Corey Stokes

Why $1000: Put some space between you and a hard time

Do you remember the story of my Chevy Malibu? I think I mentioned it in my last post. Long story short, I got, got! This is what happened. First let me just say, I really loved that car. It was the first care that I bought for myself that actually work. If you asked me now, I don’t remember what was actually wrong with Mali, But I didn’t think it was going to be that big of a deal. In fact, When I bought it to the dealer based mechanic one morning before work, I was expecting to be in and out. But instead, thirty-five minutes later, the technician came out to talk to me and gave me the shock of my life.

“Mr. Stokes, So we located the problem. You have a blah, blah blah…. the part will cost about $1000, what would you like to do?” Truthfully, I really don’t remember, the part that needed replacing. I just remember the heartache I felt when he told me I wouldn’t be driving Mali home. While he was talking to me, all I remember hearing is that it would cost me $1000 to fix the problem.

Back then, I was not in a position to pay this price. I’d maxed out all of my credit cards didn’t have the cash in my bank accounts, and my credit was so poor, that I could not even get a loan to cover it. I was completely distraught. When I tried to tell him I would bring the car back when I had the money, the technician told me he, didn’t feel comfortable letting me drive the car in its current conditions. Eventually, he agreed to take my car as a down payment for a brand new 2005 Nissan Quest.

Maybe one day there will be a blog post about the Quest, but for this story. let’s focus on the fact that a $1000 problem landed me into the sensuous grasps of a $40 thousand dollar vehicle and loan. What’s more, to get my payment to stay in the same vicinity as I was making on Mali, the dealer happily extended the terms of my loan from the standard 36 months to 72 months.

Now, you probably reading this and thinking ‘this Corey guy is pretty smart’. Let’s think about it for a moment. Instead of spending $1000 to fix a problem, I ended up spending $40,000. The technician smiled that he was able to solve the problem with my Chevy Malibu… I no longer had that problem. Instead, I now had a new minivan to go with my $40,000 loan. Who was really the smart guy?

My wife and I say “we don’t long hard lessons we learn expensive ones”. I wish I could say this was the only expensive mistake that I had to learn, but it wasn’t. We, meaning I, made several more expensive mistakes before it finally sunk in. I needed to put some space between me and a hard time.

Putting space between you and a hard time gives you the mental bandwidth to think about your solution to a problem instead of taking the first option that is presented. That space gives you the freedom and the ability to respond to a problem instead of reacting to it. In short, this space gives you choices.

There are plenty of ideas about what that space should look like. But, in a nutshell, put some amount of money in an account, to handle anything that comes up. This is your baby emergency fund. I recommend $500 -$1500. Depending on where you are in your life will determine the amount of space you need.

No, I’m not saying that all you need is a $1000 emergency fund. A full emergency fund should be between three and six months of your income or your expenses. But until you get to that amount, and while you are still trying to live life, a $1000 buffer between you and a rough patch will go a long way.

If I would have had this buffer of $1000, fixing Mali would not have been a big issue. I could have simple paid for the repair. When I purchased my first home in 2006, learning from Mali was put to the test when the water heater went out. The $1000 buffer was more than enough to help me fix the problem without throwing my world through a loop.

Some would recommend having a credit card to handle these situations. personally I do not recommend this course of action. For one thing, I don’t think that debt should be used as a tool in your financial plan, therefore I do not recommend credit cards. Also, If you are trying to recession-proof your life, borrowing money is not the way to do it.

I once asked a question to my social media feed. “What would you do if you had an extra thousand dollars?” My answer is simple. I wouldn’t do anything with it. I leave it along and let it give me peace of mind. Knowing that I can handle life, as it comes up will allow me to focus on more important things; like building a full emergency fund to get more space between me and the inevitable and eventual hard time.

Protect Your Financial Future from Yourself

Recently I came across an article that described several ways that we sabotage our own financial futures. Now, I don’t know about you, but I work too hard to be sabotaging all of my efforts. I wanted to know what this was all about. In the article, Josh Monroe, a writer for Kiplinger, describes 7 things that we all need to look out for. He says, not only do we sabotage our financial lives, but we also do things to impair our success in other areas of our life as well by doing things such as: Hitting the snooze button, when we know we should get up to head to the gym or get ready for work. I know that is one thing I need to stop doing. I wanted to know what could we possibly be doing to ruin my financial future So I can share it with you. Here are the 7 things we do that will sabotage our financial future.

Saboteur number 1

If you have ever made a purchase because you didn’t want to miss out, then you’ve fallen prey to the first of the saboteurs. When we spend money frivolously, we miss the opportunity to save. As Jon Acuff explains in his book, “The Compound Effect,” If you purchased a cup of coffee from the leading coffee place every day on your way to work. That $4.00 cup of coffee will cost you over $50K over a twenty-year period. Every dollar that we spend, is a missed opportunity to save. When we purchased that coffee instead of making it ourselves, (because we didn’t want to miss the double points Tuesday) we fell prey to this saboteur. Monroe calls this the fear of missing out. I really hope you enjoyed that $50K cup of coffee.

