Thursday, January 29, 2015

Start with a Budget

Living Large by whole-heartedly enjoying the things in life that are most important to me happens most naturally when I practice the other piece of it, which is living within my means.  Simply stated, it’s spending only what I make or less.  It sounds simple, but it’s actually quite complex when you consider that the norms in our society include borrowing liberally to leverage our purchase power, creating financial peer pressure to spend more than we make.  Creating and sticking to a balanced budget each year, though, can not only keep your financial house in order, it can also help you choose your life’s passion. 

Start with a Budget - ParentUnplugged - Stacy Snyder
As a kid and teenager, it was easy to budget as I made so little money at my part-time jobs that I could only spend so much on clothes and outings before my wallet or bank account was empty.  When you were out of money, you simply couldn’t buy anything.  Those years were fun and simple.  Turning 18 threw a wrench into the plan for me.  Credit card company promotional tables lined the commons that first week of college with their reps taunting, “Buy it today and pay it off later,” and “Establish your own credit history,” as they handed me my free dorm-room-shower-caddy for opening up a revolving credit account at 21% interest.  It went downhill from there and I loaded up on debt for six years. 

Consumer Credit Counseling showed me, among many other debt-reduction ideas, how to create my first written budget in my early 20’s.  The advisor used a sheet of paper and a pencil, I later transferred it to an excel spreadsheet, and now I use Quicken, but regardless of the platform, the format is still the same.  You simply have to write down every dollar you bring in and match it to every dollar you hand out.  Do it in your photographic memory, on a bar napkin, in your phone, or in a piece of DIY software, but you have to do it if you want to get a handle on your finances. 

Start with the basics of a budget.  While doing it by month seems to be the easiest for most, since many payments are due monthly, use whatever period of time makes most sense for you, such as week or quarter.  First track the amount of your paycheck(s), allowance, stipend, grant, support, alimony, and any other source of income.  If you don’t make a static salary or wage, but say work on commission, calculate an average based on your last 3 months’ income earned.  Next create a separate column of regular expenses.  Regular doesn’t necessarily mean just monthly, but can mean a one-time expense that happens each year, like registration fee on your car or a 3-Day Pass to Lollapalooza.  Write each expense on a separate line with the name and amount.   If you’re not sure of what you spend on a regular basis, start by guesstimating.  You can go back and finesse the numbers later.  While utilities and car payments and bus passes usually make it onto these lines, many people forget the everyday “little” items that add up to big expenses when multiplied to equal a year’s worth of expenses, such as personal care such as grooming, salon visits, and products .  Household expenses like paper towels and tissue and toilet paper many times get forgotten, and expenses like dining, entertainment, kids’ sports and activities, and drive-through coffee really add up.  Take, for example, the year I reviewed my budget in December and was shocked to see that $5K had been spent in stocking our bar at home!  While the number itself is relative to the situation, for me that number represented 5% of the total income brought into our household that year.  It was more than the amount we spent in groceries for the year, more than we spent on our vacation, and topped what we gave to charity in a 12-month period.  Priorities people. 

Once you have all of your income in one column and your expenses in another, add up the two columns.  Your income should be more than or equal to your expenses.  If it’s not, you need to balance out the numbers.  This may require a Come-to-Jesus talk with yourself and a sit-down with your family about prioritizing or it may be as easy as looking for glaring categories where you can spend less and alter the amounts to reflect what you WANT to spend instead of what you have spent in the past.  Maybe you spend $700/month dining out.  It’s less expensive to buy groceries and make meals at home, so in order to cut costs, you could prepare more meals at home.  My dad always says, “Every solution creates a new set of problems.”  Your new problem may be that you don’t currently have time to do that, as by the time you go to work, go to the gym, make meals at home, and spend time with your family, the hours in the day have been exhausted.  So maybe it means changes your priorities for a period of time, or maybe indefinitely, to allow for cost cutting.  Maybe you could lose the gym membership to both cut that category amount and allow for the cooking at home, allowing you time to work out with your spouse, kids, or a friend, after dinner.  Everyone’s different and there is no one-size-fits-all approach to budgeting.  Be creative.  You have to make the numbers work based on your values, priorities, and lifestyle.  Maybe you’ve cut all the proposed expenses you can and find that you’ll still be spending more than you make; time to look for extra income like a second job, or auctioning some of your possessions, or selling one of the items you own that you’ve financed, like a car or a home to alleviate the monthly payments.  No matter what your situation, there’s always options, some more palatable than others.

