I’m not gone.

A quick update for those who are not yet informed.  My son entered the world on September 1st.  Between him and my new job i have not been blogging much.  I have not been doing too much outside taking care of baby and mom, work, and some exercise.  I’ll work at being more regular with my posts.

Cabela’s

I am taking this moment to suggest everyone go buy something at Cabela’s this month.  What you buy is up to you.  Well i was offered a job working at Cabela’s in the Camping department.  They might have an IT position opening up soon that i might see about trying to transfer into.  Am i getting paid to write this???  I’m not getting a paid to write this but i am suggesting you buy from them to ensure that i’ll keep getting a paycheck.

Save Money on Gas

Filling up your gas tank is expensive.  Even when you have a hybrid vehicle.  Diesel vehicles, or some tricks may get you better mileage but this post is not about reducing cost by getting better mileage.  There are a number of things that you can do to get cheaper gas at the pump.  Driving less would save a ton on gas.  Once again not the focus of this post.  So how do you reduce the price you pay at the pump.

Start by finding a cheaper gas station – Sites such as GasBuddy or MSN Gas Prices track gas prices for you.  By checking the gas map before you head out on your errands you might see a station that saves you money further along your route.  You can look and see that gas in some town is cheaper and a much cheaper place to fill-up on your road trip.  Both of these sites are Web 2.0 apps where users update the prices.  Both sites are great resources but driving out of your way, across town, to save a few cents might just cost you more.

Using a Gas Station card – You can save 5 cents a gallon by using a Valero Card to pay for your gas.  Shell, Texaco, Exxon all have their own cards.  You can usually save 5 to 10 cents per gallon with these cards.  These cards have the problem of tying you to a certain gas station.  You can get around this by just carrying a card for each station that has one.  Is that worth it to you?

Get your gas at your grocery store – Safeway and Albertsons both have gas rewards programs that save you money when you show at their store.  Costco passes their saving on in the listed gas price.  All require your membership rewards card.  Because they can track your every purchase to better market to you they sell you cheaper gas.

Pay with cash – Some gas stations give the same 5 cents per gallon discount when you pay with cash that they give with their credit card.  You are then not tied to the station you have the rewards or credit card for.  You will likely have to pay inside where your are more likely to make an impulse purchase on that candy bar since you saved money.

Look for coupons – Every week my parents pickup the local Nickel Ads because a local gas station has a new 5 cents off per gallon coupon.  This coupon requires you pay inside with all those tempting impulse purchase items.  Some stations even took other station’s coupons so you might not be limited to just the one that puts out the coupon.

Use your rewards credit card – The Discover Open Road (no longer available) credit card gave 5% cashback for gas station and automotive purchases.  Using this with my Safeway Rewards saved me much more than many other options.  With gas over $2.00 per gallon I saved more than paying with the Gas Station card or cash.  I could use it with my grocery rewards or coupons.  Discover might not be accepted at some establishments locally but every gas station and bar in town took it.  The same seemed true for American Express.  The one restriction i ran into was only getting 5% on my first $100 of gas purchases each month.

 

By using these methods i was able to save money so i know they work.  What methods have you found to save on the price you pay for gas?

3 Surcharges Added into my Grocery Bill

Store loyalty rewards cards cost me money.  Safeway and Albertsons and I'm sure others in different parts of the US give gas discounts.  Having $1.30 per gallon savings off my next fill-up left me wondering how much extra I've spent to earn those rewards.  With credit cards a store will increase costs for everyone to cover expenses of processing those cards.  Albertsons is likely charging everyone extra to more than cover the gas fill-up savings.

By shopping at a store with loyalty or rewards cards with gas bonuses i am likely paying 3 surcharges that i might be able to avoid.  My prices must cover the loyalty discounts.  My prices must cover gas rewards.  My prices must cover credit card transaction fees.  Not many stores manage avoiding passing these fees onto their customers.  The only large retailer i know that avoids these surcharges is Costco.  They charge a membership fee that most stores do not charge.

What can you do to avoid these surcharges?  You may not want to.  I pay to shop at Costco and pay for these surcharges because i am spending less for the items i buy than shopping somewhere else that will not charge them.  Some smaller shops might save you some or all the surcharges.  Only avoid these charges if you are saving money by avoiding them.

Let us know what you do in the comments.

Personal Finance Advice Readers

Welcome Personal Finance Advice readers. This morning PFAdvice became the first financial blog i read that linked back to here. If this is your first time here i started this blog March 30th and have averaged 1 post here a week. I also post on different blogs on other subjects. Look around and feel free to tell me if you want a post on a certain subject.

A Start to Living Organized

One of the shows i watch is Clean House.  I am always amazed at how much stuff people have that just clutters their homes.  You will see people that talk about having to hide their shopping from their spouse.  People who have so much money sunk into things that they are willing to have a TV show come and sell off their junk to reorganize their lives.  You don’t need a TV show to reorganize your life.

