Since my wife and I are trying to reach some specific financial goals we are kind of strict about any money that we blow. The dollar amount that would trigger my wives fury while we were trying to eliminate our personal debts (I know this may sound insanely low to many of you) was around $25. Do remember though that my wife is a saver by nature and I’m the one that liked to spend. Also remember that I’m talking about spending money that wasn’t in our spending plan – I’m not talking about things like food, gas, needed things around the house, car maintenance etc. – I’m talking about things we hadn’t planned for like a cool $52 sweatshirt, or a $175 replacement for the broken cell phone – you know that sort of stuff.

Now that our debts have been cleared (with help from some learned behaviors like this one) our spending threshold has now been adjusted accordingly. We’re now closer to the $80-$100 range for “free” spending. Now that we’ve worked so hard to always discuss and share our finances we usually talk about most things over $50 anyway (note that we talk about it…not fight about it). Hopefully one day with enough hard work and discipline when I surprise my wife with the new Cadillac she wants and the only discussion we’ll have will be where we’re taking it for dinner that night and who gets to drive – now there’s the spending threshold I’m shooting for!

Agreed upon spending limits is where a couple’s shared finances can really help a couple succeed over the long term due to the unavoidable accountability. How’s the saying go? “At some point he’ll have to come home!”

What dollar amount do you feel you should have agreement with your spouse before buying something as to avoid your home turning into a bad Jerry Springer episode?  If you’re single at what dollar amount do you feel you’ve let yourself down buy spending too much?

When the blind lead the blind…get the hell out of the way!

Have you ever heard that saying? Well as stupid as the saying is it actually has some solid logic to behind it. When I was first working to take out my debts I got some great advice from someone that makes quite a heck of a lot more money than I do (I know that’s hard to believe). Anyway…he told me “never hire an accountant whose client list includes people that make less money than you do.” In other words always look for people that can help you grow into more than you are now instead of the opposite.  

This advice stands true with most of the advice we receive around money (and most anything else for that matter).  If somebody isn’t successful with the particular advice they’re giving why should you not be a bit skeptical?  This is exactly what many do with our money decision each day. Often we take counsel from people who make poor money decisions. Sometime it’s formal counsel like an advisor and sometimes it’s just a couple guys hanging out having a beer bs’n about a new ski boat. In either case always step back for a second and ask “where’s this information really coming from? 

In a business sales seminar I was once taught to “mentally step back” from a negotiation and pretend you are looking in on the conversation like an outsider. The idea being as an observer of both parties you get a better idea of where each party is coming from and where they’re trying to go. Whenever I receive money advice I do this as well, not in lame close my eyes and go to my “happy place” kind of way, but I try to step back and take an intentionally subjective look at what’s being said. Who’s saying it, What they’re saying, Where has their experience and/or expertise come from, Why are they really telling this to me, etc. Also you must always understand that some things rub off on us with or without an actual conversation, especially from friends and family. Always be alert to what people around you are saying and doing. If everybody around you is driving around in financed cars or living in homes with absurd mortgages you may find yourself taking their cues.  

With your money you need to be cautious of where you get your guidance. You must always be objective with new information. You must always consider who it’s coming from, where they are coming from, why they are passing these nuggets on to you, and what it has to do with you. Why would you allow people who continually make poor money decisions to advise you on your finances? Sad thing is we all do this stupid move everyday and often don’t even realize its happening.

So what steps can you take to avoid unintentionally honoring advice from broke people?

• Have a solid financial plan – you don’t have to be rich or have your plan completed but clearly knowing where you are going and how you intend to get there will help you do what you feel is correct not what others tell you is correct.
• Continue learning – the more you know the better information you will have to make more sound decisions. You don’t have to be a genius with your money but if you know more you will have more option available to you
• This is a big one….Don’t hang around with broke people! Okay, that’s a bit harsh but seriously if the people around you are not helping you reach your goals maybe you should consider how you interact with them. I’m not saying stop talking to your broke family, coworkers or friends (unless you want to, you can blame it on me I don’t mind) but if they’re dragging you out to dinner or continually convince you to do things that you really can’t afford this might be a good time to reevaluate when & where & how you spend time with certain people. They may unintentionally be creating obstacles to you reaching your goals.     

