personal finance writer

Round Up!

2009-11-18T16:23:00.000-08:00

5 personal finance lessons from NASCAR.
Smart spending offers these tips that provide not only a financial lesson but also offers insight into the racing sport.

8 personal finance lessons from Monopoly

Bargaineering offers a list of the lessons learned from the game Monopoly. Who knew a children's game could come so in handy?

Customer Service vs. Price Shopping

2009-11-02T13:55:00.001-08:00

So I found something interesting today. There are two suppliers of pet supplies in my town. Generally I'll go to the one across town. Petsmart. They know me, they help me find appropriate coupons and discounts, and make helpful suggestions for our animals. (This treat is more healthy, or that bed's warmer, whatever) And they're really really nice about returns. They let me take back a bag of treats just because the dog doesn't like them! I was most impressed. One of the employees even gave me some tricks to save on the dog food I insist on feeding them by telling me to stop by on the weekends when the demonstrator's come by and usually have nice coupons :)

Today in an effort to be more fiscally conscious I decided to visit the other store, to see what their prices looked like, and it's a little bit closer to where I live. I have to say, I'll be returning to Petsmart. The prices were about the same actually, exactly the same for everything I looked at, but there was no help! There were very few employees in the store, and while they were very nice but they didn't know anything about the products I was looking at.

So the purpose of today's rant, is that shopping around is definitely important but if you need some help with a product, go to a place that has better customer service. You're more likely to get the product right in the first place, plus if you get to know and are nice to the employees they'll point you in the right direction for your wallet. And you're supporting the business in your community that treats you well.

You can apply this to anything. If I know exactly what I want and don't need help for something electronic, I go to the cheapest place (in this town, usually walmart). But if I'm not, I'm going to hit Best Buy. It's worth an extra $2 to have somebody point me in the right direction and answer questions. Otherwise, I find myself frustrated with the product, and having to buy something else later, which adds up to a lot more.

Increasing Income

2009-10-30T15:48:00.000-07:00

Sometimes cutting expenses is just no longer possible. At some point you've cut to the bone. If you still can't make ends meet or if you just don't want to cut them that far, than it's time to start increasing your income.

Man Vs. Debt takes a realistic look at the pros and cons of starting your own business on the side. Be your own Boss

The Buck List provides several ways to make extra income on the side. 10 interesting ways to make some side cash

Another trick I've used successfully is surveys. Here's a list of the websites I use. Here!!

You can also start a blog. This however isn't a quick fix. It's a lot of work and the adsense revenue only trickles in at best. But it is fun!

If none of these can cut it, a second job might be in the cards for you. Or better yet a second job that lets you do whatever on the job (think security, night watch, etc.) so you can combine methods!

Tracking your spending

2009-10-29T13:26:00.000-07:00

There's a couple different methods to tracking spending. Some are more complicated than others, but figuring out which one works for you is the the best route.

Some people like to track their spending in different categories. So you have the excel spreadsheet that has stuff like "housing", "car", "pets", "groceries", whatever in columns and you put in your individual items.
I use a modified version of this. Anything I go over in one category (usually something like groceries if there's a big sale or pets if somebody needs to go to the vet) has to get stuffed into something else. (Usually entertainment or miscellaneous).

Others have a set spending amount each month and just enter bills as they come in. They know how much money they have left at the end of each month.

Another way to keep it even more simple is to use Wealth Pilgrims model. He uses his bank statements and tracks the total expenditures (usually called withdrawals) on his statement and calculates a moving average. If it's coming in lower then what he makes, great! If it isn't, obviously something needs to be tweaked.

Depending on if you just care that you're still cash-flow positive or want to know where all your money goes will indicate what plan works for you. If you like many people are actually in the negative cash-flow zone, then focus on cutting expenses and increasing your income.

CashFlow!

2009-10-28T14:48:00.000-07:00

I found a copy of the RichDad's CashFlow computer game (based off the more popular boardgame) at my local used bookstore. I found it quite interesting.

However, it teaches some pretty interesting principles. To get out of the Rat-Race you have to create enough passive income to cover your expenses.

You can definitely see the creator's nod to Real Estate. The best way I've found in playing the game is to purchase real estate so you get rent. I also like to buy at the very low end and sell when it gets high to make a quick profit. Generally to knock out other debts or be able to buy better investments.

