Finding balance in a chaotic world

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Financial

Balance on Vacation

MallI’m back after an enjoyable family vacation. While I won’t say I’m well rested, vacationing with a three and six year-old is never restful, I will say that it was one of the most relaxing vacations I’ve had in quite a while. The main reason for this was all due to my wonderful wife who carefully planned out the details of our vacation. She did such a great job that we just coasted through the week and enjoyed our time together. Now, I’ll be the first to admit that our method is a little anal-retentive, but it did such a great job or alleviating preventable stress on our trip that I felt it was worth sharing. Read more »

Easy Credit Terms Available

credit cardI’ve been going through my credit report and closing the accounts that I no longer use. Some of these have been on my report for over a decade with no activity so I’m going through the various customer service phone lines and trying to get them closed. I’m surprised at times how easy and how difficult this task is. It should be a matter of telling them I want to close my account and they do it. One of the cards it was just that easy. For the rest though it was kind of a pain. Read more »

The Lottery is a Tax

lotto ticketI often quote a joke I heard one: “The lottery is a tax on people bad at math.” The odds of winning more money than you spend on the lottery are so low that the government is the only institution allowed to do it. We’re talking odds of millions to one depending on which game you like. The fact is that for every winner there needs to be tens of thousands of losers in order to finance the payouts. Yet every day people pay their money and play. So why do people play? Why am I tempted? Clearly something is out of balance. The desire to win millions of dollars overrides rational thought. Read more »

Formula for Success

ledger sheetThe very first formula you learn in Accounting class is the one for profit. It is a simple one and yet it is what every company in America chases after.

 

Profit = Income – Expenses

 

See, it’s not rocket science. Logically, to increase profit (i.e., left over money) you need to have greater income, less expenses or a combination thereof. So what does this have to do with balancing your life?

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A Need to a Want

So a few years back my wife, Amy, was concerned about our financial position. She had actually been Moneyconcerned for a quite a while but I never tuned into this. After all, we were doing ok. We had a little bit of credit card debt, but certainly nothing like the average American. We had one car payment that was reasonable, our mortgage, and my student loans for my MBA. Nothing too outrageous, but we were still running out of money each month. It wasn’t a lot but it still happened and it added up.

So she read Dave Ramsey’s Total Money Makeover and was convinced that that was the way we needed to head. She asked me to read, and I did. I felt his tone was a little too salesmany, but what he said made perfect sense. So we set off to follow down that path towards financial freedom.

For me, the crux of the whole book was the way he did his budgeting. Previous attempts at a budget in our house used monthly averages. This caused problems whenever things like our twice-a-year car insurance came up since the price of it was amortized over a period of months. It shouldn’t have been a problem if we had squirrled away that amount each month, but somehow it never happened.

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