Step back and look at the advice, influence, or sales pressure and only then can you make a clear decision on your next move. Figure out what works best for you to keep yourself on track and always remember who you’re listening to because sometimes you don’t even realize you’re listening to them (and there’s a fairly reasonable chance they’re an idiot)

1. The third week of October is apparently our week for eating dinners out. Sunday we took my wife’s mother out just to enjoy her company and thank her for watching our daughter five days a week for free (I figure that’s worth tossing some Thai food her way every once in a while). Monday we I needed to pick up my vehicle (I’ll get to that one in a minute!) so that lead to another dinner out. Though this time we were hooked up with a $10 off online coupon so that covered the beer. Tuesday, my favorite aunt was in town for a business conference so once again we headed downtown to catch up over some chow. Friday we find ourselves at a rehearsal dinner for a friend’s wedding – true, the dinner is free but the baby’s new outfit necessary for flower girl duty…well that’s not so free! I consider this a dinner related expense.
2. Saturday gets pricey downtown again even with our crazy hookups! Due to the above mentioned wedding we spent the weekend in a downtown hotel suite. True we only live 30 minutes from downtown but with the baby and a lot to do we decided to get a place to stay in the city. With my wife’s crazy hotel hookups (she works in sales in the hotel business so she knows everybody that matters) we got the room for less than a third of the regular price. And since I worked my crappy second “get out of debt” job as a valet at this same high-end hotel the $38 per night parking fee only cost me a smile and a couple fist-bumps with the ex-coworkers.
3. The crazy hookups continued to ease the pain through the weekend but we still dropped some dough.  Saturday my hot little sales-lady wife pulls some more strings and we find ourselves at the Zoo with $30 worth of free passes. Well free that is if you exclude the $5.00 parking, the $12.00 snack and the $7.00 Starbuck’s drive-by on the way there. I guess that’s the cost of some beautiful moments with my little girl. And you can’t buy that at your local Wal-Mart!
4. The wedding Saturday night had no official cover charge. Dinner was provided by our hosts but there was a gift purchase involved so in a way there was a cover charge. No big deal though, dinner was good and it was all so terribly romantic that it probably would have induced vomiting if any outsiders were watching. (take a moment here and wipe your eyes – I know, I’m a little choked up as well).
5. Here was our big budget killer this week! I had the pleasure of forking over the money to replace the engine in my SUV.  This expense stung like hell but the good news is since I got such a sweet deal on the car (once again Viny Financio and his fist full $100’s talked louder than the seller’s asking price) I was still right at Blue Book value even after we dropped in the new engine. Of course this was due to me having a very good friend that does this sort of stuff for a living so instead of laying out the estimated $6,800 I was in it less than $4k I’m glad we were able to cover all this with cash from our emergency fund because they don’t accept credit cards for homie-hookups! And thanks to another good friend I also managed to get by without needing to rent another PT Cruiser/death Trap.

So all-in-all this week cost us right around $4,500 not including our regular living expenses! Things did work out though, and it helped that October is double a Magic Month for us. In a way though I still feel sort of like I was accidentally kicked it in the groin by my own friends and my own possessions but we’re still rolling FinancialFreakShow debt free and we’ll keep fighting but I promise you Vinny Financio will keep fighting dirty!

I will say this, I am proud of her for making some more “grown up” decisions regarding her finances but I honestly think this is a waste of her time…and I let her know that (I know I seriously need a better opinion filter, but whatever). I told her that I doubt a $15 CD is really hurting her finances at all. I then told her that her newer car, her new couch and her new $2600 bull dog she bought with a cash advance with her credit card were her problem. Cutting CD’s out of the budget is cute but you’d have better luck trying to pick up a turd from the clean end! Seriously though if you think squeezing $50 a month out of your budget you haven’t address the actual problem…..YOU! 

