Thursday, December 31, 2009

New Years Resolution's

Happy New Years Eve, enjoy time with your friends and family, and remember to stay safe! We'll be enjoying a low-key evening at a friends house playing Wii.

I haven't given my New Years resolution much thought, this year. It seems like the time is passing more quickly now. Below are a few things that I want to accomplish in 2010.

1. Enjoy more time with my wife, and our puppy Teagan
2. Pay off the last of my credit card debt, and be completely debt free.
3. Get rid of my gut that is starting to form.
4. Knock out the den wall, and maybe even put in some hardwood floors.
5. Live for improvement!

Wednesday, December 16, 2009

Forget Saving and Start Paying

Everywhere you turn, people are recommending ways to save money shopping, but unless you actually use that money to pay off credit card debt, or contribute it towards an emergency found you aren't making progress. We all have a habit of living paycheck to paycheck, and when additional expenses like car repairs come-up, we grit our teeth and find a way to over come it.

Its time to start creating our own additional expenses, and forcing our lifestyles to compensate. Working backwards is a sure fire way to guarantee success. After all, you can't spend what you don't have.

Here how:
Start automating your credit card payments to an uncomfortable amount. If you regularly pay $300 dollars each month, crank it up to $500. You will definitely feel a lifestyle shock, but it might be the wake up call you need. Do you contribute $100 dollars per month to a saving account only when you remember to do so. Set up an automated monthly transfer of $300.00. The money will get zapped from your account whether you like it or not. Your lifestyle will change out of survival instead of at will. It's time to get serious with your finances. Implement the "30 day Zero rule." Lets get rid of debt once an for all, instead of just chipping away at it in your spare time.

Now is a perfect time to ramp up the amount you pay towards debt or an emergency fund. You can start 2010 with a bang, and directly see all you hard work in each larger payment.

Tuesday, December 15, 2009

Personal Finance and the Land of Make Believe

"Fewer than four of 10 American adults have an emergency fund to fall back on in the event of some financial disaster," according to a nationwide poll. And yet nobody seems to be the slightest bit worried. We still go about our daily routines buying lattes, going out to movies, and purchasing the latest gadgets. Who cares if we have a little credit card debt, or maybe a lot. It's not worth changing our lifestyle, right?

Wrong! As children we are raised to believe in happy endings, and fairy tales. Unfortunately as adults we learn that life isn't always fair, and bad things can happen to good people. You could lose your job tomorrow, then what? If a leaking pipe creates a breading ground for hazardous mold, could you pay to clean it up? What if you need a new transmission costing $3,500.00? What if Fido gets hit by a car and needs a $5,000.00 surgery? Can you afford those $6,000.00 braces for junior? Why did I have to get that $200.00 seat belt ticket? Emergencies happen all the time. We are all playing financial roulette with our lives, and everyone is thinking the same thing: I won't happen to me.

Well.... What if it does? Stop living in the land of make believe and start building you emergency fund now. If you don't you'll be sorry.

Take The Money

In life we are sometimes faced with the decision to accept a sure thing, or risk it all for more. Just yesterday Jake Locker of the Washington Huskies announced that he will pass up an opportunity to enter the NFL draft next year. This would have guaranteed him a $12-$23 million dollar contract. Instead he will finish his senior year playing college football, with plans to enter the NFL the following season. This shows incredible heart and dedication to his team, but it could be the worst decision of his life if he's injured.

You see it all the time on a game shows like "Cash Cab", or "Deal or no Deal". The contestants chooses between walking away with a substantial amounts of money, or betting it all on hopes of hitting the jackpot. Clouded by greed and the excitement of the show, contestants go for the jackpot and lose.

In casinos, gamblers on a hot streaks also rarely stop to leave with their winnings. Instead they give in to temptation and continue playing. Soon all of the winnings are gone.

The rational decision is to humbly accept good fortune for what it is, and to not sacrifice windfalls in the name of greed. So, the next time you find yourself in this situation remember just take the sure money and walk away. I guarantee its better than nothing.

Monday, December 14, 2009

The 30 Day Zero Rule

It amazes me that "the average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008." (Source: Nilson Report, April 2009) And yet we still use our credit cards regularly without remorse.

I am fed up with trying to pay down credit cards, that continue to grow in size. It's pointless!! That is why I am encouraging everyone to start using the "30 day zero rule."

30 Day Zero Rule:
From this point forward I will not allow myself to use a credit card unless that card had a Zero balance within the last 30 days. If you pay your credit card off each month, than you can use that card; but if you carry a balance for more than a month, you cannot use that card again until is has been paid off in full.

