Your Financial Plan

I heard something that was made to stick in my brain.  I have said many times that handling your money is very very simple and we complicate it.  Here is your financial plan:

#1) Work Hard
If you do not do this then your financial plan is ruined from the start.  Work as working for the Lord and not for men.

#2) Spend Less than you Make
This is something that many in America DO NOT GET.  It’s very simple not complicated.

#3) Give and Save with the rest
Do both.  Not one.  Scripture tells us both are important, so do both with the whats left over.

This is it.  As long as you do this, you are recession proof.  Do this for the next 20 years of your life and I promise you will have the financial stability that everyone in America craves.  However, I will say as a Christ follower I do not want your motive to be financial security.  As we have seen with the recent economic crisis…money is not certain.  It can be taken away at any point.  So, our motive to adopting this financial plan is not really that we would benefit…it would be that we want to be obedient…having a healthy financial life is just a by-product of obedience.

I wanted to share this because I thought it was something that is simple that everyone should live by.

On other news this week: I am moving into my new house.  I have help so I am thankful but have lots to do (not to mention the World Baseball Classic is on – GO USA).  With this in mind I have decided to make this an irregular week of posts.  I will likely post one more time later this week.

T.O. was released…

As you may or may not know I am a HUGE sports fan.  I love em all.  One of my favorites is NFL football.  This morning I heard the news that the Dallas Cowboys has officially released Terrell Owens (eating a 9 million dollar hit on the salary cap in the meantime).

It made me think, “man this was a huge financial mistake.”  It’s not like people didn’t advise Jerry Jones (the cowboys owner) to not sign this guy.  He had caused problems with the 49ers and Eagles and everyone knew he would inevitably cause problems in Dallas.

Jerry Jones likely made the right decision today…even though it was such a hard financial decision.  At some point, you have to recognize a mistake and cut your losses.

We see this all the time in our financial life.  But rather than cut ties…we just let the problem fester.   Allow me to explain:

If you finance a car, for let’s say $20,000, and at some point in your financial life you say “oh no, this makes my budget too tight…or maybe even makes it in the negative” this will cause major problems because you are stuck with a decision.  #1) Keep the Car #2) Sell the car.

Many times people in this situation will find themselves upside down in the car, meaning that they owe more on it than its worth.  (Might still owe $18,000 on it but it’s only worth $14,000)  This is when people say, “well I’ll just keep it rather than take the loss.”  However, I would much rather you sell that car and keep a $4,000 debt and add an extra $2,000 for a new “beater car.”  $6,000 of debt (and drive a beater) is better than $18,000 (and drive a nicer one) because the only way you can be free is by making that debt $0.

People that disagree with this always push-back with how they want to keep their standard of living (i.e. drive a nice car).  However, I would argue that by keeping the car, this would actually ruin your standard of living.  Proverbs 22:7 says that the borrower becomes the lender’s slave…when you are in debt, you have the same emotional implications that slaves do…you’re trapped (I have met too many people that are in this position for me to know this is true).

Sometimes a financial mistake, whether its Terrell Owens or a car that you can’t afford, may hurt when you cut ties…but it is better to do so than let the problem fester.

Correction & Fresh Bread

First the correction.  In yesterday’s post I said “If you are my friend think to yourself “Have I ever helped Kakaras move?”  The answer is no. “

If a friend has ever actually helped you move and you say this statement you will get a “friendly” text message reminder or two.

It turns out I have had a handful of people that HAVE helped before…and very unlikely that they will help again now.  So thats that…many apologies.

Speaking of “moving” as many know I am going to have a new place of residence in a week-ish time.  I found out a little piece of info…banks are backed up and it is hurting the home-buying process.

If you have a mortgage application chances are you have not seen final approval yet.  Mine is 8 days out and still no final approval.  This is a major concern because it is not uncommon for the underwriter to not pick up and review the application until A DAY BEFORE CLOSING.

The problem here is if there is a question or something needs to be added to the file.  This will literally cost people their house (not to mention the time, money, and energy already invested).  So, if you have a mortgage that has yet to see final approval it might be worth it to be in the loop.  I am unsure if calling your mortgage officer will do anything (because the underwriter is the one) but my mortgage officer says that she can hurry the underwriter so it might be worth a shot.

Anyway, just wanted to share something that was in the front of my mind.

Tips for Moving…

My apartment is starting to look less like a home and more like a warehouse.  I am okay with this because it means that I am soon moving into mine and wifey’s first house.

Let me first say that NOBODY likes moving.  It is so physically and emotionally exhausting and I am sure I will be feeling it in full swing this time next week.