To get started organizing there are three things you need

• A calendar – The calendar is for keeping track or important dates and events.  Organization for the days of the year.
• A planner – If the calendar keeps the days of the year in order the planner tracks your events throughout the day.  Organization for the time in the day.  Most calendar software applications will double as as both the calendar and planner
• A system for filing things – You may need 2 systems.  One for files on your computer and another for items around your home or office.  A place for everything and everything in its place.

I recommend starting first with just a calendar.  Add important dates, birthdays, anniversaries, work functions, school events, etc.  Then move on to the planner.  If you are using Outlook of Google Calendar do these two steps together.  Now move onto just one area of your house.  Move everything that does not belong in that area out and keep it organized for one week.  You can move on to the rest of the house later.  We are talking about a start here.  Once you know you can keep it organized you can move onto a second area.

Once you get started you will begin to have less stress.  Having an organized area leaves you feeling better about yourself.  You will have more time not having to search for things.  You will be able to declutter items you have multiple of or no longer need.  It will be easier to identify these items.  You can save money by eliminating duplicate purchases.  There are plenty of benefits to living organized.  The best might just be not appearing on a show like Clean House where the entire nation knows of your organization and clutter problems.

$50 a Month Plus Free HBO

My in-laws finally called the cable company to try to save some money.  I have suggested this a number of times.  Without knowing how much they were paying i was still confident they could save money.  They signed up for the Comcast Triple Play and saved money over their current bill.  They currently had local phone service from Qwest and had cable and internet from Comcast.  The Triple Play package moved phone to their Comcast Bill.  The promotion also included free HBO for a year.  This left a larger cable package and a smaller bill.  As you likely guessed they saved $50 total.

If you are interested in lowering your cable bill there are some things you can do.

• Identify what specials cable and satellite companies are running so you know where you can negotiate.
• Call your provider and ask what specials they can give you.  Some companies have packages and specials for current customers.
• Tell your provider that you can sign up with their competitor for the best deal you have found.  Ask them to match the deal.
• If they can’t or won’t match the deal tell them you want to cancel.  You will usually get transferred to someone that can make you a better deal.
• Most cable or satellite providers have 2 layers of management for those who want to cancel.
• If your current provider won’t try to work out a deal then jump ship.  You will be much better off.

Out of Town Job Interviews

I had 2 out of town job interviews last week.  Job interviews are hard work.  I found places to stay with family to cut down on costs.  I budgeted for food and gas.  My first interview was in Medford, OR with Providence Medford Medical Center.  The interview was Wednesday morning.  I met with the manager and the team i’d be working with.  Having worked there before i knew everyone in the department that i did not interview with.  I went and grabbed some breakfast after the interview in the hospital cafeteria and was joined by Robert who i had worked with before.  The interview went well.  I even accounted for the fact that i’d get no new applications completed on that day.

Thursday was another interview.  This one was with the North Central Education Service District located in Condon, OR.  This is a small town of just under 1000 people.  I planned such that i’d be able to interview and make it back home the same day.  Getting to town i realized this was not somewhere i wanted to live.  You can only learn so much about a place online.  Knowing i did not want to live there i still did the interview.  Practice is always a good thing.  Even knowing i would turn the job down i did not account for one thing.  Waiting to hear back.  I accomplished very little in the time i was waiting for an answer.  I heard back this morning.  Maybe now i can be productive again.

Maintain a Positive Attitude in a Long Job Search

I’ve been in a job search for over one year.  In this time i’ve tried to maintain a positive attitude.  Sure research claims there is a bonus to my job search.  If improving your search is the reason you got here keep reading.  I have been trying to maintain a positive attitude because i feel better when i do.  I like to be in a good mood.  The fact it improves my chances of getting a job is not something i’ve concerned myself with.  I have learned some things in my time that i thought i’d pass along.

• Set a schedule and stick to it – On days i sleep till noon (usually from staying up all night) i feel i have wasted the day.  I job hunt in the morning; read or study in the afternoon; and exercise at night.  This is the basics.  My schedule is more detailed than this.  The reason for the schedule is it leaves you feeling like you have accomplished something (because you have).
• Play games – Find a sport or two that you enjoy.  Then find somewhere to do it.  For me this was Ultimate, Tennis and Basketball.  Because i chose sports that are fun it is not a chore.  Plenty of team sports are played all over the place.  Hit up a newsgroup or other online forum looking for where groups play.  Also renew interest in  board or card games.  In addition to being fun they can replace more expensive entertainment (reducing stress over money).
• Maintain your faith – If you are religious in any way hold on to that.  It will give you strength.  I believe that God will provide for my family.  He has so far.  He will continue to do so.  Your church may even have employment services to help you find work.
• Learn something new – Find a subject you want to learn more about.  Find an area you can improve in your current or desired field.  If there are certification programs study for them.  If certifications exist in your field they often make a difference at some level.  Develop or find a self-study course for the certification and get started.  Stating “I’m in a certification program for x” during an interview is almost as good as having the certification.
• Clean house – There are two aspects to this.  First get rid of stuff.  If you have ever watched the show “Clean House” or “Clean Sweep” you know how much better the people feel after getting rid of stuff that complicates their life.  The second is to organize and keep your dwelling clean.  Knowing where things are reduces stress.  Being clean lifts your spirits.
• Read – Add some fiction into your life.  You probably should balance out your studying somehow.  The imagination required to see characters and places will take your mind off of your troubles.  It might also help you think differently a find another way out of joblessness.  Non-fiction is good but often does not give me the same level of escape as fiction.
• Give Service – Focus on other will help you realize that you are not as important as you think you are.  It does for me.  Seeing people in worse situations than you will also help you see that things are not as bad as you thought.
• Do something you enjoy – Hobbies are a great thing.  Find one to further take your mind away from problems.  It may even grow into a job.

