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Joe is a former financial advisor and media representative for American Express and Ameriprise. He was the “Money Man” at Detroit television WXYZ-TV, appearing twice weekly. He’s also appeared in Bride, Best Life, and Child magazines, the Los Angeles Times, Chicago Sun-Times, Detroit News and Baltimore Sun newspapers and numerous other media outlets.  Joe holds B.A Degrees from The Citadel and Michigan State University. 

What Did We Learn in 2012? (…and a look forward into 2013): Two Guys and Your Money Episode 24:

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Have shows come automatically to your iPod! Use the 2 Guys iTunes page here.

Listen to shows on your smartphone! Try the Stitcher app here.

 

Here’s the perfect way to end 2012: one last episode of Two Guys & Your Money!

If you’re interested in making more OR saving more in 2013, we’ve got you covered in this episode. Our mission this week was to ask the question: What should we have learned in 2012?

Big thanks to Laurie Ruettiman of The Cynical Girl fame, as well as Ornella Grosz (Moneylicious), Paula Pant (Afford Anything), Lance (Money Life & More), as well as our usual team of PK (DQYDJ.net), Dominique Brown (Your Finances Simplified) and Barbara Friedberg (Barbara Friedberg Personal Finance).

 

Show Notes:

<> Top 10 Dumbest Financial Stories of 2012

<> Laurie Ruettiman: What should we have learned about work in 2012?

<> PK:  2012 highlights

<> Ornella Grosz

<> Paula Pant

<> Lance: Money Life & More

<> Barbara Friedberg

And:

<> Dominique Brown

<> Top 5 Things OG & Joe learned in 2012

<> Movies: OG: Jack Reacher, Joe: Playbook Silver Lining

 

Post-Holiday Distress: Did You Spend Too Much?

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Stop. Take a deep breath. That feeling of dread? It’s just the holiday spirit leaving your body with each passing breath. It’s your own fault… everyone knows not to look at the receipts on the day after!

If you were smart, you planned ahead. You created a holiday account at the beginning of the year so by the time November rolled around, you had cash on hand for cherry-picking the best deals.

If you were smart, you stuck to your budget and didn’t let stress, competition, irresistible deals, or last-minute price hikes to knock you off your plan. You made a list of people and charities you wanted to recognize, set a price per gift, stuck to your list, and got your shopping done early.

That’s if you were smart.

But if your candy cane and cookie euphoria is dissipating with every thought of your credit card statement, you’re not alone. It’s engrained in our culture: Thanksgiving is to overeating as Christmas is to overspending – lavish spending you’d never consider otherwise.

The pressure to GIVE is powerful; our senses may leave us entirely. When we shop, we anticipate the warm embrace and feeling of joy WE create when a gift is received. It’s awfully noble. But if you’re like me, today is the day you watch your kids and realize just how little use your gift will get (I will never buy a robotic pet again!).

So what’s next?

Budgets are fluid. They require constant reevaluation. If you overspent, it’s time to reconsider your budget for the coming months. You won’t be able to see any viable options without a clear picture. If you didn’t before, go back and write down what you spent.

Chances are, it’ll make you feel better. You’ll realize that, while you had a bad month for your budget, you aren’t completely out in the cold. Because, you see, most of the year… You were smart.

If you’re not feeling better, take solace knowing that it’s possible to mount a comeback.

A few years back, holiday spending tipped my credit card balances over the edge. I wasn’t smart. I thought I was – it makes sense to open up store credit cards to save 10%, right? Wrong. It wasn’t until too late that I realized I wouldn’t be able to make the minimum payments on so many cards.

I knew enough to see that with accumulating interest, everything I could afford to pay towards my various credit card bills would be going straight into the creditors’ pockets while my debt level remaind constant. Classic debt spiral.

What did I do? Consolidate. Debt consolidation sounds ominous, but it’s far worse for your credit to fall behind on payments. You can take advantage of low interest rates on balance transfers and merge your debt to one account, or seek a consolidation loan to pay off your principal balances. If you have good credit history, you may be able to achieve a lower interest payment or a longer payment period. Managable. You can handle that.

The moral of the story? I’ll say it again:

Stop. Take a breath. Enjoy what’s left of the holidays. You’ve got options.

