So, you want a Great Dane? Financial lessons learned in pet ownership, Part 1

Sugar Lynn the Great Dane at 3.5 months of age by W. Vance

Life is a continuous learning adventure.  We often do things because we think the grass is greener on the other side, or we just want something so bad that we just make it happen at the expense of many other things.  Other times we are just too nice to say no to others and know we’ll regret it later.  Both of these behaviors have gotten me into some personal and financial stress when it comes to my dogs. 

In November 2016, two of my best friends got a Great Dane puppy.  When they were talking about getting such a large dog, I was criticizing them, telling them they were crazy to want such a large, pony-like, canine, but I soon found out what an amazingly loving, goofy breed they are.  About a week before Thanksgiving, Bolin, their new puppy, arrived in a crate on a jet plane.  My heart melted and I was in love.  That night I was canvasing puppyfinder.com to find my Great Dane.  I joked about getting a female and all of us having a litter of puppies someday.  Well, the Saturday after Thanksgiving, my little bundle of joy arrived.  Her name is Sugar Lynn, who got the Sugar part of her name by default because she was so darn sweet I kept calling her sugar.  The name stuck and I added Lynn since she is from the Eastern hills of Tennessee. 

By the time Sugar had arrived, I was well over $1,000 into this, plus puppy food, and then she had “the runs” and I was worried sick.  I immediately made a vet appointment, which costed in excess of $200, but she was okay.  Then there were vaccinations, which with each exam, ran about a $100 each time, until she was fully vaccinated after three trips.  Food for one great date can cost between $60 to over $100 per month, depending on how far up you decide to go. 

In April of the next year, I wanted to get Sugar a playmate.  I looked at another puppy, but thought I would try and adopt.  I found a big Euro Dane named Diesel in the San Francisco Bay area.  I paid the $400 adoption fee and gave him a try.  After a few weeks, I was feeding him and he bit me.  It hurt badly, but I was okay and managed to not go to the doctor.  I was scared of Diesel, arranged to take him back to California and let them keep my donation.  I was out several hundred dollars at this point and no second Dane. 

Baby Spice at eight weeks of age sleeping on the outdoor lounge by W. Vance

I decided a puppy was again the best course of action.  I found another little girl for sale for $700 in Tonopah, Nevada, about a four hour drive from Reno, and arranged to get her Memorial Day weekend 2017.  That is when Spice came into my life.  She was seven weeks old and cute as a button.  Vet-wise, I did the shots and exams, bought good food at Costco, and things went pretty predictably until last November, when I decided to let Bolin stay at my house for a few days while his owner was out of town and both my girls were in heat.  This is where the real fun **sarcastic laugh** begins.

To be continued next week! 

In the meantime, what, if anything, would you do different regarding your pets?  Maybe it’s how you went about acquiring an expensive breed, or vet bills?  How do you maintain the best life for you pets while not blowing the bank? Leave me a comment!

Looking on the bright side of things: Unintentional savings during the COVID-19 lockdown

Another day of social distancing, self-quarantine, and isolation is in the books in hopes of curbing the spread of COVID-19.  The debate continues in Washington, D.C. on how the economy should be propped up, and the stock markets took a little more of a stumble today, which is seeming the new normal.  This prompted me to think about controlling my outgo as opposed to hoping for a government bailout.  This lockdown of society is helping me to spend less.  I thought about how my inability to go out to dinner with friends, shopping malls, or the movies has cut my spending in recent days.  My gasoline usage is down about 90% from normal.  Not to mention the fall of oil futures has impacted the price we are seeing at the pump, which is compounding the savings. 

I did go out on Saturday, sanitary wipes in-hand, so that one of my Great Danes could get her scheduled vaccinations, and happened to be near the Home Depot.  I stopped in for a few items needed to get some things done around the house.  Besides reading, homework, and intensive home sanitizing, I have been able to get outside and start some spring projects such as pruning and recovering the backyard from the dog-pee fest that gets left unchecked because of the cold weather.  One of the Items I picked-up at Home Depot was a Simple Green Outdoor Pet Oder Eliminator.  This was my cheap Saturday entertainment! 