My one complaint is that you can make payments forever and make no difference in your debt and you also can't attack it one chunk at a time. (So you have to save up 5K in your account to pay off and demolish the car payment, etc.)For some of the smaller loans this works, but it's a real pain trying to knock out that mortgage payment. It also won't let you pay off the mortgages on your rental properties which would increase the amount of actual income coming in from that (the rent has to pay the mortgage, repairs, etc. before it comes to your pockets) investment.

You can also purchase stocks. It's nice that you can see the range the stock sells at so it's easier to tell if it's a good buy or not. The dividend bearing stocks are horrible in this game, but I'd be interested to see if that's the case in reality. Money magazine ran an article on the "rentier" class that lives off dividends, etc.

Overall a good game, fairly amusing, worth a buy if you can get it cheap. I don't know that I would pay the full $100 cost on RichDad and $200-300 cost at Amazon. But if you canget it used it's worth your time.

Another note, the online gameplay could be interesting, but understand that you have to not only purchase the software but you have to pay for a membership in their community. I haven't tried it so I can't vouch for that.

CashFlow on Amazon link

Roundup!

2009-10-27T16:33:00.000-07:00

Money psychology
The problem with finances is that we can’t always be rational about everything. Get Rich Slowly offers some great tips for managing the emotional side of your money here.

Look rich or be rich?
For most people you have to pick one. The Simple Dollar offers his argument for the latter here.

5 ways to live better without spending more.
Wise Bread presents an article on living better but more frugally. Ironically there are 6 tips in this one, but the tips are handy and provide a simple way to keep things in perspective. Good for beginners of personal finance.

10 small businesses that are free to start.
Need some extra income? Read this article for some useful ideas.

20 questions to ask before you adopt a dog.
A spectacular article by Funny about Money addresses several of the questions you need to keep in mind when getting a new dog. Only you can decide what’s a deal breaker and what isn’t, but being prepared can make the transition for your dog much easier.

Walmart goes wireless

2009-10-14T15:22:00.000-07:00

Walmart is now going into the wireless business. According to this article it'll launch on the 18th, a few days from now. It won't work with your current phone but they offer some reasonably priced handsets depending on your needs. The article mentions a $100 keyboard phone available, that's certainly better than the price of the nicer phones with my cell phone company even with the "discount". You can keep your current number, and there's no contract. However, if you lapse service you loose the number. It's a pre-paid plan and it seems pretty reasonable. $45 a month for unlimited minutes, texts, and web access. That's cheaper than my current plan and I don't even have web access! There's also a cheaper plan for $30 that has 1000 minutes, 1000 texts and 30 megabytes of web access. I'll probably head down to my walmart this weekend to check it out. I love T-mobile's customer service but I can't deny that pre-paid (aka no contract) is appealing especially when it's the same number of minutes, over twice the texts and the addition of web access (30 megabytes isn't much but hey I could check my email away from home :)) for about 60% of what I'm paying now is pretty hard to turn down. What are all of your thoughts?

Helpful articles

2009-10-13T15:13:00.001-07:00

Saving Money

Tips for Dealing with Health Insurance
In most cases, if your insurance won’t pay you’ll have to. So it’s in your financial interests to do everything possible to have them pay for legit treatment. After all that’s why you (or your employer) pays those premiums right?

Buying durable furniture
What kind of wood is the piece made of? How are the joints constructed? How about the cushions? These are great questions to ask and this article gives you the answers you should be looking for in a nice piece of furniture.

Cooking tips
Cooking at home is one of the fastest ways to cut your budget down. But not many of us have time to be gourmet chefs. This article has some great tips to reduce your time spent in the kitchen so you have more time for you.

Investing

Investing while still a student?
The sooner the better when it comes to investments. When you’re young you have the value of time. If you’re in grad school you need the help anyway. You’re taking some extra years to get more education but that’s also years you’re not earning. So getting a leg up can help ease that financial burden.

General

Armor of personal Finance
Cut your expenses, remember what’s important, and move that gap between your income and expenses as far to the positive side as you can. Those are the keys to wealth.

Snowflaking your debt
Take the little money amounts you get and apply them to your debts. You’ll never miss the money and it can make a big difference over time.

12 biggest financial mistakes
The simple dollar goes over the most common mistakes people make that keep them in debt and scrambling.

