The Happy Homeowner

Why it’s Important to Always Have a Back-up Plan

Posted on June 6, 2012 by Jen

I’ve always been a fan of having a plan. Whether it’s an annual plan of what I’d like to accomplish over the next 365 days or a plan to get me through the day, I’ve found that planning is a vital component to any organized, hard-working person’s success.

But what about when the best-laid plans go awry?

My solution is to always have a back-up plan.

What is a back-up plan?

Just like a back-up dancer lends support to the main performer, a back-up plan gives you support when you need it most. It is your ticket to a less harried existence when your first plan is forced out the window.

It’s also a way to keep your stress at bay and regain your footing when the universe seems hell-bent on knocking you down. And when it comes to finances, it can often be your best friend when the plan you’ve been working towards suddenly gets washed away.

Why do you need a back-up plan?

Anyone who’s lived past the age of 12-13 knows that life doesn’t always move along according to our plan. When setting out on its various paths, nobody originally plans to lose their job, get into an accident, come down with a serious illness, get divorced, etc. But these things happen and when they do, you need to be prepared!

How to make a back-up plan

It really couldn’t be easier. Write down your main plan, then below each piece of that plan, list some details about what you would do if you could no longer follow the original plan. For example, if your plan was to go back to school this year but you found out your pregnant, what would you do to still keep working towards your original plan despite a longer timeline?

My back-up plan

It’s no secret that I’m currently between full-time jobs. While I could sit back and just wait to see what happens with all of these interviews (for one company I’ve already had 9 interviews for one position and have just found out I’ve been invited back for the 10th–and final–meeting tomorrow; a daunting process, indeed!), it’s not in my nature to remain stagnant.

Therefore, I’m putting together a back-up plan for what I’ll do in the event that none of these jobs pan out (when I say this it means that either they don’t think I’m a fit or I don’t think they’re a fit–I don’t want to settle this time around!). For me, the plan is to finally bid adieu to the 9-5 grind and set off on my own course. If I can’t solidify a new full-time job by July, I’ll officially be concentrating all of my efforts on opening my own business.

While I’ve mentioned this before, it’s been a bit of part-time endeavor for me. This is because my full-time schedule has necessitated a smaller focus on getting the business off the ground. But without the 9-5 responsibilities, I will be able to direct my efforts to making it a success.

That being said, I know it will be an immense challenge, but I also know that this is something I’m passionate about. If these new jobs don’t pan out for whatever reason, I may take this as the universe’s sign that I’m not supposed to be in an office anymore. At the very least, I have a hell of a back-up plan that will keep me motivated for years despite the potential lean times ahead of me!

Do you have a back-up plan? If so, what is it?

Photo credit:NicoleAbalde

How to Manage a Bare-Bones Budget

Posted on June 4, 2012 by Jen

While I’m figuring out the next steps in my professional endeavors, I could potentially be dealing with a significant reduction in salary. Whether or not it’s going to be a short-term or long-term reduction is still up in the air and contingent upon finally hearing back from these positions I’ve been interviewing for.

Until I’m certain of what my next steps are (ie. an offer letter that’s signed, sealed,and delivered!), I’ll be adhering to a bare-bones budget plan.

What is a bare-bones budget?

A bare-bones budget is exactly as it sounds: Adhering to a budget that’s based on the absolute minimum amount of spending for which your situation allows. It’s a no-frills, no-extras-allowed plan that’s as strict as it is necessary when you’re faced with a substantial reduction in income.

What does a bare-bones budget include?

Your bare-bones budget should only include necessities such as food, housing, healthcare, insurance, and debt payments. For me, this includes the following:

Mortgage payment
Condo fee
Groceries (basics only!)
Utilities
Insurance (car & homeowner’s is now fully paid for the year)
Student loan payments
Retirement savings (a non-negotiable for me)
A small amount of long-term savings (can be used as a buffer for unexpected expenses if this salary reduction continues for longer than anticipated)

What a bare-bones budget does NOT include:

All frivolous expenditures are officially out the door! For me, this means no more:

Dining out
Movies, concerts, events that require a ticket purchase
Shopping for anything other than groceries
Vacations (although Kilimanjaro is still on as it’s fully pre-paid already!)
Hobby-related expenditures
“Extra” personal care such as cosmetics, manicures, etc. (although I’ve never had a manicure, pedicure, massage, etc. so this doesn’t really apply to my situation)

How to maintain motivation during this phase:

Sticking to a bare-bones budget isn’t going to be very fun. But, it’s necessary and it will be a great exercise in personal strength, tenacity, and willpower. Also, there’s not many better ways to hone your ability to delay gratification!