There may be other things you can do to maintain or build a positive attitude in a long job search.  These are the ones that have worked for me.  Some things i’ve left off because i don’t feel they work (non-play exercise) or they don’t seem to work for me (focus on a better diet).

Should I Buy a Home or Rent?

Buying a home is a good decision.  This advice has been around for a while.  It is wrong.  Plain and simple; wrong.  Buying a home is only a good decision when it is a financially sound decision.  Squawkfox has a list of 6 Mortgage Meltdowns; times when buying a home is not financially sound.  The first step in seeing if this is right for you is to look at a rent vs buy calculator.  I usually look at the one from the New York Times.  This calculator would be all you need except for one thing… risk.  Risk is why you can make money work for you.  In home ownership the risk is usually working against you.

If you are single.  When you are single you usually come out ahead in the rent half of the rent vs buy calculator.  You can rent a place with a roommate or two and come out much better with renting.  It is often not financially sound to buy as a single individual.  I’m not even going to compare investing the difference or add it into the calculations. 

If you are married.  Once you are married you might come out ahead buying, but your marriage is one of the largest risk factors in buying a home.  With divorce rates around 50% or higher in many countries you are taking a gamble on the purchase of your home.  The average divorce happens after 7 years.  At 7 years you have likely spent $23,800 more buying than renting.  It takes on average 16 years of a 30 year mortgage for a home to be cheaper than renting.  At 50% buying a home has odds comparable to putting $200,000 on black and knowing you will have to wait 7 years to know if you “lose”, 15 years to know if you “won” and 35 years for the payout.  Starting with over 50% chance of divorce or add in the likelihood of bankruptcy then your financial odds are better in Vegas.

You can increase your odd by looking at your real chance of divorce or figuring how you compare to divorce statistics.  If you are signing a prenuptial agreement then you should just forgo the home purchase.  A prenuptial agreement is just a plan for what to do in your divorce.  Chances are that divorce will happen before buying was cheaper than renting.  While you may want to buy a home it does not make sense financially for a number of people.  The thought that everyone should buy led the sub-prime market and is a partial cause of the current recession.

 

Even if the numbers do add up don’t forget risk.  Buying a home might just be more risky than day trading in the stock market and is more risky than gambling in Vegas.  Let us know what you think in the comments.

Financial Peace Revisited

My most recent book i’ve read is Financial Peace Revisited by Dave Ramsey.  In this book Dave gives you Peace Puppies.  Things such as plant seeds and handle credit report corrections yourself.  This book is an updated version of Financial Peace and adds a couple of chapters.  I’ve never read Financial Peace for the same reason college classes use the newer versions of textbooks; updated information.

Having started my own financial plan and listened to The Dave Ramsey show nothing in this book was all that new to me.  I’d describe this as the back story and build up to his baby steps.  The book was designed to be uplifting and give you a sense that you can have financial peace.  It does i good job of doing so.  It does not, nor was it designed to, go in-depth into his baby steps.  Having not read it my guess is that is what The Total Money Makeover is.

Each chapter ends with Dave’s wife Sharon giving her two cents.  This is followed by the Peace Puppies.  I’d have liked the key points to be highlighted separately. Dave lists all the Peace Puppies you’ve gone through every chapter.  I’d like just the new ones and all of them listed just at the end.

What did you think of this book.  Share in the comments.

I Will Teach You To Be Rich

Today i finished reading I Will Teach You To Be Rich by Ramit Sethi.  Much like Dave Ramsey has his plan for financial success, Ramit Sethi has a plan for financial success. His 6 week plan sets up financial automation, replaces a budget with a Conscious Spending Plan, and starts a retirement fund.  He frequently points out the biggest (and possibly only) hurdle to being rich is planning and getting started.

Ramit asks his readers “Would you rather be rich or sexy?”  He does this because often the path to riches are not sexy.  Sure some people play professional sports.  Some win the lottery.  This book is not for them.  This book is written for people under the age of 35.  He gives advice for every age group but expects the 20-35 group to be the ones reading.

Having followed the blog at IWillTeachYouToBeRich.com the first chapters sounded real familiar.  Ramit uses the same examples on his blog as in his book.  I have no problem with this as it reiterates what he is saying. His plan and the advice on his blog is great.  The biggest problem with the book was it was hard to finish.  With all the action steps i’d read something, put the book down, then go do what Ramit said.  I’d then start doing something else and have to come back to the book later.  This book is top of the three i’ve reviewed so far.

 

Have you read this book, Rich Dad, Poor Dad or The Millionaire Next Door (check out my reviews)?  Give your thoughts in the comments.

