At the start of the year, my church began offering Dave Ramsey's Financial Peace University. Our church has offered many of the Crown/Compass studies (including the one we're featuring in SMI this year) in the past and it was time for something new. Especially appealing was the fact that someone other than me was going to lead it! I was enthusiastically on board with the idea and signed up to participate, as I've never actually gone through Financial Peace (though I've seen Dave at a live event and am generally familiar with their stuff).
One of the main topics last night was how to raise financially smart kids. Dave isn't big on paying kids an allowance. Instead, he feels kids should be paid for work they do. His emphasis is on tying work and money closely together in those impressionable brains. He does mention that there should be some things expected of the kids that they don't get paid for — that they do just because they're part of the family. But it's pretty clear he falls on the "pay for work" side of that divide.
This was interesting to me, as Austin used largely the opposite approach with his kids. They were brought up understanding that you help with work around the house because you're part of the family, and as part of the family you also are cared for, in part, by receiving an allowance. There were some jobs that were paid extra, but most were expected as being part of the family.
There are definitely pros and cons to both approaches, I've opted more for the "allowance and you work because you're part of the family" approach with my kids. But I do find some of Ramsey's arguments persuasive as well. I think there's something different for a kid when they've specifically earned money — it feels different and they treat it differently. And instilling the idea that if you want to have money, you need to work for it seems like a good idea (although I've not worried too much about that, as I fully expect my kids to work at jobs outside the house when they're old enough to do so).
I'm leaning towards introducing more of a hybrid system at our house, where certain chores are expected but other paid job opportunities are available as well. But I haven't come up with anything specific yet and I'm a little leery of every new job being met with a question of whether they're going to get paid.
Anyway, I'm curious to hear your experiences with this issue. What have you tried that worked well, or didn't work so well? Please share via the comments link below.
Financial author Matt Bell tackles a problem we haven't written on lately: the rising proportion of couples who are keeping separate finances.
He cites a recent Money Magazine survey in which:
71 percent of married Americans acknowledged keeping secrets about their spending from their spouses
44 percent said keeping secrets about money is acceptable under certain circumstances
40 percent admitted that they tell their spouse they spent less on purchases than they actually did (women lied mostly about clothing, shoes, and things for kids; men lied mostly about things for the car, entertainment, and sports tickets)
Matt's perspective is in line with what we've written on the subject in SMI:
I don’t care how many people have gotten on the separate accounts bus. I’m clinging to my quaint, clearly out-of-fashion point of view that the ideal way for man and woman to get along financially is to practice full financial disclosure before marriage and complete financial transparency after marriage.
Full financial disclosure means talking about money before marriage. A lot. It means detailing how much debt you have, how you got it, and what you’re doing about it. It means revealing how much you have in savings and investments and how much you earn.
It isn’t about interrogating each other; it’s about talking with each other about something that’ll impact countless aspects of your relationship.
And here’s where I’ve really gone off the deep end. I have this odd point of view that if one person had a lot of debt before getting married, after the wedding, both spouses have a lot of debt. If one was rich before the wedding day, the minute the vows have been said, both spouses are rich.
This isn't a very popular opinion these days. And it's understandable why the numbers have shifted this direction over the years as divorce has become so much more common (if eventually separating seems like an eventual probability, it can feel like preparing for it financially is a smart, even necessary, move).
I found this comment to Matt's post particularly telling. (I've added the emphasis below.)
As a marriage counselor I concur with your statements about the need for joint financing. I cannot count the number of couples who come to see me with problems that seem to be unrelated to money yet when we look at the whole issue – separate money is at the root. I tell all couples, in new marriages and old that separate money is asking for trouble. When I counsel engaged couples I am particularly strong with them because I don’t want them coming back in 5 years!
If you're married and keeping separate money, I encourage you to prayerfully consider whether this is the right course of action. It might be worth picking up a copy of Matt's book (mentioned in the post; note that I haven't read it).
As always, I'm interested in your (non-judgmental) thoughts on this sensitive matter. You might have an insight that could really help someone else reading this (as iron sharpens iron...).
Hello again friends! Hope everyone had a great Thanksgiving.
Before diving back into market stuff, I thought I'd comment on a pleasant surprise from this past weekend. Like many Americans, I took advantage of some of the deep store discounts offered. The combination of my loathing of physical shopping and my researcher temperament makes me a natural for the online madness that has become the "Black Friday - Cyber Monday" weekend. Not that I'll go buy a bunch of stuff I wasn't going to buy otherwise, but I will try to think through things I'm going to be buying soon and make those purchases while they're sharply discounted.
(That's one of the benefits of being debt-free and having a savings reserve, by the way. You can dictate your own purchase schedule to take advantage of opportunities, instead of having to wait until a crisis hits and pay whatever the current price is.)
As I've mentioned before ( Members Only), I've been a Upromise member for roughly a decade now. Upromise is basically a rewards program that deposits your savings into a college 529 plan account. (You can read more about how it works here.) 529 plans are a great way to save for college, the Upromise arrangement takes virtually no effort on our part, and I have young kids, so it's been a good fit for us.
I should note that nearly all of the benefit we've received from Upromise has been as a result of earning 1% back on all of the purchases made with our Upromise Mastercard. We don't think about it — it's very similar to earning 1% back from Discover or a whole host of other cards.
Anyway, a week or so ago, I got a mailing from Upromise touting a great savings opportunity they were providing between now and the end of the year. Normally that stuff goes straight in the trash, but for some reason I actually noticed it and took the time to look it over (hire that marketing person!). Bottom-line: Upromise was offering an additional 10% cash back on any online purchases made with the Upromise Mastercard at their roster of vendors. (You have to go through the Upromise site first and link to the partner's site from there, but then you're just shopping the vendor's normal webpage.)
In addition to that, they had a calendar laid out of all the vendors that were offering special savings rates. For example, Best Buy normally pays 2% back to Upromise members online. But for a particular week (and as it turns out, most of this past weekend), they were bumping that to 10%. So for someone like me with a Upromise Mastercard, the total contribution to the 529 plan on Best Buy purchases would run to 21% on those days (10% from the vendor, 10% extra Upromise offer for their Mastercard users, plus the standard 1% for those MC users). And that's after whatever sales/markdowns they were already running for Black Friday, etc.
Best of all, the roster of vendors is surprisingly robust, and a bunch of heavyweights are part of the expanded savings calendar. Add it all up and there was serious savings to be had.
Again, I should reiterate that if you're the type to get sucked into buying more (very easy to do) because of the illusion of savings, this is not necessarily a good thing for you. But we got some fantastic savings on some things this past weekend.
For example, this week's featured vendor is Sears. We've been planning to replace our 15+ year old washing machine, given that the wash tub is quite small and our kids' clothes are getting bigger and bigger (we don't know how old it actually is — it came with our first house over 15 years ago). My wife is the rare gem who would actually ask for that as a Christmas present, so I was already looking and doing my homework when I realized the potential savings at Sears.
We've had very good past success buying Kenmore appliances that are highly rated by Consumer Reports. One I was considering was already on sale this past weekend, marked down from $822 to $599, with free shipping. Sears was also running a Cyber Monday promotion that knocked an additional 10% off. Finally, by purchasing through Upromise with their MasterCard, a further 21% discount applied (technically the final 21% isn't a discount off the price, it's money that will be deposited in our 529 account).
Final tally: that $822 washer was available for $426. That's nearly half off.
I admit, I've never bothered to shop through the Upromise website before. But my experience this weekend (coupled with Matthew's October Level 1 article) have opened my eyes to the potential.
I'm sure my friends at Dave Ramsey would cringe to read this, because they'd argue I'd be better off without the credit card, paying cash instead. Overall, they'd likely be right. But the reality is I'm going to buy a certain amount of stuff online like this. In the past, most of that has gone through Amazon. Now, I'll at least take a quick peak at the Upromise options first. And that's exactly why it's worth it to those vendors to rebate in this way.
If you're a current college saver and are looking for a good rewards card, you might want to check out Upromise. Naturally all the usual disclaimers apply: don't do this unless you are very disciplined, pay your balance in full each month, and so on. You need to know yourself and evaluate whether this will be a helpful tool or a trap for you.
(This post may sound like a paid endorsement for Upromise, but it's not. There's no relationship or benefit being conveyed in any way...it's just my reporting on something I found beneficial. If some number of readers can benefit as well, that would be great.)
Anyone else taking advantage of Upromise's discounts this year?
I have a love-hate relationship with IKEA. I'm grateful that they offer a clean, modern design aesthetic at unbelievably low prices. However, you have to be careful what you buy at IKEA. As much as it pains me to write this, it seems that more often than not, you can buy some poorly-constructed products.
