This is the second part of a series on setting up a financial plan.
The beginning of the series is here.
The next article is “5 Accounts, #2 – Online Savings“.

Just about everyone has a checking account, and a lot of people (my former self included) misuse it horribly. In the UK, such accounts are generally known as “Current Accounts”, which is actually a far more useful way of thinking about them.

The upside of a checking account is extremely easy access – through cheques, ATM withdrawals or debit-card purchases, you have a ready flow of money available at all time.

Every dollar you keep in that account, though, is losing value over time. This is because the measly interest rate on checking accounts doesn’t match inflation, which generally runs at 3-4% per year. So $100 kept in a checking account for a year will only be worth the equivalent of $96-$97 in “today’s money” a year from now.

Your checking account should be your primary “monetary interface” with the rest of the world – it’s usually where your paycheck goes, and the account that you’ll use to pay for rent/mortgage payments, groceries, meals out and all the other day-to-day transactions involved in just living. You should constantly pare it down, though.

So I’ve armed myself with a brand-new interest in personal finance, and I’ve got a list of sources to feed that interest. Time to start planning the fundamentals of how I’m going to manage and distribute my money in future.

I’m going to break this up into a series of posts because otherwise it’ll just be a long-assed screed that even I get bored of reading.

First off, there’s two main basics to take care of. Number one, determining the right accounts to keep my financial plan running, and secondly, determining a schedule for distributing money between those accounts.

Once that general framework is sorted out, I’ll need two major tools to keep track of progress:

1. A “net worth” tracker (basically, just a spreadsheet)
2. A way of tracking spending, so that I can pare down unnecessary costs and formulate a workable, sensible budget for day-to-day living.

A lot of what I’m going to cover (how to divide your money up; financial tools) can be found elsewhere on personal finance blogs and other sites, but what I hope to lay out here is a distillation of the best concepts I’ve picked up in my reading so far, from the point of view of someone who (as you may well be) is basically new to this game.

Apologies in advance for the multiple threads this site has recently developed – there are 2 active topics which I consider to be “ongoing” right now – productivity and finance, and I’m brewing up more tasty mind-beverages on those topics even as I type this.

Veering onto another topic entirely, though, today’s major preoccupation is international in nature. Right now I’m working n a talk I’ll be giving soon to a bunch of Korean developers in Seoul, regarding Flickr’s API. What’s interesting about this is the peculiar challenges it raises.

Firstly, I’m not 100% confident that my inevitably-slightly-manic English presentation will be all that understandable to a diverse group of Korean speakers. I’ve brewed up something of a defense against this – designing slides for the presentation which contain both an English component (so that the presentation matches the talk, and I know what’s going on, more-or-less), and a Korean translation. Hence the hurry to get the slides done – so that a Korean co-worker can translate! Nevertheless, it means that every design has to be somewhat “symmetrical”; and that there’s half the usual space per slide for any given concept.

But the really weird thing is how much uncertainty a foreign culture injects into the process of building entertaining presentations. In the circles I move in (amongst my fellow Flickr-ites, for example, and other talented presenters such as the lovely Mr Coates), the Done Thing these days is to illustrate one’s slides with somewhat-relevant photographs, usually as a background to the slide.

The approach makes a lot of sense for the Flickr team (we are, after all, in the business of hosting awesome photos), and has taken off in general due to the ease with which anyone can find good creative-commons licensed imagery through Flickr.

Using photography in this way also has the advantage of making the presentation immediately more visually appealing, and allows for a host of sly (or not so sly) jokes in the form of tangentially-related imagery, or flat-out visual punnery.

I’ve been meaning to post this recipe for about 2 years, but somehow it’s never actually happened before now. It’s become a favourite old standby, the only condiment I always have in my fridge, and the recipe I most frequently pass on to friends (usually after rifling extensively through age-old email archives – another excellent reason for sharing it on the web.)

It’s based loosely on a recipe that Simon posted to london.food a couple of years back, but has been through several cycles of, uh, “maturation” (mostly simplification) since then.

The Boring Bits

• Makes 2 medium jam jars’ worth
• Preparation time: 30-40 minutes
• Cooking time: approx. 1 1/2 hours

I’m still trying to work out if the first comment on my post about finance a few days back was a helpful hint, or spam. I let it through because it seemed pretty genuine, although it raises quite a few doubts in my mind. I’ll repeat the main point here so you don’t have to bounce around the site.

If you are starting out investing in stocks and shares, you might want to use a share tipping service. They point you in the right direction, and then it is down to you to decide if you want to invest in what they suggest or not. You might decide not to invest in everything, but it tends to broaden your horizon and show you companies you would never have looked at before. If it is good, it will also keep you up to date with what the stock market is doing.

The site link which followed is useless to me, being a UK share tipping site (I live in California, for anyone late to the game). And even so, there are a couple more reasons why it doesn’t help much.

I promised a post on productivity when I resumed writing last month, but as I’ve been gathering notes and writing drafts I’ve realised that it’s a really huge topic, and probably better treated in chunks. I’m starting here because procrastination is one of the most serious common roadblocks to productivity – no matter how robust your task-tracking methods or efficient your “inboxes”, if you regularly balk at certain tasks then progress is impossible.

So what are we up against?

Procrastination has one major root cause – fear. There are many sources of fear; some (fear of death, fear of pain) are hard-wired into all of us; others (fear of embarassment, fear of inconvenience, fear of failure) are learned responses to past conditions. All fears originate in the subconscious, and herein lies the problem.