Any credit cards that currently have a revolving balance are subjected to this rule and therefore cannot be used. This is the only way to guarantee that your payments will actually decrease your debt.

Extra Alaska Air Miles at Safeway

We live a block away from a Safeway, and do most of our grocery shopping there. It turns out that in Alaska, Washington, Idaho and Montanna, Safeway will contribute 125 Alaskan frequent flyer miles for every $250 dollars spent. My wife and I do have an Alaskan Credit card, that we could also use for additional frequent flyer miles, but our Chase Debit Rewards provides a better cash back reward. Since groceries is one of our biggest expenses, we can rack up points pretty quick.

During a single transaction at Safeway, our Credit Card-Fu is to use a Chase debit Rewards card, Safeway Club Card, the Safeway Alaskan Frequent Flyer Miles, and the Safeway gas discount.

For every $100.00 spent we get:
400 pts, 20% off on applicable items, 50 miles, and 3 cents off gas.

What are some of your Credit Card-Fu moves?

Friday, December 11, 2009

Quick Tip: Alway Bring a Pen and Paper to a Meeting

Though obvious to most, it never ceases to amaze me how many people show up to business meetings without a pen and paper. Even if you don't take any notes, at least be prepared. Having the proper tools shows professionalism, while showing up empty handed implies that the meeting is a waste of your time.

I alway carry a pen on me, even when I'm just stepping away from my desk for a momment, but I have OCD problems. My little black book is also great for taking quick notes.

Monday, December 7, 2009

Secret Cash Stash

According to, the average American family goes out to eat 50% of the time. During the holidays, it's also customary to dine out more frequently with friends, family, and co-workers. Unfortunately, dividing the bill among large groups can prove to be a hassle. The restaurant may split the bill, but usually somebody gets stuck paying more than their fair share. In the spirit of Christmas, phrases like "I'll get you next time" and "mine is only 8.99, so here's $10" are nonchalantly exchanged like cheap white elephant gifts until those with only credit cards are left to make up the difference. After table negotiates, the waiter is presented with an array of cards resembling a jigsaw puzzle with vague instructions like"$25 on my card, $47 on his blue Visa, and here is the rest in cash." Most people forget to add tax and tip when adding up their menu items. Needless to say, friends are begrudged for having to cover for others, and the waiters almost always get screwed.

Having personally been on both sides of this transaction, my advice is to always carry a secret stash of cash in your wallet. Keep the stash separate from your regular spending cash, and use it specifically for these kind of situations. When the bill comes around, look at it carefully. Make sure to contribute enough for all of you consumptions, plus tax, plus tip, and maybe a little extra as a friendly gesture. By using cash responsibly, you won't be forced to pay for everyones elses meal, and you won't be placing a burden on others at the table.

Thursday, December 3, 2009

10 Great Movies That You Never Knew Existed

Below are some of my favorite indie films of all time. Don't be surprised if you've never heard of them. Many of these movie never made it to main stream theaters, but they are definately worth renting.

Surely there are more that I forgot, but this is off the top of my head.

Quick Trick: Keep Toilet Paper at Your Desk

Take a roll of toilet paper from the bathroom at work and keep it in your desk drawer. It will come in handy for blowing your nose, cleaning up spills, or as an eraser for a dry erase board. Best of all it's free. No more spending money on a box of kleenex. Just a quick trick.

Wednesday, December 2, 2009

The Cost of Clutter

When buying a house, we want to maximize the amount of space for our money. Real estate agents commonly do this by determining the "cost per square foot" when comparing homes. Determining the cost per square foot is simple, just divide the price of the house by it's size.
  • Price ÷ Square feet = Cost per square Foot

    According to, the average price of a new home in the U.S. is $292,600, and the average size is 2,215 sq ft. This means that a square foot of space on your floor deems a value of $132.00. I don't know about you, but junk filled boxes occupy many square feet of my garage floor and the contents of each box are not worth $132.00. Now try to imagine all of the surface area of clutter in your house. How many boxes could you fill? Think of each box costing you $132.00. All the space you worked so hard to buy is currently being wasted by clutter.

    Clutter is simply a poor allocation of resources. Would you allow a stranger to occupy a room without paying rent? Of course not, so why waste a room storing junk that will never be used. In either case you are paying rent or a mortgage for unusable space.

    So don't ask yourself if the clutter "is worth keeping", ask yourself "is it worth paying $132.00 to keep?"

