Consciously choosing to underearn

If you’re anything like me you often set goals for yourself. With respect to personal finance, these goals are often directly or indirectly related to how much one makes. If you have a goal to pay down debt, you have to base your pay down rate around how much discretionary income you have. If you are looking to buy a house, you typically make sure your mortgage payment is no more than XX% of your take home pay. There’s no denying our incomes are crucial pieces of the game that is personal finance.

So what if I told you Girl Ninja and I are intentionally falling short of our maximum income potential? Some might think that’s crazy, but I suspect those that really think about it will admit, they too are guilty of under-achieving.

Here are two ways the Ninja household is saying “thanks, but no thanks” to more money.

Girl Ninja’s Job:

She taught public school in San Diego last year and her contract paid $40,000/year. Last year sucked major vacuum (see what I did there?). She was worn down emotionally and physically which in turn put unnecessary stress on our marriage. So when we made the move to Seattle, we had a few decisions to make. Does she look for a public school contract, a private school contract, or go back to substituting? Ultimately, we decided she should give private school a shot and see if her overall work/life balance would improve. It has 🙂 She makes $11,000 less this year than last, but she is at least $20,00/yr happier. I’ll take that trade any day of the week.

This Blog:

So I mentioned yesterday I made $13,000 last year from PDITF. Many of you are like “Holy cow, you mean you get paid to write this garbage?” Not exactly, it’s more like I write this garbage regardless, and sometimes people give me their monies. I love their monies.

Thirteen G’s sounds like a lot of money to those that don’t understand how blogging works (from a business perspective), but let’s get real; It’s pennies compared to what many other PF bloggers make. You might not realize it but Get Rich Slowly, Bargaineering, The Simple Dollar, and Consumerism Commentary all sold for millions of dollars. Literally. (click link for reference)

(side note: there have been times I’ve wanted to write about how personal finance bloggers go about making major money on their blog, but am not sure if this is something that you care about since many of you are not bloggers yourself. Would love to hear from the non-blogging community as to whether this would interest you or make you want to stab your eyeballs out).

Suddenly $13,000 doesn’t seem like so much. If I was more disciplined (read: If I cared) I don’t imagine I would have much difficulty doubling my blog income in just a few months. There are all sorts of SEO tricks, ghost writers, ad networks, etc that I could use to make this thing more profitable. But frick, I spend about five hours a week on PDITF (an hour for each post) and at this point in my life, I have no desire to spend any more of my precious free time on it. Not even if it means I could make more.

So yeah, money is cool and all, and I’m sure if our income wasn’t as generous as it is right now we’d focus our attention on making more. But in this current phase of life we are chilling out maxing, relaxing all cool, shooting some b-ball outside of the school (fresh prince of bel-air reference). Translation: we are content with our current position.

We have zero desire to work harder just to make another dollar. Money can buy me more stuff, but it can’t buy me more time.

So reader, are you maximizing your earning potential? If not, how much more do you think you could make in 2012? Be reasonable not optimistic. What lead you to the decision to pass that money up?

p.s. I have no beef with people who are maximizing their potential, especially if it’s for life improvements like paying down debt, vacationing more, retiring earlier, blah blah blah.

p.p.s. I’m going to include a link at the end of each article from now on with my favorite “nail” that was recently posted to MANteresting… How to save a life if someone is choking.

Why you so nerdy?

If you read my blog I’m guessing one of four things is true about you. 1) You have at least a moderate level of interest in personal finance. 2) You could care less about personal finance, but you at least moderately enjoy my stick figure drawings. 3) You could care less about personal finance and my drawings, but you have at least a moderate level of interest in my personal life. 4) You ended up here by accident and will be leaving just as quickly as you came (I hate you fourth-category person :)).

Since this is a personal finance blog, and most of us have an interest in the topic, I thought we could talk a little bit about the how we became so stinkin’ nerdy.

There is nothing inherently sexy, or even all that appealing, about money. We’ve already decided money has no intrinsic value, so why the heck do I find it so fascinating? I mean, it wasn’t always this way. Heck, I didn’t even know how to transfer money from my savings to my checking account until I was 22 years old! Twenty-freaking-two. (my mom always made the transfer for me)

In just three months, I went from college student; never paying rent, car insurance, or really any bills for that matter, to a federal agent who suddenly had all sorts of financial obligations and commitments. I couldn’t even spell 401K, let alone understand the importance of one.

