Written on Thursday, August 24, 2006 by Dus10 D :: 10 Comments
I just wanted to let you all know that I am moving to use Blogger's new beta service. The new site is going to be Rational Cents. I already like what the new Blogger software will allow, such as categories. However, there is currently no facility to modify templates, so I will be using one of the base templates.
Written on Monday, August 21, 2006 by Dus10 D :: 3 Comments
You hear the talk everywhere you go in the world of personal finance: "You need an emergency fund!", or "Should you pay down debt first, or start saving?" Well, I am not getting into that debate very deeply. However, many people have been in a situation where having five to ten thousand dollars would have made a huge difference. And I would also suggest that you should work on paying down debt as well as building up an emergency fund simultaneously. I say this because the emergency fund is supposed to be there for an emergency... and if you could predict when that will occur, then it is likely not an emergency, is it? Anyhow, this discussion assumes that you have decided to build up an emergency fund. It is great to get a nice quick start, as well, because if you don't, you may become discouraged. So here are some things I have done to jump start my emergency fund that you may find useful:
Open a High-Yield Savings Account: In economics, the term "opportunity cost" is used to describe the most likely alternative that you would seek in any decision. For instance, instead of saving $100 a month for an emergency, you would may likely decide to spend it on a nice dinner. Well, when you are just saving money for an emergency, the opportunity cost will seem very high. So, in order to make it more powerful, you need to receive a return on your avoided opportunity. One of the more popular savings accounts is the HSBC Online Savings Account. Currently, it is offering a wonderful 5.05% APY. Besides this, there are no fees and your minimum deposit and balance are only $1.00. Just to make this better, there are typically sign-up bonuses available if you read through the FatWallet thread. These are usually around $25. (Currently, they are offering a $25 Best Buy Gift Card instead of cash).
Make it Automatic: Sure, you have read all the reviews of Automatic Millionaire (you may have even read the book for yourself). You need to take the decision out of your hands. In a previous post, I referenced a website that will let you amortize a savings goal. My goal for my savings account is $10K in ten years. So, given the amortization, I need to save about $32 every pay period at 5.05% to get to $10K in ten years. However, I knew that I would occassionally tap the fund, so I bumped it up to $45 per pay period and set up direct deposit. So, in ten years, without having to actively decide to save, I will have $10K!
Short-circuit the cycle: Now, ten years is a long time to wait for an emergency fund. So, we need to short-circuit this time frame. It is not bad to have the previous automatic savings, it just means that we need to do some extra work here and there. I do a few things to make some extra money, and I make sure that at least half of it goes into the emergency fund (if not, more). For instance, I have outlined making some extra cash with MaviShare. I took 100% of this money and deposited it into the savings account. Also, I have been selling some items that have been collecting dust on eBay. I put about 65% of those funds into savings. Beyond that, I do a considerable amount of mystery shopping. I put half of that money into savings (which actually is more than half of the profits, considering that a good chunk is usually reimbursement money). And last, and probably least (cash-wise), I scrap metal here and there. Aluminum cans are an easy way to start... and it takes about 24 aluminum cans to equal one pound of aluminum. Further, many places deduct 3% for "moisture content". But, this is usually in the for of cash, so it doesn't go into savings, but it does make the saving easier to accept.
Reduce your burdens: Nothing can break good savings habits better than a heavy financial burden. Even if $50 will not fix the situation, you will feel very tempted to not save if you have financial pressure. You need to reduce your expenses. You can always turn to the Automatic Millionaire for this (the Latte Factor). In the mornings, it is easier, and more fillings, for me to have a breakfast sandwich and not a bowl of cereal. The McDonald's by my house makes it very convenient, as well. But, this is about $4 per day, or $80 per month. So, instead of doing that dance, I buy a big box of breakfast sandwiches and orange juice from Sam's Club every couple of weeks. It ends up costing me half as much. For lunch, it is difficult to spend as little as $5 in downtown Indianapolis (of all places). However, it is VERY inconvenient to bring my lunch. So, instead of bring my lunch, I bring my drink and only get a six-inch sub for lunch, rather than a meal. This brings my lunch cost down by about $3 a day, and it also keeps me from consuming the bad of chips with the meal. So, for those two meals, I save about $100 a month, and that is more than the direct deposit. There are plenty of other places to reduce expenses as well. We are saving $15 a month on our electric bill compared to the same time last year (even though this summer has been much warmer) by switching our most used bulbs to compact fluerescent bulbs.
I hope this is useful for you. It has worked out very well for me. I should have had over $1080 in my savings by the end of this year, but I ran into some savings issues and spent my money. However, I am back on track and have more than caught up with these few tricks. So, if I run into some issues in the future, I can always use the extra cash I make, rather than tapping into my savings. Further, please share aany tips you have for making quick increases to your savings!
Written on Tuesday, August 15, 2006 by Dus10 D :: 2 Comments
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Blog post sponsored by Make Money Blogging
Written on Saturday, August 12, 2006 by Dus10 D :: 1 Comments
Well, I just spent about an hour of my time on MaviShare and made $31.00 for signing up for free offers (Thanks Supermom from Getting Out of Debt!). MaviShare has all sorts of offers that you typically find out there on the Internet, and someone else gets paid for your referal, except that MaviShare gives you about 65% of the money. MaviShare can also send payments via PayPal, immediately. You can also get a check, once you reach the payment threshold.
