Power of Money

My wife and I drive around town in a car that I bought for $600. This is somewhat hilarious, given the fact that we have enough cash shaved to buy a brand new 2008 Honda Civic. The website I went to lists it at as having 1 mile on the odometer- our current car just went over the 170,000 mile mark.

Not that we'd ever buy it (apparently buying a brand new car is one of the worst mistakes you can make financially) but it's helpful to put into focus just how much money we've saved. Our current plan is to drive our car until something hideously expensive falls off, and then buy another dependable used one. Doing that, after all, is part of the reason we have this much money in the first place.

I find it despicable that the only thing that proves a man is worth something is how many green pieces of paper he has, but that's the way our world works. I don't have to like it, but I have to learn to play within those rules (to a point) if I am to succeed in it.

Negative $131.80

I went to the gas station on Friday night and spent $11.80 on beer and other sundries.

My wife went to get a haircut and buy some more clothes for work, spending $120.00.

The total price for her haircut was only $20, which I understand is quite good for a girl. She even saved money by shampooing and drying her hair before she went.

Girls have a hard time in that it's difficult to buy good work clothes for little money. I'm currently in school (and have few people to impress) so I generally just wear my clothes until they fall apart. As a professional in an academic setting, she doesn't have that luxury.

On the bright side, we do have a $78 check we received in the mail, due to a billing error in our favor. Haven't deposited it yet, so I won't place it in the total.

Current savings: $18,624.97

Total savings: $19,010.97

$14.84

I grew weary of adding up the interest from the CDs on a daily basis, so I'll try weekly for a while- comes to about $14.84 a week.

Doesn't seem like much, but it adds up quickly. For example, our goal for the month of October is to have a total of $19,750.00 saved up. We're currently around $19,150.00 (once you add in the interest over the last week) which is only $600 short of our goal. My wife saves $400 out of her paychecks, leaving a $200 difference. By Halloween, we should have earned another $60 in interest- meaning we only have to come up with another $140 or so by the end of October to reach our goal.

Of course, we could always save more than that, but meeting our goal would be rewarding enough.

Current savings: $18,756.77

Total Savings: $19,142.77

$160.00

Received loan check from sister.

Current savings: $18,741.93

Total savings: $19,127.93

$480.00

Today, thanks to the "third check" phenomenon that occurs occasionally when a person is paid every two weeks, we'll be able to save $480.00 towards our house. It would be more, but we're using $120.00 to pay off a bill I incurred from renting an apartment over the summer for my internship. Thus, we're basically improving our net worth by $600.00 today- not an insubstantial move in the right direction.

Once this money is added in, our "total" savings level is over $19,000.00, which was our goal for the month of September. Sister's $160.00 check should be in the mail, so the two totals should grow closer together in the next few days.

This is, if I'm not mistaken, the highest "current" total we've ever had- we were at $18,420 for a day or so but that was it. So we're excited. Our next goal is to have at least $19,750 by the end of October.

Current savings: $18,581.93

Total savings: $19,127.93

Birthday

Spent $157.72 today. Wife's birthday is coming up this week.

She has an MP3 player that's she's had a while- a $50 dollar deal that worked okay until it suffered a large crack in the LCD screen about three months ago. It still worked, but with the screen smashed it was almost impossible to tell what song was going to play next. To make it worse, the earphone jack was always loose, so songs would cut in and out constantly.

Since she loves music more than anyone I know, I figured it was high time for her to get a better one. Sometimes, money isn't the most important thing. She works hard everyday, and a person eventually has to see some fruit of their labors to make it worthwhile.

We also spent some of the money eating out at Sonic. Hard to go financially overboard there.

I think one of the main benefits of this blog is that it forces us to justify our expenses. It's alright to spend money (even if it's just for entertainment) as long as we do so in moderation. The good news is that I can also use it to run with when I go jogging. Hopefully it will improve my time.

Also, I refuse to spend any more, because then we'd have to change the house picture and the bar on the right- I'm not willing to deal that kind of blow to financial ego.

Current savings: $18,101.93

Total Savings: $18,647.93

Bonehead

I forgot to add in the $55.55 that's currently in the change jug. I don't have the time to deposit eight dollars in the bank, so I just stuff it in there. As a result, it contains a lot of paper currency as well.

Here are the correct numbers:

Current savings: &18,259.65

Total Savings: $18,805.65

Amateur Investing

Last night I got a wild hair and decided to start investing. Whereas we're saving for a house, I see no reason why 5-10% of our money couldn't be placed in conservative investments in the stockmarket.