The CD’s aren’t your problem girl. Your lack of planning & your lack of discipline are your problem. If you actually want to change the way you spend money then change the way you spend your money…ALL OF IT. Don’t just change the parts that are easy. Change all the parts that are broken, change the parts that hurt, change the parts that are will truly make a difference. Don’t try to nickel and dime your way out of 20k, 50k, 100k in debt cause we all know you sure as hell didn’t get in 20k, 50k or 100 worth of debt buying CD’s so why do you think this will ever get you out (if you did get in debt buying CD’s get your butt on Craigslist tonight and start selling!) Get out there and get mad, break something…break the habits that got you to this place. If you don’t at least try you will have no one to blame but yourself. True, it may not be only your fault you ended up here but will be your fault if you stay here (especially if you don’t want to be here).

So take a lesson from my friend and stop buying those CD’s if that’s what you need to do. Then take a lesson from Vinny Financio’s real financial world and cut deep into your lifestyle to the point it hurts, stop buying all the other garbage too until you have your stupid messes cleaned up. And then we’ll go drop some cash baby!

1. Toss them to the curb and go back to the old standby pair. (makes good sense)
2. Toss them to the curb and replace those bad dogs with a fresh pair. (how I would have done it in the past)
3. Try to track down the world’s smallest screw and attempt to make those NASCAR pit crews jealous with my rockin’ repair work.  (likely not going to work but what the hell I’ll give it a shot, 3 it is!)

So I figured all I needed was the world’s smallest screw. I stopped into a sunglasses store and asked the girl if she could help. And bless her little sales-girl heart, she recommended that I might be interested in a new pair. So I asked her “do they cost the same price as the screw?”Apparently the answer was “No” since she never actually responded while she dug around in a drawer behind the counter. She came up with a small box with atleast 2000+ assorted little screws and several screwdrivers. While she “screwed around” with my glasses she again mentioned that they had 10% off this same particular brand and she pointed to a big hanging sign displaying two hotties wearing some sweet new shades having the time of their lives on the beach. She then told me I should try a couple pairs and see what I liked. So I figured what the heck, lets browse around while I’m waiting for her to do her magic. Sure enough 30 seconds later I began having those “hey, these are pretty nice” thoughts. Luckily before I asked to try them on I heard “looks like I got it here”.  Good timing little sales girl that was seriously a close one! So I thanked her for the free fix up job and hit the door. 

I felt like a new man. I felt like I had single handedly concurred the little sales girl and stared into the face of one the world’s vast marketing machines. At this point I was thinking about how easy it could have been to separate me from my cash if she hadn’t been able to fix my sunglasses.  But since I started my never ending fight towards my domination of personal money matters I’ve noticed the commercials and marketing BS seems much louder and more obscene than I remember. There’s a constant prodding to take action, to conform or to be different depending what wares they’re trying unload on you. You’re too fat, too skinny, too gray, too many wrinkles, your boobs are too small, and that car is sooo last year. The pounding never ends and thank goodness we don’t consciously take in all the sales and marketing that’s presented to us every day. If somehow I was able to pay attention to all if it I’d probably only buy two things…a bottle of Jack Daniels and a handgun and attempt to ease the pain from the overload it’d cause.

It’s an ugly world out there when it comes to your money so keep your guard up. Keep your financial goals in mind. Remember that your money is finite so spend accordingly.

Now, I always have some cash in my pocket, especially since I refuse to use credit cards anymore, but I sure as heck don’t have $3000 in my pocket very often. Since the thought of having my very own fist full of $100’s sounded so exhilerating I figured I’d give this big shot technique a try and see how it worked for me. This sounded like a logical experiment so shortly after meeting Fist-full-of-100’s Guy I withdrew my entire starter emergency fund of just over $1500.00 rolled it up and stuffed it in my front pocket. After leaving the ATM I headed over to Starbucks to meet up with a friend.  I was excited just thinking about the moment I’d get to whip that wad out of my pocket and say “I got this one.” Just like Fist-full-of-100’s Guy had done a few nights before.  So without hesitation as soon as he placed his order BAMM! The fat wad was out of my pocket and a smile was on my face. The only problem was I looked like a complete idiot bustin’ out $1500 to buy two cups of coffee. 