Among the free offers were $8.00 for getting your Experian credit report and score, $7.00 from Stamps.com (and $5.00 of free postage which came in handy for an eBay auction that ending that day!), $5.00 for signing up for eBay, $8.00 for signing up for Real Rhapsody, and more. This was a great offer. I already have the money transfered to PayPal, and it is en route to my HSBC Online Savings account that is now earning 5.05%!
Written on Friday, August 11, 2006 by Dus10 D :: 1 Comments
There are some of you out there that may not have credit cards with rewards programs. I myself do accumulate frequent flyer miles with American Airlines AAdvantage program. Traditionally, I have only done this via actually flying. Beyond that, AA does send offers that will net some miles. However, the AAdvantage Dining and Hotel Rewards program allows you to setup any Visa/Mastercard to help you earn up to 3 miles per dollar on food and hotel stays at specific restaurants. I setup my checkcard that is also enrolled in the Visa Rewards program for double the rewards.
Written on Wednesday, August 09, 2006 by Dus10 D :: 0 Comments
I have discussed the Rule of 72 in the past... and very recently, I discovered the Rule of 115. Essentially, the Rules of 72 and 115 allow for very simple arithmetic methods to determine the amount of time it will take you to double or triple your investment, respectively. Just divide 72 or 115 by your rate of return, and it will give you the number of years it will take to double or triple the investment. So, with a rate of return of 10%, annually, it will take you 7.2 years to double your investment, or 11.5 years to triple it. These figures are obviously approximate. You can also use these rules backwards to determine the rate of return you will need to double or triple your investment in a certain period of time. For instance, if you want to double or triple your investment in 10 years, simply divide 72 or 115 by 10, and it will give you the rates required for each, 7.2% or 11.5%, respectively.
I just posted this on Helium Knowledge under the the topic Investing. If you have a moment, stop by and take a look and rate it compared to the other articles.
Written on Tuesday, August 08, 2006 by Dus10 D :: 1 Comments
I am sure that a lot of you have heard of the "Keep the Change" program offered by Bank of America. Essentially, they round up your check card purchases and place the extra funds into a savings account. In addition, they match this change up to $250 annually. They match it at 100% for the first three months the account is open and at 5% thereafter. Overall, this is not a bad deal. But, if you work it all out right, it can be a much better proposition.
Bank of America also offers sign up bonuses, and they are frequently detailed on the Fat Wallet Forums. Right now, it appears that it is $125 in sign up bonuses. Open a free checking and a savings account, and then enroll them in the "Keep the Change" program. In addition, there are talks about milking "Keep the Change" so that you max out your $250 in the first three months, so that you don't have to worry about it the rest of the year. So, $125 plus the $250 match and your $250 contribution add up to $625 in savings, very nice.
There are further exploits outlined on the Fat Wallet Forums that discuss the ability to open many accounts, and you can receive the sign up bonuses and enroll in "Keep the Change" in each. So, you and a spouse/partner could each sign up for this program... and given what seems to be a 90-day waiting period, you could each do this four times a year. $5000, cha-ching.
At one time, Bank of America was also offering $10 to $15 for using online bill pay. You could do this with each account, likely, and add another $80 to $120 for the entire year.
Certainly, you could go overboard with this. But, if you just want to get started, go open up an account and make sure to use the sign up bonus. Then, enroll in "Keep the Change" and start saving. Also, make sure that you evaluate the different types of accounts and pick the most appropriate. There are fees and minimum balances that vary for each type. "Keep the Change" is supposed to work with any checking/savings account combination.
Written on Tuesday, August 08, 2006 by Dus10 D :: 0 Comments
Sorry for the very long drought of posts. Blogging has really been on the back burner of my mind these past several months. I have had several things going on with myself related to school and personal development. My wife has also returned to school. And, this summer, we started our oldest two children in swimming lessons, and it has been great.
Anyhow, I am on the war path to get things straightened out with my finances. Lately, I have let all aspects slip. We got a loan to basically cover the deductible for fixing my car... and by lack of discipline, it did not go to fixing the car... so we had to struggle through two paychecks to make it work out. The car is fixed, and paid for, but there is this ridiculous debt now... on top of the debts we have not reduced to zero (two vehicles, some medical bills, student loans, and a mortgage).
Anyhow, I have seen a raise since I dropped off the face of the blogosphere, and I have finally become eligible to participate in my company's excellent 401(k)... and I have been contributing up to the match. So that is good news.
I have also ramped up my mystery shopping and hope to pull in some extra cash from this. Half of this goes into my savings, and the other half goes to paying down debt or making my undisciplined lifestyle work (I know... I need more discipline... but it is difficult when you share equal responsibility with another adult that likes to be fiscally undisciplined). Hopefully, when the vehicles are paid off, we can be more disciplined while still having fun. Anyhow, I am also looking to find a few other sources of income... and some of them will hopefully be passive.