Finding a Better Credit Card

I have seen people unwilling to drop their credit card company.  Even with all the advantages with changing.  I myself don’t want to try and get a new credit card until all my credit card debt is gone.  Since 1 brought 3 credit cards and my wife brought 2 credit cards to our marriage we have cards from Chase, Discover, HSBC, and Wells Fargo.  This leaves a few options for us.  We want to cut this down to 3 cards.  The Wells Fargo card is a backup funding source for our Wells Fargo checking account so we will not have any overdraft charges.  It makes the checking account we have a no fee account.  We don’t even have to use the card, just have it.

Not wanting a new credit card company but wanting better rewards than the 1% we get on the Discover, Chase, and 1 of 2 HSBC cards.  So we did some shopping around for a new card.  We compared all the different cards that Chase, HSBC, and Discover have.  I exported my transaction record from Mint.com to Excel.  This let me compare the rewards formulas against my spending.  I also compared some other cards not by these companies.

Most credit cards companies will change your rewards program over the phone faster than you can fill out an application for a new card.  We found that sticking with the Discover Classic Card i have*, has better rewards than the next best option of the Discover More card.  I was surprised to see this.  I figured changing was a better option.  The best card to match with the Discover was the Amazon card from Chase.  Changing cards can get us a 15% increase in reward payout.

There are advantages and disadvantages to keeping your same credit card company.  If you are (one of the few) getting good service you continue to get that good service.  You can be getting better rewards than what you have.  The length of credit on your credit report stays the same.  You can even change your rewards package with a balance.  No balance transfer often saves 3% of any balance.  Moving to another card can improve the service you get.  You get promotions for moving.  You can get better rewards.  You might get other perks as well.  Look within your own credit card companies when changing.  You might even be able to get the promotions.  But be warned, you will almost always lose any rewards (not cashback) you already have earned.

*You can no longer get this rewards package.  It was replaced with the Discover More rewards.

Rich Dad, Poor Dad

Being another staple in many financial libraries my next read was Rich Dad, Poor Dad by Robert Kiyosaki and Sharon Lechter.  This book is subtitled ‘What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not!’  This book left me with conflicted feelings.  While reading it was suggested that the Rich Dad was made up.  I did not have a problem as he was a means of teaching the points of the book.  For the first half of the book all the points are backed by a story of how Rich Dad taught through practice then followed up with the lecture.

The second half of the book the feeling changed.  The points were no longer about Rich Dad as much as they were “Here is how i did it through Real Estate speculation.”  Each example through real estate was followed with a caveat of don’t do it this way.  Just learn the principle.  The last couple of chapters suggest to learn the process for real estate speculation go to seminars.  I was not surprised to learn that Richard Kiyosaki has a series of seminars on learning real estate.

Anterior motives aside, the principles seem sound.  The book does not ever teach you how implement the principles.  This is a good thing.  It allows the book to remain relevant longer.  Implementation is also dependant on your situation.  Many other subjects teach in a similar way.  Computer Science is one; the implementations change over time so principles are more important than thing to do.  There is a chapter at the end on things to do.  It is sparse and seems an afterthought.

Have you read this book or The Millionaire Next Door (check out my review)?  Give your thoughts in the comments.

New York Number

I was reading a post on Consumerism Commentary.  Flexo’s post Let’s Stop Envying Millionaires suggests with the increase of millionaires in the world that we should look at a lighter level of savings  He also suggests that $1,000,000 won’t be enough to retire on.  He also introduced me to the best retirement calculator i’ve seen.  This calculator asks a few questions about your preferences instead of asking about money.  Based on your preferences it calculates your recommended retirement amount.  This calculator is your New York Number.

My score from this questionnaire is 20 correlating to a $1 million retirement amount.  This amount makes me feel more comfortable with the What is your current salary and how long until you retire based projections.  My normal range was $700,000 - $2,000,000.  One thing i don’t like about most retirement calculators is they want you to predict what rate of return your portfolio will have until you retire and the rate after you retire.  If i could predict the markets that well i’d be rich enough to not need to worry about financial planning.

What you you think?  How much are you planning to retire with?  How did you determine the amount needed?

The Millionaire Next Door

Since i’ve gotten a few books from the library i thought i should share my findings.  My most recent read is The Millionaire Next Door by Thomas J Stanley & William D Danko.  This book has a great reputation that is well deserved.  It is based on years or research and interviews with millionaires.  It is easy to read.  It gives great insight into the difference between millionaires and their neighbors.  None of the millionaires are the ones seen on TV.  Reading this book was a great vindication for the things i’m doing.  To see i’m as or more frugal that the average millionaire in my spending habits is great confirmation that i’m on the right track.

This book is not for everyone.  This book does not teach you how to become rich.  It teaches you what those who are already millionaires are doing.  Since this is a research book it is full of research and the results.  This book will be most enlightening to those who are not frugal.  It’s biggest point is defense vs offense.  Defense of being frugal.  Defense of planning for the future.  Offense to say you must make a decent wage.  This book often tells you both are required to become a millionaire.  If you are reading personal finance blogs you are likely not going to learn many groundbreaking things in this book.  It will make you feel better about yourself that you seem to be on track.