Tuesday, December 1, 2009

Send Your Finances on a Camping Trip

Ever wonder why we spend our precious vacation time camping in the woods? Why we voluntarily sleep on an uncomfortable inflatable mattress inside a dirty tent? Well...Its because it makes our regular bed feel that much more comfortable when we return home. Camping gives us an appreciation for the modern conveniences that we normally take for granted.

Our spending habits, are another thing that many of us take for granted. With Christmas just around the corner, now is a perfect time to send your finances on a camping trip.

Financial Camping
After paying your mortgage, credit cards, utilities, and any other regular bills, try temporarily living off only 10% of your paycheck. This experience can be humbling, and only leaves room for the bare essentials. You may be spending more time at home living off rice and beans, but remember its only temporary.

While "Financial Camping" you may also have to pass up a night out with friends, and the sweatshirt on sale at the mall. You will have to prioritize your trips in the car, and pack a lunch to work. You will have to scrape to make artificial ends meet, but after its over, you will be left with a large amount of unspent money.

Unexpected expenses like car repairs and medical bills happen to all of us. We some how find a way to get past them. I have faith that you can survive a Financial Camping trip, and you'll be better off for it. Plan a Financial Camping trip on your calendar today, you won't even need time off from work.

Tuesday, November 24, 2009

If you haven't already pulled your Thanksgiving turkey out of the freezer, than today is the day. According to USDA the following time is necessary to thaw a turkey:

Fact Sheets

Poultry Preparation

Let's Talk Turkey—A Consumer Guide to Safely Roasting a Turkey
Fresh or Frozen?

Fresh Turkeys
  • Allow 1 pound of turkey per person.
  • Buy your turkey only 1 to 2 days before you plan to cook it.
  • Keep it stored in the refrigerator until you're ready to cook it. Place it on a tray or in a pan to catch any juices that may leak.
  • Do not buy fresh pre-stuffed turkeys. If not handled properly, any harmful bacteria that may be in the stuffing can multiply very quickly.

Frozen Turkeys
  • Allow 1 pound of turkey per person.
  • Keep frozen until you're ready to thaw it.
  • Turkeys can be kept frozen in the freezer indefinitely; however, cook within 1 year for best quality.
  • See "Thawing Your Turkey" for thawing instructions.

Frozen Pre-Stuffed Turkeys

USDA recommends only buying frozen pre-stuffed turkeys that display the USDA or State mark of inspection on the packaging. These turkeys are safe because they have been processed under controlled conditions.

Image of seal of inspection for poultry DO NOT THAW before cooking. Cook from the frozen state. Follow package directions for proper handling and cooking.

Allow 1¼ pounds of turkey per person.
Thawing Your Turkey

There are three ways to thaw your turkey safely — in the refrigerator, in cold water, or in the microwave oven.

In the Refrigerator (40 °F or below)
Allow approximately 24 hours for every 4 to 5 pounds
4 to 12 pounds 1 to 3 days
12 to 16 pounds 3 to 4 days
16 to 20 pounds 4 to 5 days
20 to 24 pounds 5 to 6 days

Keep the turkey in its original wrapper. Place it on a tray or in a pan to catch any juices that may leak. A thawed turkey can remain in the refrigerator for 1 to 2 days. If necessary, a turkey that has been properly thawed in the refrigerator may be refrozen.

In Cold Water
Allow approximately 30 minutes per pound
4 to 12 pounds 2 to 6 hours
12 to 16 pounds 6 to 8 hours
16 to 20 pounds 8 to 10 hours
20 to 24 pounds 10 to 12 hours

Wrap your turkey securely, making sure the water is not able to leak through the wrapping. Submerge your wrapped turkey in cold tap water. Change the water every 30 minutes. Cook the turkey immediately after it is thawed. Do not refreeze.

In the Microwave Oven
  • Check your owner's manual for the size turkey that will fit in your microwave oven, the minutes per pound, and power level to use for thawing.
  • Remove all outside wrapping.
  • Place on a microwave-safe dish to catch any juices that may leak.
  • Cook your turkey immediately. Do not refreeze or refrigerate your turkey after thawing in the microwave oven.

REMINDER: Remove the giblets from the turkey cavities after thawing. Cook separately.

Friday, November 20, 2009

10 things that you didn't know Google could do!

Everyone knows Google! Even the verb to "google" was added to the Oxford English Dictionary on June 15, 2006. It's the standard for searching information on the internet. But few people are aware of how powerful it really is. Here is a list of tricks that you probably didn't know google can do in addtion to regular website searches, shopping and Gmail.
(Click on Pics to enlarge)

1.) Calculations- google can perform basic math functions.

