Still on track!

So the job change has cased a little bit of a hiccup in my financial plans, which I had planned for and am happy to say I am now done with. It’s not a big deal – it basically comes down to my new job having a slightly different payroll schedule, and of course the fact that there’s a certain lag between when I start and my first paycheck. In order to be prepared, I basically held off on Baby Step 2 until my first paycheck from my new job. At that time I figured everything would be okay, and I could use the accumulated amount towards Baby Step 2.

It worked – but I have to say that psychologically, I felt very much off-track during that time. I had almost forgotten how much I loved putting money on my car loan and seeing the balance drop. So when I finally put another principal payment on my car loan, which was an amount equal to what had accumulated while between jobs, well, it felt pretty good.

I’m happy to say that I feel like I’m on track again – not that I was really ever off track – but I feel good that I’m able to see progress again.

I like my new job, although, I have to admit I miss my old job. A lot. It’s strange how you miss the things you took for granted. At my old job my lead was able to teach me a LOT. I like being on the learning side of things. At my new job – I hesitate to say this, but it’s true – I’m smarter than my lead, and it bothers me. I continually have to explain things to him, and sometimes he doesn’t get it. I think he’s just inexperienced, and maybe a little over his head in his position. He also likes to argue, especially when he feels defensive (I sense just a little bit of male machismo in his defensiveness/argumentativeness). Now I know that all this sounds pompous, but I’m not sure how else to explain it.

I really miss my old job. I miss being able to ask my lead questions and learn from him.

After my first week at my new job I had made the decision to work this all out as a challenge – in other words, see if I can learn from the experience rather than run from it. I was in a very similar situation a long time ago, and I found another job as quickly as I could. This time I’m going to see if I can work through this, and learn from it.

At any rate, I’m on-track, or back on the Baby Step 2 express.

My last day at my old job is tomorrow. :(

So it’s probably obvious I did in fact take the new job.  It was such a difficult decision, but ultimately it matched up with what I want to be doing – and it seems like a more secure job in terms of layoffs.

So aside from leaving people I’ve worked with for the past few years, I am looking forward to the challenges of the new job.  It comes with access to a gym, so I’ll be able to continue working out – and moving forward with both my health and financial goals.

I’m STILL in Baby Step 2.  My last car payment is inching closer every single day.  It feels great that I’ll finally be free of that albatross – and of course I’ll be focusing on paying off the last of my debt:  my student loan.

I’ve somewhat settled into the routine by now.  My biggest struggle has been that I can’t make it happen in hours or days instead of months.  I’m okay with that now.  I know it’s going to take some time – but I can stay the course and implement my plan.  It’s actually, well, no big deal.  That’s how it’s supposed to be I suppose.

I probably wrote this before – but I’ll write it again:  Having the plan and implementing the plan is just about as good as having achieved the goal itself.  It is the best I can do right now.

I have been looking forward to Baby Step 6.  You see, Baby Step 3 will take me a couple more months, and Baby Step 4 is a flip of a switch.  I don’t have children, so Baby Step 5 is a non-issue for me right now.  Baby Step 6 is the one I’m really looking forward to.  Baby Step 6 is to pay off your home early.  For me, this means actually saving up for, and buying a home.  I’m still going to have to get a mortgage, but I’ll pay 20% down first and get a 15 year fixed rate, which I’ll probably pay off in about 7 years if I stay on track.    I’ve already set up the spread sheets.

So it’s basically same ol’ same ol’ for me right now.

Looking Forward

So if you’ve read my previous posts, you know that I’ve been mulling over a new opportunity for several weeks now.  This has been one of the most difficult decisions I’ve had to make because I really like my job, but there’s been several layoffs since I started, and the future isn’t quite as certain.

As I mentioned in a previous post, I was approached by another company, fairly soon after our last round of layoffs.  I interviewed with them, and then heard nothing back – for several weeks.  I had thought I was off the hook, and almost put them out of my mind assuming they had decided not to hire me.  And then yesterday the recruiter called to tell me that they wanted to move forward with an offer.  So I figured I had one more night to think/sleep on it.

I received the offer tonight and faxed my signature to them accepting it.  I believe it will be good for me, both personally and professionally.

