The Belt :: Visualizing Weight Loss

I wear the same belt every single day. It's a dark brown belt, and it goes well with jeans and matches my Sunday shoes well enough that my wife doesn't complain. I've been wearing this belt for the past two or three years. Last week when I had to punch a new hole in it, I realized that it tells the story of my weight loss pretty well.


You can see indentations in the belt right before six of the holes. The left most hole is the one I punched last week. That's the under 215 pounds hole. It's the first time I've needed a hole there since I got the belt.

Six holes to the right you can see a faint indentation. That's from when I weighted 240 pounds.

If you were to plot the depth of the indentations, it seems that it would create a bell curve representing my efforts (and lack thereof!) over the years to lose weight. It seems that no matter what I try I always end up back in the 225-230 pound weight range, as witnessed by the two deep middle grooves.

The newest hole is actually a little more snug than I would like it to be. It's not painful and doesn't cut of my circulation, but if I start eating it's tight enough to trigger the loosen-your-belt signals in my brain.

This is intentional in my part of course. My stomach doesn't want to cooperate and tell me when I've had enough until I'm about ready to heave; my waist and belt are more willing to tell me when to quit.

I realize that this isn't a conventional or normal way to help limit eating, but I'm willing to do whatever works to get down to a healthy weight. 200 here I come!

What Does a Pay Stub Look Like?

How Much Do You Really Get From Your Paycheck?

What does a real world pay stub look like? When I finally started getting real paychecks, I was initially let down. I had very naively divided my salary by 24 pay periods and imagined all the cool stuff I was going to buy.

Reality is a bit of a letdown sometimes. I actually only end up with a little over half of my salary coming to me.

So, without further ado, here's my current pay stub (with certain data blanked out!)


Green is income, red is expenses.

At the top left, Salary is the amount I supposedly get each pay period (every two weeks). It works out to be about $50,000 per year.

At the bottom left is the amount that gets deposited into my bank account every two weeks.

43% of my salary doesn't end up in my pocket!

It would be difficult to argue with the taxes portion of the paycheck, but let's take a closer look at the section titled "Deductions From Gross" and "Non-taxable Company Items".

Deductions from Gross

Deductions from Gross are voluntary amounts I choose to have taken out of my paycheck. As much as it stinks to get that much less cash, there are good reasons to get those amounts removed.

Less Taxes:
These deductions are taken out before taxes are calculated. It appears that the taxes are about 15% of the taxable amount. If this is correct, then I pay about $100 less in taxes each pay period by deducting these amounts from my gross paycheck.

What are these accounts though?

Health Insurance - Employee:
This is a medical 'flex spend' or 'cafeteria plan' expense. We estimated how much we were going to spend on medical costs this year, and are having that amount removed from my pay over the course of the year. This account can be used for dental work, eye doctor visits and glasses, birth and related expenses etc. Since we knew we'd be having a c-section baby this year, we knew at least how much we'd be spending.

FSA:
This Flex Spend Account is for child care. Since I'm at work and my wife is at school, we needed someone to watch our kids for part of the day most days of the week. With this account we can pay for child care from our pre-tax money.

401(k):
We are currently putting in 15% of my gross salary into our 401(k). We'd like to retire well, so we've got to make sacrifices now.

Even though these deductions don't come home with me, two of the three are or will be used by me during this year.

Non-taxable Company Items

This is the section which shows non-salary benefits that the company is providing. It appears that they company is paying $306.07 per pay period for insurance for my family.

They match 100% of my 401(k) contributions, up to 3% of my salary. It's true then that I am not being matched completely with my 401(k) donations, but at least it's something.

Take Home Per Year

In all my excited imagining about how to spend my money, it turns out that I should have been thinking about taking home just less than $30,000 per year instead of the $50,000 gross salary figure.

So, if you just barely landed that dream job with the huge salary, don't make too many plans till you carefully review what you're actually bringing home each month.

Good Books In the Home

When I was a kid I liked to read. I would read almost anything I could get my hands on from Medical text books to Shakespeare to Alistair MacLean. I would peruse the local library, but most of the books I read were ones I found at home.



I've often wished that my parents would have had more classics on the shelves. The classics that are sited time and time again by professors, by lecturers and by insightful people everywhere.

