Wednesday, September 25, 2013

Getting out of Debt: Part Deux.

So I got a few comments/emails on the last finance post which indicated that some follow up might be needed.  Primarily, it was pointed out that “sure, it’s easy for you to get out of debt:  you’re a two-good-income family with no kids.”  And while yes, that is true, as I mentioned in my last post, I had gotten rid of most of my debt before I got married.  And I had done it multiple times.  So I wanted to offer a “part deux” of tips that are helpful whether you’re single, married with kids, a college student, whatever.

1)  Bite the bullet & get a second job.  That was me, from age 22 to 26.  Three of those years I was also a college student (the latter year during my masters).  Yes, it sucks.  Yes, you will have no free time for fun.  Yes, you will get stressed because your second job will likely be something that might be considered “beneath” you.  For me, the second job was delivering pizzas.  Honestly, if you need a second job, this is the one I recommend if you have a somewhat reliable, non-gas-guzzling car.  I made minimum wage as my base hourly, but averaged about $15-20/hour with tips.  Granted—a lot of that goes back into your car for maintenance, but hey—extra money is extra money.  And pizza shops are open long hours, 7 days a week, which makes it easy for them to give you hours outside of your normal work schedule.  During my junior & senior year of college, I was working for the campus newspaper 25 hours a week, taking 12 hours of classes, and delivering pizzas about 30 hours a week.  After I graduated, I was working full time at a local TV station, and still doing pizza 30+ hours a week.  Was I exhausted all the time?  Yup.  But I was also throwing an extra $1500 at my debt every month, which to me made it all worth it.  (PS—you also get a lot of free pizza, which helps the grocery budget.)

Moi, rockin’ the PJ’s uniform, circa 2003.

Will you get frustrated?  Absolutely.  I can’t even count the number of times some customer treated me like garbage, to which I would smile, apologize, get back in my car, and then beat the crap out of my steering wheel while screaming, “I HAVE A BACHELOR’S DEGREE!!!!”  But, then I’d get a couple really nice customers, some good tips, and it would all even out.  You just have to keep your eye on the goal:  No. More. Debt.  And the harder you work, the less time you will have to do it.  Remember:  The second job is temporary.  You’re not going to be this stressed forever.  It is a means to an end—an end to your debt, which is the most overwhelming freedom I can think of.  It is 100% worth it.

2) If you’re married/have a partner, you MUST communicate about money & be on the same page.  Dave Ramsey says that every couple has one spender, and one saver—or, “one free spirit & one nerd”.  If you’re the one reading this, and you’re the one who’s motivated to get out of debt, you’re probably the nerd (no offense).  And these opposing views of finances are often what cause marital strife; did you know that approximately 45% of divorces are due to financial problems?  One person goes out & spends the dough, the other person gets mad, they fight, but nothing gets resolved. In fact, the spender probably goes out & buys something else to make themselves feel better.  Free-spirit spenders don’t like making budgets. It doesn’t sound like fun.  But you HAVE to find a way to get them on board BEFOREHAND, while making the budget, otherwise they will feel like the budget is being imposed on them—like it is something you’re doing TO them, rather than something you’re doing together.

Nagging WILL NOT WORK.  You need good, clean, open, honest conversation.  If you can, get a sitter (if you have kids), cook a nice meal for your spouse, share a drink, and then tell them that you’re excited about the idea of getting on a budget.  You’re scared about having debt for the rest of your life.  You’re nervous that you’re living beyond your means and that you don’t have enough savings to cover your butts if one of you were to lose your job.  Tell them your goals for the future, and ask them what their goals are—and then DISCUSS how being out of debt could make that happen sooner.  Did you never get to have a “real” honeymoon because money was too tight?  Talk about how once you’re debt free, you could finally take that trip.  Got kids?  Talk about how much more you could bless them by being able to travel, or help them with college, if you had no debt.  When you have no debt, you can do almost anything.  You can be charitable:  you could take money that used to go to the credit card companies and bless someone’s life with it.  We’ve all made a list of the things we would do if we won the lottery---try making a list of things you’d do if you had no debt and money in the bank.  It’s just as much fun to dream about—and it’s something you have far better odds of ACTUALLY DOING.