Start with a Budget - ParentUnplugged - Stacy Snyder
Once you’ve set up your budget of proposed spending, you then need to stick to it and track what you spend.  If you put $400 a month in your budget for groceries, then only spend $100 at the store each week.  Pick and choose your stores and purchases instead of shopping on demand.  Following your own financial recommendation is the key to success.  Track your daily expenses and tabulate your monthly expenses in each category.  Keep receipts, take pics of them, have them sent to you electronically, or keep a running tally in your head of what you’ve spent on what…it doesn’t matter how, just do something that makes sense for you.  Sounds dramatic?  It’s not.  Once you tabulate what you actually spend in a month, you will be shocked, as most of us don’t accurately depict our spending because we don’t have a handle on the facts.  Once you see what you spend, compare each month/quarter/or year what you spend to what you predicted and massage the numbers from there.

While budgeting helps me ensure my family’s financial security, which is hugely important, it also provides the bonus of giving me a reason to sit down and actually evaluate who I am and who I want to be.  How we spend our money tells a lot about us.  It shows me how I spend my time, how my family spends its time, what we hold near and dear, and what we’re teaching or not teaching our kids.  Sometimes I like what I see and I’m proud of our month or year.  Other times, I’m disappointed and ingest the data and use it to hone my priorities and passions, allowing me to refocus for the next year or period of time.  What does your budget or spending say about you?

Thursday, January 22, 2015

Make Money and Save Money by Doing the Things You Love

Make Money by doing the things you love - Stacy Snyder - Parentunplugged
Before we get into the down and dirty money-saving concepts of what I call Living Large, I want to remind you of the basic concept, which is balancing the ideas of living comfortably within your means and whole-heartedly enjoying those things in life that are most important to you. 

My wife loves her job and truly “lives to work” in the service industry.  She’s been with the same company for almost fifteen years and never gets tired of a Potbelly Sandwich.  Conversely, for five years, I was simply “working to live” in real estate sales.  While schlepping anything from a house, a job opening, or even a date is in my bones, making it impossible for me NOT to make money in sales, I derived zero pleasure from the day to day work of a real estate agent, not even from the rockin’ financial payoff, except when I used it as a vehicle to pay down debt. 

I’ve always believed in the idea that if you love what you do, the money just naturally comes.  This is more of a soft approach than a hard-core job search for a specific position you love.  Basically it’s the mind-set that the more time you make for yourself to do the things you actually enjoy, even be it just as a hobby or project, the more opportunities you’ll come across to make money doing what you love.

Case in point:  a person who volunteers time to others to do the things he loves, such as teaching people how to do things, fixing broken stuff, preparing tax returns, teaching roller skating, baking sweet treats, heck, even writing, can often pick up paying job requests simply by showing up and doing what he does.  Experience shows over and over that people gravitate towards other people that are passionate about what they’re doing and will think of that guy first and reach out to him when another need arises.

By being a natural efficiency helper, i.e. I like to help people do things more easily and in the shortest amount of time possible, I’ve had job offers galore.  Yes I'm good at it, but the job offers come because I'm passionate about it and that rubs off on people.  Because I grew up in a hoarder household, I love to go through and purge stuff….my stuff, your stuff, it doesn’t matter…I just like to clear it.  In doing so, I’ve picked up gigs to clear and organize other people’s homes.  Take it a step further to note that because I’m also a long-time fan of garage sales, I’m a natural craigslister, ebayer, virtual garage-seller, and free-cycler.  Just by talking about selling and purging things, or sometimes just by chance that other people view my posts, I’m often asked to sell or clear other people’s stuff for a fee.  I don’t set out to necessarily make money doing these random things that I am passionate (or obsessive, depending on how you look at it) about, but it simply comes naturally, creating a new source of income.  Imagine what could happen if you actually set out with a business plan to market the things that you do or make well?  Could you supplement or even replace your current income?  Of course you could.