The first time I went to IKEA was October 2003 (there are no IKEAs in Louisville, but we were in Chicago on a getaway). Being a big fan of modern furnishings, but having little money at the time, it was like going to Disneyland for my wife and I.
Two years later we went back and bought two nightstands, a wide 3-drawer dresser, a tall 5-drawer dresser, and a wardrobe for $350. What a deal, right? But when you start assembling the furniture with that little hex wrench they give you, you quickly realize that these are not heirlooms we will be passing off to our children. Particle board chips. Veneers peel. Cams get stripped.
Now in all fairness, these particular pieces have at least a few years left. No peeling to speak of and the drawers all open and shut fine. The doors are impossible to align though, and the wardrobe is buckling a bit from the clothes on the rod. But other pieces we've bought haven't fared nearly as well, like the end tables, the can opener, a few of the picture frames, and so on.
What's my point? That if you can afford it, buying quality, I believe, could save you money. For instance, we would have saved $4 on the can opener had we just bought a good one to begin with (like the one we bought to replace the IKEA one). Our end tables, while they weren't expensive, have some veneer peeling and bubble spots and they just need to be thrown away quite frankly.
Now I'm not saying you can't get good stuff there. In fact, we still really like going. We bought a huge mirror for $100 that would have cost $600+ in a similar style somewhere else. We like the lamps we've purchased, as well as some kid's furniture/decor items that seem to be holding up quite well. You just have to be careful.
But there's another way you can get in trouble: most everything is such a good deal that it's easy to buy more than you need. Because of the price, I find it tempting to buy things that I only kinda like, rather than holding out for something I love. In fact, I have the same issue with Old Navy that I do with IKEA. Clothes are insanely cheap, and usually, cheaply made. Rarely do I see something there that I just love, but often times I see stuff I like (actually, I more or less swore off Old Navy for this very reason... last week was the first time I'd been in an Old Navy in over a year). The clothes can be great for kids, it's just that often times they don't last.
So I've decided that I'd rather have one really nice shirt from J. Crew than 4-5 shirts that I only sort of like from Old Navy. It's likely to last me longer and I'll get more enjoyment out if it when I wear it. And the same goes for IKEA. I'd rather have one really nice living room coffee table from Room and Board, than a whole living room collection that I just sort of like from IKEA.
This commitment to quality over quantity got me to thinking, "I wonder what our Facebook Fans" think of this tactic. So, I decided to ask. Here's how a few of them responded:
Fred from Louisville wrote:Quality weathers the bounce of the market. Quantity doesn't matter if you are loosing money.
Martha from Richmond wrote: It is far better to buy quality than to have to turn around and replace something that doesn't last. Quality shows.
Jason from Orlando wrote:Total cost of ownership (TCO) this is often forgotten about in the equation. Also there is the intangibles, the way I feel (and perhaps perform better/produce more) with quality in my hand versus something cheaper. Likewise, is it provable (objective) quality or is it inferred (subjective via suggestive adverts)?
And our friend and frugal guru Mary Hunt from Debt-Proof Living wrote:Match quality to need. If you'll use it very little (Halloween costume), get the cheapest one you can find. If you'll use it every day for as many years as you can possibly get out of it (car), buy the most quality you can afford.
So what do you think about what I've said. Do you agree or disagree? When is it best to buy quantity vs. buying quality?
This week, I want to present you with the #1, best, top, absolute greatest financial decision we've ever made. I'm not confining the topic to spending, saving, investing, or what have you. This is bigger than that as it encompasses all things money.
I married my lovely bride in October, 1999. Two weeks after we got married, I learned that the corporate wellness center I was working for was shutting down at the end of the year. To top it off, my boss already knew this, knew I was getting married and becoming a step-parent, and he didn't have the common courtesy to warn me so that I could start looking elsewhere. My wife had a decent job in an operations department of a trust company, but we had a great deal of consumer debt, so money would be especially tight on one income.
A year later, I had taken my experience in the fitness industry and had launched a career as a personal fitness trainer. But it takes time to build a substantial client base. So I was doing odd jobs to help make ends meet. Furthermore, we were still adjusting to married life, let alone the intricacies of being a blended family. I had some upsetting events with a few of my personal training clients. Money was scarce, in spite of all our cost-cutting efforts, debt-snowballing, and frugal living. Truth of it was, not much was going right. It certainly was not the life Kim and I had dreamed of. But it wasn't just the growing pains of a new marriage…it was much deeper than that. It was a low-point in my life…and I believe I was being attacked spiritually like never before.
One fall afternoon that year, I was mowing grass for one of those odd jobs. I vividly remember driving the tractor up the hill towards the house on the property, reflecting on the state of things. And out of nowhere, the following thought occurred to me: We need to increase our giving. Say what? How could we? We were barely scraping by as it was. We had no business giving away any more money as we needed what little we did have.
But that was the thought I had. And here's why I had it: I knew increasing our giving during this time in our life would be an effective weapon in fighting our enemy. It was a battle cry. I was drawing a line. I was telling him that no matter what, I knew where my priorities were, where my strength came from, and who had my allegiance. I knew that this action would be utterly incomprehensible to him. After all, how could I serve a supposedly "all-loving" God in this way, when God allowed me to be in this position. And I knew he would hate it. All those thoughts, they not only comforted me, but they confirmed my desire to carry through with this decision. In fact, they fueled it even more.
And you'll never guess what happened the very next day, so I'll tell you. Nothing. Nothing happened the next day. No random check in the mail. No new out-of-nowhere job offers. No new training clients. Zilch. Nada. Zero. The only thing that happened was that we became poorer.
But while we may have temporarily become poorer, we also grew wiser. Looking back, I think it helped expedite a turnaround in our marriage, in our finances, and in our spiritual lives. It wouldn't be for several more years that we'd be debt-free. And it wouldn't be for an additional few years that I had a steady income that we could live on. But it was a watershed moment that would forever shape our attitude to how our spiritual lives and our financial lives are related. And I believe God honored that decision by giving us wisdom with other financial decisions (like the greatest spending decision we ever made). I think He blessed us financially by aligning better and better jobs for us. I think He rewarded us with healthy children (we're up to 4 now!) and even a great house which gave me the opportunity to become a landlord.
And ultimately, I think He orchestrated all this, as He is apt to do, to bring glory back to Himself. You see, we now make every effort to increase our giving every year, which brings Him glory. I'm writing this post, which I believe brings Him glory. I work for a newsletter whose sole purpose is to help you have more so you will give more... which brings Him glory. He is all about His glory... be it in your marriage, your work, and even in your finances.
So the next time you're feeling spiritually attacked, or your just in the mood to bring more Glory to our creator, I'd like to challenge you to increase your giving. It was certainly the best financial decision we ever made.
I recently blogged on the best spending decision we ever made. One of the key principles, if not THE key principle, is to spend with your goals in mind. The post explains why this principle is important. In fact, it's so important that I'm going to stop right now to give you a chance to read it. Go ahead, I'll wait right here...
... Back? See my point about being intentional with your spending? In the same way that you should invest with inside-out thinking, you should spend with inside-out thinking. Well, a recent spending opportunity came my way. Let me paint the picture for you:
It was a lovely Saturday afternoon and I'm at Costco with my 6-year-old doing some grocery shopping. Walk in, turn the corner past the TVs and there sits a nice, brown sectional. It's big. Seven different configurations. Child friendly micro-suede fabric. And only $999.
Now it's our ideal family couch for the basement. In fact, we had talked about this very thing... a big, brown, sectional, perfect for a family night watching some Netflix with the kids. But, what we really need first is a couch for the living room. We still have a futon as the primary seating in the living room (also purchased from Costco) and it really needs the new furniture before any other area of the house. And while we could use this sectional in the living room, it's a little big for the space and not conducive for the arrangement we had in mind.
By now you've figured that we did indeed buy the couch. And it currently occupies the living room and doesn't look completely terrible. The futon has been moved to the basement, which provides some much needed seating downstairs. But did we spend with our goals in mind?
Functional: Yes
Aesthetics: Yes
Value: Emphatic YES
Comfort: Maybe (my wife isn't blown away by the coziness of this couch, which is ironic given our Costco futons aren't the most comfortable either... but I'm thinking with some time it will break in... at least I'm hoping).
Timing: NO
So how intentional were we with our spending? Did we order the lobster?
On one hand, I'd say no. Getting a couch like this was a part of our plan, it just wasn't top priority furniture-wise. It was an unbeatable value. We had the money for it.