So…  I’m still on Baby Step 2 – but still making really great progress.  If you listen to Dave Ramsey’s radio show you hear him say that when you start the debt reduction process it’s like you get a raise – because you address both the income and spending areas of your life – you learn to live on less than you make, and therefore spend less, and you find ways to make more money.  The new job helps – it’s not a BIG raise, but definitely significant.  But more importantly, I’m living on quite a bit less than I used to.  So ultimately I’ll be able to pay off that student loan just a little bit faster. 

Baby Step 2 is a long process for me – but I’m finding ways to speed it up. 

KISS, or How I learned to give up complexity and love simplicity

It’s really interesting to me, how only ten, maybe fifteen years ago I longed for the complex, perceived “fun” things in life. Taking on additional responsibilities (credit cards, car payments student loans) just seemed like life. And to a certain extent it is – although the older I get, the more I realize just how optional those things really are.

This process – debt reduction in particular, has caused me to consider, and even value simplicity in my life. On the “No Credit Needed” podcast, the host described the idea that he worries now, so he doesn’t have to worry. He talked about having his bills paid up, or in advance for a month in preparation for the birth of his daughter (CONGRATULATIONS, NCN!!!) – so that when she does arrive, he can focus on her – and not worry about bills. WOW.

I don’t have children, but I can relate. I remember a couple of years ago we had a pretty big event happen in my family; it was painful and traumatic. I became fairly depressed for about a month, and lost interest in – well, paying my bills or keeping up with them among other things. Now depression isn’t something I struggle with on an on-going basis – but when it did hit, I felt pretty disoriented.

Here’s the interesting thing – I eventually came back around, and when I looked at my bills and decided to catch up, I was caught up already. You see, I had set up my bill payments through my bank. My bank can receive bills from almost all my accounts, and I had set up automatic payments to be sent on the due date for those. For the bills that don’t have eBill capability, I have scheduled the right amount to be sent (which is pretty much only rent). And since my employer automatically deposits my paycheck, well, I hadn’t realized just how much my finances were on auto pilot. As long as money was in my account, my bills were paid.

I had expected to have to catch up with late payments – but everything had happened exactly on time, and for the right amount. Had I realized this, I probably could have focused on my family needs a little more – and worry less about my finances. Actually in retrospect the right thing probably would have been to pay attention and not let life’s events keep me from managing my finances. But that it worked out as well as it did is a testament to the simplicity of paying bills this way.

Now I make it a personal and unbreakable policy NOT to allow any company to deduct a payment from my checking account automatically. I want control – I’m more than happy to set up payments through my bank, where I have control – but I will NOT allow another company the right to dip into my checking account. By doing it this way I can change the amount, date, or even cancel a payment if I need to. In other words, I am in complete control.

As an aside, several years ago I had an interesting conversation with a salesperson at a gym:

Salesperson: Now, just give me your checking account information and we’ll deduct payments automatically through your checking account.

Me: Whoa! I was not aware I had to give you access to my checking account in order to sign up.

Salesperson: No, it’s okay – this way the bill is paid each month so you don’t have to worry about forgetting.

Me: I schedule payments to happen automatically on my bank’s web site. Besides, it’s a personal rule of mine, not to allow companies to take payments from my checking account automatically.

Salesperson (you won’t believe this): Well, you know rules were meant to be broken.

Me: What hours are you open?

Salesperson (a little surprised at my question): We open at 5:00am and close at 11:00pm.

Me: Would you mind if I came in at, say 2:00 in the morning to work out alone?

Salesperson: No, we couldn’t allow that.

Me: Why not?

Salesperson: You can only come in during business hours.

Me: So you’re saying it’s one of the company’s rules?

Salesperson (beginning to understand): Yes, I suppose so.

Me: And you won’t bend that rule for me?

Salesperson: I could ask, but I assure you the answer would be no.

Me: So I’m sure you understand when I tell you that my personal rule is never to allow a company access to my checking account. This, like your store hours, is a rule that is not meant to be broken.

The salesperson grumbled, but he did find the right forms, and he signed me up with traditional payments.

I’ve been told before that I’m a salesperson’s worst nightmare. Later on I saw that salesperson again, and he told me that he had called another salesperson at another location and told them what I had said.

