Money Management

“Many people lack discipline when it comes to saving money. What good is having a bunch of stuff if you’re struggling, in debt, or broke most of the time? So many people put up a front like they’ve got it going on, but they know the truth. They spend all of their money trying to look important, and/or keep up an image. Knowledge is everything! Educate yourself about money, investing, and saving. I encourage you to start investing in yourself instead of things! Set yourself up for a better future and start making better choices. Building wealth takes time! Have discipline. Save. Stay consistent. Be brave enough to change your spending habits. Be wise! Don’t allow money to control you. Strive to have a healthy relationship with money!”
Stephanie Lahart

Life Under Change
Quotes that inspire, motivate and challenge us.

Grocery Shopping Under a National Lockdown

Photo by Anna Shvets on

I am an American expat living in Ecuador, South America. We have been under a national lockdown since the second week in March. The national laws of mobility have become even more restrictive in recent days due to the increase in the number of confirmed cases of the Covid-19 virus.

The days of the week when a person can leave their home to go to the supermarket or pharmacy is based on the last number of one’s automobile license plate. Those with an odd number can leave their home on Mondays, Wednesdays and Fridays. The days for an even number are Tuesday, Thursday and Saturday.

There is a strict curfew of 6:00AM – 2:00PM. This is enforced by the local and national police forces and the armed forces of the country.

Though my wife and I stocked up on non-perishable food and other household goods two weeks before the lockdown, a family cannot stock up on fresh fruits and vegetables for more than what will be consumed in a week since many fresh fruits and vegetables will spoil. The supermarkets in my city of 520,000+ residents are open 8:00AM to 12:30PM. In addition to the these limited hours, there are other qualifications to be allowed entry into the supermarket.

  • One must be wearing a mask, be wearing gloves and must have their cedula (national ID) with them. Your temperature will also be taken. You will not be allowed entry if you have a fever. Additionally, your hands are thoroughly sprayed with a hand sanitizer.

One you are granted entry into the stores. You will notice that there are no “sales” or promotions. Retailers are unable increase prices due to the epidemic because wholesale and retail prices are government controlled — there is a minimum price and a maximum price any item can be sold for. This prevents price gouging and the large national supermarkets gaining oligarchic control in the market place through artificially low and unsustainable pricing.

The next thing you’ll notice is that while the shelves are full, not all the brands they normally carry are available on a dependable basis. Only the local or national brands are fully stocked. The regional or internationally imported products are only available on a hit-and-miss basis as these larger companies aren’t mobile enough to service all the supermarkets in the country on a regular basis under the restricted business hours. Hence, the supermarkets are only receiving products from these companies once a week or so.

The only exception to this new norm is ice, masks and latex gloves. These products typically sell out of these items within an hour of delivery.

The bottom line is that living within one’s budget is quite doable as long as you aren’t brand-loyal during this lockdown.

It also helps that any layoff of employees is not permitted. The government is providing financial aid to companies to maintain their payrolls. Because of this, the working class will not suffer the financial devastation that workers in other countries are having to endure. As a result, the country’s economy has less chance of collapsing.

Small Businesses Need an Emergency Fund

Image by Free-Photos from Pixabay

Due to COVID-19 and the once-in-a-lifetime restrictive measures being taken by government authorities (national, state and local) in an attempt to slow the transmission of the virus, many businesses will not survive to see the other side when the business environment gets back to providing customers with the products and services they want and need.

The undeniable situation is that most businesses cannot continue operations when they are not allowed to be “open for business” to serve the needs of the consumer.

As small business owner for over three decades, I realized how vulnerable my business was to a downturn in business when compared to the large multi-national corporations. As such, I realized that I needed a “business emergency fund” just like a family needs an emergency fund for unexpected large expenses or a loss of income.

What exactly is a business emergency fund?

