What Playing The Lottery Taught Me About Money

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My wife and I had house guests in town a few weeks ago. After they left, I noticed a lottery BINGO scratch-off ticket had been left in my car. The person it belonged to informed me later that it was worth $5 (the cost of the scratch off).

During my daily travels, I stopped at a nearby convenience store to confirm that the ticket was a winner. Instead of asking for $5, I told the store clerk to give me a $5 BINGO card. After I returned home, I read the directions on the back of the scratch-off to make sure I played the game correctly.

Since there were 8 BINGO cards on the scratch-off, I didn't realize how long it would take to search for 38 numbers (33 in the Caller Card section and 5 Bonus numbers). After about two minutes, my neck began to ache. Also, my eyes began to water because I was staring at the BINGO card (and the small sized numbers) for such a long time. After going through this process, I learned a few things about money:

  • Fast money creates false assumptions - If I had won $50, for example, I wonder if that occurrence would have convinced me to invest in the lottery system again (doubt it). Instead of chasing a quick buck, I get more excited by routine and repetitive index fund or exchange-traded fund purchases and steady growth of our investment portfolio. In the long run, I think I have a better chance of hitting it big by building wealth slow.

  • Every financial decision contains risk - Playing the lottery, paying for a vacation with a credit card, investing for retirement, storing money in a bank, or purchasing higher priced brands versus private label products all have a certain level of financial risk, however, some choices are riskier than others. At the end of the day, it's wiser to make financial decisions that create the best opportunity to increase your wealth or cash flow.

  • It takes less time to make more money - Playing scratch-off BINGO took me approximately 15 minutes (I'm guessing I could have done it faster if I had more practice). It takes zero minutes for money to automatically transfer from our checking account to our brokerage firm each month. It also takes about another three minutes to execute various orders for the funds we'd like to purchase. Time is money!

I'd bet most people reading this have hit the lottery already. Sum all the income you've earned throughout your life. If you had received this amount of money as one lump sum payment, wouldn't you consider that similar to winning the lottery? The cool part is that you have the opportunity to be more intentional with your financial decisions since your lottery winnings come about once every two weeks on payday.

How My HSA Saved an Extra $120

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Last year, I had surgery on my left knee due to a meniscus tear. Recently, my doctor said, “You have jealous joints” during my pre-op physical for surgery on my right knee. If you’re wondering why I needed another surgery, I’ll sum it up with one word…racquetball. This most recent surgery was also for a meniscus tear.  Since Lesia, my wife, and I had already hit our deductible for the year, I figured I’d go ahead and have surgery. What can I say? My goal is to spend well.  

Lesia created a FaceBook post about my operation and I received a comment about my surgery budget (thanks Marie). We have a HDHP (High-deductible Health Insurance Plan) and qualify for an HSA (Health Savings Account). Because of our family plan, we can save (pre-tax) up to $6,850 for 2018 towards qualified medical expenses (i.e., copayments, coinsurance, deductibles, and other amounts, but not premiums).

Prior to my surgery, I phoned our insurance provider to get an estimate of the out-of-pocket expense. I had already been informed that a $400 deposit was due on the day of the surgery. Because we contribute money to our HSA each month, we used our HSA debit card to pay the deposit. This particular pot of money has been growing for years (you can’t lose what you don’t use) and utilizing it did not impact our monthly budget. We simply tapped a resource that was already available. The cool part is that using the pre-tax HSA money actually saved us even more money. In order to attain $400 in after tax money (cold hard cash), we would need to earn roughly $520 (taxes, social security, and Medicare included). By having the HSA in place, we make pre-tax contributions and decrease our taxable income.

 In summary, here are a few advantages of an HSA:

  • Contributions are pre-tax

  • Contributions are tax-deductible (i.e., decrease taxable income)

  • If contributions are made via payroll deduction, FICA (Federal Insurance Contributions Act – Social Security and Medicare) is avoided. That’s 7.65% more in your HSA.

  • Money you don’t use rolls over every year

  • Money can be invested to make even more money

  • Contributions are allowed until you’re over 65 (age Medicare begins)

Yes! You Can Make Money Doing Nothing...Almost!

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Most people know that my wife and I pay ourselves a monthly allowance. We refer to it as our fun money. In November of 2016 I decided to use a portion of my allowance to start buying shares of a stock market ETF (Exchange Traded Fund) every month. The initial purchase price was $112.63 per share. I purchased nine shares using money saved from my allowance. Fast forward 20 months and now I own 34.646 shares. The most recent purchase was made on 7/3 at a price of $141.30. If you’re wondering, the current price as I write this is $146.43 per share. Here’s how my fun money is performing:

  $5,073.28 - Current value

- $4,387.94 - Total cost (money I invested)

     $685.34 - Total gain (unearned income according to the IRS since it’s not from a job)

If my math is correct, the ROI is 15.62% ($685.34/$4,387.94). Don’t forget that I had to fund (i.e., intentionally save) 86.49% ($4,387.94/$5,073.28) of the account’s total value from my pocket.

