Debit or Credit? which is better for you?

If you regularly purchase items with your "Debit Card" than you probably know that transactions can either be processed 1 of 2 ways. The cashiers can ask you "debit or credit?" If you choose debit you enter in your pin to finalize the transaction. If you choose Credit it requires you to sign your name. So whats the difference? Either way you are still using an ATM check card.

Well the difference is actually quite significant:

Debit (enter you pin)

When you enter your pin your bank is responsible for immediately transferring the funds to the stores merchant account. You can buy groceries, go home, and view the transaction online before the chicken even starts to thaw. The transaction is processed through an electronic funds Transfer similar to entering you pin at an ATM, but only provides limited liability protection against fraud. Just like ATM it also allows the option for cash back.

Credit (sign you name)

When you sign your name, you will notice that the transaction can take a few days to process and may appear first as pending. By signing your name, you are actually conducting the transaction on a network that provides additional liability protection from fraud. Banks can charge a higher fee for these transactions. Chase even now offers a check card rewards program, for this very reason.

Either transaction types costs you the same amount of money, but I am now starting to use my check card as "Credit" to take advantage of the Chase reward points which are about a 1% savings. It's too bad that it's at the stores expense.

Beware of the "Cash for Clunkers" Bill

Everyone is talking about the new "Cash for Clunkers" bill, but becareful or you might be sorry. The Cash for Clunkers voucher is great if you are already looking to buy a new car. It’s important to remember that getting a good deal on a new car doesn’t automatically mean that you can afford it.

I have a old Ford "Exploder" with 160K miles on its last leg, and want to buy a new F150 4x4. I considered trading in my clunker, but decided to pass it up because spending money to save money is pointless, when it equals a net loss.

Don't get me wrong, I would love to drive around in a brand new truck, but I know better than to bring unneeded financial stress on myself and my family. I don’t need another car payment. Instead I will build up my emergency savings, and payoff my credit card debt. When my clunker does die in the near future, I will probably buy a cheap used truck for a lot less than the price of a new car with the voucher.

Don’t get suckered into buying something you can’t afford because it’s on sale.

What is $5 worth to you?

$5 dollars can buy many things these days, but it's interesting to see exactly how far it will stretch in certain situations. Here is my personal opinion on what is worth five dollars, and what is not.




Worth $5

• A Car Wash - If an old car already has scratches in it, I would rather spend $5 to drive it through a Machine Car Wash, than wash it myself.
• Wine Tasting - Some wineries charge $5, others don't. Who cares! You are having a good time and drinking wine.
• A Flashlight - When you are fumbling around in the dark, what is $5.00
• Parking - If there is no where to park after the first few passes, I would rather pay for $5 for parking than circle the block for 30 minutes waiting for a space.
• Maps - If you get lost like I do, $5 is a small price to pay to reach your destination.
• Foot Long sandwich - OK, So I've been brain washed by the Subway commercials.

Not Worth $5

• Snacks at Movies Theaters - After paying $10 per ticket, I rarely spend $5 for snack at the movies.
• Extended Warranties - I won't spend an extra $5, for an extended warranty on small electronics like an alarm clock.
• Valet Parking - When choosing between tipping the Valet guy, and self parking; I would much rather park my own car and save the money.
• On Demand - Don't spend $5 dollars to watch the cable companies suggested movies, when you can subscribe to Net Flix or Block Busters unlimited monthly rental program.
• Magazines - Since most magazines publish their articles online anyway, it is difficult for me to buy a printed magazine.
• Ring tones - I keep my phone on vibrate, and don't feel the need to bother others with annoying jingles.
• Lottery Tickets - You are 20 times more likely of getting struck by lightning, So don't get your hopes up.

Please comment on what $5 is worth to you!

Count Up to Impulse Buys

We are all guilty of buying things on impulse, and specifically some of us more than others. Usually something catches our eye see, and we immediately justify the purchase by convincing ourselves that it's a necessity. That split second decision driven by emotion can often be detoured with a simple pause or hesitation. According to The Five Cent Nickle, "simply stopping to question your buying decisions can go a long way toward cutting down on frivolous expenditures." That is why I have developed a unique system called "Counting Up to Impulse Buys" which caters to the severity of each impulse.

