Jana Says

Money Tune Tuesday: Intergalactic

May 8, 2012 by Jana 4 Comments

Like most people, I was saddened last week to hear about the passing of Adam “MCA” Yauch. I was around 8 or 9 years old the first time I heard the Beastie Boys on the radio and “Fight For Your Right” is one of the first videos I remember seeing on MTV (you know, in the 80s. When MTV played music). I was instantly hooked and they’ve been a big part of my musical landscape ever since (although I can’t understand half of what they say).

Seeing a Beastie Boys concert was always on my to-do list and sadly, I never got to cross that off. A few years ago, they were playing locally and we just could not afford to go. The closest I came was seeing a local, now defunct cover band doing a Beastie Boys medley during one of their sets (It. Was. Spectacular). So, let that be a lesson learned: If a band you adore and have grown up listening to is playing a rare concert in your area–GO! Figure out how to pay for it and go. You never know if you’ll get another opportunity.

I have so many vivid memories that relate to a Beastie’s song. Too many to count and I’m sure you wouldn’t be interested in most of them. But I’ll share one with you. During sorority rush, the different sororities were required to put on a skit, complete with a dance (well, my sorority opted for a dance incorporated into the skit). One year, we used “Intergalatic” and it kicked major ass. I can’t hear that song without thinking of that and, while I’m not a huge fan of my sorority, that definitely brings a smile to my face. So, in remembrance of MCA, a fellow New Yorker but one with way more talent than me, I’m sharing “Intergalactic” for today’s money tune.

Thanks for the music.

The biggest financial mistake I’ve ever made

May 7, 2012 by Jana 11 Comments

I readily admit that I’ve made a substantial amount of financial mistakes. In fact, if I didn’t, I probably wouldn’t have much to write about. But there’s one mistake I’ve made that I’ve never shared with you. I’m not sure why I never shared it before (that’s a lie. I completely know why. It’s because I’m ashamed).

What’s interesting about this mistake is that it’s not something I did; rather, it’s something I didn’t do. And by not doing this, I caused myself years of debt repayment and minimal choices instead of saving my money and having options.

So what did I do? I didn’t listen to stellar and practical financial advice when it was put in front of me. For free.

My first job out of grad school was with the federal government, working in the Philadelphia region. In our office was a trained statistician who was extremely friendly and very nice. He and I would spend lots of time talking, particularly about money. He was a few years older than I, owned a house, and really seemed to have his finances in order. He would talk to me about the importance of paying off debt, saving for retirement, and would often share strategies than he and his wife used to manage their money. He even went so far as to create amortization spreadsheets for me for my credit card debt! (I told you, he was very nice.)

Here are some other tips he shared with me:

Have a budget. He advocated that knowing where your money is going is the first step to having a handle on your finances. He told me that he and his wife had a pretty strict budget but there was always wiggle room for fun and extras.
Once a month cooking. He would tell me how he and his wife would take one Sunday a month and prepare most of their meals. They would cook chicken and hamburger and casseroles…all kinds of different foods. They would freeze them in portions for dinner and lunches. Not only did he share how this saved them money but time as well.
Having a 15 year mortgage. He and his wife owned their home on a 15 year mortgage and made extra payments every month in order to pay the house off even quicker. He showed me an amortization spreadsheet (he really liked these) to illustrate how much interest they were saving in the long run.
Pay off your cars. My co-worker was a big advocate of buying used cars, taking care of them as much as possible and then driving them into the ground. I agreed with him because at this point, I didn’t have a car payment. However, I wanted to buy one and he discouraged me from doing so until my credit card debt was paid off. He did share that if I did buy one, I should purchase a used one and do whatever I could to pay it off quickly. He then told me how much money I would save per month without a car payment.
Don’t use the credit cards at all. He suggested that I pay with cash because it controls your spending and there’s no interest. He made the point that when you pay for something in cash, the payment is done. It doesn’t crop up on your later in the month. He did say that if I have to use a credit card, pay it off in full.

At the time he was giving me this information, I would listen politely, but in my head I scoffed at the information. I couldn’t, for the life of me, understand why he was telling me all of this. I had a hard time believing he was only 27 because he sounded like an old man. And, in what’s probably not very shocking, I dismissed the majority of what he told me. Why? I just wasn’t ready to hear it. I thought that I knew exactly what I was doing and the way this guy was living was boring.

But I was wrong. Completely and utterly wrong. I should have listened to what he told me and followed his advice as closely as possible. Had I done that, I would have spent the last 5 years saving money and being comfortable with some choices I want to make rather than paying off ridiculous amounts of debt and working in jobs that I hate just for a paycheck. I would have had the freedom to have the life I want.

Years later I found out that he and his wife were certified leaders of Dave Ramsey’s Financial Peace University. Finding that out made so much click in my head, particularly with what he was sharing with me at the time we worked together. I totally got it.