While I don't yet know if my kids are going to be voracious readers, I've decided that I am going to at least make it possible for them to be if they so choose. In that vein, I've been stopping at the local thrift store every month or so and picking up any classics I come across. They are usually priced $0.50 or $1 for a paperback, $2 to $4 for a hardback. The average price comes out to about $1.00 per book.

JD over at the Get Rich Slowly blog is usually against buying more books than you will actually read, but I see these as an investment. If having lots of good books around increases the chance that my children will enjoy culture and a love reading, I'll make that investment and take the risk.

And just maybe I'll learn to enjoy reading again.

What am I worth?

The Value of a Soul...(or at least a warm body)

I am currently making $50,000/year. I applied for a new job today and will eventually have to tell them how much I'd like (assuming I get the position). What do I say? I am satisfied with my current salary. 50k is nothing to sneeze at, and with some basic money management skills we should do quite nicely as a family of four on this income.

On the other hand, what if I ask for 60k and get it? I don't want to come across as pretentious, cocky or greedy, but I would like to make as much as I can. An extra $10,000 a year would help nicely with our house buying goal.

Dispair..ity

Today after I had prepped my resume, I asked my colleague on the inside of this company if he would be able to give me a salary range I could expect. Through our conversation I discovered that he is making substantially less than I am currently -- probably in the $40,000 range. His skills are nearly as good as mine in some areas and better in others, and he's probably a harder worker.

He isn't, however, as assertive as I am. I'm not pushy or anything, but I know what I can do and I know what I want. If this company won't give it to me, I am blessed to be in the position that I can walk away from it. I'm not sure that my colleague could pull off the same thing.

If we were sharing salary info, he would know that he is being under paid, and could ask for a raise. On the other hand, if his request for a raise were turned down, and I were hired on at my current salary or higher, there might be a bit of animosity or bitterness between the two of us.

A Tradition of Secrecy

My dad has never told any of us what he makes each year. The closest I came to finding out was when I took the ACT test in high school. It asks for your parent's salary info during the registration, and when my dad said $100k+ I was amazed. To this day I have no idea how much more than that he makes. I expect I'll only find out when I have to handle the will.

I think that his attitude is typical and professional. I'm not completely convinced however that it's the best for everyone involved.

In Praise of Openness

In an open market place I would know what others are making, and I would be able to ask for a salary that isn't too far off the mark from what my peers are making. If I wanted more money than they are making, I would have to argue why I am a better value to the company than the other workers.

On the up side for me, I wouldn't know if I was getting what I am worth.

As an up side for the company, they could offer lower salaries, but then offer more performance bonuses.

In Praise of Closedness

Secretive salaries have many benefits for companies. For one thing, it is harder for competitors to poach employees. The competitor would have to offer enough extra money to be sure to pass the employee's current salary.

Another reason is that some workers aren't going to request enough money for their pay, and the company will get a good deal since the employee doesn't know that they are being undervalued.

Employees not knowing each other's salary provides less opportunities for disgruntlement between them.

Lastly, as a potentially valuable employee I know that I can request a larger salary because I know that they are saving money by not paying my colleague as much as he's worth. (Of course, I'll never know if I'm also getting low balled, just not as badly as him!)

Conclusion?

I'm still undecided about if I would rather have everyone's salaries out in the open.
Perhaps the best solution would be to publicize anonymous statistics so that the data is available, but that individuals won't know who to be bitter with.

Expensive Free Stuff

Once in a while you'll get hit with a present that costs money. Dogs are the classic example, and jokes abound about the price of 'free puppies'.

I just graduated, and was given a very nice $400 suit from my inlaws. A new suit though meant that I needed shoes that matched, which I didn't own.

So, last week we went and got some new shoes so that I can wear my suit to a job interview I hope to have next week. I ended up buying a pair of Rockport Wingtip shoes. That set us back $90 which we weren't expecting to spend this month.

On the up side, I now look super sharp (losing 20 pounds had an adverse affect on how my old suit fit), and I feel very confident walking into the interview next week. I also have a $380 net gain.