Wanting to start small (and avoid huge fees) I decided to try Sharebuilder.com. So far, it seems pretty helpful. On Tuesday, my wife and I will be investing $100 in a Total Stock Market Index (VTI) that shouldn't bounce around too much. The great thing is that they only charge $4 per trade, regardless of whether you buy 1 share or 3500 shares. As you can see above, you can also buy funds. I'll subtract that from our total.

I'm going to add a little bit of money here and there, and basically try to emulate the plan I found here. It seems like a pretty good idea. The hope is that we won't touch this money until we're sixty or so, after it's had a chance to grow.

Current Savings: $18,204.10

Total Savings: $18,749.10

General Accounting

Okay. I've got to figure out where we stand.

Our total is less than it has been lately, but that's because I let my sister borrow money. So what I'm going to start doing (as a morale booster) is add up what we have (i.e., what's in our savings right now) first, then do a total with Accounts Receivable. That's what businesses do, I think. Accounts Receivable let a person know if the bank's cash flow is positive- a company can have $10 million in assets, owe $12 million in debts, and look like it's going under. But if it's Accounts Receivable is near $50 million, it's probably pretty healthy.

Accounts Receivable will only be the amounts of money that I'm 95% sure I'm getting or will get back- it will not include purely speculative amounts of money in the future.

Current Savings: $18,208.10

Loan from sister #1 - $160.00 paid on September 26th
Loan from sister #2 - $130.00 paid in late October
Check from Boss - $255.00 paid in next few weeks

AR value = $545.00

Total savings: $18,753.10

Update

Haven't posted in a while- mostly because nothing important has happened.

Tomorrow, however, shall be rife with financial activity. I'm selling a bike that's been laying around for $25, so I'll add that to the total. My sister called and asked to borrow $100 until next payday- she's going to pay me back the wire fee plus twenty dollars. So tomorrow the number will appear a little lower than I'd like (short me picking up a paycheck- turned in timesheet on Tuesday worth $255) but it should all come back and more. I should also be receiving a check from my sister next week for $160, which is payment on another loan I made her. I would feel bad about charging her interest, but she wouldn't borrow it for free and it's mostly for stuff she could live without.

Our Second CD finally started earning interest yesterday. Ninety-five cents a day! Luckily, we put it in the CD just days before the Federal Reserve cut the prime rate half a percent. Current CDs from the same company are now going for 0.35% less than what we locked in.

With any luck, we'll be damn near $19,000 by the end of the month. Things are just moving slow right now.

Second CD

Opened up a second CD today. If my math is right, it'll make us another 97 cents a day in interest. So that will come to about $2.14 a day we'll make for doing nothing.

Also on the bright side, we've spent no money today.

Later tonight, I've got to work at least two hours on an assignment for my boss. Should be able to turn in a large timesheet on Tuesday or Thursday. He's also mentioned that he needs my help on some other stuff.

$3.35

Made $2.35 in interest from CD and placed $1.00 in change jug from residue left over from casino trip.

Current savings: $18,363.35

Ugh.

Went slightly crazy and withdrew $60 out of savings to go to the casino, of all places. Of course I didn't win any money. I could have, but I got greedy at the blackjack table.

I don't feel too bad because I only go to the casino maybe twice a year now days.

Oh well- time to subtract that from the total.

Current savings: $18,360.00

Financial Karma?

I've notice a weird principal when it comes to wealth building and/or responsible money management- namely, that good decisions beget good outcomes. This sounds self-explanatory, but the twist is that the outcomes are generally not directly related to the good decisions. It's as if the cosmic universe is rewarding your efforts by providing you with new opportunities.

I had first thought about this a few days ago. We had saved a little money, and the next day my boss hands me a project that will probably help me save around $350. It just seemed weird.

Even more unusual, today I went to a fast food restaurant and ordered four biscuits. It was more than my wife and I could eat, so I gave the other two away. Later I realized that the cashier had paid me too much money. Somehow she had handed me a $5 bill instead of a $1 bill.

So I drove back during lunch, and switched the $5 bill for a $1 bill. The cashier (it was a different lady) looked at me like I was crazy. For all I know, she pocketed the money, but at least my conscience was clean.