I recommend this book to anyone reading personal finance blogs.  It can seem long winded at times.  Some people would rather skim for the bold type only.  Don’t.  Read it.  Otherwise you’ll miss learning that the profession with the largest percentage of millionaires is …

Board and Card game reviews

Hard Work = Play posted a couple of game reviews to match Reduce Gaming Costs.

Town Hall For Hope

You may not drink the Dave Ramsey Kool-Aide.  You may be his biggest fan.  Either way his broadcast “Town Hall For Hope” is worth the hour 45 minutes to watch it.  If you missed it, Town Hall For Hope was a live broadcast at the start of May broadcast to churches and community halls all over the country.  6000 locations strong.  This broadcast was free and has been available to buy on DVD.  It is now available for free on Hulu.

 

Reduce Gaming Costs

In The Simple Dollar’s Everything You Ever Really Needed to Know About Personal Finance On Just One Page we are told “Buy games that have a lot of replay value …. they maximize the value of your gaming dollar.”  This can be a great area to reduce some spending.

Find some board and card games

Board games keep well over longer periods of time.  Monopoly has good play after 50 years.  Old people are notorious for playing Canasta or Bridge.  I loved playing Risk or chess with my Father growing up.  XBox Live has Uno.  Why, because board and card games have staying power.

Gaming should be social.

Multiplayer games tend to get more playing time than single player games.  What do you play more with a deck of cards, solitaire or poker?  Did you even play the single player campaign in Halo?  Why are Guitar Hero / Rock Band so popular?  Monopoly is the most played game of all time.  Playing Monopoly alone is boring.  Trust me.  Looking for games that will be played my multiple people will lengthen their life span.  I’ve never had a buddy ask to watch me play Super Mario Brothers.  I’ve had a game i stopped playing regularly that someone asks to play.  All of a sudden i start playing this game again.

Look for video games that your friends play.  Almost all board and card games are multiplayer games.  Games you are playing with friends and family will be games you remember.  Risk game nights with my buddies brought us together and made us closer friends.  In college there were plenty of Halo nights going on.  These individuals enjoy not just the game but the friendships.

Single Player games

Look for reviews that tell you how many hours a game will take to beat.  Look for games with plenty of challenges and ones with multiple play modes.  Newer Star Wars game will usually let you play as both the Jedi and the Sith.  This doubles the game play off the bat.  Look for older games that you can play again and again.  I’ve beat Mario and still enjoy playing it again.  Find single player games that you can play in multiplayer modes.  A deck of cards for solitaire will double for freecell, poker, 52 card pickup.

Reduce your out-of-pocket costs

Buy games used.  Used games cost less than the same game new.  I would not say this if this were not news to some people.  Trade in your used games that you don’t play.  This cash or credit can be used to get other games.  Sell games on eBay or Craigslist or garage sales.  Used books stores will occasionally have used games as well.  Don’t pay full price for video games.  Trade your games with friends.  You can reduce gaming costs and still have good gaming experiences.

Is an Emergency Fund right for me?

I am a firm believer in an emergency fund.  I tell others about the benefits and why they need one.  I have it as part of my long term plan.  I just don’t have a fund right now.  Lazy Man and Money is Glad he has an emergency fund.  I am glad i don’t have a fund right now.  Dave Ramsey advocates having a $1000 emergency fund first.  My wife and i are working on our credit card debt first.  So why don’t we follow this advice yet?

The costs of an emergency fund

The first cost of an emergency fund is the fund itself.  If you have a $1000 emergency fund your first cost is $1000.  If you have credit card debt putting $1000 in to a savings account is no different than taking a $1000 loan against your credit card.  This $1000 is keeping me in debt longer.  It is $1000 not going to pay down my debt.  On our plan this is now 2 1/2 months longer with credit card debt. Had we started when we first began working to become debt free this was almost 6 months longer.

When paying down debts you pay down the lowest balance or the highest interest rate.  We chose the highest interest rate.  An emergency fund equates to a loan of $1000 at the highest interest rate.  The rate on this emergency fund loan drops each time you pay off your highest interest debt.  Each month i don’t use that $1000 toward debt lengthens the time i will be in debt.

When an emergency hits what happens?  There is no difference to my finances with or without this emergency fund.  If i have a $500 car repair hit and don’t have an emergency fund this bill gets added to my 8.24% interest rate card.  If i pull this out of my emergency fund i add $500 back to the fund before paying extra on my cards again.  This leaves the credit card with a $500 higher balance until my emergency fund is replenished.  Either way i pay the interest on the $500 on the credit card bill. Six in one hand, half dozen the other.

Financial Insurance

Having an emergency fund is an insurance policy against trouble.  It protects you from paying interest on these emergencies.  Until you are out of high interest debt the costs are the basically same.  Insurance is a gamble against yourself.  Life insurance is a gamble that you will die.  Car insurance is a gamble that you will be in an accident.  Health insurance is a gamble that you will have health problems.