Photo: TopGold

Thanks to Jennifer Willard for taking over the blog responsibilities today while Joe & OG search for more egg nog. Jennifer has a new blog, Crayons & Coins. She also writes for Credit Guard, a non-profit debt counseling company.

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Holiday Games and Finance: What Can the Game “Dominion” Teach You About Money?

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While Joe’s playing Dominion with his sister, brother in law and spouse (we all l.o.v.e. this game at our house), Erin Shanendoah of The Dog Ate My Wallet fame holds down the fort at the blog. Hope you’re enjoying some quality family time like we are!

Dominion is hands down the favorite game in our house. Set up is minimal, and you can get through a 2 player game in as little as 10 minutes if both the players know the cards. Every game is different, which means that players need to be open to different kinds of strategies if they want a chance at winning.

Even forgetting that you have money within the game (copper, silver, gold & platinum(in the expansions)), you can learn a lot about finances from Dominion.

Every game is different. Just like every person’s financial situation is different. Because of this, there is no one strategy works for every game of Dominion, and there is no one size fits all solution to personal finance. You have to look at the cards that have been  dealt and figure out the best plan for this game, this situation. Only by responding to the uniqueness of each situation can you hope to consistently do well.

Multiple strategies can be viable options. My husband and roommate both love playing games, and for the most play well together. But they have different outlooks on life and will often see the exact same set of cards and come up with two completely different ways to win. They each go with the strategy that they are the most comfortable with.

Just because someone has a similar financial situation to you does not mean you have to both take the same financial strategy. Find what works for you and what you’re comfortable with, and you’ll have a much greater chance of “winning”.

Diversity is good. Too much is not. Currently, there is the base set and 7 expansions for Dominion. While you can play with as many expansions as you want, we’ve found the best games are limited to 3 sets- usually the base plus two expansions. 3 sets gives you lots of options, but you don’t lose the synergy between cards.

Diversifying your holdings financially helps mitigate your risk, but if you diversify too much, you lose the power of “buying in bulk” so to speak. (Average Joe and The Other Guy can both speak about this much more eloquently than me.)

Sometimes you just need more money. Other times, you need your money to work harder for you. Within Dominion, you use money to buy other cards. You can buy more money, action cards, or victory point cards. Sometimes, the best strategy is to use your money to buy more money, especially in the early stages of the game. But later, you’ll want to use that money to buy action cards. Those cards allow you to advance your strategy, hinder the strategy of others, and sometimes even buy the highest value victory card, even though you started the hand with only 2 coppers.

Early on in your life, often the best solution to money problems is just to get more–go out and work a second job, find a way to earn passive income, etc. But once you get to the point where you’re not struggling to pay the bills, you need your money to work for you. By making smart moves with your money, you can open new doors for yourself or your family, and eventually “win” the game by having a comfortable retirement. (I do hope that in real life, you won’t use your money to hinder others. That should be a game strategy only.)

Just sitting on money can slow you down. One might think the one strategy in Dominion that would work in every game would be to use your money to buy more money until you had enough to buy victory cards, and just keep doing that. It doesn’t work. While you obviously need victory cards to win the game, they don’t do anything else. You can’t spend them. You can’t take an action from them (well, in some expansions there are victory cards that have actions, but those are very special cases). Instead, they just take up valuable space in your hand and do nothing, slowing you down.

While sometimes it seems the safest way to save money is just to stick it in the recliner and sit on it, your money can’t grow that way. It can’t actually do anything for you. It’s a strategy that just slows you down.

The cards aren’t always your friends. There are good cards and bad cards in Dominion. There are cards that are good for the person who plays them and awful for others. There are thieve and militias, there are curses and witches. You can be forced to destroy your victory point cards or have a platinum stolen by the player to your left. Sometimes, you just get negative victory points. In order to win, you have to have a strategy to weather or eliminate the bad.

Bad things happen in real life. You need to have the tools to survive them. Sometimes it’s just in making smart decisions and protecting yourself. Getting yourself out of debt and carrying the right kinds and amounts of insurance can also protect you against the vagaries of the world.

Luck always plays a role, but it’s not everything. Because every player of every game of Dominion starts out with the exact same 10 cards, and a five card hand, there’s a limited number of opening hands you can have. But which one you get and how well it works for that particular game, is all a matter of luck. If two good strategies are going against each other, it’s really just going to be luck that decides the winner of the game. But it’s very rare for a well thought out strategy to lose to no strategy at all. Just depending on luck isn’t likely to win the game.

