wantmoreinlife's posterous

OK, so maybe the title of this post is a little exagerrated. Of course you can always be fired from a job, relationship, pro bono work, church committee, etc. but if you do these two things, I think you lower your odds by 90%.

1. Manage expectations. If you can manage internal and external expectations on any project or assignment, you can build a relationship with co workers, clients, your partner/spouse.

2. ABC. You probably remember "Always Be Closing" but this is "Always Be Creative." When I hear clients talk about past business relationships, it typically has one common denominator- they were not getting enough ideas.

Number 1 is fairly simple. If you plan, communicate throughout an entire process, and communicate results, you will be effective. Essentially do not go dark on the person you are trying to build a relationship with. If you see a problem coming, notify them. Be honest, be open, and be forward-thinking.

Number 2 is such a stress for people because they say "they are not creative." Creative does not mean you can draw, paint, write, play a musical instrument or even carry a tune. So often we go back to elementary school with the definition of creativity and the reality is you just need to be a problem solver. When you hear a problem, try to solve it multiple ways. Parents do this with their children all the time. Lily (our daughter) sometimes refuses to eat so we ask her to show us her muscles (which she always is happy to do). If she takes a bite, we say "wow I see your muscles getting bigger" so more often than not she takes another bite. It is just a creative solution to the problem.

There are probably many things that stem from these two items but, at the core, these should help you build long lasting personal and professional relationships.

Within the last few months, a family friend for 20+ years had his wife pass away. A truly beautiful woman in every sense of the word. A kind, gentle heart that several times went out of her way for my family and others. When she passed, at least a thousand people came to the rememberance and I had the privilege of sitting with the family.

Today I called that friend of the family for the first time since the rememberance. It has been 3-4 months and I have been in town a couple times since. Each time I drive past their home I think about stopping and always say "I will do it later." Later never comes and as I leave to head back to Tallahassee I feel awful each time for my lack of action.

The reality is I have a terrible time in those situations. I am not sure anyone "excels" in times of other people's pain but I know plenty of people that are the type that bring food each week, stop by for a chat, or give a simple phone call. I do none of the above. It's not that I do not want to, I envy those people. Today's call was the first step in that direction.

The call was a little awkward- I explained why I called probably 7-10 times. I used the phrase "I was thinking about you" over and over again and decided to talk about Dave Ramsey of all things when we discussed what we had been up to. Battling a mound of debt seems a little insignificant when it comes to coping with the loss of your best friend and soul mate.

When faced with moments of action, I always try and think of my children and how I want them to grow up and act. Its amazing because at my daughter's age (almost 3) when she sees pain, she is persistent and does not forget to ask about it for hours and sometimes remembers days.  Maybe instead of me thinking of how they will act in the future, I need to try and be a little more like them now.

Project management is truly the offensive line of most fields. If you are not sure what I am talking about with the correlation, the offensive line in football has long been heralded as the "no fame" guys and only get their name called when something goes wrong like a holding call on a touchdown. In most organizations, you have a role that talks to the client, a role(s) that does that work, and- in the middle- is a project mananger. Talking to the client always gets love- client's pay bills. People that build things always get an "attaboy" because they have skills no one else does. But a project manager, a lot of people feel as though they can be plugged in with anyone and great work will just keep on being produced. I am not one of these folks.

If you look at the the PMI website and definitions of project management, you will see several other roles but I find these most crucial:

1. Protect your resources. In my world the resource you are protecting is a designer or programmer from having to read endless emails to figure out what to do. When is a designer is deciphering a confusing email, they are not designing which is what they get paid to do. Plus, it kills their creativity and inspiration.

2. Manage resource workload. Four things cannot be due at the same time. Something has to give or another designer or programmer need to get involved to help accomplish the task. Often problems like this can be avoided at the beginning by taking a look around at what is going on with other projects.

3. Plan projects on budget and within a deadline. A long standing dilemma in project management has been you can have something two of threee ways- good, cheap, and fast. Take your pick of two because all three cannot happen.

From a personal finance perspective does this sound familiar? What about your own job? These three principles go deeper than just a job criteria, they go for solid life planning.

Since Lindsey and I are going through the short sale process I figured I would finally do a post about it. When we made the decision to short sale the Orlando home, I did some research and had a hard time really finding any stories of people that had gone through it. It seemed when people go through a short sale it is kind of like when someone goes off to serve their country- they just rarely talk about it.

My only guess is shame (and no I do not mean if you serve you have shame). For the most part, your pride takes a tremendous hit. I went through this. I had a 780 credit score at one point in time, always knew my credit would be there for my family, and never paid a bill late. Well...maybe a couple, but it was always an online bill pay coming in a day or two late, etc. I also was always raised to pay my bills and had model parents for finances. So, making a decision to let go was difficult. It was almost like not being yourself anymore and in the eyes of every person that wants to loan you money, you now are no longer a minority but you are the majority of borrowers.