Emergency funds, also known as “rainy day” funds, are cash supplies kept on hand so a business can keep operating in lean times or in the event of an emergency. Not only do these funds enable companies to keep providing services while paying their employees and suppliers, but they can also allow owners to continue supporting their families.

What are the basic components of a business emergency fund?

Accidents and disasters happen … and they can happen at any time without any advance notice. While we cannot predict what or when an emergency may occur, we can be prepared by taking steps necessary so the business can continue operations. To make sure this will happen, we need to plan based on the “worst case” scenario.

The first step in establishing a business emergency fund is to analyze your business so you can properly determine how much money is needed for your specific business emergency plan and over what period of time. Some things to consider are:

  • What expenses will be necessary to continue business operations?
  • Will you need to retain current employees? Will you need fewer employees during a time of emergency operations? Will you need more employees?
  • What additional expenses will there be?
  • How and where will you serve your existing and new customers? How will you communicate with existing and potential customers?
  • If the business emergency requires you to secure or build a new location, will the new location be suitable for the growth of the business? Will the new location serve the convenience needs of your customers?

Your business expenses will not cease simply because you are in the grips of a business emergency. You need money. Under many business emergencies, it will be a period of time before you are able to be operational again. For most businesses there are three ways of meeting your financial obligations during the business emergency period:

  1. Insurance if the cause of the emergency is insured under your business policy.
  2. A business loan may be available.
  3. You have a business emergency fund set aside and ready to use.

Ways to fund your Business Emergency Fund

Okay, you are convinced that you need to start a business emergency fund. That was easy. Now you have to find ways to fund it. That’s not so easy for many small businesses. Let’s look at a few ideas:

  • Look for ways to cut expenses. Are you spending money for something that is failing to give the expected rate of return you expected?
  • If you have a large order or sale, set a portion of the profit earned from that large order towards your business emergency fund.
  • Do you have any assets you are not using? If yes, consider selling it. Examples may include a vehicle or a building.
  • Can you add a product line or offer an additional service to generate additional income?

Choose the right type of account

As the name indicates, the money in a business emergency fund needs to be liquid so you have access to it immediately when the need arises. Your money also needs to be safe. Hence, short-term CDs, savings accounts or money market accounts are best suited for “holding” your business emergency fund.

The economic turmoil we are going through right now clearly illustrates why it could be a disaster to place your emergency fund in stocks or stock mutual funds. The last thing you want to do in a financial environment similar to what exists today is to redeem your stocks or shares in a mutual fund when the market is tanking. That’s a guaranteed loss of money.

Final Thoughts

I owned a small business for 32 years and sold it 2012 to retire. I had a business emergency fund that was adequate to continue business operations for 10 months based on the expenses of the business at the time of an emergency. The amount of money needed was reviewed annually to make sure the emergency fund was adequately funded.

I was fortunate in that I was able to fully fund my business emergency fund over a 3-month period due to a large one-time sale. I used a money market fund with check writing privileges for my funding vehicle.

I was lucky in that I only had to “tap” funds from this account once and I was able to replace the money withdrawn within 6 months. Had I not had this money available, I would have been in serious financial trouble.

Penny Picker-Upper

Image by PublicDomainPictures from Pixabay

Okay, I’ll admit it. I am guilty of picking up pennies off the ground whenever I see one. I see them all the time in parking lots and along the walkways when I take a walk. Why do I do this since one cent won’t buy anything?

I’ve attempted to explain the “why” to people who ask me about this often dirty habit. Though most people don’t “get it”, I’ll attempt to explain it to you, my readers.

Penny picker-uppers don’t pick up a penny for its money value of one cent. Rather, the value of that penny comes from the act of picking up the penny.

  • It’s a reminder that every penny counts.
  • It’s a reminder to be frugal and thrift … even with the little things.
  • It’s a reminder that the little money decisions we make add up to a lot over time.
  • It’s an act of acknowledging the down-the-road benefits of managing our money.

In the end, that 1-cent penny provides a value far beyond its face value.