Let them know that you need their help to make this work.  Make sure they understand that they’re not the only one who will be making sacrifices (and make sure that’s true:  when it comes budget time, make sure you’re giving up things that you care about as well).  Don’t point fingers, because often even “the nerd” has bad spending habits.  (Example: “I know I’m causing us to spend too much on our cable package just because I wanted all those movie/sports/news channels.”  ‘Nerds’ also have a tendency to like having the faster internet package, or a better data package on their cell phone, etc.)  Also, find out if a Financial Peace course is being offered somewhere near you.  I just did a quick search and there are 15 of them in my area.  They’re often hosted by churches, so it’s a good neutral ground.

When it comes time to make the actual budget, do your best to make it fun.  This will be tough—because budgets aren’t fun.  BUT, you can use apps and online programs that create bright & colorful pie charts, which are almost fun…but you should probably get a bottle of wine or a 6-er of their favorite beer to share as well.  :D

3) Know the Basic Budget Ratios:  When you start building your budget, first, calculate your family’s average monthly net income.  Then multiply that by these percentages to see what the maximum amount you should be spending in any category is.  If you’re paying off debt, you should probably aim for the the minimums on most of these because that gives you the most amount of leftover $$ to throw at your debt—and because obviously—you can’t go with the “max” in every category, because that adds up to more than you make.  These are intended to be ranges.  If you’re single or a two-person family, you can easily go with the minimums on food & clothing, for example.

Category Minimum % Maximum %
Charity 10 15
Savings 5 10
House (mortgage, insurance, taxes, maintenance) 25 35
Utilities (lights, water, gas + tv, phone, web) 5 10
Food (groceries & dining out) 5 15
Auto (loan, insurance, gas, maintenance) 10 15
Clothing (plus makeup, hygiene, etc.) 2 7
Medical (including FSA/HSA) 5 10
Totals 67% 117%

And whatever you do, don’t cut out that first one.  I’m not gonna get preachy on you, but if you’re a church-goer, please tithe at least 10% of your net income.  If you’re not a church-goer, find a good charity that you care about and donate that same percentage there (I am personally a HUGE fan of the Modest Needs program).  Blessing others is part of having a healthy financial well-being.  Pastors love to say “God can do more with the 10% than you can with 100%”, and it’s true.  I started seeing infinitely more blessings (both financial & personal) come my way once I started tithing and giving.  Getting out of debt does you no good if you are selfish with the money you now have, and giving a percentage while you’re on your budget gets you into the habit of being financially charitable.  Because while you’re helping yourself, you’ll also see the difference you’re making in others’ lives, which will make you feel twice as good about your decision to get on a budget.

Also, you may want to build in a “miscellaneous” category in case of emergencies or variable expenses that change from month to month (like utilities, vehicle fuel, gifts). I’d recommend about 3-5% for this category.  Here’s a really great article on budgeting for non-fixed expenses.

Your budget should account for EVERY SINGLE DOLLAR of your income.  If you’re hourly and your paycheck fluctuates, look over your last 4-8 paystubs and calculate your average.  If you finish your budget and you have $52 left over, that needs to be assigned somewhere in the budget (probably to debt payoff).  Spend every dollar “On Paper, On Purpose” before the money even comes in.  This is how you take control of your finances instead of letting them control you.

4) Plan a reward (and fund it):  You know what’s a lot more fun than making a budget?  Planning a vacation!  Get together with your family (or by yourself if you’re single) and brainstorm ideas for what you would like to do together once you’ve paid off your last debt.  Maybe it’s finally going to the Grand Canyon, or taking a Disney Cruise, or simply a long weekend at the beach.  Maybe it’s a new HDTV, or a DIY kitchen remodel.  Or, if you’re a newly married couple w/no kids—maybe your reward is finally have kids (assuming you want them).  A friend of mine said she & her husband used that as their goal after they got married & combined their debts.

Then get together & plan it.  How much will it cost?  What hotel(s) would you like to stay at? How much will you need for meals/gas/airfare? Plan it all out on paper, and figure out roughly how much it will cost. (Add 5% to that for a good pad/inflation in case it takes a while to get to your goal.)  Once you have your budget, you should also be able to calculate out about how long it will take to pay off your debt. 