On the down side, a net gain doesn't help me much financially. It's something I wouldn't have bought myself, and it's not something I will ever derive direct financial value from. Granted, if I can get a higher salary at my new job, it will have had an effect, however my old suit may have been up to the task as well.

--

You may question my buying Rockports for $90 when there were other nice looking shoes in the $40-$60 range. The last pair of shoes I bought was a $50 pair of nice leather non-Rockport shoes. They lasted a week before the sole split from the uppers.

My last pair of rockports I got in 9th grade and I still have them and wear them. Even though there's not hope for them for formal use, they've held up superbly and I wear them to work.

Finding a House

A Newbies Guide to Not Understanding Buying a House

How do you go about buying a house? There's so much data out there that it's difficult to find information.

We would like to move and buy a house in January of next year. As we've started looking at housing, we've realized that there are a ton of things that real estate websites assume you already know. Unfortunately, we don't know them, and we're getting a crash course.

Our problem is made worse by the fact that some thing real estate sites think we should care about, we don't. For example, they want to know exactly what city you want to live in and have finely divided price ranges for searching.

We just want to move to a specific region of the country. Google says the area we would be happy moving to is a roughly 420 mile diameter circle. We're also pretty flexible on price. For the right house on the right lot we'd be happy to pay $300,000, but we've also seen $60,000 houses that we like just fine (in different cities).

These and other factors are making house searching a slightly cumbersome project! Below are some of the issues we've come across while house hunting.

Things We Don't (or didn't) Know

• How many square feet do we need? What does 2000 sq. feet mean? How big is that *really*? Some pictures of rooms and houses and their square footages would help us get in the ballpark here.
• How big is an acre? This lot has .2 arces. So what? City slickers like us don't uses acres till we're trying to buy land, so we have no notion of how big an acre is!
• What are the requirements for a First Time Homebuyer's loan?
  
• First Time Homebuyer programs have different limits on salary and housing cost based on the city or neighborhood the house is located in.
  
• Is it possible to buy a house in a neighborhood with a HOA (Home Owner's Association) and not join. (I hate all the rules...)
• How do we find jobs near the houses we like?
  

Things We Wish We Could Do

• Search for homes that would fall under the max first time homebuyer's program values
• Show homes in neighborhoods/cities where I would qualify for a first time homebuyer loan
• Filter houses by areas with HOAs
• Show homes for sale on a map with the local schools, parks and other features highlighted
• Find the prices for other similar houses nearby and in other neighborhoods
  
• Have links to the local chamber of commerce or city business listing websites next to houses

There's a lot more, and a general sense of being overwhelmed. I'm sure we'll find our way through the haze, but it'd be nice if there was more digestible information available online.

If any real estate company sees this post, please feel free to implement any and all ideas. I'd love to be your customer if you did.

Time is Money

Would You Pay $16.67 to See the Latest Simpsons Episode?

I hadn't planned on starting time management posts yet, but today I had an experience that made me say "doh!". Here for your enjoyment is a short story about how I paid $16.67 to watch The Simpsons online.


Hulu is Pretty Cool

We don't currently have a cable or satellite subscription, because we don't really have time to watch TV right now, and that $50 a month should be going towards our house down payment anyways. That doesn't mean we can't watch a lot of our favorite shows though. Hulu.com is a pretty cool site. You can watch all sorts of shows, current and old, as well as movies. We use it to keep up with The Office and a couple of other shows we like.

Consulting Makes For Extra Bucks

I've been doing some programming on the side to help increase our income, and for the job I am working on right now I get $25/hour. There's plenty of work to do, and I got up at 5:00 to get a start on it before heading in to my real job.

After I'd been programming for a couple of hours, I decided to head in early. Then I checked my email, read a few blogs, then decided to see what was new on Hulu.com. In a moment of weakness, my drive to go to work early disappeared...and I watched The Simpsons.

Of course my browser crashed part way through, and so the episode took almost 40 minutes to watch. That's 40 minutes I could have been either at work or doing consulting. 40/60*$25 = $16.67. On my way to work I started thinking about all the time I waste and realized that
I could be bringing home a lot more if I would just buckle down and work.

The Value of Time

How should I be balancing my time then? Different activities have different values of course, and spending all my time on the highest value thing would mean other important things would fall by the wayside.

