Wednesday, July 29, 2009

Freedom Accounts and recent events

I was reading this interesting article. One important point I got from it and it's so true with me is that when I add up my monthly expenses there is always a lot of money left and I wonder where it goes. Selective amnesia is what it's called. We forget the non-montly payments or those informal montly expenses (like hair cuts and daily grocery purchases).
They talk about setting up a Freedom account and I was surprised that basically that's what I was doing with an old account I have in Banco Atlantida. I was putting money in there to save for expenses on the big things that are comming like my girl's school tuition fees this August.
I will ask for another automatic deposit on that account. On my emergency fund I have authorized L 1,000 every 15 days. I will start funding my Freedom account with lps 500.00 every 15 days too. For some reason when it's under 1,000 I feel it is less of a hit.
Why did this jolted my mind? well I have to pay lps 3570 in registration fees for my wife's car by friday. this is a once a year payment. Then I have a lower one for my car in November. There's also the car repairs , actually maintenance that I've found out i'm not budgeting anywhere. In any case these are expenses that throw me a curve ball in my attempt to pay off all the money I owe. This time I will have to dip into my emergency fund to pay for the registration fees. But i've managed to put in more hours in my morning job (do you notice that i'm not here or even in twitter that much any more) and hopefully I will use some of that to take my emergency fund back to it's previous level in a month or two.
Other non-montly expenses are doctor visits, non-prescription and prescription meds not covered by my insurance. Books and other similars for my wife and kids. I hate to say etc because it means I don't remember other non-montly expenses, so i'll leave it at that and list more of those here when I have them in my mind.
On other topics the crisis in my country continues and even though we are living peacefully there is tension in the air on how this all will end. Directly to me it affects me because either my boss, my wife or myself make me waste time by talking about it. Who did what, what was discovered, another deep research article to read, etc.
As much as I support the cause, it takes about an hour or two of my day every day just to keep up with events, as I don't dare be in the dark about it. Just yesterday we had a meeting from 11am to 3pm, a four hour meeting we spend 75% of the time talking about the crisis, that's three HOURS, and about one hour actually talking about work stuff. I hate so much when my boss goes off in a tangent that way. I feel the minutes breezing away as he talks and the others talk back, probably just being polite. Then I had another meeting, and fortunately the work stuff was dealt with in the start and then the crisis talk took over and I excused myself and came to hour later that meeting ended.
My morning job was delayed in sending my payment and I've had HSBC and Citibank calling me since last week about payments and until a few minutes ago I didn't have the money. So right now i'm off to keep both of them at bay.
I still haven't written down the numbers on the money I owe or the money I spend. I think sub-conciously I don't see the reason for it as I should know where my money is going. I know my credit cards are frozen. I know I don't carry then, they are cut up so I think deep inside myself I don't understand the reason to put up in a single page all the money I owe (once again), I think it might even discourage to look at the big number and feel that I can't overcome it. Same for the expenses, but I think that part would probably help me cut down (more!!) on them. My biggest problem is that my wife and to a lesser extend my girls are not on the same boat with me 100%, they are more like 50%. So it's hard each month because of that. How ironic, the oldest and the youngest women in my house try to get the most money from me. My oldest daughter doesn't ask me for money as much as my youngest daughter and my wife.
I've talked a little about this with male friends, coworkers and boss and they all agree that their wives are about the same, any money received they want a piece, a big piece (if not all of it). A bit of relief to know i'm not alone but no real help except facing the reality that I have to become a tougher husband and dad and say "NO" more often that i'm already saying now. I think that is the hardest part about my financial problems, having to face them mostly alone with little help from my family and thus I become a sort of enemy to them when I don't buy them what they want. Sad but that is my reality.
Anyway..I gotta go before they close. Otherwise I will get a call tomorrow. Off to owe less!

Tuesday, July 14, 2009

The Emergency Fund

Well, I can't live every day of this political crisis expecting someone else to come fix my problems. So back to talking about the money I owe and the progress i'm making.
I have a lot of ideas about stuff to write, like how i'm failing miserably at keeping records of my expenses or making a budget. I mean a detailed budget, because I already have a general budget. I will post my "general" budget soon I just have to copy it from my cellphone's to-do list.
One thing I had to touch on today was the emergency fund. I was read the debt kid's article about it and I felt myself on his shoes.
Previous I used to think I was missusing money by saving it on an emergency fund when I had outstanding debt. I should put every penny I could towards paying debt.
Then as it happens to everyone the unexpected would hit, a car repair, a higher than usual bill, someone gets sick ,etc. Any unplanned or overbudget expenses makes one whip out the credit card if you don't have other way to pay for that thing.
So the emergency fund came to be after considering that it would take me several years to get out of this debt and probably the money in the fund wouldn't be missed so much compared to the satisfaction of self-financing in times of crisis.
Two things have made my emergency fund grow now to about L. 7,000.00 ($350) . One is the automatic payroll deduction that goes straight into my emergency fund bank account. Two is the help of a dear friend in keeping for me the ATM card for that account and thus protecting me from the temptation to use it in non-emergency situations.
I have done something else. Every time I take money out of the emergency fund to pay for some emergency I make a note on a sticky note I keep on the savings book for that account. I have made a strong effort to repay the fund and not just let it organically grow thru the money I normally put on it from my paycheck.  Right now I have 1000lps to repay. This is down from the highest of 2800lps some time back.
I think if I were to advise someone on things to do to get out of debt I would say that an emergency fund should be one of the first things to do, even if it sounds like going against the nature of paying up debt. It took a lot of meditation of my part to convince myself to do it, and now i'm glad I did it to keep myself from pulling credit cards (which I have destroyed anyway!).
Think about it and take my's free.

Tuesday, July 7, 2009

Hardship has it's privileges

It is strange, and then it's not.
Having a curfew makes one plan a lot more in advance. Having the curfew time change makes it hard to plan.
This week i've spent the most I remember. I didn't write down everything I spent but I know that I didn't spent much money because most stores where closed when I went home from work. That forced to cut on spending on snacks and stuff for my girls. I did buy medications for me and gas for my wife's car and 200lps on repairs to a manhole cover on the sidewalk of our garage.
My wife says that she spent more on groceries, but she hasn't asked me for money because she can't go around freely as she is afraid of driving into a protest either pro or against what is happening in our country.
And then today I got paid at my morning job. I immediately paid my loan with BAC and my platinum credit card with them too. Tomorrow I plan to pay my loan with Promerica and see how that leaves me. The other money I owe is my HSBC card and my loan with Citibank.
I haven't kept good records of my expenses, payments, income, etc. Trying to send messages to the world to let them know the truth about what's going on in my country in this time of crisis has taken priority.
However I have remained frugal even in times of urgency. Maybe not to the extreme but at least buying rationally and being creative.
I hope I can concentrate back on telling my finances to you as soon as possible. In the mean time I just hope that my country's crisis ends soon.
Thanks for your support