After determining what fund to invest in, there were only three things I needed to do.

Commit to purchase one share per month. This was easy since I set my brokerage account to automatically withdraw $150 each month from my checking account.

Execute the order. There are two main ways to buy or sell: (1) Market Order – You buy or sell in real time at the current trading price, (2) Limit Order – You determine a maximum buying price or a minimum selling price.

Leave the money alone. This fund pays dividends (sum of money paid regularly [usually quarterly] from a share of profits. I also get the benefit of capital gains (rise in the value of a capital asset (i.e., investment) that gives it a higher worth than the purchase price.

It’s true that you can earn money doing almost nothing from investing. However, money will work for you only after you first work for it. Always remember, anytime you invest, there is a chance you can lose money. That’s a risk I’m willing to take.

Are Your Finances Wearing A Body Shaper?

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All of us at some point in our lives have presented ourselves to be something we were not (at least once). Don’t believe me? Remember that first date with the guy or young lady you were convinced was Mr. or Mrs. Right? You might have laughed extra hard at a not so funny joke or wore a piece of clothing to show off your muscles or curves.

Men and women wear body shapers which provide a quick and instantaneous fix to make clothing fit better. A shift of body mass here or there can make all the difference in the world. Not too long ago I had to expand the waist on all my suit pants. I guess I took the easy way out since I don’t like anything that fits tight. I can promise you will never see Al Riddick wearing skinny jeans.

When your personal finances are wearing a body shaper, it’s easy to hide a multitude of things. For example, spouses can hide expenses from each other. You can hide the lack of an emergency fund since credit cards provide the shift you’re looking for. You can also create the perception that your finances are in good shape by focusing more on a monthly payment when financing a purchase versus total cost of ownership. What lender wouldn’t want you to take longer to repay borrowed funds (an expense for you is revenue for someone else). If you retire and then discover your yearly withdrawal rate is eating away too much of your wealth too fast, you may have to re-enter the workforce under the pretense of “I got bored sitting at home.” When thinking about early retirement, if all your money is in your employers 401K, where is the magical money coming from that will support you before age 59.5 (retirement age to avoid the 10% penalty tax)?

If you’re tired of wearing financial body shapers, it’s time to get naked! LOL! Facing your financial truth will be a challenging process that will be one of the most rewarding experiences of your life. If you don’t believe me, try it on for size. You might have to squeeze slowly into your new lifestyle but once you have the complete outfit on, it feels like you’re wearing nothing.

My Wife's New Car, My Emotions, and Money!

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Most people are surprised when they learn my wife drives a 2000 Toyota Solara. She loves Pearl (nickname due to its color) because that was the first car she purchased (i.e., financed) on her own. Pearl was purchased in 1999 and she was fully loaded.

As you can imagine, after 18 years and 245,000 miles, Pearl has a few small rust spots on her hood. She also has a small dent on the driver’s side rear fender since Lesia hit a pole in a parking lot (you know those poles that are near the machine where you pay to exit). When it first happened, there was a long yellow streak on the door, but I was able to buff it out (hoping this would delay a new car purchase). Recently, after attending a Brian Culbertson concert Lesia was playing his latest music very loud on the way home and burst her passenger’s side front speaker. I wonder if she did this on purpose because her next comment was, “I really need a new car.”

A few months ago, Lesia began talking about getting a new car. You know that feeling you get when you you’re about to rip a bandage off your skin…that’s how I felt. LOL! I immediately started mentally preparing myself to part ways with a sizeable amount of cash. After all, Lesia has been my ride or die throughout this debt-free living journey so a new car was reasonable considering all the sacrifices we’ve made over the years. To me, a car is nothing more than a piece of metal that transports Lesia and I from Point A to Point B. I tend to think of them as machines that break down and depreciate.

To my surprise, I learned Lesia had grown quite fond of the Lexus RC300 F Sport Coupe (white of course). She had also visited the Lexus website to build her car. In my mind, all I could hear was the sound cash registers used to make back in the day, before purchases were made by swipe.

Although Lesia seemed settled on a Lexus, she looked at the price of other brands. During this process, I didn’t say much because I already had a number in mind regarding the amount of money that was about to leave the Riddick household. To my surprise, Lesia turned to me a few days ago and said, “I can’t believe how expensive cars are these days.” She then stated, “I don’t want a new car. I’m going to go with something used.” All the while, I’m getting more and more excited. Then Lesia said those words that almost brought tears to my eyes, “I think $20,000 is enough for my next car.” I wish I could find the words to express how happy that made me. I had mentally prepared myself for a $40,000 to 50,000 expense but to find out my wife is happy at $20,000 makes me ecstatic.