2.) Conversions-Most units of measure can be converted.

3.) Spellcheck- Just type a word in google, and it will present you with the right spelling.

4.) Correct addresses - If you type a partial address in Google it can correct it for you.

5.) Translate- google has the ability to translate phrases and documents in maost major languages.

6.) Flight Status- You can check a flight Status right from google.

7.) Stock Quotes- You can Type Ticker Symbols Directly into google.

8.) Population- Google can identify populations of Citys, States, Country's, ect.

9.) Bus Routes- Google can provide public transportation info.

10.) Free 411- google has its own free directory service like 411.

And if thats not enough, they also Store Medical Records, create and share online docs, Host Blogging, provide voice over IP chat, a virtual library, and even more.

Now we just need it to make me us toast in the morning. How do you use google?

Wednesday, November 18, 2009

The Budgeteer

I never really understood budgeting until recently, but now "Budgeting" is my new hero. It allows me to easily set aside money for large expenses, and prevents me from running out of cash before each payday.

With tools like my Ginzu Paycheck Slicer, I can confidently spend money without worrying about over drawing my account. It's so simple, that I don't know how I ever lived without it.

"Budgeting Guarantees that you only spend what you have, and nothing more."

How to become a Budgeteer
Making a Budget is simple, all you have to do is plan how to spend you money before you spend it. Some people use envelopes, others may manage an elaborate spreadsheet. Below is the method that works for me:

On each payday I simply transfer my cost of living from each paycheck into a bill pay account where my reoccurring monthly expenses are automatically deducted. Anything left over is put into the Ginzu Paycheck Slicer, where it can be divided up to accommodate all my irregular expenses and spending. I can list any upcoming expenses, and then distribute the money that I have accordingly. I also include a line item for personal spending money, and a line item for miscellaneous or unforeseen expenses to act as a just-in-case buffer. After a few minutes of working with my Ginzu Paycheck Slicer my Budget is complete. I know where all of my money is going, and that everything has been accounted for, without spending a single penny.

Are you a "Budgeteer?" Comment on methods that work for you.

Friday, November 13, 2009

Commercial Staging Areas

This weekend, I'll be trying a new decluttering/money making technique called "Staging Areas." Sounds cool right! It involves marking three 4' x 4' squares on the floor of the garage with blue painters tape. These squares designate items to be Sold, Donated, or Thrown Away. Next, I'll search the house for items to fit each staging area.

Items that are no longer wanted, but may be of value to sombody else, can be sold by:
  • Ebay -Small niche items easily shipped
  • Craigslist -Large bulky items difficult to ship
  • Garage Sale -Big ticket items that can be sold quickly
Anything that can't be sold should be put in the Donate area. Consider going through your closet and boxing up anything that you can no longer wear, or that you haven't worn in the last year. When you have enough for a trip to the goodwill, just back up you car to the staging area, and load up. Remember to get a reciept for the tax write off.

Throw Away/Recycle
Anything that the can't be donated should be place in the Throw Away/Recycle area. This are should be disposed of weekly with you garbage or with frequent trips to the dump. There is absolutely no reason to hang on to trash. Recycle if possible some places my even pay you for items such as scrap metal.

Tuesday, November 10, 2009

The Gas Money Metaphor

I believe that a car's fuel gauge is coincidentally accurate at depicting personal finance habits. Like a checking account, the contents of your gas tank fluctuate. If you just filled up on payday, the sky is the limit and money grows on trees. But towards the end of the pay period, you might be praying not to run out of gas, while trying to locate change in the seat cushions.

Most of us have experienced both extremes, but we usually have a low gas comfort limit before refueling. Below are some typical limits and my interpretations of correlating spending habits. How long do you wait before refilling on average?

Rolling on Fumes
If you're known for coasting up to the pump in neutral on the cars last breath of gas, than you probably also known for blowing your paycheck within a few days, and find youself scrounging until next payday. Don't worry you're are not alone.

No need to stop for gas, there's still a quarter tank
You probably pay you bills on time, and can manage your day to day expenses, but you still live paycheck to paycheck, and have little to no savings. Congratulations you are part of the majority.

I've got a half tank but who knows how far to the next station
Not only are you in complete control of your finances, but you also have a little nest egg of savings. You are better at managing your finances than most, and could probably teach others a thing or two.

I'm already at three quarters of a tank, I thought I just filled up?
You live well below your means and in addition to savings, you have a little spending money for hobbies and capital ventures.You are part of an elite group of well balanced personal finance aficionados.

