My Road to Financial Wellness

The following blog post is part of the The Road to Financial Wellness Blog Tour. Over a period of 30 days, the Phroogal team will go to 30 locations to raise awareness about financial empowerment. Today they will be in Cheyenne! Our goal is to help people learn about money by starting the conversation. We understand that local conversations can help bring about national awareness.

Today, in what will be a first in my blogging career (if you want to call it that) I’ll be attending an event that I was tangentially involved in organizing. For those of you in Cheyenne, WY (or nearby) feel free to come to Lions Park where Phroogal is teaming up with Warren Federal Credit Union and offering a financial seminar. It’s in the Kiwanas house at Noon, for those wanting to attend. It’s a part of Warren’s Member Appreciation day, which starts around 11:30, and they’ll have youth activities, lunch and more. I’ll be there around 11:45, and if would love to meet any readers. As a part of The Road, Phroogal asked everyone who was participating to share a story of financial empowerment. Here’s mine.

There are quite a few things that have led me to where I am financially, and many of them I’ve written about here. The one that sticks out as the real turning point to me though, was when I went to grad school.

When I got to grad school, I had 1 friend, and she had to be my friend because she’s my sister. I didnt know anyone, which after a few days I came to realize would probably be a good thing. I was never much of a spender, but when I was in undergrad I was not very good at saying no, so whenever someone invited me to lunch/dinner/for a drink, I usually said yes. I knew a lot of people, so this happened quite often.

It started costing me money – a lot of money, as you can correctly assume. I did some things here and there to cut costs and make things cheaper, but I didnt do the best (and easiest) thing: Say no.

In grad school, I was in a very small program and didnt have any friends, so there was no one to say no to. That, coupled with the fact that I knew what I was earning every month and had  been told in no uncertain terms that the plug was getting pulled, it was time for me to do something about it.

For the 2nd time that I can recall, and the first time in at least 12 months, I gathered all of my financial stuff and got it in order. Even though I wouldnt be paying it for a few years, I got my student loan data as well, and made a budget. After looking at the numbers for a while and gathering everything, I realized that for the first time ever I could build a savings account, as long as I stuck to my modest dining out/entertainment budget. There was not enough to make significant progress on my debt or student loans, but there was enough to chip down and to save some.

It was the first time that I can remember that I actually felt like I could be in control of my finances, instead of letting them control me like they had been the last few years. I wasnt making a ton of money, but my expenses were very low (probably less than $400 per month, and certainly less than $450).

I looked at that sheet, and I finally felt like I could get things under control. I had a budget, I had a steady income, a fairly stable list of expenses, and room to save. I could finally start making progress, and all I had to do was act. I also started reading up quite a bit about money. I read a lot of The Simple Dollar and Get Rich Slowly in those days, and learned that my problems were more psycological with money, so I worked on those as well.

I started to tell myself (and occasionally others) that I’d have to skip something that wasnt in the budget. I’d suggest cheaper activities (like frisbee golf) or having beers at someones house instead of going to a bar. Even though you could get an 18 oz beer for 2 bucks, I typically skipped it.

After quite a while of struggling, that was the moment that I finally felt empowered with my finances.

When did you feel financially empowered?

March 2015 Monthly Review

March Monthly Review

As you can see, I have finally finished the redesign that I have been working on for just about a year, and it seems to be going well. I started writing anonymously when I started, because I was afraid (or something) of sharing all my personal financial details online. It wasnt 100% anonymous, but it was close. I mainly did this out of fear, and I’ve been slowly loosening the reins on that since 2011 or so. I will say though, that nothing is more awkward/uncomfortable when people find your site and you’re in the room as they go through your financials. I will say that I dont regret my decision (then or now), as back at that time many bloggers were anonymous, and like me, many have started to put a bit more personality into their sites. I’m hoping that more people can relate to our situation now because they see a real person behind it.

We are continuing to move forward, but due to poor meal planning we spent a whole boat-load of money on food last month, and will be focusing on reducing those costs as the year progresses. It seems to be a never ending battle, with the hinge point being the meal planning. When we do it, we are much less stressed during the week, eat better and spend less on food. When we dont, the dam breaks and calling it a disaster is an understatement.