For the sake of example, let’s say you need about 1 year to pay off your debt, and your reward is going to cost about $1000.  Now get a jar: a nice big pickle jar, and let the kids help decorate it.  Name it whatever inspires your family: “Our Debt Free Trip!” or “Our New TV!”; something to that effect.  You then put (in this example) a $20 bill in that jar every week (make sure to account for that when you’re building your budget) until you’re out of debt.  If the kids want to help, let them throw in change or leftover allowance if they feel moved to do so.   Every so often, get together with the family and talk about the things you want to do on your vacation so that your goal stays fresh in everyone’s mind and keeps everyone motivated.  Let family members write down their suggestions for places to eat or fun things to do & drop those into the jar too.  Remind them that once you are out of debt, you will be free to do more things like this (providing you save up for them, of course).  Then, at the end of that year, if your debts are paid off, you should have at least $1040 in the jar for reward.

5) Sacrifices:  You’re going to have to trim the fat for a while until you get your spending & debt under control.  How much you trim depends on you, but remember—the more “luxuries” you cut out right now, the faster the debt goes away, and the sooner you can possibly start getting some of those back.  Do you need both a data plan for your phone AND internet at home?  Could you get rid of cable/satellite for a year and just watch shows on the internet?  Do you really need three cars in your garage---and is it logistically feasible to possibly go to ONE car for a year?  Instead of packing up your family of 4 & going to dinner and/or a movie every weekend, could you switch to once a month, and have family game nights the other weekends instead?   Can you survive the summer by opening the windows & using box fans instead of keeping the house at 69 degrees all the time, or use space heaters and extra blankets in the winter?  Could you maybe go to the salon every 8-10 weeks instead of once a month?  Can you do your own pedicure instead of paying someone $20-30?  Can you have a garage sale?  Maybe sell some items on Ebay?  Can the kids take a cut in allowance (say, go to $5 instead of $10/week) while you’re paying off debt?  Could you curb your bi-weekly shopping trips to once every other month until the debt is gone?  Can you switch to generics and clip coupons and do price matching to save on groceries?  These are just examples and they may not all be applicable to you.  But take a look around your house and look at the luxuries that can go.  It will sting.  But much like ripping off a Band-Aid, that stinging is temporary, because your DEBT PROBLEM should be temporary.  Once you conquer that, you can bring back some of those luxuries, within reason.  You don’t want to go into debt again.  And who knows?  You may find that your quality of life improves with some of those sacrifices.

6) Stay on Top of Your Budget:  Once you have the budget, you have to constantly check on it to make sure it’s working.  If you go with an all-cash system like Dave Ramsey’s “Envelope System”, this will probably be pretty easy—if you run out of cash in that envelope, you’ll know pretty quick that something’s gone awry.  But it shouldn’t get to that point.  Be aware of how much is left in each category.  I recommend checking in at least weekly.  If you’re doing an online budget tracking like Mint.Com, get together with your spouse/partner once a week and review where the money is going and how much is left.  That way, there are no surprises. 

7) OBEY THE BUDGET: If you know you have $40 left in your Clothing fund, then you get to the check out and you have $45 in purchases, don’t just say “ah well” and pay the extra.  PUT SOMETHING BACK, or you’re defeating the purpose of the budget.  If it continues to happen—say, you can never make it to the end of the month with your grocery budget, even though you’re clipping coupons and down to “beans & rice, rice & beans”, then your budget probably needs some adjusting. And that’s normal.  If this is your first time making a budget, you can’t expect to get it perfect.  But give priority to the “necessity” categories (utilities, food, roof over your head).  If those budgets are short even after making drastic cuts, cut from your “luxury” categories to move more money into the necessities.  Maybe it means turning off the internet completely for a while (you can go to the library or other spots with free wifi). Maybe it means your kids’ next round of school clothes have to come from the thrift store or hand me downs.  Again—remember the sacrifices are temporary and serve a bigger purpose, and once your debt is gone, the budget won’t be so tight. 