It wasn’t until about three months in to my job that I decided I needed a game plan. I had a conversation with a close friend about Roth IRA’s and he gave me a PF book to read, Smart Couples Finish Rich. The book was meant for married couples, but that didn’t keep me from reading the thing front to back in two days. I was immediately hooked.

Who-woulda-thunk-it? Apparently you can get “rich” without having to be a millionaire. In fact, if I manage my money properly from age 22 to 65, I could retire with millions upon millions of dollars. I hopped on the internet, started reading some blogs, and decided to chronicle my own PF journey.

And that’s how it happened. In about seven days time I went from not giving a hoot about personal finance to starting a blog called Punch Debt In The Face. Crazy.

How did the start of your PF journey come about? What motivated you to get your life in order? What keeps you motivated as the initial excitement wears off?

p.s. in other depressing news, Los Angeles Counties Board of Supervisors just gave the okay that anyone who throws a frisbee or a football on the beach can be subject to a $1,000 fine. Never thought I’d have to say to my kids “When I was your age we use to be able to dig holes in the sand.” <—-also a $1,000 fine. Dumbest. Rule. EVER!!!!

Alternative Currency.

Let’s have a little fun today shall we? Have you ever thought about money? I’m not talking about things like saving, paying doubt debt, investing, etc. No, I’m talking about tangible money. I personally am fascinated by it.

Think about it.  A $100 bill is worth ten times more than a $10 bill. Why? Simply because someone decided to print the number 100 on one piece of paper, and number 10 on the other. Money has virtually no intrinsic value. It’s only purpose is to serve as a medium for the exchanging of goods. (side note: did you know a penny costs 1.67 cents to make? how crazy is that!)

In fact money is so worthless that it’s quickly becoming an endangered species. If you’re like me then you get paid via direct deposit. Every two weeks my bank account increases as my employer transfers invisible cash in to my bank account. I can then head to Target and buy a plunger (you know for plunging things) with my debit card. Nowhere in that process did I see a single dollar. It’s this crazy magical accounting system that just kind of is.

So since we can all agree money is pretty much worthless, I figured we could get a little creative today and create some hypothetical currencies. I personally like the burrito factor. If you aren’t familiar with it, here’s a little rundown from a previous post

I can get a California burrito for $5 at the local taco stand. Not only is that sucker scrumtrulescent, but it also fills me up. Now, whenever I go out to eat and look at the menu, I run the burrito factor through my mental calculator. It looks a little something like this… “Okay, this salad is gonna cost me $12.50, which is the same price as 2.5 California burritos. Plus the salad is probably only going to fill me up 50%. So that means this salad is gonna cost the equivalent of 5 California burritos to get full. Death to salad!

So reader, what’s your currency?

image credit

It’s complicated

Let’s get right to the point today shall we? I go out of my way to ensure my personal finances are significantly more complicated than they should be. In fact, I’d even go as far as to say that I sleep better at night because of it. No, I haven’t lost all my marbles, I just hate the idea of automating my finances.

I know I’m probably in the minority here, seeing that numerous personal finance blogs preach the wonders of automating your finances. I won’t try to convince you my way is better (even though it is), but allow me to at least explain myself further. First, I’ll list off all of the regular recurring payments I have each month.

  1. Rent- $1,175 (all utilities are rolled in to this one payment, including cable/internet)
  2. Cell Phone- $60
  3. Car/Renters Insurance- $180
  4. Credit Card(s) – Varies depending on balance (usually around $1,500)
  5. Charitable Contributions – 10% of gross income
  6. Storage unit – $65 (storing our baby grand piano)

I may be forgetting one or two other bills, but for the most part I think that about covers it. I could theoretically set up an automatic withdrawal from my checking for each of these bills, allowing the companies access to my checking account. As the bill comes due, the company would pull the money from my checking account.

Now, I don’t know about you, but that totally freaks me out. Getting married and sharing a checking account with Girl Ninja was scary enough, I couldn’t imagine giving a bunch of random strangers access to my account as well.