Our subconscious has a highly vivid imagination – it’s always looking out for the wildest, worst scenario that could befall us, and steering us clear. Sometimes that’s good – it’s what stops us accepting rides home with drunks and playing with matches. Other times, it’s disastrous, holding us back from speaking in public, paying a bill or asking that cute stranger if they fancy a coffee. Our subconscious, designed to keep us safe from harm, has a hard time differentiating between Real Harm (certain death) and Not Actually Harm (“sorry, I’m dating someone”).

The very thing which makes us human – the ability to spot patterns, imagine scenarios and weigh up alternatives – can be a crippling burden if left in the control of the subconscious. Luckily, all those things also combine to afford us a defence against ourselves – rationality.

Fighting fear with rationality takes some practice, but it’s a useful skill to have. Training yourself to fight your subconscious knee-jerk reaction against getting something done provides you with a better chance of fighting stronger, more primally-driven fears (fear of flying, or spiders, or clowns).

I just caught myself doing something extremely odd; something that I’ve done habitually for years. It’s in the general class of little quirks which we tend to notice especially in generations older than us. I suspect that’s because the original underlying cause of their habit is obscured by time and “progress” and made to seem all the more out-of-place as a consequence.

My specific quirk concerns those plastic rings which hold together multipacks of cans and bottles. Whenever I’m about to dispose of one, I always take a pair of scissors and snip through every closed loop in the plastic so that none of them are joined together. I can remember very clearly why I do this, although I couldn’t tell you when it started.

At some point in the past, I heard a story about scavenger birds (seagulls and the like) who were getting their heads caught in the loops of plastic can-holders and then slowly choking themselves to death. I believe that the story specifically mentioned cutting the loops apart to avoid their suffering. I wouldn’t class myself as a rampant “animal lover” exactly, but something about the story hit home. Et voila, many years later I find myself standing in my kitchen cutting up plastic rings. Each time I do it, I remember the original story and ponder its veracity, even as I snip snip snip away.

The really crazy thing is that I then hopefully deposit the plastic in with the recycling, telling myself “well, I snipped it in case they reject and landfill it regardless.”

I fully expect, many years from now, to be standing in some kitchen snipping away whilst incredulous offspring or offspring-offspring (should such people ever exist) ask me “why the heck are you doing that?”

“Seagulls, dear. Seagulls.”

I’m not even particularly fond of seagulls…

Total, utter bewilderment. You find some sources, start reading, and tinkering and experimenting, and some of the bewilderment seems to lift, only to come back in spades when you run up against a scenario you didn’t anticipate, or a major technicality which you’d overlooked. It can be frustrating; it can become a huge time-sink. I absolutely love it.

I’m talking about jumping feet-first into a new area of knowledge or expertise, and trying to “climb your way up” through torrents of information, advice and opinion so that you build your own “world view” of the domain in question and possibly, if you invest the right time in the right places, become an expert (or at least a competent amateur) in the field in question.

I think most people have done it at least once in their lives – if only when studying at university or learning a trade. I can immediately think of 3 times that I’ve done it – getting used to the realm of literary criticism at UCL, first learning my way around the internet, perl and linux around 1998, and properly acquainting myself with the rich and impossibly complicated world of independent music, starting last year.

The reason I’m writing about this feeling now is that I’ve just embarked on a new “problem domain” – money.

I saw the idea for Mojito cupcakes a couple of months ago on Slashfood, and was intrigued immediately, but didn’t have time to bake anything back then. A friend’s birthday a few weekends back seemed like the perfect opportunity to try out the idea, so I took a look again at VeganYumYum’s original page on the subject.

There were a couple of problems with just following the recipe, though. Firstly, VeganYumYum’s page wasn’t so much a recipe as a suggested modification to a recipe – specifically one from the book Vegan Cupcakes Take Over the World, which I don’t have. In any case, trying to follow a recipe whilst also following suggested modifications is kinda tricky (as we discovered). The original recipe was also vegan. Now, I have no real problem with vegan food, but I find Soy Milk to be kinda revolting, and on the rare occasions that I like to bake, I’m a bit of a traditionalist about it. I may try the vegan cupcake thing in future, but not this time around.

So the end result was that we found a “Full fat” Vanilla cupcake recipe and set about modifying it according to the Mojito idea.

What follows is a single recipe which (eventually) worked.

Okay, so that title’s a little cruel and, yes, this is mainly filler to cover up the fact that I haven’t finished any of the pieces I mentioned previously. Soon, I promise… (again)

But anyhoo…

For quite a while, I was a big fan of Mark Morford’s SF Chronicle column. The writing was alternately breezy and frenetic, and each piece generally contained a kernel of truth or outrage which was… resonant.

Over the past year or so, though, the quality dropped. His politically-leaning pieces became directionless rants, and more and more columns were taken up with meandering rambles about consumer technology or science news.

At points, the only fun left was to play “spot the ‘Bush-ravaged’”, scanning each column to see how he’d managed to work that horribly over-used phrase of his into a subject completely divorced from Republican politics.

Today’s piece, however, is something of a return to Morford of old. It’s a little bit honest, a little bit brutal and a little bit sweet. It also contains the killer line

…whose biological clock is ticking like Dick Cheney’s pacemaker in a gay fetish dungeon…

…which made me accidentally snort tea this morning.

Since the column in question was apparently prompted by his newly single status, the headline here speaks for itself.