In case you didnt catch the last post, we are focusing our financial energy and goal setting now on the FI/RE movement, or retiring early. Both my wife and I want nothing more than to have our time back, and spend it with family and friends doing things we enjoy. The easiest ticket out of that will be to lower our expenses and build up enough savings to meet our needs for the foreseeable future. We live fairly lean already (when we can control our food spending), and figure that it will take about 10 years to reach our goal.

Debt

Mortgage $ 100,971 (-$1966) There is a huge drop off here from last month, and it’s because this took a while to write and I didnt get it up before the april payment happened. It looks like we will be under 6 figures by early may, after our extra payments this month.

Total Debt: $ 100,971

It’s nice only have 1 source of debt (and even then, we know we can sell our house for more than what we owe on it. Now that this number is solidly in control, it’s time to ramp up our savings.

Savings

Goals in this area are pretty straight forward – Max out traditional IRAs for both of us, contribute to my wife’s 457 plan (Im not eligible for a retirement plan yet at my new job) and put the rest into our savings accounts, listed below.

Vacation fund $1,000 – We will be transferring what was going to our emergency fund into this account, and once we reach a goal here we’ll be investing in taxable accounts.

Emergency Fund $9,950 – We are almost back at the 10,000 that we wanted to keep in here, but there is still some confusion between us and the insurance company about the hospital stay we had last month. The insurance company has told us that they both have and have not paid the entire bill, so we are not sure what’s going on.

How are you doing so far in 2o15?

New Goals

On July 7, 2009, I published the first entry on what would become this blog. Back then, the design wasnt great, my writing wasnt that good, and I didnt know that much about blogging or doing much of anything online (though I was great at reading the news online). A lot has changed since then.

NewDir

I had over 5k in credit card debt, over 20k in student loans, and was just about 4 months away from piling on another 20k in debt for a replacement car after my old one gave up the ghost. Over the next 5 years I worked hard (most of the time) and was laser focused on paying off all of that debt – which I was able to do in July, 2014 after I switched jobs. Oddly enough, it was about 5 years to the day since the first post here and that moment. I am afraid to think of where I’d be right now if I still had that huge debt burden hanging over my head. Sure, my life was not all fun and games during those 5 years, though I did have some fun and was able to enjoy myself. Being free from consumer debt (we still carry a mortgage) was the longest project I’d ever worked on, and when I started, there was a lot of people giving me odd looks when I told them I wanted to become debt free. It took longer than I wanted it to, but so what. It’s allowed me to do quite a bit since then, including buying a house with 20% down, building up a huge cash buffer to do major repairs, getting engaged, married and going on a honeymoon across the world without accumulating any debt, having a child and more. Not having any debt also allowed my wife and I to ride out a major cash crunch unscathed this summer, as she went part time at work to take care of our daughter, I switched jobs (each of those things ended up resulting in lower take-home pay) and our health insurance costs went up 10x as a result of the job switch. All told, it amounted to about a 40% cut in our income for the last 6 months of 2014. We spent some out of our savings, but that was on a planned project for our house, and had we not done that, we would have kept our savings intact (and added to it). I’m sure some of those things still would have gotten done had I not paid off all my debt, but having all debts paid off sure as hell made it a lot easier.

Conventional wisdom kept telling me that I’d never be totally debt free, and that I should “manage” my debt well. I had listened to that advice before 2009, and it didnt really do me any favors, so I figured conventional wisdom might be wrong and that I should tell conventional wisdom to go pound sand. When a fellow blogger left work early, he bought a farm (which sounds cool) but this part is what really struck me

It is no measure of health to be well-adjusted in a sick society. – Krishnamurti

And that’s all I could see (and still see) – a sick society.  People that have stopped working to live, instead filling evenings with mindless television and copious amounts of useless entertainment on the weekends so that they can continue to bear their jobs.