The next time you see an item that walks the fine line between impulse and necessity, try counting up to the total dollar amount in your head before deciding whether to purchase it. The more expensive the item, the longer you will be counting. You might think twice before buying a $60 pair of shoes if you must first mentally count to sixty. Counting engages your brain in another activity, and removes your focus from the desired item.

I am not saying that when you finish counting the purchase will magically become rational, but it is a good way create a pause long enough to encourage a rational descison.

Save Big on Home Depot Tool Rentals

Whether you're a weekend warrior, or a contractor by trade, renting equipment from Home Depot can be a lifesaver. Home Depot has a variety of things to rent, the prices are reasonable, and the labor time saved can be priceless. Renting tools is a fairly quick and painless process.

I recently demolished a thin concrete slab in our backyard. At first I considered just buying a manual breaker bar, but after comparing the cost of the breaker bar with the price of a jackhammer rental, I ended renting the jackhammer. The jackhammer cost $45.00, and I was able to break up the concrete, hauled it away, and returned the rental within 4 hours. If I bought the breaker bar, I would have paid more and would be sentenced to doing hard labor all weekend long.

Last Saturday, I also had to rent a 32' extension ladder to clean out my gutters. I found out that Home depot has a policy that equipment rented after 6pm can be used until 9AM the following morning for the cost of a regular 4 hour rental. So if you plan on working late in the evening, and early the next morning, take advantage of this extended 4 hour rental (actually 15 hours).

So, without trying to sound like Tim "The Tool Man" Taylor, consider renting bigger and better equipment to get your next project done sooner. It will usually save time and money in the long run.

The Universal Importance of a Buffer

In life, it's very important to establish a good buffer. A buffer will help cushion the consequences of minor problems, and prevent them from becoming major problems. It's especially important when dealing with time and money. Not having a proper buffer is the easiest way to provoke problems with catastrophic consequences. So what exactly is a buffer?

Buffers
A buffer is leaving a half an hour early for a job interview 10 minutes away. A buffer is always keeping an extra $500 in you checking account, to avoid accidental over draft fees. A buffer is buying 350 sq ft of floor tiles, when the actual area is only 300 sq ft. It’s following 5 car lengths behind, when you know you could stop in 4. A buffer can be as simple as bringing a coat, when the forecast is good; or not letting your gas gauge needle dip below a quarter tank. It’s understanding limitations, and being smart enough to plan for unexpected problems.

Murphy's Law
When the unexpected happens, it usually compounds with other problems. Usually your car breaks down the day you forgot your cell phone. You lock you self out of the house while getting the morning paper in a bathrobe. You forget your wallet during a important business luncheon. Some of these situations are just a fact of life and cannot be changed, but in some situations a buffer may help to delay the domino effect. Get the help of 2 friends, even if you only need 1 to help set up the decorations for your wife’s surprise birthday. This way you don’t fall off the ladder while frantically trying to hang streamers. I'm sure your wife won’t want to blow out her birthday candles in the ER.

Pet Airways: Pets Fly with You in the Cabin

Scooby and Garfield can now travel with you when you fly. Well technically they always could, just not in the passenger cabin. But today is the dawn of a new era, and a new company called Pet Airways allows your pet to come on the plane with you and fly across the country.

The website is currently bogged down from all the publicity it receiving, so I have not seen the exact terms and conditions. The only available page is where they fly. It appears that their destinations are limited to a hand full of locations across the country. Having seen Snakes on a plane, I am interested to know what type of animals are allowed, and even more so how the animals will react being in such close proximity.

My wife and I are planning take our new puppy Teagan to my "In-laws" during Thanksgiving, but unfortunately Pet Airways doesn't fly out of Seattle. Alaska Airlines wants to charge us an additional $100.00 each way to transport our pooch in cargo, but we may end up driving anyway.

Only time will tell if this radical new concept, will be a success or a flop.