Tuesday, January 11, 2011

I must be deranged and the Middle-Class Money Muddle

I've completely slacked on this thing the last month over the holidays...below the single line is a bit I started but completely bagged on while I was off work after Christmas. Meh. Below the double line is something I wrote this week. Having trouble finding anything worth writing about. No. Scratch that. Having trouble being inspired enough to write.

So I offer this completely sub-par installment for your laughter and enjoyment (no...not laugh with me, but AT me for how lame this is, and enjoyment in the fact that you'll feel far superior to me and better about yourself for being such after reading.)

Oh...I'm reading this book about Poland right now. Pretty interesting.
























And this one about Wall Street was pretty boring. Now I've read quite a few about the financial crisis and enjoyed most but just couldn't get into this one and never finished it before I returned it to the library.

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We (you, me and all of us) are collectively awash in the Holiday tidal wave. For some reason there were more desserts at our house this year than I can ever recall. A self-induced food coma was only partly achieved two days after Christmas when my mother and my sister and her family came to visit.

Thank God I'm on a fitness mission after officially signing up for the Tough Mudder on April 9 in Allentown, PA. While I followed an agressive cardio regime between Thanksgiving and Christmas Eve thanks to Concept2, today I did my first Tough Mudder workout. All I can say is "Ouch." The past few years I've stuck pretty much to cardio and have done very little strength training despite many years of weight lifting in the past. All I can say is I could feel it! Actually it's a fantastic workout you can do in your family room with just a few low-weight dumbbells. Even if you aren't tackling the Tough Mudder, I highly recommend it!

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This recession has affected me personally in many ways, job loss among them along with a short sale of our home in Florida (if you're wondering, I worked in the homebuilding industry in SW FL, one of the epicenters of the housing crisis. The Ft Myers area was recently ranked by the non-profit Brookings Institution as the second-worst regional economy in the country.) Yet I also have a professional/academic interest in the economy due to my MBA-Finance and BA-Economics education. It seems there is a never-ending litany of stories about how the business world is doing, the job market, the growing income gap in the US, ad nauseam. There are great websites like CNBC, Bloomberg and The Wall Street Journal for mainstream business news, and there are plenty of news stories (and even whole sections of news sites) about how bad it is for the shrinking middle class and below.
I find this all to be troublesome.
Look. The chances of me ever becoming part of the so-called "global elite" or "├╝ber-rich" are slim-to-none and so reading about them is akin to becoming a medieval flagellant or beating myself about the head with a brick. And really, for most of us (unless you're in finance for a living) knowing the results of the latest Treasury Bond auction or how many units of widgets the Very Big Corporation sold last quarter may be intellectually interesting, but it really has very little impact on our daily lives (and I'm not going to get into a discussion of how the health of the economy affects us personally....believe me, I know firsthand). 
 
At the same time, after all the BS I've been through the last few years, I've emerged a more patient and hopefully wiser person who is also aware that despite the challenges my family and I have faced, there are still people in a lot more dire straights than we are. And so I chose to be a bit more, respectively, realistic and optimistic while not putting on blinders.
With this in mind, I ask "where are the blogs, article and websites geared for the middle class"? Not that I'm not trying to achieve a level of wealth such that I can afford to give it away, but in the meantime I'm also trying to get the monthly bills paid and wondering how I'm going to afford college for my kids. I think this is most of you as well and it's what I call the "Middle-Class Money Muddle". We're (fortunately) employed but not rich. We still have to carefully manage our monthly budgets. The future is somewhat uncertain (we aren't wearing shades unlike that 1986 song by Timbuk3). In short, we're doing the best we can and muddling through the times we find ourselves in, making the most of them. I don't seem to see a whole lot about this in the news. It's either about how well the rich seem to be doing or about how dismal those are that have gone past 99 weeks of unemployment benefits. As an aside, there's a funny (very funny, but not for young ears) video which states "when God hands you lemons, FIND. A. NEW. GOD!!" as opposed to the trite "make lemonade".
So let's turn this into a source of information for the rest of us. Henceforth, be it declared that The Balanced Guy will try to incorporate a section on the Middle-Class Money Muddle with each installment of the blog. While I can't promise anything, it'll be mostly about managing your daily money, not about investing, the stock market, foreclosures, unemployment benefits or food stamps. In short, we'll avoid the tails and stick to the middle of the bell curve. Boring to be sure, but applicable.
So let's start with the basics. Really basic. Like having a monthly budget. Do you have one? If you do, more importantly - do you stick to it? For years I battled my wife over this as I used Quicken and tried to account for every penny and to what category of spending it went to. She fought it tooth and nail, mostly because I couldn't communicate what I was trying to do well enough. Finally I just got to the point of saying "Look. We have X dollars left over each month after our recurring, mandatory expenses are paid (savings, rent, groceries, insurance, gas, utilities, etc). That's all we have to spend on things like clothes, gifts, activities, unexpected expenses, etc. I don't care how you spend it but just mark it down on this dry-erase board to ensure we don't go over-budget. Voila! It was like a light-bulb went on. Now she's on-board with it and I've more-or-less given up on tracking how much is spent on groceries vs utilities, etc. As the person who pays the bills each month I have very good working knowledge of what goes out the door and it makes little difference if we spent $1,186 on groceries this month or $1,204. As long as we don't make dramatic changes in how we live our lives, those expenses stay relatively constant. Now a couple-few times a year I go through and make sure expenses really are what I think they are.
Keeping track of how you spend that "left over" money each month is actually a great way to NOT spend it. I've already mentioned the dry-erase board. It's inside the door in the kitchen that leads down to the basement. Since our laundry room is down there, it reminds us every day. As spending is tracked and the monthly "left over" money balance goes down, you can't but help say to yourself when you're in the store "Do I REALLY need that $10 DVD?" because you know it'll have to go up on the board and drop the balance. And now I'll let you in on a little secret - at the end of each month we actually have more, not much, but definitely more than I've let on. In this way, if we do go over-budget for some reason there's a bit of a buffer and in the meantime we're building up a bit of a reserve.
OK - extra money-saving tip for this entry: For many of the activities you and your kids do there is a participation fee which can range from a few to hundreds of dollars. Depending on how much spare time and gumption you have, you might be able to trade your time for that money (remember, Time = $). See if volunteering to help out with the organization or event gets you a discount or even makes it free. Think of it this way: if it's an activity for your child, there's a good chance you're going to be sitting there watching, reading, talking with other parents or messing with your smartphone...AND paying for your kid to participate. Since you'll be there anyway, if you volunteer there's a chance you won't have to pay, probably meet some nice people and provide always-needed assistance.
For a change I thought I'd post an unflattering pic of Kim K...
And here's an interesting (to say the least) article about raising children...