Brave New Life

I dont agree with everything in the entire post, but the above I think he’s to spot on. If the average american has 15k+ of credit card debt, 150k+ of mortgage debt and 30k+ of student debt (and rising) and I have just 100k left on my mortgage – what’s wrong with me?

This comes up a lot in healthy living/eating spaces as well – everyone is doing XYZ and they are not healthy, but doing ABC will get you healthy and people will think you’re weird for it. Same story in life & finances, I’ve found.

I often get asked for advice and people dont like what I suggest because it’s out of the mainstream. I often get weird looks from co-workers when they find out that I biked to work in -20 degree weather and not only did I not die during my 1 mile commute, I actually felt uncomfortably warm. I do a lot of things that people consider fairly odd, and I dont care about what they think – but I did wonder if I was doing something wrong. Just because everyone else is making imprudent (or dumb) decisions with their life, doesnt mean that I need to be doing that as well, and I’ll probably be happier because of it.

All of that thinking and talking to my wife led us to a decision about our future & goals. We decided we needed a new goal, so we talked about what we want and where we were at, and we came up with one big goal, and a series of smaller goals to help us hit our big goal.

Our goal is Financial Independence/Early Retirement/FI or whatever you want to call it. There will still be plenty of ways to reduce debt and go green, but they will all fall under the FI/RE banner.

We are both tired of working for other people, and would like more time to spend with our daughter (and potential future children). Tired of workplace politics and tired of having to cram all of our fun and other errands into the 2 weekend days. We’d like to spend more time traveling, and have more time to do it. I would like to spend more time teaching my daughter and watching her learn new things. I’d like to be able to take on the many projects that I’ve got piled up (like aquaponics, a bigger garden and more house projects) without taking weekend time. I’d like to read more books. The list for both of us goes on and on.

We ran some numbers, and realized this would be another long-term goal (even longer than it took me to pay off debt) and we’ll have to work for it – but it’s doable. We’ve been making some changes to our budget, and are planning on making a few more in the coming months that should bring our expenses down even further- allowing us to put away even more money.

Over the coming (weeks and months) I’ll be laying out our plans and strategy in more detail, including other things we are doing to do to hit our goals. Some will probably seem odd to some people and not to others, but it doesnt matter. We’ll have our freedom at the end of the road, and that’s what will matter (and will be odd as well).

As I reiterated to myself when paying off my debt :

“If you will live like no one else, later you can live like no one else.” – Dave Ramsey

The same thing applies – just to saving instead of debt freedom.

Image Source: Flick’r

How to Learn a new Language for Free

The best things in life are free, such as getting much needed exercise by doing yardwork, having an entertaining afternoon spent with your family at the park or even having a movie/TV series marathon with your spouse using borrowed DVD’s or free online streaming services. This list is actually endless, with a wealth of possibilities just waiting for you.

One such possibility is learning a new language for free. There’s been some misconception that in order to learn a new language, you have to enroll in a class, buy books and other forms of media to learn. While hiring a language tutor is still the best and fastest way to being bilingual, you can still learn another language without paying a penny.

Totally Free Learning

For a free introductory lesson in 40 languages, BBC’s Languages is a pretty good resource. It offers beginners a mini-introduction on the language they want to learn, and has many set words and popular phrases ready. The only issue with the site is that it’s been archived, so it longer receives any updates.

Omniglot is a massive database of languages, alphabets, useful phrases and just about anything you can think of and want to read about. Another language database website is Openculture.com which lists dozens of links to learn any language for free. You just need to dig to find what you’re looking for.

Carnegie Mellon University’s Open Learning Initiative is also pretty good because anybody can take a free course module and learn. It’s limited to Spanish, English, Arabic, Chinese and French, but it’s one of the most complete modules you can study for free. Honorable mention goes out to the Foreign Services Institute and LearnALanguage.com.

Gamify your Learning

As far as free language courses go, Duolingo is by far the best and most comprehensive. It encourages it’s users to learn and improve on their language skills by gamifying the whole experience. The lessons are well paced, and the program gives you all the information on nouns, verbs and accent marks among many others.

