The Savvy Life

The topic of untangling the complexity of life has been one that I’ve been struggling with lately.  It isn’t something I’ve mastered and is definitely something I want to get done.  Everything from how I keep and clean my apartment, to maintaining relationships, how I do my job, to my finances, and my health all need to be sorted out and properly managed.  I thought that this sort of project is exactly the kind of thing that deserves to be blogged, yet, I struggle with the idea of how to start.

I was blessed today with two great starting points.  The first comes from Threadbangers Decor It Yourself on Cleaning Your Closet.  Now this episode of this video show was released awhile ago, but I don’t keep up on the vidcasts as much as podcasts, so it is just happenstance that I watched it this morning.  The general concept of cleaning out your closets is to first empty your closets.  This is also the way the show Clean Sweep makes people deal with cleaning out the junk in their houses.

Once the closet is empty, the next step is sorting.  What wasn’t covered in the vidcast I linked to is the important element of getting rid of the stuff that is no longer used or needed.

The other fortuitous bit of information that came my way today is from The Simple Dollar on Making and Maintaining a Master Information Document.  For the last couple weeks I’ve been morbidly considering what would happen if I up and died.  I’m in my late 30’s no family who lives nearby, no significant other, no one that is established within my life who would know what all I have and what to do with it.  Then I realized that I right now don’t know what to do with all of my stuff.  Now I’m not talking about just the physical stuff, but the financial stuff and the simple commonplace stuff as well.

The article is brief but touches upon all the important elements I know I need to consider.

Using both of these projects, closet cleaning and Master Information Document creation, I think I have a good start on which threads to start pulling in order to untangle my life and begin the process of sorting it all out.

Over the past few days I’ve read a few other blogs that have stated in their long lists of ways of improving financial situations that one of the ways of accomplishing this is to ask for a raise.  There are entire sites devoted to the methods in which a person can ask for a raise.

I’m intrigued about other people’s experiences with getting raises.

My company has a Byzantine bureaucracy built around reviews and tie pay raises to a complex formula that gives the appearance of impartiality but is still fundamentally arbitrary.  Requests for pay raises are easily dismissed  by referring the employee to the yearly review process and the standard 3-6% raise that this review process produces.

It seems to me that companies develop this process to protect themselves (and their budgets) from unexpected requests for pay raises.  This means, though, that if I poorly negotiated my initial salary, I am forever on a weak financial track with the company with no hope of ever catching up unless I get that rare opportunity for a promotion.

I do believe all rules can be broken.  I see it done often enough to know it is possibly, yet it is annoying to me that I am made to feel that the company I work for has intentionally created barriers to my getting paid what I am worth.

Do others feel this way?  How common is this methodology in other places of work?  Do you feel like your company is assisting you in financial success or hindering you?

I’m in the midst of writing a complicated post regarding money lessons I learned the hard way which has put me in a personal finance mindset.  When I saw 21 Money-Saving Sites from Around the Web, I felt a need to pass it along.  This entry from the Get Rich Slowly site contains such a wealth of resources it is almost shameful.

It seems like common sense.  It is so common that governments do it, businesses do it, and non-profits do it.  To achieve any sort of financial success or stability, a budget is necessary.  Let me restate that.  Budgets = Financial Success.  It is a very simple formula.  Budgets help define spending and make sure it is in line with income.  Budgets encourage savings.  Budgets assist in making decisions.

Knowing all this, I still can’t seem to make a budget for myself.  I know what my bills are, I know what my income is and I know how much is in my accounts.  From that basic standpoint, I’m not doing horribly, but I’m also not making any headway.

Trying to make a budget from scratch seems almost impossible.  Tracking my expenditures is not as simple as straightforward as I would like it to be.  I know it is a simple matter of keeping my receipts and recording them in a spreadsheet or investing in Quicken or Money.   Just can’t do it consistently enough that I trust the numbers.  Trusting the numbers is critical for following a budget.

To help rectify this problem, I have started using mint.com to keep track of my accounts.  I have five accounts to track: checking, savings, ING Direct, and two credit cards. Mint.com takes all of these and merges the data into simple charts.  It lets me plot through the various transactions, coding them as I see fit and then begins to build a budget for me – a budget of actual expenditures which I can then go in and adjust to match my financial goals.

There are two big problems with this for me: one is the amount of access and personal information I need to give up in order for this to work.   The second problem is the amount of time to truly capture a solid image of my spending.  It will take another month for me to have a realistic view of how much money I spend on gas, utilities, food, and entertainment.  I decided to take the risk and let Mint.com access my checking and savings, but not ING or my credit cards.

