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The Things That Bring You Here
I’ve been walking though my analytics data. That is the Big Brother software I use to know everything about each one of my dear readers. It’s all part of my master plan to rule the world. Muwahaha!
Some of the results are interesting.
The single most-used search term to find this site is “slow carb diet“, which is great, because I really enjoyed writing that post. I’ve been slacking on the diet lately, but I’m still down more than 30 pounds. I’m currently ranked #3 in Google for this term. If I move up 2 more spots, I’ll outrank Tim Ferriss for his own product. If I aggregated all of the “slow carb” variations, this post probably accounts for more than half of my traffic from Google.
Many of you come here by searching for “how to have a perfect life“. I’ll do everything I can to help you achieve that, but it’s going to take work on your part. There are no shortcuts.
“Beat the Check” is another popular search term, but a very bad game to play. It’s almost impossible to win it, since the Check 21 Act of 2004.
It’s interesting that “trained husband” brings a few of you each month. My question: are you shopping, or exploring a new fetish? Don’t be shy.
I’m a bit amazed that “zombie wheels” is something people actually search for, but 140 people hit Google looking for that term every month, and a few of them make it over here.
“How to stretch a meal“, “things you should buy online“, and “unsecured loan advice” are some of the top personal finance terms bringing you all in, though “how to make a bunker” and its variation are popular, too.
“Hoe can you force your wife” is a bit disturbing. Most of the results are naturally for sex. I can’t help but hope that I’ve either really disappointed this visitor, or convinced him that force is a bad idea.
“How much did a pound of gold weigh in 1854?” is a search that makes me giggle. To the best of my knowledge, the troy scale has been used to weigh gold for a lot longer than that.
That was a fun little stroll through my statistics. Hopefully the fact that I used “fetish” and “sex” in a post will draw more crazy search terms.
How did you find me? Inquiring minds want to know, so please tell me in the comments.
Your Budget is Worthless
When you realize that you’ve buried yourself in debt and decide to get out from under that terrible burden, the first thing you’ve got to do is build a budget because, without that, you’ve got no way to know how much money you have or need. After you’ve got a budget, you’ll start spending according to whatever it says. Hopefully, you’ll stay on budget, but what happens when an emergency does come up? What do you do when your car dies? When you suddenly find out your kids needs vision therapy? How do you manage when your job suddenly gets shipped off to East De Moines?
Your budget isn’t going to help you meet those expenses. Most people don’t have enough money in their bank account to make it all the way to the next payday, let alone enough to keep the lights on and food on the table. How can you possibly hope to deal with even the little things that come up?
You whip out your emergency fund.
The problem with a budget is that it does a poor job of accounting for the unexpected. That’s where an emergency fund comes in. An emergency fund is money that you have set aside in an available-but-not-too-accessible account. Its sole purpose is to give you a line of defense when life rears up and kicks you in the butt. Without an emergency fund, everything that comes unexpectedly is automatically an emergency. With an emergency fund, the things that come up are merely minor setbacks. Without an emergency fund, your budget is nothing but a good intention waiting to get shattered by the next thing that comes along. With an emergency fund, you are managing money. Without it, it’s managing you.
How much money do you need in an emergency fund?
Every “expert” has their own opinion on this. Dave Ramsey recommends $1000 to start. Suze Orman says 8 months. The average time spent looking for work after losing your job is 24.5 weeks(roughly 6 months), so I recommend 7 months of expenses. That’s enough to carry you through an average bout of unemployment and a little more, but that’s not a goal for your first steps toward financial perfection. To start with, get $1000 in a savings account. That’s enough to manage most run-of-the-mill emergencies, without unduly delaying the rest of your debt repayment and savings goals.
How do you build an emergency fund?
Let’s not kid ourselves, $1000 is a lot of money when can barely make it from one check to the next. Unfortunately, this vital first step can’t get ignored. If you really work at it, you should be able to come up with $1000 in a month or so. Here are some ideas on how to manage that:
- Cut. Drop every possible expense. If you drop cable, your cell phone, Netflix, and a weekly dinner out, you will already be saving $400 that month. You’d be almost halfway there.