Frugal Opportunities

There have been three DYI (do-it-yourself) opportunities at home this week that allowed me to choose frugality over unneeded spending by hiring someone else to do the work.

  • I repaired three leaks on a ceramic tile roof and re-plastered and painted the indoor ceiling where rain water had leaked through. I was able to do the repairs myself instead of calling a handyman or contractor.
  • A sink in one of the bathrooms started leaking at the valve where the water comes from the wall to the hot and cold water pipes going to the sink. I was able to replace and install the water valve myself instead of calling a plumber.
  • My wife wanted a window shelf to put between the laundry room window and the washer and dryer to store detergents and other laundry supplies. Since it was an odd size, the cost to have one made was $42 plus $40 for the installation. Instead, I used some spare chipboard we had stored. I cut the board to the exact measurements and attached the shelf with handmade wood brackets to the ceramic tile wall.

I don’t know how much money I saved on these three projects but I’m sure it was hundreds of dollars. My cost was only $4 for two drill bits for going through ceramic tiles. All other materials and hardware were from my own stash of materials and parts I had purchased over the last 35 years at garage and estate sales.

Besides saving money, I had fun doing them. Isn’t that what being frugal is all about?

For Financial Freedom,You Need a “Fuck Off” Fund

What is a “Fuck Off” fund?

It is a sum of money that you have set aside that allows you to tell anyone or anything to fuck off so you can move on with your life. This can be a boss, a relationship partner, or a dead-end job or career that sucks in a hundred different ways.

The “fuck off” fund is your line of defense in the life game of hard knocks. More importantly, it’s one of the smart financial decisions to be made that will lead you to financial freedom and independence.

Let’s take a look at the steps needed to start your own “Fuck Off” fund:

  • Sit down calculate how much money you need each month to survive and to live a reasonably satisfied life. The fewer new cars, new smart phones and luxury vacations that are on the list, the less you need to spend for your financial freedom and independence.
  • Track your actual spending for three months so you get an accurate picture of your actual expenses.
  • Make a realistic budget that is doable … not a pie-in-the-sky budget.
  • Set up a designated savings account that isn’t tied to your checking account … or even at the same bank or credit union. This savings account will be out of sight so you won’t be tempted to withdraw from it. You want to accumulate enough to cover your budgeted expenses for six months. Once you have this amount saved, you can start investing money to grow your money for your future financial independence.
  • Set up automatic deposits to this savings account. Pay yourself first from every deposited paycheck.

Setting goals for your “Fuck Off” fund will keep you motivated and excited. Look at this example of a progressive goal using levels of achievement:

Level 1

  • Six months worth of living expenses (Emergency Fund)

Level 2

  • At least 8 months worth of living expenses
  • Debt-free

Level 3

  • At least 1 year’s worth of living expenses
  • Debt-free

Level 4

  • At least 12 months worth of living expenses
  • Debt-free
  • Plus enough to travel and live abroad to do the work you are passionate about

Level 5

  • You have achieved lifetime financial independence.

You have no debt and are receiving enough monthly income from savings and investments that you do not actually need to work. You should note that less than 1% of the population in developed countries achieve this level of financial independence and freedom.

You’ll notice there is no age criteria. The sooner you start, the sooner you’ll achieve financial freedom. There are no shortcuts. You must:

  • Maximize income
  • Live frugally
  • Abhor debt
  • Save and invest frequently and faithfully

You’ll never be in a position to tell the world to fuck off unless you have achieved lifetime financial freedom and independence.

Successfully Negotiating Prices

How many times have we wanted to buy something but the price of the item was more than we could or was willing to pay? How many times have we just walked away in this situation without even attempting to negotiate the price?

To often we won’t make the effort to negotiate a lower price. If we will at least try to negotiate, we’ll often find that the seller is willing to sell the item or service at a lower price. It helps us, though, if we utilize some “rules of negotiating” that have worked for successful negotiators.