Normally, I would be going out the get lunch and hit up multiple grocery stores for sale items and impulse my way over budget.  However, to reduce exposure to the outside world, I made a list and sent my roommate and friend out to execute my list, which saved me money because he is great at not adding extra items to my list.  I also didn’t get to go to other stores like Marshall’s, Target, or Kohl’s for the same reasons, or the fact they are closed.  To boot, I have been eating at home since I’m working from home, which is saving me at least $10 per day over going into the office.

Your savings could be growing! Image courtesy https://www.myfinance.com/how-to-save-money/

I also have been making due with what I have because it is more difficult to just pop out to the store.  Instead of shopping for a new rug for my office that was recently re-arranged to make it more work-from-home friendly, I remembered I had a rug shoved under my roommate’s bed.  Albeit, it is eventually going back to the living room when my roommate moves his stuff out, it’s better than nothing under my office chair, which has a tendency to mar the floor if not on a rug.  Quite often our propensity to easily go out and buy something new makes us forget about old things stored away in closets or the garage.  I am planning to use more of this time to go through and really assess what is needed and what can be donated when this all passes.  You may be surprised at how those clothes fit that you put away two years ago?  Maybe you’ll fall in love again with that pair of jeans or a shirt that you had forgotten about?

In this time of uncertainty, get your mind off the news and think about the bright side of things.  Maybe you are like me and working from home and saving all that commute time?  If so, make sure you are using that time productively.  Make more food at home, try to resist ordering out unless you are financially secure and just have those funds in your budget.  We will make it through COVID-19 and eventually, things will return to normal. 

Have you been able to save money on day-to-day expenses like food, gas, or groceries?  Have you been able to cut childcare expenses if you are working from home?  Reply to this blog post and let me know! 

What chould you be doing with your money in these unprecedented times?

As I write, our economy is coming to a screeching halt.  Life is going from freedom to confinement at home.  It almost feels like you are taking your life in your hands to leave to go to the grocery store, where controls have been set up to stop overcrowding and hoarding of commodities.  Large, multi-national companies such as GUESS, Bath & Body Works, and The Cheesecake Factory are either closing their doors for at least ten days or highly modifying operations to combat the spread of COVID-19 (Coronavirus). 

Hopefully you aren’t on the receiving end of any financial impacts from these closures through layoffs or furloughs.  If you are, I send my best hopes that you have a plan in place and an emergency fund.  Our leaders in Washington are trying to minimize the impact of this outbreak on our economy.  Today there is talk of potential cash stimulus being sent out in the form of $1,000 or more checks to individuals.  Such drastic measures seem to be gaining bi-partisan support and if leaders really do act swiftly, we could see money in the next two weeks.  So, what should you do if you get some extra money from the government?

First, remember why this money is being sent out:  to help people cope with unexpected expenses or loss of income due to COVID-19 impacts.  Perhaps you end up getting laid off from your restaurant or retail job, without pay?  You need to save this money or keep the lights and food going in your home.  If you do lose your job, try applying for unemployment insurance through your state.  Don’t be too proud.  It is meant for us in times of need! Even if you are currently secure, the most prudent thing to do would be to add this to your savings for now.  Perhaps in a few months this will all be over and will be remembered like an apocalyptic movie.  If that scenario pans out, then go spend your windfall this summer.  The worst-case scenario would be you losing your job due to a continued downturn in the economy.  In this case, you again need that extra money.

Image credit: https://tenor.com/view/trump-stock-market-explosion-down-gif-16459871

For those of you with investments that are tanking due to the markets almost literally going off a cliff the last two weeks, just hang tight.  Hopefully you weren’t planning on retiring in the next week or two since you hadn’t reallocated your funds, so you’re in it for the long run.  Just keep working as long as you are gainfully employed and contribute like you have been.  If you can, it is a good time to ratchet up your contributions because stocks are on sale and your contributions to retirement plans buy more shares! 