Its a rental..... filled to the brim or else they'll charge me
You're a paranoid penny pincher, you save all of your money and don't do anything fun for yourself. You may even plan your routes on to maximize every refueling. Its nice to have a full tank, but feel free to let your hair down.

There's an extra gas can fastened to the bumper
In addition to the other limits, there are those uber prepared who carry an extra gas can for emergencies. Carrying an extra gas can shows your willingness to be prepared for the unknown, but does not guarantee that you are financially responsible.

Again these are only my observations. Feel free to comment on how you drive, and whether I'm on target or out in left field.

Friday, November 6, 2009

How to turn $100 into a Partime Job

After reading "Best Ways To Invest Small Amounts of Money" on The Digerati Life, I started thinking about what to do with $100.00, and how to earn the best return on such a small investment.

"A lot of us don’t have much money to spare. Sometimes you may find yourself with an extra $100; maybe someone finally paid you back for a long-forgotten debt (it’s happened to me!) or your mom sent you over a cash gift for your birthday. Or chances are, it’s just an extra $100 rattling around in your bank account that could find better use somewhere else." -By Silicon Valley Blogger-

$100 is a perfect number. It is enough money to be substantial, but not enough to be out of reach for most people. If have ever come across $100 dollars and asked yourself what to do with it, than here is my list of how to turn $100 into income."

  • Valet Car Wash- Get yourself some cheap business cards, and print some fliers offering to wash peoples cars while they are at work. Provide a copy of your license and proof that you are insured to drive their car. Take it to a public hand wash or a "touchless" car wash. Then return with a nice shiny car to collect payment.

  • Buy a vending Machine- A simple gumball machine can be purchased used or new for around $100. Convince a local mom and pop restaurant or convenience store to keep it by their front counter for a percentage of the profits.

  • Walk/Feed Dogs- Make some fliers, get yourself a leash, poop bags, and dog treats. You could walk/feed dogs for people on vacation or at work.

  • Become a Barber - In college, I knew a guy who bought some clippers, scissors and supplies for cutting hair. All of us starving college students lined up around the block to get a cheap buzz cut.

  • Start Blogging- Build yourself a blog using Blogger, and start using adsense. If it becomes popular, buy a domain name and/or web hosting.

  • Be a Handyman -If you have basic tools laying around the house and are handy, consider doing simple handyman repairs. Post signs on telephone poles in retirement communities.

  • Dance/fitness/martial arts instructor - If you are athletic try holding classes in a public park and advertise.

  • English tutor- If you are fortunate enough to speak another language, consider teaching English to non native speakers, at public meeting areas or your local Starbucks.

  • Computer Tech Support- Setting up a Pay per minute phone is easy and only costs a few dollars a month. Just Google it and you'll find tons of companies willing to get you started.

  • Window Washer- Get some industrial sized bottles of Windex and a squeegee and print some fliers.

  • Knife Sharpener- Purchase a electric sharpener and a inverter for the car, or a nice hand sharpener. Show up at restaurants at off peak hours, and offer to sharpen their cutlery.

  • Furniture Mover- This works better if you have a friend, but many people appreciate a helping hand when moving, especially if you have a truck.

  • Ride to the Airport- If you are a punctual person with a car, consider picking up people from their house and driving them to the airport. All you need is a cell phone, email address, and advertising.

  • House Cleaning- Load your vacuum in the car, and by some cleaning supplies. With a little word of mouth advertising you could make some extra cash on a regular basis.

Some times the best ideas are the simplest, with just a little creativite advertizing and you could have a secondary income for under $100.

Thursday, October 29, 2009

Using the "F" Word in Public

No I'm not talking about the word %$#^! Swearing in public is just a way of exemplifying ignorance. I'm talking about discussing our "Finances" with others.

Traditionally we were taught not talk about our finances. The reason was probably because people felt insecure about how much they earned in compared to others. In the old days, it was also inappropriate for women to show their ankles in public. Now that its the 21st century, we need to encourage change. Not talking about money over the years is probably the reason why so many people have problems managing it.

I'm not encouraging you shout out your annual salary in a crowded subway, I am merely advocating the communication between friends and family for money management advice. Discussing dollar amounts, or salary levels, is irrelevant and may make others feel uncomfortable. Instead focus on learning techniques for better money management. Some good topics could be:
  • Asking a homeowner how to buy a house?
  • Ask a retiree how you should save for retirement?
  • See if any of your friends make a formal budget?
  • Does anyone balance a check book, or use personal finance software?
  • Who makes a shopping list before getting groceries?
  • Ask your parents if they auto pay their bills?
  • What investment strategies have worked for people you know?
  • How accounts are structure for money managing couples?
  • Bill payment responsibilities, who pays what?
  • How to responsibly manage credit card usage?

