each year, for all three years, of home economics. While that’s all fine and good, I can’t say that many of my home ec skills were learned during that time.

Sure, I learned how to sew a button and make pillows but there’s really not much else I learned. Oh, wait! I did read a recipe. Once. Mainly it was just a bunch of 11-13 year old girls sitting in a stuffy, windowless room, pretending to do actual work and talking about which boys were cute. It was great fun at the time but now, as an adult reflecting back, I realize what a gigantic waste of time that class really was. And it had so much potential!

Don’t get me wrong. I’m not faulting the teachers. They did a great job. We just weren’t ready to learn what they were teaching and those skills are not practical to teach 11-13 year old girls. But I do feel that home ec is an important class (which, by the way, I feel that boys should be required to take as well. Learning how to take care of oneself and one’s home is not solely a female job). People need to learn these important skills. Here are some of the changes I suggest:

  1. Move it high school, particularly in the 11th or 12th grade as students are getting prepared for college. The information will be fresher and more relevant.
  2. Teach skills for grocery savings. Kids have no idea how much food costs and if they’re getting ready to live on their own, it’s a good idea to give them some background information. Incorporate menu planning, looking for sales and using coupons. And while we’re on the subject, give kids ideas on how to prepare meals beyond macaroni and cheese from a box. Practical meals, not elaborate dishes.
  3. Teach skills for how to effectively and inexpensively clean a house/apartment. Go over the importance of home hygiene, including methods for organization and establishing some sort of cleaning routine that also discusses doing laundry. My husband lived in his fraternity house for 3 years. I speak from personal experience when I say that boys must learn how to clean! My immune system is greatly improved from the time I spent in that house. (This is not to say that girls are immaculate. But I don’t know anyone who got ringworm from living in a sorority house.)
  4. Teach basic personal finance skills. This includes how to balance a checkbook or use online banking effectively, the pros and cons of credit cards, having a budget, how to create a budget, how to look for a job, the soft skills required to obtain and keep a job, and the importance of paying bills on time. You cannot function as an adult if you do not have this information. I will leave the discussion about student loans, car loans, mortgages, and any other sort of major personal finance decision to the discretion of the teacher. This information may be better suited for another type of class.

Some people may think that this is a bit too sophisticated for home economics. I respectfully disagree. These are all elements that are crucial to running, maintaining and keeping a home. Many kids do not learn these skills from their parents or guardians. And I will concede that on some level, it is the parents’ responsibility to teach these skills to their children. Unfortunately, for whatever reason, many parents don’t do it. My parents didn’t. I didn’t know how to cook, balance a checkbook, clean my room properly, pay a bill or even make my own doctor appointments until I went to college. I only learned how to do my laundry at 16 because I was on a cross-country trip where we stopped at laundromats to wash our clothes. There was no real reason my parents didn’t teach me these skills; they just didn’t think it was important. Whether they thought they would always do it for me or I was too stupid to learn, I’ll never know. But it was only through trial and error, and reaching back into the depths of my brain to recall what I learned in middle school, was I able to survive.

Kids who are in the foster care system are offered the opportunity to work with programs and mentors on Independent Living Skills as they prepare to age out of the system and I think it’s wonderful that they’re given that opportunity. They sure as hell deserve it. But I think we need to start doing a better job of preparing all students to be responsible and practical adults. Schools are a great place to start.

Fear factor: Self-employment

by Jana 15 Comments

I recently guest posted over at Broke Professionals as to why I work for the government. In all of that description, I left out one key factor–I’m terrified of being self-employed.

Please don’t get me wrong. I long for the day where I can work from home or a park or a beach without reporting at a certain time, doing what someone else wants me to do and wearing something that’s not my pajamas or yoga pants. Lack of self-confidence not withstanding, here are a few reasons why I am too scared to take the plunge into self-employment:

Taxes. Except for knowing that I have to pay them and what the little abbreviations on my paystub stand for, I don’t understand taxes. They are far, far beyond my scope of understanding. If I work for myself, I will have to figure out taxes and make sure that I pay them on time and accurately. I fear that this won’t happen and I’ll have to deal with an audit. That scares me.

Insurance. Right now, since my husband and I both work for the State, our medical insurance is free (some sort of double state share formula that is way too complicated for me to understand) and we pay very reasonable amounts for vision and dental insurance. The thought of having to find my own policy and pay the borderline obscene amounts make me want to throw up a little.