Later I took the $1 bill (the same one she had given me) and went to buy a Dr. Pepper out of the machine. I retrieved my beverage, and then proceeded to walk across the break room. On the other side there was another drink machine, and hanging out of it was another dollar bill, flapping gently in the air conditioned breeze. It was as if the universe was rewarding my good deed with a free drink.

I think I'm duty bound to save this dollar, so I'll adjust the total accordingly.

Current Savings: $18,420.00

$61.17

After the bankruptcy, all of our debts were wiped clean. That was over two years ago, and we haven't really used credit since. We've operated on a cash basis entirely, and I think the experience has been a good one.

However, we have a few small bills that have cropped up that we're working on paying off.

My wife got seriously ill a few months ago- the net result is that we have a number of medical bills that we owe. Most are in the $200-300 range. We've been sending them $20 or so dollars each a month, and slowly the balances are coming down.

Last week, my wife got sick and called MEA to see if they would see her. Unfortunately, we owe them $340. Her calling them brought that to their attention, and a lady on the phone demanded that we pay it off over the next three months, or she would send it to collections. I think she was bluffing, but we're going to pay it anyway. We had been sending so little because we've just started saving, and we've been unable to pay more.

We're paying them $100 this paycheck. Instead of using our savings, we're going to simply save less than the $200 we would normally put in. That way, we're not touching our savings. Saving less is excusable- taking from savings is not. Hence, where only saving $60 of the $200 we normally would. (The other $40 is for a birthday party my wife has to buy stuff for at work- where she works the birthday person is responsible for throwing their own party.)

The trick is to pretend that you don't have any money. If my wife and I had zero dollars in savings, we would be forced to pay the balance from this paycheck. So that's what we're going to do.

Once we pay this bill off, we should have more cash every month. We'll use that extra cash toward the other bills, and eventually pay them off.

The $1.17 is for interest earned on our CD.

Current savings: $18,419.00

Financial Musings

I tend to have a love/hate relationship with money.

I don't really care for it, other than the fact that it's necessary to get the things you need and want in this life. (One could go the Survivorman route permanently, I suppose, but I don't think my wife would play along.) The problem is that humans, generally speaking, want too much. We want too much stuff. We want things to make us happy now, and then things to make us happy later. I think, at times, we even want to be happy too much. Some sadness is good.

I would like to buy a canoe or a kayak with our money. They cost about $400. However, I've determined that as of right now, I don't want the canoe as much as I want us to get a nice house in the next few years. And, having lived on this earth for over a quarter of a century, I'm pretty sure I wouldn't use it all that much anyway. I like the idea of owning a canoe better than actually owning one. Luckily, the idea itself is free.

Things bought and quickly consumed bring a superficial and fleeting happiness that quickly dissipates once the things is used up or has lost its charm. I think, for a moment, about all the things I have lying around and never use. At one point, I wanted that thing so much I paid money for it. Now it's forgotten.

Having a house would bring a sense of joy and security, which is altogether distinct from mere happiness in my mind. Winning $10,000 on a game show makes you happy- having healthy family and friends brings you joy. Eating a cake makes you happy- opening and running a successful bakery brings you joy. Two entirely different things.

Even better, joy is just as free as happiness. People just don't pursue it with as much energy these days. A few days ago, my wife and I spent some time on the porch swing. Our relationship is joyful, and it didn't cost us a dime to make it grow.

Joy is driving up to your house every day. Knowing that you outright own a piece of this earth. A little white porch on a small farmhouse. That beats a canoe any day.

So for now I'm willing to forgo the spastic bouts of happiness that come from buying trinkets, so I can achieve the much greater joy of owning a home sooner, rather than later.

Interest

Made another $1.17 today in interest, so I'll add that to the total. Every little bit helps.

Current savings: $18,357.83

$1.36

Found a $1.36 in loose change, so I put that in the change jug. Still haven't found one of those cool glass jars, though.

Current savings: $18,356.66

Adjustments

Didn't actually make the $1.04 deposit I mentioned earlier- I'll have to count my change later and see what I have left. So I've subtracted it, but I'll also add the $2.35 in interest we've made over the last two days.

Current savings: $18,355.30

Long and Short Term Goals

Our goals right now are to:

1. Save up $19,000 by the end of September. With the $400 my wife will save, the $160 my sister owes me, and any job earnings over the next few weeks, that shouldn't be a problem.

2. Save up $22,000 by the end of January. My wife saves $400 a month in her credit union, which leaves a savings goal of roughly $350 a month to reach the overall goal. With my income from working, that hopefully won't be a problem.