8) Try to Keep it Fun: Instead of thinking of it as a sacrifice, think of it as a Challenge:  your personal challenge to make yourself and your family the thriftiest sale-finders on the block.  Earlier this year, I decreed my own Fashion Challenge to update my closet on a budget. Last year, I revamped our Christmas Tree for under $20.  Get the kids involved: spread out the sale ads & see who can find the best deals on groceries.  Who can find the best coupons (and stores to double them)?  Who can put together the cutest outfit at the thrift store for $10?  If your kids are older & can help with dinner, organize a cooking challenge—who can make the tastiest meal on the smallest budget?  Give out awards like “the winner gets to pick this weekend’s movie/tonight’s TV show” that don’t cost extra cash.  Finding a good bargain always feels good, and if you’re involving the kids you’re teaching them about money and how to be conscious of their own finances. 

Thursday, September 19, 2013

Thirsty Thursday: Pimm’s Cup

We haven’t had a Thirsty Thursday in a while, so I figured it was high time!  Today we’re going with a New Orleans classic cocktail: The Pimm’s Cup.

You’ll be hard pressed to find a watering hole in NOLA that doesn’t have this on its drink menu; however the original version comes from the Napoleon House, on the corner of Chartres & St. Louis in the French Quarter.  But since the Napoleon House is 627 miles from me, I had to rely on one of my favorite local watering holes, Ophelia’s.


Now, before any of you cocktail aficionados start commenting: yes, I know there’s not a cucumber in there.  They were out.  But we’ll let that slide.  (This time, AJ…this time.)


2 oz Pimm’s No. 1 (a gin-based liqueur from London featuring quinine, fruit juices, & spices)

2 oz lemonade

2 oz club soda (or, replace both of these with a lemon-lime soda)

lemon & lime wedges

English cucumber wheel for garnish (some recipes call for muddling the cucumber & fruit in the bottom of the glass before adding the liquids. I’m actually a big fan of that version, too.)


Mix well & serve.  Goes great with the Spread Trio at Ophelia’s…just FYI.


Smoked Trout Spread, Syrian Roasted Red Pepper Spread, and Hummus.  YUM.

This is a really nice, refreshing cocktail with a very classic feel, which is perfect for sipping on a back porch…or in a wine bar while studying for the ASBOG exam.  Because really…where ELSE would you study? Sheesh


Wednesday, September 18, 2013

What’s So Great About Missouri?

Earlier this week, I was asked that question by a family member who currently resides in California.  Rather than be offended or insulted, I took it as an opportunity to reflect.  This family member originally grew up here in Missouri, but during the tumultuous 50s & 60s, when racism & sexism were rampant.  I acknowledge that experiencing something like that in your youth no doubt scars & biases a person.  And I’d be lying if I said there wasn’t a time in my own life when I wasn’t such a huge fan of Missouri.  As a teen & 20-something, my friends and I all referred to it as “Misery”.  We all dreamed of “escaping” to some place more exotic.  My chance came in 2004, when I moved to New Orleans for grad school.

It took moving away to Louisiana and being gone for 6 years to find an appreciation for my home state.  And while I will always love and miss things about Louisiana, I missed being close to my immediate family more.   And as someone who has lived in multiple places, I thought I might be just the person to tackle this question.   

(FYI: I decided to limit myself to a list of ten items, but could have continued with sections like Food, Cost of Education, Music & Theatre, Local Business, etc.)

1. Low Cost of Living:  Missouri ranks #14 as far as cheap cost of living based on this CNBC article.  I also did a comparison of Springfield, MO (my current location) to San Francisco, CA on, and  if I was to move out to Cali, my salary would likely only increase by 30%…but the cost of living would increase by 79%. I also compared Springfield to Lafayette, LA, just to get an “official” number for two places I’ve actually lived.  Cost of living in Laffy is about 10% higher, but the average salary is 9% LOWER.  Ergo,  we would have to adjust our current lifestyle in order to live within our means.  And that’s not really in the cards for us.  By maintaining a low cost of living, we’re able to squirrel away more into our savings, which we typically use to travel.  It’s much more ideal for us to have a cheap home base, and then travel frequently with the extra dough. This year alone, we’ve visited British Columbia, the Bahamas, and have a trip to New England scheduled for November.