On the other hand, I'd say we botched it. The timing wasn't great. While it would have cost more to get a more comfortable one, we shouldn't let value trump comfort. And if the right living room couch does come our way, we may not yet have the funds to buy it because we sunk them on this couch.
So I guess the question becomes, does a good spending decision have to meet ALL your goals. I'd say no, a good one does not. But good is the enemy of best and for that reason, I'd say it wasn't the best decision we could have made.
But maybe you see it differently? What would you have done?
In April 2010, we gave up TV when we bought a new house. Our thinking was, "New house, new beginnings, let's try life without cable." This past Spring, I wrote an update for a post on how we cut the costs of digital services. Here's part of what I wrote regarding giving up TV:
So how's the past year been with no signal? Mostly good, I'm glad to report. Now to be fair, we do have Netflix which can stream to our TV, so when we need a video-entertainment fix we can get one. But dropping cable has drastically reduced our watching. Our girls didn't watch that much before anyway, but even less now...
And it's the last sentence that I want to pay particular attention to: Our girls didn't watch that much before anyway, but even less now. And because what they do watch is on Netflix, there are no commercials. Now let me stop and say that we do not profess to be perfect parents, nor do we have perfect kids. But one area where our girls do not struggle with is materialism. Sure they like to look at toys (if we let them) but they don't "have to have" the next big thing. Why? Because they don't even know what the next big thing is. Why? Mostly because they don't see commercials. What things they do know about, it's because they've seen them at their friends' houses.
And materialism isn't a struggle confined to adults or teens or even tweens. Don't think a 3-year-old and a 6-year-old can't struggle with it too. Marketers are very strategic in going after our children. And they're only growing more and more savvy as they reach mediums outside the television. And while you don't have to cut cable to raise non-materialistic children, it certainly doesn't hurt.
Now I'm not saying that my kids never ask for anything, but it's rare (because when they do ask, they know we'll likely say "no" and that they'll have to use their own money). And having children content with what they have produces another unintended consequence: it frees us up to really take pleasure in the joy of giving. I've never been a fan of lists for birthdays or Christmas. Do you know how fun it is to search out that perfect gift that they didn't even know existed? It's a blast. And if it's an item that they happened to know about, they're delighted anyway because they were trying to save up for it (saving money mostly pertains to my 6-year-old as the 3-year-old is still learning the concept of money).
Talk about fun, one time I took them to Toys "R" Us to let them each pick out a small present. Why? Just because I love them and thought it would be fun for them. They were in awe, especially the younger one as she didn't even know such a place existed... a place with ONLY toys? Well, we looked up and down each aisle for quite some time because they had no idea what was even out there. After ruling out toys I thought would get limited use, conveyed the wrong image, or were too expensive, we settled on presents for each. And get this, the younger one picked books... BOOKS!
You see, the major purpose for a commercial is to create discontent. Remove commercials and there's one less device out there to compete with when trying to rear children to love the Lord first. So it's easy to see that of all the digital services we scaled back on, cutting out cable TV was the most profound, both in saving money and otherwise.
It was 2003. I had a job doing development work for a non-profit, and my wife was in charge of an operations department of a trust-company. In an effort to focus on debt-reduction, we had lived in an apartment since getting married. But our son was getting older, the apartment seemed to be getting smaller, and we were getting anxious to become first-time home owners. And since we had made significant progress on our debts, we felt we were ready.
While my job didn't pay a ton, it could help us afford the essentials. My wife made decent wages, and we had good insurance through her job. So between the two of us, we were doing all right. Our apartment was in a good school district, so we wanted to stay in the area. We both had been in apartments since around 1993, so having our own space and a yard were important to us (and the thought of a garage was sheer bliss). Other than that, there were many questions still to answer.
Should we get brick or vinyl? Ranch or 2-story? Quantity of space or quality? These, among other factors, are always a consideration. But there was a bigger factor at play here: cost. And this is where home buyers can get in trouble, buying too much house.
You see, at the time, lenders were asking, "How much house can you afford?" with the implication being, however much you can afford is what you should buy. And that becomes the dominant factor in the buyer's mind, "How much can we afford?" This was and still is the WRONG question to ask.
I'm not sure why this mindset doesn't permeate most all of our other spending decisions. I mean I'm glad it doesn't, but why not? When you're at a restaurant, do you order based on what you can afford or on what meets your goals of taste, appetite, value, smell, nutrition, and so on? You don't likely open a menu and say, "Because I can afford the lobster, that's what I'm getting. Yes, I'm allergic and I'm gonna swell up like a tick. And no, I don't like eating giant, wet bugs that reek of salt and death. But I can afford it so by golly, I'm getting it." While cost may somewhat dictate which restaurant you visit, my point is that it's not your primary basis for what you order... or at least it shouldn't be. You should base it on your goals.
So when it came to our first house purchase, we asked not what could we afford, but what could we spend and still be in line with accomplishing our goals. What were our goals?
Eliminate remaining debt.
Continue to increase our giving each year.
Send our son to a Christian school.
Allow my wife to stay at home if she desired.
Getting a house big enough to allow for more children but not so big so as to be too much to manage.
So we turned down bigger and nicer houses in bigger and nicer neighborhoods. Instead, we found a great little house in a great little neighborhood that allowed us to work toward our stated goals. We bought a house that we could afford on just my income because that was the single biggest factor in allowing us to work towards ALL of our stated goals.
And why was that the best spending decision we've ever made? Because literally two hours before the closing on our house, I lost my job. Two hours and totally out of the blue! Just like that, our income was cut by about 40%. And it would stay that way for the next nine months, until I came back to work for Sound Mind Investing in 2004. But we would be okay on just my wife's salary because we bought the right amount of house.
Why else was it good that we bought what we did? Because it allwowed Kim to become a full-time stay at home mom in the summer of 2006.
Why else was it good? Because we were able to get Jordan into the school we wanted.
Why else was it good? Because we eliminated all of our debt (minus the house itself) while in that home.
Why else? Because we were able to keep increasing our giving.
Notice a pattern? We were able to accomplish our goals because we spent money with our goals in mind. We didn't let the ability to spend dictate our decision (this kind of access to credit is a temptation that so many fall into when it comes to credit cards. If it's a temptation to you, ask for a lower credit limit or switch to a debit card).
So where does that leave us now? Well, for one, that first house became our first rental house. Being a landlord was something I had always wanted to try. If we had bought a bigger house, it would have been much harder to rent it. This was the perfect first house for us and the perfect first rental for us.
What else? We're due for our 4th child this week. Kim has been at home five years now and there's no place I'd rather her be.
And finally, most importantly, we're able to feel the Father's pleasure by giving freely and with great joy to causes that are on our hearts.
So when it comes to spending, spend with goals in mind. Practice the #1 way to save money on nearly every purchase and focus on what you can control by not letting the availability of money be the driving principle for your spending decisions. Don't order the lobster just because you can!
What about you? What the best spending decision you ever made?
If asked for ways to save money on purchases, several ideas would come to mind: clip coupons, buy on sale, use promotional codes, etc... you know, the usual stuff. Nothing glamorous, but they work.
However, if I were asked for the absolute best, the number one approach to saving money when buying stuff, I would say: planning/timing. And before you quit reading because you're disappointed it's not some magical, secret silver bullet, let me explain.
If you're not in a hurry for something, you can wait till it goes on sale, correct? If there's no rush, than waiting to use a coupon makes sense, right? The problem is, often times we don't plan this out. We buy when we "need" something and so we're forced to pay full-price because we have an impending "deadline." We've all been there. Poor planning leads us to wait till the last minute, and the last minute rarely leads to savings. (Plus, at the last minute, there is often a poor selection). Here's a personal example.
My wife and I recently did a surprise room makeover for our two girls who will be sharing a bedroom to free up a room for our baby due in August. We'd been stockpiling decor options for several weeks, but with the makeover just a week away, we were without good curtain options.
The only thing we could find were curtains from Pottery Barn Kids (which don't come cheap I might add). Because of the time it takes to ship them (another added cost), we didn't have time to try to find a means of discount (promotional codes, gift cards, coupons, wait for a sale, etc).
Had we done a better job of planning out this makeover, we could have found some cheaper ones we like from somewhere else, or perhaps tracked down some kind of discount. But because of the timing, we paid full price + shipping. (That was painful to type.)
Timing is one of the primary principles behind extreme couponers. Yes, they add coupons on top of sales, but they don't wait until the need an item to buy it — they buy it when it's the most beneficial financially and then they stockpile the items for when they need them.