What I’m seeing in the charts Mint.com provides is I am well within the national norms on my spending so far and seeing how much I am spending on things like my cable churns my stomach.  Do I really watch $60 worth of TV a month?  I will have to evaluate that expense and look into alternative broadband internet access.

I’ve been using Mint.com for roughly a month and a half.  I tried to user wesabe.com at one time and found it too bland to bring me back.  I like colorful charts. I like the thought that maybe there is some intense analysis going on behind the scene trying to find me ways to save money.  Of course the only way it has determined I could save money is switch my internet, phone, cellphone, and everything else over to Verizon.  I think maybe this free service is sponsored by Verizon.  Just a guess.

I know the only real way for me to save money is to monitor my spending carefully, make wise purchases, move money from my checking account into my ING Direct saving account, set other money aside for emergencies, and work the other side of the budget equation: earn more money.

Do we really know what possessions we have? If something were to come up missing, how long would it take for us to realize it? If everything went missing, how much of it would we remember when filling out the insurance papers? Even if we have perfect memory, we might not recall everything when dealing with the stress of a disaster. A fire, flood, or hurricane could take everything away from us but we pay for insurance to guard against that disasterous potential. The only way we can get the real value out of our insurance is if we know what value was lost.

RealSimple has an article titled Prepare for the Worst by Creating a Home Inventory detailing how to perform a home inventory.

“Home inventories make it easier to substantiate your claim” in case of fire, natural disaster, or robbery, says Jeanne Salvatore, a senior vice president at the Insurance Information Institute.

An inventory also determines if you have the right type and amount of insurance. You may find that your computer equipment is worth $5,000 but your policy covers only $3,000 worth. You can then increase your coverage. Home cataloging also makes creating wills easier.”

There are several software packages available to assist in the process of taking a home inventory. A few are listed below. Having the inventory in digital form will make it easier to store in a secure location (a cd or dvd of the data in a safe deposit box, with a relative in another state, or stored on a server) and to update. Keeping the inventory up to date will become one of those annoying but necessary tasks. The RealSimple article recommends updating the inventory after each major purchase. For those of us who don’t make many major purchases but several smaller purchases, it may become more difficult to keep the inventory up to date. To address this concern, I recommend doing an inventory once in the spring and once in the fall. Combine the inventory with Stuff Elimination (spring cleaning, etc.) so you are also removing items from the inventory that you no longer own.

http://www.knowyourstuff.org/ – Free
http://www.mycroftcomputing.com/eiown.html – Free 30 day trial
http://www.allmythings.com/ – Free Basic Service

Being a member of Gen-X, I am fully aware of the financial vise I’ve been put in. The government would really, really (and according to the last piece of mail I got) REALLY like it if I would pay off my student loans. Yet, the jobs I’ve gotten with my vaunted liberal arts degree barely pay for rent.

To be very honest, I didn’t realize the problems I was facing are the problems my entire generation are facing. Gen-X the first generation to earn less than our parents (in terms of inflation adjusted dollars). Gen-X faces some very unique challenges when it comes to finances. Gen-X is the generation social security is going to run out on, yet Gen-X is the generation that has to pay for the long lived retirement of the Baby Boomers.

Linda Stern writes in the article Gen Xer more cynic than slacker about specific advice for Gen-X.

Watch your fees. Hedlund contends that huge fees are a trap for this generation: Bank overdraft fees, which can pile up on debit card exchanges, as well as credit card late and over-limit fees. “These people blame themselves,” assuming they deserve the fees they rack up because they’ve behaved badly. But those myriad fees have been ratcheting up faster than bad financial behavior has.

I am one of those people who ‘blame themselves’ for fees, for parking tickets, for anything institutions stick me with.  The idea of negotiating fees seems a bit absurd to me, yet apparently it is done daily.  Fees are waived all the time.

Gen-X needs to learn how to use the system to its advantage instead of letting the system take advantage of them.

On NPR this morning, there was a story about weight loss and behavior modifcation.  One of the methods discussed was carrying around a list of benefits of losing weight.  The list was the essence of why the person wanted to lose weight.

I immediately saw a wider benefit to this method in application to other things.  One of the important aspects of developing a list of 8 reasons is I will be able to determine if this is truly something I want to do or if it is something I think I should do.  The difference is important.  Right now, I think I should do a lot of things, but I have little motivation to do them.  Part of being motivated to do something is understanding why I am doing it.