2. Low Tax Rates:  Missourians pay on average $96 per $1000 in sales & property taxes, placing them at #39 (in a ranking of highest to lowest) on this CNN poll.  The highest tax rates in the US?  New York, Maine, Wyoming, Hawaii, and Wisconsin take the Top five spots.  In a ranking of “Cost of Doing Business” from low to high, Missouri places #19.  And in CNN’s 2013 “Top States” poll, which considers multiple factors like education, cost of living, quality of life, business friendliness, and economy, Missouri ranks squarely in the middle at #26.  Not impressive, perhaps, but its overall ranking places it well ahead of states like Hawaii (#50), California (#47), Louisiana (#43), New York (#35) & Florida (#30).

3. The Ozark Mountains:  There is beauty in nearly every state.  In Louisiana, you have majestic plantations and mysterious cypress swamps.  In Cali there’s the towering redwoods and coastal highways.  Colorado & Tennessee get impressive mountain scenery.  Some people even find Kansas beautiful; I am not one of those people, but a friend from Louisiana was awestruck and told me, “THESE are the ‘amber waves of grain’ they talk about in ‘America the Beautiful’”.  Here in Missouri, we have the rolling hills and diverse forests of the Ozark Mountains.  In the autumn, the beauty of driving through this area is awe-inspiring.  And for a geologist like me, the outcrops of rock along the roads and riverways make me swoon.

Foggy view of the White River, Hwy 341 Overlook, Baxter County, Arkansas

4. Comparatively low risk of environmental hazards:  Sure, it’s part of  “Tornado Alley”.  But I’ve lived here for 27 of my 33 years, and have never once been affected by a tornado *knocks on wood*.  Yes, many people have, but major tornadic events are few & far between, and typically only impact a small area at a time.  In my 6 years in Louisiana, I was hit by 5 hurricanes (Ivan, Katrina, Rita, Gustav, and Ike).  Every state has risks, though.  Cali gets earthquakes, landslides, wildfires & the occasional tsunami.  East & Gulf coasts have flooding, erosion, & tropical storms. Deserts have heat, drought, & periodic deluges in the valleys.  Northern states get snowbound.  Oklahoma & Kansas have death by utter boredom (just kidding).  It’s all about what risks you can handle.  This article from NBC News shows Missouri reporting 53 “major disasters” since 1953, with Louisiana reporting 60, Florida reporting 65, New York reporting 67, and California with 78 in the same time frame.

Missouri’s major cities also have significantly better air quality than some other major cities across the country. KC & STL score 3.85 and 4.5 respectively in the ALA’s “State of the Air” Report: for comparison, San Diego has 16.2, Baton Rouge has 9.3, Chicago gets a 8.5, and L.A. is terrifying with its 81.8.  For reference, Springfield (where I live) scores 0.7.

5. The Cave State!  Missouri is home to over 6,400 caves, with more being discovered and registered monthly.  There are about 20 “show caves” scattered across the state that provide tours for a small admission fee.  Missouri’s caves are the reason I fell in love with geology and went into the career that I chose. I get to explore “wild” caves with my caving grotto and am in charge of sampling water from cave springs in this area to track changes over time.

Onondaga Cave, Leasburg, MO

6. The Great Outdoors: Whether you’re into paddling, cycling, hiking, running, or horseback riding, Missouri has more than enough space for you.  The Ozark Trail alone covers 300 miles of Missouri; plus hundreds more miles of trails in the state’s 83 state parks.  Missouri has been named “Best Trail State” by the nonprofit organization American Trails.  Add in 58 paddle-ready streams & rivers (over 110,000 miles of waterways in the state), hundreds of miles of equestrian trails, and even urban Greenways like here in Springfield, and there’s no excuse to stay inside.

Johnson Shut Ins State Park

7. Sports:  Having two major cities like Kansas City & St. Louis offers us double the opportunity to pick sides and root for our favorite teams.  KC has the Chiefs and the Royals, STL has the Rams, the Cardinals, and a bonus hockey team (Go Blues!)  Throw in a major college player like Mizzou and a minor league baseball team like the Springfield Cardinals, and there’s no shortage of options.