- Sell. How much stuff do you have that you don’t need, want, or use? I’d be willing to be there’s more than you realize. Last spring, I had a garage sale that brought in about $1300. Everything we sold was just crap we don’t use any more. We sold candles and candle-holders, DVDs, books, clothes, toys, electronics, games, and anything else we could find. I spent a month going through every room in my house to find my inventory. Craigslist is a good way to sell just one or two things at a time.
- Work. Have you thought about delivering pizza or working weekends in a gas station? If you have some technical or writing ability, you could pick up some part time work on oDesk or eLance. Your opportunities are only limited by what you are willing to do.
Stop at a grand?
Dave Ramsey’s advice is to get your fund up to $1000 and then leave it alone until your debt is paid off. Screw that. I’ve got money going into my fund every month. It’s only $25 per month, but over the last two years, it has almost doubled my fund. Don’t dedicate so much money that you can’t meet your other goals, but don’t be afraid to keep some money flowing in .
Using the fund?
When can you pull the money out? That is entirely up to you. I have ju st two points to make about withdrawing from your emergency fund:
- Don’t keep the money in an easy-to-access account. If your fund is in the savings account that serves as your overdraft protection account, it’s too easy to spend it, and it will go away. I keep it in my INGDirect account. I don’t use the checking account for anything in person, so I don’t carry the card. If I want to spend that money, it will take 2-3 days to transfer into my main bank account.
- Never decide to spend the money on the spur of the moment. There are very few major financial decisions that can’t wait until morning to be answered. Sleep on it. If it’s still necessary tomorrow, you can spend it without guilt.
An emergency fund makes your life easier and your budget possible when the unexpectable happens. Don’t forget to fund yours.
How much money do you keep in your emergency fund? What would it take to get you to spend it?
Sunday Roundup: Father’s Day
On Father’s Day, 3 years ago, my third and final kid was born. My kids are all horrible brats and I love them dearly.
I wouldn’t give up fatherhood for anything. Watching my kids grow and learn, steering their development, and teaching them how to navigate life is the most fulfilling thing I’ve ever been a part of. Also the most frustrating. I can’t imagine being anywhere else, not being with my kids. I have no respect for deadbeat parents.
I am incredibly grateful that I had a proper model for manhood and fatherhood. My dad taught me the concepts of honor, integrity, and responsibility. I couldn’t be the man I am now, if he wasn’t the man he is. Thanks, Dad.
Best Posts
Sometimes, the coolest things in the world are the things most likely to kill you. Call me crazy, but I’d happily strap a 1200 cc propeller to my crotch and find out what 10,000 feet looks like.
Via Budgeting In The Fun Stuff, Super Frugalette reminds us that, when there’s a significant amount of money involved, spending a few hundred dollars on an attorney isn’t wasteful.
Fivecentnickel discuss multi-level marketing. It doesn’t matter which company you are in, if your downline is more important that your product, it’s a bad business model.
Keith Ferrazzi shows us how to improve our body language when it really matters.
When I started driving, I tossed my car in a ditch going way too fast. Naturally, it was my parents’ fault for giving me the curfew I was trying to beat. They never would have bought it if I would have told them I was driving like my grandma and it jumped into the trees by itself. Why does the FBI think that’s believable? Corruption, maybe?
Financial Samurai talks about living a life without regrets, which is a personal goal of mine.
Food storage will become critical when the zombies come.
Beer is good. Even the cave-men thought so.
Carnivals I’ve Rocked and Guest Posts I’ve Rolled
3 Ways to Keep Your Finances Organized was an Editor’s Pick in this week’s Festival of Frugality. Thanks!
5 Reasons Your Wealth Isn’t Growing was included in this week’s Carnival of Personal Finance.
Money Problems: Insurance was included in the Totally Money Blog Carnival.
Unlicense Health Insurance was included in last week’s Carnival of Personal Finance.
Thank you! If I missed anyone, please let me know.
Yakezie Blog Swap
Last week, the Yakezie shared what they would do with a single financial do-over.
– Melissa from Mom’s Plans shares her biggest financial mistake at Barbara Friedberg Personal Finance: Opening an eBay Store and Using Credit. It is a great story about how not to grow your business and how competing priorities can pose a real challenge.