When I wanted out of the real estate industry so bad I couldn’t see straight, my gut instinct was to look for another high-paying gig, no matter what it was.  But instead, I happened upon a business opportunity with a jewelry company by a fluke.  I had met a friend for lunch and she was wearing a super cool black onyx ring.  I love unique pieces of jewelry.  I don’t wear a ton of bling, but when I do, I only rely on pieces that I absolutely adore.  When I asked my friend about the ring, she told that she had purchased it at a home jewelry party, and that she was so impressed with the rest of the jewelry that the company makes and the high profits from the sales, that she decided to start selling it herself to make some extra income.  She asked me if I wanted to have a party to help her out.  I one-upped her and not only said sure, but asked if I could sell it too, as I wanted a way to afford to buy jewelry!  By the end of that first party, my friend and I had sold tons of jewelry, earning her a big commission, earned loads of free jewelry for ourselves, and I had booked 6 future jewelry parties from my more-than-willing guests.  I had set out just to find a new black ring and ended up with a full-time salary from a part-time gig.  Again, I didn’t set out to consciously make money selling jewelry, but simply because I allowed myself to do what I enjoy, wearing jewelry, even though I couldn’t really afford to buy it, I created a new source of revenue.   

Additional sources of income can be generated on a much smaller scale too.  I LOVE to give my opinion on things – shocker.  So for the past 15 years, I’ve participated in Market Research Study groups, where my input actually gets heard by companies whose products I use in exchange for a financial payout, usually anywhere from $75 - $300 for a 1-2 hour study.  This is different than giving blood, plasma, or sperm for cash in college so you could go out to the bars that evening, which I also used to do.  No, what I’m suggesting is choosing only those opportunities that actually appeal to you, as you’ll not only enjoy what you’re doing, but make extra money at the same time.  Here’s a few of the market research groups in Chicago:
·         Matrix Research
·         Smith Research
·         FocusScope 

One final example of making money doing the things you love, and I have hundreds of them, is to be a beta tester.  I love new technology.  I love to hear about it, get people’s feedback on it, and of course, try it myself.  Over the years I’ve been a default beta tester for at least 25 new ventures, from deal-saving apps to baby product websites to accounting software.  Again, I really like to give my opinion on things, AND I use all sorts of technology, so it’s a good match.  Sometimes beta testers are granted compensation, in the form of money, products, or services.  It’s a great way to keep your mind fresh, help companies out by giving your input on usability, and to make money or save costs on something you’d buy anyway.  Want to get started?  Beta test a new app called Payyourselfie which doesn’t offer compensation for the actual testing, but because it is designed under an emerging app category of "apps that pay money," which is an idea in itself in making extra money, it pays its users simply for taking selfies.  Simply visit the website and request to beta test.   

You can also save money appreciating those things that bring you joy.  While Groupon, Living Social, and have been out there saving folks money for some time now by selling discounted products and services in exchange for consumers buying them in advance, a whole new line of apps that save you money are out there ripe for the pickin’.  Snap by Groupon is a new app that allows you to browse and choose grocery and household items from a list of products you plan on buying in the future.  You then buy the promoted items at any store (I always recommend ALDI for best savings), snap a photo of your receipt, and accumulate a cash balance in your snap account.  It works on repeated use, so you have to hit $20 in your account before you can request a payout.  Genius. It's available for free download.   
Saving Money doing the things you love - Stacy Snyder - Parentunplugged

