you must have a plan

Continuing the theme on how to pay of debt here are some of the things that helped me in paying down debt and start planning for the future. This is hopefully a future where I am financially independent. I hope these thoughts help you too.

 

 

– A better paying job

 

Like I said I got a better paying job that would allow my wife to stay home and also would allow us to be able to pay down our debts. The security and stability provided by a new job should help on multiple fronts. It is definitely not a ticket start buying frivolous things, it is more important to get debt free and live frugally. This is a bit more complicated in real life then for me to say, just because there is so much nice stuff out there too buy. However this might also me an argument to save for everything you want to buy, only use cash and buy high quality items that will last a long time. But here are the steps and actions that I took after I got my new job in order to get ahead financially.

 

– map finances:

 

One of the beauties of the internet is that it gives you many financial tools for free. It does everything from your bank keeping track of your expenditures to MINT keeping track of all your expenses. So it is important to utilize those resources in tracking where your money is going. Once a week you can use these tools to map out where your money is being spent and getting an idea of how to reduce these expenditures. I utilize a 30/30/30 approach to focus my spending. 30 percent of your income goes to donations and investments, 30 goes to rent and utilities and 30 goes to regular expenditures such as food , gas and so on.

 

– paper money

 

While I am big fan of gold and silver and other tangible things that have intrinsic value there is a lot of room for paper. I would recommend having an emergency fund and some physical dollars in your possession. This is because it plays back into using the envelope system. (the envelope system: http://libertariandad.wordpress.com/2013/11/28/the-envelope-system/ Also you never know when you may actually need physical cash and it shows how much you have. It is amazing how much less you will spend when you have physical dollars in your hand.

 

– set goals

 

Humans in generally can’t see much passed a year in terms of what they want to do and that is if they are lucky. Most people think about a week out and may plan about 2 months out. But with getting out of debt and where you want to go financially you want to look at 2 months, 6 months, 1 year, 5 years and then by age 30, 40, 50. Grab a note book and write your goals down and if you need help you can always Google goals. There are thousands of financial advisors out there. These are my goals for the coming years.

 

2 months: stick to the envelope plan and put away 500 into my savings account

 

6 month: (which will be December) pay with saving for all of Christmas and pay of my wifes student loans with the money I have been putting away

 

1 year: Buy 400 dollars worth of silver coins (you should have physical silver not stocks in it), have 30k in my 401k, have 2-4 months of emergency savings and I could go on.

 

I’ll skip thirty cause I have already passed that goal.

40: I would like to own a house, have 6 months of emergency savings, have over 100,000 thousand dollars of assets (liquid and solid)

 

50: Seriously?

 

– read articles about saving money

 

Just like anything else one is interested in it is imperative that you read about it. There are thousands of articles on finance on what to do and where to go. At this point all you have to do it Google how to pay of debt and you will be greeted by thousands of hits. Most of these websites will also tell you how to pay of debt and where to go from there.

 

I hope that this advice is useful in helping you focus for the future. I will write more on where I am today and what my plans are for the future.

Digging yourself out of a hole part 2

Admitting that we were way over our heads was one of the first steps that we had to take in order to put our financial in order. It is never easy a thing to do and it is frustrating, a lot of pride has to be swallowed to over come this hurdle. However it is totally worth it. Once we admitted that we were in over our head we put together a plan that would set us up for success.

 

Here are the steps that we took to get to where we are today:

 

1. Find a way to increase your income whether that is working more then one job or trying to get a promotion or starting a side business. I was able to find a job that massively increased my pay and my wife was able to stay home to take care of my son. It also allowed us to put away some money for a rainy day and start paying into our debt.

 

2. Decrease expenses. Yes this is easier said then done, but whether it is selling the expensive car you have for a cheaper one or moving further from work for a cheaper house do it. I read about cutting out drinking coffee from Starbucks, if you are drinking nothing but high end drinks sure but if you just drink coffee…I don’t know that is personnal preference. What we did was move in with my parents in law (yes this not for every one but it definitely helped pay down a lot of debt). My wife also learned how to cut my hair (although she still would get her hair cut professionally). 

 

3. Look at where you want to go or in other words set goals. Whether its paying of all debt, buy a house or what ever. You are in charge of your own life. My wifes and my goals were to pay of our debts and have 2-4 months of living expenses. Also it would be great to have my wifes student loans paid off. In the next article on digging yourself out of a hole I will address where I am. It is a lot further then I thought I would be. Oyeah, the number one goal I had was to have over 100,000 in assets by the time I am 40. Am I almost there, just wait and I will tell you. 

 

4. Read about finances. I don’t know how many blogs and financial books I have plowed through in order to figure out what I should be doing with my money. You don’t wake up one day knowing how to pay of debt or how to invest, this all takes time and diligence. I recommended Dave Ramseys website and books. Once you start that you can always do searches on Google that will give you advice on how to pay of debt and invest.