– Budgeting in the Fun Stuff shares her biggest financial mistake and potential do-over at Super Frugalette: Investing in a Friend’s Business. Its a good, but costly lesson learned about small business.
– Eric from Narrow Bridge Finance shares how He Wouldn’t Have Paid Down His Student Loans So Fast at The Saved Quarter. This may seem counter-intuitive, but he has some good points. Check it out.
– Mr. S from Broke Professionals shares how He Wouldn’t Have Bought a New Car at My Personal Finance Journey. This has some great analysis, especially considering the new car was a hybrid!
– The College Investor posted at Wealth Informatics: What you should know when you are investing?
– Wealth Informatics posted here: If you had one financial do-over, what would it be and why?
– Barbara Friedberg shares how She Was Scammed at Mom’s Plans. You have to watch out for the hard sell!
– Joe at Retireby40 tells us about How He Invested his 401(k) in Company Stock right before the dot com crash, at Financially Consumed. A financial adviser may have helped avoid this one!
– Financially Consumed shares his Car Purchase Do-Over And Over at Retireby40. Car addicts have it tough!
– LaTisha from FSYA shares her do-over story in It’s Never Too Late at Little House in the Valley. Sometimes the do-over is quicker and more painless than most.
– Little House yell’s Do-Over! Do-Over! at FSYA Online. It looks at the road to saving more, starting on an elementary school playground!
– The Single Saver asks, What Are The Long Term Consequences of Small Purchases at Totally Money. A cool post on how past purchases cost future returns!
– Miss Moneypenniless from Totally Money shares her story of Vacationing to the Brink of Bankruptcy. Sometimes a vacation can be fun, but the bills afterward may be daunting.
– Super Frugalette shares How a Lawyer Could Have Saved Her $24,700 at Budgeting in the Fun Stuff. Maybe lawyers are worth it sometimes?
– Jason from Live Real, Now shares how he Amassed $90,000 of Debt at Debt Eye. A good lesson in living a little more frugally.
– Kevin from Debteye shares his do-over: Not Buying a House Right Out of College at Live Real, Now. I have said it before that buying a house can be challenging right out of college.
– Penny from The Saved Quarter shares how She Would Have Finished College Before Having Kids at Narrow Bridge Finance. An awesome story that has will soon have a happy ending!
– Jacob from My Personal Finance Journey shares how he was Scammed on eBay at Broke Professionals. An important lesson for anyone selling or buying online.
– Marissa from Thirty-Six Months shares how she Accumulated a Ton of Student Loan Debt at So Over Debt. If you are going to live the life, you’re going to pay the price!
– Andrea from So Over Debt shares How She Would Have Started Saving for Retirementat Thirty-Six Months. I would love to read a post on each of the stories you mentioned getting to where you are now!
– Below Your Means shares his story about A Missed Investment Opportunity. There are so many times I wish I could have gone back and bought a stock!
Get More Out of Live Real, Now
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Have a great week!
Totally Money Carnival #5, the Superbowl Edition
Welcome to the Totally Money Carnival #5, the Superbowl Edition. It’s my privilege to be the first outside host for this carnival.
I don’t watch the Superbowl. I’ve never been into spectator sports unless I have some skin in the game. If I’m playing, or have some money riding on the outcome, I’m watching. Other than that, I’ll usually pass. Yesterday, a bunch of grown men in tights earning envy-inducing amounts of money ran around for a few hours in front of people, some of whom paid 5 figures for the privilege of watching. Yay!
Editor’s Picks
http://www.youtube.com/watch?v=hpjaOUjUPUc
Mike Piper presents Protecting Your Private Files posted at Oblivious Investor, “How can you keep your sensitive documents (scanned tax returns, for instance) both backed up and protected in the event of computer theft?” Ed. I love this solution, and I use it. All of my tax returns, online receipts, and documents I don’t want to lose get treated this way.
Suzanne K. presents The Psychology of Why You Can’t Budget—And Five Tips to Help You Do It posted at PsychologyDegree.net. Ed. I’ve always been a fan of trying to understand what makes people tick.