Think about it. Plane tickets usually get more expensive when you wait until you need them. The same with hotels (sure, there are last-minute deals, but the selection and quality may not be up to your standards). If you're buying a car because yours is on the brink of death and you need something stat, you won't have the time to research for the best car for your situation.
And when is it most expensive to buy clothes? When they're in season. You could have saved a bundle on a winter jacket in February if you were planning for next winter, but those savings are likely gone now.
This is why timing is everything. It affords you the opportunity to make a purchase without deadline pressures, gives you more selection to choose from, allows you to research discounted options, and — let's face it — makes the process more enjoyable overall. (And, chances are, if you're doing a good job of timing your purchases correctly, you're probably also doing a good job budgeting for said purchase because you're a good planner.)
Take my word for it: you never want to pay full price for curtains from Pottery Barn Kids. Plan better and carefully consider the timing of your purchases. I bet you'll save money almost every time.
About a year ago, I did a post regarding my family's progress in cutting the costs of digital services. Now, 12 months later, I thought I'd let you know how things have gone.
Text messages: First up was texting. I was looking into an app called textPlus that we could use instead of paying for a texting package via my cell provider. The way it works is that those you text have to be using textPlus as well.
Since I couldn't guarantee that those I text could/would also use textPlus (other than my accommodating wife), I decided not to pursue this app any further. So, no money saved.
Cable: I also mentioned that I had a billing error from the cable company and that it was finally resolved. So that saved a little bit of money. But I also decided that we could do MUCH better — i.e. pay nothing at all — by canceling cable altogether (again, with the support of my accommodating wife). Do What? That's right: go TV-less — no cable, no satellite, no digital antenna, no nothin.' (Remember how home-schooling used to sound weird, now people are doing it everywhere? That's what is happening with the growing ranks of those cutting the cable — who knows, someday, the weird ones could be those who have cable/satellite).
So how's the past year been with no signal? Mostly good, I'm glad to report. Now to be fair, we do have Netflix which can stream to our TV, so when we need a video-entertainment fix we can get one. But dropping cable has drastically reduced our watching. Our girls didn't watch that much before anyway, but even less now (though that may be partially due to the only TV being in the basement of our new house).
But dropping cable hasn't been without its downside — namely, the lack of live sports! We're big college basketball/football fans and we were able to watch only a handful of games on the computer. So the lack of access has generally meant missing games or going to a friends' house to watch (mostly the latter).
Fortunately, for March Madness, there was an iPhone/iPad app that played every game. But for much of the year, not having cable or satellite was a definite inconvenience on the sports front. (This also harmed the hospitality angle, since we couldn't invite friends over to our house to "watch the game." This was certainly an unintended consequence.)
Given the good (less time watching TV, spending less money), the bad (limited sports), and the ugly (departing from my wife and family for a couple hours to go watch games elsewhere), will we re-subscribe to cable? Not sure.
Probably the best thing would be to get a digital antenna and be able to catch most of the games via broadcast signals. This would be the most cost-efficient, and because there'd be so few channels available, it wouldn't dramatically increase the temptation to start watching a bunch of TV again — at least I don't think so. (You may have to wait a year for another Updated Update to find out what we decide.)
Phone: Now for the home phone. As you may recall we started using Ooma last spring (with the support of my accommodating wife, of course). For the uninitiated, Ooma is a device that connects to your high-speed Internet and your home phone and allows you to make calls with no monthly charges, although there is a ~$11 yearly FCC "pass-through" charge.
So how's it been? Pretty good.
At first, we had some stability issues. After talking with customer service a number of times, they overnighted us a new unit. The new unit hasn't had any stability issues — but that's not to say it's perfect. Depending on your data upload speeds from your ISP, you could experience a delay when talking on the phone.
For instance, our Ooma is connected to a router and when you combine the router with a meager 1.5mps upload speed, there's a delay in the time the person you're talking to hears what you've said. So this can be a little bit of an annoyance, but not to the point that it would make us want to go back to a full-fledged land line. Plus I have the ability to check messages at home from any computer with an Internet connection, as well as see call logs and a few other nifty features. And with both spouses having cellphones as backups, we see no reason to go back.
(Not unlike cable, someday people may think it's weird that people ever had landlines. We're just ahead of the weird curve — or behind it, not sure which).
One other thing, we haven't yet paired my wife's cellphone with Google Voice because we have plenty'o cellphone minutes and we can't get a smaller minute package. However, if the minutes start running low, we may pair her phone with the Ooma using Google Voice.
All in all, I'd say it's been a successful venture. How successful?
1) We've saved close to $1,000
2) We've spent far less time watching TV
3) Perhaps most importantly, it's helped me realize what an accommodating wife I have!
What about you? Saved any money over the past year on digital services? If so, how? If not, why not?
In my last post, Buying a car — new: Part 1, I confessed to doing something back in 2008 that I never expected to do: I bought a new (rather than used) car.
Nearly all the financial "experts" frown on such purchases because of the ridiculous amount of depreciation that occurs the second you drive it off the lot. That kind of financial logic is difficult to argue with. After all, I'm a "best-deals" kind of guy and rarely are new cars the best deals.
But, as I said in the post, "Our game plan was to have a bigger car by June [2009], to boost our level of retirement savings, to increase our giving in 2009, and to make my wife happy."
Still, some blog readers, uh, "took exception" to my decision. Here's what a few commenters had to say:
"Thank you Matthew, for taking the depreciation of a new vehicle for me. Let me know when you are ready to sell it in 3-4 years so I can pay next to nothing for it in cash. I know you said you'd 'likely' own it for 8 years, but your post lets me know that you are excellent at justifying. Let us know how the warranty works. Usually covers everything except for what needs fixing. I will refrain from name calling, but your purchase surely does go against the SMI principles I've been reading for many years."
"I don't think it is wrong that you bought a new car. The problem is the principles you broke. No they are not laws, but breaking Biblical principles has a way of not working out. First you took on debt in order to buy the new car. I know you are thinking your can earn more than 1.9%, but that probably did not work out last year if you were in stocks. And we all know that we can not reliably forecast what will happen this year. Secondly you are investing in your 401(k) without being out of debt. You are breaking the order of the 4 steps that SMI outlines."
"I'm sorry, but I feel you were a bad example for going into debt for a depreciating item. It goes against all the principles taught in your own newsletter and by Crown Financial Ministries. And it was not even for absolute necessity, as for some very poor people who buy something cheap just to get to work. The price of used cars also went way down."
Yeeeouch! Maybe "took exception" is understating it a bit. They filleted me. But that's okay. We invite healthy (even if heated) discussions on financial matters at SMI: "As iron sharpens iron, so one man sharpens another."
♦ ♦ ♦
As I mentioned, that original post went up in 2009. So let's fast-forward a couple years: how'd it all work out? How did we do with our game plan?
Boost to retirement savings – check. We were able to fully fund our Roth 401(k) here at work. And because we were investing during the bounce-back from a severe downturn, we did quite well. Upgrading was up 33.6% in 2009.
Increased giving in 2009 – check. Years ago, my wife and I put into place a system to help us increase our giving each year. While tithing 10% is a good place to start, it is important to us for it not to be the final destination. While it's not always easy to increase our giving, we trust God to work things together for the good.
Wife happy with new van – check. And if asked, I like it too. In fact, we like it 42,257 miles worth so far. This thing is a tool-box on wheels, making it much easier to do road trips with our three kids (fourth coming in August!), car-pooling to school, trips to the grocery and even occasional outings to Lowe's where I can take the seats out and hold quite a bit of lumber. Could we have done all this with a used car? Yes. But the peace of mind from the warranty does have its value (we haven't needed it yet by the way).
And so the million-dollar question: would we do it again?
Probably not — but not for the reasons you're thinking. It has nothing to do with the monthly payment (which we no longer have — we paid the car off in January 2011). It doesn't have to do with the lost depreciation, either. True to our plan, we intend to keep this car for quite some time. Nor does it have to do with newer models coming out making me wish we had waited.
What then? It's the dings. The scratches. The dents. I didn't realize how badly they'd hurt emotionally.
Our nice new van now has been through a couple of fender benders, car toppers falling on the side panel (that one was all me), scratches from purses and grocery carts, crayons ingrained into the floor, etc. And every time there's a new one, it still hurts.
When you buy a car used, it's already a little imperfect, so the new imperfections aren't as painful. But with this car, each one reminds me of what use to be our perfect, shiny, immaculate minivan. I have to say, I didn't see this coming.