There is another emotion you have in the process that is tied to your home. Your home is no longer a home- it is an investment. All the feelings and memories get trumped by dollars, cents, and sense. A hard thing to do. In our case, we brought our daughter home from hospital there and had dreams of watching the kids play in the pool. We had these feelings even though we have not lived in the home for 3 years. I could not imagine what it is like for a family living in a house and making the decision to throw in the towel.

If you are ridiculously upside down in a house (in our case $150,000), struggling to stay afloat each month, and are considering a short sale opportunity, know the emotion that is going to come at you. There is a reason why you may not read a lot of stories about the process online.

But there is a silver lining and I will talk about that in the next post.

Last month our power bill hit a total of $475 of which $135 was a loan for the air conditioner. In other words roughly $340 for the power bill. Living in Tallahassee, we pay for sewer, water, gas, and various other expenses in this bill so it is not 100% electricity. BTW, sewer is about $45-$50 a month.

We have a programmable thermostat and our air conditioning habits were as follows:

8AM Wake up: 72 degrees

10AM Leave: 75 degrees

6PM Come Home: 72 degrees

7:30PM Sleep: 69 degrees

For this last bill I changed the thermostat to:

7AM Wake up: 72 degrees

9AM Leave: 76 degrees

6PM Come Home: 73 degrees

7:30PM Sleep: 69 degrees

We saw a $50 reduction in the electricity bill. Yes, I know 69 degrees is bone chilling to some but it is a norm here at the Thompson household.

For the record, I do not have the ability to hire people but I do have the abilty to send a potential candidate to someone that does. I have now forwarded and interviewed two people that I found on Twitter for employment. One I wish we had hired but the timing was off and another we did. When it comes to what I deem invaluable in a new employee, here is my list:

1. Loyalty. I deeply believe if someone has already proven themselves to be loyal as a vendor, intern, etc. then they will make a great hire.

2. Drive. You must be be able to show you can do something above and beyond. Typically anyone that talks in social media about more than personal tasks and comments about the world with insight, fit this bill.

3. Dependability. This is a hard one in an interview but is closely aligned to loyalty. I normally talk about people that would recommend the interviewee  and why to try and figure this piece out.

4. Create. I am impressed with people that create content in any form. If you have a meaningful blog, can have a good thought in 140 characters, or start your own Facebook member page, I am impressed. Pumping out content is hard enough but striving for meaningful content when no one pays you is impressive.

And as an interviewer, you need to dig deep. I recently saw an image of someone that tweeted to a social media company to hire them. Clever. So, I decided to look at her newly started blog and this is how the first post I saw began- "While Dennis is at the store getting me Tampons (LOL), I thought I would take a minute to write a quick update."

"A" for effort but once you dig a little past the Twitter feed you question the content.

I am almost 33 years old and have bought 3 homes. I bought my first home pre boom, my second on the tail-end of the boom, and my third at pretty much rock bottom. I have never put more than 5% down at a closing, financed almost every penny, and have even done improvements at the sake of putting down more on a house to appease aesthetics. Here is all I have learned:

1. The mortgage broker has all the power. This person controls closing costs, your payment, and your ability to even borrow. 90% of all costs are affected by the mortgage rate. And with all this power, most likely the mortgage broker is just trying to beat the quote you last received. If you tell them you have a quote for 5%, they will get you 4.95%.

2. Don't buy the first house you see. I have done this twice. One time it was a blessing, the other is a nightmare.

3. Don't get sucked into the "Ohh it is just another $50 a month" routine. This is pretty easy because you are looking at a 30 year mortgage (15 if you follow Dave Ramsey's teachings), a payment of let's say $1,500 and say "what's another $50 a month?" $50 a month is most likely around an extra $5000-$8000 dollars on the purchase price. But spread that $50 out over 30 years and you are actually paying $18,000 after interest.

4. Cash is king. If you haven't picked up from this blog yet then read more blog posts:) Cash will help your rate, conrol your payment, help when taxes go up, help you enjoy your new purchase, etc.

5. Save for at least 25% down on the house. Not only does this help you avoid PMI (private mortgage insurance that actually is required for houses with less than 20% down) it also proves to yourself that you are ready for a home purchase. Crap breaks. Already since I have owned this house I needed a new AC and new duct work for the sweet price of $10,000.

6. Think 10 years out. Man, we NEVER did this. Will you have kids? Will one of you might want to stay home from work? Do you really like your job now? Do you work for a company that has a history of laying people off? If you had to get a new job and have a 20% over entry level salary, what mortage could you afford? 30%? 40%? You get the idea. Think of every possible bad news scenario and think in terms of the house you want to purchase. For example, it may have a pool- do you need a pool service? Can you cash flow pumps breaking? You name it, it may happen. Plan for it.