I’ve read horror stories about people who thought they set up a $200/monthly payment and were shocked to find out $2,000 was withdrawn instead.

Or how about the person that had their car payment scheduled for the 8th of every month. Well it just so happened that on the night their account was to be debited, their bank was beefing up security protocols and restricted all customers accounts for a few hours. As a result, the payment never processed. But because it’s suppose to be automatic, you never think to check and make sure everything went smoothly. Thirty days later you are dealing with an angry Toyota representative hounding you for being one month past due.

No thanks. Automatic payments don’t sound worth it to me. To be perfectly honest, I actually enjoy manually paying my bills. It reminds me how much money comes in and out of our account each month, but more importantly it makes me want to continually shop around and make sure I’m getting the best deal possible. It essentially keeps me intimately involved in our personal finances. And I need not remind you, making love with money is my favorite kind of romance.

Do you automate your finances? Why or why not?

How you doing? $63K in debt with a six figure income.

Last month I asked for PDITF readers to submit stories about how they’re doing. I was amazed by the feedback I received, overwhelmed even. Far more people expressed interest in contributing to the series than I anticipated. I couldn’t keep up with all the emails and submissions I was getting, so I avoided them instead  (Haha, like a true Ninja right?). I added the emails to my “To Do” list and haven’t paid much attention to them. I’m just now taking the time to look ’em over and get things worked out (sorry for the procrastination).

Today we are kicking the series off with  BR, a woman who doesn’t necessarily agree with her husband on how their six figure income should be allocated…

My name is BR, and I have been married to DH (dear husband) for about 18 months.

Together, DH and I make $100,500 before taxes. After taxes, 401(k) contributions, insurance and all that come out of our checks, we usually take home just over $62,000 a year. We both can get yearly bonuses (last year, I didn’t get one, but my husband got $8,000) and my husband gets a Christmas bonus at the end of each year, usually the amount of one paycheck, but again, this isn’t guaranteed, so I don’t count it as income.

Our debt:

  • Car loan- about $12,000
  • Truck loan- $16,000
  • My student loan- $8,900
  • Husband’s student loan- $26,700
  • Total debt: $63,600

When we got married, we had about $15,000 of credit card debt between the two of us. We set a goal to pay it off before our first anniversary, and actually did it two months ahead of schedule (thanks mostly to my husbands bonus)! We were both really relieved to be out from under that debt, but we completely disagreed on what to do next.

If I had my way, we would never go out to eat or buy anything that we don’t NEED until we have everything paid off. It would only take a year and a half, and then we would be free and clear! My husband feels like this is not reasonable, since all the debt is low-interest (what he calls ‘good debt’) and both our vehicles are worth more than what we owe on them. His bigger priority is saving for a house, since he feels that paying rent every month is throwing away money. He also thinks that going out to eat is fun and relaxing (I think he’s just trying to get out of doing the dishes :)) and he loves to go to the movies.

So, we compromised. We put $900 a month in our house fund, and then I pay whatever extra I can find in our budget on my student loan. We go out to eat once a week, and we each get $20 a week to spend on whatever we want. My $20 usually goes toward my student loan, but I also use it to thrift shop or get a haircut occasionally. While I would love to have my way, I am able to compromise with this, because our debt is no longer at a point where it keeps me up at night, like it did when we first got married. If push came to shove, we could sell our cars and reduce our debt to only student loans. Also, watching the balance on our savings account go up is super fun, and it is comforting to know that right now we could live for two months with what we have.

Really, we are not in a bad place at all. We spend much less than we earn, we save a decent amount, and we are working on paying off our debts. I get impatient, and really want to ‘punch debt in the face’, but at the end of the day I would rather have a peaceful marriage than no debt.


Ninja’s comment: If you want to submit your story for the “How you doing” series, shoot me an email.

The thorn in my side.

I like to consider myself a pretty good manager of money. Money comes in, and money goes out. It’s a simple process really. But no matter how hard I try, I just can’t seem to get a handle on the Ninja household average food budget. This one category is totally throwing my whole game off. Take a look at this ridiculous graph of how much eating costs us each month (groceries and dining out).