 

5. Be willing to sacrifice, but don’t be martyr. Many people who think that paying of debt essentially means cutting out everything are going too far. Yes it will hurt to pay of debt however does all the fun have to end? No. You can still go out to eat on occasion. You can still have your coffee however it is all with moderation and budgeting.

 

This is what my wife and I went through to get to where we are today. One last point I forgot to make, write down where you want to go and do it every month until you get to the place where you want to be. I will continue writing more about these events and where we are today.

suicide, an end of innocence

It all started with a phone call. He is dead, Tim committed suicide. There was a long pause and something exploded in my brain.. “What happened?” I asked but feeling as though I am a million miles away from the conversation. All I hear is something about his friend finding him and the paramedics are there. There are grief counselors in the school. I hang up the phone and my whole body starts shaking and tears rolling out of my eyes.

 

My dad holds me and I am shaking, crying uncontrollably. The rest of the day passes by like a dark cloud in the sky. All emotion has left me and I am left completely empty. If only I had gone to his house. If only I had talked to him more. If only I had called him. Why didn’t I see it coming? The questions rolled through my head for weeks and months after Tim had taken his own life.

 

Even 12 years after the event I still feel emotional about the event. In many ways it feels as though it was an end of an era and some piece of me was buried with this young man. I still have questions about what happened. However it also taught me a lot about suicide and about the indicators that someone is suicidal. If you ever suspect or even have suicidal thoughts yourself talk about it. Yes it is unfortunate and can be embarrassing, but it shows you care. You never know, you may have just saved a life.

 

 

Way to go in over simplifying things

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After writing my last article on ” Human action isn’t always one or the other” (http://libertariandad.wordpress.com/2014/06/04/human-action-isnt-always-one-or-the-other/) it led me to think about how this concept was hard to put into words. It also made me think that the concept itself isn’t as easy to describe because it is easy to lock into a small portion of any kind of statement and try to criticize it or simplify the concept. Its sort of like the debate on vaccines, just because some one questions their efficacy doesn’t mean one is anti vaccinations. This also goes for all kinds of other issues. Questioning something doesn’t mean you are a denier or against it. Furthermore, many times things are way more complicated then how they appear.

I bring this up because so many times when I see statements or arguments I begin to think to myself, this subject is waaaay more complicated then that. Things like lets raise the minimum to 10.10. Well okay, that seems pretty straight forward right, but then you have to start asking questions like “How will this affect new workers?” “Why is there a need to raise the minimum wage?” “Can we end inflation?” I could go on forever, but these questions on any subject just aren’t really addressed. Also it gets worse when you read comments, “Impeach who is in the oval office” isn’t having discussion about the issues.

Maybe I am just stating the complete obvious when it comes to the discussions of things and I should just leave it at that. Maybe most people realize that most issues are not just a straight road, but instead is more like the entire road system in the US. I would like to hope so because that is much more like the world we live in, things are not very straight forward with all cars traveling in one direction. No instead there are cars driving all around us, going up exit ramps, stopping at stop lights and so on. It also means that people can have a wide variety of thoughts on a subject and that doesn’t mean that it is right or wrong….only one that is heading in a different direction.

Danny was the best runner in the world

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Since Dannys youth had been groomed to be the best runner in the nation. He was faster and stronger then any other runner out there. He received multiple awards and his name was already famous at a very young age. In elementary school he would get up early and run 10 miles before school even began. This was the same for high school and college. He won just about every award that he possible could.

What was not to readily ever discussed though was that while he was an amazing runner he began using some steroids to run better in his early years of college. It was nothing big but just enough to give him even greater boosts. The records he set were amazing, but he wanted more and started pushing for even more sport enhancing liquids to push him higher and higher. He was running miles faster then most could even believe.

Then  one day in the last month of college he was running for his daily job when he collapsed on the ground grasping his chest. He had a minor heart attack and was advised by the doctors there to stop using sport enhancing drugs. However Danny didn’t listen to this, instead he got himself a prescription from a doctor for various over the counter drugs and pain medication. This is likely the reason why he made it to the Olympics and got gold.

During those Olympics he fell and badly damaged both his legs, he refused to stand down and instead took high doses of morphine, oxycodine and adrenaline to keep on running. After the Olympics he fell into a deep depression because the injuries that he had sustained  left him unable to run. Months went by and Danny was even more upset about what had happened and was looking for some way to become healed. He started drinking to ease his mind and slowly started feeling better. He started training again and it was during this time he met a man who offered to give him something that would push him further.

