Beating Broke

Personal Finance from the Broke Perspective

Rainbows on the Road

By 8 Comments

The other day, as my daughter was on her way to the car when I picked her up from daycare.  Along the way, she noticed something on the ground.  In the excited voice of a 4 year old, she said “Daddy!  Look!  A rainbow!”, and then pointed at the spot on the ground she was looking at.  As I got closer, I found that she was looking at a spot on the wet ground where some sort of oily fluid had likely leaked out of the bottom of a vehicle.  Of course, oily fluids, on wet ground tend to separate out into what you and I would probably best describe as an oil slick.  But, to my 4 year old, it was a rainbow on the ground.  As we drove off to pick up her brother at school, I began thinking about what had just happened.

The thoughts were amplified when she noticed another “rainbow” on the ground on the way into the school.  On our way back out of the school, with her brother, she excitedly called her brother over to show him what she had found.  My son is 6 (nearly 7), and so has a slightly more advanced knowledge of the world than his sister.  I fully expected, in the way that only a brother who doesn’t understand a 4 year old is likely to do, that he would quickly dismiss it for what it was, an oil slick on wet ground, and that her excitement would quickly dissipate.  Instead, as she pulled him over and pointed it out, saying “Look!”, he quickly said “A rainbow!”.  He saw it too.

Rainbows on the RoadAs parents, we’re always so excited to teach our children new things.  We’re often quick to correct them when they don’t get something right, or don’t understand it.  They saw a rainbow.  I didn’t.  All I saw was an oil slick.  Obviously, I saw the resemblance.  But, I knew what it really was, so the wonder that my children had for it was lost on me.  But, it kept me thinking.

How often do we take what we know, and use it as a filter for the world.  Surely, that’s what knowledge is for, right?  I know that 1+1=2, and that certain letters spell words, and that drops of oil on wet ground make a oil slick.  Yes, it’s colorful, but it’s an oil slick, not a rainbow.  How many times do we become so certain in our knowledge, and the filtering that we use it for, that we fail to see the rainbow?

How many people out there are so set in the knowledge that a bank is the lender, and use that to filter the idea of peer-to-peer lending as a sham, without allowing for a little of the rainbow to shine through?

The point is this: If you never question what you think you know, how will you ever know if you’re wrong?  Sometimes the formula and constants change.  Sometimes, the environment itself is what has changed.  Heck, look at the newspaper industry.  How long did they refuse to see the emergence of blogs (like this one) as a major change in the dynamic of how people get their news?  Some of them still refuse to see that rainbow.

If you do one thing to improve your personal finance today, question what you think you know.  Most of the time, you’ll still be right.  But, maybe, just maybe, you’ll see a rainbow instead.

What are some rainbows that you’ve found by questioning what you thought was true?  What methods do you use to find the rainbows in your life?

Original Image credit:Oil slick. @blackmetalbike by Growinnc, on Flickr

What Christmas Expectations Are You Setting for Your Children?

By 9 Comments

What are your children’s expectations for Christmas presents?  Do they expect many Christmas presents under the tree and their every wish to be met?  Do they expect a modest Christmas?

Believe it or not, the answer to this question doesn’t really depend on your kids; it depends on you.  From the time your children are small, you set their expectations, and what you set by example is what they come to know as “normal” (until they get married and find that their partner has a different “normal” than they do, but that is another post).

If you have small children, think carefully about what expectations you want to give your children.  Yes, retailers would prefer that you shop ’til you drop and give your credit card a work out, but it doesn’t have to be that way.  Here are what some people do who have chosen to have a different Christmas celebration than retailers would prefer you have:

1.  Give some new gifts, some used, and some homemade.

Amy Dacyczyn, the original Frugal Zealot and author of The Tightwad Gazette had six children to buy for.  Each child got one new gift.  Then, they got a few gifts that were used items that she had purchased at garage sales and thrift stores.  She also made her children a few gifts.  If I remember correctly, she spent $50 or under for each child.  (Of course, this was 20 years ago, so accounting for inflation, she spent no more than $82 for each child in 2012 dollars.

While you might balk at the idea of giving garage sale gifts for presents, I can tell you that I followed Dacyczyn’s practices when I had my own kids, and some of our kids’ presents are nice finds that we got at garage sales.  My oldest is 8, and he has yet to complain about it because it is what he expects.  He still does get new presents, but there are used ones in the mix.  (I like the term recycled better, though.)

2.  Give a charitable donation instead of gifts.

Ann Voskamp, the blogger behind A Holy Experience, recounts that one Christmas Eve 10 years ago, her son asked her, “Why don’t we give up things so we can give to Jesus for his birthday?”  The question radically changed Voskamp’s way of thinking, and from that year on, her family has foregone giving Christmas gifts to one another.  Instead, each day during Advent they make a charitable donation using the money they would have spent on gifts.

