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.