Silicon Valley Blogger presents Prepare Your Tax Return: Tax Products vs Tax Pros posted at The Digerati Life, saying “If you don’t enjoy preparing your taxes, you’re not alone. There are various ways to get your tax returns done. How do you go about preparing your taxes: DIY or with the help of a pro?” Ed. Tax time sucks. If we abolished payroll deductions and made everybody in the country write a check to the IRS every year, there would be a revolt on the next April 15th.
Kevin McKee presents How To Know if Your Job is Expendable posted at Thousandaire, saying “When businesses start doing poorly, some people are at risk of losing their job, while others are safe. Find out which category you fall in with these simple questions.” Ed: I was given a demonstration that defines expendability in the workplace. Fill a glass with water and place it on the counter in front of you. Stick your finger in the glass. Now, pull it out. See the impression you’ve made? I’ve done the rockstar bit, and I’ve been in positions that were necessary for the profitability of larger divisions of large companies. It doesn’t matter. Corporate loyalty is a joke.
Budgeting
35% of people who attend the game write it off as a corporate expense. (source)
Miss T presents 5 Ways to Lower Your Monthly Bills | Prairie EcoThrifter.com posted at Prairie Eco-Thrifter, saying “Believe it or not, there are lots of ways to save money, no matter how much of it you have- or don’t have.”
Credit
http://www.youtube.com/watch?v=jRYLhkOV2so
Tim Chen presents Pentagon Federal Offers Best Gas & Airfare Credit Card Rewards, Period. posted at NerdWallet Blog – Credit Card Watch, saying “There is only one credit card in America that offers no strings attached 5% cash back at any gas stations (excluding the likes of Costco) – the Pentagon Federal Platinum CashBack. It also gets you 2% back at grocery stores.”
Miranda presents Accelerate Your Credit Card Debt Pay Down posted at CreditScore.net, saying “Use these techniques to pay down your credit card debt faster.”
Buck Inspire presents Moving Up and On From Prepaid Debit Cards posted at Buck Inspire.
Ryan Hudson presents How I Got a Credit Card Late Fee Waived posted at Best Credit Cards IQ, saying “Don’t take accidental late fees laying down. Do something about it. Here’s how I got rid of my late fee.”
Debt
No network footage exists of Super Bowl I. It was taped over, supposedly for a soap opera.(source)
John presents Get Out of Debt Fast – How to Speed Up the Process posted at Passive Family Income, saying “There are quite a few people today that are beginning to dig their way out of debt. They have monitored their spending, created a budget, and have done the best that they can to stick with it. But, as many of you have experienced, the excitement of becoming debt-free gets pretty old after a while.”
Finance
http://www.youtube.com/watch?v=VRDx18GYITw
Mike Collins presents Defined Benefit vs Defined Contribution posted at Saving Money Today, saying “Understanding the different types of retirement plans.”
Boomer presents 10 Ways For Women To Obtain Financial Empowerment posted at Boomer & Echo, “It’s not that difficult to get your financial life under control (your control). Remember, a man is not a financial plan.”
Frugality
The Super Bowl is measured in Roman numerals because a football season runs the span over two calendar years. This year the season began in 2010 and ends in 2011. (source)
Madison DuPaix presents Substitute, Improvise, and Make Do With What You Have posted at My Dollar Plan, saying “So often, when we run out of things we need, we run to buy something or spend money when we don’t have to. Find out how you can avoid this trap.”
Money Beagle presents The Power Of The Free Calendar posted at Money Beagle.
Amanda L Grossman presents Homemade Diversion Safes: Save Money by Making Your Own posted at Frugal Confessions – Frugal Living, saying “You can purchase your own home security money safes (diversion safes), but I thought it would be more frugal and fun to think of ones to make on your own. See what I can do with a used deodorant!”
Money Management
http://www.youtube.com/watch?v=KQkK1UCH1EU
MoneyNing presents What Would You Do with a Million Dollars? posted at Money Ning, saying “I know what I would do with a million dollars. How about you?”