♦ ♦ ♦
So there you have it. And while we probably won't buy new again, I don't have regrets over buying this one new. It fit our game plan, lined up with our risk temperament, filled a need, and pleased my wife.
What about you? Ever bought new and then regretted it? Or maybe the opposite held true: you bought used and wish you bought new?
What will you do differently next time? Tell your tale.
In this two-part piece, I'm going to first look back at a post I did in February 2009 regarding purchasing a new(!) car. In part 2, we'll fast-forward to where I am now in my thinking on buying cars new, rather than used. So let's rewind a couple years, shall we?
Confessions of a liar?
Okay, I did it. I admit it. I did something I publicly announced I wouldn't do, stopping just short of telling you to read my lips. I bought a car — new. Gasp! You did WHAT?
Let me clarify a few things. To be exact, I had earlier said, "I'm not likely to buy a car new" — "likely" being the operative word. And in the post in which I made that statement, I was talking about buying a car for me. But the new car is for my wife.
But I'm sure a few of you are griping about these technicalities. So what, pray tell, brought me to this seemingly un-SMI-like decision?
Background: Last March [i.e., March 2008], we added Gigi to our fold. That meant it was difficult for the five of us to go anywhere — two car seats, a teenager, and a 2004 Pathfinder do not mix. In fact, when we went on our annual family vacation, Jordan had to ride in a separate vehicle. My wife was not happy, therefore I was not to be happy.
Being a loving husband who valued his vacation time, I quickly promised a bigger vehicle by next vacation. And after some soul searching, my wife Kim relented to the idea of a minivan (she had been plagued by the anti-minivan virus, which apparently is a very real phenomenon that mom's deal with, battling what seems to them as a loss of soul and self).
Fast forward seven months and we had the perfect storm for car shoppers: a collapsing economy and year-end inventory. Dealers needed to deal.
But you're saying to yourself, "Just go find a 2-3 year old Honda Odyssey." That proved to be difficult — unless we were willing to sacrifice our whole wish list of options, color, and so forth.
I was able to further rationalize the decision with the 1.9% financing. While I had hoped to pay cash for the vehicle, I was stymied — mostly by my decision to contribute aggressively to a newly created 401(k) plan here at SMI. Furthermore, Honda was offering to extend the bumper-to-bumper warranty an extra five years for about $300/year, and if we never used the extra warranty, they promised to refund that money. We figured that we'd be "likely" to have the car for eight years, so that was a no-brainer for us.
Why spill the beans about my new car purchase when I know I'll likely disappoint a few of you? Admittedly, it's a little cathartic. And we try to be pretty forthright around here (I've had several people inquire).
But most importantly, SMI is always talking about having a game plan and sticking to it. Our game plan was to have a bigger car by June, to boost our level of retirement savings, to increase our giving in 2009, and to make my wife happy.
That was my thinking a little more than two years ago. Would I buy new if I had it to do again? I'll have the answer in Part 2.
My wife and I decided this would be the year we would transition from using a combination of credit cards and debit cards to primarily using cash. While we'll still use a rewards-based credit card for gasoline purchases (we're not going to spend more on gas just because we're using credit, so we might as well get rewards for that spending), we're otherwise moving to a cash approach.
We haven't finalized the plan just yet. Probably, we'll combine our cash spending with some kind of online accounts for certain budget categories, such as using ING "sub-accounts" or some version of PNC Virtual Wallet. (Having been avid debit card users for 11 years, I already gave Mvelopes a try, but didn't find it intuitive or helpful.)
So, I posed the following question over on our Facebook Page: Best advice for someone transitioning to the cash/envelope budgeting system?
Here are some of the responses I got:
• Find a method that works for you (we like MoneyWell), adjust your budget as needed (it can take a bit to fine-tune things), include some fun money, and be patient with yourself (trying and missing the mark is more progress than not trying).
• Start with the right envelopes. I don't think you want to get carried away with too many envelopes.... Cash works very well with those areas of your budget that are tough to control such as entertainment and grocery shopping. Perhaps try cash with those and use a debit card with the rest.
• We're thinking of trying it just for the areas I tend to overspend in.
• Make sure you have your spending categories finalized.... Get your envelopes together. You may find that most of your fixed expenses do not need to be part of the envelope system. We mainly use the cash system for food and miscellaneous.
So where are we in the process? We're no longer using the credit card except for gas (as noted above). Previously, we paid for most of our expenses via credit card (to earn cash rewards). But because we pay the balance down to zero each month, it felt like a huge bill hanging over our heads. Now it'll be much smaller and more palatable mentally and financially.
Next up we need to finalize our budget categories and their percentages/amounts. I've always found this calculator from Crown Financial Ministries to be a good starting place, so we'll likely use that.
After that, we'll need to devise our game plan: take out X dollars every Y weeks and divide it among these Z envelopes. Also, we need to decide who is making the withdrawal and who is carrying how much money and... logistics in other words.
I'll be back later in the year to report on our progress. At that time, we hope to be well-oiled machines — but as one commenter said, "be patient with yourself (trying and missing the mark is more progress than not trying)."
But we haven't got there yet, and that's where you come in. What have you tried that has worked and what hasn't? Any software or physical envelope systems you'd recommend? I'm all ears. Just post to the comments area below!
We moved last year, and in our relocation process we gave away a lot of stuff: clothes, housewares, decor, and miscellaneous items. Never wanting to give the government more money than I have to, I'm always diligent about getting receipts, writing down items we've given, taking pictures, and so on. It's a little work, but as you'll soon see, well worth it.
The hardest part in the process is in determining fair market value for the items. I'm never too excited about doing this, but thanks to TurboTax's ItsDeductible, the process isn't as bad as it could be. ItsDeductible is the easiest and cheapest way I'm aware of to determine the market value. And it's free (they are hoping you'll then import the information when you file your taxes through TurboTax). So how does it work?
After logging in with your current TurboTax login info (or creating a free account), you can choose to track your current year's donations, add donations to the previous year, or adjust donations for an amended return from two years ago. I selected the second option.
From there, you are given four types of donations: Items | Money | Stock | Mileage.
I naturally selected "Items." After than you will add/select a charity name and the date of the donation. Then you look up the item you donated. This can be done via search box, or from a list of categories/sub-categories. I find it easier to do a search, then select the appropriate sub-category generated from the search.
Once you've located an item(s), you have the choice of quantity and value: High Value, Medium Value, and Low Value. (I'm have not idea why they include the low-value option; the Pension Protection Act of 2006 disallows tax deductions for any clothing and household items that are not in "good" used condition or better.)
Choosing the value is the hardest part as we don't typically record the exact condition of the item, so there is a judgment call involved. Since we don't give away items in poor condition, I'll usually put half of the items in High Value and half in Medium Value unless I can remember that item's exact condition. (Note to self: Next time, it would be helpful to put an H next to the High Value and an M next to the Medium Value items when then them down.)
Let's walk through an example:
Say you have some blankets you gave away. A search for the term "blanket" generates the following choices: Receiving Blankets, Bed Spreads, Blankets, Comforters, Duvet Covers, Quilts, and Quilt/Comforter. Since you just had a regular old blanket, you select "Blankets."
You're then taken to a few more choices, Electric and Non-Electric. And under each of those are even more options, from the size to the material. Since you remember that you gave away a really nice fleece blanket and a decent acrylic blanket, you put a "1" in the High Value box next to Fleece, and a "1" in the Medium Value box next to Acrylic.
Then you click "Add Items" and are taken to a summary screen showing what you've given so far and the value of it.
From there you can add more items or complete that donation. If you complete it, ItsDeductible shows a summary of all your donations and the estimated savings based on your tax bracket (which you selected in the sign-up process). You can also make edits from this screen, print individual donations, or be done with the donations.
If you're done, you're given a quick summary of all your donations, including any Cash, Stock, or Mileage donations you've entered, along with an option go to more-specific summaries that you can print. If you're not using TurboTax, you'll want to print the donations to include with your tax info.
It sounds like a lot of work, but it's not difficult, and you get faster with it as you do it more. I had it done in less than an hour. And it showed an estimated value of $2,193 worth of goods donated. Depending on your tax bracket, that's a savings of about $200-800... for an hour's worth of work! And that didn't include any Cash, Stock, or Mileage donations (and the miles to and from Goodwill can really add up).
So if you're not taking advantage of non-cash donations when you itemize your deductions, you're really doing yourself a disfavor — that is, unless, you make $200 or more an hour. In that case, hire someone to do it for you!
First, a little background on Craig. Having worked in both youth ministry and pulpit preaching ministry, Craig is currently a missionary in Papua New Guinea with his wife and three children. He has attended Rochester College, York College, Abilene Christian College, and Harding University Graduate School of Religion, and he holds an AA, BA, and a Masters of Divinity degree, all in the field of Biblical Studies.