When to start the emergency fund

Hopefully never.  Wait, never?  With some advance planning you can have an ING Savings fund for health costs, car repairs, lost job, etc along side your vacation fund.  Since most people don’t want to plan that much in advance they lump all of these into one “emergency fund”.  Even i don’t want to plan that much so i too will opt for the emergency fund.  If you were going to have these separate funds you don’t start until your debt has been paid down.  Using a lump “emergency” fund then i suggest starting at this same point.  Don’t take a loan against yourself.

 

What do you think?  When do you start your emergency fund?

Credit for College Students Costly

NBC News recently aired a segment on Credit Cards and College Students.  Embedded is the video from Hulu.

What key is more important: protections from credit cards or teaching about financial management?

Using Technology to Save Money

Saving money is hard work.  Technology and gadgets are not cheap.  Trying to have the best of everything takes a toll on the finances.  Technology does not have to cost you.  Technology can be employed to reduce costs.  Saving on entertainment. Saving on other technology.  Decluttering.  Using technology to reduce your financial output is hard work.

One aspect of technology that can be replaced is cable.  Many places have reviewed replacing cable so here are some highlights.  Hulu.  Hulu has episodes, movies, and clips from Fox and NBC.  This gives all you 24 and The Tonight Show.  Hulu also recently worked out a deal with Disney so ABC, Disney, ESPN, ABC Family could all have content show up.  Various Food Network, Style Channel, and HGTV content is also available.  iTunes has shows for purchase.  Many different locations show their own videos on their own websites.   Like sports than ESPN360 might be what you want.  You can rent TV and movies on dvd or Blu-ray via services like Netflix or at your local library.  You can also just dump the cable and go outside.

Another way to save money with technology is to reduce your technology costs.  You can find ways to extend the life of your computer.  You can add RAM or a larger Hard Drive.  I don’t suggest much in the way of expansion past this.  You can put older systems to use as a server.  You can make use of open source software.

It is possible to save on storage costs by decluttering.  Digitize papers and convert movie and music collections to electronic media.  Not having 100 DVD cases means you don’t need or spend money on DVD storage systems.  Storing all papers digitally means you can rid yourself of the filing cabinet.  You might even recoup some of the money spent on all this stuff.  eBay can be your friend when you are the seller.

If you have a system that is top of the line you likely spent a lot on it.  One way to maintain better equipment is to subsidize upgrades.  If you build a computer yourself it will cost less than buying a built system.  Take advantage of this by selling your system to upgrade.  You can often sell a system for the cost of parts to build your new better system.  You have to constantly do this so this option only works if you build systems as a IT consultant or if you have a ready supply of buyers.

Spending to Save Money

How much added savings do you require to be willing to spend money on a money saving device?  I had always thought it was silly to spend money for devices to save money.  Recently i realized that even though i scoff at the idea i have been doing this for a long time.  I looked at these devices as scams and fake.  Look at your own feelings on the thought of spending money on something to save you money.  Buying “money saving” devices is throwing money out the door.  But maybe not…

 

Gift Cards

There is a thriving online community in the gift card trade.  You can trade your old gift cards with a full or partial balance for cash or other gift cards.  You can often buy gift cards online at a partial cost of the amount on the card.  Some locations even give free gift card of say $5-10 with the purchase of a $25-50 card.  If you are planning to shop at this store it might be worth buying the gift card to get the free one then getting back in line with your purchases to use these cards.  I recently bought a $100 gift card on ebay for $50.  This can be risky.  I did my homework and bought from someone with over 10,000 positive feedback and 0 negative.  This made my purchase at that store 50% off.  Pair this kind of savings with % off coupons or sales and you’d could have $150 or more in merchandise for pennies.  Buying a gift card for half off is not uncommon.

 

Coupons

Ebay also allows for the sale of coupons.  They require you to mail the actual coupon not just email a copy.  My sister recently bid on and won a $75 off $100 purchase at Old Navy coupon.  Coupons can just as risky as gift cards.  With proper checking these might be ok as well.  A problem might arise as most coupons state not valid for transfer or resale.  The Old Navy coupon did.  The coupon my sister bought had an individualized barcode and Old Navy accepted her coupon.  They could have just as easily said it was invalid and left her to battle ebay and the seller for her money back.  Her cost for the $75 savings was just $12.  Coupons can be found for 75% off or better.  You might just get a stack of them for free.

 

Entertainment Book

Buying a book full of coupons be worth the investment.  It is important to make sure that you will use the coupons and that you not buy something just to use a coupon.  If you were otherwise going to buy the things the coupon book has coupons for you might save money.  I have also seen coupon books sold by school groups.  A similar item to a coupon book are varsity cards.  Sports teams will sell a card that has various deals at local businesses.  These often have buy 1 get 1 offers and often have multiple pizza places on there.  I would always buy these to help whatever group is selling them if i planned to use them or not.  And normally with the varsity cards or coupon books you only need to use them 2-3 times to save your costs.