My family is the most important to me (highest non-financial value). Working at my job makes me the most money (highest financial value). Spending time on either of those pursuits would usually give the highest returns to me (happiness or money). Relaxing is important too of course, but losing $16.67 in opportunity costs just to watch a mediocre episode of the Simpsons just doesn't make logical sense.

Improving My Time ROI

In order to make better use of my time, I've created a schedule for myself. I decided that during the week I will try to be more strict on my time usage, and that the weekends will remain unstructured for the time being.

Each of my time blocks are color coded to reflect why they are important and so I can see if I'm at least trying to live a balanced life.

The Personal Projects entry is orange and green because I have hope that a couple of my personal projects will eventually act as extra streams of income as well.


Tell me what you think about my schedule, and leave any stories you might have about time you've wasted and regretted.

Losing weight and making money

What do losing weight and managing money have to do with each other?

1. Well, for starters, unless you're a freegan or a self-sustaining farmer, you're paying for your food.
   

   We recently (March) noticed that we were spending about $500 per month on food. For a family of 4 in a reasonably priced part of the country, this is way more than what is needed.

2. Both require making and sticking with plans
   

   I have been aware of my increasing weight for several years. Between 2003 and 2008 my pants size increased from a 34 to a 36, and even that was starting to be a bit snug.
   

   Over Christmas holiday (2007) I stepped onto a scale and realized that I was up to 240 pounds. I committed to eat more healthily for the upcoming year, and the first several months of this year that was as firm as my commitment got. I ate less, and ate smaller portions but it wasn't until I also created a spreadsheet to track my progress that I was able to actually control myself and start losing significant weight.

3. Both are exercises in self discipline
   

   People, or at least me, are lazy. On our own, we will take the path of least resistance for most things. Controlling appetites is difficult weather you're trying to reign in a budget or a waist.

So now I'm down to 215 lbs from 240, and I am on track to reach my goal of 200 well before new years. I think these last 15 pounds are going to be harder than the first 25 though. I'm going to need to find some sort of regular exercise regimen to follow to burn off the fat.

For what it's worth, my weight loss plan thus far was mainly dietary. I now rarely snack late at night (when I'm programming), I try to drink more water, eat less meat and fatty stuff. I did play racquetball occasionally last semester, but 25 pounds worth of it.

Weight loss isn't fun. I hate passing up delicious food in order to become more healthy, but that's the way it is. I am already enjoying more mobility, more endurance and more fulfilling play time with the kids.

Our financial strategy

Goals
Before figuring out a financial strategy, we had to figure out our goals. Our goals are:

1. Live within our means
2. Pay off debts before they cost us interest
3. Save for a house, and for emergencies

Summary
Here's a high level summary of our specific strategy, based on those goals:

1. Pay off debts first
2. Keep money where it will earn as much interest as possible while remaining as accessible as needed
3. Use a budget to maximize the amount of money we can save

Implementation
And here is our specific implementation, as of May 15, 2008:

When we get a paycheck:

1. Put tithing and offerings (10% of paycheck + offerings) into checking (we pay with a check)
   
2. Pay off the balance on the credit card (also use funds from the Money Market account, if needed)
3. If it is the start of the month, put $600 for rent into the checking account
4. If there are any other bills, pay those
5. Put $100 "we don't accept credit cards" money into checking account
6. Put remaining money into the Money Market Account

Spending:

1. Pay with the credit card when possible
2. Remember that there is only $100 spendable in the checking account
3. For non-standard expenses (medical, tuition, etc.) which can't be paid with credit card, transfer needed funds from Money Market to checking.

Money Market Surplus:
When more than $500 accumulates in the Money Market account after paying all expenses, transfer that money to a higher yielding (but harder to access) account. We are currently putting our money into CDs, but we have been looking at high yield online accounts, such as ING's.


Results

1. We earn 1% back on Credit Card purchases
2. We earn 1.144% on the money sitting in our money market account
1. 1 & 2 together effectively create a 0% loan from the credit card which is paid off each pay period (bi-monthly).
3. We keep enough money liquid to pay expenses for each two week period. This reproduces the paycheck-to-paycheck feeling we've lived with for so long
4. Money we don't need immediately goes to higher earning accounts while being protected from our merciless spending

We have been operating with this strategy for the past two months (April, May) and have found it fairly efficient so far. We know how much we have to spend because we can compare our credit card balance to the amount in our money market account.