And sure enough the barista saw right through me. With a smirk on her face and a smart little attitude she said “Is that all you have?” Ouch! I was busted by a 17 year old coffee pusher! 

So I did my best to play it off all FinancialFreak cool and said “Why, how much do the other guys usually tip?”

All in all it was a lame experiment to roll like a big-shot but in the end I came out looking more like Al Bundy than Al Capone

How much cash do you usually carry in your pockets?

Just ask any car dealer or mortgage broker (or sadly enough many politicians) how much they think you can afford and I bet they tell you it’s more than you thought you could. Case-in-point – Cash for Clunkers program and Adjustable rate mortgages. Both of these programs were designed to quickly and painlessly separate the consumer from their hard earned money. Though these deals sound like they’re out there to benefit the consumer that it really depends on if the consumer is signing up for deal that’s truly in their best interest considering their own situation. Cash for Clunkers is especially financially lethal because it has now encouraged over a million people to close their eyes to common sense and invest in a guaranteed depreciating asset while grabbing their share of the 3-billion dollar* government windfall. According to Kiplinger’s Magazine it’s estimated a new car looses an average of 20% of it’s value the day it’s purchased. That means for example a $40,000 Lexus ES300 you purchase on Saturday will only be worth $32,000 on Sunday – and this doesn’t even come close to the 65% loss in value over the next 5 years bringing your value down to a pathetic $14,000. Money guy Dave Ramsey has it right when he says “the worst car accidents happen on the showroom floor.”

I’m all for dropping some cash on your ride but do it because it makes sense for you and your family not because they can’t shut up about it on the news. Remember always, always, always think long term when making financial decisions and if somebody’s telling you it’s too good of a deal to pass up they may be right but make sure you’re the one making that call not them.    

Oh well, at least one good thing came out of this Cash for Clunkers program…there are now a lot less warn out cars on the road polluting our precious environment with their filthy disgusting “Election ’08” bumper stickers.

I began adding all the extra money onto the one debt with the lowest balance and just paying the minimum that was required on the rest. (I did care about the interest rates because this stuff wasn’t going to stick around for long!) At this point it was around $300 that was being spread across 7 different payments each month. By this time my lowest balance was a Master Card with $1248 on it (one of our Master Cards that is). I was now dropping $420 payments on a $1200 debt – and that’s assuming I wasn’t able to whip any extra cash to add a little more fight to the battle! Once that was all wrapped up I threw that $420+ on top of the next debt’s minimum payments for a total of $525 and Round 2 was in full swing.

Have you tried the “Debt Snowball” approach yet? How did it work out for you?

Here are some of the results: (this shows what they would pay first - last)

1. Mortgage or Rent 79%
2. Car Payment 41%
3. Auto Insurance 39%
4. Credit Cards and/or Cell Phones 38%
5. Cable and/or Satellite Television 32%

The survey results look good to me. If someone is in crisis mode the first thing they need to do is shore up their position as best they so they can hopefully “live to fight another day.” This means taking care of the essentials first. Food, Shelter, Clothing, & Transportation. If these four things are taken care of you can hopefully keep workong to address whatever your other issues are (and we know people got some issues!) Beyond the essentials look to cover your secured debts next. Things next like car payments or other property. Since these debts are secured by liens the lenders may be much faster to attempt a repossession of the property.  Next address your unsecured debts. Things like credit cards, phone bills, cable bills, old medical bills etc. Obviously all these debts need to be addressed but aside from questionable and sometimes illegal collection tactics these folks have little ability to retrieve their money with out taking you to court first. True, you do need to get these thing taken care of but the dentist can’t usually repo your dental work instead he’ll have to slap a lawsuit on you before he can legally take back the fat gold grill in your mouth.

Remember the unsecured debts (especially credit cards ad payday loans) will likely be the first to start yelling since they are in the first loser’s position if you file bankruptcy. They yell loud and they yell often hoping that you’ll become emotional and pay them before you feed your kids.  All the creditors obviously need to be addressed but if you or someone you know finds themselves in a seriously tight spot try to leave emotion (as much as you can anyway) out of the process and address the bills in a way that gives you the most flexibility to keep fighting.