Rather than just hiring movers and getting charged an arm and a leg, I have come up with a few tips (that I plan on implementing) to help us with the moving process.  I will get to test first hand if these are good tips or not.

Tip #1: Get boxes for FREE.- Do not pay for these things.  A month before you move, spend a couple minutes calling furniture stores and ask if they have boxes you can have.  You would be surprised…Wifey did this when we slept outside for homeless for the homeless and it was MONEY.

Tip #2: Rent a UHAUL – I have never rented one of these in my life.  I have always packed up my Honda Accord and taken 38 trips to my living space. I found out that UHAUL’s are VERY inexpensive if you are keeping it in the same city.  I think they get you on mileage.

Tip #3: Use your friends - Again, I actually have never done this before.  If you are my friend think to yourself “Have I ever helped Kakaras move?”  The answer is no.  I have always been a do it myself/don’t want to bother people kind of person.  Well not this time.  The way I figure is wifey and I are going to pack everything up in boxes and label what room in the new house they go to.  Which is why our living room will look more like a warehouse.  I am going to organize everyone I know and try to get some help…the more the merrier.  So rather than having 5-ish people doing all of it with each person exerting a TON of effort.  My goal is to get 25-ish people and each person will do it with very little effort.  Of course, wifey and I still have to unpack but the issue that usually is the hardest is getting stuff in the house.

So these are my Kakaras tips.  Not unlike the way we organize our personal finances…the way to move effectively & efficiently is planning.

House Stimulus

There are two first time homebuyer tax credits available now.

• If you purchased your first home (haven’t owned a home in 3 years) betwen April 8, 2008 and December 31, 2008 you are eligible to receive a $7500 tax credit to be repayed over the next 15 years at 0% interest.
• If you purchased your first home (haven’t owned a home in 3 years) between January 1, 2009 and December 1, 2009 you are eligible to receive a $8000 tax credit that does not have to be repayed.

How do I get it?:

The IRS has now issued a Form 5405 to be filed.  Here are some IRS requirements and rulings. 

• If you have already filed, the credit can still be claimed in this year’s tax return by filing an amendment using the form 5405.
• To be eligible for the home buyer credit, your modified adjust gross income (MAGI) must be less than $95,000 or $170,000 (if married filing jointly) for the relevant tax year. The phase-out of the credit begins when your MAGI exceeds $75,000 or $150,000 (married filing jointly), meaning the amount of credit received decreases after these limits. 
• The purchase date is how you decide which credit you are eligible for. Only homes purchase from Jan 1 2009 to Dec 1 2009 are eligible for the fully refundable $8000 credit. If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

 Just wanted to give some details on this plan as it pertains to my life directly (since I am closing on my house next week) so I figured I’d throw it everyone else’s way.

Healthy Living vs Bang for Your Buck

I know, this is an unusual title for a blog post.  But I want to share some thoughts that are competing in my brain that I have decided to tackle.

I am wired to “get the most out of my money.”  If I buy a tv, I want to get the best VALUE.  I don’t want the best TV…I want the best TV for the price.  Do you see the difference?  If I go to Six Flags, I want to be there from the time that it opens to the time it closes.  Not just because its fun, but because I paid for it and I am trying to get the most value out of what I pay for.

These really aren’t that unusual things.  In fact, I have embraced the fact I try to get the most for the money.  However, there is one area where it does not work so well.

Eating.

What happens if hypothetically I travel to Charlotte and eat at the Cheesecake Factory (delicious food) and I get full after eating only half my meal?  I do not have a minifridge in the hotel, I am not going home soon, and my options are to stop eating and let half of my food that I ordered and paid for get thrown away or suck it up and eat it.

Well,  you can imagine what I did.  However, I am trying to break this habit.  I love getting the most out of my money, but not at the cost of my health.

Just thinking out loud with some thoughts/fresh bread.  I do not think most people have this type of wiring but if you do and you relate I hope you share in my feelings and attempt to trade healthy lifestyle at the cost of 8.95 for half of your dinner entree.

Free Food

I have some free food that my readers are sure to enjoy (courtesy of Hustler Money Blog): 

Quizno’s is giving away One Million Free Subs with no purchase requirement. For a  Free Small Signature Sub or Small Everyday Value Sub, simply register your name, email address, and birthdate.  I would use a junk email address and check your email for the printable coupon.

Not a fan of Quizno’s? Then check this free Arby’s Roast burger with a purchase of a drink. Coupon is good until March 9th.

If you prefer a sit in restaurant, get this Buy One Get One free entree coupon at Denny’s. There’s also this Ruby’s Tuesday BOGO coupon that’s good until March 24th. Don’t forget this TGI Friday’s BOGO good until March 1st.