Oh, and he's debt free (mortgage excluded).
What I first noticed about his e-book was how professionally it was done. From the table of contents to the use of images, formatting, grammar, it all has a top-notch feel. This isn't always the case with self-published e-books.
After the introduction, Craig details what he calls "The Menu for Financial Health." This is his creative way to approach a financial plan. On his menu, he has listed (among other things):
Beverage — Give Generously
Soup — Pay off all debt with an interest rate above 6%
Salad — Save 3-6 months worth of living expenses
Dessert — Save for major future purchases
I found this to be a great outlook on finances and should appeal to many who haven't been persuaded by other financial plans.
After this, Craig talks briefly about "Financial Focus Points — The FFP is where you send all the dollars your budget helps you create. For example, if you are trying to get out of debt, that is your FFP."
From here, we move into the nuts and bolts of the e-book, and that's defining a budget, working with a budget, creating a budget, budgeting methods, budgeting tips, and budgeting questions.
One of the things I appreciate about his writing is that while he does it with honesty, he does it without beating you up over things. For instance, he writes:
The question we must each ask ourselves is — when budgeting gets hard, will I quit?
If you respond to the difficulty of trying to get control of your finances by avoiding any period of discomfort, then this budgeting system won't work for you. My best advice would be to email mhforc@gmail.com and ask for a refund. However, if you are willing to endure a season of discomfort, adjustment, and transition, then you'll really enjoy the rewards.
I love that kind of gentle candor.
Another thing I appreciate is the lack of rigidity. Craig doesn't claim to have all the answers, nor does he say there is only one right way and it never changes. In fact, he says quite the opposite when he mentions, "Budgeting is a process, not an event... There is no such thing as a perfect budget." I believe this kind of perspective makes the book more accessible and easier to digest.
Craig has also sprinkled in personal stories, Bible illustrations, analogies, and tips throughout the book. One of my favorites is on page 42 when talking about how to decide what to cut from the budget, he says:
When we buy things, we don't just spend money. We spend our time. When deciding what stays and what goes, you should ask: do I want "x" number of hours of my life to be used on buying this item?
But my favorite aspect of the book is that when reading it, you can really hear his heart — that as Christians, God is an essential reference point in how we spend our money. This is evident in how he suggests giving back to the Lord (generously, extravagantly, from the firstfruits and the leftover), as well as in his closing prayer:
I pray that you might commit everything you do to God in prayer. Ultimately, budgeting is not about you. It's not about putting another dollar into a bank. It's not about saving every penny you have. It's about doing what God would want you to do with your money.
In closing, I found The Secret to a Successful Budget a pleasure to read. Craig has a thorough, well-written resource to offer Christians struggling in mastering their budget. So if yours is non-existent or in need of some direction, I think Craig could provide you both the encouragement and motivation you've been needing.
Wow! Another Christmas is just around the corner. How have you done thus far on your spending plan for 2010? If not great, don't lose heart, today's a new day. And for those who've done wonderfully, there's always room for improvement... especially around the holidays.
And with one of the busiest shopping days of the year upon us, I wanted to remind you of a series of posts we did last year entitled, The Ghost of Christmas Budgets Past, Present and Future.
In The Ghost of Christmas Budgets Past, I encouraged you to embrace your families' creative giving traditions while keeping the cost of past homemade gifts in mind: "So in your efforts to keep spending down this year, embrace the ghosts of Christmas budgets past. Listen to them and learn what you're getting yourself into."
One thing we did years ago was to decide that we should put more emphasis on individual birthdays than Christmas. That cut down the amount we budgeted for just one event. I think it made the individual attention that each of our 4 children got on their birthday more meaningful.
The second decision we made was that whatever we budgeted to spend on ourselves, we would budget the same amount to give to other ministries. Human nature being what it is, this went a long way toward keeping our splurges to a minimum. — Bob
We've always created a budget for Christmas, right down to the annual Christmas DVD we add to our collection each year, or postage for Christmas cards. We also budget an extra margin of around 10% — which comes in handy when the gift my mother-in-law would really love is $5 to $10 more than I budgeted and I can't find it on sale...
I want to recommend a site that's helped me keep Christmas organized and sane for several years now. It's called www.organizedChristmas.com. I made a binder with master copies of forms I use every year, such as master gift list, family wardrobe check, menu planner, etc. There's a master calendar with "countdown" weeks, so you can be totally done early in December and just enjoy the season. Checklists, too! Everything is free for the printing, and the website owner (now retired) is Christian, so many of the articles speak right to the heart of Christmas and are great for re-reading year after year. — Cate
As for me, next year I'll do a better job of looking at sites like dealnews.com (slogan: "Where every day is Black Friday") before I go out shopping. But I have to say, using these online saving tips paid off...
I'll also continue to use cell phone apps like have ShopSavvy which kept me from overpaying on more than one occasion. With ShopSavvy, you simply take a picture of a product bar code with your phone's camera, and within a few seconds you're shown a list of the best local and internet prices for that item.
And perhaps next year, I'll focus our September-November shopping on the non-toy presents. According to Dan de Grandpre, founder and chief executive of dealnews, the best time to buy toys is at least two weeks after Black Friday (or about two weeks before Christmas) when retailers, such as Toys 'R' Us, Wal-Mart and Amazon.com, slash prices to clear out unsold inventory.
So there you have it, some friendly reminders on how to stay in the black on Black Friday.
It's SMI's Personal Finance Friday, and today I'm bringing you a smorgasbord of articles to get your financial juices flowing.
Fitness Deals to Beat the New Year Rush: "It's true that you won't see splashy promotions right now, because most gyms wait to publicize big promotions until the New Year's resolution rush. But if you walk in and ask, you'll find they're very willing to give a discount to get you in the door..."
"'Dad, I need $40 for my new cross-country jersey and stuff,' he said. I fished out a fifty to pass over to him. He could give me the $10 change later.
"Whoa, just a second, I thought. 'Whatever happened to the change for the 30 bucks I gave you back in August?' I demanded.
"'What $30?' he responded..."
The Mall Goes High-Tech: "Back in August, the big retailer Gap decided to go where few large retailers have gone before — using a popular discount Web site to hold a nationwide sale. Shoppers had 24 hours to go online at Groupon.com and buy half-price shopping vouchers good for everything from jeans to trendy messenger bags.... [B]y day's end, almost 450,000 potential customers had bought into the deal.
"It's the new paradox for the American shopper: Just when buying online has become second nature for most consumers, retailers are shaking up the way they sell, now increasingly using the Internet to lure them back to Main Street or the mall."
Goodbye to All That Penny-Pinching: "The challenge for us lies not in knowing what to do, but in doing it. Despite our current economic travails, we live in a society of great wealth. Every time we drive past a shopping center or flip on the television, we are confronted with all the great products we don't own but could.
"Even for those inclined to be cheap, it's not so simple.... So, rather than providing helpful tips in my previous columns, I've used the space often to examine those two great forces that make us spend more than we should: seduction and compromise."
Future-Proof Your Phone's Data Plan: "Following AT&T's lead, both Verizon Wireless and T-Mobile are expected to unveil new cell phone data plans this week, offering lower prices for customers willing to give up their unlimited data plans. But the $15 savings might not be worth it — and if you switch, there could be no going back."
In our never-ending quest to equip you with tools and resources for better financial decision making, I'm back with two more. Now bear with me on these two, as they may not be as obvious in their money-saving potential.
The first up is Dropbox, a file-hosting service that lets you store files across the internet using file synchronization. They offer free storage of up 2 gigs, 50 gigs for $9.99/month, and 100 gigs for $19.99/month.
The setup is ridiculously easy: sign up and then install the Dropbox sync client on any computer (PC, Mac, or Linux) from which you'd like to be able to access the files. That's essentially it. Have a file you think you might want to access from both home and work? Just put it in in your Dropbox folder.
Dropbox also has apps for the iPhone, iPad, Android and Blackberry platforms. This came in handy the other day when I wanted to listen to a sermon I had put it in my Dropbox at work. I pulled out my phone and tapped the file. Within seconds, Andy Stanely was giving another brilliant sermon.
So how does Dropbox save money? For starters, remote-control software services such as GoToMyPC are overkill for my needs. I have the free (2 gig) Dropbox account and am currently using only 3% of my total capacity. So rather than paying GoToMyPC $20/month, I'm paying nothing. Secondly, it keeps me from having to burn files to portable media, saving me the time and money of doing so. Furthermore, since the files are synced, I can always know that I'm working with the most recently updated file (if you've ever saved an older file over a newer one, you know the frustration of having to redo it — and, as they say, time is money).