We will likely modify some of the details going forward, for example we are looking at options to maximize our 'extra' money. CDs aren't giving a very great interest rate right now. We will also consider getting a credit card with better rewards once we determine which one will be the best for us.

I like to eat

I like to eat. A lot.

My preference is to eat until I'm full, then continually top off for the next couple of hours while hanging out with friends and family. You know, like at thanksgiving time.

That eating style, along with being busy as a student and working full time (no time to excercise) left me at 240 pounds at the end of Christmas break in December 2007.

Recognizing that 240 pounds is too much for a 6 foot 3 inch guy, I looked around to see what I should be weighing, in order to be healthy. I know there are a lot of ways to calculate what's healthy, I ended up deciding to target a healthy Body Mass Index (BMI).

Using the handy calculator at http://www.nhlbisupport.com/bmi/, I found that I need to be below 200 pounds!

New Years being what it is, I decided to try to lose 40 pounds by next new years. That is:

• I will weight 200 pounds by December 31, 2008

As a non-specific sub goal, I'd like to be more active and live a more healthy lifestyle. Don't get me wrong, there's little I enjoy more than a good solid meal at a churrascaria, but I don't want to be obese anymore.

Later this week I will outline my weight loss plan, and how it relates to finances.

Background: An overview of our current accounts

We have several accounts which we use to our benefit. Our main bank is the local credit union. Their service is excellent, and their rates are good. The real benefit for us though is the one-stop web page where we can manage (almost) all our accounts at once.

Our accounts at the credit union, their balances [amount] and the interest they earn (interest%,APY%):

1. Savings Account [$0], (0.797%, 0.80%)
2. Money Market Account [$2,308.40], (1.144%/1.15%)
3. Checking Account [$765.02], (0%,0%)
4. CD [$6,051.83], (3.057 %3.10 %)
5. Credit Card [$1,671.80], (11%?)
   

We also have an account at Wells Fargo. We keep it open only because the credit card there has been open for about three years longer than our other credit card, and we don't want to jeopardize our credit score till we've secured our house loan. Our accounts at Wells Fargo:

1. Checking Account [$100.08], (0%,0%)
2. Credit Card [$0],(21%?)
   

Other money we have includes about $150 in super emergency cash tucked away at home, a couple of savings bonds in our children's names and a plastic pig full of change.

You may have noticed that in the previous post I said we don't carry a balance on our credit card, yet there are over $1500 of charges on it at the moment.

On Tuesday I'll go over our current financial strategy and show you why.

Background: Our life situation

I believe that money advice and information is more useful if you have a frame of reference when considering the advice. All advice isn't good advice, and not all good advice applies to everyone at the time they hear the advice.

Here's our life situation

• I just barely graduated and am working full time.
• My wife is getting her MBA.
• We have two young kids (both under 3).
• We rent an apartment, but are planning on buying a house in the next 18 months.
• We have about three years of car payments remaining, at zero percent interest.
• We will have to start paying interest on student loans in June 2009. (About $6000 total in loans)
  
• We don't carry a balance on our Credit Cards
• My work has a 401(k) plan with matching up to 3% of my salary (Salary: $50,000/yr + bonuses)
  
• My wife and I both have minor money making hobbies (no dependable income, probably a total of several thousand extra dollars a year)
• We believe in the law of tithing, and pay 10% of all our income to our church, as well as other offerings from time to time.
  

We are a deeply religious family, but I will try my hardest not to be a zealot or to push religious views too heavily in this blog. If you are offended by the mentioning of religion in a financial blog, you have several options:

1. This is the Internet, and you are free to find another site to visit
2. Realize that not everyone is just like you, and that we can agree on some things and disagree on others
3. Every time I mention faith, blessings or the likes, do a mental search and replace and say belief and luck instead
   

I've got friends with all sorts of beliefs including Zoroastrian, Jewish, Mormon, Baptist, Catholic, Spiritist, Agnostic, Athiest and more. What we have in common brings us together as friends, what is different provides variety in our lives.

Tomorrow: An overview of our current accounts