28 May 2009

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.


20 May 2009

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.

16 May 2009

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?

15 May 2009

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?

11 May 2009

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.

06 May 2009

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.



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.