The idea is not to interrogate the people in your life, but to learn from their experiences and to share ideas about how to improve your financial health. Sharing ideas will benefit everyone.

Wednesday, October 28, 2009

Little Black Book

In an effort to improve my life through organization, I plan to start carrying around a small memo pad. I already write myself notes constantly so I don't forget things, just like the guy in Momento. Over the years, I've learn to trust my handwriting more than my memory. My "To Do lists" are written on scratch paper and either folded, or crumpled up in my back pocket. A little notepad might allow me to keep these same notes in a more organized fashion, and provide me with an simple archiving system. It would also keep me supplied with scratch paper for notes on the fly.

I considered downloading the latest organizer/planner app for my iphone, but the simplicity of a pen and paper is much more practical. I am to lazy to navigate through fields and text-type tiny messages. For now I'll keep it simple, and save the option to upgrade to my iphone for later.

Black Book uses:
  • Memos/Notes
  • To do list
  • Directions/Locations
  • Calendar Updates
  • Names/Contacts
  • License Plate Numbers
  • Sketch Diagrams
  • Time Stamp
  • Accident report
  • Statistics

The standard for Military/Police Field Notes are 3" x 5" spiral notebooks with graph paper, and some even have a leather covers. My notes will be organized by date with a line-break separating each day.

All Weather

I may get waterproof notepads from Rite in the Rain. They're priced pretty reasonably and provide a additional protection from the elements. They even offer custom notebooks.

I will let everyone know how it works out, but I figure it's a small price to pay to get more organized.

Friday, October 23, 2009

How to Remember Everything

If you haven't already heard, allows you to write text messages from any computer, and schedule when they're sent for free. This site is worth Bookmarking, and a great tool for sending yourself reminders. The next time you need to pick up milk from the grocery store on your way home from work. Just click, type, and submit. While driving home you'll get a text message reminding you to stop at the store.

Many cell phones already have an alarm feature, but I find it more practical if you're sitting in front of a computer.

Wednesday, October 21, 2009

Don't Wait to Get Your Halloween Costume

The clock is ticking, with only 10 days left to find a Halloween costume. You're probably planning to pick up something last minute at the Halloween Store ...... And then it hits you. Do you remember what the Halloween store is like the night before Halloween? It can only be described as pure and utter Chaos. Screaming unsupervised children run rampant as parents viciously wrestle over the last incomplete Spiderman costume. Emo high school kids are hanging around in numbers hoping to pocket the last pieces for their costumes. The Cashier, who is not even old enough to drive, is scrambling to fix the malfunctioning registers. The checkout lines snake across the sales floor with bleak hopes of ever getting to the counter. And the lucky people that make it out alive, with costumes, will soon find that they were swindled out of a small fortune. Their cheaply made costume will start to rip and unravel before the Halloween party begins.

This is why I always recommend the thrift store. Its in expensive, the textiles are usually better in quality, and you're only limited to your imagination. But you better get there quick, because the good stuff goes fast.

Tuesday, October 20, 2009

Calculating the Value of Rewards Points

If you have ever redeemed rewards points, you probably know getting your money's worth isn't always easy. Credit Card companies do this on purpose. They would much rather sell you a cheap knock off item that could be found at Sharper Image, or in a Sky Mall catalog, than give you straight cash.

Gift Certificates
Credit card companies receive advertising discounts for selling gift cards to stores and restaurants. This is why a $10 gift certificate at Burger Barn, costs fewer points than a $10 Visa Gift card. Burger Barn is basically paying the difference to guarantee your business. With a Visa Gift card $10 is $10 anywhere you spend it.

So which is better to get?
Ask yourself a few simple questions before reedeming store specific gift cards:
  • Do you regularly shop at this store on a weekly or monthly basis?
  • Would you make the same purchase if instead you could just have the cash?
  • Were you already planing to shop with this vendor?
  • Are you 100% positive the store didn't just catch your attention, and make you think of something to buy?

If you answered No to any of these questions; consider getting the Cash Reward or Visa Gift Card. The lure of impulse buying is too strong, and odds are you are trying to justify an irrational purchase.

If you answered Yes to all of the questions; you could be making a rational decision to take advantage of the additional store or restaurant specific discounts.

When To Redeem
You may be wondering when is the best time to cash in your growing reward point bounty.

