21st Century Dad
One Dad's Thoughts, Ideas, and Feelings.
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Ease the Strain of Annual Expenses

April 13th, 2009 . by 21st Century Dad


I promised a personal finance post a long time ago. Here it is.

Frugal Dad recently wrote a post about having a sinking fund. I wasn’t familiar with the term, sinking fund, but I was aware of the concept long ago. For those of you joining me here out of context, a sinking fund is an amount of money set aside regularly to help fund irregular expenses.

In the past, whenever an irregular expense like the 6-month premium for my car insurance came due, I simply charged it. I told myself I would pay it off over time. I even gave myself extra credit, calculating the APR over the same time frame was still less than the inconvenience fee charged by the insurance company for making installment payments.

My financial health is trending upward, but I am still operating on  a cash basis.  Oh, I can get credit, but it’s hardly on favorable terms. The banks aren’t being very nice to people with good credit scores either these days. Since I am on a cash basis, I have to carefully plan for these irregular expenses.

I created a spreadsheet that helps you calculate how much of your monthly budget should go toward your sinking fund. It looks like most budgeting spreadsheets, but with additional columns. The additional columns are for quarterly, semi-annual, annual, and bi-annual expenses.

Like most people, I find it easier to look at money on a monthly basis. The biggest portion of our expenses occur at that interval. At the bottom of the spreadsheet, you’ll see a running tally of how much you need to put into your sinking fund each month. This is a fun spreadsheet to play around with. I can daydream and  run what-if scenarios all day with it.

Download the spreadsheet here.

You might notice the screen-shot above doesn’t look like Microsoft Office. With yet another frugal move, I started using Open Office. When Microsoft Office 2008 was released for the Mac, I asked myself if I should upgrade or do I jump ship for the open-source alternative? I asked myself, but my wallet chimed in before anyone else could speak.

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The Art of War – Recommended Reading

February 2nd, 2009 . by 21st Century Dad

The Art of War

Riding the bus offers me ample opportunity to read. The most recent book I read was “The Art of War: In Sun Tzu’s Own Words” by Gary Gagliardi.

The Art of War is a military classic. However, most readers are business people, not military leaders. It is required reading in some business school curriculums. The lessons contained within apply to any competitive pursuit in our professional and personal lives.

It’s written in a very simple and clear style. It’s a breezy read, and almost too elementary sounding at times. The simplicity on the surface hides a richness of meaning within the text. You will need to pause and think while you read. Since the text addresses military situations, you have to do your own translation of the scenario to business or personal dealings in your own life.

You hear of people going to war too quickly.

Still, you won’t see a skilled war that lasts a long time.

You can fight a war for a long time or you can make your nation strong.

You can’t do both.

Sun Tzu’s 2000 year old military wisdom applies today, and he knew nothing of “weapons of mass destruction” or vast oil reserves in the desert.

The last chapter addresses the use of spies. You’re not managing spies, but you are gathering intelligence on your own life circumstances. You’re doing your research online. Your friend might work at a company you’re interested in working at.

I started thinking about my own life circumstances and how it feels a little bit like war. I’m separated from my child, and will be for several months. Now that my personal finances are thoroughly Chernobylized, I am forced to use Chapter 7. I can’t “go home” until the job is done. A case of MRE‘s purchased in preparation for hurricane season and stashed in the cupboard underscores the war-like feeling here even more.

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Dad Needs to be Financially Responsible Too

March 4th, 2008 . by 21st Century Dad
Photo: Valentin Mosichev, iStockphoto.com

A 21st Century Dad must also be in charge of the family finances. I’m not saying it’s a man’s duty specifically, but if it does fall on you, you better be good at it. There’s a lot more on the line than your own well being.

Guys like J.D. at Get Rich Slowly, Frugal Dad and Mike over at From Mike focus on personal finance. I enjoy writing about the variety of topics that a father today is interested in.

Where Does Your Money Go?

Years ago, I did a revealing exercise. I tracked every dollar I spent, down to the penny. It wasn’t hard to do. I ended up spending less because it meant having to write it down and tabulate it later. All of a sudden, that one dollar here and there for a soda ended up becoming $40 at the end of the month.

Track your spending for a month. You’ll find there’s a lot of fat you can cut out. You may be shocked at where your money goes. The Starbucks Latte is a favorite target of personal finance gurus. It may or may not be what’s sucking you dry. When you examine your spending, you will certainly find things to cut out.

Plans and Goals

It’s called “personal finance” for a reason. Everyone’s needs are different. Based on your spending analysis and your current needs, you will need to come up with a financial strategy for your family.

  • Do you need to save up to make a down payment on a new home?
  • Do you need to pay off debt?
  • Are you making a nice chunk of money but still living paycheck to paycheck?

Where to Go From Here

We didn’t learn much about personal finance in school. I spent many of my supposedly adult years being ignorant of money matters. My own education about money started with the exercise I described earlier and reading Rich Dad, Poor Dad. The book taught me a few things. The most important lesson I learned was that I knew very little!

A great place to start is the blogosphere. I let my personal finance education fall off a little bit… and yes, I’m feeling the burn. I’m a little sloppy right now. These bloggers have inspired me to revisit personal finance and tighten things up.

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