At any rate, I like to keep control of my bills. So setting up automatic payments through your bank isn’t for everybody – but for me it works like a charm. In fact, in a way it allows me the freedom from worry. As long as I have an income.

So over the past few months, I’ve been able to remove bills from the list of bills on my bank’s website – and the smaller that list becomes the better it feels. Simplicity feels great – and allows me to relax a little bit.

A Review: The Richest Man in Babylon

This is a short book; I was able to read it in one night – partially because it is short, but also because I couldn’t stop reading.  It uses stories from ancient Babylon to illustrate simple but important lessons about personal finance.  I’m not sure that the stories are based on anything except imagination, but the book was written in the 1920s.  It is refreshing to know that the principles that were used nearly 100 years ago (and according to the book thousands of years ago) are still valid today.

Several characters from ancient Babylon are introduced, most of whom I could relate to in one way or another.  There were some common sense, “of course” kind of lessons in the stories, but there were also some unexpected lessons that hit home for me.  One in particular had to do with procrastination, and why it can be costly to put off important decisions.

It is very creative and timely – I intend to give this book to kids in my family as they graduate from high school.

Amazon:  The Richest Man in Babylon

Inspiration at 33%

Hey I found a new podcast today, and I’ve listened to almost all of the new, 2008 podcasts.  It is called “No Credit Needed, or NCN for short.  I liked the name so much I just had to listen.  It’s basically an informal, humorous podcast by a normal guy who has worked his way out of debt and likes to talk about personal finance.  I’m not sure what his name is – online he seems to go by “NCN.”

The No Credit Needed website:  www.ncnblog.com

I like that he uses the same principles that Dave Ramsey teaches, so it’s nice to get another perspective to help balance things out.  It also helps that he’s willing and able to laugh at himself; in fact, even though he offers much of the same advice that Dave Ramsey teaches, the light hearted nature of his podcast is a welcome change.

Something he provides at his website is that you can sign up for a chart to show how much you’ve paid off, or towards a goal.  It inspired me to take a look at where I’m at – actually how far I’ve come would be more accurate.  I added up all the debt I had in 2007, in order to see what percentage I’ve paid off so far.  I had thought I had paid off more – but in fact, I have only paid off 33% of the total so far.  At first I was a little disappointed – I mean, only 33%?  But considering the time goals I’ve set for myself – it is right on target.  And hey, that 33% represents a considerable chunk of change.  I know in my heart that I’ve done everything I could to pay as much as I could since I started – so aside from a serious windfall, it’s the best I could do.  I have plenty of reason to feel good about where I’m at – and more importantly, that I’m still on-track and well on my way.

Opportunity vs. Loyalty

I’m faced with a very difficult decision. I can’t provide too many details, except that I was approached by another company with the possibility of employment.

Jumping ship.

Okay so normally that’s not such a bad thing, but as with most drama, there’s more to it. I’m a web developer, and I started right out of college about 10 years ago. As you can imagine, I’ve witnessed my share of layoffs. So job stability has not been something I’ve counted on, although I’ve managed to survive all but one layoff throughout my career. I’m either doing something right – or extremely lucky.

I started working for the company I now work for, almost 2 years ago. This was one of the first companies I really wanted to work for. The product they provide is something I really believe in, and feel that they’re not just trying to make as much money from the consumer as possible. The product is well worth what they charge, and probably more important – I and my friends, and my family all use it on a regular basis.

In the past 2 years we’ve had a few layoffs though. I hate layoffs for obvious reasons, but with this company it really scares me because I really want to work there. I told a coworker a few weeks ago that I can get a paycheck anywhere -I don’t need to work there – but I want to because I believe in what I’m doing. I also like the people I work with.

So. The dilemma? I’m not confident that my job is stable – and another company has approached me and wants me to interview with them.

I agreed to the interviews, and scheduled a vacation day with my current employer for that day. The new company is doing some really neat things – I would certainly be challenged intellectually, but I’m not yet sure how much I can believe in their product – it’s not that I don’t – I just don’t yet know enough about them. I’m doing my homework though – and paired with the interviews, I ought to know enough this week.

I can’t help but feel guilty. At work today I had a hard time looking people in their eyes – I felt like I was betraying them. My sense of loyalty is probably one-sided. I’m sure they would lay me off in a heartbeat if it was right for the company. They’ve done it to others.