Another gamified experience can be found on Internet Polyglot. Here you can play a matching game, a guessing game, a typing game or play all of them by selecting the mix game. If you want to see how you stack up to other people learning on the site, register for a free account so your progress can be saved.

Immerse Yourself

Another way to learn a new language is to immerse yourself in it. Even if people in North America don’t study English, they’ll pick it up as children because everybody’s using it. The same principle applies in language immersion. If you know someone who speaks the language you want to learn, ask this person out for coffee or just hang out.

Large groups of people are better, and a popular way to learn another language is to live abroad. Couchsurfing is an excellent resource if you’re looking for a free place to stay while in another country. Ask your hosts if they can talk to you in their native tongue and offer corrections if needed.

If you don’t want to spend for a plane ticket, you can host other people on your couch. Just make sure that the people you accept speak the language you want to learn. You can also volunteer and join WWOOF or the World Wide Opportunities on Organic Farms where you’ll work on a farm for 4-6 hours a day in exchange for free food and lodging.

The Takeaway

Learning a new language for free is totally doable and you should really consider trying it. While you won’t be offering services like the best quality French translation services with native speaking French translators, learning a new language can at least make your job prospects a little better and you’ll enjoy your world  travels more.

Personal, Installment and Unsecured Loans – All You Need to Know

Unsecured installment loans are loans that you can have that do not need any collateral. Usually, they are slightly easier in terms of paperwork than a secured loan like a mortgage. However, the amounts offered are smaller and the loan period is also shorter. Because of the fact that you don’t have to put up any collateral, lenders do find these types of loans very risky. As a result, you will find that installment loans tend to have above average interest rates.

If you have poor credit, it can be difficult to be granted a personal loan. However, there are now installment loans specifically for people with bad credit. Some of those will require a guarantor or co-signer. Others have even higher interest rates.

You can use these types of loan for any purpose. This includes:

  • Paying your child’s college tuition.
  • Paying for your medical bills.
  • Going on vacation.
  • Buying a car (although a car finance loan may then be better for you). Positive’s bad credit car loans may be a good choice.
  • To pay for a wedding.
  • To improve or refurbish your home (you may want to consider a secured home loan instead).
  • To make a down payment on a home and have a bigger chance at getting an affordable mortgage.
  • To meet expenses incurred in business.

The Advantages of an Installment Loan

There are numerous advantages to this type of loan. They include:

  • People with a good credit score can easily get this type of loan at a low interest rate.
  • There are also options out there for people with poor credit.
  • You can use them to consolidate other debts.
  • It is a quick process and you can complete it online. This means you could have your hands on your money in just a few days.

How to Apply for an Installment Loan

Because you don’t have to have collateral for this type of loan, the most important thing is your credit history. However, this doesn’t mean that you can’t apply for one of those loans if you have poor credit. However, the poorer your credit rating is, the more expensive your rates will be as well. Many lenders are now also fully online, which means you don’t even have to leave the house in order to apply for your loan.

Usually, lenders will tell you the application criteria you have to meet. As standard, they tend to be:

  • That you are at least 18 (21 in some states).
  • That you are in fulltime employment.
  • That you have an active bank account.
  • That you are a legal and permanent resident of this country.

A Word of Caution

It is important to remember that loans are serious financial commitments. If you are unable to make the repayments on a loan, you will end up in a lot of difficulty and this can negatively affect your financial situation for many years. This is why, if you are currently already in some financial difficulties and have bad credit, you may want to think about whether applying for another loan is a good idea.

February 2015 Monthly Review

Cart track in Upperaustria leads to the sky.

These keep getting later and later into the month, but I’ve been working on the new site design (and have been, for probably about 8 months) and it should be ready to go live soon. There’s a lot of new stuff, and will go into where SLB will go and my renewed focus for the site once everything changes over. I think it looks pretty good if I do say so myself but we will see how it works.

Unfortunately, we had an expensive month, as our daugther spend about 3 days in the hospital. We’ve got that bill to look forward to, but we also have our taxes coming back with a positive number, so I’m happy about that. We are still spending WAY too much on useless things, but we are working on it and overall our numbers are moving the right way. They just are not as good as they can be.

