Living Within My Means

What does that even mean? For most of my life, I didn’t know. Money came in and money left. I rarely (if ever) kept track of how much money I spent on this or that. This started to hurt me in high school. I wanted to go to college of course, and I actually had a pretty solid summer job through my high school years. I probably pocketed $7,000-8,000 each summer. I was into cars, so I spent a decent amount of my money on the occasional modification for my Mustang (yeah I was one of “those” high schoolers). I’ve always been a tech guy, so I had a smartphone in high school, an iPod, I bought a digital camera and I had an HP laptop too. Between all that stuff, buying gas, taking girls on a few dates, and just being a moron in general when it came to money, I didn’t have much to contribute to college when my senior year rolled around. Honestly, I can’t even blame my parents for this. To their credit, they taught me about credit card debt, spending less than you make, and saving. Shoot, I even took a personal finance class in high school. I knew a decent amount about finances, but like many things, if you don’t put what you know into practice, it does very little good for you.

Fast forward a few years, and I found myself with my first “big boy” job as a general manager of a hotel. I was making $45,000 a year as a 24-year-old (I also quickly got a raise to $50k). My rent with utilities was just over $500. I was only shelling out 15% of my paycheck for rent and related expenses. And at that age? I should have (and could have) been killing it. Instead, I was killing my bank account with sheer stupidity.

I thought I needed a car to fit the image I thought I needed to have. I was having success, and my ’98 Buick LeSabre didn’t scream “general manager” to me, so I sold it… to my much smarter, fiscally conscientious roommate at the time. But that is a different story. There was nothing wrong with that car. It was comfortable, pretty quiet and great on long road trips. The insurance was cheap, it was decent on gas, and I really should not have had any complaints about it. But I thought I could afford a nicer ride. So I went down to a local dealership and pulled out $17k worth of car loan to finance a 2010 Ford Taurus SHO. A quick rabbit trail: that car was awesome. 365 horsepower from a twin-turbo V6 is enough to embarrass some sports cars from a stoplight. That’s what attracted me to it, it was one of those “sleepers”. See, told you I like cars! It’s a weakness of mine.

Overnight I went from having a paid-for, reliable vehicle that I paid $400 a year to fully insure, that got 25-30 miles per gallon, and took regular (cheaper) gas, to a car that I had to pay $280 a month on, cost me $1,200 a year for insurance, and almost never cracked 20 miles per gallon. To make matters worse, it guzzled more expensive premium gas. Even all those expenses aside, my stress level regarding my car went up exponentially. With the Buick, I didn’t treat it badly, but I also didn’t freak out if I hit a pothole, got an unavoidable chip in the paint from rocks flying up on Montana highways, or if my buddies and I piled in after a hike, smelly as all get out. It was a functional car that I didn’t worry about. With the new ride, I felt like I had to keep it clean all the time, didn’t like it when people slammed the doors… you get the idea. It made ME more obnoxious.

I had that car for less than a year. It stressed me out, it was more car than I needed, and at the end of the day, it really bit me… In the end, it lost almost $5,000 of its value. And just so you know, a bank doesn’t care how much your car has depreciated when they go to collect on your outstanding loan balance. All in all, it was a really terrible financial choice.

I think I could go on here. But you get the idea. A few things I’ve learned that I am now practicing that help me “live within my means”, and may be able to help you too:

  • Nobody cares what car you drive!!! I now have a paid-for, cheap 1993 Mazda Miata. The funny part? I have gotten more compliments from people on THAT car then I got on my Mach 1 Mustang AND Taurus SHO combined. It almost makes me cry.
  • Not having a car payment frees up a bunch of cash each month that you can use to pay off debt, loans, or if you are smarter and farther along than me, you can start saving CASH for your next newer ride. Keep that no-loan thing rolling!
  • Older, less flashy cars are almost always cheaper to insure, put gas in, maintain, and operate overall. As a bonus, you won’t worry about a ding or a scratch here or there.

These are just a few things I’ve learned regarding car loans, used and new cars, and living within my means. If you haven’t made the mistakes I’ve made in buying and selling cars, please take my advice and hear it from me first: the new car’s not worth it!

MintSIM (now Mint Mobile)

For as long as I’ve had a smartphone, I’ve had Verizon service. Living in Montana, there really was no other choice or option if you wanted to be able to get any kind of cell service in the western part of our great state. While Verizon has always been on the expensive side of things, the service has always been really good, and the customer service has been pretty helpful (when you need them).

Living in the greater Portland, OR area now, for the time being, I started to contemplate what a phone service change might look like for me. Up until recently, I’ve paid $70 for our portion to be on my folks’ Verizon plan. This provides us with 2GB of data (on average) per phone to use each month. Not exactly a ton of data. Sure they have other plan rates and tiers, but for the price, we have stayed at the 8GB plan across 5 lines (due to a promotion on one of the phones, we got 2GB extra each month for “life”, which is how I come to the 10GB/5 lines = 2GB each). At $35 per line for the two of us and 2GB of data each, the deal is – eh – okay.

