You’re broke because you choose to be

The title of today’s post may be a little harsh, but I’m not one for sugarcoating. If you have been in a coma for the last two years, you may not have noticed the economy is not in the greatest shape. There is no denying many Americans have been affected by the economic downturn, but I get pretty frustrated with people that always point the finger at someone else.

I am going to punch a baby in the face (figuratively speaking of course)  if I hear another person complain about how broke they are. Don’t get me wrong, I don’t have a problem with broke people, I only have an issue with those that complain about being broke, but have no plan to become un-broke (is that a word?).

Don’t tell me you can’t get ahead when you have an 800 channel cable package, an unlimited cell phone plan, and a fridge full of beer and soda. Wanna know something? You’re not broke, you’re stupid. Ya gotta change your mentality. You have to accept responsibility for your situation and quit pointing the finger at someone else (even if it really is someone elses fault).

Maybe you worked really hard, made a decent salary, used your credit cards responsibly, but fell victim to some shady business practices from your lender. Oh freakin well. Last time I checked, bitterness wasn’t a key to success. Bad things do happen to good people, but what really separates the winners from the un-winners (losers sounded too harsh) is the drive to consistently better themselves.

If you have found yourself strapped for cash, don’t sit idly by and wait for someone to fix your problems, it’s on your shoulders. That means you might have to say goodbye dining out, adios Nordstrom, and ::GASP:: farewell tall-non-fat-caramel-macchiato-upside-down-with-a-whip-a-grip-and-a-kung-fu-twist from Starbucks. Please do not tell me you aren’t sure how you are going to pay your credit card bill if you haven’t canceled your cable. Change starts with you (and your spending habits).

Yes my tone may be slighty harsh, but sometimes people need a good swift kick in the a$$. My assumption is most of my readers are either financially secure, or at least have a plan to become financially secure, and therefore this message does not really apply to you, but it’s still an important message nonetheless. Do you have any good stories from people whining about their finances when they have done NOTHING to correct the issue? Is it possible that I simply lack compassion and am actually a terrible person for being so mean? You can call me mean, but I like to think of myself as…well…honest 🙂

Monthly Expenses: December 2009

It’s not as bad as it looks I promise. Well, okay it’s pretty bad, but I have some excuses. December was an expensive month for me with Christmas travel, presents, and oh yeah, getting engaged. I had a rare occurrence last month… I spent more than I made (Bad ninja, very bad ninja). Here’s the spending breakdown…

My Income:

Blog: Oh Em Gee!!!! I can’t believe I can make money writing about whatever the eff I want. I still haven’t really attempted to monetize PDITF because I don’t want to become an advertising whore, but the cash flow sure doesn’t hurt. Right now my sole blogging focus is on not sucking.

Salary: My take home pay from the day job. I’m getting really really antsy for my $12,000 February pay raise! In the meantime, I’ll have a few more $1,350 bi-weekly checks coming my way.

Gift: Grandma Ninja is a baller and hooked it up with a little Xmas money cash flow. If any of you are feeling generous just let me know and I will gladly take your money 🙂

Tutoring: I remember now why I love tutoring, It puts a couple hundred dollars in my checking account each month. In 2008 I made $11,000 tutoring, 2009 made $4,000, and this year I hope to make about $5,000. It’s the easiest money I’ve ever made. In fact, just last night I made $50 for one hour of Pre-Calculus. I knew pre-calc would come in handy at some point!

My Expenses:

Auto: I spent $70 last month on gas and $76 on a AAA roadside assistant/renters insurance plan.

Camera: I got a fun toy for Xmas, the Canon Rebel XSi digital SLR. I had to buy a case and memory card for it. I foresee this photography thing being a very expensive habit, so I will try my best to temper my impulse spending here.

Dining/Groceries: Holy Jamoley! I spent $220 on dining out last month. I try to spend under $100 each month eating out, but I blew it last month. It’s actually not as bad as it looks because $120 was for Pizza for my surprise engagement party, and another $50 was on lunch with Girl Ninja and her parents right after I proposed. Still though, seeing over $350 in this category makes me want to throw up all my food and then re-eat it (hey, that’s recycling right?).

Interest expense: Ummm yeah, about that student loan of mine. I have been making only minimum payments on this pesky loan for the last month and a half. With a wedding and honeymoon pending I’m stockpiling cash, but will most likely revert back to making $1,000-$2,000 monthly payments.

Misc: As the category alludes, this is a miscellaneous category for all the random one time purchases that don’t really fit anywhere else. The majority of this expense is the setting for Girl Ninja’s engagement ring. I bought the diamond in June and the setting in December so it helped split the total cost over a six month chunk of time. If ya missed it last month, here’s another look at the Ring…

Reimbursement: Since I work from home, my internet bill is reimbursed ($40/month x 2moths, plus a parking reimbursement). Working from home is quite convenient, you all should try it :p

The other categories were too unimportant or self explanatory so that is why I didn’t cover them. The overall total at the bottom is the cash I had leftover after all my expenses. As you can see, I didn’t do too hot on the overall total… -$514, to be exact. I can’t say I’m surprised by this because it is all the result of an engagement. What can I say, you women are EXPENSIVE (but worth every penny….usually). January’s spending report should be much more normal.