Cutting Expenses edition

2009-10-06T13:28:00.000-07:00

Hello and welcome to personal finance writer! The basic goal of personal finance is to increase the gap (in a positive direction) between your income and your expenses. So you can increase your income, or reduce your expenses or ideally both. Here's how I'm attempting to cut my expenses and the results.

Housing:
Old deal: a one bedroom one bath apartment. $800 a month. Fairly nice apartment, nothing amazing but not too shabby. (I'm in an extremely expensive town so this was actually pretty standard).

New deal: a two bedroom two bath condo with a friend. Rent is $400! I can live with sharing :). Only downside is my bedroom is smaller and the living room and kitchen are no longer exclusively mine. But I like the bathroom's design better.

Savings: $400

Utilities:
Old deal: apartment billed me for water and garbage. Private accounts with electric and gas company. About $100 a month.

New deal: Included in my rent! Big plus for the move.

Savings: $100

Internet:
Old deal: $50 a month with cable company.
New deal: Included in my rent plus I get TV and a landline now!

Savings: $50 (since I didn't have the TV or the landline before and don't use them enough to justify them after I get my own place I won't add their costs to my savings)

Clothes:
No significant changes. Had a washer and dryer in the old place and have one in the new place. On the plus side the new one's dryer is much better and doesn't take 3 cycles to dry one load.
Haven't changed my buying habits as I avoid buying clothes whenever possible. Now if only I could carry that over to books and electronics...

Savings: No real change

Food:
Probably doing worse in this area. We're still working on figuring out the kitchen so I'm eating out frequently. But my roommate gets the ads! So hopefully I'll be starting to save by playing the "grocery game" will keep you guys updated on this.

Savings: Negative. :(

Entertainment:
I cut my World of Warcraft account at least while I'm in school. I'm canceling the subscription and if I want to play I have to go to walmart to buy the time card. This will cost a little more (gas, time, etc.) but then I don't feel as guilty when a month goes by that I haven't used it. Since Blizzard is awesome and keeps the account and your character information available I can go back when I'm between quarters or if a month just isn't as busy so this seems to have few tradeoffs in my situation.

No other changes, I'm still a bookaholic and video game addict. I try to keep costs down by using the local used book store (also has music and games).

Savings: $15

Phone:

I use T-Mobile. Pretty happy with them. The customer service is awesome. They put up with regular phonecalls asking if there are any cheaper plans available. My currently plan is a little over $50 a month. But I use the phone a lot. The next cheapest plan I tried before and ending up with an $80 bill because of overage charges. So I'll be sticking with what I have for now. I'm on contract for the next two years so I'm not switching companies without a good reason.

Savings: No change

Car: Now this is where I really need to work on some things. I'm looking into possibly refinancing my Mazda. My interest rate isn't horrible or anything but I'm seeing some banks offering 2% or more lower rates. However, I need to do more research (find out about pre-payment penalities, if it's a weird teaser rate, that sorta thing) before I make the switch. Also my goal is to drop my payments as low as possible for flexibility and then just throw money at the principle.

Savings: No change yet, pending a refinance

Auto insurance: Used inbox dollar's netquote (I'll talk about inbox dollars in my next post about increasing income) to get quotes from different auto insurance companies. Had a couple calls and some emails but all the rates are significantly higher than my current company so no luck there. ($200 a month compared to the $80 I'm paying now)

I should probably call my auto insurance company though and see if the "good student" discount is still valid if you're in grad school.

Savings: No change, pending a possible new discount

Gas: Up a little bit. Gas prices seemed to rise in my area recently and I'm also getting less mileage per gallon because I still have boxes in the back of my car. I also had a longer commute for a while. Should go back to normal I think once I'm settled in. She's due for an oil change soon so I'll have them check the tire pressure when I go in and see if they need to be rotated, that kinda thing.

Savings: Negative, pending me quit being lazy.

Overall, the cutting the expenses train seemed to be pretty successful in some areas (like the move that cut rent by half and removed the utilities and internet expense) but pretty standstill in others (like auto insurance, clothing costs, etc.) We'll see if I can dig up significant savings off refinancing my auto-loan.

I'm still a student so I don't have student loans to deal with yet though watching that number tick higher every quarter is scary. But it'll be worth it, in three years I'll my license and can start bringing in a much higher salary or maybe even start my own practice! Might start looking into more scholarships now that I have a better GPA to bargain with :)

How do you guys keep your expenses down? Do you have any recommendations for me? Are there questions you'd like me to answer? Tell me in the comments. :)