This is a radical idea, to be sure, but it is the norm now for her family.

3.  Only give 3 gifts.

Another idea based in Christian roots is to only give your children three gifts.  Some do this because the Wise Men brought Jesus 3 gifts.  Others take a spin on this and give their children three gifts–something they want, something they need, and something they can experience.

4.  Meet needs as gifts.

Gifts don’t have to be all luxuries and things you want.  When I was growing up, my parents’ money was extremely tight.  I got some new clothes during the back to school season, but my winter clothes and sometimes even my uniform clothing or new backpack were all given as Christmas presents.  I was always excited to get these things and never felt deprived.  My mom told me a few years ago that she had to give gifts this way because money was so tight, but I never knew.  This practice was normal for me.

Christmas gift giving was not always the extravaganza it is now.  As an adult, I reread the Little House in the Prairie books, and I was struck by how happy Laura was to get her very own handmade tin cup and an orange for Christmas one year.

If you are a parent of small children, you can start your Christmas gift giving traditions now, and they don’t have to involve credit card debt you can’t pay off until March or April.

What is your favorite way to give gifts at Christmas?

img credit: South Granville Live on Flickr

Personal Finance Reassessment

By 6 Comments

Occasionally, there comes a time when you have to take a look at your personal finances and do a little personal finance reassessment.  While the need may arise to do a complete overhaul once in a while, a simple reassessment can usually suffice.  All it takes is a little attention, and some dedicated time to making sure that your finances are in order.

Recently, my wife and I were, more or less, forced to do a little personal finance reassessment.  That’s such a nice, delicate way of saying it isn’t it?  Truth be told, our finances were (are) in a mess. The ripples from when I quit my job last November are still plenty big, and the new job that I have seems to have come just in time to keep us from completely going under.  Combine the drastic decrease in income that event brought about with a couple of people who remained stubborn in their budget, and it was a recipe for disaster.

financial peace jrLuckily, we’re usually pretty good at talking about money with each other.  Don’t get me wrong.  There’s plenty of room for improvement.  But, we’re good about not getting into any heated arguments with each other, and being able to figure out where we’ve gone wrong and correcting it.

So, we sat down and caught up our dreadfully behind budget.  And, let me stop here to say something.  What kind of idiot doesn’t keep doing the budget when he quits his job and is making a fraction of what he used to?  This guy.  Dumb.  So, yeah, we caught up the budget.  About 6 months worth of financial data entry.  Some by hand because our bank doesn’t keep history online over 90 days.  So, one by one, directly from the statements I printed off.  Did I mention how dumb that was?

In case you’re curious, catching up on about 6 months of budgeting takes about 6 hours.  6 HOURS!  It’s done though.

One of the things that we discovered, after having done all of that, is that the reason that we were in the pickle that we were in wasn’t because of the loss of income, although that played a part, but more because of how badly we had slipped in the last few months with our spending.  July and August in particular were well above what June was.  In our defense, those are usually higher spend months because they’re usually the only real summer months we get up here in North Dakota, but it was still way off.  And it cost us.  The last several weeks have been pretty hairy, financially.

The scary part of all of that is that we haven’t had a bad financial situation like that for over 5 years.  And, maybe, in that 5 years, we’ve become a little bit lax in our budgeting, and in our finances in general.  No more.  We’re taking the control back, and keeping our finances in order.  Not doing so could mean disaster.  It surely means stress, and that’s something we just don’t need.

During our little reassessment, there were several things that we picked up on.  Like the fact that we didn’t have any life insurance on me.  In my previous job, my employer kept a policy on me that would have been more than sufficient.  For some reason, they decided to cancel that policy when I quit.  😉  So, we’re now budgeting for life insurance policies. Or, the fact that our spending on eating out and groceries had gone way up.  A simple attitude adjustment helps with the eating out, and we’re going to start trying to use menu plans to keep our grocery bill down and to spread it out over the month. Another thing that seems to be part of the issue is the timing of some of our bills.  Before, I made enough that it wasn’t an issue when the bills came due, we always had at least enough to make it to the next payday.  Now, with my lower salary, it’s getting a bit tight right before the 15th (when my wife gets paid), and a few of the bills that come in right before the 15th are adding a little extra stress.  I need to call a few of them and try to get them moved to a slightly later due date.

In the end, our personal finance reassessment came just in time.  We kept a close enough watch on our finances to see the need arising, and were able to meet the need and keep things from getting any worse.  Chalk it up to a lesson learned.  The (almost) hard way.

When was the last time you had a personal finance reassessment?

img credit: Matt Mcgee, on Flickr