$160.00 Deposit

Deposited $160.00 into savings account today.

The numbers won't really reflect that, however, because we really only saved $40 of the $100 we made from selling the laptop. Since I'd already added $80 to the overall total, I'll fix it by only adding $120.00 to the actual total. Trust me, it makes sense- I've thought about it so much my head hurts.

Which leaves to the following edict regarding online savings blogs:

Rule 1: Never add money to the total you haven't yet squirreled away into a financial institution and/or change jug.

I added the $80 yesterday before we were able to deposit it. Lo and behold, my wife needed some medicine, and we picked up some groceries. A little gasoline this morning before work, and $60 or so was gone. Poof. Vanished. Amazing how that happens.

On the brighter side of things, my boss gave me a LOT of work to do. I have to write an appellate brief, which takes at least 20 hours even if you do minimal work. So there should be some more money coming soon.

Current savings: $18,353.99

Daily Interest

Made $1.17 yesterday on interest.

I usually like to imagine our savings as an army fighting for us. Each dollar equals one soldier in that army. As the "generals" so to speak, we can either let our soldiers chill out, or we can put them to work.

At 5% interest, 100 of these soldiers can go out and "capture" or "recruit" 5 more soldiers over the course of a year.

Today we've managed to capture another soldier for the army. One dollar doesn't sound like much, and it's really not. It's the dollar after dollar after dollar that really adds up. And once the dollars you've created start making dollars, things move really fast.

Current Savings: $18,273.99

Update

Today I got $60 out of savings to buy workout clothes so I could run. This sounds like it's not a necessity, but it does fall under the "bleeder" emergency rule. Apparently the clothes I have now are not conducive to running 2-3 miles at a time, as they make me chafe horribly. And I mean horribly.

I bought some spandex training shorts for $30. Since I'm heterosexual and have social anxiety disorder, I also bought some loose shorts to wear over them. They were on clearance at Sears for $3.99, so I bought three pairs. It's one thing to be frugal- it's another entirely to be penny wise and pound foolish. I'd just end up buying more expensive shorts later.

I also used some of the $60 for gasoline. The remainder ($1.04!) goes back into savings.

On the brighter side, I received my $100 for selling the laptop today. We'll keep $20 of it out for gasoline and sundries, and deposit the other $80. So today we have a net positive change.

Current Savings: $18,272.82

12 Cents

Found 12 cents today, so I'll add that to the total.

Today is another no money spent today. We basically stayed in. Wife recuperated and I watched a lot of professional football.

Current savings: 18,251.78

Change Jug

Started a change jug today. I wish I had one of those cool glass apple cider jugs, but for now I had to settle for a plastic cat litter container. I managed to scrounge up $1.04 in change to start, so I'll add that to the total.

Current Savings: $18,251.66

$3.52

Since the inception of our CD, we've made $3.52 in interest over the first three days. Not too bad. So, I'll throw that into the overall total.

Current Savings: $18,250.62

Non Argent, S'il Vous Plait

Officially a "no money spent day."

Took my parents to see a house for sale in a little town south of where they live. They seemed to like it- whether or not they'll actually attempt to buy it is another question.

The city they've lived in for the last 30 years has become increasingly unsafe, and it's time they get out and enjoy their retirement in a place where they don't have to worry as much. It's also good practice for me, because it lets me know what I can buy for the money.

We saw a house today that was selling for $45,000 that was in really good shape. It had 9 foot ceilings and was built in 1939. They don't build houses like that anymore- the solid wood window frames, the crown moulding in every room, hardwood floors throughout. Given that we have almost $20,000 saved up, my wife and I could probably buy it ourselves, but we'd rather not at this juncture.

What's funny is that roughly four years ago, we bought a house in Georgia for $120,000 with no money down. I don't even think we thought twice about it. We were dumb, but in our defense, it was a subprime mortgage lender. In retrospect, no responsible creditor would have let us borrow the money. Oh well. You live, you learn. Now, we won't buy a house that costs 33% less, even though we have roughly 40% of the asking price. I'm proud of us.

Nada Moula

Well, considering it's raining, and we're in for the evening, I feel it's safe to call it- we've spent no money today.

I'm meeting with my boss next week about a new project- it should lead to some more money, as well as (hopefully) getting paid for my last few projects.

Now, to spend some time with the wife while she recuperates in bed. We like watching the Law & Order marathons on USA. Pretty cheap hobby.