Other
More drivers are involved in alcohol-related accidents on Super Bowl Sunday than any other day of the year (except St. Patrick’s Day), according to the Insurance Information Institute. (source)
Joe Morgan presents Is Gen Y Irresponsible, Or Is It A Matter Of Perspective? posted at Simple Debt-Free Finance, saying “Generation Y has a reputation for having a sense of entitlement, but here’s one reason it may just be a matter or perspective.”
Saving
http://www.youtube.com/watch?v=_78ylMLa0JQ
Ryan @ MFN presents Roth IRA Qualifications posted at The Military Wallet, saying “Are you qualified to open a Roth IRA? Find out income and contribution requirements to see if you are eligible!”
Brian @ BeBetterNow presents Money’s Golden Rule: Spend Less Than You Earn posted at Be Better Now, “In the end, most personal finance advice boils down to spending less than you earn. Here’s another article to reinforce that.”
Spending
http://www.youtube.com/watch?v=g364TG_8Qmw
Barb Friedberg presents Wealth in Life: 25 Cheap Ideas for Fun posted at Barbara Friedberg Personal Finance, “Join in to build a massive list of low cost fun!”
Taxes
http://www.youtube.com/watch?v=R55e-uHQna0
PT presents Tax on Unemployment Compensation posted at PT Money, saying “A detailed look at what taxes are due on your unemployment compensation.”
Ken presents Important Tax Update for 2010 You Don’t Want To Miss posted at Spruce Up Your Finances, saying “A few of the tax provisions applicable to tax year 2010 such as the extension of tax filing date, expanded tax benefits, phase out on some limitations, etc.”
Fanny presents Top 10 Tax Deductions for Parents posted at Living Richly on a Budget, “Being a parent is one of the most important roles in life. Why not take advantage of all the deductions you qualify for?”
Thank you all for participating! Next week’s host is Saving Money Today, so be sure to submit your posts.
Perez Hilton: The Cost of Living in New York City
Ahhh, New York City. The Mecca of all that is glamorous, rich, luxurious and exciting. To some, the good life. So, you’re ready to pack your bags and head for the big city? Slow down there, big dreamer. The cost of
EVERYTHING in the city is higher than the national average, meaning your 70K per year needs to be 166K in New York City to keep your current lifestyle. Let’s talk about the basics here: lodging, food and entertainment:
Apartments in New York City are insanely high. Like, find a roommate and hang a curtain down the center of your one bedroom to make two bedrooms high. The average Manhattan apartment costs $3,973.00 per month, almost $2,800.00 more than rentals elsewhere in the country. Looking to buy? The average sale price of a home in Manhattan is $1.46 million, compared to under $230,000.00 elsewhere. I suppose the good news is that in New York City, you don’t have to own your home for an elite status, as is required in other areas. Considering a family of four making less than $68,700 per year qualifies for public housing in New York City – you better be making bank if you plan to check your mailbox next to any celebrities.
If rent has not broken you, you must also eat! I mean, you won’t be eating MUCH after paying rent, but you will need a nibble here and there. It will come as no surprise that the restaurants in New York City are pricey. Celebrity favorites such as the Four Seasons, Le Cirque and Nobu are over $50.00 PER PERSON. I just choked on my Diet Coke. Eateries such as McDonald’s and local Mexican restaurants are abundant, but they too are higher priced than elsewhere. Your best bet? Learn to cook. Eat leftovers. Use coupons. Pair those coupons with sale items. Find a generous and rich companion. Skip meals.
As far as entertainment goes, I’m afraid at this point, your only entertainment will be browsing the web for supplementary forms of income. Seriously, unless you are in the 1%, utilize the many forms of free entertainment that New York City has to offer. A jog through Central Park, window shopping or a walk through the city all offer ample opportunity for fun free of charge. Sadly, Broadway plays and designer shopping must be left to the rich and famous.
In conclusion, one can lead a good, but not extravagant, life in New York City on a normal income. Be prepared to work hard, save hard and live frugally. Unless you’re living on money that is coming from an investment or dividend, you shouldn’t expect anything more. Listen, New York City is exciting, good grief, it’s the “city that never sleeps,” but it isn’t cheap. Of course, the people I know who have lived there for a short stint of time had little money and have since moved on – with no regrets and countless memories from that season of life.