I did a little searching and stumbled upon a company called MintSIM. They are one of a new line of phone services that contract with and run off of existing networks. I haven’t done a ton of research on the finer points of this process, but I do know that MintSIM runs off of T-Mobile infrastructure. Their idea is relatively simple. They don’t have any physical stores, and they sell cellular service “in bulk”, so that is how you achieve your savings. You buy service in 3, 6 or 12-month chunks. They had a promotion when I decided to sign up, so I was able to get 3 months of service for $20 per month, or $60 total. BUT with this plan I have 5GB of LTE data all to myself… pretty good deal, huh?

Verizon – $35 per month, 2GB of data

MintSIM – $20 per month, 5GB of data

So what is the catch? Well, transitioning wasn’t that seamless. I did try to port my number with Verizon directly to MintSIM, but ran into some technical difficulty. I can’t blame MintSIM for that particular problem, but then again maybe I can. When I tried to call in for support, the service department was lackluster at best. I left the calls with them more frustrated than when I began. This is one of the things you pay for with Verizon. There is a store somewhere near you where you can always walk in and talk to someone face to face when over the phone or online customer service fails. You don’t have that with MintSIM.

Long story short, I ended up porting my number to Google Voice, installed Google Hangouts on my iPhone 6S Plus (so I could still get calls and texts from my old Verizon number), got a new number with MintSIM, and set up Google Voice to forward any calls placed to my old number, to my iPhone. Probably could have phrased that better, but you get it (if you are technical. Sorry I get lost in my geek gibberish sometimes).

I don’t want to throw the baby out with the bathwater here. I really like MintSIM so far. Coverage has been just as good as Verizon in our area outside of Portland, the data speeds are actually faster than Verizon. I just had a one hour call tonight with my buddy and it was crystal clear, no drops. Being a big tech guy, I usually provide my own technical/troubleshooting service myself when something goes wrong. So having a brick and mortar location for me to walk into is not very valuable. Truth is, in more than a decade as a Verizon customer, I’ve almost never walked in for “support”. I know that this isn’t for everyone, but just a reminder that you pay a big premium to have that kind of “support” that you may or may not use all that often.

Whew okay, the point of this blog is about money. So let’s crunch some side by side numbers right quick. We are going to give MintSIM the benefit of the doubt here, and for comparison say that you are a customer that pays for 12 months of service in advance for 2GB of data (just so we can compare apples to apples). Also going to use the past plan situation I had with my family for the example too.

Verizon – $35 per month for one line @ 2GB of data

One year of service = $420

MintSIM – $15 per month for one line @ 2GB of data

One year of service = $180

With MintSIM you save 57% annually, or $240.

My main purpose for “jumping ship” to this service was two-fold for me:

  1. I don’t need all the “bells and whistles” Verizon has to offer. I buy used phones anyways, so bringing my own phone is no problem. The reception and service in this area is just about equal between these two carriers in my early testing.
  2. The cost savings are very significant. If you are looking for a way to “trim” down your budget, take a look at your cell bill. There might be more savings available than you might think.

A couple more recommendations for any of you looking to save money on your cell phone bill as well.

  • Don’t buy a new phone. $1,000 for an iPhone X? I mean come on… I got a nearly mint condition iPhone 6S Plus for $180. Fully paid for, no more payments. And to tell you the truth, pretty much just as good as a brand new iPhone 8 or whatever. The camera is fine, the screen is great, it’s still very quick. Oh, and mine has a headphone jack.
  • Do you really need that unlimited plan? Probably not. I would say that most people use 2-5GB of data each month. My parents literally use 200MB or less of data each month. Point is, you’re probably paying for too much. Also, if you are a big data user, maybe it’s time to think about how much you have your face in your phone?… oh just ruffled some feathers.
  • USE WIFI! It makes me sick to think about how many people just blow through their data because they don’t take time to log in to wifi (which is free or already paid for) while they are indoors. Wifi is everywhere. This is a great way to cut data usage.

Thanks for reading!

Coffee at Home

People have a lot of differing opinions on coffee. More specifically, the cost of having coffee each morning. There are some that say it’s not a big deal if getting a coffee at the local ‘Bucks is how you wake up before heading into work. Others claim that if you chose to save that money instead, it could add up to some serious cash. Let’s get to the bottom of this.

When I worked at a hotel as General Manager in my last position, I developed this mindset that I made good money (in hindsight, it was okay money). I worked hard and put in quite a few hours each week. I started finding myself swinging into the Starbucks at the light closest to my work as a reward. It was just a nice pick-me-up and I felt good starting the day that way. Buying a $5 coffee is partially for the coffee itself, but there is a certain “feel good” component knowing you can “afford” to get yourself something nice like that.

I had to cut this crap out of my life. Let’s just go over some quick math that will probably make you sick to your stomach, and then let’s talk about alternatives.

My drink of choice is the caramel macchiato. Not the manliest drink, I know. But I’ve always been a fan of some sweet in my coffee. Also, a funny side note that any coffee snob is going to roll their eyes here because Starbucks’ caramel macchiato isn’t a “real” macchiato. LOL, you can go start a blog about people’s coffee ignorance. But this is a money blog. I digress…

When I go get a coffee at SB, it comes out to $4.65. If I’m not being cheap, which I usually try not to be, I tip a dollar as well. So my per day coffee cost is $5.65.