Retirement. Although I have a Roth IRA, I also have a guaranteed pension where the money comes right out of my paycheck. I also have extra money deducted and put in some sort of Fidelity account. While self-employment means that I’ll have to significantly ratchet up the Roth and Fidelity savings, and I’m OK with that, losing the pension makes me really, really nervous. Confession time: because of the pension, I’ve been very lazy with the rest of my retirement savings and I’m afraid of how much catching up I have to do.

Finding work/clients. This is where the self-confidence bit comes into play. I am the world’s worst at convincing someone that he should pick my work over someone else’s (the fact that I have the job that I have is, in my opinion, a huge fluke and/or divine intervention) because, if I’m being honest, I don’t think I’m really all that better than anyone else. I have a terrible time selling myself (this also eliminates my potential career as a prostitute. This is probably a good thing) and, as a self-employed person, I would have to put myself out there. It’s not the rejection I’m scared of; I can handle rejection. I’m just not comfortable with saying “Hey, I’m awesome. I’m better than a sparkly unicorn who breathes diamonds and you should hire me instead of that loser”.

Inconsistent income. As the parent of a small child, I love the fact that I can rely on my paycheck to be consistent every single time I get paid. I have a nice, comfortable budget that provides for all of our needs and the occasional want. I know that if my daughter needs something, I don’t have to worry about the money that may or may not be in my paycheck; I’ll know exactly how much will be there. Being self-employed, there will be ebbs and flows in my income and that puts me on edge. I know there are tools to help budget and plan on an irregular income but there’s something about the consistency of my current paycheck that’s soothing. I thrive on stability.

To me, jumping into self-employment is like jumping off the high dive into a really amazing pool complete with swim-up bar and big screen TVs playing Jason Segel movies all day long. Right now, I’m on the ladder of security and stability, thinking about stepping onto the diving board to jump into the pool. Each rung I climb is a step closer to my dream. If only I could get over my fear of free falling.

Are you self-employed? How did you get over your fears and decide to take the plunge?

When free isn’t

by Jana 5 Comments

Here in the personal finance world, we love the word free. Except there’s a catch with the word free. Free does not always mean better. Yes, not having to pay is certainly better than having to pay. Absolutely, 100%, every time. But a free item doesn’t always mean it’s a good item. And a not so good item means that you will eventually have to pay.

Here’s an example: When my grandfather passed away 3 1/2 years ago, my grandmother (who does not drive) offered my husband and me my grandfather’s car. Yes, it was a slightly older model that didn’t get a lot of use and baked in the hot South Florida sun but my father and uncle would take care of it on their trips down. We were in the market for a new-to-us car and this price of this one–free–was perfect. My grandma even offered to pay for the autotransport truck! How could this go wrong?

Well, it went very, very wrong. The car was delivered and we took it out for a little test run. It ran OK during the test run; OK enough that my husband felt comfortable driving it on his 45 minute commute. Monday morning, about 20 minutes after he left, I get a frantic phone call that the car died–completely died–on his way to work. He was able to get it off to the shoulder while he waited for a tow truck. For reasons completely unknown to me, he had the car towed to our house where he an our neighbor proceeded to inspect the engine and ultimately conclude that the transmission had died (I believe it was the transmission. In any event, it was some expensive part that goes under the hood and helps make the car run). So, after all of that, we now had an autococoon on our front lawn.

To have it towed to a mechanic to determine if my husband’s and neighbor’s prognosis was correct was going to cost us money. The parts were going to cost us money. We lost time off from work (fortunately, we get paid time off to use at our discretion) that we were trying to save. We couldn’t even get in touch with one of those money-for-junk cars companies to come and take it. We didn’t even care about getting money, we just wanted the car gone. It was just a big mess all around. Eventually we were able to get rid of it; I think the junk company gave us $200, just enough to recoup the towing costs.

You may be wondering why we didn’t opt to fix the car. For starters, we didn’t have access to the cash required to fix it and there was no way we were using credit. Second, the car wasn’t worth as much as the repairs were going to cost. Third, my husband was so pissed off with the thing that he would have been angry every time he drove it (at the time, I drove an SUV and there was no way he was taking an SUV on an 80 mile round trip commute every day. Gas costs would have been crazy). You would not like my husband when he is angry, so we junked  the car. My sanity was better off. And you can’t put a price tag on my sanity.

Fortunately, we were able to get another year and half out of the car we were trying to replace and got a great deal on my husband’s new-to-him car last March. But we still have a car payment because of it. The purpose of accepting my grandfather’s car was to be able to have a newer car that would last long enough for us to save up the cash for a replacement. That plan clearly backfired.

At least now we know for next time–free does not always equal good.

Has free ever backfired on you?

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