Welcome to 21st Century Corporate America.

The thing is, if I can increase my income – even if only a little bit, it will help me financially. I have no way of knowing whether this job has more stability – probably not – layoffs seem to be a way of life for developers. I don’t yet know whether I can believe in this product more than I do with my current job – which may be a moot point the next time layoffs happen.

I’m a little torn, undecided, and maybe a little afraid.

I suppose I don’t have to make any decisions until I’m actually offered a job. It’s interesting that I can actually relax – I don’t need to get this job, so the interview process is a lot less stressful. Without a job, I’m more inclined to take the 1st offer I get. Now, I am counting my blessings that I can – at least right now – really evaluate how I feel about this company, and whether it’s what I really want to do. It feels good.

What do snowballs and behavior have to do with each other?

I just re-read my last post, and decided that I hadn’t explained why Baby Step 2 “…has everything to do with behavior.”  It makes mathematical sense to pay down the debt with the highest interest first, right?  I mean you’ll pay less in the long run.  Well, based on what I’ve learned from Dave Ramsey’s books and radio show, the snowball method helps to gain psychological momentum.  In other words, it feels great to have a few relatively easy wins at the start.  As those smaller debts get paid off, you gain a feeling of accomplishment that helps you to stay with it, and possibly even become more “gazelle intense.”

Each Friday (I believe), Dave opens up his radio show to let people call in to do the “I’M DEBT FREE!” yell.  It’s amazing – if you haven’t heard it, and need a little inspiration this is an easy way to find it.  The first few times I heard this, I was surprised to find myself tearing up.  In those 3 simple little words you can hear the hurdles overcome – the struggles, the victory, and ultimately the hope in those people’s lives.  It’s amazing.  I want so badly to call and do that scream.  Even if I can’t manage to get onto his program I might just do the scream at home – recorded, and post it here. 

Everyone has a story, and while you don’t get the details – every time I hear people call Dave’s show and yell, I get a glimpse of their story.  You get the important stuff.

So it’s obvious – we’re all human.  We need inspiration.  We need more than raw math to win.

Weight and Debt

This process is teaching me an important lesson, as well as forcing me to face one of my biggest demons: frustration with long-term commitments. I’m learning that consistent behavior over a long period of time will get me to where I want to be – both in terms of weight management and financial goals. I’m slowly accepting the fact that getting out of debt is a long-term commitment; it won’t happen overnight, and is going to take a commitment on my part. I’m terrible when it comes to long-term. I hate long-term. I want to achieve my goals immediately. But this one isn’t going to happen that way. Neither will losing weight.

I’ve started working out pretty much every day – nothing really big, just about 30-45 minutes a day starting with an elliptical machine, and ending with some weights. I’m beginning to see results, although I’ve actually gained a little since I started. I think the gain is from muscle. The point is that this, like the debt snowball, is about making consistently good choices over a long period of time.

Dave Ramsey is right – this is about behavior. When I can change my behavior and begin to make good decisions consistently, things start working. Whether money or weight, it’s pretty much the same.

The changes I’m beginning to see in my life are most pronounced not in the size of my wallet, or the length of my belt – it’s other, probably less noticeable, but more important things. I have more free-time to spend on what is important to me. I’ve started to put consistent effort into making sure my living area is clean – so another case of consistent good choices being good for me: it’s better to spend 5 minutes a day to maintain a healthy living area than to put up with a mess for weeks, until I finally get sick of it and spend 4-6 hours cleaning it up, only to start the cycle again. I have a better outlook on life – both because I think I am beginning to realize that big problems don’t have immediate solutions – and also because there are simply fewer things to worry about on a day-to-day basis.

It’s about behavior. When I first listened to Dave Ramsey talk about the debt snowball – paying down the smallest debt first instead of the highest interest debt – I thought he must be horrible at elementary math! But, his argument for the debt snowball has everything to do with behavior – change behavior and the rest just kind of falls into place. I agree. This process is forcing me to address what has been a problem in so many other areas of my life – behavior.