* Are you wondering why I post the previous month’s expenses a couple weeks late? I use quicken to track my spending and I have to wait until the end of the billing cycle before I can download these transactions. I know I could manually add each expense as it comes, but I am entirely too lazy for that. Thanks for checking in and if you got any comments, tips, or advice I’d be more than happy to hear it. *

“Finances are so complicated”

How many people have you heard excuse their lackluster personal finances because managing their cash flow seems like too much work. I’m afraid I know a handful of people that are so intimidated by their finances, they choose to ignore them completely. Guess what?! Managing your money is really, really, really simple. Even more simple than this maze…

There are really only three things that can be done with money.

1) Spend it

2) Save/Invest it

4) Steal it

4) Give it

For the love of all that is holy, don’t try and make personal finance more complicated than it should be. Your goal should be to have less than 100% of your money in the “spend” category. Ya got issues if you are spending 103% of your income every month, sadly this is more common than we all realize.

To keep this post short I’m gonna post up the percentage of my income that gets allocatted to each category every month….

Spending: 60%

Save/Invest: 30%

Donate: 10%

So that is the breakdown of my numbers. Keep in mind it is an average, some months my spending was 35% of my monthly income, and other times it was 140%, so it’s important to try to think over the course of a year or so.

Now it’s your turn sucka, why don’t you post up a quick snapshot of your “Spend, Save, Give” percentages. Try to be honest and accurate. There really is no “perfect” breakdown as each of us is unique and has our own perceptions of what is important to us.

p.s. don’t do drugs (yeah, I know that has nothing to do with finances, but I just thought you mind need a friendly reminder :))

I suck at accepting gifts

As Girl Ninja and I continue planning our wedding, I’m learning all sorts of crazy things about myself. One of the lessons I have learned thus far: I suck at accepting gifts.

Girl Ninja’s parents have been totally awesome and gave us a very generous wedding budget. I don’t know if Girl Ninja wants me posting up the amount, so I’ll just give ya’ll a ball park…it’s between $10 and $100,000 ;). In all honesty, it is the largest sum of money we have ever been gifted.

I think I might be a terrible human being, because my initial reaction was not necessarily excitement and gratitude. My first thought was “Thank goodness I don’t have to wipe out my life savings for this thing beautiful day.” But then my second reaction was “We can’t accept that, and if we do accept it, we aren’t going to spend it all.”

I’m genetically frugal, it is in my DNA, so I became slightly uncomfortable with the thought of spending so much money on one single day. I found myself trying to convince Girl Ninja to reduce costs, cut corners, and ultimately sacrifice the quality of our wedding, even though everything we want is within our budget.

Girl Ninja said something to me last night that helped put me at ease. She said, “Ninja, You need to understand that this wedding is a party that my parents want to throw for us. It is a gift and we need to be grateful for it.” (No she didn’t actually call me Ninja, but I would be so happy inside if she did).

How many times have we been given a bday or xmas gift, only to respond “I can’t possibly accept this.”? Ya know what? Girl Ninja has a point. Sometimes we need to shut up, and accept generosity. I may be frugal by nature, but I need to be careful not to offend, or at least appear unappreciative of this gift.

Sometimes frugality can be a curse, and this my friends might be one of those situations. Have you found yourself struggling to accept a gift? Why is it so hard to let people do nice things for us? Am I a total douche for having an initial feeling of discomfort instead of excitement?

p.s. the wedding allotment was given to us with no strings attached, except one…the money is for a wedding, and a wedding only. Many of you may be thinking “Cheap out on the wedding and pocket the leftover.” Not an option, and not what Girl Ninja and I would want to do 🙂

Do me a favor, ignore the majority of my advice

So I was reading the other day (Yes I do actually know how to read) and came across something profound. I’d like to share it with you now…

No one-size-fits-all recipe can guarantee a great relationship. Whether we’re talking about husband and wife, close friends, co-workers, or parent and child, every relationship is different. No two are ever exactly alike. What builds and sustains one is often of no value in another….

…..Each relationship has its own dance and drama, played out according to the unique strengths, needs, and personalities of the partners.

If you are wondering, this excerpt comes from the book “Contrarian’s Guide to Knowing God.” I think the author makes a valid point: What works for one person, might not work for another. Later in the chapter he goes on to discuss, that just because each person is different, that does not mean there are not fundamental rules in which we must all oblige. For example, don’t kill, steal from, or lie to each other. When these “ground rules” are broken, bad things happen.