For those moments where I’m particularly feeling the need to splurge, I’ll be doing the following to ensure my motivation remains high to get through this phase with my e-fund still in tact:

Reminding myself that this is a temporary phase. I’m very close to securing a new full-time job, so I know this will be a temporary phase. Unfortunately, these hiring processes are taking much longer than I had originally anticipated, but I will continue to remind myself that I’ll be settled in a new job sooner than later…
Seeking out creative options. Reducing expenses to the bare-bones minimum doesn’t mean that fun and socializing goes out the door. In fact, it’s almost more motivating to me because now I have to come up with creative options for spending time with my friends. I’ll be relying on the plethora of free summer activities available in the city as well as surrounding my social time around activities such as running, biking, and hiking–which are free and healthy!
Remaining positive. I’ve weathered a great deal of storms in my life, and I know I can get through this phase just fine. I’ll keep a smile on my face and a spring in my step knowing that I’m headed towards nothing but greener pastures. Even if the road to those pastures is a bit uglier than I had hoped, it’s absolutely still one worth navigating…

What do you think of the bare-bones budget idea? Have you ever adhered to one? Do you have any other tips/suggestions?

Photo credit: pathfinderlinden

Financial Simplicity Carnival, The “I Believe You Have My Stapler” Edition

Posted on June 3, 2012 by Jen

I believe you have my stapler...

Three things I love: Mac & cheese, blog carnivals, and the movie Office Space. When I had the opportunity to host the Financial Simplicity Carnival this week, I knew that my theme had to surround one of these topics and, let’s be honest, it’d be just a bit too odd (even for me) to base a carnival theme solely on mac & cheese.

Here are my personal favorites from recent submissions for the “I Believe You Have My Stapler” edition….

Making Money

Ted Jenkin presents How Does Boredom Equal Making Money? posted at Your Smart Money Moves. If you are interested in making more money in life, you have to make the smart money move of getting excited around being bored. While it isn’t the most fun exercise in the world all the time, those that do it and do it well are rewarded no matter what path in life they choose. Have a boring day!
Ashley Lennon presents How to Make Money on eBay posted at Skint in the City. A round-up of how to make money on eBay, with some little known tips, including how to time your sale ending.
Dividend Growth Investor presents How to generate $1000/month in dividends posted at Dividend Growth Investor. The goal of every dividend growth investor is to create a portfolio which throws off a sufficient stream of income that pays their expenses. As soon as the amount of dividends exceeds the monthly expenses, the investor has reached financial independence.Now that we have the end goal in mind, we have to determine when exactly we need to be able to achieve the target monthly dividend income.

The thing is, Bob, it's not that I'm lazy, it's that I just don't care....

Spending & Budgeting

Jeremy presents Putting Your Health Before Your Finances posted at Modest Money. One area that I was particularly naive was how I viewed health. I thought that while I was young with no obvious problems that I just didn’t need to worry about it. As a result I was irresponsible and abused my body. This may not seem like a financial mistake, but I’m really learning it all comes full circle.
Boomer presents Financial Literacy Is A Lifelong Pursuit posted at Boomer & Echo. With all the information available on TV, newspapers, magazines, and online there’s no excuse for the shocking lack of financial knowledge that most of us have. Choose your own destiny, or someone else will.
Emily presents My Dream in 23 Years – What’s Yours? posted at Evolving Personal Finance. In 23 years, Emily and her husband want to have a giant party to celebrate their 25th wedding anniversary and 50th birthdays. What’s your dream?
MMD presents Can You Afford to Work? posted at MyMoneyDesign. Does your daycare cost more than you make? Would it make sense for you to simply quit your job and stay at home with the kids? There are many reasons on both sides of the argument. Let’s explore a few of them.
Sean presents Money Saving Workout Routines for a Fit Recession-ista posted at One Smart Dollar. Spending money for a gym can be expensive. Here are some great tips to keep yourself in shape and not break the budget.
Khaleef Crumbley presents Planning A Financial Diet – Eat Healthy And Spend Less posted at Fat Guy, Skinny Wallet. Eat healthy and spend less…something that seems impossible However, if you follow these tips you can do both!