If you have cash well beyond your emergency fund of three to six months, it may be a good time to buy up some cheap stocks now, or in the near term, of companies that have been dragged down but have great long-term prospects.  I can’t believe how discounted UPS and FedEx shares are since people are now stranded at home in many areas with only e-commerce to scratch that retail therapy itch.  Also, some strong retailers such a GUESS and American Eagle Outfitters have seen their stock dump by as much as 75% since last month.  Although they will be closed for ten days, it is highly unlikely solid companies will go under and within a year, it is likely share prices will return to where they have been in the past year.  If stock picking isn’t your game, then buy an index fund that follows the DOW or S&P 500.  If you have cash to invest now, it is likely you will see the biggest rewards for buying when everyone else is running for the exits.

These are just a few suggestions on how to manage your money in these uncertain, yet opportunistic times.  I would love to hear how you are managing your finances today.  Are you doing the same thing as before, are you saving more, investing, or doing something completely different?  Leave a quick comment below!

It’s also a great time to give money or time to those in need!  If you can spare it, see if you can support those in need in your local community.

Lessons Learned: Getting Through College Debt-free

Are you thinking about getting your first degree, or perhaps a master’s?  We all know paying for college is expensive and sometimes it feels nearly impossible to think of paying cash all the way through.  I felt that way once I got into my bachelor’s degree almost a decade back. I did my research and figured out exactly how much per month I would need to pay to ensure my student loan was paid back at the end of each term, and if paid back within six months, any accrued interest would reverse. Sounds like a great plan, right? 

Well, things didn’t start out too well.  Once school started, I also wanted a new truck. Instead of just driving my nine-year old, 2005 Altima, I ran up a $34,000 auto loan, which I rationalized by talking about the low interest rate I received, as if this validated spending roughly two-thirds of my annual salary at the time. That first great big $480 loan payment came due a month and a half later and I was deep in auto and student loan debt, with no way out for a long time.  With ballooning debt, I pretty much ignored my new school loans and pretended like they didn’t exist.  

The one saving grace, or so I thought, was the $5,250 tax-free, annual tuition reimbursement I had received from my employer.  The problem here was that I was taking loans for education and then used the later reimbursements for other things I wanted.  Again, no discipline on my part and a mistake that still haunts me today.  

Fast forward about 18 months and I was now receiving job offers to get into accounting.  I was excited to leave retail, but would now owe back nearly $10,000 in tuition reimbursement because I left before completing a year of service.  How would I pay this back? Drumroll! Tap my 401(k) proceeds to pay them back. While better than taking out more debt, it was a serious blow to my retirement savings, that I’m still recovering from because of the missed growth from 2014-2019.  

I did wise up around late 2015.  I moved up through a couple different positions and increased my income.  I made it a point to stop using student loans once I got stabilized at my job and got some permanent tuition reimbursement going.  Now, I use that reimbursement to fund my next semester and any overages, I make up in cash. My last student loan was on December 27, 2015, and I managed to pay cash through Graduation in September 2016.  I managed to pay about $10,000 out of pocket, so I walked with $42,000 in federal student loans.  

When I went back for my master’s in 2018, I had a new plan!  I only went back when I had a job that would pay for my degree and if I could make up any differences between reimbursements and costs.  I also held myself to having the cash to pay my tuition when it was due, or a credit card paid off, in full a month after before interest accrued.  This strategy has worked very well. I am in my last semester of my master’s program and have paid off over $4,000 of old student loan debt and paid for current school.  

Each time I had a plan, but what was different? Execution and sticking to the plan. At age 32, I still felt compelled to have new things and not reign in the spending, while today, at 39, I kept driving my paid off truck, put tuition reimbursement back into paying for the current semester by floating a semester on my rewards card for a cycle. I did use credit card debt, but very carefully and have always paid it off without interest and never used a balance transfer to achieve my goal here. I also had the cash on-hand to clean up the mess quickly and wasn’t hoping a next paycheck could cover it. One other difference was going to a state school for my masters instead of an online private school. University of Phoenix, where I earned my undergraduate degree, charged approximately $1,900 per upper division course for tuition and fees. At my state school, graduate classes have been about $1,300 per class for a graduate degree. I won’t even get into how many great people I’ve met who I think will be instrumental in my career in the future as we all graduate hopefully move into management roles.