Dropbox is a dead-simple, practical service that's worth trying if you have file sharing needs.
Next up is PayPal. Now PayPal is really without peer for web-based payments and money transfers. I mean sure, Google Checkout lets you pay for things, but it's hardly as ubiquitous or robust.
PayPal has had apps for the iPhone, Android, and Blackberry platforms for a while. You could use these apps to send money to people, donate to a charity, or look at past transactions. But now iPhone users can deposit checks by taking a picture. Pretty wild. Simply snap a picture of a check via the PayPal app and the funds will be transmitted to your account within seven days.
Of course, banks such as USAA and Chase also allow you to do this kind of thing — provided you have an account with them. But PayPal's 226 million accounts makes its reach and accessibility vastly superior.
So how does this save you money? No more driving to the bank to make the deposit, a time and money waster. I didn't say it was gonna save you a ton of money, but every little bit adds up. And let's be honest... it's just really cool too.
That's our Personal Finance Friday for this week. Spend wisely — and have a great weekend!
A few weeks back, we told you about three tools that could help you save money. Today, as part of SMI's new Personal Finance Friday series, I'm back this week with another one.
I'd like to introduce you to Ziplist. What is it? "ZipList is a free shopping list management tool that allows you to create and share grocery lists with family members." After registering for your free account, you can start building your lists by searching for items and adding them.
While the service is geared towards groceries, you can add clothes, home improvement items, essentially anything you want. There are fields for coupon information, notes, and the ability to mark an item as "Important." You can assign certain items to a preferred store and if a store you shop at isn't listed in your zip code, you can create it. You can even rearrange the store's aisles so that your list is geographically efficient.
Where Ziplist really shines is with its recipe functions. You can add recipes to your account and whenever you're ready to shop for them, simply find that recipe and click "Add to list" and the recipe's items will be added to your list. You can even add recipes you find on the web by installing a special link on your toolbar and clicking it when there's a recipe you want to keep. Very slick.
Furthermore, Ziplist has a free app for the iPhone so you can access your lists on the go. Additionally, you could build your lists using only your iPhone's camera by scanning the bar code of the items you'd like to add. Don't have an iPhone? There are options to access your list via text messaging, instant messaging, and email.
You can also share your lists. This is especially helpful for families. Say I remember that my wife is going to the store today and there is a certain melt-in-your-mouth-not-in-your-hands chocolate I'd like. I simply add it to the shared list (via the site, email, text, instant message, or my iPhone). When she pulls up the list on her phone, there's my candy, organized by category.
There are other services similar to Ziplist, like Grocery iQ. While Grocery iQ doesn't allow you to add items straight from your computer, the interface might be more intuitive for some. Furthermore, it has free apps for both the iPhone and the Android platforms. Overall, I have found Ziplist far more robust and feature-rich, but since they're both free, they're both worth trying out.
So you're saying to yourself, "This is all fine and dandy, but how does it help me save money?"
A few ways:
You aren't likely to buy items you already have or forget items and have to spend time and money (on gas) going back to the store to get the missed items.
Having a list keeps you more efficient — and, as they say, time is money.
But most importantly, sticking to lists is one of the first lines of attack against impulse buys. If you'll commit yourself to your list (and coupons), you won't likely walk out of Costco with a greenhouse they tempt you to impulse-buy while you wait (and wait and wait) in one of the only two lanes they have open!
Next Friday, we'll focus on preparing for retirement. Spend wisely — and have a great weekend!
It was the best of times, it was the worst of times.
Today, I finally redeemed all the Bing Cashback rewards I had accumulated over the past year. But it was bittersweet. A few weeks ago, my go-to cashback site announced its closing. So, through misty eyes and a heavy heart, I made the redemption for both the first and the last time.
Build it and they will come.
Perhaps that's Microsoft's thinking behind the announcement of Bing Rewards, the replacement for Bing Cashback. Here's how it works:
1) Download the Bing Bar
2) Register with a free Windows Live ID
3) Start earning credits
How do you earn credits? By doing things like searches, setting your homepage to Bing or trying out new features of Bing. When you've earned enough credits, you can redeem them for gift cards, electronics, digital downloads, and movie tickets, to name a few.
Of course, earning enough credits to get a substantial reward could take quite a while. In fact, this is the same business model behind Swagbucks.com. I have an account on Swagbucks that I rarely use because it was taking forever to earn enough points to redeem anything worthwhile. And more importantly, I didn't like the search results.
And that's what this is really all about... search.
You see, Bing Rewards is mostly a poorly disguised effort (if not ill-conceived) by Microsoft in its never-ending battle to drain market share from Google's bread and butter — its search engine. The good news for Microsoft is that Bing has not only been a solid performer, but in the grand scheme of things, a grand-slam. The problem is, the score was 55 to 2, with Microsoft on the short end. So maybe now it's 55 to 6. But to make the deficit reasonable, you're gonna need a constant stream of base hits plus the occasional home run here and there.
The question then becomes: Is Bing Rewards even a base hit? Maybe. Some won't like that you're required to download the Bing Bar (which is used to track your credits). I don't care for that either, but it doesn't bother nearly as much as the requirement to use Microsoft's Internet Explorer browser. I'm a Firefox user and will not switch browsers just to participate in Bing Rewards.
For Bing Rewards to bat some runners home, Microsoft will have to open it up to other browsers and remove the requirement to download the Bing Bar (and even then I'm skeptical how much it would help). If they do that, I'll participate because I quite like Bing and use it for my searching already. But it doesn't mean I have to be happy about it. Bing Cashback had set the standard and I'll be reminded of that every time I earn a single, lousy credit.
You can't always get what you want... But if you try sometimes you might find...
You get what you need
That may be true, I'm just not thinking this is one of those times.
I'm a sucker for most calculators, sites, graphs, apps — essentially any techie tool — designed to help me save money. I've recently come across three tools aimed at doing just that.
1% More Savings Calculator: This aptly named tool does one thing and does it well. Simply put in a few pieces of data (income, savings balance, time horizon, etc.) and it'll produce a graph showing your ending savings balance at your current rate of saving, your balance at an additional 1% of saving, and finally, your balance if you could save by an additional 1% each year until you reached 16% total savings.
The real fun comes by moving the "Percent You Save Each Year" or "Expected Annual Return" slider one notch to the right to see what a difference a single percentage point can make.
Takeaway: It's a nice little motivator. Working hard to eke out an extra percent of savings each year can make a big difference over the long haul — but not as big as increasing the expected rate of return by 1%. But, of course, we applaud both.
Springpad: An app that helps you remember stuff: Essentially, Springpad is a free service that tries to help you keep track of everything from recipes to movies you want to see to gift ideas and more.
Where Springpad gets really interesting is that it can alert you when a particular item that you've added has dropped in price. For instance, as this nice review points out, Springpad may let you know when an item that's used in one of your recipes goes on sale.
I've been playing around with Springpad for the past few weeks. When I logged in today, I saw I had an alert. Turned out, an album I had added from Amazon had a price change by $2. And what's interesting is the price change came from Buy.com. So even though I only added it from one vendor, it tracked the price from multiples, and when there was a price change it let me know.
Furthermore, it also alerted me to a special offer with a promo code from Amazon on how to save $3 on an album. Pretty nifty.
I did this all from my computer. There are also free apps — iPhone, iPad, and Android — to help you keep track of stuff on the go. Your accounts will sync across all platforms (so if you add something from your phone, it will show up when you log in on the computer). Springpad recently updated the app to include alerts on special offers and price drops. I'd also like to see an email or SMS option for these alerts, but this is a good step in that direction.
Takeway: This a pretty useful little service — and seeing how it's free, it certainly worth a try! (The only sticky note I'll need now is the reminder to actually use Springpad.)
Abogo: Transportation costs made transparent: This is a great site for those who are moving and are curious about transportation costs for getting around town. As this NYT write-up points out, you simply enter an address and Abogo will tell you how much the average household in that neighborhood spends on transportation costs. Now keep in mind, this is an average, not a projection specific to you. There are just too many variables to get that precise.
For instance, when I entered my address, it gave me a cost that was much higher than we pay (thankfully). But then again, I'm only about 15 minutes from work, my wife is a stay-at-home mom (i.e., no commute), the kids carpool to school, my car ownership costs are reasonable, etc. Of course, even approximately determining the amount one spends on transportation costs takes a crazy amount of math (PDF). So don't expect super-high accuracy — but since the tool is free, it certainly doesn't hurt to consult it.