  • Visa Gift Cards
    Most of the Rewards programs grow at a fairly linear pace in regards to Visa Gift Cards. This means there is no real difference between buying a $5 dollar gift card every time you hit the limit, versus saving all of your points for that $50 gift card.
  • Store and Restaurant Specific Gift Cards
    The larger store and restaurant specific gift cards tend to be a slightly better value, if you can rack-up a lot of points. However, it's extremely important to always check to make sure your points do not have an expiration date.

Actual Point Value
Now for the technical stuff! To Maximize your redemption spending, you must understand the value of your points.

  • Gift Card Validation- Gift cards are easy to validate just divide the dollar amount of the gift card by the total number of points it cost to purchase.

Example 1 : $25 Burger Barn Gift Card ÷ 11,000 points = $0.00227 Cents Per Point
Example 2 : $25 Visa Gift Card ÷ 15,000 points = $0.00166 Cents Per Point
Example 3 : $15 Cash Rewards ÷ 7,500 points = $0.00200 Cents Per Point

When comparing gift cards, you want the largest Cents Per Point. If you are a regular at the Burger Barn, and can answer yes to all the questions above, then Burger Barn is the best gift card for you. For the majority of us, the Cash Rewards is the best value because it makes the most cents per point, without influencing you to spend at an establishment that you wouldn't normally.

Buying Items, Vacations, or Airfare
If you insist on buying items like that toaster with a built in back scratcher, you need to evaluate whether its worth your points. This formula starts by using a known Cents Per Point from a Cash reward or Visa gift card, and multiplying it to the number of points for the desired item. If the toaster costs 20,000 points and you know that the same points are worth $0.00200 each, then the actual price your are paying for your toaster is $40. Now check to see if you can find it cheaper online.

Example 4 : Cost of Toaster 20,000 x the known CPP $0.002 = $40

Who Cares if its free money?
You should! Many of these cards have a annual charge that is almost equal to the average persons rewards earning. This means that you are essentially investing $25 to have the opportunity of redeeming $20-$30 worth of points. Even without an annual charge, the actual earning are microscopic compared to the spending it encourages. It is a way for credit card companies to make money. They wouldn't provide this service if they didn't. So be smart don't frivolously spend you points.

Thursday, September 24, 2009

Throwing Away is Therapeutic

If you tend to horde junk, and you know who you are, consider launching an all out attack on your cluttered lifestyle. The best way to get the ball rolling is to Schedule a Cleaning day. Plan to spend the entire day cleaning and throwing things away, without interruption. A good rule of thumb is to think big. Don't spend the day dusting nick-knacks, and sorting file cabinets. Go for the jobs with the most impact. Decide to finally park your car in the garage, or to completely empty a bedroom and starting over from a blank slate. Remember the goal is to throw out as much as possible, otherwise you are just moving junk from one part of the house to another, in a wasted effort.

If you are wondering whether or not to keep an item, odds are you should just get rid of it. Try to understand that you subconsciously hold a higher unrealistic value for your belongings. If you honestly believe that an item is worth taking the time to sell, than stop what you're doing immediately and go sell it. Posting something on Craigslist should take no more than 10 minutes. If it takes you more than 10 minutes, than you are wasting time, and as punishment you should sacrifice the item to the trash for avoiding work.

Renting a dumpster is another good way to force yourself to throw out Junk. Its the "American Way" that if you rent a dumpster, you are going to fill it to the brim because it's paid for, and we want our moneys worth.

Work at a face pace and be quick to make decisions. Your first instincts are usually right. It's only when you stop and think that your brain has time to coerce you into keeping stuff.

After a full day of clutter carnage, sit back and enjoy the fruits of your labor. You will feel at peace and relieved from a burden you never even knew you had. After I simplified my life and got rid of my junk, it astounding to me that people can live any other way.

Thursday, September 17, 2009

Picking Up Pennies

An article on WiseBread asked readers if they picked up fallen pennies, and if it's even worth your time? This got me thinking......What is my time worth.

I know that if a neighbor offered to pay me $5.00 to mow his lawn, I would probably tell him to take a hike. But if he offered to pay me $100.00, I might just do it. This tells me that Time and Effort are important factors.

