Monthly Archives: December 2009

The Best Thing About My Old Truck

I have this old truck – a 1994 Ford.  (It’s not THAT old, but at 15 years, it has its share of scrapes and dings.)  I use it, mainly, to haul off the trash, but it’s also good for towing a trailer or bringing home supplies from the lumber yard.

I bought the truck, used, almost 10 years ago.  I really like my old truck.  It’s not much to look at, but it’s fun to drive and it gets me where I need to go.

Recently, I had a couple of truck-related.  It needed some pretty major engine work, several other parts (like the brakes and belts) needed to be replaced, and it needed new tires.  I thought, very briefly, about replacing the truck with a newer model – but quickly decided not do so.

Instead of replacing the truck, I had it repaired.  A good friend of mine is a mechanic, and he fixed the engine and replaced the worn out belts and brakes.  Two days ago, I had a new set of tires put on it.  It’s now running, in my opinion, better than it has in years.

The best thing about my truck – honestly – is the fact that it’s paid for.  It’s mine.  I own it.  Sure, it’s old, a little beat up, and requires some attention, but, again, it’s paid for.  For the cost of two, maybe three, car payments, I was able to get my old truck fixed, put a good set of tires on it, and keep it road-ready for another five, maybe ten, years.

To put things in a bit of perspective, let me tell you a quick story-

Several years ago, long before No Credit Needed time, I owned a little blue car, a sedan.  It was a nice car, it handled well, and had no major mechanical issues.  One day, as I was driving down the road, I heard a strange noise.  When I arrived home and inspected the car, I found that there was a problem with the rear tire on the passenger’s side.  I also noticed that the right-rear brake-light had gone out.  Instead of fixing the tire (or just buying a whole new set) and replacing the brake-light (a 5-minute job that might have cost me $5) – I traded the car and financed the purchase of a brand new SUV.

That’s right.  I didn’t want to deal with two very minor repairs – so I went into debt – simply to avoid a little hassle.  It makes me cringe, even now, thinking about the foolishness of that decision.  Alas, I was young, convinced that I could make the payments, and looking for excuses to upgrade.  I found the excuses (very lame excuses), and I made a poor financial decision.

The good news is, after years of not-so-bright decision making, I managed to get my act together, turn things around, get out of debt, and move forward.  I don’t want to even think about where I’d be, right now, had I not come to my senses.

By the way – I’m not saying that I’ll never buy a newer (or even new) automobile.  In fact, a few years ago, I purchased a slightly used minivan for our family.  However, there was a major difference between the SUV purchase and the minivan purchase.  The SUV purchase was ill-planned, silly, and required taking on an unwise amount of debt.  The minivan purchase was well-planned, justified, and made with cash.  The day after I purchased the SUV – I felt immediate buyer’s remorse.  The day after I purchased the minivan – I felt a sense of accomplishment.

Each time I take it for a spin, I’m reminded of the fact that my old truck is paid for.  The title, tucked away safely, has my name on it.  Humble though it may be, it gets me safely from point A to point B, and that’s really what’s important.  Divorced from any notion that I-am-what-I-drive, I’m free to focus my time (and my finances) on more important things.

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Bossing Myself Around

Having read countless articles about personal finance and money management, I’ve come to the following conclusion.  The best thing that I can do to insure that I have a sound financial future is to be a better boss – of myself.  Allow me to explain.

About four years ago, after spending almost 15 years working (with very little in savings to show for it, and several thousand dollars in credit card and automobile debt), I had a (what is now quite obvious) revelation:  It’s not just important that I have a job, pay bills, and take care of pressing financial needs, but it’s also vitally important that I take the time to actually manage my finances so that I can provide long-term financial stability for myself and my family.

I understood, from a very young age, that it was important that I work hard and do a good job for my employer.  What I missed out on, and what I think most folks are missing out on, is the fact that it’s also important to do a good job – for myself.  I had to learn to focus on the “business of me”.  I realize that this is not a novel concept, but it is one with which I did not personally identify until just a few years ago.

Like most people, I live a busy life.  I have a wonderful wife, a full time job (in the real world), a part-time job (in the online world), and three young children.  My wife and I are busy with activities at our church, taking our kids to and from various practices and school events, and spending (some limited amount) of time with our own friends, socializing.  At the end of most days, I’m exhausted, ready to veg out in front of the television, eat some popcorn, and then go to sleep.  It’s always tempting, especially when things get busy and I’m mentally exhausted, to neglect sound money management.  Tempting – and foolish.

Over the past four years, I have learned to boss myself around.  Instead of neglecting my finances, I make them a priority.  On my calendar, right next to appointments and scheduled events, I pencil-in time to pay bills, research investment opportunities, read other personal finance sites, and work-out my budget.

I am not naturally inclined towards organization.  I tend to be forgetful and I have a hard time remembering dates, names, faces, schedules, and times.  I have learned, however, to be very organized.  I live on a budget.  I have a filing system for financial documents.  I regularly review all of my financial accounts.  I maintain a balanced, neat checkbook.  Each day, I make the choice, the firm decision, to do all of the small things that are necessary for managing my finances.  I boss myself around – and I listen to the boss.

There are thousands of resources (many which I use and recommend) which can help us manage our finances, but the most powerful resource isn’t found on a bookshelf or linkable via some website.  The most powerful resource you have is your willyour choice to be and to do more – with your life, your money, your talents, your blessings, your gifts, and your time.  Evey significant change in your financial life begins with a choice that you make – a soul-deep decision to follow a specific, certain path.

The above was going to be my last sentence, but I feel compelled to include the following.  When I speak of “bossing myself around”, I mean that I choose to make financial management a priority and I choose to move from laziness towards productivity.  It is important to me that I point out, that as a believer in Christ, all ultimate authority resides with Him, in whom I have placed my trust.  I use the word “boss” in a positive light, as one who manages that with which he has been blessed.  Rock on!

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Getting Ready For 2010

As preparation for 2010, I’ve spent some time updating automated contributions to various retirement, education, and cash savings accounts.  Here’s the breakdown –

My Retirement Accounts -

403(b)Monthly amount = $1375

A percentage of pre-tax income is deducted from each monthly paycheck.

Roth IRAMonthly amount = $312.50

My goal is to make the maximum allowable contribution for 2010.  For my situation, that’s $5000.

My Wife’s Retirement Accounts -

Roth IRAMonthly amount = $312.50

My wifes’ goal is to make the maximum allowable contribution for 2010.  For her situation, that’s $5000.  She also makes pre-tax contributions to her pension plan.

Education Savings Accounts -

ESA 1Monthly amount = $125

The annual contribution limit for my oldest daughter is $2000.  

ESA 2Monthly amount = $125

The annual contribution limit for my son is $2000.

ESA 3Monthly amount = $125

The annual contribution limit for my youngest daughter is $2000.

Cash Savings Account -

Automobile Replacement – Monthly amount = $500

At some point, we will need to replace one of our automobiles.

Future Home Purchase - Monthly amount = $500

At some point, we hope to pay cash for a new home (or use available savings for healthy down-payment).

Summary -

The total of all monthly contributions, excluding my wife’s contributions to her pension, is $3375, which represents a very substantial portion of our household income.  It’s important to note, some contributions, those to Roth IRA and Education Savings Accounts, are calculated for a 16-month contribution timetable, running January of 2010 until tax-filing deadline April 2011.

As we continue to live debt-free, my wife and I have come to realize just how important it is to save, save, save – and then save some more.  We set lofty goals for ourselves, including the contribution goals that you see above.

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