Photo by me during newspaper days…you may be Missouri State now, but in my heart, you’ll always be SMS.

8. Wine Country:  When German settlers began moving west with their land grants, many of them settled in Missouri because the climate and gently rolling hills reminded them of their home country.  I myself am 10th generation German-Dutch heritage.  And sooner or later, these fine farmers realized that because of the similar climate and soil, their German grapes grew well here, and they developed the Missouri “Rhineland”.  In 1880, Missouri produced more wine than any other state; the state currently has over 100 wineries with a wide variety of wine styles.  While many wine aficionados may turn up their noses at the sweet “fruit wines” that are popular in this state, special attention should be paid to the amazing vintages that are created with Norton (the state grape), Chambourcin, Vignoles, and Cayuga grapes, which grow extremely well in this area.  Another nice thing?  No inflated price tags. Stone Hill’s 2011 Norton took top prize at this year’s Missouri Wine Competition: Price per bottle for the best wine in Missouri?  Only $18.99. Blumenhof Winery took multiple silver & bronze awards at the 2013 US Wine Competition with wines that range in price from $14-18.



9.  Beer Country, Too:  And we’re not just talking about Annheiser-Busch.  Missouri is home to over 50 breweries, many of which are concentrated in St. Louis (about 25).  Springfield has three (Springfield Brewing Company, Mother’s Brewing, and White River Brewing).  While Euro and German style beers rule the palates of this land, the nice part of micro-brewing is the “micro” portion of that, meaning small test batches.  My favorite, Mother’s Brewing, has a lot of fun experimenting with flavors:  they have three flagship brews, 4 seasonals, 8 “Mother’s Others”, plus their “Thing 1 & Thing 2” which change nearly every time I visit their Tasting Room.  So far, there’ve been 7 different versions of Thing 1 & 2… the cranberry-hibiscus wit (Thing 2 7.0) has been one of my favorites, though Thing 2 5.0 (featuring Bergamot Tea in the brewing process) was pretty darn wonderful, too.

10. Job Diversity & Pay Gaps:  This one may be specific to me, but it bears mentioning.  In Louisiana, I was subject to a lot of gender discrimination, because down there, the “environmental” field is dominated by men, and the predominant clients are oil & gas (also a male-dominated field).  Not surprising, given that the oil & gas industry employs over 17% of Louisiana’s work force, with another 5-10% working in fields that are indirectly related to that industry (like professional consulting, my career field).  And according to the AAUW’s Gender Pay Gap research, Louisiana women only make 69% the salary that men do.  In Missouri, that gap is only 78%—still not equal, but significantly better.  And according to this study by MU & the Women’s Policy Alliance, for women who have graduated college, that ratio jumps up to 90%.  Gender diversity amongst employees is also much more evident in Missouri over Louisiana; at my company in LA, there were fewer than 10 women in professional non-administrative roles…in a company of over 300 employees (<3%).  My company now?  14 out of about 60 employees (23%) are female professionals, with another 12 percent in administrative roles.  I also have more job satisfaction because my work load is not directly correlated with oil’s price per barrel.  My clients range from transport, to retail fuel, to manufacturing, to general retail, and the type of projects I deal with vary greatly.


Now, I’m not saying Missouri doesn’t have down sides.  But the same can be said for any state.  And this isn’t some egotistical pitch voting Missouri the best state on the planet.  Humans are very subjective in their preferences, and for me, these are the things that make this state a perfectly wonderful place to live.  Am I saying I’ll live here forever?  Who knows.  Hopefully I’ll win the lottery eventually and retire to a small island (that still has WiFi) where the dollar is worth a thousand of the local currency and I can hire a personal chef to make me fresh ceviche for every meal.  But for the time being, I’m very happy here.

So, if you’re from Missouri, hold your head high, and if someone asks you “what’s so great about it”, feel free to rattle off any of these items.  If you’re not from Missouri, we hope you visit some time!  As the Show-Me state, we’ll be more than happy to show you exactly why we’re happy to hang our hats here.