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Updated Join Pete the Planner in raising money for tornado victims

Published May 22, 2013

Join Pete the Planner in giving creatively. Let’s raise some money for the people of Oklahoma who have been affected by the recent tornados. Join Pacers fans around the country by committing to donating money, for each Pacers points scored tonight (5/22/13.) You choose from the commitments below, and together, we’ll send some much needed money to the people of Oklahoma (via the Red Cross). No funds will be collected by Pete the Planner. A link will be sent to all particpants so they can make their donations directly to the Red Cross.

To make it a bit more fun, I will give a $50 gift card and any of my books that you would like to one random participant.

We’re using the honor system

Join the fun and make your commitment!!

Update 8:34am 5/23/13: Together we raised over $11,000 for OK tornado disaster relief. If you’d like to donate too, go directly to the Red Cross Disaster Relief donation page.

Why do you need money?

Published May 21, 2013

Sometimes I don’t know why I write these types of blog posts. I don’t do it because I feel like I know more than other people. I don’t necessarily do it because of the copious amount of wine I may or may not be consuming. I think I do it because of the vast amount of financial situations I get to sift through on a regular basis. While I’m outwardly trying to assist people in making the best possible financial decisions, internally I’m asking myself very weird questions about the people I’m assisting. Don’t worry, I’m not wondering if they’d make a good skin suit or something. I’m wondering about what role money plays in their lives.

Over the years I’ve discovered there are four primary reasons why people need money. Sure, you can certainly take the boring, dumb view of this and say this is a stupid question. But we’re all better than that. Money is man-made. Mankind decided that we needed it, and we’ve decided they were right. Surprisingly enough though, we’ve evolved from this original decision, and individually, we need money for a few standard reasons.

1. To makeup for the past- You may currently have a very healthy, grounded view of money, but your past may not. Unfortunately, until your past obligations are satisfied, your past wins. These obligations come in many forms: debt, judgements, garnishments, collections, and even over-commitments to mortgages, student loans, and car loans. If you have ever said to yourself something like “I would never have paid this much for a house, if I had it to do all over again,” then you need money because of that past decision. As daunting as this realization is, it’s not the end of the world. Once you clear the past, then you can firmly form your money relationship with the present and the future. This should be your aim. Hell, it’s just how it works. It’s a process.

2. To fund a dream or lifestyle- I’m not hating the player, or the game. If you need money in order to fund a chosen lifestyle or dream, cool. You just need to make sure this doesn’t turn into funding your past. Have you always wanted to open a bakery? Awesome, use money to do this. And make me some donuts. Have you always wanted to live in NYC? Cool. Do it. Have you always wanted to send your kids to private school? Cool. Public schools are better, but cool. Half-kidding.

3. To fund a habit- Financially speaking, is a shopping habit any worse than a drug habit? Is a dining-out habit any worse than a drinking habit? Is an over-gifting habit any worse than a gambling habit? Again, financially speaking, I don’t think any of them are different from each other. Addiction is addiction. I’d love to tell you about the two worst clinically addicted individuals I’ve ever come across, but their spending habits make me uncontrollably sad. Seriously. Why is your insistence on spending money on something trivial, okay? It’s your money, feel free to do what you like. But the reality is that you need money because you have a jones for an item or experience that has taken ahold of your sensibility. This is why YOU need money.

4. It’s simply a byproduct of work- A job’s main purpose doesn’t have to be the generation of income. Income can simply be the byproduct of work. In my opinion, this renders money worthless. I believe this to be a good thing. I understand how weird this sounds. If you understand this, then you understand it. If you don’t, you have yet another reason to think I’m a jackass. There are some very centered individuals both objectively wealthy and not, that feel as though money is silly. I hope to get to this point in my life. It takes a tremendous commitment to cause and purpose to render money worthless. Wealth alone, even vast wealth, doesn’t get a person to this point. It’s a combination of reduced financial obligations, a purpose-driven life, and effortless frugality.

Why do you need money?

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An open letter to incoming college freshmen

Published May 17, 2013

Congratulations, you made it through high school. You cleared the first great hurdle and are ready to experience the most freedom you’ve ever had in your life. All of your older family and friends are equal parts jealous, excited and anxious for what this freedom might draw out of you.

It’s a beautiful thing, this freedom. The way you use it will help define who you are and who you will become in your personal, social and intellectual life (as you’ve probably heard repeated in the form of bad commencement speeches and Congrats Grad! Hallmark cards over the last two months). But this freedom will also begin to define your financial life as well.