We need to do our due diligence homework

To start with, we need to know a few things about the product or service before we attempt our negotiations:

  • What is the price the competitors are charging for this product or service? If you can document that a competitor is selling this item for $xxx, the seller may be willing to meet or beat it. This puts pressure on a the seller to accept a lower price because he knows that you want or need the product or service and that you have done some research about the product.
  • What is the cost of the item to the seller? This is especially important when purchasing a big ticket item like a car. When you know the difference between what the seller paid for an item and what his asking price is, you have a powerful negotiating tool in your possession. Your intent is not to deprive the seller of a reasonable profit but rather not willingly pay a price that results in excessive profit to the seller.
  • Does the seller (or salesperson) have a quota to meet? Many businesses and salespeople have a monthly sales quota. If you are near the end of the month and the business or salesperson hasn’t met their monthly quota yet, your chances of successfully negotiating a reduced price is very good.
  • Why is the seller selling? There are times when we buy something from an individual rather than a business. If the seller needs to sell the item quickly, offering to pay cash immediately for a lower price may be all the negotiating required.

Make the seller name the price first

Having the seller state the price first gives you the opportunity to make a counteroffer for a lower price.

This puts us, the buyer, in control of the negotiations because we are determining what it will take for the seller to make the sale.

If we, the buyer, first tell the seller what we are willing to pay for the item or service, the seller will often times tell us that she cannot sell the item for what we are willing to pay.

This puts the seller in control of the negotiations which is the opposite of where we want to be in the negotiating process.

Don’t be afraid to offer a much lower price

If we are going to make a counteroffer or be the first person to name a price, our offer needs to be much lower than what we are actually willing to pay. This puts the seller in the position where his attention will be focused in getting our offer higher … not on getting the price he actually wants.

Keep quite

Once we have made an offer, we need to keep our mouths shut. Silence is a powerful tool. Remember, the seller is just as uncomfortable as we are when there is silence. In fact, the seller is mentally working on what he must do to prevent losing the sale.

The first person to break the silence loses their negotiating position. The seller knows this and will attempt to outlast us. We must not let this happen.

Ask for something extra

In today’s economy, few sellers can afford to let interested customers get away without making a sale. This puts us, the buyers, in control.

If the seller isn’t able or willing to sell the item or service at the price we want, ask the seller if she will add something extra to in exchange of for us paying her final offering price. Example: Ask if she will throw in a microwave oven with your purchase of the washer and dryer.

Know the seller’s limit

When it becomes clear that the seller will not go below her last offer, don’t be afraid to politely walk away from the deal. Walk away on good terms. The seller may very well be more willing to reduce her price in a few days when the item is still unsold. Money in the bank pays the bills … inventory on the showroom floor does not. In fact, the seller may be having to pay interest on a loan to carry the inventory.

Let’s keep in mind that our goal is not to keep the seller from making a reasonable profit. Our goal is to not allow the seller to make excessive profit at our expense.

Again, we must be willing to walk away if the seller is unwilling to negotiate or meet our counteroffer. Rarely will a particular seller be the only seller with the product or service we need or want. We are not under any obligation to buy from a particular seller. Our money, and how we spend it, is the only real voice we get in the marketplace.

Final thought

We need to realize that the seller’s objective and reason to be in business is to sell products and/or services. They seller knows all to well that no money is made unless a sale is made.

Why So Many Americans Can’t Save for Retirement

A 2019 report from Ladder, a life insurance company, revealed that the average adult spends $1,497 a month on non-essentials. Wow, that’s about $18,000 a year spent on things we can do without! That is especially troubling since 78% of full-time workers in the U.S. live paycheck to paycheck.

Let’s take a look at some of this non-essential spending that prevents us from saving for our retirement.

Eating Out

A typical family spends over $3,000 a year (or $250 a month) on eating out, takeout and delivery of food. What we gain in convenience, we lose in cash … cash that is no longer available to be invested for our retirement.