Some people start life luckier than others. Some people get lucky later on. And some people make their own luck by coming up with a well thought out strategy. And in life, it’s not really going to matter if you retire with $2 million while your buddy is ending with $2.1 million. You’ve both “won”.

Don’t forget to have fun. Dominion is a game. The husband and roommate are both competitive people and love to win. I care much more about enjoying the game. But I can’t enjoy the game if I feel ineffective. I will enjoy myself just as much putting together a strategy that comes “this close” to winning as I will winning the game. I will even enjoy a failed strategy if I find a single good combination within it.

How much money you die with matters only to the people you leave it too. You can’t use it anymore. Don’t put your life on hold just to reach some arbitrary savings goal. If you never take vacation until you’re 75 years old, are you going to be able to climb the island stairs at Tintagel? Yes, you want to save for the future and make sure you have enough to retire in comfort, but there’s no counting up victory cards at the end of your life, declaring you the “winner”, so make sure you have some fun along the way.

Two Guys & Your Money 023: Better Work? Quality Trips to the Grocery Store?

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Have shows come automatically to your iPod! Use the 2 Guys iTunes page here.

Listen to shows on your smartphone! Try the Stitcher app here.


I know what you’re thinking…you guys have been doing this for at least eight months….isn’t it time for a Best Of episode?

Your prayers have been answered.

Because both OG and I are “out of the office” for the next several days, we’re giving you the best gift ever: listening to our early episodes while we were still getting the hang of podcasting. I know. You are so welcome.

 

Show Notes

<> Open

<> Our favorite early interview: Julie Clow, author of The Work Revolution

<> Our favorite PK piece: which funds to remove first to spend?

<> Our favorite roundtable piece:

<> Our favorite Top 5:

TODAY is your last chance to enter our Mommy Millionaire giveaway. No, we’re not giving away a mommy millionaire. We’re giving away the book (just to clear up any ambiguity).

<> Favorite holiday movies:  OG: Elf  Joe: Christmas Vacation

 

Budget Nightmares: What Are You Doing At 2 A.M.?

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When I left The Citadel (go Bulldogs!) to attend Michigan State (go Spartans!), I said goodbye to a lucrative track and cross country scholarship. I felt bad, but the writing was on the proverbial wall. My coach had given me “one more year” to run better at the end of year one, and I promptly pulled a quadricep muscle early into the fall campaign. I’d been a guy they thought was a (quoting the coach), “Diamond in the rough” anyway. Turns out I was pretty much just rough.

Immediately, I had money problems. My parents couldn’t afford to pay for MSU. I had this general notion that financial aid would cover everything. Imagine my bitterness  when I found out that my dad made too much money to qualify for any need-based aid.  My loan package quickly swelled as my first course of action was to get through school quickly. When I realized what a mess these loans would be, I made the tough decision to become a part time student working three jobs.

Here’s how I made that decision:

During one of my money woes, I tuned in to my favorite late night money talk show hosts on the radio: a guy named Bruce Williams. He sounded like that knowledgeable grandfather who’d give you either an arm around your shoulder or a swift kick in the butt. Maybe listening to him was the idea behind our podcast….I don’t know.

One night, drowning in my own debt and hopeless money situation, I heard a woman call in to the show. She and her husband both worked hard, but they weren’t making ends meet. Bills continually piled up and their reserves dwindled.

“What are you doing at 2 a.m.?” Bruce asked.

The woman stuttered. “What do you mean? We’re sleeping!”

“Why are you sleeping at 2 a.m. when your bills are getting further and further behind?”

The woman quickly answered, “We need all the sleep we can get so we work well at our job in the morning.”

Bruce sighed. “So you’re saying you need your job worse than your house and car? Then why don’t you sell your house or car?”

“I can’t sell my house or my car. Then I wouldn’t have any place to live!”

“My point exactly,” he said. “So, if you like your house and your car, what are you doing at 2 a.m.?”

“What are you getting at? I can’t do more than I’m doing.”

The radio host laughed. He had this chuckle that always sounded a little sad. “What I’m getting at is that you have serious money problems, but you don’t want to change anything. If you’re serious about solving your money problems, you’ll get a night job too, or you’ll find ways to make more money at your day job.”