Takeaway: If you're moving and transportation costs among prospective neighborhoods are a concern, might as well check it out. If you're staying put but want to feel better about your costs cause you walk to work, then by all means, Abogo.
It's too bad really, I was a big fan of Bing Cashback. I first started using Bing Cashback late last year, when, in an effort to diversify the free internet services I frequent (i.e. I don't like relying too much on any one provider, be it Yahoo, Google, or Microsoft), I switched to Bing Search. Since that time, I've saved nearly $250.
We are writing to notify you that the Bing cashback program will be discontinued, and the last day to earn cash back on your Bing Shopping purchases will be July 30, 2010.
So why did it close down? Usually, these things just boil down to profitability. But here's NPR's take:
Note that Microsoft themselves said, "We did not see the broad adoption we had hoped for." That could mean not enough users of the program or not enough increased search engine market share or... But who knows?
So what if you're a Bing Cashback user and you have rebate money you haven't redeemed? No worries, you have until July 30, 2011.
But what if you're such a Bing devotee that you aren't interested in other rebate programs? There may be hope for you after all. Did you notice that at the end of their announcement, they say, "...and we are currently working on an exciting new program which you will hear more about from us later this summer."
Hmmmm... I'm intrigued.
Update:Rumors are flying around that Bing Cashback might team up with Amazon. Whether or not that is true is anyone's guess. Until we know for sure, you can use this handy list of other rebate sites from Comparerewards.com for your online shopping.
I'm torn. I can't decide if my love for our dog outweighs my distaste for feeling duped into buying yet another kind of insurance: pet insurance. Yes, it's real with actual revenue numbers to back it up. Opinions vary regarding its merits: this piece acknowledges the value, while this piece does not. Then there's this information about calculating the worth of your pet.
If you ask me, it's impossible to put a price on a face like Gertie's. But I think I'm in the "factor it into your budget" camp. In other words, instead of paying premiums to a pet insurance company, open a pet savings account and "pay yourself" instead. If we put money aside now, not only will it be there if we need it but we'll get the benefit of compounding interest.
But that's only half the story, the money-saving, budget-conscience half.
Isn't there a stewardship issue here? Don't think so? Maybe this piece will change your mind. It willl certainly incense the hard core pets-aren't-people-they're-possessions crowd. Even a big-time pet lover like myself was taken back. Listen to this:
APPMA reports that 42% of dogs now sleep in the same bed as their owners.I'm not judging anyone... yet.
Half of all dog owners say they consider their pet's comfort when buying a car. I barely consider my kids' comfort.
With annual growth nearing 50%, the pooper scooper industry is now experiencing a lot of consolidation...There's a "pooper scooper industry"?
I'm not going to say that some of these crazy things people do for their pets are morally or even financially wrong because I don't know their heart or their giving. But it's hard not to have questions when you learn that Fido could be put on a cocktail of Slentrol and Reconcile; one for the unwanted pounds he put on while being depressed and the other for the depression from all the canine separation anxiety. My question in particular: Why medicate when he could just have liposuction and go everywhere with you in your canine-cozy Caddy? ;-)
Is it just me or is there a financial stewardship issue banging around in here somewhere? I think so, or at least there certainly can be without proper balance. You see, I want my giving to reflect how much I love the God and love other people. So it's more about my love for Him and less about my lack of love for Gertie.
Besides, when pet cloning comes down in price, Gertie will know how much we love her for the rest of her lives.
(This piece originally appeared in a July 2007 blog post (membership required) of The Sound Mind Investing Weblog.)
Last summer, we wrote about Swaptree, a website that allows you to list and trade books, music, DVDs, and video games for free (and soon you'll able to trade Blu-ray discs and audio books). Since then, I've had a chance to use it in real life.
Here's how it works in general. Lots of individuals create lists of items they want, as well as items they have to trade. For the most part, you're saying that you're willing to trade any item on your "have" list for any item on your "want" list. (You always have the opportunity to reject a trade, but if you do this too often, Swaptree will evidently get cranky.) This is important, because in most cases Swaptree arranges deals among three parties, rather than two. In other words, you're sending an item to person A while getting an item from person B.
Here's the detailed version of how this works:
After you sign up for a free account, you are prompted to list items you have to trade and those you'd like to have. Listing items you have is quite easy. You either search for it or, better yet, simply enter in the UPC or ISBN in the "Have" list box and click "Add". From there, you select the item's condition and give a description if you'd like, then submit. Very quick and easy.
To add items to your Want List, type in the name of the item in the search box, then click the "Want It" link when it pops up. It's really that easy.
Next, you can view potential trades by clicking on your "Want List" and then sort the selections by "View Only Get Now Items." If there are any trades available to you, they will show up here. Next you can initiate a trade, assuming you are okay with the exchange. But not all items are equal. You may not want to trade a popular movie for an old paperback. But if you are good with the terms, you can initiate the trade and wait for the other party to accept (they are given roughly 2 days). If it's accepted, you'll get an email (or you can check back on the status by clicking the "My Trades").
Assuming it's accepted, you have a couple days to mail the item. Swaptree will give you the person's mailing address. You can either have Swaptree calculate and print the postage/mailing label for you right then (you'll need a credit card to pay for the postage if you select this option and they charge a small fee for this service - but it's extremely convenient and the prices are quite reasonable), or you can calculate your own postage.
After you mail it, you can "Contact the user" to notify them of your ship date and/or ask them questions/make comments. Once you've received your item, you can come back to "Rate the User". This rating might make a difference with whom you trade in the future. Since other users also likely take notice, it's advisable to solicit positive feedback if they haven't already rated you.
And that's Swaptree in a nutshell. We recently moved and came across some old movies and video games that I had intended to sell on eBay. But since I didn't want to hassle with auctions, and there were some DVDs we wanted, I thought I'd give Swaptree a try. And it works as advertised. I'm notified when someone initiates a trade and I check back once a week to see if there any available trades I may have missed or if I want to add some items to our Want List. So far, I've made 4 trades (traded movies for movies and traded video games for movies) and haven't had any issues. The only fees I've paid were the shipping costs. Again, Swaptree makes a small profit when you buy and print postage but you don't have to use their postage generator.
If there's a downside to Swaptree, it's that pending the size of your Want and Have Lists, a trade could take a while. So if you're in a rush, this probably isn't your best option. But it will likely be on my pre-eBay checklist if there's an book, movie, CD, or video game I'm interested in getting. And it sure beats paying retail because as is often the case, patience pays dividends for the frugal.
UPDATE: Swaptree has acquired Swap.com. Besides an eventual name change and a bigger user base, the changes brought about by this acquisition will take some time to manifest. In the meantime, it's free trading as usual.
Wanna get out of debt? Start by looking at your biggest expenses and find ways to reduce or eliminate them. For many of us, that biggest expense is our mortgage.
But not for 45-year-old Jay Shafer of Sebastopol, California. Why? Cause Jay has taken downsizing to a whole other level. Jay lives in an 89-square-foot house he designed and named "Tumbleweed." Jay, a former grocery store clerk, now designs these houses for a living. And not only has his mortgage disappeared, his utilities are now under $100 a year. Here's his story:
To be honest, this lifestyle appeals a great deal to me. Not only because of vastly reduced expenses, but also because of the burden of choosing, maintaining, replacing, cleaning, and storing our "stuff."
That said, I wouldn't go near this lifestyle till we're empty nesters because of the following equation:
Blog
Members Only), I've been a Upromise member for roughly a decade now. Upromise is basically a rewards program that deposits your savings into a college 529 plan account. (You can read more about 
And you'll never guess what happened the very next day, so I'll tell you. Nothing. Nothing happened the next day. No random check in the mail. No new out-of-nowhere job offers. No new training clients. Zilch. Nada. Zero. The only thing that happened was that we became poorer. 
My wife and I recently did a surprise room makeover for our two girls who will be sharing a bedroom to free up a room for our baby due in August. We'd been stockpiling decor options for several weeks, but with the makeover just a week away, we were without good curtain options.
Since I couldn't guarantee that those I text could/would also use textPlus (other than my accommodating wife), I decided not to pursue this app any further. So, no money saved.
Phone: Now for the home phone. As you may recall we started using 
What then? It's the dings. The scratches. The dents. I didn't realize how badly they'd hurt emotionally.
Next up we need to finalize our budget categories and their percentages/amounts. I've always found this 
Where Springpad gets really interesting is that it can alert you when a particular item that you've added has dropped in price. For instance, 