What tips can you share on getting through college debt-free? If you have loans now or payments coming due soon, how will you manage the extra financial weight?

Expecting the Unexpected

Remember the saying “life is what happens when you’re making other plans”? It’s the absolute truth.  As I sit here on day number four of my hospital visit, I am thinking more and more about how the medical bill copays will pan out and if I’ll make it back to work in time to not have a lapse in my normal earnings, my anxiety grows, but isn’t as bad as if I didn’t have an emergency fund in place.  Many popular personal finance personalities recommend three to six months of expenses in a liquid savings account (not stocks or bonds!) but often fail to talk about how emergencies other than unemployment can come up. Dave Ramsey often mentions car breakdowns can probably be prevented or foreseen and are not always an emergency when you are getting out of debt. So, how can you better test your emergency cash preparedness needs?

Add up your normal expenses including food, transportation, housing, minimum debt payments, and any other necessities such as medical prescriptions. You want to base your amount of what you actually spent in the last several months, so tracking your expenses is important in planning for future expenses. Next, make sure you include and irregular expenses. For me, this includes auto insurance, property taxes, sewer, and HOA dues. You may not incur some expenses if you are out of work for a while. These may include childcare and excess fuel costs you may spend on due to a long commute. Don’t forget to factor in health insurance needs. If you lose your job, you can continue COBRA coverage, but it may be several hundred to over one thousand dollars per month.

Sum these amounts into a monthly amount and multiply by three to six months, depending on your employment patterns and economic conditions in your industry. You need to decide how comfortable you feel with the decided on amount. It’s okay if you feel the lower end is enough. Having some safety net is better than none at all.

Next, consider other emergencies. My recent trip to the hospital for a dog bite had been much more intense than I could have imagined. While I have a relatively low co-pay on my Health Savings Account (HSA) medical plan as recommended by Dave Ramsey, it is still $1,500, and there will be other random bills that may be out of network and not covered. Not to mention possible missed pay if your company paid leave runs out before you are better.

These are just some basic recommendations on what to plan for. What other emergencies do you plan for? Comment, and I’d love to hear your ideas!

Whose Financial Plan is Right for You?

Photo by William P. Vance

Depending how much you keep up on the advice given by well-known financial coaches Dave Ramsey and Suze Orman, you may, or may not, know the differences in their plans.  While both plans ultimately encourage you to become financially responsible and independent, their views on debt are vastly different.  Some people believe in “good” debt, such as fixed-rate home mortgages and student loans used to land a good-paying job while others, such as Dave, believe all “debt is dumb” and only accept a home mortgage made on a 15-year fixed payment schedule and is no more than about a quarter of your take-home pay.  How can you tell what plan is right for you?

credit cards, cash, checkbook
Taken by William P. Vance

I want to put it out there that I listen to the Dave Ramsey show via podcast and have done so since 2009 when we were in the depths of the Great Recession.  I started out on the Ramsey plan and swore off credit cards twice, but could never bring myself to cancel them and lose my fabulous credit score and the opportunities to easily refinance my home and get super cheap car insurance.  While I believe you don’t need a credit card to live a great life, I do feel like having a great credit score makes things easier, only if you have the discipline to say no to impulses and make credit purchases as part of your monthly budget and pay them off in full before interest accrues.  This advice falls in line with what Suze preaches and is the dead-set opposite of what Dave’s plan suggests.

So, how can I tell if Dave or Suze is better?  In a nutshell:  it depends on you.  If you have a history of not paying off your cards in full because you tend to just swipe, and then get anxiety when you get that little email showing your new statement-ending balance and cannot pay it off before the due date, then you are a candidate for Dave’s plan.  You need to go “cold turkey” and learn self-control.  Cutting up the cards is likely the route for you unless you can temporarily make it without your cards and pay off all of your outstanding debts and stick to a budget. 