How the heck do we go from $400ish in the early part of the year, to a low of $280 in spring, to the mid $700’s in late summer? Our average food budget is as crazy as Britney Spears was when she cut off all her hair….

Leave Britney alone (anyone get that joke?).

Britney’s right, the Ninja’s food budget IS crazy and I don’t know what to do about it. Girl Ninja and I both agree that there is no reason we should be spending so much. In a perfect world, we’d be dropping about $250-$300/month at the grocery store and about $150-$200/month dining out. All in we’d love to keep our food spending to about $450/month. WHY CAN’T WE DO IT!?

Food is the thorn in our side, or I guess the thorn in our budget. It’s the only category that fluctuates on such extreme measures. We plan to limit our dining out to weekends only, pay better attention to what is on sale, and throw in a few “cheap” meals during the week (tomato soup and grilled cheese, black bean soup, etc). We obviously can manage just fine on a $450 average food budget ’cause I don’t remember starving in January, February, April, or July. It’s just gonna take a little more discipline and planning, but I’m confident we can figure something out. Worse case scenario; I stop eating altogether. Oh and don’t worry. We wont turn in to extreme couponers. I hate those people.

What item in your budget always seems to throw ya off (food, travel, clothes, gas, etc)? How much do you spend each month on dining out and groceries (dollar amount and number of people in family)?

If you’re with Bank Of America, you’re dumb or lazy.

As much as I’d like to think only good things about customers of Bank of America (since some of you may fall in to that category), I’m seriously beginning to doubt their intelligence. I’m sure you’ve already heard the latest on why Bank of America sucks, but I couldn’t help but share my two cents on the matter with you all today. If you aren’t familiar with what I’m talking about, let me enlighten you…

Starting in early 2012, Bank of America will begin charging some of their customers $5/month for all non-atm debit card usage. You either have to go to an ATM and get cash for all your purchases, or succumb to the $5/monthly fee for using your debit card. Let’s be honest here, BoA knows that you will likely find yourself in a situation where you need to use your debit card at least once each month. Swipe it once, BAM, you just became five dollars poorer. Say it with me ya’ll:


If you are a BoA customer this is the perfect excuse to leave that pitiful hell hole! Get out before they start to nickel and dime you to death.

Deductive reasoning forces me to assume that any/all Bank of America customers must either be stupid or lazy. What other possible explanation could be offered? I know there are ways around the fees, and that you personally may not have to deal with these new policies, but that doesn’t make BoA’s business model any less sketchy. Think about it like this:

You like Jack in the Box. You especially love their two tacos for $0.99 deal. You eat Jack in the Box once a week. One day you are watching the news and catch a report that there is an E. coli outbreak amongst Jack in the Crack products. In fact, four people have died from the E. coli poisoning and hundreds of people are hospitalized. How do you react?  You don’t just say to yourself, “Well even though everyone else is getting E.Coli, I haven’t, so I I’m gonna keep eating Jack in the Box.” Instead, not only do you stop eating J in the B, but you tell all your friends and family to avoid the restaurant as well. If you continue to eat Jack in the Box tacos, even when their tacos are literally killing customers, you MUST be either dumb or lazy. (in case you weren’t aware there really was a Jack in the Box E. coli issue, this crap really happened!)

Just like you don’t have to get E. Coli to realize you should stop eating Jack in the Box, you shouldn’t have to be fee’d to death before realizing Bank of America sucks. Contrary to popular belief, Free checking and free savings accounts do still exist. And not only that, but they exist with banks and credit unions that actually put their customers first! Vote with your dollar people and stay the heck away from BoA.

Who do you bank with? How do you feel about them? If you say anything but “They freakin’ rock my face off” you need to start shopping for a new bank (ING, Ally, USAA are all awesome). Do you think Bank of America sucks as much as I do? Anyone brave enough to defend BoA?

p.s. If you hate your bank and want to switch, but don’t know how or who to go with, you can always email me and I’ll throw out a few recommendations.

p.p.s. If you are reading this via email or a feed reader and don’t see my stick figure drawing, you have to click over to my website to see it. I accidentally hit publish before I uploaded the image which means it might not be showing up in your feed.