Don’t worry this one’s pretty easy I promise.

1. Figure out what you’ve got coming in each month and where the heck it’s all going.
2. Next figure out what you can cut back on (ex. heat, clothing for the kids, food, you know the unnecessary stuff) and what you’re not able to cut back on (ex. booze, smokes, online gambling – you know the important stuff in life) – FYI, that was a joke
3. Begin making some tough decisions and adjust your budget accordingly. Apply the extra money toward your goals– make sure everybody involved comes to agreement on this stuff
4. Come up with a cool way to track you progress. A nifty spread sheet is what I used (but I’m sorta nerdy) Another idea may be to put a big list on the fridge where you can see it everyday and cross things off as you go (ask any kindergarten teacher, this may sound lame but it works!) Use what works best for you and helps keep you on track towards your bigger goals. 

The important thing here is to work on refining your money habits to accomplish the things that really matter to you. Personal finance in many cases is more of a psychological game than a numbers game so play to win. Many of us make enough to accomplish our goals but don’t always behave in ways that allow us to.

 If I’ve got correct goals, and if I keep pursuing them the best way I know how, everything falls into line.  -Dan Dierdorf

 The blogger posts about how he wanted to buy the Weber E-310 BBQ which sells for close to $800 – a pretty sweet BBQ which he’d been saving for. He then goes on to say he made a better purchase and settled for a Char-Broil BBQ for a little less than $400 – again good job, you did some homework and saved some cash.

Here is what made me say what you were thinking…

The next post on the blog was titled “Housing Update: Short Sale, Foreclosure, etc.” I assumed this was a post about his opinions about the complicated housing market. Turns out this blogger has been trying to sell his house for more than 16 months and is currently on the verge of a foreclosure. Here’s a quote from his post:

Our savings is gone, our emergency fund is nil and I have cashed in about half of what little retirement we had put away. I am earning as much side income as I have time for and my wife babysits anywhere from one to five children (beside our own) everyday in order to make ends meet. At the moment, our credit is good and God has provided for our needs, but we are at the point where we are starting to incur major debt on behalf of this house.

So let me summarize here. He’s earning as much side income as he can, his wife is babysitting extra kids for money, he used his emergency and retirement funds to help weather the storm. If I were counseling this couple on their finances my advice to them would unquestionably be to spend the money they saved and invest in a new $400 BBQ. This is really the only option they have left to help prevent their family from being foreclosed on. If we were on the verge of foreclosure and I came home with a new $400 BBQ it would not be a pleasant conversation over freshly grilled steaks with my wife – who knows it might even be the last convesation we have as a couple!

My thoughts do go out to this family as nobody wants to go through a foreclosure….then my FinancialFreak mind kicked in and my thoughts quickly changed to “I wonder what sort of deal this guy will give me next month on his almost brand new $400 BBQ?” I better go back and bookmark that post!

Big and inexpressibly masculine, broad and low, with a rising rhythm from nose to tail and perfect isometric tension, the QP has a self-possession and – that makes its six-figure, four-door competitors – Mercedes-Benz AMG S-class, Audi S8, BMW 760Li – look like prison dentistry.

– Los Angeles Times

Any car that’s “inexpressibly masculine” and can make an AMG Mercedes-Benz S-class “look like prison dentistry” is okay in my book! With a selling price of only $130k that works out that I only need to save $71.23 a day…every stinking day for the next five years and that baby is mine. That’s going to take a bit more than cutting Starbucks out of the budget. But I guess it’s one more reason to keep my finances in order so someday my family will have a proper 440 horse power grocery-getter that will deliver us to McDonald’s Play Land at 177mph!

After catching a glimpse of the world of possibilities we live in today I approached my work with a refreshed attitude and drive. So aside from a good street fight what gets your blood going?  Cars? Boats? Charity work? Respect in your field? A sweet vacation? Ladies of the night? 

Comment on why you get up in the morning and decide to put up another fight for another day.