If you have cards, use them to earn rewards or discounts, and pay them off by the due date and hit your savings targets, then you likely won’t be held back over time by credit card debt.  No matter which plan you follow, both Dave and Suzy believe in having an emergency fund of three to six months of expenses.  This emergency fund is like an insurance policy against life, and although it can be difficult to leave it alone when the big-ticket item is staring you in the face, think about how horribly you will sleep at night knowing that if you lost your job tomorrow you would likely be having a tough time making rent or your mortgage payment. 

The gist of picking the right financial plan is that there is not a universal plan for everyone.  If you have kids and an old car or house, the chances of an emergency cash situation occurring is likely and having car payments or too much debt only increases the chance of ruining your budget and financial success.  If you are single and don’t plan to have kids, you needs are different.  I believe that if you stick to Dave’s plan, the “baby steps”, you will ultimately win.  So the next time you decide whether to spend or save, remember my piece of advice:  no one ever said, “I sure wish I wouldn’t have saved that money for a rainy day”.  You can always act cautiously today and put off spending, likely making a wiser decision tomorrow.

Whose financial advice do you follow?  Share some of your favorite financial celeb’s advice in the comments below!

Stick to Your Plan, Control Yourself, and We All Make Mistakes

I love building things around the house.  Home improvement projects can become addictive.  Once I start on one project, I start thinking about the next one while working on the current one.  Last spring, this was just the case.  After paying off all of my credit card debt since being divorced, I decided that it was time to stop being tight with money and make some home improvements for my enjoyment with the future in mind.  I wandered into Home Depot one cold, dreary, February Sunday and noticed a sign near the entrance boasting “up to 20% off counter tops”, and so it begins.

As I get older, I have learned to understand my impulses.  When I was in my 20’s, I would just do what I wanted, without thinking much about how I was going to get there unless it was a really big purchase, like a car or house. Nowadays, I tend to tell myself:  STOP!  I ask myself questions like:

  • Do I have the cash to cover this want?
  • How will I feel about spending $x,xxx six months after the purchase?
  • Would it feel better to have that money in my savings account?
  • Are there more important goals in my life and is this congruent with my goals?
  • What are my true motivations for wanting to make this purchase?

These are some of the questions that keep me out of financial trouble more often than not. Being able to identify these behavioral patterns in myself has allowed me to get ahead, which I measure by looking at my increasing net worth and my quality of life (not to mention increased sanity!).  I have the same tendencies, but I react to them differently. 

I admit that I am a spender, but the feeling of security gained from having a big pile of cash in the bank is a big reason why I don’t just buy what I want, when I want.  I can remember being 23 years old and always broke.  On payday, I paid all of my bills, which left me with almost no cash, but I did have available credit on my cards and was able to eat and buy gas on that.  Then something would go wrong and my life would become stressful.  This stress radiated into my career and my personal relationships.  I didn’t realize it then, but I felt out of control.  The lack of control was causing chaos not only in my financial life, but in all other areas.  I couldn’t sleep well when I was wondering how I would fix my car and get to work to keep up this rat race. 

Fast-forward about three years and I was advancing my career and financially.  I was ready to purchase a house with my significant other.  It was 2007.  Home prices were decreasing.  This seemed like the best time to buy since we had been in such a hot market.  The joke was on us!  Within a year of closing on the brand new house, prices dropped over $100K on our block from what we had purchased it for. I was, and still am, a firm believer that individuals should do what is ethical, even if the popular thing to do is not.  Many of those people kept their jobs and income and dumped their underwater homes rather that weather the economic storm. 

We stuck with it, paid our mortgage, and things are pretty good today.  It worked out and I’m moving on and up.  The moral of the story is to stick to your big plan.  Don’t let fads or impulses throw you off track. If you do, get back on track! Everyone will have obstacles with money, health, careers, and more.  You can plan for these obstacles and make incremental choices every day to move you closer to, or further from, those goals.