4 posts categorized "budgeting"


My $380 shoes and why American manufacturing may not be dead




Recently, seemingly against all logic and reason, I purchased a pair of $380 shoes.  I had a gift certificate which helped a little, and I purchased them in tax free New Hampshire which helped a little more.  But the brunt of this purchase was taken by yours truly.  Now here’s the sentence you didn’t expect: these shoes were a tremendous value.


Those of you who know me personally know I have no fashion sense whatsoever.  I cannot recognize which brand names are in or out and I am usually a decade away from whatever is hip.  So why such a purchase?  One word:  quality.


I realize you think the shoe salesman took old Pete for a Kansas City Shuffle, tricking me into buying the priciest shoe in the store.  (It was actually the third priciest shoe in the store BTW.)  But truly, this brand of shoes will literally last me ten years.  (And since I am always a decade behind in fashion anyway this is the ideal fit for me.)  They’re real leather, hand stitched and most important to the point of this blog, made in the USA. 


Less than a year ago at the same store I purchased a pair of $85 shoes made in another country.  (I won’t say which but you can guess.)  And these “cheaper” shoes are already falling apart.  So you tell me, if I have to buy a new pair of these cheap sleds every year, which pair is really the better deal?


I’ve bought Wal-mart screw drivers and literally bent the metal on them.  Not bent the metal Uri Gellar style, I mean bent the metal trying to turn a screw.  The “price” of the screwdriver was terrific.  But was there any real value when it cannot do the job it was made for?  Ever bought a $65 DVD player that breaks after a 6 months?


America is not going to win in the cheap sandals price war.  But if manufactures can convince consumers that high quality and high price is actually a bargain, American manufacturing has a chance.  It’s not easy, but I hope this blog will help. 


The Art of Microbudgeting



If you’ve used micro budgeting before it was probably on a long vacation.  Perhaps backpacking through Europe, perhaps a trek across country or maybe just a week long spring break venture.  Vacation or not, microbudeting is an excellent way to keep your spending under control.


Most folks create a monthly budget because most bills (electric bill, cell phone, rent and mortgage) are paid monthly.  But the monthly format is hardly set in stone.  Why not make a budget for a week?  Or a day?  Even a night of just a few hours?  This is the essence of microbudgeting. 


When I traveled to Viertnam I had a budget of about $100 per day.  Why not do the same in your every day life?  Set a daily budget be it $20 a day, $40 or whatever.  As you go throughout the day subtract in your head every time you buy a coffee, hit the vending machine, or take a cab home.  If you go over by $10 one day then next day’s budget is $10 less.  Or if you conserve on Thursday you are more than welcome to splurge on Friday.


Some folks make microbudgeting easy on themselves by leaving their house with their ID and the amount of their daily budget in cash.  No credit cards, no ATM cards.  When the cash is gone that’s it.  (Yeah yeah I know, what about emergencies?  Well doing this for a day or two isn’t going to kill you.  Before you do it, tell a coworker your plan and that if emergency breaks out you might need an emergency loan.)  Once you’ve weaned yourself off the plastic you can start carrying it again.


The key to budgeting is not writing it but sticking to it.  Sometimes trying to stick to a budget for a month is tough.  Try instead sticking to a budget for just a few hours and see how well you do.


The One Piece Of Financial Advice No One Ever Tells You


I have read close to 500 books on personal finance and investing.  I’ve written two books on that very subject.  But never have I come across the piece of advice I am about to give you now.  It wasn’t it any of the books I read.  It was never told to me but any of the money management experts I interviewed.  You won’t even find this piece of advice in my books. 




The advice is to save money for other peoples’ weddings.  I’d say I’ve blown an easy 10 grand on other peoples’ weddings.  I mean ya add the bachelor parties (from what I can remember) the tux rental if I was drafted to be in the wedding party (and I deliberately choose the word drafted) the airfare and hotels for destination weddings (those are brutal on the old wallet) and the gift (the cheap ones are always the first to go off the registry) I easily spent $10,000.  Women have it worse with dress purchases and the bridal shower.  (BTW someone write me back and tell me the TRUE difference between a bridal shower and bachelorette party.  Can’t we just combine them?)


But I never budgeted for a dime of it.  I knew to save for the big things like a car, a house, my retirement and perhaps my own wedding (though if Ivanka Trump ever returns my calls I won’t have to worry about that.)  But I never thought of saving for another person’s wedding.  Just one wedding is a small purchase so perhaps that is why you don’t think of it.  But add them all together and throw in a few Vegas bachelorette/bachelor parties and you’re spending a BMW lease payment every month on weddings (that are not yours!)


So if you are in late 20’s and early 30’s you want to put a little aside in the budget for other people’s perfect day, not just your own.  And perhaps part of that budget plan includes turning down a few offers.    


The Best Way To Budget…EVER

People often ask me, “Haven’t I ever seen your picture in the post office?”

But people also often ask me, “What is the best way to do my budget?”  “How do you budget Pete?”

First let me answer the last question.  I like to keep my budget simple.  Budgeting for me is more difficult than most since, as a self employed person I get paid in various amounts.  Sometimes payments can be MONTHS overdue so I really need to plan ahead. 

Basically I like to take the old “eat that frog” strategy and do the tough stuff first.  So once I had $10,000 saved up in an emergency account, I begin every year by maxing out my retirement accounts as quick as I can.  Then I think about large purchases that I might HAVE to buy that year.  (For instance, a few years ago, Old Pete, never the diligent flosser, spent a bit too much time with his dentist.  About $1500 too much time.  My dentist told me in advance of the beating, so I had time to plan ahead.) 

Also in this economy I have a rental property that falls about $100 a month short of its mortgage.  While I could budget to pay the $100 every month I prefer at the start of the year to pay the full $1200 into the operating account and not have to worry about it the rest of the year. 

I do this because come say…April-ish I’ve wiped out almost all my big expenses so for the most part I can spend money like a drunken sailor.  Not a “wild turkey” drunken sailor (because I still have bills to pay) but kinda like an Amstel light drunken sailor.  It’s easy for me to have fun since the big stuff is already out of the way.  If speeches/book sales/go go dancing doesn’t bring in the money I hoped well I have less fun for the year but I have paid myself first. 

So that’s how I do it.  Now onto the other question (not the post office question, the other question.)  What is the best way?  Quickbooks?  Mint.com (shame on me I have YET to check these dudes out.  Write back and tell me what you think of them.)  Excel?  The old yellow paper and pencil (typically also yellow?) 

The short answer is, and I mean this, do what works for you.  That is the BEST way to budget whatever your system is.  I like to get all my big problems out of the way.  Not only is it easy for me it relieves a lot of stress throughout the year.  But others especially when money is tight, really need to do something month to month or even week to week.  Whether that is a software program an online program or just on paper, create a system that works for you and STICK TO IT!