 

Club Memberships

My last group is club memberships.  I have been a Costco member for many years.  I did not group this in a similar category to the Entertainment Book until recently.  There are people that will buy membership at these locations just for 1-2 big tickets items.  If Costco has the HDTV you want for $100 less than any competitor it is worth the $50 for membership just for that one item.  You then have access to all the other club perks and prices.  Costco membership might be worth it just to buy Costco gas.  Like with other saving methods you have to make sure you use if for things you would buy even without the membership.  Also warehouse clubs prices are not always cheaper; you still have to shop around.

 

Spending money to save money can be a great investment if you make sure the “money saving” device will in fact save you money.

My Great Resume is all Wrong

Developing a good resume is hard work.  I have a great resume.  I have worked with various resume gurus and and spent countless hours working on it.  I have a one page and two page version.  I start with my 4 page resume and edit it down to one or two pages depending on the job.  Tailoring your resume is an important step for each position you apply for.  Sending out 25 copies of a resume broad enough to cover all 25 positions will produce fewer results that 3 tailored resumes.  My resume is full of action words and results.  I don’t include anything without a reason.

But my resume that is great is not producing the results i want.  I recent sat down with a recruiting manager that reviewed my resume.  I sent him a copy of my resume and told him of the results i was getting with it.  They were poor.  I was getting a call in every 50-75 applications.  Not the 1 per 25 average i see different locations.  He told me my resume looks good and requested we sit down for a discussion.  He asked about my background similar to a normal interview.  He made some notes then told me the bad news.  My resume was great.  It was possibly the best resume of someone getting such poor results.  I even accounted for time self-employed consulting.  There was only one problem that was causing my heartache.  My chronological resume was not a functional resume.

All my life i learned that a resume listed your work from the most recent to the oldest.  Included the positions relevant to the one i was applying for.  Kept the action words and results that showed i have the skills from the position description.  Sent my resume with a cover letter that showcased why i fit the job.  I had also learned that functional resumes were for people who had something to hide.  Functional resumes were for covering up that you did not have the experience.  

This recruiting manager pointed out that many resumes are not scanned by someone other than the hiring manager.  These individuals often screen out applications where the most recent position is not in their field.  People were not seeing that i had the skills only that my last job was in a different field.  He suggested that i needed to build a functional resume.  I needed to to highlight my skills not my recent positions.  Functional resumes are for people changing careers.  You want someone to see your skills first.  Now before i send resumes i have another task to complete; determine if this company will accept a functional resume.

Finding a job is Hard Work

I am not a victim of the current economy. I lost my job 9 months ago. I have not been able to find new employment in my previous field of employ of the field i have the most experience with. I progressively branch out my job search. To begin i was looking in one or two locations. I told everyone that i was looking for a new job. Since my wife is working i have been doing odd jobs and looking for something in my preferred field. Finding a job is harder work than having a job has ever been. Despite having applied for over 50 jobs in 6 states this month i have not managed a single interview. My one interview this afternoon is from a position i applied for last month. I follow up best as i can.

But i am not a victim of the current economy. I refuse to let myself be a victim. To me a victim is to be helpless in a current situation. I have options available to me. Many others that consider themselves victims are also not victims. They have options. There are places such as Labor Ready or other daily labor positions Anyone that can legally work in the US can work for these positions. I and most of these people could work fast food. Almost anyone with access to a car can get a job delivering pizza. Being unemployed is not being a victim. We are also still making headway in paying off debt. We spend as little as possible. We look for deals and savings on those things we do spend money on. We will get by for now.

This is not a long term solution. I don't like being unemployed. Being the homemaker is nice. It has given me more respect for those that do this. It is not for me in the long term. With plans to grow our family with children we decided that i would be the bread winner and Mary Jo will be the homemaker. She wants to do this. I want to be able to provide for my family so she will not have to work outside the home. Being a stay at home mother is likely harder work than any job she would have outside the home.

For anyone interested in my resume. I do DJ gigs and am looking for a position in one of two fields. With a degree in Scouting Education (non-profit business administration) i am looking for a position in non-profit management. With a Information Technology background with 10 years over of experience i am looking for a position as a Server / Network Administrator. I am looking to stay in the Western United States in Washington, Oregon, California, Nevada, Utah, or Idaho. If you have a potential lead you want to share use the contact me links from my resume.

Vacation Woes

Last week was Spring Break. Since i am looking for new employment and my wife works at a school we made plans to take a vacation to California. We figured out a budget and did what i always do on vacation. We did not look at our budget once during our trip. We did anything we wanted to do on the trip and did not worry about costs. We stayed with family so we did not have hotel costs and this reduced our food costs. But these things were budgeted for. Weather interfered with our plans to go to Yosemite so that was added back into our budget. We spent more when we went out to eat. We tried to do activities that were mostly free so almost the entire budget was traveling and food.

Today was the day or reconciling what was spent with the budget. We planned a budget of $400 dollars. We ate at Sonic and In-N-Out since we do not have those near home. We did less traveling than planned (since Yosemite had snow we cut it out). We went to more LDS Temples than planned (free). We used cash part of the time and did not track exact amounts off cash. Food $175 + Gas $150 + Other $50 = $375. $25 under budget. But only because some plans fell through.

This time we were on budget but suggestions would help us stay on budget better next time?