So let this be a lesson. If the guy at work is preaching to you about ways to manage your money, listen. He probably knows what he’s talking about. And it will literally save you in the long run.

Yakezie Blog Swap: My Big Fat Fancy Wedding

May 4, 2012 by Jana 10 Comments

Today I “occupy” Jana’s blog as part of a Yakezie blog swap organized by Jacob at My Personal Finance Journey. It’s my first blog swap so I’m super psyched that I got paired with Jana, one of my favorite bloggers, principally because of her relevant and very honest posts, but also because she’s really accessible (Jana’s note: I think I’m flattered by this. Jury’s still out). Anyhow, enough about Jana 🙂 If you’re wondering who I am, my name is Nick (Jana’s note: Nick is, incidentally, one of my favorite bloggers. And not just because he thinks I’m awesome). I’m a father of two (and, relevant to this post, a husband of one…) and I babble incessantly over at Step Away from the Mall, a blog about my views on life and money. This post is about how my wife and I (two very cheap people) spent a ton of money on our wedding…

It’s admittedly a bit different than other posts about weddings in that it’s not a checklist of “things you can do” to save money on weddings (but some of you can find things “not to do” from it because it ended up costing a lot of money…). But I’m the one occupying Jana’s blog today and when I occupy, I do it my way… 🙂

Later this month “Wifey McGee” and I will celebrate our fourth anniversary. I don’t remember exactly how much our wedding cost (suppressed) but let’s just say I’m pretty sure it was at least twice the national average… We had a huge guest list, and I’m not sure what the average wedding “size” is, but we spent a lot… In fact, we spent money on a lot of things we either didn’t even notice or didn’t care about on our special day. We definitely could have cut some from our flowers and DJ (we now use a DJ who charges 25% of what we spent on our wedding, for example).

But we did a few things right… First of all we had an incredible wedding. My wife was a star! I was appropriately in the background… From what I understand, everyone had fun. We even had wedding crashers who said it was the “best wedding they ever crashed…” Second, we had everyone we wanted there. Third, we negotiated and received discounts on everything we got. But two “big issues” stick out from that lovely day that smacked us in the wallet…

The Issue: Too many people to invite.

One “Big Fat Greek family” on my side and two “Big Fat Extended Families” on my wife’s side. Collectively we have 8 full, half- or step-siblings and about 20 first cousins alone… So just inviting a “first-tier” of family would be big! We anticipated about 450 people if we invited “everyone” from our families and work with necessary “plus ones.” This was unacceptable (to her mostly…).

The Solution: Reduce “categories” and make it inconvenient…

We did not invite “kids.” I wanted to because I felt bad for parents who had to get babysitters. But my wife was against it, wanting an adult-only celebration with drinking and partying. So we “compromised.” (Whenever you see “compromised” in quotes that means McGee thinks we compromised but she actually won completely…).

Result: No kids. We ended up inviting between 350 and 400 people. Amount saved: We estimated at least $2,000 (we have a lot of kids in the family – note I now agree with her and am happy we nixed the kiddos.).

Second, we booked it on Sunday of a long weekend. This cut about 150 people from the guest list for sure. And not 150 of the close ones… 150 of the “cousins of cousins” and “bosses” or “if we invite him we have to invite hers.” The people we really wanted there didn’t care when it was (or where). They were coming.

Result: We had a little less than 250 show up – and each person who came was very, very important to us! It was really awesome. Amount saved: We estimated about $6,000.

The Issue: Having a “nice” wedding!

Definitions! Wifey McGee wanted a “nice, small” wedding. I wanted a “big, but casual” wedding. McGee’s definition of “nice” is the same as mine for “fancy”… haha. And her definition of “small” apparently meant immediate family and grandparents only! My definition of “big, but casual” meant a tent in my parents’ yard and barbecue for 500 people (this includes the kids that lost their invites…).

The Solution: Budgets and written priority lists!

We went the first month of planning without a budget. We figured we had a lot of money to spend and were cheap people so we didn’t need a budget even though we budgeted in our daily spending… Big mistake. Things started to get out of control. So we sat down and listed everything we wanted and an amount we were willing to spend. Once we had everything listed on the page we put priority numbers 1-25 and a budget for each. If something had to be cut, it was the lower-priority ones. Once we were done, we could spend up to the budget for each item and we didn’t freak out. She had all of the “nice” things she wanted and, while I didn’t “understand,” I was comfortable because we had control. Once we got to the bottom of our budget we didn’t spend more unless we cut somewhere else. If there was money left over we either kept it or added some of the lower priority items.

Result: Things like upgraded napkins and seat covers never made the cut in favor of things like open bar for everyone all night. (We had a food and beverage minimum, so we focused on adding to food and beverage items at the expense of other things that didn’t count towards the minimum.).