As far as penny reconnaissance, testing these factors was quite simple. With a stop watch I timed myself picking up a penny. I after a couple of tries from a standing position it took about 2 seconds to pick a penny off the floor. So for 2 seconds of my time, I earned $0.01. That equates to a wage of about $18.00 an hour. According to that is the equivalent wages of a sushi restaurant supervisor in San Jose, CA. On the other hand if you pick up a dime, you are earning the same wages as a highly qualified Neurosurgeon, or about $374K a year. Granted you are only working for a few seconds at a time, but I don't know many people that would pass up those kind of wages. Here a calculation breakdown:

$0.01 @ 2 seconds = $18/hour
$0.05 @ 2 seconds = $90/hour
$0.10 @ 2 seconds = $180/hour
$0.25 @ 2 seconds = $450/hour
$1.00 @ 2 seconds = $1,800/hour
$5.00 @ 2 seconds = $9,000/hour
$10.00 @ 2 seconds = $18,000/hour
$20.00 @ 2 seconds = $36,000/hour
$50.00 @ 2 seconds = $90,000/hour
$100.00 @ 2 seconds = $180,000/hour

After seeing the results of these calculations, I will always pick up dropped change.

Too bad I only pick up "heads", I'm superstitious like that.

Wednesday, September 16, 2009

Understanding Personal Cash Flow

Do you always run out of money right before you get paid? Are you constantly broke from overwhelming bills? It's because as Americans we stereotypically live just outside our means. We tend to want things that we can't afford, and are willing to spend every last penny trying to get them.

Despite what you may think, a raise in salary won't solve your money problems. If you made more money, you would just spend more money. In order to improve your situation, you must first understand the fundamental principles cash flow .

Cash Flow
Cash Flow is the difference between how much money you make vs how much money you spend. Improving your Cash flow is the key to solving your financial all problems:

  • (+) A positive Cash flow occurs if you are diligent enough to set aside portions of money in a savings account.

  • (0) If you spend every last penny of your paycheck, and are unable to save, than you have a Zero Cash Flow.

  • (-) If you spend more than you make, and your credit card debt is growing, than you have a negative cash flow.

The best way to improve cash flow is by budgeting. Make a practical budget and stick to it. Consider using a budgeting tool like my Ginzu Paycheck Slicer to help plan and organize your spending habits. By defining your expenditures, it will help you to track and isolate the problematic areas.

Make a decision right now to regularly set aside and save a certain portion of money as soon as you get paid. By setting aside this money for savings you are less likely to spend it, and it will force you to exist on a lower income level. Saving money from every paycheck and not touching requires disicpline but is crucial to generating a positive cash flow. Many experts recomend saving a minimum of 10% of your income.

Friday, September 11, 2009

Learn When Not to Speak

Dealing with your own bad habits, can twinge nerves like fingernails on a chalkboard......Let's face it, nobody likes to admit their faults. For me, I am just now learning the art of keeping my mouth shut.

I have bad habits of unintentionally speaking in a round about manner, and occasionally voicing unwanted opinions. In the past, I always felt confident speaking up in business meetings, and I could effectively convey ideas. I attribute many of my accomplishments in business to this assertive attitude. Unfortunately there is a time and place for everything.

The first time I had this epiphany, I was in one of those classic long table Big-Wig conference room meetings. As usual, I was expressing my thoughts on the discussion topic. After I finnished, one of the big bosses thanked me for my valuable input, and in front of the entire group, commented on how I talk a lot. Slightly embarrassed I made an effort to monitor my future interjections.

Not saying anything can:
  • Be a powerful tool when negotiating sales
  • Be a way of diffusing altercation
  • Provide valuable time to think before you speak
  • Camouflage uncertainty
  • Insinuate stoicism and strength
  • Add emphasis on words spoken
  • Curb excessive generosity
  • Avoid incrimination
  • Make room to listen

So make an effort to speak concisely, because "silence can be more powerful than words," or so the expression goes.

Tuesday, September 8, 2009

Re-Check Your Receipts for Discounts

Running errands with my wife, we randomly stopped at Old Navy to both find some amazing deals on the clearance rack. I got a bunch of $5 T-shirts, and a few pairs of nice Khaki pants for around $7 a each. It helps that I am 6'3 and 210 lbs; I can take advantage of all the XL sizes that nobody else wants.

Walking out of the store, my wife mentioned that her bill seemed higher than estimated. We stopped and re-checked the receipt and sure enough the clerk missed about $19.00 in discount savings. We went back inside and the store promptly fixed the error.

We went to another store and made a few more purchases. An item rang-up at full price even though it was on sale, but the luckily clerk caught it.

Both transactions happened less than 20 minutes apart, which to me is statistically significant. I wonder how many other items I mistakenly paid full price for because I didn't think to re-check my receipt.

So if you are buying a lot of clearance stuff, or something just doesn't seem right make a point to stop and re-check your receipt.