7. Factor in gas. When I bought my first home, gas was $1.50 or so a gallon. It really was a non factor in a monthly budget but as it went to $3.00 or $3.50 it became a huge budget item. I remember driving all over Orlando for work and it really cut into my take home pay. If you live far from work, think about what an extra $1.00 a gallon would mean to a monthly budget.

8. Don't let beauty overshadow what a house really it is- shelter. Although it is great to have a nice house, it really is shelter and a place to sleep where you have to take care of the bug problem. Don't start a laundry list of changes before you buy the house. If you have a list, probably you should not purchase.

I want to start providing a recap each month on how we did with our financial journey. Here goes June...

THE GOOD

1. We saved $300 a month on health insurance by signing up for a high deductible plan for the family and have plans on opeing an HSA. The HSA will be fully funded August 1. Feel free to read on the HSA move.

2. We no longer have car payments. This eliminated $320 a month from debt and an overall $13,000 since we started in February helped knock this out.

3. We wrote down where out money should go (AKA a budget) June 1 and never missed a beat. In fact, we ended the month somewhere around $50 under budget.

4. We received an offer on our home in Orlando and the bank and prospective buyer duked it out. Though we just got word on July 1 that it appears the house is going to be sold short-sale style, this can count as June since thos ofer started in that month. This will save about $190 a month and about 1000 times that much on our net worth.

THE BAD

1. We got a little sloppy at the end of the month. We could have been about $100 under budget but we started to get a little happy with the spending.

2. June was to be the first month with no check cards and that lasted 8 days. I had a couple business trips to go on and needed my card and just left it in my wallet. Overall, less than $40 was spent on check cards that was unplanned.

THE UGLY

1. We had to buy a new alternator for Lindsey's car. $550 hit but we paid cash and had received $500 unplanned money for a commission so really no harm, no foul.

If you have a family, you probably gave it on this quest. If you are single, you probably have no idea about what life is like when you have kids. Healthcare ain't cheap. I am fortunate that my employer pays for myself and, thanks to becoming part of a large corporation, my family's cost went down this year. However, the cost was still $650 a month.

We are a pretty healthy family. Lindsey has taken this year to basically become a model and run in 5K, 10Ks, and in October her first half marathon. Luckily we are blessed with healthy children and I, despite being probably 40-50 pounds overweight, am keeping it together. We go to the doctor for regular annual checkups and that is about all.

Thanks to Dave Ramsey, I started loking at Health Savings Account (HSA). Basically here is how it works-

STEP 1: you must have a high deductible insurance plan which is a minimum of $1,200 if you are single and $2,400 if you are a family. In our case, I had to shop around and leave my employer's plan for my family and I stayed on for myself since they pay. This may be scary because that means you need are going to be leaving $10 co-pays for the most part and will be picking up medical expenses on your own up to your deductible. BUT, hear me out before you bail...

I got three quotes from BCBS:

$3,000 deductible- $480 a month premium for all of us, minus me = $340

$5,000 deductible- $372 a month premium for all of us, minus me = $276

$10,000 deductible- $268 a month premium for all of us, minus me = $190

As you can, the monthly savings will range from $310 to $460 a month. It isn't all puppy dogs and ice creams yet because what happens in the situation of disaster and we need to go to the hospital? See step two.

STEP 2: Open an HSA. An HSA will allow a family to contribute close to $6,000 per year to an account that grows tax free much like a 401K or mutual fund. The difference is that this can only be used for health related circumstances, not a new car. These things have some advantages:

1. It grows tax free and they grow in some of the same options you hve with a 401K (specific funds may vary but the premise is the same).

2. There is no "use it or lose" it. It rolls over each year.

3. Contributions are tax deductible.

So remember the money I am saving in step one? Time to put it to use. Instead of taking $310 (most likely I am choosing the $3,000 deductible) and having a shopping spree each month, I need to get prepared. Remember that deductible? Well, at $3,000 that means we need to go about 10 months before we have enough money to cover the deductible in the event of something bad happening.

QUESTION: What if something bad happens in 5 months? Well, at that point I would only have half of the deductible saved up in my HSA to help. Basically, I would have to set up a payment plan with the hospital. I admit, we are racing a little bit against the clock to get that money in the HSA so we are prepared.

There are a ton of advantages to the plan I outlined above but I wanted to ease some other concerns:

1. Our doctors are in network. That means, regular trips for preventative care are covered for FREE on the plan and we do not have to change from the doctors we already like.

2. Prescriptions have some relief but not as much as my employer plan. The good news is that those qualify as expenses towards your deducitble.

I recommend definitely taking a look. An HSA is a great way to prepare for the future and as you have more money in your HSA, you can increase your deductible and save on monthly expenses.

More to come as I venture down this path but as of August 1, we are off and flying.