Ready for the personal finance tie in? No two financial journeys are ever the same, but the ground rules apply to all. Sure there may be some disagreement in what is considered a fundamental financial principle, but here are mine…

1) Spend less than you make

2) Don’t accumulate debt (without a game plan to pay it off)

3) Have money set aside for a rainy day

If any one of these three financial principles are violated, you will almost surely face unnecessary hardships.  Notice, though, that there is room for WHAT YOU WANT within each parameter. Sure you need to spend less than you make to have financial freedom, but it’s up to you how much less. Maybe it’s $50/month, $500/month, or more. You get to decide what works best for you.

Becoming financially secure is not about following a strict guideline, but more taking some basic principles and making them unique to your situation. We need to be more tolerant of our peers gameplans (unless their plans involve money, vokda, a tiger, and a midget).

I’m a pretty stubborn individual so it’s important for me to be reminded that my way is not the best way (although I will definitely try to argue that it is).

What are some universal financial principles that you believe everyone must follow? Have you been stubborn, like myself, and become frustrated when people don’t do things “your way”?

I’m willing to bet…

…very few of you PDITF readers work in the financial sector. I sure as heck don’t! People often think that I must have some type of financial credentials (business degree, work in financial sector, etc) to write about money. In reality, all of my “financial wisdom” (or lack thereof) comes from observation and personal finance books/blogs.

Wanna know a little secret? I began college an accounting major, and after taking my first economics course, realized I would be absolutely miserable being a business man (no offense to you business minded folks). If you’ve been following me for a while, you know my degree is in Psychology, which last time I checked, was not at all related to finances in any way, shape, or form.

Not only does my degree have NOTHING to do with finances, but my work is also far from it. People often ask if I have any desire to become a financial adviser. Wanna know the truth? Hell to the No. There is a difference between a hobby and a career. I’m a Special Agent by day, blogger by night 🙂

Yes, I do enjoy learning about personal finances. Heck, I even enjoy sharing with other people (you included) my opinions on how financial success can best be achieved. But let me be clear… I have ABSOLUTELY no desire to earn an income by managing people’s money for them.

I’m a huge advocate of personal responsibility. I like to encourage people, and remind them that they can manage their money on their own, often without third party help. In fact, I like to pretend my lack of financial education or career, motivates people like you to get your money issues worked out. I’m hoping you can relate to my story and become equally motivated!

So I took a gamble and bet the majority of you have no “expertise” in a financially related field. Am I wrong? What is your degree in and what field do you work in? Why do you come to my site and read my stuff knowing I have no credentials? Is it for my crazy drawings, or do you actually learn something every now and again?

Perks of the job…

As I walked across the stage and received my college diploma I had dollar signs in my eyes. I was all about trying to earn the largest income possible. Two and a half years later, I’m coming to realize salary is only one piece of the puzzle. A large salary is nice, but awesome benefits really turn me on….puuurrrrr.

Insurance was a foreign concept to me as a college student. I was on my parents health insurance and never really realized how important it was. To date, I have still had no major medical emergencies, but having a job that provides full insurance benefits puts my mind at ease. Since I work for Uncle Sam, I have quite a few insurance options. Competition drives down prices. If I worked for a company that didn’t provide health insurance I could easily be paying twice as much per month, in premiums, for an individual plan.

If you didn’t already know, I work from home. A few of the perks that come with this: I can work in my underwear, no boss breathing down my neck, and my internet bill gets reimbursed. That’s $40 a month automatic savings in my pocket.

I guess I must be kinda important because I’m fortunate enough to have a work vehicle. If I took another job I would most likely have to drive to work each day. Assuming I had a 25 mile (roundtrip) commute for said job, I would be spending roughly $1,000/yr just to get to and from work (and that doesn’t even account for the wear and tear on the vehicle, maintenance, etc). My work vehicle doesn’t only save me gas money, but it also reduces my private auto insurance premium. Since I only put a few thousand miles on my personal vehicle each year, I am able to insure it as a leisure vehicle, which in turn lowers my insurance quote, probably saving me another $20/month.

I know 401K matching is pretty typical in most large companies, but it is not a guaruntee. Especially when the economy suffers and employers need to cut back some of their costs. Fortunately for me I have had 5% of my income matched since the first day I started. At my current income ($50K), The Man is contributing $2,500 towards my future.

So in reality, my salary may only be $50K, but I’m actually receiving about $5,000 in additional (mostly tax free) benefits. Whenever I look in to other job prospects I remind myself that the salary is only a small piece of the overall employment picture. Heck working from home is so epic, I would have to get paid a lot more elsewhere to consider giving up the freedom I have.

Now it’s your turn bloggers. Wont you share some of the benefits you receive from your employer? Do you get free lunch (like google employees)? Maybe discounts at certain retailers? What percent, if any, does your employer match to a 401k? Is the salary what’s important, or is it the benefits?