I’ve got a post in the que about why we are choosing to divert some of our extra cash to our mortgage, even though the rate is 3.375%. There’s been quite a bit written about it, but we have been looking at it from a bit different angle.

Debt

Mortgage $ 102, 937 (-$778) This is continuing to go down steadily, and we are happy with the way this is progressing. At the end of 2014 we upped the extra payment to $250 every two weeks. Unfortunately, I set it up wrong and it didnt paydown that amount every time in January. That has been fixed, and we will continue to send $250 every two weeks to our note (in addition to our normal payment). By my calculations, we should be free of this debt in 6 years or so. Due to this, I’ve been casually looking around for a 7/1 ARM at a lower rate than we have now, but that has proven difficult. We have a low rate right now, I can’t find anyone willing to give me a rate that makes it worth switching.

Total Debt: $ 102, 937

It’s nice only have 1 source of debt (and even then, we know we can sell our house for more than what we owe on it. Now that this number is solidly in control, it’s time to ramp up our savings.

Savings

Goals in this area are pretty straight forward – Max out traditional IRAs for both of us, contribute to my wife’s 457 plan (Im not eligible for a retirement plan yet at my new job) and put the rest into our savings accounts, listed below.

Vacation fund $1,000 – A dip in this account was cause by our severe cash flow issue (wife’s employer messed up her paycheck last month, so she was paid much less this month), so we had to move a bit out of savings to cover it.

Emergency Fund $9,500 – We are working building this back up after pulling some out to do some renovations to our house. This will go up a bit slower than it was last year, as we’ve diverted part of the money that was going in here to my wife’s 457 plan.

The year is plugging on just fine, and I’m hoping everything will continue like this.

The eco-struggle: a tricky task for businesses

If there’s one thing businesses struggle with, it’s maintaining an air of social responsibility. In a world of corporate greed and unfettered capitalism, the free market reigns – and any notion of social enterprise, particularly when it comes to the environment, is placed on the backburner.

It’s a problem we’ve covered in this blog before – but there’s still little sign of change from governments and businesses.

December 2015 marked major environmental talks in Paris between leading heads of state, one heralded by attendees as a major step forward for eco-concerns. But the praise hasn’t been universal.

The talks, intended to establish a viable predecessor to the Kyoto Protocol, have been called a “triumph of mediocrity” by Spiked columnist Ben Pile.

The problem? It didn’t go far enough. Governments agreed to cut carbon emissions however they pleased, rather than reaching a real consensus. In short, it wasn’t an agreement at all.

Hypocrisy from governments

Without any kind of protocol in place, heads of state can continue to favour capitalism over the environment.

In Britain, for instance, The Department of Energy and Climate Change (Decc) is expected to cut subsidies for solar panels by up to 90 per cent, a move announced only a few days after the Paris climate talks ended.

Instead of green measures being bolstered, funds are being funnelled into oil mining in Scotland, fracking in England and Britain’s first nuclear power station in over a decade.

Governments, then, appear to have found a way to make it look like they’re doing far more than they actually are when it comes to the environment.

But green concerns can be tackled without the help of world leaders, albeit on a smaller scale. With collective action, the rapid pace of climate change could be slowed.

Becoming the force of change

As was alluded to in the first paragraph, businesses can be the real force for change if they choose to be. What can they do?

Even minor improvements can help in a small business. If you’re the owner of an SME, invest in a few office plants (we’d recommend this company for great service) to further oxygenate your workplace. Thanks to photosynthesis, plants will “breathe in” carbon dioxide and “breathe out” oxygen, offsetting much of the waste in your company.

To go even further, reduce waste by cutting down on paper, car journeys and electricity. You could even persuade your employees to ride bicycles to work, or get the bus instead of using their company cars.

As governments continue to frustrate green activists with their refusal to help the environment in a meaningful way, your business could become a pioneer in eco-concerns. So consider how you can cut back on wasteful resources.