Danny never asked questions but started taking it and he was able to run faster then he had ever before. He kept on training and went on to win another Olympic games however he received silver. Like before, he went into a deep depression after winning the Olympic games. He started drinking even more heavy then before and in order to get himself training again he had to use multiple medicines, drinks and steroids. Danny went on to win the bronze at next Olympics however the years of drinking, medicines, steroids, crazy routines had left him permanently hurt and Danny was never able to fully get up again.

Danny spent the rest of his life barely able to walk and only recollecting the greatness that he had achieved.

Digging yourself out of a hole part 1

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One of the toughest situations people get themselves into is high levels of debt. Whether its credit card, student loans, car or just spending too much. It is hard to avoid, just because there is so much nice stuff out there that needs to be bought with our pay checks. Once confronted with this debts and the realization that one should go pay it back people will make excuses for why they can’t do it. This varies from it being too hard, they like their life style, they don’t have the money to change things and it goes on and on. The real issue is how to overcome these hurdles and really start to manage your debt and instead of debt you have savings, investments and real (paid off) assets.

This is the way my wife and I got out of debt. (some of the numbers and exact life events have been changed to protect the guilty)

Here is the back story to how we got to where we were (heavily in debt and unhappy). We were young and in love and got married with this romantic notion that love would carry us through. We both had rather low paying jobs, we were both going to college and had little to no idea about finances and what exactly that was. Neither one of us had been raised with family who were very good at managing finances (not that we are alone like that). Our combined income was about 2500 dollars and here were our expenses.

–    1290 apartment
–    300 entertainment
–    100 tithing
–    100 gas
–    150 car insurance
–    150 telephone
–    300 food
–    50 gym
–    50 internet
–    40 cigarettes
–    270 car payment

That comes out to being about 2600 dollars and I am not even including any other incidentals, like eating out and so on. This went on for about a year and I think we ended up with about 14K in credit card debt, 11k car loan and 30k in student loans. Then we had a number of mishaps, my wife lost her job and we lost about months salary and then she was involved in a car crash and we now lost my car. To complicate things even more we found out that we were going to be parents.

This was my wake up call, I am going to be a dad and I have lots of debt and no real prospects. What do I do?

Hold the banner high

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Growing up I read a many books about knights, soldiers and other famous people and always admired many of them for their devotion to duty. But what does this mean today, what are your responsibilities? The most obvious one is be a good citizen. I have always been a bit perplexed by this one, cause I am not sure what it means. It assumes that one most likely shouldn’t start any quarels and not promote problems or at a minimum attempt to resolve them. How does this work in the context of knights and soldiers? Well to me, knights held honor above all else and would do whatever it takes to keep their honor. What does that entail one might ask? It’s actually rather straight forward.

 

The reason I say this is because in today’s society it is easy to have low standards for all things, you don’t have to be smart, you don’t have to work hard, you can be a slob, you can be a jerk and apparently that is okay. Just watch tv it is abhorent how many people act rather disgraceful on it and people laugh about it. My goodness, where do people get the guile to act this way?

 

I am here to tell you that it is okay to have high standards and expect others to have them too. It is okay to be smart and show your intellect. How else would one drag other people up if you don’t show what you are made off. Be involved with civic groups, go to church and be involved, help your neighbours with things, volunteer with activities, all of these things are good and should be encouraged. A former colleague wrote on my going away letter, “If not you then who?” To this day I hold that dear and would encourage people to have the same courage to do the same.

Human action isn’t always one or the other

 

Maybe being raised in two cultures has helped shape my view of the world and one of the biggest conclusions I have come to is that there is a lot of situations that are not black or white or one or the other. It’s not like a football game where you are either for one team or the other there is a lot of nuance out there. In many debates and discussions I have had people assume that if I am not for something that I must be against it. However what if there is a third way one where a person is ambivelant about something. A good example is cigarette smoking, I don’t smoke myself and don’t want others to smoke however I am not against smoking or smokers. (even though it does smell yucky) If you are an adult and want to enjoy a cigarette then you should be able too.

 

This extends into much of my outlook on the world even politics, I do vote however I don’t really view myself as being republican or democrat. There are elements that I agree with from both parties, however this makes it difficult to vote one or the other cause I would rather vote other. Maybe one day that will happen, we shall see. But as I was saying, this view extends into much of my life I believe I try to be educated and thorough about the decisions I make from day today. Whether I buy a truck or a minivan, whether to eat healthy or not healthy these aren’t wrong or right decisions they are just personnal choices that one has to make.

 

Now I know that some one would read this and go, well you are being wishy washy and not standing up for prinicipal. To which I would say that that is not true, there are absolutes in this world or else I wouldn’t be a Reformed Christian or a libertarian. These two world views shape my every day life and many of my personnal views, it also can be a reason why I do what I do. However to attempt to pigeon hole one person and have a black and white view of the world is doing yourself a disservice and can make debating with some one difficult.