Saving money can be as simple a concept as enjoying eating doughnuts and coffee.  By being a doughnut lover, you probably pay attention to a social media post about donuts or notice if your favorite doughnut shop is offering a special or has a job opening. While it’s on a much smaller scale, than say, a full-time job’s salary, getting free donuts and coffee for a week is truly not only sheer happiness for a doughnut fiend, but also a true savings.  If you eat breakfast and drink coffee every day, that could add up to $5/day or more, totally $25 in savings.  If you like that idea, steal it, as Glazed & Infused is actually offering a FREE cup of coffee and doughnut holes at each of its five locations to every customer this week through Monday, January 26th.  They’d love a little social love in return, but it’s not required. 

As parents, we often forget to take time to figure out what is currently important to each of us.  Sure we can all point to family and security and friends and maybe even work, but what about those ancillary things that you truly love like, playing or watching a sport, road-tripping, or feeling good about the impact you can make by giving your time to an organization or a person.  These are the things that get swept under the rug and often forgotten, yet these are the things that can bring you back to being true to yourself.  And if you’re out doing the things that you already love on a regular basis, one of the by-products can be making and saving money.  Live Large folks!

Friday, January 16, 2015

Living Large

ParentUnplugged - Stacy Snyder - Living Large
I love being a parent to my kids and sharing my insights on parenting issues through ParentUnplugged.  It wouldn’t have been possible for me to spend enough time with my own kids, though, to come up with my ideas on parenting, had my wife and I not made the unpopular decision to change the way we view money. 

Six years ago, we found ourselves stuck in a financial mindset we had never actually subscribed to, yet felt obliged to perpetuate, because that’s just what people in auto-pilot do in attempts to keep the plates spinning.  We were living in an affluent neighborhood with big houses, big cars, big spending appetites, and big debt.  From the outside we looked happy, and we were, to an extent.  We had family, friends, and enough material things to keep a small country afloat.  But that happiness could only go so far as we were buckling under the overwhelming debt we had unconsciously accumulated. 

Everyone has their own reasons for taking on more than they can handle, but in our case, we had lost 2 pregnancies and we simply stifled our grief by spending money or shit that didn’t matter.  You name it, we bought it:  possessions for ourselves, our child, and our pet, meals out, entertainment, trips, experiences, new cars, new hair, and even a $40K “investment property” that is worth about thirty-seven cents on the open market today. While we could afford to pay the piper for all of our purchases by utilizing payments on multiple revolving or installment credit lines, we were just skating by and not saving a dime.  We were actually building debt daily at an alarming rate. 

ParentUnplugged - Stacy Snyder - Living Large
Sensing potential disaster, I picked up a copy of Dave Ramsey’s Total Money Makeover.  I read it cover to cover on a 2-hour flight and de-boarded the plane with a new lease on life.  The chapters didn’t offer any fancy tricks or specialized financial advice, but simply supported the main concept of the book, which is to spend less or make more to reach financial security.  More specifically, reducing debt, creating surplus, dismissing the use of credit, and most importantly, living only on the cash in your pocket. 

I set off on a new course immediately, and within a year’s time, we had paid off over 80% of our accumulated debt, abandoned my job and its six-figure income, which allowed me to stay home and raise my own kids.  For the past five years, my family has been enjoying a quality of life I didn’t really realize was possible, almost exclusively within a one wage-earner family model.  Creatively saving money and generating income is now engrained in my being, and I’ve spent so many hours sharing my ideas and experiences with friends on my couch and strangers in line at the store, that I decided it’s time to start incorporating it into my writing.  

I’m passionate about balancing the ideas of living comfortably within my means and whole-heartedly enjoying those things in life that are most important to me.  I call it Living Large.  I’ve developed quite a diverse playbook of how to pinch pennies without much effort and how to bring in extra money without really working.  So look out for my Living Large suggestions in upcoming posts, as well as your favorite parenting stories.  Thank you for your continued support via feedback, comments, and sharing my blog and its posts.