The woman quickly interjected, “We’re both at the top of our pay scale. That’s why we need to hold on to these jobs.”

“You aren’t listening,” Bruce said. It was one of the few times I’ve ever heard him turning angry on the show. “You can’t work like you do, eat like you do and sleep like you do AND expect something to change.”

Unbelievably, she ranted at him. “I can’t believe this. I call you for serious advice and all you do is blame my job, blame my house, and blame me. We’re doing everything we can do and it isn’t getting any better.”

…and she hung up on him!

Maybe she wasn’t listening, but I sure was. I became a substitute paper boy and redoubled my efforts to advertise my disc jockey service better. I went around to fraternity houses and spoke directly with the social chairmen. I made mixed tapes with some cassettes I had laying around and brought them with me (that dates me, huh? I’m glad I didn’t say reel-to-reel tapes….). Later, I found out that my tapes were a hit around the school. More than that, extra money started to trickle into my hands, and my view of my financial situation changed.

 

Here’s what I learned:

  1. I’m in charge of my financial destiny.
  2. Sleep is overrated when you’re in over your head.
  3. Financial planning is easy. It’s either an income problem or an expense problem. If you can’t fix one, you have to fix the other by default or the plan won’t work.

If you’re reading this because you’re in broke week (a term coined by my friend Michelle over at See Debt Run), you can either fix it once today and have to fix it again next month, or you can change your money earning skills or spending habits. For short term needs, you could borrow cash, but remember that this isn’t the final solution: it’s duct tape until you’re able to get on your feet.

While we’re talking about duct tape on your financial situation, how about a cool $100 cash or Amazon money? Would that help you avoid your long term plan for a few more days? Ha! Maybe you can use it to buy a radio that’ll change your life, too….

Enter our gigantic giveaway below:

a Rafflecopter giveaway

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2 Guys and Your Money 022: Making Life an Adventure – The Hobbit episode

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Have shows come automatically to your iPod! Use the 2 Guys iTunes page here.

Listen to shows on your smartphone! Try the Stitcher app here.

Just like a certain film that appeared in box offices last weekend, we have an epic podcast for you this month. Not only do we have unbelievable guests, but the stories our regular contributors share about their adventures is equally as exciting.

Show Notes

 

<> Open – Our favorite motivational phrases

<> Natalie Sisson – Suitcase Entrepreneur – Biking Africa

<> Len Penzo – Getting the big raise: Check out Len’s companion piece at his blog.

<> Chris Klinke – Mountain climber – Walking Away from Six Figures

<> Dr. Dean – Running for public office

<> Let’s Give Something Away: Mommy Millionaire

Enter our giveaway here

<> Barbara Friedberg – Snagging a book contract

<> PK from DQYDJ – Avoiding TPS Reports and the Power of Automation

<> Jana from Daily Money Shot – Writing a Novel in 30 Days

Average Joe’s Friday Sing Along

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Welcome to our new feature. This will play on sporatic Fridays (read: whenever I feel like it).

Thanks for all the great emails about the Diary. Like everyone who writes (on the internet or elsewhere), I get frustrated sometimes and it’s great to have a place to just vent, you know? Plus, I like being able to share a few of the “secrets” we’ve learned over the first year of operating this thing, and it’s been fun going back in the time machine and looking at stats from a year ago.

That’s all I’ll say about that topic, because I created the Diary specifically because I knew there were people out there who’d be interested in my rants….but it isn’t the mission of this blog.

This weekend we pick up a new table for our dining room. Buying furniture always is a struggle for me. On one hand, I like having nice stuff, but on the other, I don’t want to pay for it. Call me the opposite of the US Government! If I were buying on credit or didn’t have the funds to do it, I’d definitely walk away from the transaction. BUT I do have the money available, we really haven’t spent much on the home this year, and it’s a nice upgrade SO we pulled the trigger.

You know your life is exciting when you spend a paragraph of the blog writing about your new table. Par-tay.

In better news, five minutes from now a good friend is picking me up to fly in his new plane to Dallas to watch our kids swim. I’ll post pictures on Twitter and Facebook.