You could set this up any way you like. But for this example, I’m going to say that the daily coffee grind (see what I did there?) is a weekday thing. So five days a week I’m getting a coffee. You see where this is going:

$5.65 per day x 5 days per week = $28.25 coffee bill per week

$28.25 per week x 52 weeks per year = $1,469.00 per year for coffee. I sh*t you not. Also if you look at that number and don’t bat an eye, this “average dude” blog probably isn’t for you. That is significant money!

Let’s just get crazy and say that you get into that coffee routine for your working life (say, from age 25 to 65.) Let’s also just be super conservative and say that the price of coffee never goes up in those 40 years (fat chance) and that you invest that money instead at a very conservative 7% rate. If you chose not to have those daily coffees, you could have a fat $313,792.46 sitting in an investment account at age 65! THAT’S ALMOST A THIRD OF A MILLION DOLLARS. HELLO.

So now that we’ve done too much math, let’s talk about alternatives. I found out that I love and need coffee in the morning. I still have coffee nearly every morning (and usually it’s seven days a week). Hard to believe, but you can actually make your own coffee at home. Yeah crazy I know. How did I find this out? Well, a couple of things:

My wife and I moved for her to start graduate school. Graduate school is not cheap. Saving money has become much more of a priority to try to mitigate the financial avalanche that we are going to find ourselves buried in when this is all said and done. So, we are trying to save where we can.

On top of that, my new job is 100% remote, so I work from home every day. This has GREATLY helped my habit modification. My NEW habit, instead of rolling into the local Starbucks, is to roll out of bed and out to the kitchen. We get the Costco Columbian roast coffee which is honestly really tasty (coffee snobs, roll your eyes again). A huge three-pound can of pre-ground coffee is only $8.99. And it lasts about 2.5 – 3 months. Probably our “biggest” coffee expense is the creamer we like to put in it, which ranges in flavor, but probably comes to about $4.00 every two weeks. More quick math for you math folks:

$8.99 for coffee for 75 days (2.5 months) = $0.12 per day

$4.00 for creamer for 14 days = $0.29 per day

Grand total coffee cost (this is for 8-10 cups of coffee per day, so I get refills!) = $0.41 per day for TWO people to have pretty darn good coffee.

Even annually, that is only $149.65, or 10% of the example above, getting coffee out each weekday.

All of these numbers are much more tolerable. You may not, and probably don’t work from home, so your answer to coffee portability is to get a nice coffee thermos or drinking cup. I bet you have one stuffed in one of your kitchen cabinets somewhere.

So what is my point here? Well, I don’t care how you make your coffee. Maybe you like nice pour-overs, cold-pressed/brewed, or however else coffee can be brewed. Make it however you like. The savings of preparing your own coffee is nuts. Don’t know how to make your favorite cup of coffee? I would encourage you to learn how to make it! Not only will this help you save money, but you will also gain a new skill in the process. Find what works for you.

You can do this! It’s all about habits. My new habit is to brew a pot of coffee each morning at 7AM. You can make a new habit, too. I know you can!

Fed Up

What’s up world. Let me introduce myself. My name is Justin. I am 27 years old, am recently married, and most days I feel like I don’t know what the hell to do about my financial situation. Glad we could get that intro out of the way.

I qualify as one of “those millennials” that so many people like to talk about, good or bad. We get a bad rap for a lot of reasons. We don’t know how to save. Employers don’t know how to deal with us. Most of us have side hustles. We can be insanely irresponsible and cleverly cunning all in the same day. One thing that I have found to be a common thread among us is the feeling of being overwhelmed by our financial situations.

Our generation is facing a huge student loan “crisis”. I think I read that the total student debt in the US is now at $1.4 trillion. Honestly, that’s pretty insane.

One of my buddies, who I graduated college with, made a long post on Facebook the other day. He was really upset about where he found himself financially. The job doesn’t pay enough even when I work my butt off. Cost of living is too high. My bills always eat up anything I make. I have crushing student loan debt. How the hell am I ever going to pay this off? The feeling can be summed up in a word: hopeless.

This guy made the post that I have wanted to make, but I’ve always felt such things should be kept to one’s self. After all, finances should be kept quiet, right? I think this is another shift that millennials are making. We are more transparent than our parents or grandparents when it comes to more taboo subjects like income and finances.

What is my purpose in writing? A few things I suppose.

  1. I owe a bunch of money, and I hate the feeling.
  2. Some days I feel like I will never achieve my financial goals.
  3. My wife is sick of hearing me talk about budgeting/making money/finances in general. I don’t blame her.
  4. I want to help others out there that are like me.
  5. I am a lifelong learner, and I know I have a ton to learn.

Posts here will vary a lot, from rants to budgeting ideas; saving suggestions to real-life struggles. I just want to take the “scary” out of finances for myself and others. Fear often comes from ignorance. The best way I figure I can overcome that fear is to grow in knowledge and experience. Thanks for joining me along this journey!