You’ll be faced with a dangerous combination of limitless freedom and limited resources. The decisions you make at the beginning of your college career can help you establish behaviors that will either serve you well, or set you up for a life of overspending and scraping by.

So, no pressure.

Here’s a list of 10 tips that can help you start your college career off on the right financial foot.

1. Use your meal points! Go to club call outs! (Note the exclamation points)

Most schools have meal plans for the dining halls. Take advantage of these, and eat every meal there if possible. Because these plans are pre-paid and usually cover an entire semester, you’ll benefit from discounts associated with buying in bulk. Also, be smart about your points. Don’t buy that candy next to the register; you don’t need it.

Finally, attend as many club callouts as possible, even if you have no intention of joining. Club callouts often offer free food to attract as many students as possible. As an added bonus, you’ll also learn about student life options on campus.

2. If you have to eat out, be smart about it

If you have to eat out, don’t opt for lobster and steaks. Take advantage of cheap options like fast food dollar menus and sandwich shops. I recommend Jimmy John’s or your campus pizza place. A lot of restaurants offer huge discounts near finals; use those to your advantage, not as a reason to eat out.

3. Be smart about buying textbooks

You might have heard horror stories about escalating textbook costs. They’re all true. But there are some ways to be savvy about getting your textbooks without selling yourself short (or stealing). Ask friends who have taken the class if they needed the textbook. If they only used it sporadically, see if you can borrow the book from someone in class. If you do decide to buy the book, always buy used or see if you can set up an exchange with your friends. If you can shave a couple hundred dollars off your textbook budget each month, it will free up spending in other areas.

4. You don’t need a 42” 3D TV

Don’t splurge on dorm room items like TVs and sound systems; you’ll get by just fine without them. Chances are someone on your floor will have not read this column and will have purchased a behemoth television that becomes the envy of—and gathering place for—everyone on your floor. You can save all kinds of money by not being that person. Bring as many items from home as possible; you’ll fit in just fine.

5. Video games can be a black hole

It sounds like something your parents might tell you, but it’s true: Video games can be a dark place to go in college. Not only will you waste hundreds of dollars on systems and games, you’ll waste hours that can be used studying, going to class, being social, and generally being a real human being.

6. Student discounts are your best friend

Companies understand that college students are generally broke, but it doesn’t mean they don’t want your business. That’s why many stores offer discounts and deals if you show your student ID. Clothing stores offer percentages off and special deals; restaurants do “buy one get one free” promotions. Research what stores on and around campus offer these (second-year students will have figured out most of the best deals) and use them whenever needed. Also check back home when you return for holiday break—national chains sometimes offer them in all stores.

7. Keep an eye on your things

It may seem obvious, but students lose hundreds, if not thousands of dollars worth of items in college. When you’re running between classes and clubs, the gym and your residence hall, you’re bound to misplace something. Two items that often end up vanishing are student IDs and mail keys. The bad news is, replacements are always overly expensive, so be sure to keep a close eye on them.

8. Want something to do? Try the Union

Student unions often offer free or discounted entertainment for students ranging from movie screenings to bowling nights to touring bands and comedians. Why spend 15 bucks on a movie and popcorn when you can grab dinner at the dining hall (on your meal plan as discussed in our first point) and head to the union?

9. If you can’t make the game, sell your tickets.

If you buy tickets to your school’s sporting events but can’t make it, try your best to sell your tickets. There are always other students trying to find tickets, and you can really cut into the amount you lose or even make a profit on it, depending on the game. Market your for-sale tickets on student ticket exchanges or your class’s Facebook page to get the most exposure possible.

10. Don’t cause damages.

Another obvious one, but it happens more often than you think: Don’t punch holes in walls, trash the bathroom, or break your desk. If you need to let off some steam, go to the gym or call up a friend or play some video games (conflicting advice alert). Follow the rules and it will save you a lot of money and headaches. It’s not fun advice to follow, but then again, when is advice fun?

One last thing that should probably go without saying: Study hard and get involved, you are wasting 10s if not 100s of thousands of you and your parents dollars if you don’t take it seriously. Make the most of your newfound freedom, and be smart with your money. That is all.

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Sometimes your spending changes, and you don’t even realize it

Published May 14, 2013

This is Ted. He ruined our grocery budget.

I was reviewing our family spending over the last couple of months, and I noticed that our grocery budget is significantly higher than it was this time last year. I racked my brain to see what had changed. Sure, we had a new child, Ted, but there’s no way a baby could have that sort of impact on a grocery budget, especially since the formula days had passed. I was wrong. Ted is an eating machine. He eats extremely healthy food, but he eats a lot of it. It was time to make some budget changes.