"PC Load Letter?" What the --bleep!-- does that mean?

Investing

Dr Dean presents Are You An Investing Scaredy Cat? posted at The Millionaire Nurse Blog. Risks and rewards in investing…Do you understand them? What makes people sell when they should buy?
FamilyMoneyValues presents About the Stock Market – Terms that Confuse posted at Family Money Values. The stock market, like every other specialized area, has it’s own language. Some of the stock market terms can be confusing – even to highly educated people who have been investing for years.
SB presents How to Control Stock Trading Impulses posted at One Cent at a Time. People with money to invest often get attracted to stocks after reading an article or two. It is important to not buy out of impulse. Take time, do research and set some guidelines to control your impulses.
Darrow Kirkpatrick presents How I Rebalanced Through Perilous Times posted at Can I Retire Yet?. To rebalance your portfolio, or not to rebalance? When? How? The experts’ advice is often conflicting and arbitrary. Here I show you my own personal rules for rebalancing.
Don presents Should You Re-balance Your Portfolio or Let it Ride? posted at My Dollar Plan. Read on for an interesting take on re-balancing vs. leaving your portfolio alone.

I do want to express myself, okay. And I don't need 37 pieces of flair to do it!

Debt Reduction

Ben DeMeter presents Unforgiven: Inside America’s Student Loan Bubble posted at Credit Card Assist Blog. An in-depth examination of America’s student loan crisis with perspectives from government officials as well as student debtors and lenders.
David John Marotta presents Securing Your Credit posted at Marotta On Money. A U.S. Public Interest Research Group report in 2004 found that one in four credit reports have serious errors that could significantly lower your chances of being approved.

It was a blast to host my first carnival! Make sure you submit weekly at the Financial Simplicity Carnival.

And I’ll leave you with one of my favorite Office Space photos….

Office Space Damn It Feels Good to be a Gangsta

Photo credits: Bumper Stickers, Jordan_mac, 20th Century Fox

June 2012 Goals

Posted on June 1, 2012 by Jen

As I type this post, I’m waiting to hear back about the final decision regarding a job I’ve been interviewing for recently. The job itself is a fantastic opportunity (even if it is a full-time job back in the office) and I hope things come together. I could potentially know their decision this afternoon, in which case I’ll post an updated goals list later. However, until that offer letter is signed, sealed, and delivered, I’m not counting on anything.

That means that my June budget is an absolute disaster. As it stands right now, I’m $416 in the hole due to my 6-month car insurance premium coming due this month (of course!) and extra retirement auto-deductions because this is a three-paycheck month for my part-time job.

Of course I could simply pull $$ out of savings to cover this shortage, but I really like the idea of challenging myself to find ways to bring in the extra cash. I haven’t counted the income I’ll make from working for LUNA later in the month, so I’ve got a bit of a head start (I don’t know exactly how many hours I’ll end up working yet, so I’d rather wait to calculate my potential haul until they give me a schedule). For the remaining money, I’ll be turning to my love of working side gigs from Craigslist to cover the shortage.

Wish me luck because this month could be interesting!!!

Financial Goals:

$1,000 into retirement accounts
$472 for car insurance premium
$300 into regular savings (an auto-debit from PT paycheck)
Limit variable spending to $400

Household Goals:

Complete master bath back splash project
Finish concrete walkway demo/re-grading

Personal Goals:

Secure a new FT job
Begin my training for the Chicago Marathon
Survive the month!!!

What are your June goals?

Photo credit: Dworianyn