Saboteur number 2

The next action that we take that sabotages our financial future is making big purchases that have long term consequences. Such as taking out a $40,000 loan to fix a 1000 problem (yes, I actually did that). We borrow money to buy cars and other items. Really, if we simply take a breath and save, then we could better afford anything. When we realize the commitment we have made, it is usually too late. We’ve already tied up our biggest wealth-building tool, your income. This single action prevents us from being in a position to take advantage of other opportunities in the future.

Saboteur number 3

This next saboteur even I have caught myself doing. It is called lifestyle creep. This happens when we get a little extra money in our pocket, and we start spending “all willy nilly”. Before we know it, our increase is gone, used up by our lifestyle. Instead of saving or investing that raise, we increase our cost of living. Could you imagine how much money you would have saved if instead of spending each raise, you invested it? A friend of mine told me about one of his mentors, who over a twenty-year career, never took a raise. Instead, he increased the amount of his retirement investing by the amount of the raise, never falling prey to lifestyle creep.

Saboteur number 4

Next, focusing on the wrong priorities will sabotage our financial future. Here’s the thing. Being able to sustain an adequate standard of living in your golden years should be priority the number one. Right next to ensuring we can live today. Monroe explains that many people have put off or have used retirement funds in order to pay for kids’ college or to try to get out of debt. Please don’t steal from your future to fix your today. The truth of the matter is, there are many ways that we can help our kids go to college debt-free, without taking money away from our future selves.

Saboteur number 5

This next one is dear to me because it was the hardest lesson that I had to learn. We are sabotage our financial future by not playing financial defense. Now, what does that mean? When you sit down with many financial professionals, they will talk to you about strategies for investing in the market. Where to put your money to protect your future. Monroe calls this an offensive strategy. But this is only half the equation. A defensive strategy is protecting you now, so you can invest in your future. Such as having a three to six-month emergency fund, and adequate insurance coverage. This is a way to give you and your family peace of mind when a catastrophe hits, like a COVID-19 pandemic!

Saboteur number 6

This next one makes me mad! Too many times, I’ve heard people tell someone, the market is crashing, better get your money out. Chris Hogan, the author of “Everyday Millionaires”, says it like this. “people jump off the roller coaster too soon.” The stock market, like a roller coaster, goes up and down. It even sometimes has your stomach in knots. But when you get out of the game too soon, you make a temporary loss permanent. Don’t make a temporary situation permanent by pulling your money out of the market too soon.

Saboteur number 7

Finally, Monroe says we sabotage our financial future by trying to do it alone. Even I must admit that I don’t know everything. But I have a team of people that I trust, that can aid me in finding the right solution. We all need to have people we can trust in our corner. Including your significant other, an accountant, and a lawyer. These individuals will help you to see your blind spots and help you can stay on track. No one does it alone!

We are going to make mistakes. But let’s not let our mistakes ruin our financial future. By making some small tweaks, now, you can protect your financial future from these 7 financial saboteurs.

Resources

Are you trying to get out of debt? You don’t need a CONsolidation, you need a coach!

7 Ways to Sabotage Your Financial Future

I made a mead ale

If you know anything about me, then you know I am all about learning from those that have done it before. This is why for this experience, I looked to a craft mead book. This is my 3 batch, but second attempt at making a mead. I haven’t made everything in the book yet. But the journey is still young. The book listed several different types of meads all of which sound amazing. Since, however, my initial fascination with brewing was with brewing beer, I was intrigued with the mead ale. A mead that was labeled as a beer, and that would not take a full year to be drinkable.

While brewing, my wife noted that she definitely did not like the smell of hops. So the next time I do anything with hops, I will have to go outside. The good news is, I get to break out my camp stove that has been in storage for the last few years.

Although I did get some grief from one of the Facebook groups when I posted about it, this experience was still fun for me. People made comments about this just being a hoppy mead, and not really a beer. While others made comments about me needing a new wife. Well, I never claimed it was a beer, it is described as a mead brewed like beer. Also, I kind of like my wife, so I think I’ll keep her.

This recipe called for honey, hops, water, citric acid, and yeast. While most meads take the better part of a year to be ready for drinking, this mead ale would only to take 1-3 months. Very exciting!

I started brewing this in June, Around the same time that I racked each of my other meads. While it was fermenting, there were several things that I needed in order to be finished with this ale. First I would need bottles to bottle it. Next, I needed to cap the bottles, so the gases would not escape during carbonation.

I found a local brewing store only a few miles from my house. The store clerk was able to answer all of my questions without making me feel like an idiot! She said reusing beer bottles, but with new caps would.be acceptable. So that is what I did. She was so helpful in fact, I went back to get her help several more times for other projects.

Capping

The capping process did not go particularly well. I went through way more caps than I needed to, I spilled one bottle of the ale, and I should have used at least one plastic bottle. Now, I have no way of testing the for combination (more on that in my combination post).

Once I finally got the caps on properly I set the ale in my garage (a warm area) for 3 days, then moved them to my basement (a cool area) for a few weeks to carbonate.

Tasting

7/21/2020 Mead Ale tasting and check to see if it is carbonated.

I promised that I would keep these post short, so this one will be continued. I think I’ll let this ale continue carbonation for another week. The carbonating process was interesting and not at all as the book suggested. But I’ll discuss that during my next post.