Bottom Line:

We spent way more than necessary for our wedding, which would have been amazing even if it weren’t somewhat fancy. But we did a couple of things right. We had a budget and stuck to it, cutting unnecessary categories of “invites” and “things.” We saved up and were ready to spend some of our money and our parents gave us some money they “demanded” we spent on the wedding (long story…). Spending without guilt was one of the rewards of saving carefully over a long time for something we “wanted.”

One thing we probably could do differently if we were doing it all again, which would have saved a lot of money would be the “location, location, location.” My family is north of Boston. Her family is south of Boston. So we picked a place in Boston to meet in the middle. At the time, I didn’t want to make my family travel too far. Reasonable for sure, but we could have moved it slightly south of Boston and saved at least 20%. The real important stuff happens inside the hall. What’s on the outside of the hall is really not worth “paying up” for, if you ask me. We also likely would have had less of a food and beverage minimum at a place outside of Boston. Finally, we could have saved money on flowers and lights, which were very nice, but I don’t think contributed that much over basic flowers and lighting (we splurged a couple hundred bucks for mood lighting at the last minute…).

And, if you’re wondering, that’s an actual pic from our wedding: The last time two cheap people spent like royalty….

My No Spend May

May 2, 2012 by Jana 15 Comments

Most of you know that I am in the thick of a pretty severe bout of depression. Among the numerous side effects of this, for me, is spending money on nonsense. Mostly things like nail polish and books and $.99 iced teas from Dunkin Donuts; nothing that’s going to break the bank or drive my family into debt, but enough that I’m frittering away my spending money on nothing important (I should note here that I’m trying to save my money for FinCon12 and a few other events I have coming up). So I decided to do something about it.

I’ve implemented a no spend May.

No spend challenges are pretty common in the personal finance blogosphere. In fact, I spent about 4 years participating a no spend/controlled spend challenge and it worked wonders for me. I learned how to control my purchases, keep track of my money and learned the difference between a need and a want (in fact, more than once, I’d be in a store about to make a purchase and I could hear the voices of the other no spend ladies in my head asking “do you really need that”). But as my financial situation improved and I got more comfortable with controlling my spending, I started to get a little lazy. Compound that with the depression and I found my old habits starting to crop up. Which is making me feel even more out of control and that’s making the depression even worse. It’s a pretty vicious ride that I’m pretty desperate to get off of.

That’s why I’ve decided to re-up the no spend challenge for myself. It’s taking a small piece of my life that I can control and working with that. I’m hoping it’ll have a chain reaction effect, allowing me to regain control over other parts of my life as well. In order to achieve the desired effect, I have implemented a set of rules to keep me on track. Here they are:

It is acceptable to purchase things with my Amazon gift card or the credit in my iTunes account. This is not money coming out of my pocket (since they were gifts) and is intended to be spent on things I enjoy. I feel no guilt about using that money during this month (although I shouldn’t need to. I have about 18 books waiting to be read and I have no idea what music or apps to buy anymore).
Anything planned does not count against my no spend days. For instance, I scheduled a haircut last month for the end of this month. It is a planned, budgeted expense and although it’s not entirely necessary, I’m not counting it (this also applies to the pedicure I have budgeted). This also applies to my library fines.
This includes anything unplanned for my daughter. I have been buying her a lot of stuff lately, almost as a way to compensate for stuff I can’t buy for myself. She is a line item in our budget and for one month, I have to watch what I spend on her. She has enough stuff and what needs to be replaced has already been budgeted.
If there is a way to do something for free, I have to use that option. If I’m working at the library instead of at home, I’ll have to remember to pack lunch instead of going to one of the restaurants on Main Street (seriously, that’s the name of the road that our library is on). If I can watch something from Netflix or using our Groupon to Blockbuster Express, I have to do that first. And so on and so on for the entire month.
Stay away from places that cause me to overspend and only stick to my lists. Not only will this prevent me from going over budget but it will help me relearn to control myself in places like Target.

I know this seems like common sense, especially for a personal finance writer, but for me, it’s necessary. I feel like this is the first (well, technically, third) step in getting myself back together. I’ll let you know at the end of the month how I did (I don’t want to bore you with all the updates. Plus, I have lots of other good stuff planned to write about).

Wish me luck!

Money Tune Tuesday: Ain’t No Rest For the Wicked

May 1, 2012 by Jana 4 Comments

I’ll admit it. I’m not a huge fan of this song. I find it kind of annoying and listening to it more than once a week is not something I care to do. It’s actually a relief when then radio stations I listen to don’t play it. But the other day I was driving to pick my daughter up from school and it came on. For the first time, I actually listened to the words. And you know what? It’s a pretty interesting song.

For those unfamiliar with it (or for those who don’t care to listen), it’s about people who do bad things for money (prostitution, muggings, stealing) but underneath the undesirable acts is a greater purpose. As the song says “I got bills to pay, I got mouths to feed, There ain’t nothing in this world for free”. I like that the song raises ethical dilemmas inside of a sort of catchy tune (sort of like Everlast’s “What It’s Like”); makes for an interesting aural experience.

What do you think?