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!


Cindy in California said...

I know it's been difficult in Honduras with all the political uncertainty. Although I am not there, I am following it closely. I'm sure for those who are living there it is THE topic of conversation and does take a lot of time. I hope Mel just fades away this becomes a catalyst for better things with the next administration.

That said, it's time to take your head out of the sand regarding your finances. Just because you don't total your debt doesn't make it go away. Not knowing your spending doesn't help anything. You have been diligently working at both of your jobs. I'm proud of you for keeping up this hectic pace. Now, it's time to also focus on your personal situation. Face the music...just do it! Write down your debts and accept the number you see. You can then be encouraged as you see the number go down.

August 1st is Saturday. It's a new month. Start recording your expenses! All of them. Everyday. For the entire month. You really, really need to do this for at least 90 days. It'll help you recognize and start to plan for the irregular expenses.

You want to get to the point that you have an pretty good idea what the irregular expenses are on an annual basis. (This is not an exact science since they can vary, but that's why you have an emergency fund). Then come up with an monthly average. When you have a month where the irregular expenses are less than the monthly average you want to save the difference so you have it later when you need it.

You're doing well to start to set aside L500 for this. Once you really know what these are you'll know if this amount is right or needs to be increased.

I do not want you to get discouraged. I want to encourage you. You really will be better off to know where you stand and then make plans accordingly.

Thanks for your transperancy in continuing to blog. Keep plugging along in paying your debt and planning for your expenses! I want to celebrate with you when you make the final payment!

Larry in Mazatlan said...

Cindy is right. Carry a small spiral notebook and write down each and every expense WHEN IT HAPPENS. Don't wait until later in the day and try to remember. After a reasonable length of time, like 90 days, you'll have an idea of what your expenses really are and will be in a position to establish a budget.

What about that spreadsheet you were talking about a while back? Don't get too techy and try to get it on your phone. Just set it up on your everyday computer and update it every night from your spiral notebook.