The Long Haul

Now that the disbursement checks have come, the easy money has arrived. However, our job is just starting. As I said before, a monkey could save found money, but it takes a responsible human being to actually use that money wisely and add to the total.

Our plan is to:

Take what we have (minus a few thousand for emergencies- doctor visits, flat tires, etc.) and place in CDs that will earn us interest. If we could place $16,000 of the money in a CD earning 5%, that would equal $800 a year.

Add to the overall total by a) placing $200 every two weeks into savings, b) cutting back on monthly expenses, and c) placing my earnings into savings.

We have three (3) known large expenses coming up in the next six months. I need to get a crown on a tooth ($500 or so) heartworm treatment for a dog ($500 or so) and bar exam application fee ($600 or so). We'll need to save now, to defray those expenses- otherwise, 10% of our savings will be gone in three transactions.

Visual Saving #3

Bought some sky today, and a few more bricks.

$6,737.77

Today my wife received her disbursement check from her school. She is completing a higher degree that will lead to a pay raise at her job. This will be the only year she takes student loans- the rest of the time we'll pay for them out of pocket. But until then, we'll add it to the overall total. It'll earn interest, at least.

In a related note, our $8500 CD should start earning interest today.

Current savings: $18,247.10

Doctor's Visit

My wife has been struggling with something the last few days, and today we took her to the doctor's office to get some medicine. It's basically the "crud," as we call it, but turns out it's a good thing she went- the doctor said it was something that could easily turn into pneaumonia.

We went to a medical clinic in a Wal-mart store- the basic office visit was $65 and the additional nebulizer treatment was $25. Prescriptions were basically $106 or so. All in all, we got $210 out of the the ATM. There was a surcharge in there of $2.00 or so- I'll update when I'm sure.

All in all, I'm glad she went- I'd hate to see her suck through this for the next week or so.

Current savings: $11,509.33

No Dinero, Por Favor

No money spent today. Brought a tuna kit to eat at lunch.

Other than that, not much to report.

Current savings: $11,722.83

$485

At this point in time, three different entities owe me monies totalling $485.

My friend (as mentioned previously) owes me $100.

My sister (a frequent borrower) owes me $160.

My boss owes me roughly $225, given the time that I've worked.

I fully expect all three of these to pay me, so I'm not irked about that. What is strange is the fact that I've never had that much money coming my way from so many different sources. Maybe there's something to that "multiple streams of income" theory after all.

Current Savings: $11,722.83.

Daily Musings

Our $8500 CD went into effect today. It should make us $215.33 over six months.

Finally sold my laptop today for $100. It had a frayed power cord, and some sort of vicious malware on it that rendered it unreliable for exams. The guy I sold it too (a friend I go to school with) said he'd bring me the money tomorrow. I know where he lives, so I'm not too concerned.

Current savings: $11,722.83

House Search

Went driving a bit today to look at this house. It's selling for roughly $25,000. More than we have right now, but a reasonable house to purchase with the down payment money we have. (Not that we would, but I enjoy hypothetical gesticulations as a cure for boredom from time to time.)

It's on over an acre, and apparently has central heat and air. But it was a little too far out for my taste- that, it it was dreadfully close to the road. Who live son over an acre and then parks their house that close to the road? Strange. Also, someone was living there, so we didn't stop for long.

$140 Deduction

Today we withdrew $140 out of savings so my wife could get some work clothes and make-up. It had been a number of months since her last trip, so her supplies were dwindling in the cosmetic sense.

Current Savings: $11,722.83

Updated Total

Due to monthly fees and interest payments, our total has changed just a bit.

For some damn reason, my brick and mortar bank keeps charging me $8.00 a month to hold onto my money. On top of that injustice, they only pay me 36 cents in interest. (Although, in fairness to them, it's probably due to the fact that I withdrew money so much during the month- a habit of my pre-saving days.) Maybe next month it'll be lower.

Current Savings: $11,862.83

CD

Today my wife and I deposited $8500 of our savings into a 6 month CD earning over 5 percent interest. It's dreadfully important to let your money work for you through the power of compount interest.

Last night we headed to an impromptu birthday party, and bought a cheap bottle of wine and a present along the way. I can't remember how much they cost exactly, but it came out of our "everyday" checking account, so I'm not too concerned.

In order to defray that cost, however, I did leave $37.75 of the $8,537.75 in our checking account. So our savings has (unfortunately) went down a bit.

Current savings: $11,870.36