Budget fluctuations can really sneak up on you, and put a major dent in your financial progress if they are ignored. I’ve seen couples ignore increased grocery spending, rising fuel costs, and increasing mortgage payments. This is bad. You shouldn’t assume that your “excess” income can absorb/handle the swelling expenses. This is inefficient. There are technically three options to consider when your expenses increase, and as you will see, one of the options is a terrible option.

1. Cut spending in other categories- Your income is finite. Your income isn’t necessarily going to rise just because your expense are rising. Let’s break this down to the simplest level. If your income was $5, and you spend $2/month on groceries, and $3/month on clothing costs, and your grocery spending increases to $2.50/month, then you must change your monthly clothing spending to $2.50/month. In my opinion, this is why monthly budget awareness is so important. If you see trends that indicate certain category spending has increased, then you must reduce spending in other categories so your trend doesn’t have long-lasting financial damage.

2. Reduce the amount of money you are saving- This is assuming you are saving (accumulating) money on a monthly basis. You should always budget your savings, not just save what’s leftover at the end of any given month. If your method of saving has always been the “save what’s leftover” method, then stop doing that. It’s silly. SPEND what’s leftover, not save what’s leftover. Save first. You will save a ton more money if you actually budget it.

3. Go into debt- Like I said, this isn’t really an option. But if you don’t adjust your spending or saving, then you are most likely going into debt. You wouldn’t believe the number of people I see go into debt without even realizing it. This starts when certain expenses creep up on you.

Ted will eventually eat more. And our grocery budget will continue to grow. Mrs. Planner and I must make a wise choice when we decide which way we should handle this spending increase. And you must make a wise choice anytime your spending starts to rise.

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Why giving yourself an allowance when you are in debt is stupid

Published May 7, 2013

I attended Eagle Creek Elementary School. It was a lovely place. I have very fond memories of my time there, even when Jessica Mink accidentally spilled water on my Walter Payton poster project. The orange paper-stock couldn’t handle the moisture. The ink ran. I ugly-cried in front of my entire fourth grade class. I forgave her late last year. I digress.

One of the most important lessons I learned at Eagle Creek Elementary was that pleasure should come after doing what you are expected to do, and not before. Allow me to explain. At Eagle Creek, you had to finish your entire lunch tray prior to becoming cookie eligible. It worked like this: once you ate all of your food, or hid it in your milk carton, you would show the teacher that your food was gone, and then you would be able to buy a cookie for $.10 or Wacky Cake for $.25. Like you, I don’t know what made the cake wacky. It was moderately wacky, at best. The point is that you had to take care of business (eat your lunch) prior to enjoying some of the finer things in life, like a institutionally-produced cookie or a cake of whack.

As a kid, I knew that this natural order of work and pleasure made sense. I didn’t like it, but I understood. And like the rest of my classmates, I vowed to disrupt this hierarchy as soon as I was given the chance to. I believe this principle is responsible for one my biggest financial pet peeves: the adult allowance in the face of debt.

Debt, as you might know, disrupts your present, and your future for that matter, if you don’t get it under control. Dealing with debt can be a frustrating process, especially when you’d rather enjoy the present. One of the most obvious signs I see which indicates someone is trying to enjoy the present, is the presence of an “allowance” line item in the budget. Whereas you might think having a budget is a good enough strategy to get you out of debt, premeditated irresponsibility via the adult allowance line item, is not good. In fact, a week doesn’t go by that I don’t see an adult in debt that refuses to stop spending money on random crap that pleases them, and justifies it by budgeting it as an allowance.

Don’t get me wrong, you always have the right to waste money. I’m not here to tell you how to spend your money, especially if you choose not to care about your financial life. However, if you want to improve your financial life and want to stop worrying about money, then I am here to tell you exactly how to spend your money. And spending your money on random crap, while you are in a debt, is a really bad idea. Even if you budget said crap.

Many couples assign allowance, fun money, or some other cute word for no-questions-asked discretionary spending. I personally don’t have a fun money account. It’s just not my style. Again, feel free to divvy up your joint income into individual pots, but I think it makes it harder to accomplish your financial goals. And the point of this entire post is that giving yourself fun money when you have any sort of debt, other than a mortgage, is really a bad idea. I’m not suggesting you don’t ever dine out, buy shoes, or go to a concert, I’m just suggesting that having a monthly excuse to make poor decisions seems like a really bad idea. It seems that way, because it is.

In my opinion, albeit a ridiculously expert one, allowances can work, but they never work when you are trying to get out of debt. You must eat your entire tray before you have the opportunity to purchase Wacky Cake.

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