Let’s get on with the show:

 

Some Wonderful Reading

 

Let’s start with Glen at Monster Piggy Bank. Sometimes I don’t know what to do with Glen. I called him “Crazy Man” one time and he questioned what that was about….then he gets all crazy with the tattoos and work posts. Of course he’s Crazy Man! Do you think people should be discriminated against at work because they have a visible tatoo? Check out the post.

There’s major congratulations in order. Kim at Eyes on the Dollar has knocked out $30k in debt. Momma said KNOCK YOU OUT!

While we’re talking congrats, Holly at Club Thrifty will now post twice monthly at Get Rich Slowly. Hey, Holly, when you’re a huge star, don’t forget us little people.

In my favorite travel journal, Reach Financial Independence, Pauline tells an awesome story about helping her employee get a new bike…and then decide that he isn’t that crazy about paying it off.

Mrs. PoP from Planting Our Pennies wins my award for Best Analytical Post of this list (an incredibly prestigious award). Check out how she turns discounted cash flow into numbers porn for us financial geeks.

Sam Dogen writes a thoughtful post at Untemplater about whether we should bail out student loan debt. If we decide that’s okay, let me know ahead of time. I have twins starting college in a year and I’ll just finance it all with public funds…..

Speaking of Crazy Man (and a guy who won’t fight me when I call him that…he wears it like a badge) Len Penzo answers the question “Credit or Debit” that’s so popular at retail outlets everywhere.

Finally, if my blogging friends haven’t seen it yet:  My friend Sicorra at Tackling Our Debt gave the gift that keeps on giving (no, not fuzzy dice for the rear view mirror). She handed to bloggers everywhere some awesome tools to help manage their to do list, blogging tasks, advertisements, expenses and calendar.

I have about 30 posts by other authors I thought were fantastic this week, but in the interest of sprinkling a few highlights, that’ll be enough for now. Any more and it’ll be a list too long for you to enjoy.

 

We’re WAY Popular AND Modest

 

Thanks to everyone who tweeted our articles this week. I know I’m not great at the “hey, thanks for the RT!” posts. I don’t know how people find the time to do all the things they SHOULD do for others, get their blog written, hold down a job, and drink a case of beer a week. Sigh. Apparently people rearrange their priorities differently than I do….

Here are a few of the places that featured our writing or who talked about us fondly:

I guest posted at One Cent at a Time. It was about the rock band Rush and goal setting. Apparently that went over people’s head, because the post that I thought was my big winner of the week didn’t garner a ton of comment love. Apparently I’m not yet today’s Tom Sawyer…..

Cil Burke (clearly Dr. Dean’s better half) at the Millionaire Nurse Blog talked about how much fun we had playing board games at Fin Con in her post about surviving family functions. I was sure we were going to see liquid coming out of Len’s nose at one point. Can’t wait for next year to do it again. BTW, if someone wants a family game recommendation for the holidays, feel free to email me. I get tons of questions from family/friends this time of year about what the best option might be…..

Erin at The Dog Ate My Wallet and Kim at Eyes on the Dollar mentioned our post about dining and dashing at Pizza Hut. I love having friends who can reinforce my image as a reprobate…

 

In Closing

 

Thanks again for reading the blog this week! Next week we’ve got an awesome podcast episode on Monday, followed by posts Tuesday, Thursday and Friday.

The Worst Gifts Ever: Crystal Frogs, Re-gifted Candy and More Bad Holiday “Fun”

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While our little half-acre of the internet is called The Free Financial Advisor, sometimes I think people go overboard on the “free” part.

Re-gifting isn’t something I frown on. Two weeks ago we received a bottle of chocolate wine. If I could find a friend who I thought loved that sort of thing, I’d re-gift that baby in a heartbeat. They’d be happy in their alcohol and chocolate stupor, and I’d get that little slice of counter space back. Win-win.

In some ways, I agree wholeheartedly with Greg at Control Your Cash. Giving “stuff” at the holidays is silly, and the older I get, the sillier it seems. Creative re-gifting to “fit in” this holiday season could help some budget-tight families make it through this period without falling into debt. But re-gifting just to unload used stuff to someone who clearly isn’t in the market for an item is ridiculous.

Regift away, but make it thoughtful, people.

In early November we shared OG’s Halloween experience on the podcast and on Facebook. It seems that someone, unhappy with their choice of candy gifts during an earlier holiday, gave OG’s son this little beauty for Halloween.