So Americans kind of have a reputation for being impatient – for wanting everything right now, and not wanting to wait for anything. So is it any surprise we have both national debt and weight problems? Something happened between the signing of the Declaration of Independence and today, that caused us to become too comfortable – to want to have everything, and not wait for, or work for anything. Okay I’m being a little pessimistic – but I’m not far off. We’ve become a country – a society where we have everything, but own nothing.

If it’s 2008 this must be Baby Step 2

Well, right in-line with my obsessive personality I’ve gone and budgeted myself right into boredom. Well, it’s not really THAT bad – but I’ve used up my discretionary money and I still have a week yet to go. It’s not bad really – it just means I won’t get to indulge in my favorite mocha this week. And I’m going to have to be careful over the weekend, too. No eating out. No movies. No more gas for my car. I feel like I’m working minimum wage again.

Last year at about the beginning of the year I started doing the Dave Ramsey baby steps and crashed. When I get into something I tend to go overboard – I kind of become obsessed with it until I decide it’s no longer interesting and then I stop – or until I become overwhelmed. It’s been good for my career – I think employers have appreciated the intensity I bring to my endeavors. The problem is when those things take long-term intensity. Whether weight loss or financial plans, long-term is just difficult for me. I want results immediately, and I’m willing to put in almost superhuman efforts to attain those goals – it’s the daily grind that’s so darned difficult. My best friend thinks I have ADD. I think I’m just American.

So last year I started the baby steps with more than gazelle intensity – it was more like I got on the Space Shuttle and tried to reach the moon – but instead of a rocket I was pedaling – with all my might. I was working a full-time 9-6 job during the day, doing freelance web design projects on the side, and even doing magic shows for children’s birthday parties on the weekends. As if that wasn’t enough, I had decided to take on a 2nd job at Safeway, stocking shelves from 9:00pm – 2:00am. I was able to keep this up for a couple of months before I really just crashed. Two people in my life showed concern over my well-being – my best friend, and my Mom. Together they convinced me to quit my part-time evening job so I could get some sleep and regain my health.

And to add insult to injury I had turned something I love (magic) into something I hated – every time a new request came in for another birthday party I started to hate it. The last show I performed, I realized something was wrong – I snapped at one of the children. Now I started doing magic because I love children – I love seeing their wonder and amazement, and enjoyment. Until I started the baby steps last year I used to perform for Birthday parties – not for the money, but because I loved doing it. When I started losing my passion for it, things started going downhill.

So even though I knew to watch out for it, I allowed myself to go too far again this year. It isn’t even half as bad as it was last year – not by a long shot. But I’m probably not giving myself enough blow money between paychecks. It’s not serious – and certainly not detrimental to my health. In fact, that I noticed and am able to admit this to myself is pretty big actually.

It’s this daily grind that is so difficult! And it’s kind of a downward spiral – when I’m trying so hard not to spend money, I have tended lately to stay home – but staying home is boring. So I either start browsing the web and find cool new gadgets I want, or I start looking at my spreadsheets trying to maximize efficiency – trying to find ways of reducing the amount of time to complete baby step 2 as much as possible. Boredom sucks.

My friend warned me last week, that she thought I was obsessing over this again. That was probably when I started paying attention. It was also right before I ran out of money.

And it’s not like I don’t have hobbies! I love photography, and want to get out and start doing that again. In fact I’ve been thinking a lot about trying to do this new technique – called HDR, or High Dynamic Range. It doesn’t require any new equipment at all – I can basically do it for free with everything I already own.

I also play poker. Yes I know it’s gambling and that’s not good for somebody trying to get out of debt. It’s pretty social. A small group of friends and I play twice monthly, and the buy-in is $10. It’s one of the few scheduled “adult-only” times I get to spend with friends. We’ve talked about the possibility of playing only for chips – in other words no money at all, but that idea wasn’t met with a lot of enthusiasm. It seems harmless enough anyway. I figure it amounts to about the cost of a movie, and I get to spend it with my favorite people. Oh, and it helps that I win occasionally.

Let’s see – aside from various hobbies, I also have several friends.

So it’s not that I have nothing to do. I have plenty to do. But so often I find myself bored to tears – and that’s when I start thinking about shopping or obsessing over my budget.

This time is going to be different. I’m not going to tighten my budget so tight that I have no room. I can still be gazelle intense – and still stay on target!