Our Plan

When deciding what to include and plan for in our plan it was important to remember our goals. We plan to live debt free. We want to have a large family. We expect to own a home one day. The LDS Church councils us to avoid debt, have food storage, build a financial reserve, get all the education we can, teach others. These items match with a number of the financial plans you can find.

1. Plan a budget: Most plans just assume the budget. We put it as a step. Setting a budget is important to know what resources we have available. We started by creating the budget. But sitting down and reviewing the budget every quarter is important. A company puts out quarterly earning statements to ensure the financial plans are working. This is also good advice for a person or family. Review and adjust every quarter.
   
   
2. Get out of debt: Saving $1000 dollars before paying debt is nice but we don't have as much debt as half the callers on Dave Ramsey's shows. Dave also suggests a debt snowball. We opted for a similar plan but instead of paying debts based on the amount we decided to pay them based on the interest rates. This makes the best use of our money. The emotional benefit of getting rid of smaller debts is nice, we felt the more logical approach would work for us.
   
   
3. Three months supply: Different from Dave's 3-6 month emergency fund. A 3 month's supply includes 3 months worth of cash on hand and 3 months worth of food and water. Three months worth of budget and three months worth of basic food supplies. Grains, dried beans, rice, canned or dried fruits and vegetables.
   
   
4. Retirement fund: 15% of income into retirement investment accounts.
   
   
5. 1 Year Emergency Fund: Build up financial reserves to cover one year. Use your income as a basic starting point. Up until this point you are spending less than you make so you don't need a full year's salary. Figure out what you do need and save it.
   
   
6. 1 Year Food Storage: Increase your 3 months of stored food to enough to sustain for 12 months. Well stored staples like sugar, grains, beans, etc can store for 30 years or more. Rotate the staples you have with your new purchases.
   
   
7. Pay off the home: Get rid of this last debt as fast as possible. Get rid of the mortgage.
   
   
8. Children's college funds: It is possible to work your way through school. Once you are clear of all debt and working for the future you can begin helping others. Paying for children's college is a bonus.
   
   
9. Build wealth and give: This point is the last point of almost every source of financial information. The what's next step. Now that you are sound you can help others financially. Give substantially to charity, start your own organization, do what you want. Just use your wealth to help others.

Dave Ramsey's 7 Baby Steps

Quite possible the largest financial program i know of is Dave Ramsey's 7 Baby Steps. Dave is often the person that got other bloggers and financial analysts into the field. He has a number of books and programs to not only teach you how to establish financial freedom but to help you complete the program and path. Before beginning his program he suggests you have a plasectomy. This is a process of removing your ability to produce more debt. On his TV show he even shows the creative videos people send of destroying their credit cards. Let me explain the steps.

1. $1000 Emergency Fund : Things happen we don't plan for. When starting out we often have been using our Credit Cards for Emergencies. This fund is to replace the credit card for emergencies.
   
   
2. Debt Snowball : List all debts and minimum payments from smallest to largest balances (don't include the mortgage as this comes latter). Do everything possible to pay off that first debt. Once the first is gone take the full amount you were paying and add it to the second debt until all debt is gone.
   
   
3. 3 to 6 month Emergency Fund : Take your emergency fund and increase it to be large enough to live on for 3 to 6 months. Now you can survive if you lose a job instead of just fixing a broken appliance.
   
   
4. Invest 15% of your income : Use your pre-tax (401K, 403B, etc) to its max then put the rest of the 15% into a Roth IRA. This is creating your retirement fund.
   
   
5. Create a college fund for each child : Save enough to pay for their college. Since Dave wants you out of debt he does not want you children to start with college loan debt.
   
   
6. Pay off the home : Once the college tuitions are secure; pay off the home as quickly as possible. Get rid of the mortgage payment.
   
   
7. Build wealth and give : Invest in mutual funds and real estate to build wealth. Use this wealth to help those in need. Help how you feel best.

Dave has a great program. I feel it is not the best plan for me. I know what motivates me and how my mind works. In the next post i'll show our plan and compare it to Dave's Baby Steps. Dave's plan is fundamentally sound and more can be found in his book The Total Money Makeover.

An Introduction

Money is hard work. Having money is hard work. Being broke is hard work. Saving is hard work. Making budgets is hard work. Financial planning is hard work. Finding a job is hard work. Making money is hard work. Everything about money is hard work. Spending money can even be hard work. I like money. I like spending money. I like enjoying what i've spent money on. Money does not always like me. I am currently undertaking some of the hardest money challenges almost anyone ever makes. Being unemployed and paying down debt.

I have not always been the best at managing money. I have made plenty of mistakes. I have also made some smart money decisions. I do some money planning. Now that i am married i have someone to help me with money. We can make the same mistakes we have in the past or we can continue on the path of financial prosperity. We are on that path now. We are not yet to our destination. Hopefully following my journey will help you find your path the financial prosperity. I get advice from Dave Ramsey. I get advice from other blogs (perhaps some will guest post here one day). Each has it's own plan. My wife and I have taken all those and developed one that we feel will work for us. It is working for us. If someone learns from our mistakes and grows from it i will consider this blog a success.