Not only does OG NOT have a girl….it also isn’t Valentine’s Day, and hasn’t been for about roughly eight months. Luckily, Fun Dip will survive a nuclear winter, so what’s a half-year to a bag of sugar?

Let’s continue the fun. What are your worst gifts ever….re-gifted or not?

 

My 3 Worst Gifts

 

3)

Cheryl’s sister used to brag about their income level (“Lou makes so much money….but how can you live on $400k per year?”). She’s gotten better recently, but that doesn’t stop us from chuckling about it every six or seven seconds. A few years ago, during the height of her “monetary influx discourse,” she gifted me a book about the Enron fiasco, something that she thought I’d love as a money geek. She was right on the money, and I told her. She said, “Yeah, when Lou (husband’s name changed to protect the guilty) read the book, he thought you’d really like it.” As I flipped through it, pages was dog eared and some food stains marked several pages. That’s when I realized that Lou hadn’t liked “that title.” He’d liked “that actual copy of the book and now that he’s read it, we’re gifting it to you for the holidays….because how many books can you buy on $400k?” Don’t get me wrong: this is #3 NOT because it’s a used book, but because it was a used book passed off as a new one by someone who brags about how much income they make.

2)

The second culprit wasn’t gifted to me exactly, but to Cheryl. While I’m a Catholic boy, my wife is from a Jewish family. That makes Christmas travel easy: I win. That also means her family gets Thanksgiving every year. No family battles for the Saul-Sehys. Initially it made for some funny moments when my well-meaning mom tried to do the right thing. One year, early in our marriage, she decided–in an effort to show no favoritism–to give both sister-in-laws the exact same gift. Christmas morning, after the stocking were emptied and we’d moved on to the gifts, she laid huge boxes out in front of Cheryl and my sister-in-law (a different one than above), with instructions to open them at the same time. I feel bad remembering this, because she was clearly excited as they opened the boxes.

In front of both women was a beautiful hand-made ceramic Nativity scene.

Cheryl stared at it. Nothing says “welcome to our Christian family” to a Jewish girl like a Nativity scene.

The room was super-duper quiet. Finally my dad, sitting in the corner, said, “I told you it was a bad idea.”

We laughed about that one out loud then, and for years after. I still feel bad for my mom, but she’s given us so much over the years, you knew she wasn’t going to be right on every call. God knows I haven’t.

1)

This one is truly bizarre. Some gifts were mixed up at our wedding as they were transported back to my apartment. The next day we worked through them all. For the most part, they were easy to figure out. Only Uncle Stan would have gotten us those German beer steins. At the bottom of the pile, after all the gifts had been assigned, was a beautiful crystal (wait for it…….):   frog.

It’s a nice enough frog, but the gift raises a few questions. Who the hell looks at me and says, “You know what would be perfect for Joe? Two words: Crystal. Frog.” I have difficulty imagining someone walking through a department store, searching for that special wedding gift, thinking, “Hmm….salad chopper. No. Pillows. No. Knife set. Nah. Oh, check this out. A crystal frog! Perfect.”

The Funnest Part

Honestly, today’s post was less about me sharing, as it was me being curious about what you’ve received. I can’t wait to check out the comments to hear some amazing “worst gift” stories. Step it up below:

Read More:

What Is a Speakeasy? 5 Common Questions and Answers

2 Guys and Your Money Episode #021: When Your Job Goes Bye Bye

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Have shows come automatically to your iPod! Use the 2 Guys iTunes page here.

Listen to shows on your smartphone! Try the Stitcher app here.

It’s job transition time on this week’s show.

If you’re ready to leave your job OR you’ve been asked to leave, this is the show for you.

Thanks to Evil HR Lady, Suzanne Lucas, for explaining severance tricks and to Jefferson from See Debt Run for giving us some awesome interview tips.

PK talks statistics while Len Penzo, Barbara Friedberg, Dominique Brown and Dr. Dean Burke discuss how to handle the unemployed period.

On this episode we find out who won the November giveaway.

 

Show Notes:

<> Open

Book reference: 48 Days To The Work You Love by Dan Miller

<5:35> Interview with Suzanne Lucas from Evil HR Lady.org – Severance Packages

<19:32> PK from DQYDJ.net: The most interesting employment statistic

<23:52> Shortwave: How to handle your money when you’re between jobs

Check out the bloggers featured on our Shortwave segment here

<42:00> Let’s Give Something Away:

Guess that voice, tweet or become a Facebook friend and enter the giveaway here.