Phone upgrades

Smartphone makers like Samsung, Apple and Google spend millions of dollars on advertising to get us to buy new phones every time they develop a new smartphone … a new smartphone that can cost $1,000 or more. While a new phone may offer a couple of slightly improved apps or features, rarely are they worth $600 – $1,000 for a new phone as long as our current is working well and meeting our needs.

Clothing and apparel

The average American spends over $1,800 a year on new clothes and apparel. I think we need to adopt the following “code of conduct” concerning clothes and apparel:

  • Buy less
  • Only buy the essentials
  • Wear and use them until they are stained, ripped or they no longer fit

Lottery tickets

The average consumer spends over $80 dollars a month on lottery tickets. Though we can’t win if we don’t play, we know full well that the chances of winning are minuscule. Let’s take this $1,032 a year and save or invest it for our retirement.

Extended warranties

Here’s the truth about extended warranties: They are expensive and we typically only get pennies back for every dollar we pay for them.

When purchasing a big ticket item, let’s do our due diligence research and buy high-quality items that have a track record of lasting a long time with few (if any) repairs.

Cable TV

The prices for cable TV have skyrocketed and there’s no end in sight. Far too many people are paying well over a $100 a month for cable TV … especially for plans that include HBO and sports packages.

There are too many low-cost OTT (over the top) media options available over the Internet. Check out CNET’s Best live TV streaming services for cord-cutters in 2020 for prices and comparisons.

Impulse purchases

While this is a broad term, it basically boils down to purchases we don’t actually need but buy “in the moment” when we see them displayed at the store or online.

Big ticket items like the newest smartphone, large(r) screen TV, motorcycle, laptop computer, etc. can sabotage our financial position for months or years … especially if they are purchased on credit.

Let’s vow to minimize the amount of money we are wasting on products or services that don’t bring us long-term usage and actual personal fulfillment. I’m confident that doing this will provide us the dollars needed to finance a retirement fund.

February2020 Budget Reconciliation (Retired)

As was hoped for, February came and went without all the financial drama that dominated January. Let’s take a look at February results.


Budgeted: $4,038
Actual: $4,691 (1)(2)


Budgeted: $60
Actual: $60

LP Gas
Budgeted: $25
Actual: $14

Budgeted: $58
Actual: $50

Phones (Cell & Landline)
Budgeted: $40
Actual: $34

Cable TV
Budgeted: $91
Actual: $91

Internet (Fiber Optic)
Budgeted: $27
Actual: $27

Budgeted: $116
Actual: $57

Home Maintenance
Budgeted: $50
Actual: $0

Auto Insurance
Budgeted: $83
Actual: $83

Budgeted: $60
Actual: $45

Auto Maintenance
Budgeted: $50
Actual: $15

Auto License/Registration (Monthly Escrow)
Budgeted: $15
Actual: $15

Budgeted: $6
Actual: $0

Health Insurance (includes spouse)
Budgeted: $453
Actual: $453

Budgeted: $50
Actual: $11

Budgeted: $500
Actual: $399

Budgeted: $700
Actual: $601

Budgeted: $50
Actual: $26

Budgeted: $80
Actual: $100

Federal Taxes – U.S. (Monthly Escrow)
Budgeted: $330
Actual: $330

Real Estate Taxes (Monthly Escrow)
Budgeted: $12
Actual: $12

Total Expenses

Budgeted: $4,016
Actual: $2,435

February Summary

$4,691 Income
$2,435 Expenses
$2,256 Profit/Surplus Income (48.1% of income)

Amount transferred to savings: $2,256


Though I am retired, I am not eligible to receive Social Security Retirement Benefits from the United States until age 66 and 4 months. I am currently 63 years old. All monthly income is originates from savings and investments.

(2) I had an extra 15 days of interest in February due to a 380-day CD maturing. This CD was renewed at 9.5% APR for another 380 days.