If you're thinking about a new car purchase, I suggest you check out Edmonds True Cost to Own (TCO) Calculator. If we had gone with the Lexus RC300, the TCO is a little more than $64,000. Ouch! What's the money lesson in all this? Plan for the worst-case scenario and hope for the best.

Introducing Our New Brand Identity & Website

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Our secret is out! Game Time Budgeting has a refreshed brand look and launched a new www.gametimebudgeting.com. 

The new logo is an evolution of GTB’s original look. It shows a visual change without losing the recognition we’ve built with our clients and the many thousands of lives we have impacted. It demonstrates our growth as an organization since 2010 – it’s modern, energetic and clearly says who we are and what we do.

The new website is designed to enhance your experience, a simpler navigation, better content flow, optimized for use on all devices, and is clear in our mission – helping individuals have more by spending less.

Go explore the site, where you’ll see our full set of financial fitness programs (now available as webinars), meet our team, read blogs that are both educational and entertaining, and find resources to help you along your journey to improved financial fitness.

We hope you like the new site and welcome any feedback you may have at al@gametimebudgeting.com.

#1 Way You Have Not Tried to Improve Your Credit Score 


During the past 20 years, I may have checked my credit score three times.  Truth moment! This is a topic I have not cared much about since making the decision to live debt-free.  My wife and I have not had a conversation (that I can recall) about credit scores in over a decade. Don’t misunderstand, we talk about money all the time but not credit (that money belongs to someone else).  If you are curious, my score is 818. The highest FICO score is 850.  

After learning my three-digit number, I began to wonder why it remains so high although I have no debt. Here is my assumption.  During a summer internship with Wachovia bank in 1994, I signed up for a credit card. I am sure someone at the bank probably said, “You need this so you can start building credit.” Sound familiar? Although Wachovia bank was purchased by Wells Fargo in 2008, my credit history started 23 years ago.  My credit card company sent a letter recently which stated:

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As a reminder, a FICO score consists of the following:
•    Payment History – 35%
•    Credit Utilization – 30% (percentage of credit available that has been borrowed)
•    Length of Credit History – 15%
•    New Credit – 10%
•    Types of Credit – 10%
After my wife and I paid off our mortgage, we established a home equity line of credit (HELOC). It has never been used and I’m 99.9% sure it never will. I have only two credit lines on my credit report, a credit card and a HELOC.  

I think my credit score is over 800 because my available credit is very high; however, my utilization rate is 0%. There you have it. My ability to borrow but lack of borrowing due to my debt-free living choice may be the #1 way most people have not tried to improve their credit score. 

View this video for a simple 4-step process to eliminate debt

How to Jump Start Your 2018 Vacation


I attended an event with my wife recently and eventually found myself engaged in a conversation about money. 

A young lady began to explain her budget and I got the feeling she was looking for feedback. Based on what I learned about her financial habits, I said, “Do you mind if I ask you a few questions?” She said, “No!” I took this as permission to invade her privacy (just kidding). One of the opportunities for improvement I discovered was how she and her husband save and plan for vacations. 

For most of us, our vacation expense consumes the largest amount of cash used within one respective month (emergency expenses excluded). Think about your last vacation. How much did you spend after adding airline tickets, rental car, hotel fees, gas, parking, meals, souvenirs, baby-sitting, and shopping for clothes? Here are some simple tips to help jump start your 2018 vacation plans.

1.    Set a realistic vacation budget - Determine how much money your last vacation cost. Next, ask yourself … could I afford it? If you are still paying for fun you had last year, probably not. 
2.    Save on a consistent basis - If you usually spend $2,500 for a vacation (depending on your family size, this number could be higher or lower), start saving $208 a month ($2,500/12 = $208.33) for the next year versus using a credit card and then paying interest upon your return.

3.    Repurpose extra income - If your employer provides a year-end or holiday bonus, save this unexpected wealth. Use your 2017 tax refund as a resource to fund your travel budget.

While conversing with the lady, I explained that my wife and I stay one year ahead on our vacation budget. The money we are using for vacations this year was saved in 2016. The money we are saving in 2017 will be used in 2018. At the current time, we have approximately all the money we need to travel for the next 12 months. 

The hardest and easiest part about this process is the first step … saving. Today, you have the choice to begin saving for next year’s trip. Here’s some motivation.  Consider how less stressed you will feel when looking for a vacation destination next year and realize it can be paid for in cash. Do the math because numbers do not lie. All it takes is discipline – the ability to train yourself to follow a code of behavior – and you already have plenty of that. 

What money tips do you have for planning a stress-free vacation?