<48:30> Jefferson from SeeDebtRun discussing his article The Interview Question That Is ALWAYS Asked

<1.02:22> End Show: Films

OG: Waiting For Superman (thumb up), Joe: Life of Pi (thumb up)

 

 

Year End Tax Planning: A (Surprising) System of Cleaning My Closet

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On the way home from this Thanksgiving weekend in Michigan, I finally reached my limit with the situation in my closet.

For the last four years it’s become bigger and bigger mounds of….clothing. Just as I get the closet organized, it becomes a mess yet again. Being a recovering financial advisor, I loathe messes. Everything should be in neat and tidy rows, not thrown on the closet floor.

Historically, at this point I’d decide to get rid of clothing. I’d pick up stuff and make the “stow or go” draft move:

“No,” the hoarder in me said, “I’ll wear that some day.”

“I got that at my favorite 5k in 1998. I can’t get rid of the Pickle Run shirt!”

“If I get that stain out I’d wear it all over the place.”

I should have been saying, “Some day bell bottoms will come back in style!”

Sometimes–not often enough–I’d find a piece that definitely had to go. Whenever I brought home new clothing from holidays or trips to the mall, old stuff stacked up. The “donation” pile contained a lonely piece or two. I was adding clothing at a 2:1 rate over donations.

On the way home I snapped. Suddenly I formulated a plan:

 

The Plan

 

It was so easy, I can’t believe I hadn’t seen it earlier.

Clothing decisions (and by extension “stuff” in general”) isn’t about whether I like each “thing” or not; of course I loved them all. I wouldn’t have bought them if I didn’t like them. They all had sentimental value AND my mind needed to justify the reason I’d added them to my collection in the first place.

In short: using my current criteria, there was no way I’d ever clean out the closet.

In my a-ha moment, I flipped my thinking: the closet wasn’t a place to store all the cool stuff I wanted to keep. It was a place to store things I needed.

Following that train of thought led me to the real question:

How much did I really need?

 

The List

 

I made a list of things I really needed:

10 Long Sleeve Running Shirts (probably don’t need 10, but that was a start)

10 Short Sleeve Running Shirts (closer to the number)

4 Pairs Running Shorts

3 Pairs of Jeans

4 Pairs of Dress Pants

3 Suits (again, probably too many for my lifestyle, but I could cut more later)

6 Ties

6 Button down shirts

5 Pullover sweaters

….and so on.

 

…and Action!

 

Sunday was a bloodbath in my closet. I tore everything out and placed it on the floor. I was making Top 10 lists of each type of clothing. Soon I was at the difficult portion: there were pieces I liked, but they didn’t make the  Top 10 (or 5, or whatever….). At this point it didn’t matter how much I liked the shirt: there were enough pieces for me to wear without it in my closet. Better to gift it to someone who really needs it this holiday than to keep it sitting in my closet with 10+ items I’d rather wear.

I created a gigantic mound of clothing to donate.

 

Itemized Charitable Donation Deductions: Bonus Time!

 

If you itemize your taxes, you are probably eligible for charitable donations to 501c3 organizations. If you aren’t sure whether the place you want to donate clothing is a 501c3, just ask them. They’ll know.

If your organization is eligible and you itemize deductions on your taxes, you may be able to write off your charitable contributions. I received a receipt at Goodwill that listed all of the items I’d donated to them. I’ll use this at tax time next year.

Bonus!

 

The Lesson

 

I’ve learned this lesson 100 times and still continue to struggle with it daily. Don’t get caught in one line of thinking about a problem….especially nagging ones like cleaning out a closet. Turn the question around. Search for a better answer. Scour the web for strategies….soon you’ll have a clean closet, better decisions and possibly tax deductions!

 

This is another in our list of systems for busy people. Want more? Check out our budget plan for busy couples. It’s another play-tested system (that one OG uses with couples all the time and I used when practicing…it’s worked magic for non-budgeters.)

What are you waiting for? Go clean out that closet and cha-ching on the tax deductions!!!! What system do you use for weeding out old clothes you still love but should probably chuck?