No BS Finance

Fact: Overdraft fees are getting higher and higher every year.

Fact: Banks maximize the fees they get by choosing the most beneficial method, for them, of applying checks to your account.

Fact: If your largest check is for your mortgage or car, the banks method may be best for both parties - you may rather the bank pay that check first rather than letting it bounce.

Uncomfortable Fact: Nobody has to bounce a check. It happens if we are either spending above our means or too lazy to ensure we have enough money in the right account.

I’ve never thought much about zippers, let alone repairing them if something breaks. Thanks to moneydummy and her dilemma, now I have.

At least for me, hearing “cash poor” is a euphemism for struggling with everyday expenses or trying to live up to a higher standard of living than you can really afford.

But, it has sunk in recently, that we are cash poor. And it’s great!

Sure I’d like to have more money (who wouldn’t), but we’re meeting our priorities. We’re saving aggressively for retirement, have college funds set up for the kids, and still make it through the year just over the breakeven point on a cashflow basis.  Throw in my annual bonus (which we budget $0 for since it isn’t guaranteed) and tax refund (grumble, grumble, I can never seem to nail it just right) and we have a little money for extra saving - or splurging like our cruise coming up next week.

The benefit of budgeting our savings so tight is that we don’t get complacent about hitting our budget. Any waste or extra spending makes us worry about making ends meet. We can’t scrimp on the savings to compensate since those are automatically transferred each month.

Cash poor is awesome when budgeted savings has you there.

2006 was a great year - 5-6 more just like it and we’ll be millionaires years ahead of schedule.

Liabilities were reduced by 4% due to extra money paid on the mortgage and retiring the auto loan we used to get a discount on the car (then paid off in 5 months).

Income was substantially higher than anticipated. My annual raise was a touch higher than normal, but the major impact was the overtime pay I received while our normal workforce was on strike. Strike pay ended up being 12% of my total compensation for the year.

Overall, our net worth increased by 28%, from the above items, plus a large run up of the stock market. With our money in index funds, we didn’t have to worry about missing out due to having money in the “wrong place” for the rally.

This made up for the poor 2002 we had, where net worth increased by a measly 6%, which seemed even worse given the absolute value. 6% of not much is also not much.

Following up on my Simon Delivers experiment, I got my first order on Thursday. The produce was very nice and exactly what I would have picked out myself in the store. I have to say on an afternoon of snow and cold it was nice not to have to lug two kids to the grocery store.

I might do it again if I had a savings offer like I did this time. But here’s the one lesson I learned. If you are planning to try something like this, tell all your friends and ask them if they have any offers they are not going to use. I found out Thursday afternoon that a friend had a Simon delivers offer for a $25 gas card for first time customers and a different $20 off offer. So, I could have saved another $45 if only I had talked to friends first!