One of my most troublesome issues I have is exercise.  I know I should do it for general health reasons and to help lose weight, yet I lack motivation.  When the opportunity presents itself to go running, I don’t.  Part of building the motivation to exercise would be consolidating my reasons.  Create a list of eight reaons why I want to exercise.  Once I have developed that list, when the time comes to go for a run, I can use those eight reasons to push myself up off the couch and out into the world for a jog.

Whether it is saving money, networking, dating, or changing other elements of my life, of your life, sit down and write out eight reasons why you want to do something that you currently aren’t doing.

Why do you want to network more?  What benefits will you derive from exercising?  Why should you be more extroverted and ask more people out for dates?

As a practical example, here are my eight reasons why I want to exercise:

1. Stamina.  I want to be able to have more than twenty minutes of physical activity before becoming completely winded.

2. Improved self image.  While I’d like to lose weight, I’m more interested in toning my muscles.  I have no reason to look like a Spartan from 300, but I’d like to at least lean more in that direction in regards to my physique.

3. Improved mental ability. Exercise and mental acuity go hand in hand.

4. Enjoyment of food. By exercising regularly, lapses in what I eat aren’t as detrimental.  I encourage hedonism as a lifestyle, not as a form of slow suicide.

5. Better clothing options. When you have a gut, certain clothing choices aren’t very flattering.

6. Dating potential.  Being lean and more athletic increases dating opportunities.

7. Vigor. Exercise will improve my overall health, increasing torso strength, forestalling ailments associated with aging.

8. Disciplined escapism.  Exercise routines will add an element of discipline in my week where I disconnect from all the electronic media, and focus inwardly.

In a simple article entitled Branch Out to Find Work You
Love, Penelope Trunk writes out a few bits of advice for those individuals seeking to find some happiness and satisfaction in his or her job.

I chaff at some of the advice she offeres, like “Don’t go to grad school for humanities.” Yet, I forgive it because she is playing a statistics game. As with most advice, the reader needs to keep in mind that personal desire trumps a stranger’s advice each and every time.

My favorite bit of advice from this article is the following.

Don’t work with jerks.

Conversations that are insulting have five times the impact on your day than positive conversations. Unfortunately, we have a great memory for the unpleasant. Daniel Gilbert’s research supports this, but Bob Sutton, a professor at Stanford University, specializes in the jerk at work.

Sutton warns that if you work with jerks, you become one. His book gives advice on how to make sure you don’t end up working with these toxic people, and his web site gives you a way to test yourself to see if you’re a jerk yourself. After all, if you’re the jerk, you’re going to have a pretty hard time finding an office without one.

With spring on its way, it is a good time to consider renewing yourself, whether it is in your current job or in a new job.

I’m all for saving money.  I’m all for saving lots of money.  Unfortunately, it doesn’t seem as easy as it should.  I understand the concept.  You take all that you earn, subtract what you owe, subtract what you need to live, and save the rest.  It is such a simple formula.  Yet it seems that category of ‘what I need to live’ is like a huge black hole.

Jonathon Clements wrote in an article entitled, Tricks to Soften the Pain of Saving,  different tricks to help you save.  Some are obvious, like putting tax returns and bonuses into savings.  Some are more ‘tricky’ like zeroing out your checking account so it appears you have less money than you actually do.  This type of trick will not work for me, because I am keenly aware of how much money I have.  Writing a different amount in my check register won’t fool me.  It is like setting a clock ahead fifteen minutes to make you think you are running late.  I lack the ability to lie to myself.  Maybe I’m just not a convincing liar.

If you have any tips and tricks to increase your savings, I’d love to hear about them.

Personal Finance Advice is calling it the Ultimate Credit Card and I would be hard pressed to disagree. I don’t have one and no one I know has one which means I am travelling in the non-elite circle. That’s okay, because I don’t think I could even afford the entrance fee to this exclusive club of American Express Black card holders.

Information about how one qualifies for the Black Card today is somewhat of a mystery since, although there are references on the American Express website about the card, there is no formal page where you can see the requirements to get an invitation to carry one (there is a user ID and password protected page for those that do have the Black Card). When the invitations first arrived in 1999, the Black Card came with a $1000 a year fee. People that now have the card say that the yearly cost has risen to $2500 a year and a minimum of $250,000 a year needs to be charged to qualify.

I don’t think many people who read The Savvy Life will have an American Express Black in their wallets, so this is a chance to at least see how the elite are living so we can see what we are striving to achieve.